Friday Cat Blogging - 22 July 2016

Somebody pointed out last week that we haven't seen Hopper for a while. Is that true? Maybe! So here she is, in all her green-eyed glory.

Have a nice weekend, everyone. We deserve one after four days of the Republican convention.

I work for a 501(c)(3) nonprofit, so I'm keenly aware that I'm not allowed to endorse candidates. That means y'all will just have to guess who I'm voting for in November. I apologize for having to keep you in such suspense.

Until recently, though, I had no idea why non-profits weren't allowed to endorse candidates. Then I began hearing about the "Johnson Amendment" from Donald Trump. Obviously someone put a bug in his ear, and he's been repeating it like a mantra for weeks now. So what's this all about?

The “Johnson Amendment,” as the 1954 law is often called, is a U.S. tax code rule preventing tax-exempt organizations, such as churches and educational institutions, from endorsing political candidates. At the time, then-Senator Lyndon B. Johnson was running for re-election, and he and other members of Congress pushed the amendment to stop support for their political opponents’ campaigns, George Washington University law professor Robert Tuttle has explained. Many have also argued the amendment served to stop black churches from organizing to support the civil rights movement.

“All section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office,” the IRS explains of the rule on its website. “Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.”

There you go. So why has Trump suddenly decided this is a threat to democracy? You can probably guess: because conservative churches want to endorse Republican candidates and give them lots of money without losing their tax-exempt status. Jerry Falwell Jr. explains:

In recent years, religious liberty group the Alliance Defending Freedom has advocated for its repeal, arguing that the law is unconstitutional and lets the IRS “tell pastors what they can and cannot preach,” and “aims to censor your sermon.”...“This is something that could make a difference with Christian voters in the fall,” Falwell says. “It is almost as important for Christians as the appointment of Supreme Court justices.”

My first thought about this is that it would provide yet another avenue for big money in politics. I can imagine rich donors setting up, say, the Church of the Divine Supply Siders and then funneling millions of dollars in dark money through it. Fun!

On the other hand, in a world of Super PACs and Citizens United, why bother? They can already do this easily enough, just as churches can set up "action committees" that are legally separate and can endorse away.

I'd genuinely like to hear more about this. Within whatever framework of campaign finance law we happen to have, is there any special reason that nonprofits shouldn't be able to endorse, organize, and spend money on behalf of a candidate? I have to admit that no really good reason comes to mind. Am I missing something?

Did you miss Donald Trump's post-convention press conference? No worries! Twitter has you covered:

The latest survey of purchasing managers suggests bad news for Britain:

The U.K. economy likely contracted in July as businesses responded to the uncertainty created by a vote to leave the European Union by cutting output and payrolls, according to a survey of purchasing managers at manufacturers and service providers....The U.K. PMI is a measure of activity based on monthly questioning of 600 manufacturing companies and 650 service providers since 1998. It has a close correlation with official measures of economic growth.

....Markit said the measure fell to 47.7 in July from 52.4 in June, the sharpest one-month drop on record. A reading below 50.0 signals a decline in activity, and a reading above that level indicates an expansion.

Is this a temporary dip, or a sign of things to come? Obviously we don't know yet. But that's a helluva big drop for a single month.

Republican Presidential Candidate Donald Trump, speaks during the final day of the Republican National Convention in Cleveland, Thursday, July 21, 2016.

It's over. Finally. Here are today's five best moments:

  • Trump says blandly that he might not come to the aid of our NATO partners in the Baltics if Russia invades them. Mitch McConnell chalks this up to a "rookie mistake." Newt Gringrich won't even go that far: "Estonia is in the suburbs of St. Petersburg," he says. "I'm not sure I would risk nuclear war." How confidence inspiring.
  • Trump's speech leaks hours early, upstaging the evening speakers. It is a stunningly dystopian description of a country in terminal decline, possibly the gloomiest speech ever given by a presidential contender.
  • Jerry Falwell Jr. passes along a strained joke his father told him. Dad was musing about being interviewed by Chelsea Clinton, who asked him what the biggest threats to the country are. He answered "Osama, Obama, and yo mama." This went over well on the convention floor.
  • Trump pal Tom Barrack highlights one of the worst deals Trump ever made: overpaying for the Plaza Hotel and then being forced to sell it at a loss a few years later. This is supposedly an example of what a great dealmaker Trump is.
  • Trump tells America: "I am your voice." And: "Nobody knows the system better than me, which is why I alone can fix it." If this reminds you of the kind of thing a cult leader might say, you're not alone. And the whole speech was spat out with a delivery that was scarily reminiscent of Mussolini or Fidel Castro.

By the end of Trump's speech, his campaign slogan for the next three months was clear: "Make America Fear Again." Buckle up.

No, Police Fatalities Are Not Going Up

Here's another chart to prepare you for Donald Trump's speech tonight. It shows the number of police fatalities since the violent crime peak of 1993. For 2016, I've extrapolated from the number of fatalities through today. As you can see, there's nothing scary here. The number is down from two decades ago and basically flat over the five years.

