Kevin Drum

Healthcare and Me (And You)

| Tue May. 26, 2009 6:20 PM PDT

Over at the Washington Monthly, Jonathan Gruber writes that universal healthcare would create more fluid job markets and spur entrepreneurship:

The main reason for this is a phenomenon known as "job lock," a term coined during the last round of debate over universal health coverage in the early 1990s. Job lock refers to the fact that workers are often unwilling to leave a current job that provides health insurance for another position that might not, even if they would be more productive in that other position. This is because employer-provided insurance is traditionally the only reliable form of fairly priced private insurance coverage available in the U.S.

....[Alison] Wellington estimates that universal health care would therefore likely increase the share of workers who are self-employed (currently about 10 percent of the workforce) by another 2 percent or more. A system that provides universal access to health insurance coverage, then, is far more likely to promote entrepreneurship than one in which would-be innovators remain tied to corporate cubicles for fear of losing their family’s access to affordable health care.

That's true.  Take me.  Suppose I wanted to quit my job and write a book.  The first step would be for me to have a book in mind that I wanted to write — which, unfortunately, I don't.  But say I did.  Would I leave MoJo to do it?

Probably not.  I've never shopped around for an individual healthcare policy, but my guess is that despite my general good health, I'd get turned down simply for being over 50 and having high cholesterol.  And without health insurance, I really couldn't afford the risk of being self-employed.

It's true that this is a moot point until I have a burning desire to spend full time writing a book, but you never know.  Maybe someday I will.  It doesn't matter, though, because that book will probably stay unwritten no matter how good it might be, since I'd have to give up my health coverage to write it.  Pretty stupid system we have, isn't it?

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Gay Marriage in California

| Tue May. 26, 2009 11:19 AM PDT

The latest on Prop 8 from the LA Times:

The California Supreme Court today upheld Proposition 8's ban on same-sex marriage but also ruled that gay couples who wed before the election will continue to be married under state law.

....Although the court split 6-1 on the constitutionality of Proposition 8, the justices were unanimous in deciding to keep intact the marriages of as many as 18,000 gay couples who exchanged vows before the election. The marriages began last June, after a 4-3 state high court ruling striking down the marriage ban last May.

This doesn't surprise me on either count.  The argument that Prop 8 was a constitutional "revision" requiring a two-thirds vote, not a constitutional amendment requiring a majority vote, never seemed legally defensible.  At the same time, all the marriages performed prior to Prop 8 were as legal as church on Sunday.  I don't know if even an initiative could retroactively annul them, but at the very least it would need to do so specifically and directly, which Prop 8 didn't.

But it might soon be moot anyway.  Prop 8 passed by only a bare majority, and public sentiment is continuing to change.  An initiative to legalize gay marriage might well pass in 2010, and if it doesn't it certainly will by 2012 or 2014 at the latest.  Time is on the side of the good guys.

Waiting for the Meltdown

| Tue May. 26, 2009 9:57 AM PDT

Leaving aside Jonah Goldberg's contention that Sonia Sotomayor is "the most left-leaning Hispanic possible/confirmable" Supreme Court nomination, this actually strikes me as an interesting point:

If Obama picked a centrist, opposition would have been principled, but pro-forma. By picking Sotomayor, conservatives will no doubt demand full-throated opposition, which plays perfectly to Obama's purposes (so long as he doesn't dump Sotomayor for some, any, reason). I don't think this was the key factor in his decision, but you can be sure the White House will love casting conservative opposition in those terms.

I also doubt that this was a key factor, but it wouldn't surprise me if a few people in the West Wing did indeed figure that this was a nice bonus.  The wingnut wing of the Republican Party seems hugely energized by Sotomayor's nomination and ready to go ballistic over it.  This might be good for them in the short term (it's a nice fundraising opportunity, brings internal factions together, etc.), but Obama, as usual, is looking a few moves ahead and understands that a shrieking meltdown from the usual suspects will mostly help the liberal cause: the American public already thinks the conservative rump running the Republican Party is crazy, after all, and this will help cast that feeling in stone.  Most normal people think empathy is a good thing, not a code word for the dictatorship of the proletariat.

And Obama?  He gets to be the calm at the center of the storm, providing his usual striking contrast to the seething stew of preachers, radio screamers, and Gingrich acolytes who will be making themselves ever more tiresome to Mr. and Mrs. Heartland with their ranting jeremiads.  I don't blame conservatives for opposing Sotomayor even though they know that she'd only be replaced by someone equally liberal if they did somehow manage to derail her (liberals did the same with Roberts and Alito, after all), but if they're smart they'll realize that the usual shriekfest is playing right into Obama's hands.

