“The Timidity Trap”: The Best Lack All Conviction, While The Worst Are Full Of Passionate Intensity
There don’t seem to be any major economic crises underway right this moment, and policy makers in many places are patting themselves on the back. In Europe, for example, they’re crowing about Spain’s recovery: the country seems set to grow at least twice as fast this year as previously forecast.
Unfortunately, that means growth of 1 percent, versus 0.5 percent, in a deeply depressed economy with 55 percent youth unemployment. The fact that this can be considered good news just goes to show how accustomed we’ve grown to terrible economic conditions. We’re doing worse than anyone could have imagined a few years ago, yet people seem increasingly to be accepting this miserable situation as the new normal.
How did this happen? There were multiple reasons, of course. But I’ve been thinking about this question a lot lately, in part because I’ve been asked to discuss a new assessment of Japan’s efforts to break out of its deflation trap. And I’d argue that an important source of failure was what I’ve taken to calling the timidity trap — the consistent tendency of policy makers who have the right ideas in principle to go for half-measures in practice, and the way this timidity ends up backfiring, politically and even economically.
In other words, Yeats had it right: the best lack all conviction, while the worst are full of passionate intensity.
About the worst: If you’ve been following economic debates these past few years, you know that both America and Europe have powerful pain caucuses — influential groups fiercely opposed to any policy that might put the unemployed back to work. There are some important differences between the U.S. and European pain caucuses, but both now have truly impressive track records of being always wrong, never in doubt.
Thus, in America, we have a faction both on Wall Street and in Congress that has spent five years and more issuing lurid warnings about runaway inflation and soaring interest rates. You might think that the failure of any of these dire predictions to come true would inspire some second thoughts, but, after all these years, the same people are still being invited to testify, and are still saying the same things.
Meanwhile, in Europe, four years have passed since the Continent turned to harsh austerity programs. The architects of these programs told us not to worry about adverse impacts on jobs and growth — the economic effects would be positive, because austerity would inspire confidence. Needless to say, the confidence fairy never appeared, and the economic and social price has been immense. But no matter: all the serious people say that the beatings must continue until morale improves.
So what has been the response of the good guys?
For there are good guys out there, people who haven’t bought into the notion that nothing can or should be done about mass unemployment. The Obama administration’s heart — or, at any rate, its economic model — is in the right place. The Federal Reserve has pushed back against the springtime-for-Weimar, inflation-is-coming crowd. The International Monetary Fund has put out research debunking claims that austerity is painless. But these good guys never seem willing to go all-in on their beliefs.
The classic example is the Obama stimulus, which was obviously underpowered given the economy’s dire straits. That’s not 20/20 hindsight. Some of us warned right from the beginning that the plan would be inadequate — and that because it was being oversold, the persistence of high unemployment would end up discrediting the whole idea of stimulus in the public mind. And so it proved.
What’s not as well known is that the Fed has, in its own way, done the same thing. From the start, monetary officials ruled out the kinds of monetary policies most likely to work — in particular, anything that might signal a willingness to tolerate somewhat higher inflation, at least temporarily. As a result, the policies they have followed have fallen short of hopes, and ended up leaving the impression that nothing much can be done.
And the same may be true even in Japan — the case that motivated this article. Japan has made a radical break with past policies, finally adopting the kind of aggressive monetary stimulus Western economists have been urging for 15 years and more. Yet there’s still a diffidence about the whole business, a tendency to set things like inflation targets lower than the situation really demands. And this increases the risk that Japan will fail to achieve “liftoff” — that the boost it gets from the new policies won’t be enough to really break free from deflation.
You might ask why the good guys have been so timid, the bad guys so self-confident. I suspect that the answer has a lot to do with class interests. But that will have to be a subject for another column.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 20, 2014
“Not So Fast!”: “The Sky Is Falling,” Says Anonymous Chicken
I’m sure many of you saw a certain headline from The Hill today: “O-Care premiums to skyrocket.” At first I thought the source was The Drudge Report.
