Kevin Drum

Boehner's First Lawsuit: Obamacare is the Lucky Winner

| Thu Jul. 10, 2014 8:25 PM EDT

I am pleased to report that John Boehner has taken my advice. He introduced a House resolution today that would give him authority to sue the president, and here's what it says:

Resolved, That the Speaker may initiate or intervene in one or more civil actions on behalf of the House of seek appropriate ancillary relief...with respect to implementation of (including a failure to implement) any provision of the Patient Protection and Affordable Care Act....

Blah blah blah.

And just which provision of Obamacare does Boehner plan to target? Here you go:

"In 2013, the president changed the healthcare law without a vote of Congress, effectively creating his own law by literally waiving the employer mandate and the penalties for failing to comply with it," Boehner said in a statement. "That's not the way our system of government was designed to work. No president should have the power to make laws on his or her own."

Well, Obama didn't "literally waive" the employer mandate, he just delayed it for two years. But close enough!

Now, there are two sides to this. On the positive side for Boehner, it's fairly defensible as these things go. It's not a slam dunk, but you can make a decent case that Obama really did overstep the plain text of the law. However, the downside is that Obama probably doesn't care much about this. It's a fairly minor provision of the law, and if he loses the case it doesn't do any serious damage to Obamacare. In fact, the only damage it does is to the small employers who asked for the delay. So really, Boehner is only setting himself up to oppose the interests of small businesses.

But here's the really interesting thing about this: Boehner is suing over a provision of the law that's been delayed until 2016. But a lawsuit like this takes a while. It'll take a while to file the documents, and then a while longer to get on the calendar of a district court. Then another while for a hearing and a ruling, and then yet another while for an appeal. Then yet another while if the White House asks for an en banc review. And then finally yet another while as it goes up to the Supreme Court. How long altogether? I'd guess a minimum of a year and a half, and probably more like two years. So the best case for conservatives is that the Supreme Court takes it up in late 2015. By the time they're ready to rule, it's moot because the mandate has taken effect and Obama is out of office.1

Boehner is smart enough to know all this perfectly well. In other words, he knows that this is purely a symbolic gesture. Not only does Obama not really care much about it, but it's vanishingly unlikely that the Supreme Court will ever hear the case. That makes it an almost perfect piece of theater. Neither side cares much, and it will never be decided. Boehner gets to say he's doing something, Obama gets some mileage out of mocking him, and that's it. The real-world impact is literally zero.

And that might be just what Boehner wants.

1This assumes that any court is willing to grant Boehner standing to sue in the first place.

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Fine. I Retract My Defense of Optics.

| Thu Jul. 10, 2014 5:21 PM EDT

On Wednesday morning, conservatives were all atwitter over the fact that President Obama had been photographed playing pool and drinking a beer the previous night in Denver. A mere thousand miles away, there was a humanitarian crisis on the border! How out of touch can a guy get? Clearly this was Obama's Katrina moment.

This combined two of the right's favorite Obama-era tropes. First, it was about his millionth Katrina moment. Conservatives still can't get it through their heads that George Bush's Katrina moment was never really about those famous photographs of him mugging with a guitar while the levees were being breached in New Orleans and later staring moodily out an airplane window at the flooding below. It was about "heckuva job, Brownie." It was about his casual near-destruction of FEMA over the previous four years. It was about the startling contrast between his laggard response to Katrina and his near-frenetic response to the Terri Schiavo panderfest just a few months earlier. But conservatives simply refuse to believe this. They're convinced it was all about an unfair photographic comparison, and they're determined to make a Democratic president suffer the same fate.

Second, it's become practically a parlor game for conservatives to chastise Obama for engaging in some kind of social activity while there's a serious crisis somewhere. This is an evergreen faux complaint. After all, there's almost always something serious going on somewhere, which means you can always figure out an excuse to haul out this chestnut.

Now, to some extent none of this matters as long as it's just a partisan response from the professional right. But yesterday it metastasized into something more over Obama's answer to a question about why he wasn't heading down to the border to see the refugee crisis for himself. "I'm not interested in photo-ops," he said. "I'm interested in solving a problem." This almost instantly turned into a misquote: "I don't do photo-ops." And with that, the mainstream press started piling on too.

