Relevant and even prescient commentary on news, politics and the economy.

Note to Christie: Sleights of Hand Work Only If They Go Unnoticed.

Chris Christie’s political success in New Jersey was based on the perception that his personal style — which involved lots of yelling at people — was a sign of his governing effectiveness. This perception may have flourished most easily in a state whose informal motto is “You got a problem with that?”

But what some of us suspected all along was that Christie didn’t yell at people because he was a get-results kind of guy; he yelled at people because he had anger management issues. And his office’s bizarre screed against David Wildstein, his former ally now turned enemy, confirms that diagnosis.

— Paul Krugman, Be Nice to Your Social Studies Teacher,, today

Since the bridge scandal broke early last month, and it’s been reported that some now-high-profile Christie appointees have resigned or been fired, I’ve wondered from time to time what has happened to one obscure Christie appointee: the guy who Christie assigned to shadow him with a videocamera in public settings and capture his tirades at ordinary constituents.  The purpose was to post the videotapes on YouTube: publicly humiliating unwitting foils as the road to reelection and higher office.

Sadistic-narcissistic-clown for president!

George Will and I don’t agree on much, but last fall, after Christie made some  highly-publicized vile comment to, if I remember right, a fan of a baseball team that was competing with Christie’s favorite team (or some such), Will wrote a column in which he made what struck me as a spot-on point.  His larger point was that he dearly hoped that the 2016 presidential contest does not end up being one between Hillary Clinton and Chris Christie, but he made clear that his objection to Christie was that a pathologically rude person–someone whose stock-in-political-trade is gratuitous insults–should not be president, irrespective of any other considerations.

I remember thinking at the time, “Well, good for George Will.”

After I read the full story on Friday about Wildstein’s lawyer’s letter, I thought any judgment about its meaning and effect was, rather obviously, premature. The letter provided no specifics at all.  But after Christie’s office responded on Friday, saying that the attorney’s letter proved that Christie played no role in the decision to cause “traffic problems in Fort Lee,” I wondered whether Christie was now claiming it was Wildstein who texted deputy chief of staff Bridget Anne Kelly that it was “time for some traffic problems in Fort Lee,” rather than, y’know, the other way around.  Wildstein’s apparent lack of documented evidence that Christie knew of the plan to cause traffic problems in Fort Lee before it was executed hardly means that no such evidence exists; it means only that Wildstein has no documented evidence of it.

So an important question was, is Christie really going to claim now that the others who it already is known were involved in the scheme–Bill Baroni, Wildstein’s superior at the Port Authority; Bill Stepian, Christie’s top political advisor; Bridget Anne Kelly, his deputy chief of staff–were mere puppets of Wildstein?

And now we have the answer, which is, yes.   Otherwise, what in heaven’s name was the point of that really weird memo disseminated yesterday?  Maybe that, as Krugman says, “This guy is scum. Everyone has always known that he was scum, since he was a teenager. And that’s why I appointed him to a major policy position”? Wildstein either has or knows of obtainable, documented evidence of whatever, or he doesn’t.

And Wildstein was not the one who sent the text saying, “Time for some traffic problems in Fort Lee.” He was the one who received the text.  Sleights of hand work only if they go unnoticed.

But Krugman’s larger point is this:

What’s remarkable here, actually, is how many pundits were taken in by the Christie persona. How could they not at least have wondered whether this guy’s bullying style reflected deeper flaws?

Yes.  But his bullying style, in itself, should have offended pundits en masse, as deeply abusive of his official position, which was the source of his ability to so publicly misuse ordinary individuals.

To reiterate: Good for George Will.

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George Will Comes Out for Single-Payer Healthcare Insurance! Cool!

WASHINGTON — Someone you probably are not familiar with has filed a suit you probably have not heard about concerning a four-word phrase you should know about. The suit could blow to smithereens something everyone has heard altogether too much about, the Patient Protection and Affordable Care Act (hereafter, ACA). …

The four words that threaten disaster for the ACA say the [federal] subsidies shall be available to persons who purchase health insurance in an exchange “established by the state.” But 34 states have chosen not to establish exchanges.

Four words in the ACA could spell its doom, George Will, Washington Post, today*

Ah.  While George Will’s readers don’t know about the lawsuit and others like it, and don’t know about the the four words at issue, my readers, here on AB, are not so in-the-dark.  The problem, of course, is that my readers are, well, not that numerous.  And George Will obviously is not among them.

