Category Archives: markets

Democratic Party Principle

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A couple days ago, one of Obamacare’s primary architects, Jonathan Gruber, said this about the need for the tactics used in order to get the thing passed.

This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. Okay, so it’s written to do that. In terms of risk-rated subsidies, if you had a law which said that healthy people are going to pay in—you made explicit healthy people pay in and sick people get money, it would not have passed…. Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass…. Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.

Despicable as that is, though, what really bothers me are two other things.

In a subsequent interview with MSNBC‘s Ronan Farrow, Gruber had this exchange with Farrow regarding those remarks:

“Do you stand by the comments in that video?,” MSNBC host Ronan Farrow asked Gruber, referring to a video of Gruber explaining how a lack of transparency helped Obamacare pass into law.

“The comments in the video were made at an academic conference,” Gruber said. “I was speaking off the cuff and I basically spoke inappropriately and I regret having made those comments.”

Notice that: Gruber regrets the remarks, but he does not at all regret the underlying principle he espoused. He stands by his claim that Americans are too stupid to understand the issues at hand, and he stands by his claim that it’s entirely appropriate to lie to us in order to get his way.

The other thing that bothers me is the lack of senior Democratic Party officials’ repudiation of Gruber’s underlying principle. I’ve not seen even any rank and file Democrat repudiating it. Apparently, this is a principle of the Democratic Party at large—we’re dumb, and it’s OK to lie to us to get past the impediment to their policy enactment that our dumbness presents.

Heads Up

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Politico is reporting

The Democratic Senatorial Campaign Committee has canceled its advertising reservations for Sen Mary Landrieu ahead of the December runoff in Louisiana.

The committee canceled all broadcast buys planned from Monday through Dec 6 in the state’s five major media markets, three sources tracking the air war told POLITICO. That’s about $1.6 million worth of time. The DSCC is in the process of canceling an additional $275,000 in cable placements….

This race is not a done deal. That’s a lot of money for running out a ground game, something at which the Democrats are very good, last week’s election results notwithstanding.

Stay focused, stay alert. Stay in the game, and get Bill Cassidy elected. The fat lady isn’t singing. She is a skilled campaigner, though.

Another Assault on Privacy

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This time by a major cellular telephone company: Verizon.

…it has emerged that Verizon Wireless has been silently tracking around 100 million mobile customers using a supercookie that can’t be opted out of.

This is an especially nefarious invasion: the “cookie” lets Verizon track your movements on the Web—every page. And they then peddle that information to any advertiser willing to pay up.

Indeed, “supercookie” is a bit of a misnomer. Cookies store stuff on your computer that Web sites that you visit use when you revisit them. Often, it’s useful and beneficial information: how you like that Web site presented, for instance, or login information (beneficial only if it’s a convenience to read an article, and not giving access to your financial or other personal information to that site), and so on.

This thing, instead, enters the stream of information being exchanged between your browser and the Web site and

injects a new HTTP header every time you visit a website. Not just Verizon websites—any web resource that is accessed via Verizon’s network (i.e. everything). This header, called X-UIDH, contains a unique identifier that’s tied to your Verizon account. Your web browser (or any other app on your phone that uses HTTP) always receives this header with your unique ID—there’s nothing you can do to stop it.

Three things make this even worse than it sounds.

  • they didn’t tell you about it
  • you can’t block it or even opt out
  • not only Verizon can use the resulting information—any third party can access it

Verizon says it’s only on their cellular network, only using your Web accesses via your cell phone. So far.

It’s unconscionable that a major company would pull such a stunt; although it’s sadly common. It’s unlikely that Verizon will stop this invasion. It’s necessary, then, to get onto your newly elected and minted Congressman and…encourage…him or her to look into this and to legislate to protect our privacy.

Trade

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I wrote earlier about our GDP number, including the impact on it of our trade gap—specifically our import numbers. Now the other side of that coin has been exposed.

The US trade gap widened in September as exports fell to a five-month low, a sign of weaker demand for US-made goods that underscores concerns about a global economic slowdown.

The trade deficit rose 7.6%…. Exports decreased 1.5% from August while imports were almost unchanged.

Two reports don’t make a trend, but they are suggestive.

In A Separate Report….

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Overall household spending [Note: household spending is different from the consumer spending I referenced in yesterday’s article, and this is a different report from the one I referenced yesterday] fell 0.2% from August, the first decline since January and only the third since the recession ended in mid-2009, the Commerce Department said Friday. The drop reflected a big decline in purchases of big-ticket items such as cars.

Falling demand for cars, household appliances, and other big-ticket (read: expensive—have you priced refrigerators or dryers lately?) items: is this a one-time blip or a trend resulting from pent-up demand being momentarily released? The old family beater finally wore out, and the family had to buy another car? That’s consistent with anemic consumer spending generally these last several quarters. Still, it could be a blip, and household spending (not the same as consumer spending, but close enough for the context) could be discovered to have resumed its slow growth when October’s numbers are published.

Meanwhile,

Americans’ overall income—including money from wages, investments, and government aid—climbed 0.2%, the smallest increase of the year.

And

Inflation-adjusted household spending on durable goods fell 1.9% from August, the sharpest decline since September 2009.

That’s at the consistently very low inflation rates, too. This is what we’re actually spending (or not) in terms of buying power—how far our paychecks go—and it’s a long-term trend. These wage and adjusted spending numbers don’t comport with hopes of higher spending, and so of real economic recovery in the near or medium-term future.

And this:

Friday’s report also showed US inflation remains below the Federal Reserve’s annual 2% target. The price index for personal consumption expenditures—the Fed’s preferred inflation measure-rose 0.1% from August and 1.4% from a year earlier.

Low inflation is good, but inflation this low is reflective of low demand. See above, regarding income, for an idea of future recovery.