Kevin Drum

Who's Really Behind Newsweek?

| Mon Mar. 31, 2014 7:50 AM PDT

When Newsweek reappeared on newsstands a few weeks ago after publishing its last print edition in 2012, it provided a jolt of instant credibility for its purchaser, International Business Times, the publisher of a website of the same name. But who is IBT? There have been rumors for some time that it was founded—and is still directed—by David Jang, the charismatic Korean leader of a Christian sect known as "the Community," but those rumors have never really been confirmed.

Until now. In the latest issue of Mother Jones, Ben Dooley reports on the results of a multi-year investigation based on financial statements, thousands of internal messages, and dozens of sources. It turns out that IBT's ties to Jang go much deeper than previously established:

  • The Jang-founded Olivet University and IBT are linked to a web of dozens of churches, nonprofits, and corporations around the world that Jang has influenced or controlled, with money from Community members and profitable ministries helping to cover the costs of money-losing ministries and Jang’s expenses.
  • IBT’s CEO and chief content officer have been in frequent contact with Jang about the direction of the company, receiving advice on personnel decisions, business strategy, and font selection.
  • Money from other Community-affiliated organizations funded IBT’s early growth.
  • Olivet students in the United States on international student visas say they worked for IBT full-time for as little as $125 a week.
  • Jang sees Community-affiliated media organizations, including IBT, as an essential part of his mission to build the kingdom of God on Earth.

As Dooley says in his article, there's nothing unusual about business leaders associating with people or institutions that share their values. But if there's nothing unusual about the ties that IBT's leaders have to Jang and the Community, why have they been so eager to downplay them? Click the link to learn more.

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Health Insurance Rates Are Going Up Next Year, But It's Nothing to Panic Over

| Sun Mar. 30, 2014 2:11 PM PDT

The LA Times has a piece today about the next battleground for Obamacare: rate increases for 2015. The warnings are already coming thick and fast:

WellPoint Inc., parent of California's leading health insurer in the exchange, Anthem Blue Cross, has already predicted "double-digit-plus" rate increases on Obamacare policies across much of the country.

.... Health insurers aren't wasting any time sizing up what patients are costing them now and what that will mean for 2015 rates. Hunkered down in conference rooms, insurance actuaries are parsing prescriptions, doctor visits and hospital stays for clues about how expensive these new patients may be. By May, insurance companies must file next year's rates with California's state-run exchange so negotiations can begin.

I hope everyone manages to restrain their Obamacare hysteria over this. Here in California, we've played this game annually for years. Health insurers in the individual market propose wild increases in their premiums—10 percent, 20 percent, sometimes even 30 percent—and then dial them back a bit after consumer outrage blankets the media and the Department of Insurance pushes back. But even then, we routinely end up with double-digit increases. Just for background, here are the average annual rate increases requested by a few of California's biggest insurers over the last three years:

  • Anthem Blue Cross: 10.7%
  • Aetna: 12.1%
  • Blue Shield: 15.4%
  • HealthNet: 12.0%

And this doesn't include changes in deductibles or out-of-pocket maximums. Add those in, and the annual proposed increases are probably in the range of 15-20 percent. Obamacare, of course, limits both those things, which means that in the future insurance companies will have to put everything into rate hikes instead of spreading the increases around to make them harder to add up.

Bottom line: if we end up seeing double-digit rate increases, it will be business as usual. Insurance companies will all blame it on Obamacare because that's a convenient thing to do, but the truth is that we probably would have seen exactly the same thing even if Barack Obama had never been born. So let's all keep our feet on the ground when the inevitable huge rate increase requests start flowing in. It's mostly an insurance company thing and a healthcare thing, not an Obamacare thing.

Friday Cat Blogging - 28 March 2014

| Fri Mar. 28, 2014 12:00 PM PDT

This week, in a feat of breathtaking middle-aged athleticism, Domino leaped into the empty laundry hamper and then leaped out a few minutes later. All by herself. I honestly didn't think she still had it in her. But she seemed to enjoy herself for the few minutes she was in there, and then followed me around to find out what happened to all the clothes that had been taken out. Later on, of course, she curled up and took a nap on the fresh laundry. Quite a life, isn't it?