To refresh your memory, faithful readers, back on Dec. 3, I posted a detailed post, prompted by a New York Times article that day by Sheryl Gay Stolberg.  Stolberg’s article was titled “A New Wave of Challenges to Health Law.” My blog post was titled “The Antidisestablishmentarianism Theory of Obamacare Illegality. (The ACA has a (dis)establishment clause!  Who knew?).”

I began my post, as I often do for the sake of efficiency (I don’t get paid to write these things. Dan???)**, with a quote from the article that discusses the issue I want to write about.  In this instance, the quote was:

A federal judge in the District of Columbia will hear oral arguments on Tuesday in one of several cases brought by states including Indiana and Oklahoma, along with business owners and individual consumers, who say that the law does not grant the Internal Revenue Service authority to provide tax credits or subsidies to people who buy insurance through the federal exchange. …

The subsidy cases, if successful, would strike at the foundation of the law. Subsidies and tax credits, which could be available to millions of low- and middle-income Americans, are central to Mr. Obama’s promise of affordable care. In drafting the law, Congress wrote that such financial help would be available to people enrolled “through an exchange established by the state” under the law.

“ ‘Through an exchange established by the state’ under the law.”  I wrote:

Hmm.  Okay, let me take a crack at this.  The law gives each state the option of running its own exchange or instead allowing the federal government to run an exchange for the state–an operation that must be done separately for each state, because each state has its own insurance companies offering different policies than other states, and subject to state insurance laws and state agency oversight.

The law doesn’t say “through an exchange run by the state” under the law; it says “through an exchange established by the state” under the law.  The states know their options.  Fourteen of them chose to establish an exchange by setting one up and running it.  The rest have chosen to establish an exchange by delegating to the federal government the job of setting up and running the exchange for the state.

The law itself, in other words, by requiring that each state choose one of two mechanisms to establish an exchange–directly or instead by delegation to the federal government–required every state to have (i.e., to establish) an exchange.  The tax credit, or subsidy, provision of the statute does not limit tax credits (subsidies) to people who live in states that choose to physically set up and run the state’s exchange itself.  It provides that benefit to people regardless of their state of residence, because by operation of law–specifically, by operation of that law–states can establish their exchanges by delegating to the federal government the physical setting up and running of the exchange.

Depends, in other words, on what the meaning of established is.  Or, more accurately, on what Congress intended the meaning of “established” to be.  And I’ve just told you what that is.  Surely, the federal courts understand the concept of contracting out a tech job.  Thirty-six states have chosen to contract out this job to the federal government.  Except, of course, that the contract was not negotiated but instead compelled by law.

Voila!  The antidisestablishmentarianism theory is disestablished.  The tax credits/subsidies clause in the ACA applies even to you, Red State denizens who qualify financially.  Congratulations.  I mean, my condolences.

I do not suggest that this is a slam-dunk.  As Will explains, the IRS, charged with enforcing the statute, has interpreted it as “consistent with,” and justified by, the “structure of” the ACA. By which, Will says, “The IRS means that without its rule, the ACA would be unworkable and that Congress could not have meant to allow this.”

Well, no, actually, what the IRS means is that in the 14 states that have established and run their own exchanges, the entirety of the law that remained after the Supreme Court struck down one part of it–more on that part below, because Will doesn’t understand the legal theory that succeeded in that part of the Supreme Court opinion; he should have phoned one of the legal eagles he mentions fondly before he bandied it about near the end of his column–is working reasonably well, thank you very much.

And that in the remaining 36 states, it’s also working fairly well now that the federal website is working fairly well.

And that if the Supreme Court does take the bait in these lawsuits, and strikes down the federal subsidies to lower- and some middle-income folks and families–who by then will be receiving those subsidies and enjoying meaningful healthcare insurance and the resulting relief from fear of economic hardship or calamity, should they need major medical care (or even just a broken ankle set)–the ruling likely will be the final nail in the federal-programs-via-federalism juggernaut so strongly supported by Republicans until Barack Obama became president.

Yes, as those links show, I’ve written extensively here about the death of federal-programs-via-federalism, courtesy of the Tea Party.  In those posts, I’ve also discussed the probable result of this for healthcare insurance: a major push for single-payer coverage, albeit not as a monopoly. This is a.k.a, “the public option.”

Will and his compadres apparently haven’t noticed that, with the exception of the Tea Party, most people who are concerned about Obamacare are not raging about “freedom!”/“liberty”!  Instead, they complain that their provider networks are too narrow or that the healthcare plan that they “liked” has been cancelled but usually are easily replaced by a plan they like better.

