Kausfiles: A mostly political weblog.

Election 2009: Were the Exit Polls Wrong Again?

Why do I get the feeling that the VNS Exit Polls were way off--in a pro-Dem direction--once again? Answer: Because early evening posts like this one from Marc Ambinder seemed to be hinting at a Corzine victory:

Courtesy of CBS News: If Jon Corzine wins re-election, he can thank women, who gave him a narrow advantage and who voted at higher proportions than men did.

He could have written "If Chris Christie is the new governor of N.J., he can thank men, who gave him a huge advantage ..." But ... he didn't. Did the exit polls show a relatively big Corzine victory? Back in the day when the exit polls were widely leaked, everyone would know what they were and--if they were wrong--they would know that they were wrong. Now they are more closely held--which allows the VNS to keep screwing up and hide its inaccuracy ... Again, if we can't trust the exit poll's bottom line result (presumably due to a subtle bias in which voters pollsters talk to) why can we trust any of the demographic breakouts that scholars, etc. use? Won't they be subtly biased too? ...

Update: A kf source reports

Exits were close in VA and Corzine ahead in NJ. 

Pathetic! I guess I was wrong when I said they were subtly biased. ...  7:25  P.M.

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Hardy Perennial: Stuck in traffic this evening? Why the end of Daylight Saving Time invariably produces giant, gas-wasting jams on local freeways. ...  3:49  P.M.

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Shorter Nagourney (and you're not missing much): "Best outcome for Democrats: Win ... Worst outcome for Republicans: Losing ...."** ...

**--Those are direct quotes. I am not aware of all internet traditions. ... 3:46 P.M.

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This is not the market share we paid for: After a big ad campaign, General Motors gets an estimated 21% market share in October. Edmunds.com had predicted 22.4%. Kf analysts not impressed, await scathing TTAC take-apart. .. Update: TTAC punts to its readers, who note a) GM achieved this market share with lots of "incentives" (i.e. price cuts); b) GM introduced several new models, which is a good thing--but new models often produce a sales spike that evaporates within a few months. ... Bailout II still on track. ... 3:22 P.M.

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Night of the Goolsbee!

Good News for Hyundai: It looks as if UAW workers are rejecting the proposed contract that would not-quite give Ford the same concessions the union gave GM and Chrysler. After all, Ford is still losing fewer billions than the other two were losing before the government helped them slash their debt in bankruptcy. So Ford clearly needs to be bled a bit more. The near-certain prospect that Ford will in response ship more work out of the country may not matter if you are a UAW veteran 2 years away from retirement. ... P.S.: Is Obama aide Austan Goolsbee's prediction--that saving Chrysler would cripple Ford's comeback attempt--coming true? ... [via TTAC]  5:41 P.M.

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Titans of Spin: Chickaboomer on CNN CEO Jon Klein's hypocrisy. (He used to think the 25-54  demographic segment that CNN's now losing was crucial.) ... Mediaite makes the same point--more respectfully, alas. ... P.S.: Remember what CBS veteran Bernard Goldberg said of his former colleague Klein: 

"[A]t CBS news he had a reputation as the kind of guy who thought people who tell the truth do it mainly because they lack imagination.

5:40 P.M.

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Fisker also announces upcoming "Seppuku" two seater: Why would electric luxury car maker Fisker decide to build its new model in a UAW shop in Delaware that only recently turned out some of the least reliable cars GM made? TTAC suspects federal dirigisme. ... 5:39 P.M.

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The Man Who Didn't Save GM

Detroit Bailout II Nears the "Old News" Stage! 1) My colleague Daniel Gross thinks the GM and Chrysler bailouts weren't designed to actually save GM and Chrysler:

Sure, there was brave talk of reviving these once-proud brands and returning them to their rightful place in the pantheon of American corporations. But from the outset, I've believed that the interventions were simply efforts to delay liquidation rather than to avert it altogether, to provide a breathing space in which managers could find homes for valuable assets (other companies) and find chumps to absorb the losses from bad decisions (that would be the taxpayers). [E.A.]

