U.S. Politics: Russian Around

[Martell Spy]

An Important Insurer Says Paul Ryan’s Health Care Plan Fails at Its Only Goal: Making Coverage Cheaper

http://www.slate.com/blogs/moneybox/2017/03/08/insurer_says_the_gop_s_health_care_plan_would_raise_premiums_30_percent.html

[The Anti-Targ]

30 minutes ago, Martell Spy said:

An Important Insurer Says Paul Ryan’s Health Care Plan Fails at Its Only Goal: Making Coverage Cheaper

http://www.slate.com/blogs/moneybox/2017/03/08/insurer_says_the_gop_s_health_care_plan_would_raise_premiums_30_percent.html

Right, because individual mandate (to get healthier people in the system and thus reduce the overall risk for insurers) is gone and people with pre-existing conditions can't be denied so long as insurance is continuous. That this leads to a premium increase is pretty much kindergarten economics.

It's why single payer is the only solution if you want a mechanism that spreads the cost by getting healthy people to contribute to the revenue base for providing healthcare. If you only get unhealthy, or medium to high risk people to contribute to the revenue base then surprise surprise the cost per person goes up.

I think perhaps the reason for that "liberal when young, conservative when old" thing is because of the loss of functioning brain cells as we age. Nothing to do with wisdom, and understanding better how the world works.

Edit: So in interviews during the campaign when Trump said (of healthcare) "We're going to take care of everyone" or something like that, I guess he was using "take care" in the Mafia sense of the term.

[The guy from the Vale]

3 hours ago, James Arryn said:

Possibly, good point. Though I think he lived in Switzerland during the Confederacy, which would have exposed him to alternatives, I think.

Not really, no. Geneva had just recently joined the Confederacy when Calvin became active, so he had little time to investigate the different systems of taxation in Switzerland. Even if he had, though, the Confederacy's cities were not particularly big on downward redistribution of wealth. To take the two most powerful cities of the Confederacy at the time, Berne and Zurich were both different kinds of plutocracy, both trying to emulate the greatness of the North Italian Republics of Venice Genoa and Florence. In Berne, the local aristocracy had a tight hold on power and wealth, exploiting their rural conquests in Vaud and Aargau. Their influence continues to this day: the current mayor of Berne belongs to one of these noble families (Interestingly, Laura Bush is a descendant of the same family). In Zurich, power rested with the trades and crafts guilds, while again, rural farmers bore the brunt of the tax burden. So... no, there were no local examples of downward redistribution of wealth available to Calvin at the time.

[The Anti-Targ]

China approves 34 Trump-related Trademarks.

On the face of it, from the US perspective this is a non-issue. Trademark protection is an important issue and all of the trademark applications were probably legit. But I wonder what sort of quid pro quo China might be expecting since they might see this as having just done a big favour to the US president. If China is expecting something in return then if they don't get it, or the USA does something that causes disadvantage to China or loss of face then China might go into punishment mode. China went into punishment mode with us a few years back because of a loss of face, and it caused a major disruption in trade, and we are still tidying up a few loose ends.

But also the Trump admin needs to make sure the perception is all above board. Any perception of soft peddling on China could be a basis for heavy political criticism even if the perceived soft peddling is a diplomatically sensible course of action.

[Ormond]

2 hours ago, The Anti-Targ said:

 

I think perhaps the reason for that "liberal when young, conservative when old" thing is because of the loss of functioning brain cells as we age. Nothing to do with wisdom, and understanding better how the world works.

 

The idea that people become more conservative as they age is very problematical as a general statement. There hasn't been a great deal of good longitudinal research on this subject, and the results are very mixed. Most of the research I've seen showing people getting more "conservative" politically as they age is from the UK. Much research from the USA on this shows, if anything, people becoming on average more liberal as they age, especially on social issues. When Americans and Canadians become more conservative with age, it's often on issues relating to things like security and taxes, and seems to be the result of becoming a parent, not just getting older, because childless people don't seem to get more conservative with age on those issues. 

At the moment the oldest generation regularly voting (the so-called "Silent Generation") tends to be the most conservative, but that seems to be a cohort effect, as they are the people who first became politically aware under the Eisenhower administration, which led to a higher % of Republican identification. They've always skewed more Republican than the two generations on either side of them, the World War II generation and the early Baby Boomers. 