Or would like better if they knew of its availability.  Either because, with subsidies, it’s much less expensive, or because for a small additional cost, it’s much more comprehensive.  And because, well, it or something similar will continue to be available even after they actually make a large claim. Many people who have a pre-existing medical condition and who have feared that losing their job and therefore access to healthcare insurance at all, have some strong opinions about this, too.  Many of them agree that the issue is “freedom! liberty!”

As a liberal who would love to see a public option available to all–a system that uses its near-certain bargaining power to significantly lower healthcare costs and broaden provider networks or eliminate the very concept of it–I say to the justices, “Go for it!”  And as a Democrat, I’ll be licking my chops during the following campaign season, if they do.

Will says that some people argue that “the language limiting subsidies to state-run exchanges is a drafting error.” To which he responds: “Well.”  But he also disputes that the drafting-error claim is accurate. The words “established by the state,” were “carefully considered and express Congress’ intent.” “Congress,” he says, “made subsidies available only through state exchanges as a means of coercing states into setting up exchanges.”

Okay. Except that, well, what exactly is the hammer, the gun held to the head, in the coercion equation?  The states can establish and run their own exchanges or instead choose to allow the federal government to establish and run an exchange for the state; each state, remember, needs its own exchange, because the insurance policy options are for each state alone. Coercion? Really? The state saves money by allowing the federal government to establish and run the state’s exchange.  Our money or our life, isn’t all that coercive. “In Senate Finance Committee deliberations on the ACA, Chairman Max Baucus, D-Mont., one of the bill’s primary authors, suggested the possibility of making state-run exchanges the sole source of subsidies because only by doing so could the federal government induce state cooperation with the ACA,” he says.

I’ll take his word for it.  The problem is that there is nothing inherently problematic with the federal government attempting to induce cooperation with the ACA or any other statute, when there is no penalty to the state for refusing the inducement and failing to cooperate.  Will might want to check out how, say, federal transportation funds usually are distributed.  He doesn’t understand this, though, and the last three sentences of that paragraph run off the rails.

Baucus, he says, suggested the possibility of making state-run exchanges the sole source of subsidies because only by doing so could the federal government induce state cooperation with the ACA, because, um, that way “the law’s insurance requirements could be imposed on states without running afoul of constitutional law precedents that prevent the federal government from commandeering state governments.”


The constitutional law precedents he’s referring to are actually, first, a line of dictum in a Supreme Court opinion suggesting that there is a line, not crossed in that case, beyond which the federal government cannot go in trying to obtain a state legislature’s enactment of legislation, and, second, the section of the Supreme Court’s multipart ACA opinion issued in late June 2012. That opinion upheld all but one of the challenged sections of the ACA as constitutionally permissible use of federal fiscal power, and struck down the part of the Medicaid-expansion section that made continued federal Medicaid funds available to each state contingent upon the respective state’s agreement to expand the Medicaid program under the ACA.

The commandeering of state governments, the Court held, occurred because the Medicaid program, a program in which every state voluntarily participates and that is funded jointly by the state and the federal government, is too popular for state legislators to vote to end. Thus, coercion by the federal government, not because of the federal funds that would be provided to the states for the additional Medicaid coverage but because of the state funds, albeit only a small percentage of the costs of the expansion, that the expansion would require beginning a few years into the expansion program.

The success of this argument dismayed scads of legal scholars and other followers of the litigation. But the theory requires something resembling coercion of state legislators.  A huge part of modern conservative-legal-movement constitutional federalism claims do flip the Constitution’s Supremacy clause upside-down. But, really. No one, not even Paul Clement, at least to my knowledge, claims that the absence of a state veto over legitimate federal legislation constitutes the commandeering of state governments by the federal government, and therefore states must approve federal legislation. The federal government is entitled to use its constitutionally “enumerated” spending power to provide subsidies, in the form of tax credits or in some other form, toward the purchase of private healthcare insurance.  Will’s claim to the contrary is ridiculous.

Will says, accurately, that passage of the ACA required the vote of every Democratic senator. He also says that one senator, Ben Nelson of Nebraska, “admirably opposed a federal exchange lest this become a steppingstone toward a single-payer system.”

Nelson, as a longtime lawmaker, probably is aware of the law of unintended consequences.  Will, by contrast, has never been a lawmaker.


*Link is to a non-pay-wall republication titled slightly differently.

