# Kevin Drum

## Sorry, Donald, You Can't Count Retirees As "Unemployed"

| Thu Aug. 20, 2015 1:44 PM EDT

In his interview with Sean Hannity last week, Donald Trump said the unemployment rate wasn't 5.3 percent, as the Bureau of Labor Statistics says. "That's phony math," he told Hannity. "If you add it up, it's probably 40 percent, if you really think about it."

Was this just a one-off comment because he was trying to bond with Hannity? Or was it another budding Trump meme? Today, in an interview with Time, Trump doubled down:

Don’t forget in the meantime we have a real unemployment rate that’s probably 21%. It’s not 6. It’s not 5.2 and 5.5. Our real unemployment rate—in fact, I saw a chart the other day, our real unemployment—because you have ninety million people that aren’t working. Ninety-three million to be exact.

If you start adding it up, our real unemployment rate is 42%.

Trump saw a chart! Here it is, if you're interested. I like charts too, so I guess that's OK. And Trump is right about one thing: roughly 93 million people (42 percent of the adult population) aren't employed. But why aren't they employed? Let's check out another chart for the answer. I don't think I've ever created a pie chart before, but that seems appropriate for a Donald Trump post, don't you think? In fact, let's make it a 3-D pie chart.

As you can see, there are indeed about 93 million people who aren't working. The vast majority of them, however, are retirees, the disabled, full-time students, and folks who have no interest in working (stay-at-home parents, etc.). There are about 8 million unemployed, and about 8 million more who are underemployed or would like to work but have given up trying to find a job. If you add up those two categories you get the U6 unemployment rate, currently at 10.7 percent.

You can make a case for using U6 as your preferred metric of unemployment. But counting retirees? Or students? Or the disabled? Or parents taking care of children? Sorry, but no.

POSTSCRIPT: I threw together the numbers in the chart pretty quickly. They're all in the ballpark of being accurate, but could be off by a little bit. Frankly, a more detailed dive just didn't seem worth it.

## Obamacare Is Facing Yet Another Legal Challenge

| Thu Aug. 20, 2015 10:47 AM EDT

Do you remember John Boehner's House lawsuit against President Obama over some details of Obamacare? When it was finally unveiled, it turned out it had two parts. The first challenged a delay in implementing the employer mandate. That was a big meh. Even if the suit prevailed, it would be meaningless by the time it finished its trip through the court system.

