Tuesday Reads

autumn reading1

Good Morning!!

Is is just me or is there just about no important news coming out of Washington DC? We just finished with a horrible crisis in the government, and there’s another one coming up when Congress and the President have to deal with the continuing resolution and the debt ceiling once again. Yet there seems to be very little focus on dealing with this ongoing threat to the country’s ongoing well-being.

This silence on the economic situation makes me nervous. I suspect there’s a lot of planning and discussion behind the scenes on how those in power are going to convince the mass of Americans to give up our social safety net–they’re trying to figure out how to loot Social Security and Medicare.

I don’t think they’re going to be able to do it, because Americans are awake to the possibility now. As Dakinikat wrote yesterday, President Obama still dreams of a “Grand Bargain,” and so do many other powerful people like Pete Peterson, Alan Simpson, and lots of Republican and Democratic politicians. Just look at how Twitter responded when “Fix the Debt” tried to hawk its greedy plans on the social media site recently. Dakiniat wrote about that yesterday too.  So I guess I see the current silence on as the calm before the storm which will hit after all the politicians enjoy their long, relaxing Thanksgiving and Christmas vacations.

Meanwhile, the biggest political story at the moment is the apparent mess that the government made of the Obamacare website. I haven’t tried to get on the site myself, so I don’t really understand what the problems are. But the media is very focused on them. From what I can tell, the biggest problem seems to be that the site is too slow. Today’s Washington Post reports that the government was aware of the problems but went ahead with the site launch despite them.

Days before the launch of President Obama’s online health ­insurance marketplace, government officials and contractors tested a key part of the Web site to see whether it could handle tens of thousands of consumers at the same time. It crashed after a simulation in which just a few hundred people tried to log on simultaneously.

Despite the failed test, federal health officials plowed ahead.

When the Web site went live Oct. 1, it locked up shortly after midnight as about 2,000 users attempted to complete the first step, according to two people familiar with the project.

As new details emerged about early warning signs of serious deficiencies in HealthCare.gov, Obama on Monday gave a consumer-friendly defense of the health-care law, insisting that the problems many Americans have faced in trying to enroll in insurance plans will be fixed quickly.

“There’s no sugarcoating it: The Web site is too slow; people have been getting stuck during the application process,” he said at a White House event.

At the same time, he admonished Republican critics of the federal insurance exchange, saying that “it is time to stop rooting for its failure.”

Obama’s reaction to the problems isn’t getting good reviews, even from supposedly liberal journalists. At the Atlantic, Garrance Franke-Ruta called Obama “Insurance Salesman In Chief.

Of all the things Barack Obama ever expected to be during the course of his life, a television insurance salesman is probably not one of them.

But that’s the role he took on Monday morning in a Rose Garden speech pitching insurance through the Affordable Care Act’s online marketplaces and acknowledging for the first time just how troubled the website to access them is. His remarks failed to address many of the specific concerns raised byreporters and technologists about the gargantuan Healthcare.gov website, and he and provided no new information about what went wrong or how, specifically, it will be fixed.

Instead, his message was more like an infomercial designed for the general public: We know there are problems with the site and we are on it. Meanwhile, we’re offering a great product that will save you money, so keep on trying, even if it’s a little frustrating.

Young_Lincoln_By_Charles_Keck

On yesterday’s Morning Joe,

Washington Post healthcare reporter and commenter Ezra Klein pushed back against the administration’s reference to the problem as bugs and technical problems.“These aren’t glitches, the website, to a first approximation, simply isn’t working” Klein said on Monday’s Morning Joe. Early traffic problems that occurred when the site was overwhelmed by visitors on the first few days may have actually masked the public from the larger problems, he said, like garbled or false information being sent to insurers.

“No one beta-tested the site, which is almost criminal,” the Huffington Post’s Sam Stein said.

“They keep using the word unacceptable. It’s not unacceptable, it’s outrageous,” Mike Barnicle said.“This is the president’s singular achievement, and to be so reticent about the problems that have gone is kind of surprising.”

Politico criticized Obama’s “passive” response to the problems with the website:

Once again, Barack Obama risks looking like a bystander to his own presidency.

Here’s what he did to kick off the week: assemble a crowd in the Rose Garden to hear him repeat how “frustrated” he was about the many problems that plagued the launch of the Affordable Care Act’s website, promise that a “tech surge” was already on its way to set those problems right and implore people to bear with him until they see what the program can do.