Raw Data: By 2017, Obamacare Will Be Covering 36 Million People

| Fri Mar. 28, 2014 11:26 AM PDT

Megan McArdle asks, "Is Obamacare now beyond repeal?" Good question! McArdle goes through the various estimates of enrollment figures, concluding that something in the neighborhood of 5.5-6.5 million people are likely to sign up this year, depending on how much enrollment accelerates in the last few days of March and how many people drop out because they fail to pay their premiums. That sounds reasonable to me. Then this:

Does that mean that Obamacare will basically be beyond repeal, as its supporters hope? It certainly makes things harder. But we still don't know how many of these people are newly insured, or how many of the previously insured like these policies better than their old policies — nor how much pressure it is going to end up putting on the budget. Those are things we won't know for quite a while. But if it were impossible to ever cut off an expensive entitlement that goes to the middle class, TennCare would never have been cut.

But there's something missing here. It's something that nearly everyone has neglected in the frenzy to figure out what's happening right now. Here it is: the world doesn't stop in 2014. Enrollment of around 6 million makes Obamacare hard to repeal, but for now that's not really what's holding it in place. What's holding it in place is the fact that Democrats control the Senate and Barack Obama occupies the White House. And even if the Senate switches parties next year, I think we can all agree that Obamacare is going nowhere as long as Obama stays president. So 2017 is the earliest it could even plausibly be repealed.

But what do things look like in 2017? The chart on the right shows the latest CBO estimates. By 2017, a total of 36 million Americans will be covered by Obamacare. Of that, 24 million will have private coverage via the exchanges and 12 million will be covered by Medicaid. Those are very big numbers. Even if Republicans improbably manage to get complete control of the government in the 2016 election and eliminate the filibuster so Democrats can't object, they'll still have to contend with this.

Does this make Obamacare invulnerable? Of course not. Nothing makes it invulnerable. It's always possible, though it seems vanishingly unlikely at this point, that it will fail so badly that even Democrats sour on it in a couple of years. It's also possible that Republican hostility will remain so furious that they just flatly don't care about 36 million constituents. And maybe they won't care that the health care industry is fully invested in Obamacare and will fight efforts to get rid of it.

Anything is possible. But when you talk about the chances of repealing Obamacare, you should be talking about 2017. And if you're talking about 2017, then the number that matters isn't 6 million, it's 36 million. That's a mighty big nut to crack.

Quote of the Day: "I Have to Thank Obamacare for Saving My Life"

| Fri Mar. 28, 2014 9:58 AM PDT

From Kathy Bentzoni of Slatington, Pennsylvania, who signed up for Obamacare after giving up her "useless" old coverage because it was too expensive and denied all her claims. A few weeks ago, knowing she could afford it, she went to the ER complaining about numbness in her fingers:

Where would I be without Obamacare? ER, 3 units of blood, multiple tests in the hospital and a 5-day inpatient stay without insurance? Probably dead.

I have to thank Obamacare for saving my life.

Bentzoni would have been treated in the ER regardless of her insurance status. Without insurance, though, she might not have gone. Or she might have waited too long. But on March 1, knowing that it wouldn't bankrupt her, she went in time to avoid the worst. And thanks to Obamacare, she can afford the ongoing care she'll need to treat her rare blood disorder.

This is from a piece at CNN highlighting five Obamacare success stories. More like this, please.

Pre-K Can Make You Healthier and More Talkative

| Fri Mar. 28, 2014 9:27 AM PDT

I'm a fan of pre-K and early childhood interventions in general. For the most part, this isn't because these programs boost IQ or increase academic performance. They may do a bit of that, but the evidence so far suggests that direct academic effects are modest. Rather, the benefits are mostly indirect: fewer behavioral problems; less teenage drug use; better impulse control; lower arrest rates; and so forth. Today, Aaron Carroll suggests yet another benefit: these programs produce healthier adults. That's the conclusion of a long-term follow-up in the Carolina Abecedarian Project (ABC):

Males who were randomized to the ABC program had significantly lower blood pressure (systolic 143 vs 126). That’s a massive difference. They had significantly lower levels of hypertension. They had lower levels of metabolic syndrome and lower Framingham risk scores. To get a sense of the magnitude of the difference, one in 4 males in the control group had metabolic syndrome; none in the ABC group did. Women also had improvements, although not as dramatic.

Males in the intervention group were significantly more likely to have health insurance at age 30, and to have bought it. They were more likely to get care when they were sick at age 30, too. They were at lower risk for overweight throughout their childhood. Women in the intervention group were less likely to start drinking alcohol before age 17. They were more likely to be active and to eat more healthily.

