Kevin Drum

Did the Housing Bubble Also Spur a Microwave Oven Bubble?

| Wed Mar. 26, 2014 8:50 AM PDT

A few days ago, when I read this piece in Quartz about the decline in microwave oven sales, I was suspicious. "A shift in eating habits—which favors freshness and quality over speed and convenience—has left a growing number of microwaves dormant on kitchen counters," said the author.

Hmmm. Maybe. But although there might well have been a trend toward freshness and quality among the kind of people who read Quartz, I'm less convinced that this is true of the nation at large. The frozen pizza section of my supermarket sure doesn't seem to have shrunk lately. Still, I didn't really have a good explanation for the decline in microwave sales. But Megan McArdle does:

So people are shifting toward built-in microwaves — and sales of microwaves peaked in 2006. This doesn't suggest a trend toward fresher food to me; it suggests that the housing bubble produced a surge in demand for microwaves, as contractors and homebuilders installed them above half the ovens in the U.S. When the housing bubble popped, demand sank precipitously. Because people replace built-in appliances much less often than they do the ones on their countertop, it's taking a long time to recover.

I don't know if this is the explanation either, but it sounds fairly plausible as at least part of the explanation. Generally speaking, I'd add that microwave technology hasn't improved or changed a lot in the past decade, so most of us don't have much incentive to buy a new one as long as the old one is still working. After I read the Quartz piece, for example, I tried to think of what I use our microwave for, and I only came up with four things: melting butter, pre-cooking potatoes, heating pasta sauce, and reheating leftovers.1 I remember that a while ago Marian and I were thinking about getting a new one for some reason (stuck door latch?), but ended up not bothering. It just wasn't ever urgent enough to get us truly motivated to shop around.

1Microwave popcorn is an invention of Satan. It will never be found on my shelves.

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Administration Announces Yet Another Obamacare Extension

| Tue Mar. 25, 2014 6:20 PM PDT

This is about the least surprising announcement of the week:

The Obama administration has decided to give extra time to Americans who say that they are unable to enroll in health-care plans through the federal insurance marketplace by the March 31 deadline.

Federal officials confirmed Tuesday evening that all consumers who have begun to apply for coverage on, but who do not finish by Monday, will have until about mid-April to ask for an extension. Under the new rules, people will be able to qualify for an extension by checking a blue box on to indicate that they tried to enroll before the deadline. This method will rely on an honor system; the government will not try to determine whether the person is telling the truth.

I suppose conservatives are going to throw their usual fit over this, but it's neither unexpected nor very serious. Unlike the renewal delay and the employer mandate delay, which are both calculatedly political and of long duration, this one is merely an attempt to allow as many people as possible to enroll. It's pretty justifiable, and it only extends the deadline by a few weeks. Nothing to get hot and bothered about.

Today I Am Showered With Riches

| Tue Mar. 25, 2014 3:51 PM PDT

I'm rich! This is from today's mailbag:

This is all thanks to the price-fixing suit against Apple and five big book publishers. The timing is kind of bad, though: I've been buying my books from Barnes & Noble lately because the Kindle app on Windows is kind of sucky. On the other hand, my Windows tablet mysteriously died last night, so for now I'm back to my old Android tab anyway. So maybe the timing is OK. I guess it depends on how quickly I recover from my pleurisy and get down to the mall to get my Windows tab replaced. Seems like everything is breaking these days.

WEDNESDAY MORNING UPDATE: My Dell Venue Windows tablet suddenly came back to life after two days of not responding to anything. That's just damn peculiar.

The Hobby Lobby Case Probably Doesn't Depend Much on What the Law Says

| Tue Mar. 25, 2014 11:34 AM PDT

So the Hobby Lobby case was heard today, the latest in a long string of challenges to Obamacare. (Next up: whether the law allows subsidies only for policies bought on state exchanges, not on the federal exchange.) In short, the question in this case is whether Obamacare's requirement that insurance policies cover contraception is legal.

I haven't written about it before because I'm frankly not sure what to say. As with so many other recent cases, the law seems pretty clear to me. There's no precedent for corporations having rights of religious freedom in the first place, and that alone seems like enough to toss the case out. But even if they do, the plaintiffs have to show that the contraception requirement imposes a "substantial burden" on them. Their argument is that if they don't comply, they'll get hit by substantial penalties. But that's ridiculous. The question is whether complying with the law is a substantial burden. In other words, does insurance coverage that includes contraception cost them more than insurance coverage without it? The evidence on this is fuzzy, but it seems to be fuzzy only on the question of whether there's any cost at all. Even if there is, it appears to be small. There's simply no serious evidence that the cost of complying with the law is large in financial terms, and it's obviously not large in operational terms since Hobby Lobby literally has to do nothing except continue buying insurance from the same carrier they've always bought it from.1

So that's where we stand. There's no precedent in the past two centuries that gives corporations First Amendment religious freedom rights. And as near as I can tell, the contraception mandate imposes, at most, only a tiny burden on Hobby Lobby.