Here’s what he didn’t do: explain why those problems weren’t addressed before the Oct. 1 launch, why he didn’t seem to be aware of them before they went very public, or who would be suffering the consequences for any of it. He didn’t apologize. He announced, in broad terms, who would be coming in to help. But he didn’t say anything about who would be shown the exits.

His “nobody’s madder than me” Monday echoed the kinds of statements he’s repeatedly made about problems over the last few months — “Americans are right to be angry about it, and I am angry about it” (the IRS scandal), “It’s not as if I don’t have a personal interest” (the NSA scandal), “This is not a world we should accept” (Bashar Assad’s use of chemical weapons). He puts himself forward as a man frustrated with what’s happened on his watch, promising change, insisting that nothing of the sort could ever happen again.

I have to agree. Obama’s passivity is one of the biggest complaints I have about his presidency–particularly in the way he has (or hasn’t) dealt with the economic crisis.

The New York Times reports that it will take “weeks of work” to fix the website problems, despite the fact that most of the problems have been identified.

In interviews, experts said the technological problems of the site went far beyond the roadblocks to creating accounts that continue to prevent legions of users from even registering. Indeed, several said, the login problems, though vexing to consumers, may be the easiest to solve. One specialist said that as many as five million lines of software code may need to be rewritten before the Web site runs properly.

“The account creation and registration problems are masking the problems that will happen later,” said one person involved in the repair effort.

Personally, I’m finding this all pretty depressing, because it was starting to look like the Democrats could retake the House in 2014. The Obamacare mess isn’t going to help that project.

Today, CNN reported the results of new new poll that found that: 75% say most Republicans in Congress don’t deserve re-election.

A CNN/ORC International survey released Monday also found a majority saying that the Republicans’ policies are too extreme. And according to the poll, Democrats have an 8-point advantage over the Republicans in an early indicator in the battle for control of Congress. But with more than a year to go until the 2014 midterm elections, there’s plenty of time for these numbers to change.

The poll was conducted Friday through Sunday, just after the end of the 16-day partial federal government shutdown that was sparked in part by an effort by House conservatives to dismantle the health care law, which is President Barack Obama’s signature domestic achievement.

A majority of those questioned blamed congressional Republicans for the government shutdown and said the President was the bigger winner in the deal to end the crisis.

The survey also found nearly eight in 10 saying the shutdown was bad for the country, and the standoff has led to a loss of confidence and satisfaction in government. And more than seven in 10 think that another shutdown is likely.

I hope Obama gets serious about fixing the Obamacare problems so Republicans can’t get up off the mat.

leaves books

Another big story in the news is the $13 billion penalty the Justice Department is seeking to get from JP Morgan Chase.

From Bloomberg: JPMorgan Guilty Plea Sought by Holder Shows Harder Stance.

JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon went to Washington almost a month ago to see if U.S. Attorney General Eric Holder would settle a criminal probe of mortgage fraud at the bank if it paid more money to resolve related civil investigations.

Holder’s team, which included Deputy Attorney General James Cole and Associate Attorney General Tony West, said ending the investigation by the U.S. attorney in Sacramento would require the bank to plead guilty to something, according to a person familiar with the talks, which were held in a conference room that was Robert F. Kennedy’s office when he had Holder’s job….

Later, the department proposed the bank plead guilty to making false statements related to sales of toxic mortgage bonds. The bank proposed a nonprosecution agreement, which Holder rejected, the person said. The bank agreed to assist the continuing criminal probe. The negotiation typifies the harder line the Obama administration is taking in its second term.

Well, that’s good news IMHO.

Holder’s refusal to let JPMorgan, the biggest U.S. bank, escape criminal liability for its mortgage-bond sales, and the move to extract penalties for wrongdoing that led to the financial crisis, may go a long way toward appeasing critics of the Justice Department who have been urging charges against bankers since the collapse of Lehman Brothers Holdings Inc. in 2008….

The effort began on orders from President Barack Obama, who promised in his 2012 State of the Union address to hold banks accountable for their role in helping trigger the deepest recession since the Great Depression. A mortgage task force of prosecutors and regulators set up to carry out the president’s mandate produced the record $13 billion deal, which requires a formal sign-off by both sides.

Great! Let’s hope Obama follows through. Another good sign is that The Wall Street Editorial page is up in arms about the settlement.

