Coal Power Faces a Steady Decline

Inside Climate News: “Coal’s future as a major energy source is being attacked by a variety of pathogens: government regulations, market forces and moral arguments. As a result, government charts plotting coal’s life expectancy look like the flat vital signs of a very sick patient.”

“The Energy Department’s statistical arm, the Energy Information Administration, forecasts in its its latest annual energy outlook that U.S. coal production ‘remains below its 2008 level through 2040.’ And that is without weaving in the impact of the Clean Power Plan, because it hasn’t yet taken effect.”

“For the next 15 years or so production might creep up, it said, but only by a fraction of a percent each year. Considering that production has dropped 16 percent between 2008 and 2013, that’s hardly a robust recovery.”

“And then the tepid growth evaporates away. From 2030 on, the report said, demand for coal from its main users, electric power companies, would be essentially flat.”

“Coal’s dwindling prospects reflect several main factors: the increasing weight of other environmental regulations, including new standards limiting mercury emissions and other toxic pollutants; the availability of cheap, relatively clean natural gas; steadily increasing energy efficiency, and the surging installations of renewable energy plants, especially wind and solar.”

Obamacare: An Example of How Politics Makes Smart People Stupid

Ezra Klein argues that five years after its passage, Obamacare is “increasingly, evidence of much that’s right” with American politics.

“Much of what Americans know about Obamacare is simply wrong. A plurality, for instance, think the law is costing more than originally estimated. Only 5 percent know it’s actually costing quite a bit less:”

“Obamacare is an example of a depressing fact of American politics: more information doesn’t change minds … The more information partisans get, the deeper their disagreements become. When it comes to politics, people reason backward from their conclusions. Politics makes smart people stupid.”

“Even as it is often irrational for elected officials to look at the facts and come to a conclusion that puts them at odds with their party, it is rational for them, when in power, to come to conclusions that will help them govern well.”

“Governing has feedback loops that press releases don’t. Parties that want to stay in power — and they all do – have an incentive to do a good job.”

“In that way, voters discipline the system even if they don’t know much about individual policies, and even if they don’t regularly update their opinions on how various laws are working. Most people aren’t experts on politics, but they are experts on their lives and the lives of their loved ones … They eventually punish the politicians they think responsible.”

Is the Technological Revolution Overhyped?

Paul Krugman: “A growing number of economists, looking at the data on productivity and incomes, are wondering if the technological revolution has been greatly overhyped — and some technologists share their concern.”

“New technology is supposed to serve businesses as well as consumers, and should be boosting the production of traditional as well as new goods. The big productivity gains of the period from 1995 to 2005 came largely in things like inventory control, and showed up as much or more in nontechnology businesses like retail as in high-technology industries themselves. Nothing like that is happening now.”

“So what do I think is going on with technology? The answer is that I don’t know — but neither does anyone else. Maybe my friends at Google are right, and Big Data will soon transform everything. Maybe 3-D printing will bring the information revolution into the material world. Or maybe we’re on track for another big meh.”

“You see, writing and talking breathlessly about how technology changes everything might seem harmless, but, in practice, it acts as a distraction from more mundane issues — and an excuse for handling those issues badly.”

Obamacare’s Survival Threatened by a ‘Drafting Error’

Robert Pear in the New York Times: “They are only four words in a 900-page law: ‘established by the state.’”

“How those words became the most contentious part of President Obama’s signature domestic accomplishment has been a mystery.”

“The answer, from interviews with more than two dozen Democrats and Republicans involved in writing the law, is that the words were a product of shifting politics and a sloppy merging of different versions. Some described the words as ‘inadvertent,’ ‘inartful’ or ‘a drafting error.’ But none supported the contention of the plaintiffs, who are from Virginia.”

“The plaintiffs say the law allows subsidies only where marketplaces have been ‘established by the state.’ It is a distinction that those who drafted the law say they did not intend to make.”

“At the Finance Committee, which thrashed out its version of the bill in September and October 2009, senators initially assumed that all states would set up exchanges, so they added a section to the Internal Revenue Code to provide subsidies, in the form of tax credits, for insurance purchased through an exchange.”

“Senators authorized a backup plan to allow the federal government to establish an exchange in any state that did not have its own, but they failed to include that language in the section of the tax code providing subsidies. ‘We failed to include a cross-reference to the federal exchange,’ [Christopher Condeluci, Republican staff lawyer] said. ‘In my opinion, due to a drafting error, we overlooked it.'”

 

Which States Rob From the Poor to Give to the Rich?

Christopher Ingraham: “We don’t usually think as much about the impacts of state taxes on inequality. A team of researchers at the Federal Reserve recently released a paper exploring the topic and found something, if not surprising, discouraging.”

Many states “actually undermine the federal government’s anti-inequality measures.”

“In essence, they take from the poor and give that money to the rich. I’ve mapped each state’s contributions to inequality reduction below. States in green have tax policies that build on the federal tax code, making the gap between rich and poor smaller. States in purple have tax laws that undo federal measures to address inequality.”

Screen Shot 2015-05-26 at 7.21.53 AM

“In some cases, the magnitude of the effects are quite large. The tax code of Tennessee, for instance, decreases federal anti-inequality efforts by nearly one-third.”

“‘State-levied taxes, on average, work to exacerbate income inequality.’ There are a number of factors driving this, including state-level gas taxes, which tend to be regressive (everyone pays the same rate) and serve to moderately increase inequality.”

Medicaid Expansion Contributes to Decline in Uninsured Rate

Kaiser Health News: “The health law’s expansion of Medicaid coverage to adults with incomes over the poverty line was key to reducing the uninsured rate among 50- to 64-year-olds from nearly 12 to 8 percent in 2014, according to a new analysis.”