[Zorral]

8 hours ago, Ormond said:

A very important point to bring up -- but just to point out, the Coast Guard is NOT the same thing as the National Guard. It's the former where the cuts are proposed. 

Duh -- I knew that. Thanks for the correction.  Argh, I hate doing that!

[Zorral]

However, the plan includes cutting of the revenue streams that come into Medicare and Medicaid from the sales and subsidies to drug companies and other such streams, with the idea of having them gone gone gone within 10 years.

 

[The Anti-Targ]

Yeah, Somehow I don't think ideological leopards change their spots terribly often. It would normally take some kind of other life-changing experience (like finding God, or losing God) for someone to flip from con to lib or the other way around.

Honestly, I don't know why parents would become more conservative on taxes. In the USA the experience might be different but here I think most parents get sufficient benefits from tax-payer funded programmes and services that the idea of cutting taxes, which could reduce those programmes and services would generally make parents favour retaining current taxes or even increasing them (for the top earners). Though I think some parents might welcome some kind of universal dependant child tax credit. At the moment direct financial support for dependant children is income tested and is a welfare payment rather than tax credit. We used to have a universal family benefit. But then the 80's came along. My great aunt was old enough when she had her daughter that for 2 or 3 years she was collecting the pension and the family benefit, until her daughter turned 18.

[The Anti-Targ]

I thought it was an interesting comment from one pundit on the radio this morning about the Wikileaks CIA phone / smart TV hacking dump. He said Wikileaks hasn't ever dumped anything that exposes the Russian govt. Is that correct? Is Wikileaks really just out to get major western powers?

They don't sound like equal opportunity leakers, but rather leakers with a major bias, which as an activist group, there is nothing inherently bad about having a particular bias. Green Peace has an environmental bias, for instance. But it does raise the question for a group like Wikileaks about whether there is some nefarious political influence or even collusion by govts that have had a free pass, or only been lightly touched. 

[Cas Stark]

Maybe no Russians leak anything to anyone because they figure that Putin will poison them or shoot them down in the street. 

[LongRider]

Rep. Eric Swalwell from California has put up a bunch of info concerning Trump and his Russian connections up on his website, looks interesting:

 

President Trump has also surrounded himself with people who do business with and are sympathetic to Russia. The New York Times reported that members of Trump’s 2016 campaign and other Trump associates had frequent contact with senior Russian intelligence officials throughout the campaign. In addition to these questionable communications, here are a few other associates with ties to Moscow:

The image won't paste here so go look.  

 

[Manhole Eunuchsbane]

 Rachel Maddow had an interesting piece tonight about the one single change the Trump campaign made to the official GOP platform during the RNC. This was the softening of the stance towards Russia in regards to the Ukraine. Trump denied having anything to do with it. Manafort denied having anything to do with it. Today a Trump campaign staffer reported that he had it changed at Trump's request.

  

 

[James Arryn]

3 hours ago, theguyfromtheVale said:

Not really, no. Geneva had just recently joined the Confederacy when Calvin became active, so he had little time to investigate the different systems of taxation in Switzerland. Even if he had, though, the Confederacy's cities were not particularly big on downward redistribution of wealth. To take the two most powerful cities of the Confederacy at the time, Berne and Zurich were both different kinds of plutocracy, both trying to emulate the greatness of the North Italian Republics of Venice Genoa and Florence. In Berne, the local aristocracy had a tight hold on power and wealth, exploiting their rural conquests in Vaud and Aargau. Their influence continues to this day: the current mayor of Berne belongs to one of these noble families (Interestingly, Laura Bush is a descendant of the same family). In Zurich, power rested with the trades and crafts guilds, while again, rural farmers bore the brunt of the tax burden. So... no, there were no local examples of downward redistribution of wealth available to Calvin at the time.

Ah, interesting. Thanks for the information.

[ThinkerX]

I find this overly optimistic - but if it starts happening in the next few years, Trump will (wrongly) take the credit:

 

http://www.msn.com/en-us/money/markets/opinion-how-the-us-could-bring-back-up-to-half-the-manufacturing-jobs-moved-overseas/ar-AAo1EDY?li=BBnbfcN&ocid=msnclassic

 

Many companies that offshored manufacturing didn’t really do the math. An Archstone study revealed that 60% of offshoring decisions used only rudimentary cost calculations, typically just price or labor costs and ignored other costs such as freight, duty, carrying cost of inventory, delivery and impact on innovation. Most of the true risks and cost of offshoring were being ignored.