But the second part was a surprise. It challenged the outlay of $175 billion as part of the Cost Sharing Reduction program, which pays out money to insurance companies and lowers premiums, primarily for the poor. Obama claims that CSR is like Medicare or Social Security: a mandatory payment that doesn't require yearly authorizations. Congress claims it does, and went to court to fight its case. So how is that going? David Savage of the LA Times gives us an update: In May, U.S. District Judge Rosemary Collyer voiced exasperation when a Justice Department lawyer tried to explain why the Obama administration was entitled to spend the money without the approval of Congress. Why is that "not an insult to the Constitution?" Collyer asked. But the more formidable barrier now facing the lawsuit is a procedural rule. Judges have repeatedly said lawmakers do not have standing to re-fight political battles in court....But in late June, the high court gave the House lawsuit an apparent boost when it ruled the Arizona Legislature had standing to sue in federal court to defend its power to draw election districts....Ginsburg in a footnote said the court was not deciding "the question of whether Congress has standing to bring a suit against the president." But administration supporters acknowledge the high court's opinion in the Arizona case increases the odds the suit will survive. ....Washington attorney Walter Dellinger, a former Clinton administration lawyer, believes the courts will not finally rule on the House lawsuit. "There has never been a lawsuit by a president against Congress or by Congress against the president over how to interpret a statute," he said. If the courts open the door to such claims, lawmakers in the future will opt to sue whenever they lose a political battle, Dellinger said. "You'd see immediate litigation every time a law was passed," he said. In other words, this is starting to look an awful lot like King v. Burwell: a case that initially seemed like an absurd Hail Mary by conservatives, but that eventually started to look more formidable. In the end, King still lost, but not before plenty of liberals lost a lot of sleep over it. I think that's still the most likely outcome here. Allowing Congress to sue the president would be a huge reversal for the Supreme Court, and it's not clear that even the conservatives on the court want to open up that can of worms. But there's more to this. If the Supreme Court rules that Congress has no standing to sue, but it looks like they might treat the case sympathetically on the merits, conservatives merely have to find someone who does have standing to sue. That probably won't be too hard. It may take years, but one way or another, this might end up being yet another legal thorn in the side of Obamacare. ## Trumpmentum Has Been Losing Steam Ever Since the Debate | Thu Aug. 20, 2015 10:04 AM EDT I hopped over to RealClear Politics this morning to take a look at their latest poll averages, and it shows something interesting: Donald Trump may have hit his ceiling. On August 5, he hit a peak at 24.3 percent. He then plateaued for a few days and has been falling ever since. He now stands at 22.0 percent. Not all poll averages show the same thing. I also took a look at Pollster, and they show Trump's climb starting to slow down, but not quite peaking yet. Even there, though, it looks like Trump is going to hit a ceiling soon. At the risk of making a hard prediction that will soon look foolish, it looks to me like Trump has peaked at about 25 percent. Even among the Republican base, his blustery showmanship only gets him so far. ## Iran Agreement Looks Like a Done Deal in Congress | Thu Aug. 20, 2015 9:35 AM EDT From the Guardian: Barack Obama has enough votes to get the Iran deal through the House of Representatives, despite Republican efforts to block the historic nuclear accord, the minority leader, Nancy Pelosi, has said. With a Senate vote looking increasingly secure for the president, Pelosi’s comments suggest it is now extremely unlikely that Congress will halt the deal. Pelosi, the Democratic leader in the House of Representatives, said on Thursday in an interview with the Associated Press that she was confident House Democrats would have the votes if necessary to see the Iran deal through. Nancy Pelosi is a pretty shrewd vote counter. If she says there are enough House Democrats to see the deal through, I believe her. It probably doesn't matter, though: there are now 25 declared supporters of the deal in the Senate, and Obama only needs nine more to ensure passage of the deal. That shouldn't be too hard. ## A Conversation About Scott Walker's Health Care Plan | Wed Aug. 19, 2015 9:04 PM EDT Ramesh Ponnuru thinks I got Scott Walker's health care plan wrong. Maybe! Let's go through his objections. 1. I complained that Walker's plan would cost a lot but he doesn't tell us how he's going to pay for it without raising taxes. Ponnuru: "Walker says he is going to reform the tax break for employer-provided plans and get savings out of Medicaid....There’s no reason to doubt that some such mix could be made to work." I tentatively doubt it.1 My back-of-the-envelope guess was that after accounting for both Medicaid cuts and the end of Obamacare outlays, Walker still had a$100 billion hole. I was wrong about that. It's probably more like $150 billion or so, since Walker would also repeal all of Obamacare's taxes. The only proposal he offers to raise money for this is to "reform the way the tax code treats gold-plated, employer-sponsored health care plans." This is the Obamacare Cadillac tax, and even in the far future it won't generate anything close to$150 billion annually. Walker still has a very big hole to fill.

2. I complained that if you don't have continuous coverage and you get sick or have a pre-existing condition, you're screwed. Ponnuru: "At that point you’d have to go to a high-risk pool."

There's a reason I didn't mention this. Walker says that his plan will "provide funds" and "flexibility" for states to address pre-existing conditions if they feel like it. "One way states could do this is by managing high-risk pools, something states have done for decades. My plan would make it easier for states to expand these pools, or pursue alternative approaches."

In other words, high-risk pools aren't a part of Walker's plan. He just mentions them as a possibility that states might pursue if they want to. And anyway, high-risk pools are infamous for working poorly because they're always underfunded. Would Walker really be willing to fund them at levels high enough to actually work?

3. I complained that Walker doesn't tell us how he'll prevent insurance companies from raising rates on people with expensive pre-existing conditions. Ponnuru: "A protection for people in the group market who have maintained continuous coverage has been law since 1996. Walker’s plan would just expand and strengthen that approach in the individual market."

That's possible, but Walker's plan doesn't say this. I can only respond to things Walker actually says. What's more, the individual market is fundamentally different from the group market, which is why HIPAA regulates the group market but doesn't even try to regulate the individual market. This is tricky stuff, and requires more than "just" expanding and strengthening HIPAA. And since it likely requires a fair amount of detailed regulation—which Republicans are famously averse to— I'd like to hear how Walker plans to do it.