Screen Shot 2015-05-25 at 9.32.40 PM

“The study found the uninsured rate for people between age 50 and 64 who live in states that haven’t expanded Medicaid was twice as high—11 percent—as for those who live in states that have done so.”

“More than 2 million people between 50 and 64 gained coverage between December 2013 and December 2014, according to the study.”

“During the same time period, the uninsured rate among all adults between age 18 and 64 fell from 17.5 percent to 12.8 percent.”

Hefty Insurance Rate Increases May Be on the Horizon

Wall Street Journal: “Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.”

“In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016. The biggest insurer in Tennessee, BlueCross BlueShield of Tennessee, has requested an average 36.3% increase. In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products. Moda Health, the largest insurer on the Oregon health exchange, seeks an average boost of around 25%.”

“All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act.”

“Insurance regulators in many states can force carriers to scale back requests they can’t justify. The Obama administration can ask insurers seeking increases of 10% or more to explain themselves, but cannot force them to cut rates. Rates will become final by the fall.”

“Health-cost growth has slowed to historic lows in recent years, a fact consumer groups are expected to bring up during rate-review debates. Insurers say they face significant pent-up demand for health care from the newly enrolled, including for expensive drugs.”

The SCOTUS Obamacare Case: Who Will Blink First?

Jeffrey Toobin: “Sometime next month, the Supreme Court will decide King v. Burwell, and the conventional wisdom about the stakes in the case appears to have shifted.”

“It has come to seem that Obamacare’s Republican opponents are most at risk if the decision goes their way. They have the most to lose by winning … So that’s the theory: millions will suddenly be uninsured, and will blame Republicans.”

“No, it’s not. If the Obama Administration loses in the Supreme Court, the political pain will fall almost exclusively on the President and his Party … President Obama will have broken health care, so he owns it. To the vast mass of Americans who follow politics casually or not at all, Obamacare and the American system of health care have become virtually synonymous. This may not be exactly right or fair, but it’s a reasonable perception on the part of most people. The scope of the Affordable Care Act is so vast, and its effects so pervasive, that there is scarcely a corner of health care, especially with regard to insurance, that is unaffected by it. So if millions lose insurance, they will hold it against Obamacare, and against Obama. Blaming the President in these circumstances may be unfair, but it’s the way American politics works.”

“Playing chicken with the Justices only works if it works. If the Supreme Court strikes down the subsidies, the Administration will also have to answer for why it didn’t prepare for this possibility.”

GOP’s Obamacare Plan? ¯\_(ツ)_/¯

New York Times: “At precisely 3:56 p.m. on Thursday, Senator Chris Murphy, Democrat of Connecticut, introduced a popular Internet symbol for a careless shrug of the shoulders — ¯\_(ツ)_/¯ — into the Congressional record, holding it up on a placard and describing it as ‘a pretty good summary of what the Republicans’ plan is,’ if the Supreme Court strikes down the Affordable Care Act this summer.”

Jonathan Chait points out that a lack of a Republican plan has “induced a wave of panic … among Republicans. The chaos their lawsuit would unleash might blow back in a way few Republicans had considered until recently, and now, on the eve of a possible triumph, they find themselves scrambling to contain the damage. It is dawning on the Grand Old Party that snatching health insurance away from millions of helpless victims is not quite as rewarding as expected.”

King v. Burwell “works more on the level of an elaborate prank than as a serious reading of the law. And yet it stands at least some chance of success … That prospect has grown suddenly unnerving because, unlike previous Republican efforts to strangle the law, the current one comes as Obamacare is functioning extremely well.”

“The party remains doctrinally committed to the complete destruction of Obamacare … This doctrine will now put Republicans in the position of endangering the lives of sick Americans who will lose access to their medical treatment.”

States Contemplate Obamacare Exchange Mergers

The Hill: “A number of states are quietly considering merging their healthcare exchanges under ObamaCare amid big questions about their cost and viability.”

“Many of the 13 state-run ObamaCare exchanges are worried about how they’ll survive once federal dollars supporting them run dry next year.”

“Others are contemplating creating multi-state exchanges as a contingency plan for a looming Supreme Court ruling expected next month that could prevent people from getting subsidies to buy ObamaCare on the federal exchange.”

“The idea is still only in the infancy stage. It’s unclear whether a California-Oregon or New York-Connecticut health exchange is on the horizon.”

“But a shared marketplace — an option buried in a little-known clause of the Affordable Care Act — has become an increasingly attractive option for states desperate to slash costs. If state exchanges are not financially self-sufficient by 2016, they will be forced to join the federal system, HealthCare.gov.”

The Return of Go-Go Years for Wall Street

Neil Irwin: “Seven years after a crisis that shook Wall Street to its core, the financial sector’s economic imprint has largely recovered. The number of people working in the securities business nationally has returned to 2007 levels, as has the gap between the compensation of Wall Street workers and that of everyone else. The financial sector as a whole is reporting profits that are as large a share of the overall economy as in the early 2000s and more than double their average level over the 70 years ended in 1999.”

“This time, Wall Street has largely returned to a state more reminiscent of the go-go 2000s than of the middle decades of the 20th century. Average pay per full-time worker in the securities industry averaged 2.2 times that of the average American worker for the 70 years that ended in 1999 and peaked at 4.2 in 2007. It has rebounded to 3.6 times as high in 2013, and looks likely to have risen further since then.”Screen Shot 2015-05-21 at 9.48.25 PM