A Puzzling Situation

This post is beyond my capacity for explanation. Megan McArdle seems to be warning the US that it will get a bad credit rating if it doesn't pay back its debt to its creditors, and therefore we should cut Social Security. She knows about quantitative easing; is she really acting as if we are going to run out of money when we can continue to print more?

[...]In the first place, our debt payments do not simply go to enrich feckless corporations. They go into things like insurance pools, 401(k)s, and pension funds. If the government stops payments, yes, some rich people would take a bath. But so would a lot of ordinary people.


Even more importantly, if the government misses a debt payment, that's it for borrowing more money in the near future--and I, for one, am skeptical that the IMF would be able to mount a bailout, which is what we do when developing nations have this sort of trouble. The United States currently runs a $1.5 trillion budget deficit. If we miss a debt payment, that means we immediately have to balance that budget, and keep it balanced. You have probably seen a lot of blog posts lamenting the terrible plight of the states, who cannot run budget deficits during recessions and are therefore forced to make draconian cuts to services unless they are bailed out by the Feds. Well, if we can't borrow money, no one's going to bail us out--or the states. And you can expect a default to be followed by a pretty ugly recession in an economy as credit-driven as ours.


That said, obviously the best thing to do is raise the debt ceiling, and not put the US government at risk of default. But second best is to buy time while preserving our credit rating. Over the long run, if the credit taps get cut off, the social service cuts will be deeper, uglier, and permanent.

States can't print money. The federal government can. What is going on here? Several commenters noticed this too but their protests were drowned out in the general din.

The Constitution Was Written To Protect Corporations?

Megan McArdle tweets:

asymmetricinfo Megan McArdle
Progressive protesters demonstrate against conservatives' exercise of first amendment rights to peaceably assemble. http://bit.ly/fjHSvz
1 hour ago Favorite Retweet Reply

Dear me, what on earth can be going on? What are those nasty progressives doing now to destroy the Constitution?

Twenty-five protesters were arrested in Rancho Mirage, California today, at a protest in front of the Rancho Las Palmas resort, site of the “Billionaire’s Caucus,” an annual meeting put on by the Koch Brothers and other corporate entities and conservative movement operators.

Riverside Sheriff’s deputy Melissa Nieburger said that the sheriff’s department did have contacts with protest organizers, which included the California Courage Campaign, CREDO, MoveOn.org, 350.org, the California Nurses Association, United Domestic Workers of America and the main sponsor, the good-government group Common Cause, prior to the event, and that they were aware that some protesters would seek to be arrested for trespassing. She would not guarantee that all 25 who were arrested were part of that coordinated operation. The police, who wore riot gear, batons and helmets, did put the arrested into plastic handcuffs. Nieburger described them as “passive restraints.” They were being processed at press time, and Nieburger would not say whether they would be released or would spend the night at the jail in Indio.

Nieburger estimated between 800 and 1,000 activists at the “Uncloak the Kochs” event. Event organizers chartered buses from several locations around Southern California and claimed 1,500 people signed up for those buses, on top of any local activists who attended. It appeared from the ground that well over 1,000 protesters were there.

It seems they are using their First Amendment rights to peaceably assemble, to protest the Koch brothers' funding of attempts to end regulation of their polluting industries. The protesters are not demonstrating against the right of the Koches et al to assemble; McArdle is just doing damage control to make her husband's benefactors seem like innocent victims.

The protesters generally decried the Koch Brothers’ influence over American democracy, in particular their use of the Citizens United ruling to spend corporate money in elections. Koch Industries’ funding of climate denialism and other conservative causes was on the minds of the protesters as well.

The Koches have every right to meet with their operatives, of course, just like the left has every right to protest their actions. The Koches and their friends, safely ensconced behind the walls of the luxury resort and a line of riot police to protect them from anything that would offend their eyes or ears, are scarcely being intimidated from the exercise of their Constitutional right to assemble.

It's strange that when tea-baggers assemble to protest it's a good thing but when liberals do it it's some kind of anti-Constitutional act. But the tea-baggers are being supported by the Koches, so there's a mystical kind of synergy to it all--if a corporation does something it's okay, but if a private citizen does it it's not.

Fighting

We took off Friday as Megan McArdle was discussing yet another subject she knows nothing about: Egypt. But one small thing is worthy of note:

Mubarak Will Hold Onto Power By Megan McArdle

Or so he says. As my Egyptian correspondent initially predicted, he's telling his government to resign--as yasminhamidi tweeted, "Mubarak: To prove I am not a dictator, I will personally name a new government!"


Now we see if the population will tolerate it. I won't venture an opinion, as I simply don't know. But if I were an Egyptian, I certainly wouldn't stand for it.

Please tell us, Ms. McArdle, just what would you do if the leader of your government, elected through extremely questionable means, enacted policies that were killing people? Would you take to the streets with the protesters as you are implying here? Or would you tell your readers that it would be a giggle if the police/military picked up a 2x4 and start bashing them in the heads? Preemptively, that is.

No! McArdle says! She would give up her establishment job and paycheck that places her far, far above the desperate rabble and take to the streets in protest. She wouldn't tolerate such disrespect for a moment! She would risk life and limb to fight the power elite and bring them down!

The same woman who complained that there ought to be more police to protect her while she goes bar slumming expects us to believe that she would be brave enough and unselfish enough to join the powerless and fight for greater economic equality for the masses. The Right must constantly stroke their own egos to compensate for their selfishness, bloodlust and greed, must constantly praise and reward each other to reinforce their counter-factual, ahistorical view of the world, and must see themselves as action movie heroes while they are dodging our wars. It's repulsive and laughable, but it's the only way they can live with themselves. And it is why they want all liberals to shut up and go away; so nobody will break the protective Fox/MegaChurch/Suburban Hellhole Bubble of perfect mutual accord. Every single thing they see, hear, or read must reinforce that bubble or it will pop.

They will not give up until liberals are utterly marginalize, reviled, and discredited--and even then they will continue to fight them out of habit.