If you actually read the accompanying article by Elise Viebeck, the rather alarming assertion is mostly a collection of blind quotes from “health industry officials.” Yes, one former Cigna executive went on the record to say his “gut” tells him premiums could go up, which is of course very convincing. Otherwise the closest Viebeck gets to attribution is an “insurance official who hails from a populous swing state.”
In an updated version of the article, Viebeck does quote by name two experts–who deny the whole premise of her story.
And the “premiums to skyrocket” claim directly contradicts a variety of on-the-record assessments by health insurance executives–e.g., Aetna CEO Mark Bertolini, Wellpoint president Joe Swedish, and Cigna CEO David Cordani–that the Obamacare premium structure is working out relatively well. And the most reliable independent study, from the Kaiser Family Foundation, concluded that the much-feared “death spiral” of premiums that Viebeck seems to be predicting as a reality for much of the country is very unlikely to occur.
Particularly in its revised form, Viebeck’s piece has a number of “to be sure” qualifiers that undermine the headline. But it’s the headline that will get big coverage today–to be sure–maybe on Drudge Report itself. And it’s pretty clear which political constituency is driving the “story.”
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, March 20, 2014
“More Stuff Made Up About Obamacare”: A Nasty Ideological And Racial Undertone To Bobby Jindal’s Latest Campaign
It’s been obvious from the beginning that a big part of the GOP strategy for demonizing Obamacare has been to convince existing beneficiaries of federal health programs that ACA coverage would come out of their hides. Thus the constant efforts to convince Medicare enrollees that ACA was financed by “Medicare cuts” (not at all true with the exception of the reductions in super-subsidies offered to the Bush-era conservative pet rock of Medicare Advantage policies offered through private insurers). There’s also a nasty ideological and even racial undertone to this campaign aimed at white middle-class retirees who view their Medicare benefits as earned (via both payroll tax contributions and a lifetime of work), as opposed to the “welfare” being offered to those people supported by Medicaid or Obamacare.
But leave it to Bobby Jindal to come up with a line of attack that pits existing Medicaid beneficiaries against those who would qualify for coverage if, over his dead body, the ACA’s Medicaid expansion were to be enacted in Louisiana. TPM’s Dylan Scott has the story:
Engaged in all-out war with the liberal group MoveOn.org over a pro-Obamacare billboard, Louisiana Gov. Bobby Jindal (R) has accused the organization — and liberals in general — of endorsing discrimination against the disabled through their support of the federal health care reform law and its Medicaid expansion.
“Liberal groups like MoveOn.org won’t say one word about caring for individuals with disabilities, or how Obamacare prioritizes coverage of childless adults ahead of the most vulnerable,” Jindal wrote in an op-ed in the Shreveport Times last Thursday. “They just want to intimidate states into accepting Obamacare’s massive new spending programs.”
What does Bobby mean by “prioritizing” coverage of childless adults? Simply that expanded coverage comes with a higher federal match rate than is available for traditional Medicaid (not high enough, of course, to convince ideologically motivated Republicans, especially in the South, to execute an expansion that in many cases would represent a fiscal windfall for state governments while significantly reducing the ranks of the uninsured).
How, exactly, does that hurt people with disabilities, or others currently qualifying for Medicaid? The short answer is that it doesn’t, as Scott explains with some help from experts:
[T]here are a few huge problems with Jindal’s rationale, which effectively undermine the whole line of attack. First, some disabled people could actually qualify for health coverage under the Medicaid expansion, according to MaryBeth Musumeci, associate director of the Kaiser Commission on Medicaid and the Uninsured.
“People with disabilities can be within the new expansion group,” she said. “The ACA provides the opportunity for some people with disabilities to qualify for Medicaid who never qualified before. Their incomes, while still low, could have been above the very, very low limits states had set or they may not have been eligible at all if they fell into the category of single, childless adults. So it creates an expanded opportunity for people with disabilities to gain coverage.”