Now is a good time to re-evaluate the cost of domestic vs. offshore production, and not just because of the risk of an angry tweet from the president.

Chinese wages have been rising by about 15% a year since 2000. As a result, the Chinese labor cost in dollars per unit of output is now about four times what it was in 2000. We estimate that about 25% of what is now offshore would come back if companies quantified the total cost. These products would generally have characteristics such as high freight cost vs. labor cost, frequent design changes, volatility in demand, intellectual property risk, and regulatory and compliance requirements.

[Ser Reptitious]

16 hours ago, Maithanet said:

I just assumed you meant that Republicans are playing Calvinball at this point.

Amusing, yet also kind of scary how accurate that metaphor is!

[Jo498]

7 hours ago, Ormond said:

The idea that people become more conservative as they age is very problematical as a general statement. There hasn't been a great deal of good longitudinal research on this subject, and the results are very mixed. Most of the research I've seen showing people getting more "conservative" politically as they age is from the UK. Much research from the USA on this shows, if anything, people becoming on average more liberal as they age, especially on social issues.

What about people staying roughly the same as they were in their 20s or 30s but the society around them shifting? There have been fairly radical shifts in the last 30 years e.g. in LGBT issues and slighter shifts in other policy fields. Someone who sticks to the positions they held in 1985 in their early 20s would be considered a reactionary wrt some social issues today.

(It's fascinating to me how a new cold war narrative, that the sinister Russian is behind everything, seems to work so well with people who should be too young to really remember the cold war. Or maybe it does work best with people over 40 who do.)

[maarsen]

2 hours ago, Jo498 said:

What about people staying roughly the same as they were in their 20s or 30s but the society around them shifting? There have been fairly radical shifts in the last 30 years e.g. in LGBT issues and slighter shifts in other policy fields. Someone who sticks to the positions they held in 1985 in their early 20s would be considered a reactionary wrt some social issues today.

(It's fascinating to me how a new cold war narrative, that the sinister Russian is behind everything, seems to work so well with people who should be too young to really remember the cold war. Or maybe it does work best with people over 40 who do.)

The Soviets were suspicious and felt neglected as a  superpower during the Cold War. Just about everything was about trying to prove their superiority. As the people there aged,  their beliefs stayed the same,  and here we are doing the same behaviours again  in response.

[Mexal]

This guy is a total piece of shit. He railed against pay for play while being a foreign agent during the campaign.

 

[Fez]

14 hours ago, Tywin et al. said:

Does it really make a big difference either way, at least in the short term? Either repeal and replace or just a straight repeal will throw the health insurance markets into chaos for awhile. The obvious smart solution would just be to fix the ACA's problems, but of course the Republicans won't do that because it means Obama was 100% wrong, which he basically always has to be in Bizarro Conservative World. 

I think so. Both options would hurt a lot of people, but a straight repeal would prevent the death spiral that'd happen by keeping the insurance company coverage requirements but not having an individual mandate (or technically; having a mandate with a $0 penalty). And not touching the Medicaid expansion would help the bill get a lot more support from state-level and senate Republicans, I think.

I don't think they'll ever do that though, because they need a fig leaf to claim that they had a replacement plan. And I have no idea what happens next. I do not think this bill will ever become law, but Republicans are under enormous pressure to pass some kind of bill. However, I'm not sure there's any bill that will satisfy the Freedom Caucus in the House and that the Senate will pass. 

They could work with Democrats instead to pass a bill that makes technical fixes and a compromise of liberal and conservative policy adjustments; and I could also win the lottery.

[OldGimletEye]

23 hours ago, Mlle. Zabzie said:

Yes, but we deal with what tools are available, and sadly, the Fed is the tool that is available currently.  And perhaps I mispoke.  Markets are bubbly.  There will be a market correction in the next 18 months (I've already seen the articles talking about why THIS bull market is more sustainable than other bull markets - sure sign).  Though markets do not reflect the over all economy, there will be macro impacts, and I fear that current executive policies will only exacerbate those impacts. I'd rather have an gentler rate driven correction now.   

Okay, I wanted to take a little time to write a response here because of all the arguments to tighten monetary policy the argument you raise is the one I’m most sympathetic too. So, I wanted to take a little time to explain where I was coming from because I’m not completely deaf to your argument here.