4. I complained that Walker's plan wouldn't cover everyone. Ponnuru acknowledges this. I also complained that Walker had no concrete proposals to reduce the cost of health care. Ponnuru: "Capping the tax exclusion for employer-provided coverage is as much a 'concrete proposal to reduce the cost of health care' as anything in Obamacare. And so on."

That's true, and I should have acknowledged it. The Cadillac tax, which is part of both Obamacare and Walkercare, is likely to rein in costs. As for "And so on," I'm not sure what to say. I need something more specific.

Nickel summary: Ponnuru is right about the Cadillac tax pushing costs down. But I don't think his other criticisms really hold water.

On a related note, Ponnuru is right that, in practice, Obamacare doesn't cover everyone. There will always be people who go uninsured regardless of mandates, either because they don't feel like paying for insurance or because they can't afford to, even with subsidies. But aside from illegal immigrants, Obamacare really does try to give everyone a chance to buy decent coverage. And it would cover many more people if Republican governors accepted Medicaid expansion and Republican members of Congress were willing to increase the funding for subsidies.

Walker's plan, by contrast, doesn't even try to cover everyone. There are lots of people who will fall through the cracks, and this is by design. Maybe you prefer this. I don't. I'd like to see genuinely universal coverage. But either way, it's a big difference.

1Tentatively because I don't know for sure how much Walker's plan will cost. Someone is bound to do a detailed dive into this eventually, and maybe it will turn out to be cheaper than I think. If so, I'll let you know.

## No, Hillary Clinton Has Never Supported White Supremacist Violence Against Black Communities

| Wed Aug. 19, 2015 4:02 PM EDT

Activists from Black Lives Matter met with Hillary Clinton last week, and they came away unimpressed. Dara Lind says the disagreement was mostly about Clinton's support for the 1994 crime bill, a centerpiece of her husband Bill Clinton's political agenda:

The crux of the conflict is this: The activists see the 1994 crime bill, and the "tough-on-crime" agenda more generally, as "extensions of white supremacist violence against communities of color." Clinton agrees with them that the criminal justice system needs to be reformed, but refuses to accept that characterization of the bill.

Both Bill and Hillary accept that, in retrospect, the crime bill was probably misguided. But Lind points out that at the time, there was plenty of support for it in the black community:

This is an important point: Many black Americans, including black leaders, welcomed "tough-on-crime" policies as a way to protect their communities. A majority of the Congressional Black Caucus voted for the 1986 law that created the sentencing disparity between crack and powder cocaine. And in 1994, it was the CBC that saved President Clinton's crime bill after an unexpected loss on a procedural vote.

This is a history that's been largely forgotten, partly because many of these leaders regret their positions now or—like former Rep. Kweisi Mfume—deny that they supported the bill at all. And in fairness, there was plenty of black opposition to tough-on-crime policies. There are probably good questions to ask about who is trusted to speak for black communities, and whether black leaders felt politically pressured to denounce the crime in their midst as a condition of being taken seriously…

By 1994, the crime wave had already peaked; the crime rate was starting a quarter-century of decline. Increased incarceration is responsible for a small fraction of that—but by 1994, the people being put in prison, on the margin, had long since stopped being the people who posed a serious threat. The suffering caused by the bill wasn't a caveat, it was the primary consequence of its passage.

There's an important point here, one that I became more deeply aware of when I wrote about childhood lead poisoning and violent crime a couple of years ago. Here it is: There really was a huge crime wave in the '70s and '80s. And it wasn't uncommon for liberals to downplay this at the time, something that turned out to be a political disaster for liberalism. That's because the crime wave wasn't a myth, and it wasn't made up. Rape, assault, and murder skyrocketed far above their previous highs, and inner-city neighborhoods were especially hard hit. This is the reason that so many black leaders supported tough-on-crime bills of various sorts.

And while Lind is right that violent crime had peaked and was starting a long descent by 1994, no one knew it at the time. The peak had only happened a couple of years before, and there was no reason to think a small drop in a single year or two was significant. So it's not right to say that the people being put in prison in 1994 had "long since" stopped posing a threat. They posed a plenty big threat, and literally everyone who studied crime at the time thought they'd continue to do so for years. At the time, there was simply no reason to think violent crime was about to plummet.