Second, Obamacare should have no policy bearing on the traditional Medicaid program. Federal funding for the traditionally eligible population remains exactly the same, and the states retain the same flexibility to manage their programs as existed prior to the law. The ACA brings a new population into the program, but there is no policy reason that it would lead to “discrimination” — as Jindal calls it — or any other detrimental effects for disabled people enrolled in the traditional program.
“I think that’s right,” Musumeci said when asked by TPM if the Obamacare’s Medicaid expansion should have no effect on traditional Medicaid. “What the Medicaid expansion essentially does is it creates a new eligibility category. Like any other time Congress has expanded eligibility of the program, it is adding statutory authority to cover this new group of people.”
“But it’s built into the same underlying Medicaid program. States still have all of the flexibility that they previously had in terms of how they structure their care delivery system, their benefits packages, and all of those things.”
It would be interesting to know how well people with disabilities, and other current Medicaid beneficiaries, would fare in Louisiana if the national Republican “reform” of Medicaid, a block grant that reduced federal funding over time, were to be enacted. Let’s hope we don’t find out. But in the meantime, the “prioritization” argument against the Medicaid expansion is just another effort to frighten one group of safety net beneficiaries they have a stake in excluding others. It’s exactly what we’ve come to expect from self-styled conservative Christian warriors like Bobby Jindal.
By: Ed Kilgore, Contributing Writer, Washington Monthly Politica Animal, March 20, 2014
“Christie’s Latest Scandal”: How He Sold Public Pensions To Wall Street Donors
The media would label it Pensiongate — if they were interested.
When Governor Chris Christie (R-NJ) cruised to his first statewide election victory in 2009, his promise to responsibly manage the state’s pensions helped deliver him the governor’s mansion. It’s Democrats like Governor Jon Corzine who are playing fast and loose with public pensions, the Christie campaign argued. “Jon Corzine made it easier for his friends from Wall Street to manage New Jersey’s pension fund,” read a campaign press release.
But soon after Christie took the reins as governor, his skepticism of the relationship between Wall Street and pension funds quickly evaporated. Hedge funds managed by influential Republican donors soon landed enormous contracts to manage public pensions. Friends of The Governor benefited handsomely.
As the Investigative Fund’s Lee Fang reports, the controversy centers around Paul Singer, the billionaire founder of Elliott Associates. The month prior to Christie’s first 2009 gubernatorial victory, Singer donated $100,000 to the Republican Governors Association, a fervent supporter of Christie’s election bid. After his election, and despite his campaign rhetoric to the contrary, Christie suggested that Elliot Associates be given a contract to manage $200 million in public pensions. In 2012, the firm was indeed granted the contract.
The result of this investment was large payoffs for the hedge fund, while New Jersey public workers saw their pension returns fall below average. In 2013, the median pension return was 16.1 percent; in New Jersey, the pension program delivered a return of just 11.79 percent.
But because of fines and fees associated with a hedge fund investment, it was a lucrative business for managers like Singer. As Fang reports, Singer benefited greatly from the deal: Chris Tobe, a former trustee of Kentucky Retirement Systems, estimates that in 2013 alone, Elliot Associates collected close to $8.6 million in fees from the New Jersey public pension fund.
And Singer, it seems, is not one to let a favor go unreturned. After Christie became chair of the Republican Governors Association in 2013, Singer donated $1.25 million to the group.
Interestingly, Singer’s profitable deals with politicians do not start and stop with the embattled Governor Christie. A recent report in The Hill shows former Rep. Connie Mack (R-FL) may also have used his office to aid the notable Republican donor. Mack, now a lobbyist, has registered to lobby for American Task Force Argentina, a group that seeks to “hold medium and wealthy nations accountable for the repayment of their debts to U.S. creditors and to uphold U.S. court judgments against these same nations.” Holding impoverished South American nations accountable for their debt to American companies is an initiative Mack touted during his time in office.