2) I'm pretty sure Dan Gross is a friend of Steve Rattner. 3) Does Dan Gross know something we haven't been told? 4) If so, has anyone told President Obama, who--in Ryan Lizza's New Yorker piece, anyway--seemed to want the auto bailouts to actually "succeed." ... P.S.: Larry Summers was "comfortable Chrysler would survive," writes Rattner himself in an almost unreadably self-serving account of his bailout experience. "Comfortable"? Chrysler? Hello? Whose elevator goes straight to the garage? ... P.P.S.: For his part, Rattner characteristically hedges his bets, boasting only that his team gave Chrysler and GM a "healthy margin for error." Or, as Dan Gross might translate it, "a few more months." ... 12:15 A.M.

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So You Think You Have Swine Flu? Am I the only one--besides Michael Fumento--who finds reports like NBC's last night on the spread of swine flu ("galloping its way across the country") to be wildly unconvincing? The NBC piece claims "90 dead" last week under the rubric "swine flu cases." [See about 1:10 in] This is almost certainly BS. As this CDC report makes clear, that figure includes both the swine flu and the regular annual flu. Indeed, NBC promiscuously conflates a) swine flu (H1N1); b) regular flu and c) "flu like symptoms" which may not be any kind of flu at all. ... That may be because the CDC itself has decided to conflate at least the first two categories, as noted in this seemingly damning CBS story and confirmed in the CDC report itself:

This new system was implemented on August 30, 2009, and replaces the weekly report of laboratory confirmed 2009 H1N1-related hospitalizations and deaths that began in April 2009. Jurisdictions can now report to CDC either laboratory confirmed or pneumonia and influenza syndromic-based counts of hospitalizations and deaths resulting from all types or subtypes of influenza, not just those from 2009 H1N1 influenza virus. [E.A.]

I think this means the CDC does not really know how many cases are swine flu and how many aren't. (The regular flu kills many thousands of people every year.) ...12:43 A.M.

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It's All Going According to Plan!

Peter Beinart thinks Obama's on track to success. Actually, Beinart understates the favorability of the circumstances. If, like me, you assume that the most desirable and popular part of Obama's agenda is health care reform, while the rest of it is studded with sweeping measures that are controversial at best (cap and trade, "card check" union organizing) and explosive at worst (illegal immigrant legalization)--well, then everything is falling into place like a well-choreographed water ballet!

The kf Plan for Presidential Success:

-- Obama gets health care reform, but not until well after New Year's Day. That leaves no time in 2010 to take up "card check" or "comprehensive immigration reform" before the election season hits. Darn! Even "cap and trade," which as Tom Edsall notes pleases affluent elites a lot more than Obama's low-income base, has to undergo further study. What can you do?

-- The economy picks up, but unemployment remains high enough--and doubts about health care reform among the elderly persistent enough--to get the Dems clobbered in the 2010 midterms. Republicans may even win back the House. All those controversial big Dem bills that got backed up in 2010--well, they certainly won't be enacted by the GOPs. So frustrating!

-- Without a new wave of low-wage immigrants drawn by legalization, meanwhile, the labor market eventually grows tight enough at the bottom to finally raise wages as the economy grows--just in time for Obama's 2012 campaign.

-- Returned to office in an incumbent-friendly year, Obama still faces a GOP-heavy Congress, sharply limiting what he can do. He's forced to shelve much of his ambitious second term agenda--sorry!--and focus on those areas where Republicans are favorably disposed--like reining in the cost of entitlements and expanding charter schools. (As Walter Shapiro once argued--and Bill Clinton proved--having a Democrat in the White House with a Republican Congress is the institutional recipe for controlling the budget. The Democratic President reins in defense spending while the Republican Congress reins in domestic spending.)

I'm only partly joking. Or maybe I'm not joking at all. Losing control of Congress didn't cripple Bill Clinton, did it? It arguably saved Bill Clinton. Having Newt Gingrich in charge of the House allowed Clinton to push off against Republican excess, tame his own party's demands, and actually balance the budget. The difference with Obama is that unlike Clinton he will have accomplished his main goal--health care reform--first, before the drawbridge goes up.

It's all going according to plan. 1:51 A.M.

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Bailout II Watch: A member of GM's board of directors has admitted that the carmaker's recovery plan is based on it maintaining a market share of above 19%:

"The public plan is 19 percent and change. That is what everything is being based on," [Stephen] Girsky said during a panel discussion at a conference at Columbia Business School.

That's about what GM's share has been recently. But it's been heading in the wrong direction. And if it sinks to 18% ...? 