But none of that seems to matter. It doesn't matter that I'm not a lawyer and might be wrong about all this. Others with the intellectual chops to know this stuff have made similar arguments in much more detail. And anyway, I thought the same thing about the original Obamacare case. It simply didn't seem legally tenable. But it almost carried the day. A frail argument, invented a couple of years earlier and with exactly zero precedent behind it, came within a whisker of getting five votes on the Supreme Court.

This sure seems to be a similar case. The law doesn't really matter. Four justices just don't like the Obamacare mandate and will vote anywhere and at anytime to strike it down. Four justices will vote to uphold the mandate. Anthony Kennedy will provide the swing vote. It's also possible, I suppose, that John Roberts will vote to uphold the mandate, simply on the principle that having upheld Obamacare once before on a slim technicality, he's not going to relitigate it over and over on increasingly trivial details.

So....I don't know. In cases like this, the legal arguments seem like little more than window dressing. Everyone knows the outcome they want, and they tailor their opinions to produce those outcomes. Maybe that's too cynical. I guess we'll find out next June.

1Oddly enough, I don't really buy the contention that the burden is small because, after all, Hobby Lobby can simply choose not to provide health insurance at all. Technically, this might be a good argument, but it doesn't really feel right to me. If the price of complying with the law is eliminating health insurance for Hobby Lobby's entire employee base, that sure seems pretty substantial to me, even if the federal government isn't directly coercing its choices one way or the other.

Incompetent Scheming Is Just as Bad As Competent Scheming

| Tue Mar. 25, 2014 9:58 AM PDT

A couple of months ago I wrote about new evidence suggesting that several big Silicon Valley firms had explicitly agreed not to hire away each others' workers. This case has now gotten more attention, and Tyler Cowen comments about it:

I would suggest caution in interpreting this event.  For one thing, we don’t know how effective this monopsonistic cartel turned out to be.  We do know that wages for successful employees in this sector are high and rising.  Many a collusive agreement has fallen apart once one or two firms decide to break ranks, as they usually do. [More follows about how this might play out in the real world]

Cowen is an economist, and I don't want to knock him for doing some economic analysis. Still, this is the kind of thing that gives economics a bad name. Who cares if this scheme was effective? Maybe it was the Keystone Kops version of collusion. What matters is merely that they tried. These companies felt perfectly justified in conspiring to hold down wages in a tight labor market. Like so many titans of capitalism, they think free markets are great just as long as workers who are in high demand don't get any fancy ideas about what that means.

Throw the book at them. If their scheme didn't work, it just means they're incompetent plotters. But they're plotters nonetheless.

People Who Know the Koch Brothers Sure Don't Like Them Much

| Tue Mar. 25, 2014 9:37 AM PDT

This is apropos of nothing in particular, but Dave Weigel draws my attention today to a new GWU/Battleground poll that gives us approval/disapproval ratings for an eclectic bunch of people that happens to include the Koch brothers. It turns out that they're more unpopular than anyone else on the list. Weigel comments on what this means for the Democrats' anti-Koch offensive:

I generally agree that the Koch focus (Kochus?) is a poor substitute for a positive Democratic agenda, if such a thing is possible, but I don't see anything in the poll that contradicts the Democratic strategy. Charles and David Koch never, ever do TV interviews, choosing to exercise their influence behind the scenes of political groups, and they're known by two out of five Americans?

Given their low profile, you'd hardly expect the Kochs to be a household name. And yet, nearly half of all Americans have heard of them, and among those who are in the know they're very unpopular. So maybe the Democratic strategy of personalizing the robber-baron right by demonizing the Kochs is paying off. Give it another few months and maybe the Kochs will be a household name.

On the other hand, keep in mind how unreliable these polls are. It's possible that half the people who claim to have heard of the Koch brothers think they're the rap duo who performed at the Grammys a few weeks ago. Maybe if Macklemore and Ryan Lewis were less annoying, the Kochs would have done better in this poll.

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AFP Changes Obamacare Message, Still Gets It Wrong

| Tue Mar. 25, 2014 9:00 AM PDT

The Koch-funded AFP has spent millions of dollars running ads that star real Americans who have been hurt by Obamacare. Each one has been systematically debunked. So AFP switched gears. In their latest ad, instead of focusing on a single case, they simply make the broad charge that "millions of people have lost their health insurance, millions of people can’t see their own doctors, and millions are paying more and getting less." Take that, meddling fact checkers!

So Glenn Kessler took a look. Verdict: when you make broad statements, it is indeed harder to demonstrate that they're concretely wrong. After all, some people have lost their health insurance, some people can’t see their own doctors, and some people are paying more and getting less. Nonetheless, Kessler concludes that AFP's broad charges aren't much more defensible than their bogus real Americans. Two Pinocchios.