The tentative $13 billion settlement that the Justice Department appears to be extracting from J.P. Morgan Chase JPM +0.21% needs to be understood as a watershed moment in American capitalism. Federal law enforcers are confiscating roughly half of a company’s annual earnings for no other reason than because they can and because they want to appease their left-wing populist allies.

The settlement isn’t final and many details weren’t available on the weekend, but we know enough for Americans to be dismayed. The bulk of the settlement is related to mortgage-backed securities issued before the 2008 financial panic. But those securities weren’t simply a Morgan product. They were largely issued by Bear Stearns and Washington Mutual, both of which the federal government asked J.P. Morgan to take over to help ease the crisis.

So first the feds asked the bank to do the country a favor without giving it a chance for proper due diligence. The Treasury needed quick decisions, and Morgan CEOJamie Dimon made them in good faith. But five years later the feds are punishing the bank for having done them the favor. As Richard Parsons notes nearby, this is not going to make another CEO eager to help the Treasury in the next crisis. But more pointedly, where is the justice in such ex post facto punishment?

The WSJ complains that banks are being turned into “public untilities.” I think that’s exactly what they should be.

We’d like to see Mr. Dimon fight the charges, but the political reality is that he and his bank don’t have much choice. His board is eager to move on, and the government will only turn the screws harder if he resists. In a post Dodd-Frank world, banks are public utilities and no CEO can afford to resist the government’s demands.

The real lesson of the Morgan settlement isn’t that justice has finally been done to the perpetrators of the crisis. That would require arresting Barney Frank and those in Congress who blocked the reform of Fannie and Freddie, plus the Federal Reserve governors who created so much easy credit.

Hahahahahahahaha!! The oligarchs don’t like it much when the shoe is on the other foot, do they?

I’m already running out of space, so here are a few more headlines link dump style:

CBC News: U.S. drone strikes break international law, report finds

Rolling Stone: U.S. Drone Strikes Violate Laws of War

CBS News: Sparks Middle School student: Gunman said “you ruined my life and now I’m going to ruin yours”

WaPo: Economy added 148,000 jobs in September, jobless rate fell to 7.2 percent

What’s the deal with Facebook?

BBC News: Facebook lets beheading clips return to social network

MacLeans: Facebook now allows teens to post public updates

Time: Keeping Teens ‘Private’ on Facebook Won’t Protect Them

Now it’s your turn. What stories are you following today? Please share your links in the comment thread.

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31 Comments on “Tuesday Reads”

  1. Pat Johnson says:

    Not much is known about the shooter so far but the question is: what would prompt a 13 yr old to commit this crime then shoot himself?

    How miserable did that kid feel that this was his only alternative? A teacher is dead, two other students seriously wounded, and the only “positive” in this melee is that it ended before more were hurt or killed.

    With easy access to guns, and more and more children feeling a sense of isolation, we refuse to examine the origins of these outbursts until after the damage is done.

    This shooter is still a child no matter what harm he has done. Just makes no sense.

    • bostonboomer says:

      I assume it was about bullying. Obviously we need to find solutions to two serious problems: bullying in schools and at work and parents who leave guns lying around where children have access to them.

      • Fannie says:

        Exactly, parents need to spend more time with their children, and do something about their guns laying around the house, or car. Been to Sparks, Nevada many of times, surrounded by the night life of gambling and hotels, and flophouses.

  2. RalphB says:

    The media’s coverage of the healthcare.gov website problems has been too stupid to read for the most part. If you read all of it, you know less than before because a lot of is is utter bullshit and misinformation. Doesn’t the patent dumbass of this statement from the NYT story not leap out at you?

    One specialist said that as many as five million lines of software code may need to be rewritten before the Web site runs properly.

    That’s fucking impossible! As is the statement there is 500million lines in the project. NO!!!

    • RalphB says:

      Obamacare opponents have misrepresented Consumer Reports’ position

      Pundits opposed to the new health care law and some media outlets have tried to suggest that our coverage of the troubled HealthCare.gov site means that Consumer Reports has turned against the Affordable Care Act.

      Not true. Consistent with our mission to inform and protect consumers, particularly in this complicated health care market, our advice remains the same: The best place to buy coverage on your own is through the Health Insurance Marketplace in your state. That guarantees you will get comprehensive coverage, and it’s the only way you can lower the cost of your premiums and possibly even your deductibles and copayments.