Update: The Big Money's Matthew DeBord sneers at Truth About Cars for "heralding GM’s demise since gas was 30 cents a gallon and Sinatra was headlining the Sands. ... And yet ... GM lives!"  Plucky of GM! How did they survive? And to think Truth About Cars was predicting they would go bankrupt! ...

P.S.: DeBord persists in publicizing an auspicious "trend" in GM's market share. Yes, GM's share is up for  the last couple of months--but a) again, it doesn't do that much good to have a big share in the months when nobody is buying cars (September) if you have a much lower share during the big clunker sellathon (July and August). Here is a chart with the raw figures. See if you spot a significant pro-GM "trend." I don't.  b) You can always boost market share by offering cash-back incentives at the expense of profits. GM's incentives have been large--at an average $3,796, almost three times Honda's; c) DeBord cites an Edmunds prediction of a rise in GM's share to more than 22 percent in October, which is apparently based on visits to GM models on the Edmunds web site. We'll see. GM is shooting off a lot of its advertising wad this month. d) While Buick and Cadillac have "profit potential," the success of Chevrolet is "a question mark," DeBord concedes. But Chevy is where GM's volume sales are. If Chevy tanks, can GM survive? ... P.P.S.: DeBord sees growth. TTAC sees decline. One of them is wrong. My money's not on The Big Money. ... 2:25 A.M.

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Obama v. Pajama

Pajama-Baiting: 1) You have to wonder if the unnamed Obama aide's "take off the pajamas" jibe was not a self-pitying expression of frustration but rather an intentional attempt to goad the liberal blogosphere, giving Obama some anger on the left to push back against, translating into a rise in the polls. Insta-Triangulation whenever he needs it--is that what the left bloggers do for Obama now? ... 2) The worst thing they could do, from this point of view, is to calm down. Don't cut him slack! Go wild. ... 3) This pajama-baiting, near-gaslighting strategy--bloglighting!--would fit the Obama White House pattern of attempting to set up superheated fringe figures as opponents--e.g. establishing Limbaugh, and Beck, and the Birthers as GOP leaders; ... 4) Don't assume it's Rahm! Early in the Clinton administration an inflammatory blind quote from an administration official predicted that  the White House would "roll right over" Sen. Moynihan if necessary. It inflamed Moynihan, anyway. Many in the press assumed the quote came from foul-mouthed Clinton aide Rahm Emanuel. My understanding is it didn't. [Update: Moynihan apparently thought it was Rahm--his diaries indicate reporter Michael Kramer told him as much. I'd heard Bentsen. Update II: Kramer has said it was Bentsen, in print.]... Given point (3), I'd suspect Axelrod of the anti-pajamatism.. ... 11:27 A.M.

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GM Bailout II Watch: Signs are just so darn "good" for New! GM that the company is backing off its commitment to the 2010 IPO that might get the government back some of its money before the midterms, says TTAC. ... Robert Farago suggests a get-past-the-election solution that might hold some appeal for Dems desperate to show progress:

Sure, as mid-term elections approach, the feds may try to game the system, offering some kind of IPO-enabling investor “protection.”

Do you think that will fly--i.e. politically be worth the controversy that making it happen would engender (as opposed to simply delaying the IPO until 2011 and issuing an updated round of optimistic projections)? Me neither. ... :8:12 P.M.

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@kausfiles--Guaranteed 51% Good News!

Items I twittered, or wished I had:  

Best News of the Week: According to RiShawn Biddle, Obama and his Education Secretary Arne Duncan really are using the leverage provided by federal stimulus money to force states to allow more charter schools. The teachers' unions "feel betrayed." Hope that's not just for show. ... P.S.: This unashamedly  pro-Obama article runs in ... The American Spectator. ... P.P.S.: Biddle also says the Bill & Melinda Gates Foundation has helped create a "counterweight" to the NEA and AFT. Won't make up for Vista! But it's a start. ... P.P.P.S.: If there are well over a million students in charter schools now, and the federal government is pushing them to grow like Topsy, at what point does a vicious circle set in, with public schools losing their even moderately motivated students, causing them to decline even further, causing even more students to leave, etc.? Not that this public school death spiral would be such a bad thing. We should just be prepared for it. The way we should have been prepared for GM. ... 11:27 P.M.