This was, obviously, ridiculous. First of all, Obama didn't say that he doesn't do photo-ops. That would have been idiotic. What he very plainly said was that in this particular case he wasn't interested in doing a photo-op. He had introduced a plan to address the crisis and he was in Texas to discuss it with state officials. That's where he wanted to keep the focus.

And with that, as if to mock me, the whole thing exploded into a moronic national conversation about the optics of shooting pool in Denver but not going to the border to have his photograph taken with wistful-looking Latin American children. This came just a couple of days after I had defended the word optics against Jamison Foser, and plainly Foser had turned out to be right. The mere availability of the word seemed to change the whole tone of the coverage. As Dave Weigel put it, "The president is the star of most D.C. political stories, obviously, so many stories end up being about whether they help or hurt him. The problem is that the press can't be sure if they will, or won't." So they just guess.

Now, I suppose I still have a feeble defense to offer. I did say there were good and bad uses of optics, and this just happened to be one of the bad ones. But the speed with which one photograph and one misquote saturated the punditocracy and morphed into an inane conversation about optics surely makes Foser's case for him.

So I give up. There are still good uses of the word optics, but as long as the press remains so addicted to dumb uses that have obvious roots in transparent partisan nonsense, it's probably best to insist that they go cold turkey. No more optics, guys. Not until you demonstrate an ability to use the word like adults.

Americans Are Surprisingly Stressed Out About News and Politics

| Thu Jul. 10, 2014 2:26 PM EDT

Via Wonkblog, here's a fascinating little chart courtesy of the Robert Wood Johnson Foundation. They just released a survey about the causes of stress, and things like health and money problems are predictably the biggest sources. But how about all those niggling little daily causes of stress? What are the biggest routine things that send you into conniptions?

Well, it turns out that two of the biggest contributors to high blood pressure are watching the news and hearing about what politicians are up to. And boy howdy, does this beg for a follow-up. I really, really want to know what news sources cause the most stress. Is it listening to NPR? Watching Fox News? Getting your daily Limbaugh fix? Reading Kevin Drum's blog?

Perhaps the mere act of making you think about this is, at this very moment, making you red in the face. Then again, maybe not. I want to know more. Who's most stressed out by the news? Liberals? Conservatives? Everyone? And what outlets cause the most stress? Obviously my money is on the Drudge/Fox/Limbaugh axis, but maybe I'd be surprised. I want to hear more about this.

Republicans Love Obamacare!

| Thu Jul. 10, 2014 12:59 PM EDT

Here's an additional tidbit from that recent Commonwealth Fund survey about Obamacare:

That's a lot of Republicans who are satisfied with their Obamacare coverage. They might not realize it's Obamacare—perhaps they know it as Kynect or Covered California—but they like it. And if you take it away, they're going to be unhappy. That's several million potentially unhappy Republicans if the national GOP continues its anti-Obamacare jihad. Just saying.

Who's Afraid of an Itsy Bitsy Bit of Inflation, Anyway?

| Thu Jul. 10, 2014 12:19 PM EDT

Why are so many people obsessed with "hard money"? Why the endless hysterics about the prospect of inflation getting higher than 2 percent? Paul Krugman, like many others, thinks it's basically a class issue. If you have a lot of debt, inflation is a good thing because it lowers the real value of your debt. But if you're rich and you have lots of assets, the opposite is true. Here's Krugman using data from the Census Bureau's SIPP database:

Only the top end have more financial assets (as opposed to real assets like housing) than they have nominal debt; so they’re much more likely to be hurt by mild inflation and be helped by deflation than the rest.

Now, it’s true that some of these financial assets are stocks, which are claims on real assets. If we only look at interest-bearing assets, even the top group has more liabilities than assets.

But the SIPP top isn’t very high; in 2007 you needed a net worth of more than $8 million just to be in the top 1 percent. And since the ratio of interest-bearing assets to debt is clearly rising with wealth, we can be sure that the truly wealthy are indeed in the category where they have more to lose than to gain by a rise in the price level.