Giving Permission To Hate

Megan McArdle tell us that we have a very large problem:

The nation is facing some really difficult problems, particularly on the fiscal front. There's no longer any way to put it off; pretty soon, the government is going to have to start making some very hard choices about taxes and spending. No matter what it chooses, that probably means lower economic growth, angry voters, and some real loss on the part of whoever's ox is gored.

How did we get to this point? Using a US-President-As-CEO model, Megan McArdle tells us that it's all the government's fault.

The underlying economy is, I think, ultimately fine, but the structural problems with the government's finances are driving it rapidly towards an unpleasant denouement. Like a CEO with a stuck company, however, he [the president] can't just say that. Stating the obvious would make things worse, as customers and creditors decide that the end really is nigh, and it's time to get out while they still can.

Those structural problems are regulation, innate incompetence and lack of competition.

You may be in a saturated market where your second-rate franchisees are slowly destroying your brand, making it impossible to attract higher-quality franchisees . . . but that's nothing that can't be fixed by creating a new Chief Strategy Officer under the CEO, and giving that officer oversight of marketing, research, and HR. Perhaps a much larger competitor whose cost structure allows them to undercut your prices by 32% has entered your niche, but can they really withstand the fearsome might of your ISO 9000 certification and your new cross-functional product teams? The government regulators who just outlawed your three top-selling products and made two-thirds of your capital plant obsolete may be powerful--but not as powerful as your revolutionary sales force compensation scheme!

You can't blame the dodges, but they are a warning sign. Not that the CEO is a bad CEO, but that the CEO is in a bad situation he can't fix.

McArdle tells us that the solution to the problem is eliminating Social Security.

It's not that Obama doesn't know how to fix the problems; I think that like most people in Washington, he understands the broad parameters within which the fixes will be carried out. But he can't make Congress do it before there's an actual crisis. And saying all of this is all too likely to trigger the crisis--a crisis he'd much rather would happen during someone else's presidency. So he tells us what we want to hear: that we need to find a way to fix Social Security without, y'know, changing it in any way. And will you look at those green jobs! I think we're going to have a bumper crop!

The reason he does this, of course, is that like the analysts on all of those calls, we let him. Indeed, we actively, even eagerly, participate in the denial. After all, if we knew how to fix the company, we'd be CEOs, not sitting on the couch kvetching about their nonsense.

Obama seems to be perfectly willing to "fix" Social Security, but that will not make any difference to how liberals are perceived. Having already brainwashed the public into believing that all liberals spend wildly and all conservatives are fiscally prudent, corporations are now spending a lot of money to ensure that any blame for a bad economy will be placed on the back of the "welfare state" and government spending in general. To do that they have to demonize liberals and if a few liberals get shot by the crazier elements on the right, well, that's just the price of doing business.

It's McArdle's job to provide the justification and permission to attack liberals. She demonizes them constantly, calling them hysterical, stupid, "loony" and spiteful. She tells the right that it's liberals' fault that they are experiencing economic hardship, as she does in this post. She whips up fear and says liberals will kill us all. She says that it's okay to kill someone who wants to harm people. She draws the target, points the gun, and tells her readers it's okay to pull the trigger. And then she says that nobody's responsible if some crazy person actually shoots a gun.

Stanley Milgrim discovered that most people will do what they are told to do by someone in authority. Something that they would never do ordinarily, such as torture another person, becomes okay if an authority figure gives them permission to do it. McArdle uses her authority as a graduate of Ivy League schools and an employee of The Atlantic to give her audience permission to hate and fear liberals and take action against them. She is one of many, of course. Your Glenn Becks and Michelle Malkins work on the trust and gullibility of the radical right. Your Kathryn Jean Lopezes work on the tender feelings and priest-installed guilt of the religious right. And McArdle works on the educated elite wanna-bes, carefully giving them permission to hate and fear liberals for their economic policies. Nobody is going to listen to McArdle and shoot a Congresswoman. They will just listen to McArdle and vote for a politician that will eliminate regulations, so Glenn Beck can go on the air and tell people that Democratic politicians need to be "shot in the head."

Alternate Universe Megan

Less Slick and Manipulative Megan McArdle: Some people say mean and wrong things about "me-too" drugs. Lots of people say they are just knock-offs of existing drugs. I will not tell you who they are or where you can find their writings. You will have to take my word for it that they said what I tell you they said. But they are wrong. "Me-too" is a misnomer because it takes years to develop a drug, therefore any very similar drug that arrives quickly after can't be a copycat drug. My source is Derek Lowe who is "a chemistry blogger and medicinal chemist working on preclinical drug discovery."

Work day--catch you later.

Fact Checking

Some employers are more strict about mistakes than others.


Megan McArdle discusses the lamentable tendency of some people to make numerous and egregious errors.

Why Don't Publishers Check Facts
The Economist pens one of its customarily acerbic book reviews in which it notes an extraordinary number of basic errors: [snipped quote].

The Economist reviews a female economics writer and says the "trouble starts when [she] ventures into economic analysis;" she mangles elementary economics, makes "puzzling omissions," and "commits some jaw-dropping factual errors." The Economist says she is a poor writer as well.

Back to McArdle:

How does something like this happen? Online, of course--people write quickly, and they often work from memory rather than looking up every fact. It is, as any writer can attest, startlingly easy for a bad fact--like Fiat buying GM--to insert itself so thoroughly into your consciousness that you don't even know you ought to look it up.

I hesitate to bring this up, as McArdle is the professional and I am merely an amateur, but journalists actually are supposed to look up every fact. I know, I know--it's a lot to ask. You have to open a new window and type in a few words or a sentence and then spend minutes reading sources and cross-checking. It's such a nuisance when you can just depend on your memory of the last Cato paper you read, but, well, there it is--journalists are expected to check their facts before they report them. It's unfair but I don't make the rules.

But this is what fact checkers are for, and I don't understand why book publishers don't have them. They cost money, to be sure--but not that much money.

McArdle could tell us just how little they cost but that would require fact-checking.