But they're not smart, are they?

North Korea

| Tue May. 26, 2009 8:45 AM PDT

Dan Drezner remarks on the DPRK's recent nuclear test:

I think the Obama administration has come up with a novel way of dealing with the North Koreans — get everyone to talk about something else.

That is novel — at least compared to the nonsense normally spewed by the Bush administration every time Kim Jong-il decided to yank their chains.  And in any case, if meaningless bluster isn't your thing, there aren't a whole lot of choices available:

The alternatives to the repeated short-term carrot strategy are even less appealing.  There is no viable military option unless everyone is comfortable with the destruction of Seoul; there is no viable sanctions option unless China decides to cut off the energy tap, and they'll only do this if they're sure it won't lead to a stream of North Korea refugees entering Manchuria.

In other words, there's really not a lot we can do about this unless China, against all odds, (a) finally tires of Pyongyang's antics, (b) beefs up its suprisingly porous border with North Korea, and (c) decides to cut off aid.  There's some evidence of (a), but not much for anything else.

The Sotomayor Nomination

| Tue May. 26, 2009 7:55 AM PDT

Jack Balkin thinks that Barack Obama's nomination of Sonia Sotomayor to the Supreme Court is likely to go smoothly:

Senators are just as aware of the politics of appointments as Obama is.  Obama will likely need one or two Republicans to avoid any threat of a fillibuster; a candidate who appeals to important constituencies that Republicans also need will be harder to oppose and can help provide the 60th vote. Also helpful may be the fact that Sotomayor was first appointed to the bench by a Republican and is being positioned as a moderate or pragmatic liberal. In this respect, the careful positioning of Sotomayor as not the most liberal candidate Obama was considering helps to make her confirmation easier and also helps establish Obama's own image as a non-doctrinaire pragmatist.

But if you prefer to be prepared for the worst, Tom Goldstein at ScotusBlog outlines the most likely lines of attack against her:

Opponents’ first claim — likely stated obliquely and only on background — will be that Judge Sotomayor is not smart enough for the job....The second claim – and this one will be front and center – will be the classic resort to ideology:  that Judge Sotomayor is a liberal ideologue and “judicial activist.”....The third claim — related to the second — will be that Judge Sotomayor is unprincipled or dismissive of positions with which she disagrees....Finally, critics will characterize her as gruff and impersonable, relying on excerpts from oral arguments and anonymous criticisms in the Almanac of the Federal Judiciary.

There's more at both links.  In the end, I don't think Sotomayor will have any real trouble winning confirmation.

Friday Cat Blogging - 22 May 2009

| Fri May. 22, 2009 12:13 PM PDT

This week we have file photos.  The picture of Domino on the left was taken right after the Showdown on the Stairway™ that I featured here last week.  The picture of Inkblot on the right was part of the 10th birthday series of studio portraits that I took a couple of weeks ago.  (Note: "studio" = backyard.)  But hey — they're both good pictures, so why waste them?

Have a nice Memorial Day weekend, everyone.  Don't forget to give your pets an extra treat on Monday.

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A Taxonomy of Consumer Credit

| Fri May. 22, 2009 11:52 AM PDT

Are credit cards, generally, good things?  Steve Waldman says we have to distinguish between two benefits they provide.  The first is transactional credit, which is simply the convenience of using a card to buy stuff instead of hauling around cash or checks.  This type of credit gets paid off every month.  The second is revolving credit, which is when you deliberately buy more than you can afford with the intention of paying off the charges over time.  It's essentially a preapproved loan available anytime you have an emergency — or merely an irresistable urge to buy a pair of shoes you don't happen to have the money for right now.

Steve is right that transactional credit is basically beneficial, while revolving credit isn't.  In moderation it's fine, but human nature being what it is, it's often not used in moderation, which suggests it might be a good idea to limit its availability.  I'm tentatively on board with this so far, but then things go off the rails:

In fact, while transactional credit provision is a perfectly good business, it might be reasonable for the state to offer basic transactional credit as a public good. This would be very simple to do. Every adult would be offered a Treasury Express card, which would have, say, a $1000 limit. Balances would be payable in full monthly. The only penalty for nonpayment would be denial of access of further credit, both by the government and by private creditors. (Private creditors would be expected to inquire whether a person is in arrears on their public card when making credit decisions, but would not be permitted to obtain or retain historical information. Nonpayment of public advances would not constitute default, but the exercise of an explicit forbearance option in exchange for denial of further credit.) Unpaid balances would be forgiven automatically after a period of five years. No interest would ever be charged.

