Economic Growth: Are Democrats Better at It?

Brad Plumer takes note of a recent study on US economic growth by Alan Blinder and Mark Watson: “Since World War II, there’s been a strikingly consistent pattern in American politics: The economy does much better when a Democrat is in the White House.”

“More specifically, since 1947, the U.S. economy has grown at an average real rate of 4.35 percent under Democratic presidents and just 2.54 percent under Republicans.”

Why? “Democrats simply have better economic luck,” explains Blumer.

Blinder and Watston attribute the “large D-R growth gap” to three major factors: oil shocks, productivity growth and consumer confidence.

“Now, this paper is hardly the last word on the subject. As Blinder and Watson note, they can only explain from 46 percent to 62 percent of the difference in growth rates … That means we still don’t have a full answer.”

Lawmakers Say Americans Not Safer

The Hill reports that the leaders of congressional intelligence panels claim: “Americans are in more danger of terrorist attacks than ever before.”

In a CNN interview on Sunday, Dianne Feinstein (D-Calif.), chairwoman of the Senate Intelligence Committee, warned that terrorist groups are becoming “more determined” and prolific: “There are more groups than ever and there is huge malevolence out there.”

“The lawmakers argued that questions about the activities of the U.S. intelligence community only damage its ability to thwart these attacks, which, [House Intelligence Committee Chair, Rep. Mike Rogers (R-Mich.)] says, could become smaller and more frequent.”

Rogers: “We’re fighting amongst ourselves …. So we’ve got to shake ourselves out of this pretty soon and understand that our intelligence services are not the bad guys.” November Sign-ups Approach 100,000

Bloomberg reports that “about 100,000 people signed up for health insurance through the online federal exchange last month, a roughly four-fold increase from October.”

“The person who provided the November enrollment figures, said the data points to a steady increase in sign-ups even before major website improvements were completed at the end of November.”

“While far from the original goal, the jump in enrollment may be an encouraging trend for the administration and could signal that consumers are keeping an open mind about the new $1.4 trillion health law amid criticism from both Republicans and Democrats over the site’s technical failures.”

Latest Fix May Be Illusory

Conor Friedersdorf cautions that the latest fix may be illusory:

“What the report elides by focusing on the consumer experience is the fact that back-end fixes are also needed before masses of Americans can actually buy insurance. It isn’t enough to improve the front end, where consumers create an account and choose a plan. To sign up, their inputs must reach the insurance companies.”

And not addressing “back-end” fixes could cause significant problems for actual enrollment:

“When the Obama Administration states that the site ‘will work smoothly for the vast majority of users,’ do they mean that it will successfully transmit their applications to insurers, resulting in their actually being covered?”

“Or do they just mean that consumers can successfully submit their application, regardless of what happens next? A progress report with more clarity on that point is needed. Does a broken back end render the front-end fix useless to some consumers? The progress report’s narrow focus on the front end leaves me pessimistic.”


Obama Adviser Urges Patience on Obamacare Rollout

The Hill reports that President Obama’s former campaign manager, David Plouffe, said on ABC’s This Week, “it may be years until ObamaCare is working ‘really well,’ [adding] that ObamaCare was designed to be implemented by the states.”

Plouffe: “And in most of the states [it] is going quite well. You talked about Medicaid expansion. I think it’s just a fact, and it may take until 2017 when this president leaves office, you’re going to see almost every state in this country running their own exchanges eventually and expanding Medicaid. And I think it’ll work really well, then.”

“You see the interest out there … people want healthcare … They’re going to be able to get healthcare.”

Grassroots Campaigns Boost Minimum Wage

Steve Coll explores the “sources of surprise in American politics” surrounding the growing movement at the local level to raise the nation’s minimum wage.

Using as an example the recent success in SeaTac to raise the local minimum wage to $15/hour, Coll argues that “the movement has momentum because most Americans believe that the federal minimum wage—seven dollars and twenty-five cents an hour, the same as it was in 2009—is too low.”

“In January, President Obama called for raising the federal minimum to nine dollars an hour, and, more recently, he endorsed a target of ten dollars. Yet … intractable Republican opposition in the House has made passage of any legislation in the short term highly unlikely. The gridlock has prompted local wage campaigns such as the one in SeaTac.”

“According to a Gallup poll taken earlier this year, [even] a majority of Republicans favor a minimum wage of nine dollars. That reflects a truth beyond ideology: life on fifteen thousand a year is barely plausible anymore.”

Coll concludes: “a federal minimum wage of ten dollars or more will not solve inequality … Yet it will bring millions of Americans closer to the levels of economic security and disposable income that they knew before the housing bubble burst.”

Will Puerto Rico be the Next Detroit?

The Washington Post takes an in-depth look at Puerto Rico’s deteriorating economy and cautions that “the implications are serious for Americans outside Puerto Rico both because a taxpayer bailout would be expensive and a default would be far more disruptive than Detroit’s record bankruptcy filing in July.”

“The situation is being closely monitored by the White House, which recently named an advisory team to help Puerto Rican officials navigate the crisis.

“The brutal combination of a long recession, a shrinking population and [$70 billion in] debt has left Puerto Rico’s political leaders struggling.”