Tom Barrack is now telling us about the time he sold Trump the Plaza Hotel. "He played me like a Steinway piano," Barrack said. Trump was a steely-eyed negotiator, a tiger in the jungle.

Who is he kidding? The Plaza Hotel was a disastrous deal—for Trump. Trump went with his gut and overpaid enormously. He bought it for $407 million—far more than it was worth at the time—spent over $50 million in renovations, and then, when he was going through bankruptcy proceedings, was forced to sell it in a deal that valued the hotel at $325 million. Barrack and his boss took Trump to the cleaners.

What's more, Barrack was highlighting the absolute worst part of this deal: that Trump was so eager to get the hotel that he agreed to forego normal due diligence and instead allowed Barrack to just give him a list of stuff that needed fixing. It was massive negligence on Trump's part. If Harvard has a list of the worst, laziest deals ever made, this one would make the top ten list.

Yet this is the example they're touting to show what a great businessman Trump is? That takes real balls. It's a testament to the fact that the Trump campaign figures it can just say anything. The Trump hagiography is once again beamed out to millions of people and nobody will ever hold them to account.

Crime Is Down and People Feel Safer

Donald Trump is apparently planning to deliver a hair-raising speech tonight focused on the "crime and violence that today afflicts our nation." According to Trump, homicides are up, Washington DC is a killing zone, police shootings have skyrocketed, and illegal immigrants are "roaming free to threaten peaceful citizens."

Whew. Just to prepare you for all this, here's a chart you've seen many times before showing the rate of violent crime since its peak in 1993:

We don't have official numbers for 2015 yet, and they might show a small uptick. That's the nature of these things. But it's pretty obvious that America is a considerably safer place than it's been in decades.

But as the redoubtable Paul Manafort says, what about how people feel? Do they feel safe? That's a hard question to answer, but Gallup asks it every year. Here's the latest. I've included Excel's trendline just to make it clear which direction this is going:

Bottom line: crime is way down and people feel safer than ever. Try not let Donald scare you too much tonight.

A couple of days ago I mentioned that even if Obamacare premiums increase a fair amount next year, they'll still be way below original projections. An analysis today in Health Affairs confirms this and adds more meat to the story:

Jon Gabel and Stephen Smith of NORC at the University of Chicago conducted the most thorough analyses of how much premiums in the individual market increased between 2009 and 2013....They imply that ACA marketplace premiums for the [second-lowest-cost silver] plan in 2014 came in a remarkable 21 percent lower than average individual market premiums the year prior, or 32 percent lower when accounting for the new plans’ higher actuarial value, even without incorporating likely utilization increases in response to the additional coverage.

....That the ACA might have caused premiums to drop so precipitously when its marketplaces took effect may seem surprising at first — it was to us....However, the premium reductions make more sense upon deeper analysis.

First, even though sicker people were charged higher premiums in the pre-ACA world (and some were denied coverage altogether), many still purchased insurance, but likely at significantly higher rates....Moreover, by creating large premium subsidies and imposing the individual mandate, the ACA may have caused a greater influx of relatively healthy enrollees into the individual market in 2014 and beyond.

....Second, the ACA creates a price-competitive and transparent market structure, where consumers can compare similar health insurance products.

....Third, selling costs are likely to be lower in the ACA marketplaces because of the prohibition on medical underwriting and limited variation in the policies and policy riders that can be offered.

Competition is good. It's what caused the lower prices to begin with, as insurers lowballed their premiums in order to build market share. And it's what keeps prices low as insurers continue to compete on the relatively level playing field of Obamacare.

But competition is tough on the companies doing the competing. Sometimes it causes them to exit a market. Sometimes individual regions can end up with no providers. It's rare, but not impossible. And of course, competition is only possible if there are enough competitors. That's why the Obama administration is opposing the merger of two big insurers—which would leave us with only three big, nationwide health insurance providers. As Adam Smith pointed out a couple of centuries ago, sellers don't like competition. They'd rather merge or collude so they can charge the highest possible prices. But competition is what's made Obamacare work, and maintaining competition is a key part of keeping costs low in the future. Anyone who believes in the free market should want more competition, not less.

Mark Cuban, former Trump supporter, on what he thinks of the guy now:

There's that guy who'll walk into the bar and say anything to get laid That's Donald Trump right now to a T. But it's all of us who are going to get fucked.

Cuban also wonders why none of Trump's business partners are speaking at the convention. "They’re not coming forward to speak. They’re not coming forward to give him money." No they aren't, are they?

As near as I can tell, no one who does business with Trump wants to repeat the experience. Nor does he have any genuine personal friends. He's cordial only as long as you're useful to him. In other words, he's basically a low-grade sociopath. He just doesn't care about people except as markers in whatever game he happens to be playing at the moment.