Let's think about how this would work. For most people, access to various forms credit — transactional credit, auto and home loans, unsecured revolving credit, whatever — is worth more than $200 per year. Although people might occasionally fall behind, for the most part borrowers would pay off their government cards, simply because convenient participation in the economy is worth more than a once-in-five-years $1K windfall. However, people with no savings and irregular income (for whom transactional credit is a misnomer, since they haven't the capacity to pay) might well take the money and run. The terms of the deal amount to a very small transfer program to the marginal and disorganized, and a ubiquitous form of currency for everyone else. People with higher incomes would want more transactional credit, or revolving credit, which they would acquire from the private sector.

I don't really get this.  We already have "Treasury Express" cards: this is basically what debit cards are, and they provide the same benefits of transactional credit that regular Visas or Mastercards do.  Why do we need the government for that?

That leaves us with the problem of limiting revolving credit, which is the same problem we have now.  Do we need firmer rules on interest rates, fees, and penalties?  Better bankruptcy protection?  Bans on things like universal default?  An end to tricks and gimmicks and fine-print-laden marketing come-ons?  More sensible ways of setting credit limits?  Maybe.  Probably.  But unless Steve is suggesting that we essentially ban credit cards entirely — and then create some kind of federal mega-authority to limit every other kind of consumer credit too — those are all the same issues we have now.  I'm not really sure what his proposal would accomplish.

Paying for College

| Fri May. 22, 2009 10:18 AM PDT

Robert Reich points out today that the average college graduate today has to repay $22,000 in student loans, a number that's like to continue skyrocketing as university costs go up and state funding goes down.  This forces a lot of grads to shun good works and instead head straight to the highest paying job they can find:

So here's my proposal: Any college student can get full funding from the government, with only one string attached. Once they've graduated and are in the work force, they pay 10 percent of their incomes for the first 10 years of full-time work into the same government fund they drew on to finance their college education.

Now maybe that formula will need to be adjusted up or down to cover all the costs. And surely some people will game the system as they do every other one. But the essential idea is that linking the costs of college to subsequent wages makes college affordable to everyone.

I kind of like this idea.  Maybe instead of a flat percentage it's a sliding scale that starts at 2% and goes up to 20% to take account of rising salaries as grads gain job experience.  Or something.  Sure, you could still game the system, but you'd have to pretty damn dedicated to avoid a job initially because of a measly 2% charge and then keep it up for ten years.

The counterargument, of course, is that college is valuable.  It generally attracts people who already have a lot of advantages, and then provides them with a degree that enhances their earning power even more.  Why should they be subsidized at all?

It's a compelling argument.  In the end, though, I think society benefits from attracting as many kids into college as possible.  I'm no fan of the proposition that we should try to send everyone to college, but I do think we benefit by making it as attractive as possible to the largest feasible set of students who can take advantage it.  Keeping the cost manageable is part of that.

Windfall Profits

| Fri May. 22, 2009 9:56 AM PDT

I've written before about the virtue of auctioning off 100% of the emission permits in any cap-and-trade program.  The problem with allocating permits to electric utilities for free is that energy prices will go up anyway and the utilities will reap a windfall profit.  The explanation for how this happens is a little convoluted, but it's very real: utilities in Europe profited handsomely from the first botched phase of their cap-and-trade system.

Several readers, however, have emailed to say that since most utilities in the U.S. are regulated entities, they wouldn't be allowed to raise their prices unfairly.  And that's a good point.  In fact, at one time I had the idea of writing a piece about how a broad emissions program like cap-and-trade (or a carbon tax) would intersect with the fantastically complex, interlocking set of state, local, and federal regulations that govern most power utilities in the United States, but I gave up pretty quickly.  It didn't take long to figure out that I'd probably have to study the subject for years to have any real understanding of how it works.

Luckily, however, Peter Fox-Penner and Marc Chupka, who already have the expertise, have a guest post over at ClimateProgress on exactly this subject.  Their conclusion is that Waxman-Markey does a pretty good job of ensuring that no one is going to get a windfall profit from free emission permits:

The key to W-M’s success in this area is that it is careful to give the overwhelming majority of free utility allowances to the electric or gas retail distribution company, not the generator or the entity that sells wholesale gas or power itself....State regulators, city managers, or coop management boards — who have full access to the accounts of distributors — set distribution charges so as to manage the profits earned by the distributor.  This is a key point.  Unlike some other parts of the utility industry, distributor profits are strictly controlled.