    • bostonboomer says:

      Thanks, Ralph. I was hoping you would comment on this. I’ve read several articles, and I still can’t figure out what all these horrible problems are other than the website is slow.

      • RalphB says:

        I’m just gonna guess, based on some experience, and say most of the problems are due to systems integration with a lot of older, disparate systems and databases which are owned by other government agencies and insurance companies. Multiply expected issues by 36 for all the states they are handling completely and it’s complex as hell but doable.

        The early problems with account creation were probably more resource related as the site was overrun by simultaneous users. Much easier to fix than integration problems, if the identity management software they used isn’t just rubbish? Hope it’s not. Integration problems you fix as you find them, as fast as you can. Once you hit a sweet spot, it will improve every day until the noticeable problems are mostly gone.

      • RalphB says:

        Some user experiences with healthcare.gov and it may be coming together.

        tpm: Getting Better?

  3. dakinikat says:

    Robert Reich
    First came the drama over the government shutdown. Then the showdown over the debt ceiling. Now another round of negotiations on the budget deficit. Pardon me for asking, but when exactly will Washington begin to deal with the crisis of jobs, wages, and widening inequality? The Labor Department reports this morning that only 148,000 jobs were created in September, way down from the average of 207,000 new jobs a month in the first quarter of the year. Today’s official unemployment rate of 7.2 percent reflects only those who are still looking. If the same percentage of Americans were working today as when Barack Obama took office, today’s unemployment rate would be 10.8 percent. And inequality keeps widening. Ninety-five percent of the economic gains since the recovery began in 2009 have gone to the top 1 percent. The real median household income continues to drop, and the number of Americans in poverty continues to increase.

    So what’s Washington doing? Less than nothing. Our real problem continues to be a dearth of good jobs, and widening inequality. Cutting the budget deficit anytime soon will make both worse — by further reducing total demand for goods and services, and eliminating programs that lower and middle-income Americans depend on.

  4. Prolix says:

    The WSJ should be careful about using such loose language in their editorials. Comparing banks to public utilities will give sewers a bad name.

  5. Oh no…Dak: The Psychology Of Studying Economics – Business Insider

    Studying Economics Can Turn You Into A Horrible Person

    A blog post by Adam Grant in Psychology Today explores how economics majors are, on average, awful human beings. Grant quotes a study by three Cornell professors which provides evidence that economists are less charitable, more deceitful and less likely to be concerned with fairness.

    From the post:

    “Along with directly learning about self-interest in the classroom, because selfish people are attracted to economics, students end up surrounded by people who believe in and act on the principle of self-interest. Extensive research shows that when people gather in groups, they develop even more extreme beliefs than where they started. Social psychologists call this group polarization. By spending time with like-minded people, economics students may become convinced that selfishness is widespread and rational―or at least that giving is rare and foolish.”

    Read more: http://www.businessinsider.com/psychology-of-studying-economics-2013-10#ixzz2iTiScQHU

  6. Peg says:

    COLUMBUS — Ohio will expand Medicaid in January to as many as 330,000 uninsured people after a state board on Monday voted 5-2 to approve Gov. Johh Kasich’s request, following a day of drama in the Republican party.

    Ohio becomes the 25th state, along with the District of Columbia, to agree to expand Medicaid under President Barack Obama’s health care act. Kasich is the eighth Republican governor to oversee Medicaid expansion, much to the dismay of many in his party…

    …“A human being who’s been blessed, helping a human being who has challenges, is a moral imperative in our lives,” Kasich said last week.

    http://www.portclintonnewsherald.com/article/20131021/NEWS01/310210005/Ohio-expands-Medicaid-eligibility-amid-GOP-drama

    • RalphB says:

      Not gonna be that easy to get around the RWNJs.

      Republicans Sue To Stop Ohio Medicaid Expansion

      Four Republican Ohio state legislators have sued to stop the state from expanding Medicaid, the day after a legislative board approved a request from Gov. John Kasich (R) to fund the expansion.

      The Columbus Dispatch reported the lawsuit Tuesday. Two Right to Life chapters joined the lawmakers in the lawsuit, which alleges that the board acted outside of its authority.

  7. bostonboomer says:

    Maine Gov. LePage says 47% of able-bodied Mainers don’t work. It’s not true btw.