She could also talk to a few people in publishing to see if the profit margin on most books is too small to support a fact-checker, how much net profit publishing houses make, and the experiences of any publishing houses that do hire fact checkers. Doesn't that sound like fun--spend some time on the phone and the web researching an interesting topic and then tell your audience all about it? And make lots of money to do it? That would be a great job. Although, I must admit, McArdle's practice of skipping the work and going straight to spending the money is an even better job.

Sadly, there are a lot of experienced magazine people around right now who could be got at very competitive freelance rates. A quarter of a million dollars a year would get you the world's finest staff of crack fact checkers; quite a bit less money would prevent embarassments like this book. It might have even headed off the Arming America disaster, if a fact checker had noticed that the figures in his, er, smoking gun table, didn't add up.

It appears that someone has friends in need of jobs worthy of their high social standing, elite education, and Galtian superiority. Too bad our elite destroyed the economy and pulled up the ladder behind them.

Presumably the answer is that it isn't economic: readers don't care, and indeed rarely learn; there's no money in preventing the occasional catastrophe like Arming America. But then one must turn the question around: why do magazines like The Economist, the New Yorker, and yes, The Atlantic, employ fact checkers? Our readers are the potential consumers of books like the one that the Economist is reviewing; do they care less about accuracy in their books than in their magazine articles?

Based on the evidence before us I'd say that yes, McArdle's readers are not overly concerned with accuracy.

Not that anyone at The Atlantic thinks about it that way; we employ fact checkers because it seems like the right thing to do.

Perish the thought! Of course The Atlantic isn't concerned with silly things like lawsuits or reputation; they just care about the truth. And so does McArdle on her blog, just as long as she doesn't have to, you know, look the truth up.

But why does this ethic prevail at so many magazines, and at no publishing house?

It's a puzzler. But at least we are reassured that The Atlantic fact-checks its articles and therefore McArdle's very hard-won reputation for error is nothing but one of those liberal lies, like the Social Security Trust Fund and the existence of poor people in America.

ADDED: Meanwhile at The Atlantic, journalist Teri Buhl reports on illegal activities by Bear Stearns. Remember when McArdle said that there were "no villins" in our economic disaster, just systemic failure? She has quite the nose for news.

A Small Housekeeping Note

We are extraordinarily grateful for M. McArdle's brief blogging absence. (Since Friday.) Recuperation time is always welcome. Although we are looking forward to seeing how McArdle responds to Andrew Sullivan's challenge. There is a very interesting class angle to this struggle. Sullivan, an elitist, is comfortable assuming moral superiority while McArdle, an elitist wanna-be, is accustomed to using moral superiority to bludgeon her opponents. Who will blink first?!

The Atlantic is more fun than a barrel full of (self-deluded, shallow) monkeys.

The Gnome-mobile

Shorter Ross Douthat:

1. Elect Republicans

2. ??????????

3. Affordable health care!

Briefly

Andrew Sullivan: Via anonymous in comments

Loughner And The Right
21 Jan 2011 01:16 pm

Megan takes issue with this post on Loughner:

Andrew's defense seems to be that there are a lot of right wing jerks out there, and that by combing Loughner's writing, he can find a few sentences here and there that sort of sound like things that might have been said by one of those right wing jerks. But I'm pretty sure that if I combed Loughner's writing, I could find some sentences here and there that imply that Loughner read Andrew's writing, or gay rights literature, or Edmund Burke.

Really? Go ahead. Make my day. Or withdraw the claim.

He's going to have a long, long wait. It's been six months since we were promised Elizabeth Warren II: The Temple Of Doom.

Ped Xing

Worst damage control ever. Megan (of course) McArdle:

Department of Awful Statistics
Business Jan 20 2011, 11:35 AM ET 37
What to say about a statement by the Governor's Highway Safety Association spokesman which seems to blame--I swear, I am not making this up--Michelle Obama's national fitness campaign for an uptick in pedestrian deaths?

In order to make this sort of statement, I'd want some pretty ironclad evidence that, first of all, Michelle Obama's exhortations were actually causing people to spend more time walking on our nation's roads--a premise that this libertarian, for one, is pretty skeptical of.

I'd also want to see some evidence that they were walking on roads where, y'know, more people were dying.

As James Joyner says: [yadda yadda]

I presume that the spokesman had some sort of temporary freakout during the radio interview and blurted something he didn't quite mean. It happens even to seasoned pros. But c'mon, guys, where's the mumbling, red-faced, excruciatingly apologetic retraction?

Update: The spokesman writes

I am the spokesman for the Governors Highway Safety Association. In the interview you reference, I did not blame Mrs. Obama for the small uptick in pedestrian deaths. I noted that in our study we note that programs such as Mrs. Obama's may be increasing the number and frequency of pedestrians and thus exposing them to more risk. We support these programs but want to make sure that pedestrians are behaving safely-not using iphones, texting, crossing in dangerous places, etc. It's ludicrous to suggest that the non-partisan, nonprofit Governors Highway Safety Association is blaming Mrs. Obama. We encourage walking/jogging, etc. We just want to make sure that this doesn't lead to more needless deaths.

Fair enough, but it seems like we should get some data on the number and frequency of pedestrians, and their relationship to programs like Mrs. Obama's.

So where's the mumbling, red-faced, excruciatingly apologetic retraction?

If McArdle really wanted the data she could have just gone to the website, where a link to it is provided on the first page. And since the purpose of the GHSA's correction was to point out that they were merely warning that a "growing national focus on walkable communities and “get moving” health and fitness efforts may cause pedestrian exposure, and thus risk, to increase," it's not clear what else GHSA should provide to satisfy McArdle.

McArdle got her misleading information from James Joyner, who got it from the web site of a right-wing radio station. Perhaps that did not tweak McArdle's finely honed journalistic instincts since she has taken to frequently linking to other grossly ideological sites such as Cato and her husband at Reason, and therefore sees nothing wrong with a report that states an association of state highway safety offices blames the First Lady for traffic deaths.