Now, everyone knows my take on this: Both the rise and subsequent fall of violent crime was largely due to childhood lead poisoning caused by lead paint and leaded gasoline. Tough-on-crime measures, it turns out, probably didn't contribute much to the fall in crime during the '90s and aughts. But again, at the time no one knew this. In 1994 no one had even an inkling that lead might be the culprit for high crime rates.

This in no way takes race out of the crime picture. It just explains it. Black crime really did soar during the crime wave, and the reason was simple: Black families lived disproportionately in inner cities, where both lead paint and exhaust fumes from cars were rife. Racism is behind this everywhere. Black people lived in these neighborhoods in the first place largely because of redlining and racial animus. The neighborhoods then became worse because politicians built highways through them (the richer, whiter communities fought them tooth and nail). And they were never cleaned up because no one wanted to spend money on them. Paint and automobile lead poisoned black kids at a higher rate than white kids, and the result was higher black crime rates.

But while I hate to be a broken record, no one knew this at the time. And in a way, it didn't matter. Even if we had known lead was responsible, it wouldn't have changed anything. Once the damage was done, it was done. And no matter what caused it, nobody wanted to let rapists and murderers roam the streets.

This was a long and rambling way of getting to my final point. Lind suggests intent doesn't matter. Something is racist if it has racist consequences. But I think you have to be pretty careful about that. Lind is right that, whether racially inspired or not, it's important to face structural racism clearly and work relentlessly to overcome it. Nonetheless, intent does matter. Calling someone racist does nothing except make matters worse unless they really do have racist intent.

So was the 1994 crime bill racist in intent? No. Many black leaders, including black mayors who faced rising crime rates daily, supported it. Violent crime really was a huge problem—and it really was especially severe in black communities. Nobody at the time knew lead might be the culprit for this, so they had to address it as best they could given what they believed. So they did. The 1994 crime bill was not a white supremacist project. It was a crime bill.

At the end of her piece, Lind argues that Hillary Clinton "doesn't need to show she's changed her heart. But she does need to show that she has learned, and changed her mind." This puzzles me. Clinton has defended her support of the 1994 crime bill given what she knew at the time, but she has also proposed criminal justice reforms that make it clear she has learned and has changed her mind. If those reforms are insufficient, fine. Fight for more. But both Clintons have made it clear that their views on crime have changed. There's simply no excuse for pretending that either one of them was involved in a conspiracy of "white supremacist violence" against black communities.

## Emailgate Continues to Be a Nothingburger

| Wed Aug. 19, 2015 2:05 PM EDT

Bob Somerby on emailgate:

Yesterday, Candidate Clinton said it again, during a press avail:

“No matter what anybody tries to say, the facts are stubborn. What I did was legally permitted, number one, first and foremost, OK?”

It certainly wasn’t OK on today’s Morning Joe! In that program’s opening segment, everyone said that statement was false—without naming the law or regulation Clinton had violated.

Meanwhile, there’s that passage from the New York Times’ front page, two Sundays ago:

“When she took office in 2009, with ever more people doing government business through email, the State Department allowed the use of home computers as long as they were secure...There appears to have been no prohibition on the exclusive use of a private server.”

We never assume the Times is right concerning such matters. But as is always the case in these matters, the heated discussion of “emailgate” begs for clarification—a service the national press corps is rarely equipped to provide.

I'm perfectly willing to believe that Clinton's use of a private server was unwise. It probably was, something that I think even she's acknowledged. And Clinton has certainly provided some dodgy answers about what she did, which naturally raises suspicions that she might have something to hide. This kind of chary parsing on her part may be due to nothing more than her longstanding distrust of the press, but that only makes it understandable, not sensible.

That said, even when I do my best to take off my tribal hat and look at this affair dispassionately, I just don't see anything:

• Using a private server was allowed by the State Department when Clinton started doing it.
• Removing personal emails before turning over official emails appears to be pretty standard practice.
• None of the emails examined so far has contained anything that was classified at the time it was sent.
• There is no evidence that I know of to suggest that Clinton used a private server for any nefarious purpose. Maybe she did. But if you want to make this case, you have make it based on more than just timeworn malice toward all things Clinton.

What am I missing? I don't begrudge the press covering emailgate. Republicans are all over it, which makes it a newsworthy issue whether we like it or not. And there has been an inspector general's investigation, as well as an ongoing FBI investigation. That makes it newsworthy too.

But I still want to know: what exactly is being investigated at this point? If you just want to argue that Clinton showed bad judgment, then go to town. That's a legitimate knock on a presidential candidate. But actual malfeasance? Where is it?