The cost of this program was about $16,000 per child in 2010 dollars.

This isn't a smoking gun. The sample size is small and the program was run a long time ago. But as Carroll says, that's inevitable in long-term longitudinal studies: "Anytime you do a follow-up of 30+ years, by definition the intervention will be old by the time you get results. There's no other way to do it. It's such a silly attack."

Along similar lines, Bob Somerby lavishes rare praise on a New York Times report by Motoko Rich about a program in Providence, RI, that intervenes with kids even before pre-K. The goal is a simple one. Researchers just want to get parents to talk to their children:

Recent research shows that brain development is buoyed by continuous interaction with parents and caregivers from birth, and that even before age 2, the children of the wealthy know more words than do those of the poor....Educators say that many parents, especially among the poor and immigrants, do not know that talking, as well as reading, singing and playing with their young children, is important. “I’ve had young moms say, ‘I didn’t know I was supposed to talk to my baby until they could say words and talk to me,’ ” said Susan Landry, director of the Children’s Learning Institute at the University of Texas in Houston, which has developed a home visiting program similar to the one here in Providence.

....As in Providence, several groups around the country — some of longstanding tenure — are building home visiting programs and workshops to help parents learn not only that they should talk, but how to do so.

“Every parent can talk,” said Dr. Dana Suskind, a pediatric surgeon at the University of Chicago who founded the Thirty Million Words Initiative, which oversees home visiting programs and public information campaigns. “It’s the most empowering thing,” said Dr. Suskind, who is securing funding for a randomized trial of a home-based curriculum intended to teach parents how they should talk with their children and why.

One of the most frustrating things about the education gap between rich and poor is that it shows up so early, and vocabulary appears to be one of the reasons. Even by the time they're two or three, children of middle-class parents have vocabularies that are substantially larger than those of poor children. Even if poor kids get into a good-quality pre-K program, they're behind from the beginning and they never catch up.

And plonking kids in front of the TV doesn't do the trick. Vocabulary isn't built by listening, but by interacting. It requires parents who talk to their children continuously. It barely even matters what they're talking about.

The goal of programs like the one in Providence is to make sure that low-income parents know this. They may not have the time or money to do all the things for their kids that better-off parents can do, but they can talk to them. Doing that on a regular basis, starting very early in life, may turn out to be a critical component of any pre-K intervention program. Hopefully Suskind's RCT will get funded and we'll have firmer knowledge about this in the future.

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Condi Rice In Running For 2014 Chutzpah Award

| Fri Mar. 28, 2014 8:29 AM PDT

Condi Rice has joined the tut tutting brigade against Americans who aren't crazy about fighting yet another war:

“I fully understand the sense of weariness," she told a GOP fundraiser Wednesday, according to reports. "I fully understand that we must think: ‘Us, again?’ I know that we’ve been through two wars. I know that we’ve been vigilant against terrorism. I know that it’s hard. But leaders can’t afford to get tired. Leaders can’t afford to be weary.”

....Rice said the United States has taken a step back in conflicts including Syria, Ukraine and others. “When America steps back and there is a vacuum, trouble will fill that vacuum," Rice said.

That's precious, isn't it? Maybe Rice should give some thought to the possibility that Americans aren't weary of war, but weary of dumb, poorly fought wars. Maybe if the administration she served for eight years hadn't launched two of the dumbest, most mismanaged wars in American history, we wouldn't all be so weary.

As an aside, I'd point out that her administration took no military action against Iran and mounted no serious international sanctions against the regime. Her administration also did nothing when Russia invaded South Ossetia. Obama, by contrast, has doubled down in Afghanistan to try and clean up the mess left over from the Bush administration; he's forced Iran to the negotiating table by crippling its economy; he's participated in an invasion and regime change in Libya; he's crippled al-Qaeda via massive drone attacks; and he's spearheaded a growing backlash against Russia's invasion of Crimea. And when he tried to mount an attack against Syria in retaliation for its use of chemical weapons, he was shot down not just by members of his own party, but by members of Rice's Republican Party too.

Whatever else you can say about Obama, he's hardly a peacemonger. His foreign policy might not be quite as blindly bellicose and unfocused as George Bush's, but he sure isn't shy about using or threatening military force when he thinks it's in America's interest. Rice should pay more attention. She might learn something.