Again, why does she pretend to be an impartial journalist? Her pretense certainly doesn't fool anyone and it's not even necessary anymore.

*"Looking at the early data from 2010, GHSA’s report notes that 28 states experienced a pedestrian fatality decline, while 18 saw an increase and five were unchanged. (For purposes of this report, Washington D.C. is considered a state). Significantly, eight states had an increase of at least ten deaths. Interestingly, one might expect the increases to be in the large states with big cities and lots of pedestrians such as in California, New York and Texas. However, these three big states experienced reductions in pedestrian fatalities. States with increases include: Arizona (up 21), Florida (up 36), Oklahoma (up 16) Oregon (up 18), and North Carolina (up 17).

Troy E. Costales, GHSA’s Vice Chairman and head of Oregon’s highway safety program, notes that the big increase in his state comes after 60-year lows in 2009. Costales adds, “It is definitely a concern. Looking at our data, we are seeing pedestrians crossing mid-block instead of at crosswalks, pedestrians walking in the roadway, and even some walking in the travel lanes of the interstate. We are familiar with aggressive drivers; we now have aggressive pedestrians.” Costales also notes that more than half of the pedestrians killed in 2010 were under the influence of intoxicants."

Evidently drunk people who walk in traffic are being killed in increasing numbers. Who could have guessed?


Thrilling Update! Derek Thompson at The Atlantic looks into the Mystery of the Misquoted Spokesperson.

When Barbara Harsha, executive director of the Governors Highway Safety Association, reportedly told the Washington Examiner that she was concerned the First Lady's nutrition campaign would result in more pedestrian casualties, it caused something of an uproar online. So I called the GHSA office for clarification and got Harsha on the phone.

Too bad McArdle didn't do a little actual reporting. But that's why she's our very favorite conservative blogger--evidently it never even occurred to this "journalist" to pick up the phone.

Too Late

A little reminder to the people on the right who are incensed that a Democratic Representative would compare Republican propaganda to Nazi propaganda:




Because of that dumbass Jonah Goldberg you no longer get to complain about Nazi comparisons. Be sure to thank him for us.

Also, heated political rhetoric has no affect on anyone, so why even get upset?

Profit!

Megan McArdle concern trolls Harper's Magazine.

Tough Times at Harpers
Business Jan 19 2011, 11:04 AM ET 12
There's something both puzzling and tragic about the labor disputes at Harper's. I had been aware of their struggles with circulation--indeed, I'm part of them. Given how high the price is, and how rarely I felt like I was finding surprising, challenging articles, eventually, regretfully, I stopped taking the magazine. Apparently, a lot of other people agreed, a problem that was compounded by the recession.

The budget deficit has led the owner to make changes; the changes has led to resistance from the staff. And since this is Harper's, naturally, the staff has unionized.

[yap yap yap unions bad]

Given where I work, I suppose I can't let an interesting side-point pass unremarked: MacArthur apparently thinks of us as his rivals; and he simply flatly refused to believe that we were profitable.

...When one staffer brought MacArthur's attention to a recent New York Times article that stated The Atlantic was profitable this year because of its heavy investments in the web, MacArthur responded: "They're lying. They're a private company and they can say whatever they want."

At least in this corner of The Atlantic, we wish our brother journalists at Harper's nothing but success; any feelings of rivalry have waned to nothingness since those rambunctious days of the 1880s.


I hope that you will take it from me, then, that we aren't lying; we really are profitable. I spent most of last fall being repeatedly sworn to silence on our progress towards corporate goals. These profits were achieved, not so that we could show the fellows at other publications, but simply because everyone--owner and staff--is happier with a profitable publication.


As you can see from the Harpers experience. When there's not enough money to go around, people fight over the scraps. Of course, getting to profitability is insanely difficult, which is why not many publications have managed the feat recently. Given what Harper's has gone through, I can see why MacArthur would find it hard to believe in a profitable magazine.

Silly man. Did he think Megan McArdle's support for Goldman, Sachs was free?

'Atlantic' turns first profit in decades

Washington, D.C.—The Atlantic Media Co.'s The Atlantic said Thursday the brand posted a profit in 2010, the first time it had done so in “decades.”
“It hasn't been profitable in institutional memory,” a spokesperson said.

Driven by name bloggers such as Andrew Sullivan and Megan McArdle, The Atlantic saw its online revenue balloon by 70% in 2010 compared with the previous year. In the same time frame, print advertising increased 27% and overall advertising jumped 37%

New print advertisers last year included Samsung, Singapore Airlines and Xerox Corp. New digital advertisers included Goldman Sachs, IBM Corp. and Lockheed Martin Corp.

Everybody Dance!

Megan McArdle twits her amusement at criticism.

Megan McArdle
Tee-hee! RT @allanbrauer: @asymmetricinfo Of course you're reading the polls wrong. You're always wrong. You're Megan McArdle. #duh

She also informs commenters that their corrections of her errors just amuses her.

RZO
I am kind of astonished you are brazen enough to publicize opinions that seem to imply that we have just 8,000 uninsured, rather than 40 million.
As far as where the uninsured went, have you considered asking the Republican Party? It is the one that promoted high-risk pools as the answer to all health insurance woes. Health care reform adopted them as a stopgap to 2014.

McMegan
Do you read the articles you comment on, or is that too much like work?
RZ0 19 hours ago in reply to McMegan
I'm sorry, what was I wrote that upset you?

McMegan
The word you are looking for is "amused", and in this case, it's that you apparently didn't even read the headline, much less all the content. In fact, darned if I can discover what you did read that contained even the implicit claim that there are only 8,000 uninsured people in the US.

RZ0
Happy to hear I brightened your day!

McMegan
Like a screaming toddler doused in chocolate syrup . . .

She's laughing all the way to the bank. Facts? Logic? People in need? What do they matter?

Our desire to help out our fellow countrymen? Our work, our money, our fight for what is right? It's amusing to see the peasants work themselves into a froth when you know they will fail. When you know that you are plugged in to the money and power, can toss out a few lazy posts on the latest talking point, and go shopping with all of your lovely loot.