## Social Security Cuts Are Fairly Popular If You Talk About Them Right

| Wed Aug. 19, 2015 1:12 PM EDT

Paul Krugman writes today that Republicans are engaged in an act of "political self-destructiveness." They consistently support entitlement cuts, including cuts to Social Security, despite the fact that only 6 percent of Americans want to cut Social Security while 51 percent want it increased. Why are they doing this? Krugman suggests that it's because they're trying to curry favor with wealthy donors, who generally favor cuts.

I want to push back on this a bit. Krugman's comment is based on a post by Lee Drutman, which in turn is based on data from the 2012 National Election Studies survey. But there have been lots of other polls about Social Security too. Here are three taken at random from PollingReport.com:

Opinions about Social Security are very sensitive to question wording. If you flatly ask "Do you think we should cut Social Security benefits?" almost everyone will oppose it. But if you preface it with a question about the solvency of the system, more people are in favor of cuts. And if you ask about, say, raising the retirement age, you get even more people in favor—because most of them don't automatically associate that with "cuts."

This is the context for understanding the Republican position. First, they talk loudly and endlessly about how the system will collapse unless changes are made. Second, they make sure never to propose changes for retirees already receiving benefits. Third, they don't talk overtly about cuts. They talk about raising the retirement age. They talk about slowing the growth of benefits. They talk about means testing. They talk about private accounts.

None of this is to say that cuts to Social Security—even when couched in veiled terms—are popular. They aren't. But support is a lot higher than 6 percent. Usually it's somewhere between 30-50 percent, and it's often a substantial majority among Republican voters.

So that's how Republicans get away with this: they appeal to fellow Republicans and they're careful about how they frame their proposals. In other words, politics and salesmanship. But I repeat myself.

POSTSCRIPT: Why did I bother writing this post? Because it's important not to kid ourselves about what the public really thinks. Opinions aren't shaped in a vacuum. They're formed in the context of time, place, tribal affiliations, external events, and framing. Simple, isolated questions don't capture any of that.

We do ourselves no favors if we blithely assume that Republicans are committing obvious suicide without understanding exactly how they maintain support for a position that seems pretty unpopular at first glance. The answer is that they do it very skillfully, and if we want to fight back we have to understand that.

## China Seems to Be Lying About Its Unemployment Rate

| Wed Aug. 19, 2015 12:00 PM EDT

What's the unemployment rate in China? Last month it was 4.1 percent. The month before it was 4.1 percent. Last year it was also 4.1 percent. And in 2013? That's right: 4.1 percent.

A new NBER paper calls this "abnormally low and suspiciously stable," which seems like a fair judgment. So the authors, their suspicions piqued, used a nationally representative household survey to calculate the actual unemployment rate. Unsurprisingly, it turns out to differ substantially from 4.1 percent. The chart above (modified from the paper to show the two series more clearly) shows data through 2009, which is as far as the household series goes. The actual unemployment rate has been above 10 percent ever since 2002, and is likely even higher than that now, given the sputtering economic problems in China.

As of 2009, unemployment was highest among young, non-college educated women (about 17 percent). It's lowest among older college-educated men and women. But college is no longer a job guarantee for the young: the unemployment rate among young, college-educated men is 8 percent. Among women it's about 10 percent.

"Keep an eye on China and don’t be surprised by the unexpected," says Alex Tabarrok. "In China it’s not just the unemployment rate that is more volatile than it appears."

## In Shocking News, Scott Walker's Health Care Plan Screws the Poor

| Wed Aug. 19, 2015 11:08 AM EDT

This is going to be the most anticlimactic blog post ever, but can you guess how Scott Walker's health care plan compares to Obamacare for the poor? And how it compares for the upper middle class and the wealthy?

Damn. You guessed. But just to make it official, here are a couple of charts that show how the subsidies in the two plans compare at different income levels. I used the Kaiser calculator to estimate Obamacare subsidies and Walker's written document to calculate tax credits under his plan. The chart on the left shows a 3-person family with 30-year-old parents. The chart on the right shows the same thing with older parents.

And have no fear: I chose \$30,000 as the minimum income level because most families below that level qualify for Medicaid. And you guessed it: Walker's plan slashes Medicaid too. So the poor and the working class get screwed by Walker no matter what their income level is.