....Each state regulator or manager of a coop or municipal utility must conduct a proceeding to determine how the value of allowances will be treated — for example some of the proceeds might help fund energy efficiency if the regulators decide that represented benefits to retail customers.  But, W-M does not allow the size of individual customer rebates to reflect that customer’s metered energy consumption.

With these provisions, it will be awfully hard for any utility to harvest a windfall from the free allocations — especially a shareholder-owned utility.  Yes, the free allowances given to the distribution utility will be worth a lot.  But the law is pretty clear that the benefits of receiving the free allowance go to the utility’s customers, not their shareholders.

....The important takeaway is that material windfalls are about as likely as the Washington Nationals winning the pennant this year.

There's much more at the link, including a Q&A, if you want to dive into this more deeply.  And I'll confess to some lingering skepticism, since this depends largely on local regulatory authorities keeping things on the straight and narrow.  Still, this is one of those complex areas that I'm just flatly unqualified to judge, so I'm outsourcing my brain a bit.  Basically, if Joe Romm vouches for these guys and their analysis, then I'm ready to believe them unless some contrary evidence comes along.  I'm still not happy with the vast number of permits being allocated under Waxman-Markey, but (a) I understand the political realities that forced this to happen and (b) it sounds like it's not quite as bad as I thought.

The Guantanamo Quandary

| Fri May. 22, 2009 9:12 AM PDT

Here is Barack Obama yesterday on what he plans to do with enemy combatants currently held at the military prison in Guantanamo:

First, whenever feasible, we will try those who have violated American criminal laws in federal courts....The second category of cases involves detainees who violate the laws of war and are therefore best tried through military commissions....The third category of detainees includes those who have been ordered released by the courts....The fourth category of cases involves detainees who we have determined can be transferred safely to another country.

....Now, finally, there remains the question of detainees at Guantanamo who cannot be prosecuted yet who pose a clear danger to the American people....Examples of that threat include people who've received extensive explosives training at al Qaeda training camps, or commanded Taliban troops in battle, or expressed their allegiance to Osama bin Laden, or otherwise made it clear that they want to kill Americans. These are people who, in effect, remain at war with the United States.

Let me repeat: I am not going to release individuals who endanger the American people. Al Qaeda terrorists and their affiliates are at war with the United States, and those that we capture -- like other prisoners of war -- must be prevented from attacking us again. Having said that, we must recognize that these detention policies cannot be unbounded. They can't be based simply on what I or the executive branch decide alone. That's why my administration has begun to reshape the standards that apply to ensure that they are in line with the rule of law. We must have clear, defensible, and lawful standards for those who fall into this category. We must have fair procedures so that we don't make mistakes. We must have a thorough process of periodic review, so that any prolonged detention is carefully evaluated and justified.

Hilzoy is not pleased:

No. Wrong answer.

If we don't have enough evidence to charge someone with a crime, we don't have enough evidence to hold them. Period.

The power to detain people without filing criminal charges against them is a dictatorial power. It is inherently arbitrary. What is it that they are supposed to have done? If it is not a crime, why on earth not make it one? If it is a crime, and we have evidence that this person committed it, but that evidence was extracted under torture, then perhaps we need to remind ourselves of the fact that torture is unreliable. If we just don't have enough evidence, that's a problem, but it's also a problem with detaining them in the first place.

I appreciate the outrage, but this is a genuinely knotty problem.  It was knotty under Bush and it remains knotty under Obama.  For various reasons, some defensible and some not, Obama is right: there are almost certainly a small number of Guantanamo detainees who are (a) unquestionably terrorists and unquestionably still dedicated to fighting the United States, but (b) impossible to convict in any kind of normal proceeding.

At the same time, they aren't American citizens.  They were captured on a foreign battlefield, not U.S. soil.  They are, essentially if not legally, prisoners of war in a war with no end.  So what do we do?

There is no president of the United States who has ever lived who would release such people.  There's no president who would survive doing so even if he did.  It's an impossible situation.

So what do we do?  This is a case where, unfortunately, I think outrage is too cheap and too easy.  We're still left with the question: what do we do?

UPDATE: Glenn Greenwald makes the argument against Obama's proposal here.  Big Tent Democrat responds here.