California Bullet Train Fails Yet Another Test

| Thu Mar. 27, 2014 10:55 PM PDT

Here is today's round of non-shocking news:

Regularly scheduled service on California's bullet train system will not meet anticipated trip times of two hours and 40 minutes between Los Angeles and San Francisco, and are likely to take nearly a half-hour longer, a state Senate committee was told Thursday.

....Louis Thompson, chairman of the High-Speed Rail Peer Review Group, a state-sanctioned panel of outside experts, testified that "real world engineering issues" will cause schedules for regular service to exceed the target of two hours and 40 minutes. The state might be able to demonstrate a train that could make the trip that fast, but not on scheduled service, he told lawmakers.

And remember: not a single mile of track has been laid yet. In the space of a few years, based solely on planning documents that are almost certainly still too rosy, the cost of the project has already doubled; travel times have blown past the statutory goal; ridership estimates have been halved; and every plausible funding source has disappeared. Just imagine what will happen once they start building this thing and begin running into real-world problems.

Somebody put a stake through this project. Please. LA to San Francisco is just not a good showcase for high-speed rail. Even the true believers have to be getting cold feet by now.

John Boehner vs. the Tea Party, Part XVII

| Thu Mar. 27, 2014 4:28 PM PDT

It's hard not to laugh at this. The House Republican leadership needed to pass the annual Medicare doc fix, but they didn't want to raise taxes or cut other spending to pay for it. Nor did they want anyone to be forced to go on record voting for a bill that wasn't paid for. What to do? Answer:

  • Call a recess.
  • Huddle up with Democratic leaders and get their buy-in for a quick voice vote.
  • Do not—repeat: do not—tell tea party types about this.
  • Get back out on the floor pronto and call up a bill that doesn't pay for the doc fix at all. Just put it on the ol' deficit spending credit card.
  • Pass it fast before conservative Republicans realize what's going on and demand a roll-call vote.
  • Hightail it out of Dodge.

Martin Longman has the whole story here. It's pretty hilarious.

UPDATE: Just to make this even better, the C-SPAN video of the proceedings makes it pretty clear that the voice vote didn't even go in favor of the bill. At least, not by the two-thirds margin required to suspend the rules and pass the bill pronto. Truly banana republic territory.

When Housing Prices Become Fish Stories, the Economy Suffers

| Thu Mar. 27, 2014 1:30 PM PDT

Over at Wonkblog, Christopher Ingraham points us to new research from Ireland suggesting that an awful lot of people don't know how much they paid for their houses. I've adapted the main chart from the study on the right. As you can see, most people who get this wrong underestimate how much they paid—sometimes by gigantic amounts. Very few people overestimate how much they paid, and virtually no one overestimates by more than a quarter or so.

What accounts for this? As it happens, the authors are mostly concerned with how this poor recall affects estimates of the wealth effect—which I admit I didn't really understand.1 Because of this focus, they don't spend a lot of time speculating on the underlying causes. But they do mention that the older the loan, the less accurate people are; that younger people remember better than older people; and that errors are smaller among the well-educated.

But none of this explains why the bad recall is overwhelmingly on the low side. So here's my guess: people lie. Or, more charitably, they're in denial. They don't want to admit to themselves or their friends how much they lost during the housing crash. Or, when prices are rising, they like to brag about how much they've made. Everyone else claims to have made a killing, so they slice a little bit off their buying price to make it seem like they made a killing too. No one wants to be a sucker, after all. Do this enough times, and eventually you come to believe it yourself.2

1The authors say that "An increasing number of micro based estimates of the housing wealth effect use the recall house price as an indicator of housing wealth." So if recall prices are systematically lower than the actual prices paid, this would lead to estimates of the wealth effect that are too low.

That's fine, and it's a reasonable topic for a research paper. It's important to know just how the wealth effect works. But why would anyone use the recall price for this in the first place? Shouldn't wealth effect estimates be based on how much people think their houses are worth right now? Or on how much equity people think they have, which would actually be higher if they underestimate the original price of their house? I'm a little stumped by this.

2Here's another guess: people tend to remember loan amounts more than the actual price of the house. If they put 10 percent down on a $300,000 house, the amount of the loan is $270,000, and that's what they remember. I'm not sure I buy this, but it's a possibility.