The people pleading for health insurance when they have a pre-existing condition? They're the funniest thing of all. Beg, little peasant! Beg for your treat! Not that you'll get it, but it sure is amusing to see you stand on your hind legs and dance!

Meganosity

Since Megan McArdle is stuck in Tallahassee wrasslin' gators and listening with rapt attention while Jeb Bush's cronies tell her that there's never been a better time to Buy Florida, let's take a look at Paul Krugman's op-ed in the New York Times. His description of the dishonest GOP arguments against reforming health care insurance have a certain....Meganosity to them.

We are, I believe, witnessing something new in American politics. Last year, looking at claims that we can cut taxes, avoid cuts to any popular program and still balance the budget, I observed that Republicans seemed to have lost interest in the war on terror and shifted focus to the war on arithmetic. But now the G.O.P. has moved on to an even bigger project: the war on logic.

Why, that's Megan McArdle to a tee. She loved the rockets' red glare as they were busting in the bedrooms of Iraqi families, but became bored when the explosions stopped. She went on to her War on Arithmetic and sustained heavy damage at the Battle of the Calculator. And now she is engaged in the War on Logic, in which nobody can know anything ever.

So, about that nonsense: this week the House is expected to pass H.R. 2, the Repealing the Job-Killing Health Care Law Act — its actual name. But Republicans have a small problem: they claim to care about budget deficits, yet the Congressional Budget Office says that repealing last year’s health reform would increase the deficit. So what, other than dismissing the nonpartisan budget office’s verdict as “their opinion” — as Mr. Boehner has — can the G.O.P. do?

Hey, don't knock dismissing a fact as "their opinion." McArdle does it all the time.

The answer is contained in an analysis — or maybe that should be “analysis” — released by the speaker’s office, which purports to show that health care reform actually increases the deficit. Why? That’s where the war on logic comes in.

McArdle also dismissed the CBO's numbers, saying that "the CBO process has now been so thoroughly gamed that it's useless."

Krugman:

First of all, says the analysis, the true cost of reform includes the cost of the “doc fix.” What’s that?

Well, in 1997 Congress enacted a formula to determine Medicare payments to physicians. The formula was, however, flawed; it would lead to payments so low that doctors would stop accepting Medicare patients. Instead of changing the formula, however, Congress has consistently enacted one-year fixes. And Republicans claim that the estimated cost of future fixes, $208 billion over the next 10 years, should be considered a cost of health care reform.

But the same spending would still be necessary if we were to undo reform. So the G.O.P. argument here is exactly like claiming that my mortgage payments, which I’ll have to make no matter what we do tonight, are a cost of going out for dinner.

Well, what do you know--McArdle did that too. She is too slick to say that the doc fix was part of health care reform so she just said that it should have been part of the bill so it actually is. And no, it doesn't make any more sense in the original.

During the run-up to health care reform, a number of conservatives argued that the Democrats were dishonestly excluding from the cost of legislation the "doc fix" (altering Medicare payment rates for doctors, who were otherwise scheduled to get their rates cut by about 20% under a mechanism known as the "Sustainable Growth Rate" or SGR). The SGR is sort of like the Alternative Minimum Tax--it was established a while ago, and since then cost inflation has made the original targets unreasonable, so it has to be altered by Congress. But since doing so permanently would have a really eye-popping price tag, Congress alters it piecemeal every year. Perhaps not coincidentally, these is also an excellent opportunity for fundraising from interest groups who would otherwise take a big hit if the law were allowed to go into effect as written.

The back and forth over whether this should be included in the cost of health care has now ended; in the waning hours of the current congress, they've finally struck a deal on the "doc fix", and it is indeed part of the cost of health care reform. Literally, as my husband points out over on the Reason blog:

Democrats argued that the doc fix was a separate issue, unrelated to the new law and therefore unnecessary to include in the bill or the cost estimates. But that was pretty hard to believe: Reports indicated that Harry Reid had used the doc fix to buy support for the health care overhaul from the American Medical Association, and an early draft had included a fix. The cost proved to be too much.


And as of this week, it's even harder to buy the line that the doc fix is somehow unrelated to the new health care law: Senate leadership has reportedly reached a deal to delay the called-for cuts and pay for a one year extension of Medicare's payment rates. And they're paying for it by taking money out of the health insurance subsidies included in the health care overhaul....

He tactfully neglects to mention that his wife was one of the people arguing that the "doc fix" had nothing to do with health care reform. And I suppose you could still argue that it doesn't--after all, as I understand it, the doctors got played. They were expecting a permanent fix in exchange for their support (or at least their silence), not the same one-year fix they always get.

But as Peter notes, the health care bill used up all the normal pay-fors, which is why we've got this bizarre time-shifting deal. In order to pay more for doctor's visits next year, we're revising the subsidies that health-insurance buyers will receive in 2014. I'd argue that if you're balancing the cost of the doc fix with changes to the exchange subsidies three years hence, the doc fix should have been part of the bill.

All other issues aside, this strikes me as a pretty bad precedent. The doc fix will need to be paid for in 2012, too--shall we start siphoning funds out of the 2020 budget to pay for it?

Back to Krugman:

There’s more like that: the G.O.P. also claims that $115 billion of other health care spending should be charged to health reform, even though the budget office has tried to explain that most of this spending would have taken place even without reform.

How odd. McArdle did that as well.

Meanwhile, the CBO just came out and said that the health care reform was slated to cost $115 billion more than they said it would. Why? Because they didn't have time to calculate the effects on discretionary spending such as new administrative capacity, demonstration projects, and continuation of successful short-term initiatives. As my fiance notes, Olympia Snowe's demands to slow down the process suddenly seem a lot more reasonable.