Obama Proposes to End NSA Phone Records Program

| Mon Mar. 24, 2014 10:40 PM PDT

After reviewing the NSA's bulk collection of phone metadata, President Obama plans to recommend that the program be terminated completely:

Under the proposal, they said, the N.S.A. would end its systematic collection of data about Americans’ calling habits. The bulk records would stay in the hands of phone companies, which would not be required to retain the data for any longer than they normally would. And the N.S.A. could obtain specific records only with permission from a judge, using a new kind of court order.

....The new type of surveillance court orders envisioned by the administration would require phone companies to swiftly provide records in a technologically compatible data format, including making available, on a continuing basis, data about any new calls placed or received after the order is received, the officials said.

They would also allow the government to swiftly seek related records for callers up to two phone calls, or “hops,” removed from the number that has come under suspicion, even if those callers are customers of other companies.

If this is right, the NSA's data collection would end, and phone companies would do nothing differently from what they do now except that they'd have to provide metadata in a specific format when they get a court order. That's hardly burdensome to the telcos, nor does it infringe civil liberties in any noticeable way.

This is better than I expected. But I wonder what Congress will do with the proposal. Will Republicans go along? Or, after months of griping about the NSA program—remember, eight months ago 94 of them voted to defund it—will they decide that they'd rather accuse the president of endangering the American public by ending a vital program? It's an election year, after all. Decisions, decisions....

People Who Are Still Uninsured Aren't Very Happy With Obamacare

| Mon Mar. 24, 2014 10:19 PM PDT

Patrick Brennan notes an interesting finding from last month's Kaiser tracking poll on health care reform. Over the last few months, unfavorable views of Obamacare have risen thanks to the rocky rollout, but they've risen only slightly. This is true for all races, ages, genders, income levels, and party IDs.

But there's one specific demographic where unfavorable views have gone up dramatically: the uninsured. Roughly speaking, unfavorable views among the uninsured have increased by about 20 percentage points. Here's the chart:

Brennan takes a crack at understanding what's going on:

For one, they’re more likely to be interacting with the law: Navigators are trying to reach them; some of them have probably been on the individual market at times, which only a limited percentage of Americans are, and are now seeing themselves priced out of coverage; others are perhaps just disappointed with what the law has to offer, or that its plans aren’t free, period. Some of them could be people who would have been eligible for Medicaid if their state had expanded it, and now see people making a little more money getting heavily subsidized insurance while they’re left out in the cold. As Jason Sorens points out on Twitter, it’s possible that we’re seeing a selection effect — people who like the ACA and for whom it works well are now leaving the ranks of the uninsured. We’ll have to see if this trend holds up.

My guess is that this is mostly a combination of a selection effect and an interaction effect. Right now, lots of people have signed up for coverage and are satisfied with it. These folks are no longer uninsured, so they fall out of the survey. The only people left are ones who, after five months, still don't have coverage. And there's obviously a reason for that: maybe the website didn't work and they gave up. Or even with subsidies the price was too high. Or they thought they'd qualify, but for some reason they didn't.

In any case,

[Whoops. Had to take a short break for a visit to the ER. Turns out I have pleurisy, which somehow sounds rather Dickensian to me. Hurts like a sonofabitch. Plus the ER nurse gave me a shot, and now my left arm hurts too. Recommended treatment: lots of Advil for the next few days.]

Anyway. Where was I? Oh yes: In any case, once lots of satisfied folks become insured, then by definition the pool of uninsured becomes less satisfied. The ones who thought Obamacare would help them and are now disappointed are a bigger fraction of the total. Most likely, that's all that's going on here. But it's probably worth keeping an eye on anyway.

Russia Is Not Exactly a Big Winner in the Crimean Dispute

| Mon Mar. 24, 2014 2:36 PM PDT

So how are things going on the anti-Russia front? A quick recap:

Last week President Obama announced sanctions on high-ranking Russians. He also signed an executive order allowing him to impose sanctions on Russian industry. France has threatened to cancel the sale of two warships to the Russian navy. The G8 has effectively kicked Russia out of the club. Ukraine has cut off electricity to Crimea. The countries on Russia's borders are increasingly united against their next-door neighbor. The Russian economy, hardly robust in the first place, has already begun to tank. Ukraine has agreed to sign an association agreement with the European Union, precisely the action that Vladimir Putin so desperately tried to head off last year—and which triggered the Maidan protests that brought down the Ukrainian government. Today, European leaders made it clear that further economic sanctions against Russia were likely in the near future. And that's just so far.

And what has Russia gotten in return? Ten thousand square miles of territory that, nationalistic pride aside, mostly represents a political and economic drain on the state. That Putin sure is a master geopolitical strategist, isn't he?