**As we Bears know, Dan Crawford has a sense of humor.  Or did have one.

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Government sponsored enterprises

by Beverly Mann

I Beg to Differ (in Part), Mr. Will

A few days ago I posted a post on my blog that responds to George Will’s claim in his weekend Washington Post column that the auto bailout was a privatization of profits but a socialization of losses. The full post, which is at Annarborist, and is called I Beg to Differ (in Part) Mr. Will, George Will says:

In 1994, Bill Clinton proposed increasing homeownership through a ‘partnership’ between government and the private sector, principally orchestrated by Fannie Mae, a “government-sponsored enterprise” (GSE). It became a perfect specimen of what such “partnerships” (e.g., General Motors) usually involve: Profits are private, losses are socialized.

—“Burning Down the House,” George F. Will, Washington Post, June 30

Will’s column discusses a new book by Getchen Morgenson and housing-finance expert Joshua Rosner that Will says “will introduce you to James A. Johnson, an emblem of the administrative state that liberals admire.” Johnson, for those of you who (like me) don’t instantly recognize the name, headed Fannie Mae during (I guess; Will doesn’t specify the dates) during the 1990s and early 2000s. He says the book details how Johnson and a few others, acting under the guise of compassion, used the government’s backing of Fannie and Freddie loans and the public policy of encouraging homeownership, to hugely enrich themselves.

Will writes:

Morgenson and Rosner report that in 1998, when Fannie Mae’s lending hit $1 trillion, its top officials began manipulating the company’s results to generate bonuses for themselves. That year Johnson’s $1.9 million bonus brought his compensation to $21 million. In nine years, Johnson received $100 million.

Fannie Mae’s political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating the homeownership mania, and spread “charitable” contributions to housing advocates across the congressional map.

But he also suggests, if I understand correctly, that it was Johnson and the other Fannie and Freddie folks, rather than the Wall Street crowd, who instituted the concept of securitized mortgages and credit default swaps—and (inferentially) then caused European banks to spur, say, the Irish housing bubble, which, last I heard, was not funded in any part by Fannie and Freddie. And he wrote the quote that opens this post, in which he claims that the government’s bailout—loans, most of which have been repaid—to GM and Chrysler have resulted in merely private profits. Unlike, y’know, the very substantial tax breaks given to oil companies.

The estimates about the number of jobs saved by those bailouts ranges from about 500,000 to (ultimately; i.e., indirectly) 1.5 million. Will is saying, in other words, that the federal government has no legitimate business involving itself so directly in the preservation of, or for that matter, the creation of jobs, because, after all, job preservation and job creation are private, not public, financial gains. The proposition is preposterous and relies upon the sleight of hand that only company and shareholder profits count as “profits”—a conceit that is likely to be seen for what it is, in places like Michigan, Indiana and Ohio. Assuming, of course, that Will is read in such places, or that some other wingnut picks up the argument and runs (literally, may) be with it there.
(Please, please, Paul Krugman. Respond to Will’s bizarre claim. You’re the only one who could do this and who has a wide enough readership for it to matter. We both know that no response to this type of canard will be forthcoming from the White House. Ever. Okay, well, at least until 2017.)

Two or three weeks ago, Newsweek ran a lengthy article by Bill Clinton listing 14 proposals for job creation. (Oh, for the days when the Democrat in the White House had some actual ideas, some energy, and the willingness—the eagerness, in fact!—to discuss his policy proposals, in detail and concertedly, with the public.) One of them concerned one of the Obama administrations (very) few policy ideas: Substantial tax credits and outright loans to green-tech startups, which resulted in an increase in America’s share of worldwide production of batteries for battery-powered cars from 2% to 20% before until our dear leader quietly—why raise this issue publicly during negotiations when it’s just so much easier to simply give the Republicans what they want—caved, er, negotiated away this law during last December’s budget white-flag waving, er, compromise. Clinton, of course, suggests that this program should be brought back, immediately, and expanded to other types of industries.

Won’t happen, of course. Well, maybe in 2017.

As for Johnson and his ilk, hopefully there’s still time, statute-of-limitations-wise, to prosecute these folks. And hopefully, the Morgenson and Rosner book will cause enough pressure for that to happen. And I agree with Will completely that one of the most despicable aspects of what happened with Fannie and Freddie was the fraudulent claim of compassion. Wonder, though, whether Will would agree with ME that the Repubs’ genuine compassion for, say, oil company execs and shareholders is just as unseemly, in its own way. Nah.

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