The progressive response on this, as I understand it, is threefold:


1. We don't have to fund this stuff
2. Maybe we'll cut something else to fund this stuff
3. C'mon, who cares?

Predictably, I find none of these convincing. Some of the stuff we do have to fund, because the agencies are going to have to have staff to deal with the new requirements; and the stuff we don't have to fund is the demonstration projects that I was assured were going to bend the cost curve. So if we save this money in the first ten years, we lose the possibility of lower cost growth after the first decade.

What's really worrisome, however, is that I'm unaware of any happy surprises where it turns out this thing is going to cost less than expected. It's early days, yet, of course--but it's a little too early to take rapidly mounting cost projections in stride. We haven't done anything yet, and we're somehow already at least $100 billion in the hole.

Ezra Klein corrected her.

Megan McArdle has a post up saying that health-care reform is "already at least a hundred billion dollars in the hole." That's really not right, though it's certainly true that the CBO's estimate suggesting $115 billion in discretionary costs confused a lot of people. But let me just quote CBO Director Doug Elmendorf, who's doing his best to clear up the confusion.

The potential discretionary costs identified two days ago include many items whose funding would be a continuation of recent funding levels for health-related programs or that were previously authorized and that PPACA would authorize for future years. (For example, those potential costs include $39 billion authorized for Indian health services that already receive appropriations every year.) CBO estimates that the amounts authorized for those items exceed $86 billion over the 10-year period (out of the roughly $105 billion total shown in the table provided yesterday). Thus, CBO’s discretionary baseline, which assumes that 2010 appropriations are extended with adjustments for anticipated inflation, already accounts for much of the potential discretionary spending under PPACA. That is one of the reasons that potential discretionary effects are shown separately from effects on revenues and mandatory spending in CBO’s cost estimates.

So that knocks out more than $86 billion of the $115 billion. What's leftover is about $15 billion for administration and $10 billion in possible new discretionary spending. That spending may or may not happen, and if it does, it will need another vote in Congress, and it will have to be offset elsewhere in the budget.

As Elmendorf writes at the bottom of his post, this is why the CBO doesn't include discretionary spending numbers in their normal estimates. Discretionary spending is not "new spending that the bill has passed into law." Most of it's old spending that may or may not continue, and a bit of it is new spending that may or may not happen, but would need another vote and an offset.

He added a graph, evidently not realizing that using math would be a waste of time.

McArdle's response was a work of art and therefore is reproduced below. She decides--or pretends to decide--that the doc fix is a bribe, not a yearly correction of an earlier legislative error and then states that if we include the doc fix in the price of the bill we also have to include other items. To compound the error, we suppose.

Ezra, among others, points to the CBO blog follow up which says that $86 billion of the new spending consists of continuing existing levels of spending in the Bureau of Indian Affairs and assorted other agencies. In other words, just because they happened to stick this stuff in the health care reform bill, rather than somewhere else, doesn't mean we should attribute the cost to the health care bill. A number of readers have mentioned this, so I think this is worth writing more about.


It's a fair enough argument, in one way, but it seems to me that we're getting entirely too cute with what "really" constitutes a cost of the health care bill. The "doc fix", we're told, "has to happen anyway", so it shouldn't be counted--even though the permanent changes to the SGR, which are going to cost hundreds of billions, are very clearly being offered as a quid-pro quo in exchange for the American Medical Association's rather unenthusiastic support. I've defended progressives on this, on the grounds that if it's in a separate bill, well, the CBO has to score it as a separate bill.

But the corollary to this is that it's in the bill, it's a cost of the bill--even if you think the government would have gone and done this anyway at some other time. I mean, I'm happy to use the argument that we should think about previous appropriations levels, rather than what is or isn't in the bill itself . . . but then I think we have to include the doc fix as a cost of health care reform, because making it permanent is very clearly necessary to its passage, and furthermore (IMHO), would not likely be happening without PPACA--if they didn't have to buy off the doctors, they'd be doing it on a temporary basis, rather than scrambling to find the money for a permanent fix. So I don't think this logic actually improves my opinion of the bill's costs.

And even if we did throw both out, we've still got another $30 billion of unexpected spending, not two months after the bill was passed. We've got companies doing exactly what we were promised they wouldn't: exploring the option of throwing their workers into the individual markets, at great cost to the rest of us. We've got state insurance commissioners essentially commanding insurance companies to sell at a loss.

It's not that one expects the projections to be perfect. But imperfect projections are supposed to have random error--you get surprises to the upside, and surprises to the downside. All these errors run one way. Though it's too early to tell, it makes me worry that the estimates might be biased--not in the way that we commonly use the word, which implies some sort of volitional, usually explicitly political thumb on the scale, but simply in the statistical sense that the method used to do the estimates may systematically produce projections that are lower than the true value.

That wouldn't necessarily make it a bad method, either--there are reasons that we often use police counts for crimes, even though we know that many crimes go unreported; it's hard to estimate the incidence of unreported crimes, and so we use the easy-to-measure number in many contexts, even though we know it's too low. So I want to make it clear that I don't think there's anything obviously wrong with the way the CBO is doing things. It's just that the steady trickle of bad news makes me worried that there's worse to come.

Krugman:

To be sure, the Republican analysis doesn’t rely entirely on spurious attributions of cost — it also relies on using three-card monte tricks to make money disappear. Health reform, says the budget office, will increase Social Security revenues and reduce Medicare costs. But the G.O.P. analysis says that these sums don’t count, because some people have said that these savings would also extend the life of these programs’ trust funds, so counting these savings as deficit reduction would be “double-counting,” because — well, actually it doesn’t make any sense, but it sounds impressive.

Yes, McArdle did that as well.

Unfortunately, the CBO finally got around to ruling on this question, and no, this is not actually going to fix the Medicare budget problem; it's an artifact of the way the government accounting is done.