Brad DeLong isn't buying it:

It is true that the rich do have more nominal assets than liabilities....But it is also true that America's rich have a lot of real assets whose value depends on a strong and growing economy.

I find it implausible to claim that the net gain is positive when we net out the (slight) real gain to the rich from lower inflation with the (large) real loss to rich from lower capital utilization. It's not a material interest in low inflation that we are dealing with here...

I don't think I buy Krugman's claim either. He's basically saying that hard money hysteria is driven by the material interests of the top 0.1 percent, but even if you grant them the clout to get the entire country on their side, do the super rich really love low inflation in the first place? Do they own a lot of long-term, fixed-interest assets that decline in value when inflation increases? Fifty years ago, sure. But today? Not so much. This is precisely the group with the most sophisticated investment strategies, highly diversified and hedged against things like simple inflation risks.

Plus there's DeLong's point: even if they do own a lot of assets that are sensitive to inflation, they own even more assets that are sensitive to lousy economic growth. If higher inflation also helped produce higher growth, they'd almost certainly come out ahead.

So what's the deal? I'd guess that it's a few things. First, the sad truth is that virtually no one believes that high inflation helps economic growth when the economy is weak. I believe it. Krugman believes it. DeLong believes it. But among those who don't follow the minutiae of economic research—i.e., nearly everyone—it sounds crazy. That goes for the top 0.1 percent as well as it does for everyone else. If they truly believed that higher inflation would get the economy roaring again, they might support it. (Might!) But they don't.

Second, there's the legitimate fear of accelerating inflation once you let your foot off the brake. This fear isn't very legitimate, since if there's one thing the Fed knows how to do, it's stomp on inflation if it gets out of control. Nonetheless, there are plenty of people with a defensible belief that a credible commitment to low inflation does more good than harm in the long run. After all, stomping on inflation is pretty painful.

Third, there's the very sensible fear among the middle class that high inflation is just a sneaky way to erode real wages. This is sensible because it's true. There are several avenues by which higher inflation helps weak economies that are trapped at the zero bound, and one of them is by allowing wages to stealthily decline until employment reaches a new equilibrium. I think that lots of people understand this instinctively.

Fourth, there's fear of the 70s, which apparently won't go away until everyone who was alive during the 70s is dead. Which is going to be a while.

It's worth noting that hard money convictions are the norm virtually everywhere in the developed world, even in places that are a lot more egalitarian than the United States. Inflationary fears may be irrational, especially under our current economic conditions, but ancient fears are hard to deal with. As it happens, the erosion of assets during the 70s was unique to the conditions of the 70s, which included a lot more than just a few years of high inflation. But inflation is what people remember, so inflation is still what they fear.

Bottom line: Even among non-hysterics, I'd say that hardly anyone really, truly believes in their hearts that high inflation would be good for economic growth. It's the kind of thing that you have to convince yourself of by sheer mental effort, and even at that you're probably still a little wobbly about the whole idea. It just seems so crazy. Until that changes, fear of inflation isn't going anywhere.

Pundits, Start Your Engines!

| Thu Jul. 10, 2014 11:16 AM EDT

So what's the next step in the border crisis? President Obama has introduced an emergency proposal; he's traveled to Texas to discuss it with his political opponents; and in order to stem the tide of immigrants he's declined to engage in photo-ops at the border that might encourage the tide to continue.

Republicans, for their part, appear at the moment to be completely unwilling to do anything at all.

So here's the next step: a barrage of columns from our nation's pundits acknowledging Republican intransigence but then insisting that, ultimately, the lack of action is Obama's fault. Because leadership. Because LBJ. Because schmoozing. Because lecturing. Because relationships. Because political capital. Because great presidents somehow figure out a way to get things done. Rinse and repeat.