And, make no mistake, there have been some nutty arugments for raising rates over the last few years, such as “inflation is just around the corner!” to “if you raise rates right now!, forward looking economic actors via the fisher equation will come to expect higher inflation!!!” (neo-fisherianism).

I think Minsky had some useful things to say too.

There is no doubt that asset mispricing can indeed be a very serious problem. However, the most deadly kind of asset mispricing would seem to be paired with rapid growth in credit. Also, asset mispricing where said assets are held by consumers likely to cut their consumption spending when the asset boom goes pop, think middle class homeowners, seems to be even deadlier. Not every asset price correction ends up being devastating though.

I’m not sure, which asset class, your worried about being overvalued, but with respect to equities and homes I don’t see a bubble just developing yet.

With respect to equities the Case-Schiller P/E ratio is about 29. If it starts going up and up, I’ll start to worry. I think some kind of correcton may be in the works. But, I have no idea how big it will be. Some of it is probably based on expectations of Trump and the Republicans might do, with respect to degerulation and corporate tax cuts. We’ll see what happens with that legislation and how the market reacts to it. If later, it looks like the market is going batshit crazy, I will be more inclined to raise rates later. Also, on the legislative front: If Jeb Hensarling gets his Financial Bomb Act through, then I’d be more incline to agree to raising rates, as there will be less robustness to the financial system. His simple leverage ratio of 10% is horrible.

Like the Schiller P/E ratio, home prices are high compared to their historical averages. But, I don’t see a bubble developing there yet.

Also, from what I understand from the relevant literature, it’s not so much the levels that are the problem, but rates of growth. So if you start to see rapid rates of growth in asset prices and in credit growth then, yeah, start to worry.

On the credit growth side of things, I don’t see a real problem developing yet.

Stuff to watch would be delinquency rates, asset prices, risk premia, the growth of credit and debt aggregates. None of this worries me greatly right now. But, it might in the future.

Home and Equity Price Stuff:

http://www.econ.yale.edu/~shiller/data.htm

Credit and Debt Stuff:

https://fred.stlouisfed.org/series/HDTGPDUSQ163N#0

https://fred.stlouisfed.org/graph/?g=cXyv

Consumer Delinquency Stuff:

https://fred.stlouisfed.org/series/DRCCLACBS

https://fred.stlouisfed.org/series/DRCLACBS

This kind of tells me that people are still cautious about borrowing for obvious reasons.

Bond Spread Stuff:

https://fred.stlouisfed.org/graph/?g=cXPR

https://fred.stlouisfed.org/graph/?g=cXQg

Kind of a rough gage of how “confident” people are. Obviouly too much confidence can be worrisome:

Overall, I’m not too worried yet. Now if asset prices keep growing quickly, and credit growth keeps up quckly, and if it looks like the market is not sufficiently cautious, I’ll start worrying more.

Also, the FED can come out and say it’s trying to hit a 2% inflation target. And then people can set their initial priors at a 2.0% rate. But, as the data comes in, and inflation is lower than the 2% target rate people will update their priors and start expecting inflation to be actually lower than 2%, then leading to a self fulfilling prophecy. If I had my way, the inflation target would probably around 3%. One reason is because a higher nominal rate will keep us further away from the ZLB. And, you know, given the fact we are likely to have a lower natural rate over the coming years, it's important I think, to have that extra cushion. But, we're probably not going to get a 3% target rate anytime soon. And since were not, it seems to me we could at least hit the 2% one.

One last thing: You kind of alluded to the fact the interest rate target is the only tool we have. And, unfortunately, you're not exactly wrong. We need better microprudential and macroprudential tools ( and of course were not likely to get them with Trump and the Republicans) to deal with asset bubbles, particularly credit fueled asset bubbles, which would seem to be the most devastating based on historical experience. Using interest rate policy is a horrible way to deal with asset bubbles. For one, it’s hard to predict when a bubble is occurring and if you clamp down too fast you might create the very problem you are trying to stop. I mean I think there is a strong case to be made the FED clamped down too quickly in 1928 or 1929 to deal with a stock market bubble.

To sum up: I think your concern here is a valid one and it’s one I’m sympathetic to. But, I’m not inclined that raising rates now is appropriate. Certainly, a lot of this data will have to be watched carefully.