The explanation is a little complicated, and I'm not sure how many of you want to go through it, but I'll try my hand at a reasonably succinct explanation. Basically, Medicare, like Social Security, has a "trust fund" (actually, more than one), which is supposed to fund it until the trust fund is exhausted in 2019. The "trust fund" does not exist in any meaningful sense, because its "assets" consist of claims on the general fund, i.e. all the rest of the tax money. As Medicare goes into deficit, it trades in those assets to cover its funding gap, which means the general fund has to find the money to pay off the special bonds by either raising taxes, cutting other spending, or borrowing more money. After the trust fund is exhausted, the general fund has to find the money to pay for the Medicare deficit by either . . . raising taxes, cutting other spending, or borrowing more money. The difference to taxpayers is nil.

Technically, when you cut Medicare spending, that money shows up as an increase in the Medicare trust fund, rather than some other possible accounting entry. But the effect on the unified budget is the same: the money saved by cutting Medicare is spent on other stuff. Whether Medicare is "calling bonds" or "demanding money to cover its deficit", we still have to find exactly as much money to pay for Medicare as we did before. Which is a lot of money. One of the reasons the projected deficits for the rest of the decade are so big is that the cost of Medicare is outstripping the revenue raised by its payroll tax, and so we have to shovel in more and more money from the general fund.

You can dedicate that money to paying for Medicare--but then you have to introduce a corresponding future liability on the general fund, in the amount of the Medicare savings. That would mean that this bill would increase the deficit by hundreds of billions of dollars, rather than reducing it.

Whenever McArdle says "technically" or "it's a fair enough argument" you know that she realizes she doesn't have much ground to stand on.

So, is the Republican leadership unable to see through childish logical fallacies? No.

That's McArdle.

The key to understanding the G.O.P. analysis of health reform is that the party’s leaders are not, in fact, opposed to reform because they believe it will increase the deficit. Nor are they opposed because they seriously believe that it will be “job-killing” (which it won’t be). They’re against reform because it would cover the uninsured — and that’s something they just don’t want to do.

And that's McArdle.

And it’s not about the money. As I tried to explain in my last column, the modern G.O.P. has been taken over by an ideology in which the suffering of the unfortunate isn’t a proper concern of government, and alleviating that suffering at taxpayer expense is immoral, never mind how little it costs.

That's tattooed over McArdle's heart.

Given that their minds were made up from the beginning, top Republicans weren’t interested in and didn’t need any real policy analysis — in fact, they’re basically contemptuous of such analysis, something that shines through in their health care report. All they ever needed or wanted were some numbers and charts to wave at the press, fooling some people into believing that we’re having some kind of rational discussion. We aren’t.

That's McArdle in spades. Her fake libertarianism is a nothing but a trendy veneer over her conservative core. Her job is to wave around fake numbers and deliberately misinterpret charts. She is a shill for the rich. Why try to hide it? Nobody cares. The right will believe whatever they want to believe and admire McArdle all the more for getting away with lying to everyone. The left can do nothing but complain.

Let's Play Blame The Victim

Shorter Kathryn Jean Lopez: Gabrielle Giffords was nearly killed by the culture of death she supported.

Yes, K-Lo is blaming Giffords' pro-choice stand for the attempt on her life. "The Corner" is a misnomer. It should be called "The Dank, Slimy Place Under A Rock."

The Playground Monitor

It seems Rush Limbaugh and Charles Krauthammer got into a slap fight and there was hair pulling and tears and now Kathryn Jean Lopez is here to wipe their faces and give them a Charms lollipop just like Grandma used to and make the hurt go away.

My e-mail was buzzing last night about Krauthammer vs. Limbaugh.

Sigh.

Wednesday night’s speech in Tucson was the best of Obama’s presidency. Fit between an odd invocation and hooting and hollering, he was — as is appropriate to a president — presidential and focused on many powerful images, and lives. But there were also things to criticize about Obama’s speech, and Rush did.

The "odd invocation" is called someone else's religion, K-Lo. It was a Native American blessing. "One True Ring to Rule Them All" only works for hobbits, as they say on the internet.

Perhaps because he went on too long, the president’s view of America came through.

The view of a socialist Kenyan who will bankrupt America by giving money to the undeserving masses?

Rush Limbaugh doesn’t need a defense team, but “smart, articulate, or oratorical” in funeral oration only goes so far, when one’s record is what it is.

I think her record is "They're Coming To Take Me Away."

Anyway, Rush was giving his honest reaction. And listeners have come to expect nothing less from him. For three hours a day, a voice of reason and entertainment. A voice of solidarity and education.

A voice of irrational hate and spiteful mocking. A voice of conformity and propaganda.

Dr. K does the same — he gives his honest reaction to what he’s observing. He saw the commander-in-chief, the young Hamlet, not fretting, not demurring, not agonizing. And he said so. Gave him credit where due.

Alas, poor K-Lo I knew you well. A blogger of infinite zest, of most excellent obedience, she hath born Rush on her back a thousand times.

Rush couldn’t get beyond the surroundings, though, the buts (as Rush has put it) in his speech, and the reality of his presidency. And he wasn’t alone, if my e-mail is any indication.

Both are wise men with different perspectives, both on the side of the good and just.

One remains the Leader of the Opposition. The other, Critic-in-Chief. (As NR covers have told the tale.)

Another, the sycophant-in-chief.

Rush wasn’t condescending. Charles wasn’t slobbering. I respect Charles’s opinion and always want to hear it. But I was glad Rush didn’t hold back about the big picture.

Good men, honest opinions. It’s a great country.

Good men who would happily sacrifice K-Lo to an angry mob, like Lot and his daughters in the Bible.

Beyond a speech: I want to repeal Obamacare. Rush Limbaugh and Charles Krauthammer want to, too. I want Barack Obama to be a one-term president, defeated in the ballot box. Rush Limbaugh and Charles Krauthammer both want that as well.

There’s unity in that, too.

K-Lo hasn't been this conflicted since the primaries. Her two Daddies are fighting and it's giving her a tummy ache.

Incidentally, for all the divisions even on the right about Sarah Palin, I couldn’t help noticing that a lot of it faded — if only momentarily — among some conservative critics in my midst this week, as the Left really overreached.

She'll still be stumping for Palin for president when the latter is selling wrinkle cream on QVC.