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It's More or Less Final: Obamacare Has Insured About 11 Million People

| Thu Jul. 10, 2014 12:31 AM EDT

Jonathan Cohn passes along the results of a new study from the Commonwealth Fund which estimates that the ranks of the uninsured have dropped by about 5 percentage points since the start of the Obamacare rollout:


How does that compare to expectations? The Congressional Budget Office predicted that, one year into full implementation, Obamacare would reduce the the number of Americans without insurance by 12 million. That included the young adults who got insurance before 2014, by signing onto their parents’ plans. There’s been some controversy over exactly how many people that is, but the best estimates I’ve seen place it somewhere between 1 and 2.5 million. Add that number to the 9.5 million from the Commonwealth survey, and you're close or equal to the CBO projections.

So that's probably a total of around 11 million or so. Nearly all of the estimates now seem to be converging around this number, and given the inherent uncertainty in measuring the uninsured it seem like this is about as good as we're going to get.

Quote of the Day: "This Isn't Theater"

| Wed Jul. 9, 2014 7:18 PM EDT

From President Obama, asked why he wasn't making a visit to the border during his trip to Texas today:

This isn't theater. This is a problem.

"I'm not interested in a photo-op," he said. "I'm interested in solving a problem." It would be nice if he weren't the only one.

Medicare Just Keeps Producing Great Budget News

| Wed Jul. 9, 2014 2:20 PM EDT

Medicare has been a bastion of good news lately. Every year, the CBO reduces its baseline estimate of Medicare costs, which have dropped by more than $1,000 since 2010. So what's going on? Tricia Neuman and Juliette Cubanski of the Kaiser Family Foundation round up the evidence:



No one knows for sure if these reductions are permanent, or whether high growth rates will reappear in the future. But even if the low growth rates of the past few years can't be sustained, I suspect that Medicare growth will continue to be lower than anyone expected. There are two reasons for this. First, the growth rate of medical costs in general has been declining steadily for the past 30 years, and this has now been going on long enough that it's highly unlikely to be a statistical blip. After a surge in the 80s and 90s, we really are returning to the growth rates that were common earlier in the century, and obviously this will affect Medicare.

Second, Obamacare really will have an impact. Not everything in it will work, but it includes a lot of different cost-cutting measures and some of them will turn out to be pretty effective. And who knows? If Republicans ever stop pouting over Obamacare, we might even be able to experiment with different kinds of cost reductions.

There's a fair amount of year-to-year variability in health care inflation, and we should expect to have some years of high growth. But I'll bet the average over the next decade is somewhere around 2 percent above the general inflation rate. That's not too bad.

Vladimir Putin Abandons His Erstwhile Allies

| Wed Jul. 9, 2014 10:31 AM EDT

Julia Ioffe writes about the latest from Ukraine:

As the Ukrainian army chases separatists from the strongholds they've held for months, Moscow has barely said anything—despite its springtime rants about protecting Russians wherever they may be in the world....As I wrote back in May, now that he's sown chaos in Ukraine—but uneager to participate in someone else's civil war—President Vladimir Putin has thrown the rebels under the bus. In June, rebel leader Igor Strelkov said that "Putin betrayed us," and that betrayal has only deepened as Kiev launched its all-out offensive last week. Moscow, having started all this, has offered no help to the rebels.

The betrayal, it seems, may be even nastier than that. According to a Ukrainian security council spokesman, the Russians have sealed their border, shutting down three key crossings. Not only are they not letting men and materiel into Ukraine from Russia, but they're also blocking men and materiel from flowing in the opposite direction. That is, the very men that Moscow has riled up to the extent that they have taken up arms and are ready to die in order to get the region out of Ukraine and into Russia are not welcome to seek refuge in Russia. (Not even, it seems, the ones originally from Russia.) A group of 300 fleeing rebels reportedly even came under fire by the Russians as they tried to escape into Russia.

That Putin. He's quite the guy, isn't he? It appears that he eventually figured out that Ukraine wasn't going to fall neatly into his lap, and the cost of fomenting an all-out war there was simply too great. It turned out that Ukrainians themselves didn't support secession; Western powers were clearly willing to ramp up sanctions if things got too nasty; and the payoff for victory was too small even if he had succeeded. So now he's had to swallow a new, more pro-Western Ukraine—the very thing that started this whole affair—along with the prospect of renewed anti-Russian enmity from practically every country on his border.

But he got Crimea out of the deal. Maybe that made it worth it.