“The downgrade [of Puerto Rico’s bonds to just above junk status] ignited widespread concern that the island was sliding toward default, which would hurt many investors across the United States. Because of their high yields and exemption from federal, state and local taxes, Puerto Rican bonds are held by three out of four municipal bond mutual funds.”

Puerto Rico’s general obligation bonds are now in danger of being downgraded to junk status, “paralyzing its efforts to dig out from under its mountain of debt, … The federal government could feel pressure to step in with some type of bailout.”

Are We Ready for Amazon Prime Air? is testing delivering packages using drones, CEO Jeff Bezos told 60 Minutes.

USA Today: “The idea would be to deliver packages as quickly as possible using the small, unmanned aircraft, through a service the company is calling Prime Air… The goal of the new delivery system is to get packages into customers’ hands in 30 minutes or less, the world’s largest Internet retailer said. Putting Prime Air into commercial use will take ‘some number of years’ as Amazon develops the technology further and waits for the Federal Aviation Administration to come up with rules and regulations, the company added.”

CNN: “Those FAA rules could come as soon as 2015. The type of flights Bezos proposed are currently not allowed. Unlike some other drones currently used, these would be autonomous — they would fly without a pilot.”

A video of how the service will work has a package being taken from the warehouse floor and on to the front steps of the customer’s home just a half hour after pressing the order button.

Interestingly enough, Amazon already sells a drone you can fly yourself. However, it still comes to you the old fashioned way — in a delivery truck.

'Nuclear Option' Helps Obama Regulatory Agenda

According to The Hill, “the Obama Administration’s second-term regulatory agenda should be an easier lift, thanks to changes to the Senate’s filibuster rules that make it easier to fill key agency positions and install federal judges.”

“But Obama is unlikely to suddenly start making contentious nominations, said Maryland law professor Rena Steinzor, who serves as president of Center for Progressive Reform.”

“Rather, … the new Senate rules would help Obama fill long vacant positions at agencies already reeling from strained resources following this year’s sequester cuts.”

Steinzor: “I don’t expect a bunch of fiery appointments.”

Republicans Can Still Block Obama Nominees

The ‘nuclear option’ did not completely obliterate Senate Republicans’ ability to block judicial nominations, reports The New York Times.

“It left unchanged the Senate’s “blue slip” custom, which allows senators to block nominees to judgeships associated with their states.”

And that’s a potential problem as “all but one [of the 12 vacant appeals court seats] are in states with at least one Republican senator.”

White House counsel, Kathryn Ruemmler: “It is hard to overstate the change’s importance for the D.C. Circuit, which has a disproportionate impact on the world, but it won’t have overwhelming impact elsewhere … The blue slip rule for judges has been more problematic than the filibuster, in part because it is a silent, unaccountable veto.”

'Nuclear Option' Won't Obliterate GOP Obstruction

Now that the ‘nuclear option’ has been invoked, don’t count on smooth sailing for the 231 presidential nominees waiting to be confirmed by the Senate.

Molly Ball explains: “That’s because the filibuster … wasn’t the only bottleneck in the long and convoluted process of getting presidential appointments through the Senate. So while [Harry] Reid chastised Republicans for ‘deny[ing] the president his team,’ President Obama’s bench isn’t likely to be suddenly flooded with new players.”

“Two other big bottlenecks—the administration’s difficulty putting up nominees for red-state judgeships and getting them through committee—remain. And even when those are surmounted, the process will still be lengthy and cumbersome. Nominations may well be the key to Obama’s second-term agenda, but they’re not about to suddenly sail through the Senate.”

Stop Worrying About Low Obamacare Enrollee Numbers

Ezra Klein tells us not to worry that Obamacare enrollees might not reach a “bottom-line goal” of 7 million by the end of March.

Arguing that this CBO “estimate” should be “thrown out entirely”, Klein contends that a true definition of Obamacare success is “a function of the mix of people in the exchanges — the “ratio” — rather than the number of people in the exchanges.”

“The reason the ratio matters so much was that it is crucial to keeping premiums low. The White House always thought it possible that demand in the first year would be underwhelming, and until people actually saw the system was working, many would hang back from the system. But so long as the ratio was right, the premiums will remain low, and so when people eventually come to buy insurance, they can get a good deal, and they’ll want to sign up.”

“Or, to put it differently, success in Obamacare’s first year was all about setting up success in Obamacare’s second year.”

“No one will ever look back on Obamacare’s launch and call it a success. The question is whether they’ll look back and say that Obamacare subsequently became a success.”

Majority Not Impacted by Obamacare

A new Gallup poll reports that “69%, say the [healthcare] law, so far, has not had an effect on them … More Americans say the law has hurt (19%) rather than helped (9%) their family, a slightly larger gap than was found last year.”

“A much higher percentage [(41%)] expect that it will affect them in the long run … Roughly … 20%, say the law will improve their healthcare situation.” This gap is the largest to date.

Implications: “First, the law has not to this point directly touched most Americans or affected their health insurance status in any way. Second, despite that fact, they generally do not view the law positively.”