UPDATE: Rush’s on-air response, with a light hand: “I was going to name my first child Krauthammer, even if it was a girl. but no more.”

Yes, Rush is known for his subtle humor. Just as K-Lo is known for her perceptiveness.

The Lonely GOP-herd

(I have already posted this in Roy Edroso's comments, but I want to post it here as well to preserve it for posterity. It was inspired by comments from Kia and Mr. Wonderful.)

[Roy:]
High on the Hill was the lonely GOP-herd
Lay ee odl lay ee odl lay hee hoo
Loud was the voice of the lonely GOP-herd
Lay ee odl lay ee odl-oo

Folks on the web who were quite remote heard
Lay ee odl lay ee odl lay hee hoo
Angry and clear from the GOP-herd's throat heard
Lay ee odl lay ee odl-oo

[the Commenters:]
O ho lay dee odl lee o, o ho lay dee odl ay
O ho lay dee odl lee o, lay dee odl lee o lay

[Roy:]
A Fool on the bridge of the Starship Dolt heard
Lay ee odl lay ee odl lay hee hoo
Law teachers bad with a grudge to tote heard
Lay ee odl lay ee odl-oo

[the Commenters:]
Christianists mad for the chance to smote heard
Lay ee odl lay ee odl lay hee hoo

[Roy:]
Cheerleaders not wanting Browns to vote heard
Lay ee odl lay ee odl-oo

One grizz'ly girl, nails in bright red coats heard
Lay ee odl lay ee odl lay hee hoo
She yodeled back to the lonely GOP-herd
Lay ee odl lay ee odl-oo

Soon the girl's ear with a greedy gloat heard
Lay ee odl lay ee odl lay hee hoo
What a duet for a girl and GOP-herd

[Roy and the Commenters:]
Lay ee odl lay ee odl-oo

Ummm (ummm) . . .
Odl lay ee (odl lay ee)
Odl lay hee hee (odl lay hee hee)
Odl lay ee . . .
. . . yodeling . . .

Happy are they lay dee olay dee lee o . . .
. . . yodeling . . .
Soon the duet will become a trio
Lay ee odl lay ee odl-oo

Odl lay ee, old lay ee
Odl lay hee hee, odl lay ee
Odl lay odl lay, odl lay odl lee, odl lay odl lee
Odl lay odl lay odl lay

[the Commenters:]
HOO!

Assassins

Arthur Silber is back.

Obama tells us that we must "make sure that we are talking with each other in a way that heals, not a way that wounds," and that "only a more civil and honest public discourse can help us face up to our challenges as a nation." Despite the fact that most of us are taught early in life that "actions speak louder than words," the majority of adults have more deeply internalized a lesson directly opposed to that maxim: when you judge an authority figure, you must give special weight to his words and what he says his intentions are. If his actions profoundly contradict what he "talks" about, it is the actions you must disregard. There is a direct line between forcing a child to believe that physical and/or emotional abuse is inflicted by his parents (or other caregivers) "for his own good" and arguing that the United States must invade and destroy a village, or an entire country, for its own good. Most adults spend their lives refusing to see the connection.

In fact, how a person acts is of infinitely greater significance than what he says. And toward the conclusion of his remarks, Obama conceded as much: "We may not be able to stop all evil in the world, but I know that how we treat one another is entirely up to us."

Is it "civil and honest" to ask how Obama is treating us, those poor, lost souls who are not "good and important"? I dare to proceed in the belief that it is. In answering that question, one fact above all must be mentioned first. That it is not -- and this fact has almost never been mentioned in all the interminable debates about the violence in Arizona -- reveals a great deal about the moral and intellectual rot that suffocates these wretched United States.

While I am not willing to excoriate Gabriella Giffords for her support of the military state while she is in her hospital bed, I am happy to point out that Obama's soon-to-be-famous speech, beautifully written and utterly heart-felt, is fake and cruel in its pandering to American vanity and pride. The same man who declared he can assassinate his enemies at will said the following:

The loss of these wonderful people should make every one of us strive to be better in our private lives - to be better friends and neighbors, co-workers and parents. And if, as has been discussed in recent days, their deaths help usher in more civility in our public discourse, let's remember that it is not because a simple lack of civility caused this tragedy, but rather because only a more civil and honest public discourse can help us face up to our challenges as a nation, in a way that would make them proud. It should be because we want to live up to the example of public servants like John Roll and Gabby Giffords, who knew first and foremost that we are all Americans, and that we can question each other's ideas without questioning each other's love of country, and that our task, working together, is to constantly widen the circle of our concern so that we bequeath the American dream to future generations.

I believe we can be better. Those who died here, those who saved lives here - they help me believe. We may not be able to stop all evil in the world, but I know that how we treat one another is entirely up to us. I believe that for all our imperfections, we are full of decency and goodness, and that the forces that divide us are not as strong as those that unite us.

...

If there are rain puddles in heaven, Christina is jumping in them today. And here on Earth, we place our hands over our hearts, and commit ourselves as Americans to forging a country that is forever worthy of her gentle, happy spirit.

May God bless and keep those we've lost in restful and eternal peace. May He love and watch over the survivors. And may He bless the United States of America.

The very last thing we could ever possibly want would be for our imaginary God to give us what we deserve. We not only accept that our president is a wanna-be assassin, we give him money and campaign for him. We kill little girls all the time, little girls who are just as loved as Christina. We would have to be crazy to kill them, evil, out of control and utterly merciless. And yet we do.

Less Fiduciary Megan

Shorter Megan McArdle: If banks have to follow the law it will be harder for people to get a mortgage.

Shorter Megan McArdle: Banks have to follow bankruptcy laws but if they don't I won't get upset about it.

Shorter Megan McArdle's guest poster: When banks don't follow the law they are not failing to follow the law.

Shorter Megan McArdle: That murdered little girl could have been me. Only now do I realize the magnitude of what the world could have lost.


Too bad she didn't think of all the little Iraqi girls that were killed with our bullets and bombs before she supported our illegal war.