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Neiman Marcus is stealing The Atlantic's business model  ... OK, to really emulate The Atlantic you'd have to throw in David Axelrod, and maybe sub Marc Ambinder for Nora Ephron. ...  And then sell the thing to ExxonMobil. ... 11:26 P.M.

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51 is the Wussiest Number: Ryan Lizza reports that, in the White House debate over whether to bail out Chrysler, Obama asked his advisers, "What do you think the percentage likelihood is that , if we give this deal a chance, it will succeed?" Then-auto czarito Steven Rattner answered, "Fifty-one percent." ... What do you think the percentage likelihood is that Rattner's answer was sincere? I hope, for his sake, it's close to zero. There was substantially less than a 51% chance the Chrysler bailout would succeed (if "success" means a viable company). There still is. ... Not being a sophisticated investment banker, I would translate Rattner's answer as: "I know you'd like to approve this deal, and I'm not one to buck the tide, so I'll give you the minimum necessary reassurance, while covering my ass as much as possible (in the 80% likelihood that it fails)." ... P.S.: Lizza's piece is generally encouraging--the country could be in worse hands. But it's vaguely discouraging if for Obama and his brain trust the issue actually turned on whether or not the deal would succeed, which seems a less sophisticated question than whether or not it was worth trying to soften the blow to the Midwest by postponing Chrysler's inevitable failure. Could the whole debate have been Kabuki?  ... 11:25 P.M.

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Where's Crossfire When You Need It? Jon Klein's Triumph! CNN now in 4th place, losing to FOX, MSNBC, and itself (HLN)!  Somewhere Tucker Carlson is smiling. ... 11:24 P.M.

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GM Bailout II Right On Track!

According to the WSJ account of CEO Fritz Henderson's conference call, New GM! is meeting its goals ... except for the one about getting people to buy its cars. (Matthew DeBord, please note.)

GM lost two percentage points of market share in the critical U.S. market. Mr. Henderson said GM's market share remains slightly ahead of the conservative estimates the company made early this year when laying out its restructuring. ... [snip]
 
Mr. Henderson faces intense pressure from GM's new chairman and the U.S. government--the company's new majority owner--to stem the sales slide and improve GM's financial performance.

The company has responded by getting rid of its sales chief (who had failed in his goal "to reverse the decline in GM's U.S. market share") and replacing him with a GM lifer--or as the Truth About Cars puts it, "a lifer [who] owes her career to the timid, inept culture Henderson is simultaneously a product of and ostensibly bent on breaking." She may have a short tenure. But the next exec to go is much more likely to be Henderson himself, as must be by now clear to everyone (including Henderson).

There's also this advance Thanksgiving card:

However, GM has about 10,000 more U.S. workers than it plans to have by the end of 2009 after buyout programs for hourly and salaried programs fell short. GM aims to have 64,000 workers and isn't as far along toward that goal as it expected by this point.

So they let Henderson take the bad press for the layoffs, then they fire him! The bad news goes out the door, and the new CEO gets to do something more popular. ... Maybe it really is all going according to plan.

P.S.: Ten thousand new layoffs would provide a test of whether Congress and the White House can refrain from intervening to stop them, I suppose. Wouldn't it be better for the UAW to take a small cut in hourly pay and save some of the jobs? And attract more production in the future? ... But I forget: Hourly pay cuts hurt all union members. Layoffs only hurt the laid off. If you are an elected UAW official, the course is clear. ... 6:50 P.M.

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What is wrong with our democracy that it is losing the service of legislative giants like Mel Martinez? We shall not see his like again. ... 8:56 P.M.

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Rattner's Legacy: The Chooch Is At the Door

Breitbart's Legacy? Rasmussen's latest poll finds, rather unbelievably, that voters say "government ethics and corruption" is now a more important issue than "the economy." With unemployment at 9.8%! Hello? Is this all James O'Keefe and Andrew Breitbart's doing? I can't think of any big recent corruption-related events other than the ACORN and NEA scandals. ... I doubt it is all liberals concerned about the power of the insurance lobby. ... P.S.: This might explain why, while the MSM still gives the ACORN scandals restrained coverage, the pols are running for the hills. They have pollsters too. ... P.P.S.: Rasmussen's survey, taken 9/26 --9/29, was half pre-Polanski, so that seems an unlikely explanation. ... Update: Ambinder writes as if Rep. Rangel's troubles are a central catalyst, which seems unlikely. Rangel isn't that famous. It's more plausible to blame general resentment over Wall Street sleaze and the bailouts. ... 4:02 P.M.