As it happens, Elliot Associates is also a member of Task Force Argentina. According to The Hill, employees of Elliot management were the second largest contributor to Mack’s failed 2012 Senate run. Furthermore, another hedge fund linked to Singer is owed $1.6 billion by the Argentine government.
By: David Feuerherd, the National Memo, March 20, 2014
“Ted Cruz’s Exploitative New Sham”: What “Drafting” Him To Run For President Really Means
“It is time to Draft Ted Cruz for president,” says RedState diarist “razshafer,” and to that end, Raz has established RunTedRun.com, and an affiliated Draft Ted Cruz for President PAC. Raz is, Dave Weigel explains, Ted Cruz’s (now former) regional director Raz Shafer, and not just some person using Cruz’s name to convince conservatives to send along their lucrative email addresses.
Here is part of Shafer’s pitch:
I know there are other candidates who may run as conservatives, but I believe Ted Cruz has demonstrated that he’s the only consistent conservative who will do what it takes to roll back Barack Obama’s agenda. He’s the only one who has the passion, principles, and courage needed to deliver real results for Americans.
I’ve never spoken to Ted about him running for president and I honestly don’t know if he will do it, but I do know he won’t succeed unless freedom-loving Americans like you and me begin organizing this effort now.
Ted Cruz is the people’s candidate and we need to be the ones driving the effort to elect him.
So if you’re ready to be proud of your vote again and you agree that Ted Cruz should run for president, please do three things:
Go to RunTedRun.com and sign the official Draft Ted Cruz for President petition.
Urge your friends and family to join you.
Donate whatever you can to help us spread the word and build support.
My advice, even if you do support Ted Cruz and think he should run for president, is don’t do any of this. It is a waste of your time and you will be exploited. Your name and contact information will be sold. You will have no effect whatsoever on Cruz’s decision to run for president or not. Your monetary donation will have no effect whatsoever on Ted Cruz’s potential 2016 electoral chances.
Unless you have a lot of money, and giving that money to politicians is how you gain access to those politicians in order to convince them to advance your agenda, most of the time you shouldn’t give money to politicians. Especially credible presidential candidates and sitting members of Congress. Mainly because most presidential candidates and sitting members of Congress are awful, but also because generally they already have a lot of money, have access to more money, and don’t need yours. (Again, this all assumes you’re not very rich. The very rich waste plenty of money on losers and dumb causes, but they can afford it. Plus, many of their political investments show some pretty impressive returns.)
You really shouldn’t donate money — or give away your contact information — to shady (or even reputable!) organizations devoted to “drafting” someone or other to run for president. Especially if the person they are drafting is probably already going to run and doesn’t need some sort of pseudo-grass-roots demonstration of mass appeal and fundraising ability. Ted Cruz knows he is popular and can raise money and he probably will at least pretend to run for president, unless he decides it would be more lucrative to just be a right-wing media star, in which case you have still wasted your money.
This isn’t just about Ted Cruz! Hillary Clinton is almost definitely running for president too, and she really doesn’t need your support. She has a vast fundraising network and national campaign experience; you don’t need to sign a petition (or, god forbid, write a check) to nudge her toward deciding to run again. She has already done extensive polling on the subject of whether Americans are “ready for Hillary,” and (I can’t stress this enough) she has very rich friends who will write her much bigger checks than you will.
Sometimes, these PACs or other groups dedicated to drafting someone to run for office are truly aimed at convincing reluctant candidates that they have enough already existing support to make a presidential campaign feasible. In that case, your name and donation could make a real difference! And then you end up with Wesley Clark 2004. But for the most part, national politicians don’t need or deserve your money, and people running officially unaffiliated outside groups shouldn’t be gifted your valuable data. Don’t draft anyone.
By: Alex Parene, Salon, March 20, 2014
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