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The Call of Chooch: GM's sales are down 45% from last September (when sales were already bad enough to drive the company into bankruptcy). Chrysler is down 42%. Ford is only down 5%. Car buyers are clearly punishing the two bailout recipients brutally. Robert Farago of Truth About Cars--who has been right before--predicts that GM and Chrysler will both "go down by the end of next year" without a second, new federal bailout. The only question, he says, is whether the two manufacturers will need the cash before the 2010 midterm elections. He adds:

For those of you who say the Obama’s army never really intended to rescue either automaker, that they were simply subsidizing the companies to facilitate a soft landing, I say bullsh[xx]. Washington’s big swinging dicks, led by private equity money men with a similar anatomical affliction, honestly thought they could “fix” Detroit.

Maybe they could have. But it looks like they didn't. ... Most obviously, they seem to have grossly misperceived consumers' reaction to the equities of the bailout itself.  And that 45% can't be all Republicans. ... 1:53 A.M.

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Shafer couldn't take a full day of the Atlantic's "First Draft" conference. He tried. ... In the wheat vs. chaff contest, it appears to have been Chaff City. ... P.S.: Is it really true that only 220 people were watching the feed of the Petraeus session? Janet Napolitano drew 132? Those are almost Pseudo.com numbers! Don't tell Boeing. ... [Ah but they were the right 132 people--ed. No they weren't. One of them was Shafer.] ... Bloggingheads is CBS in comparison. ... 2:29 A.M.

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Lutz, Re-castrated All Over Again!

Bob Lutz, old/new General Motors product czar and now public face of exciting New GM, has announced that GM is killing its one shot at building an affordable rear-drive sedan on the discontinued Pontiac G8 chassis--a possibility Lutz himself floated a few days ago-- because there is no "marketing" case for it ... at which point hundreds of thousands of U.S. car fans, who have residual fondness for GM because they remember its classic rear-drive cars, think to themselves, "F--k it. Let GM die. What's it good for? Building boring family vehicles that are aren't quite as good at Toyota's boring family vehicles?" ...[via The Truth About Cars] 4:23 P.M.

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Rattner Got Out Just In Time?

But they got Car of the Year! BA/Merrill Lynch predicts GM will lose 3 more points of market share--down to 15% from 22% last year--largely because there are so few new products** in the pipeline. That means the company is heading for another federal bailout, says The Truth About Cars. ... Rattner got out just in time. (Reason #5) ... 

**--Though GM has demonstrated the ability to introduce new products and still not make up much ground. See the recent history of Saturn. ... 4:52 P.M.

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Obama v. Kurtz: [From Just One Minute] Obama implies that, not only did he never formally nominate CNN's on-camera medic Sanjay Gupta for Surgeon General, but he never offered him the job:

Obama: Could I say, I have great respect for Sanjay Gupta, but I never nominated him.  

The press nominated him. I never — you know, that was not — there were people who had suggested that he might make a good surgeon general.  And I think, in fact, he could have made a good surgeon general. He's a very well-spoken person and a lot of the job of the surgeon general is to get a message out. [E.A.]

It's the press' fault! Is Obama dissembling (so as not to insult his actual nominee, Regina Benjamin) or did CNN's Howie Kurtz get it wrong when he disclosed, on January 6, that:

President-elect Barack Obama has offered the job of surgeon general to Dr. Sanjay Gupta, the neurosurgeon and correspondent for CNN and CBS, according to two sources with knowledge of the situation.

I have no dog in this fight. I trust Marmolite will get to the bottom of it. ... 4:50  P.M.

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Tim Noah has what seems like a very good suggestion regarding the public plan  

[The House bill says the] public health insurance option "shall offer basic, enhanced, and premium plans" and may also offer "premium-plus plans," presumably at escalating levels of cost. This is to make it conform to the private plans also offered within the new, strictly regulated health insurance exchange created under the bill.  ... [snip]

Rather than provide a menu of four public-option plans, I'd prefer to see the government establish a single, reasonably generous public-option plan and leave the gold plating to private insurers. Doing so would allow the government to take a more egalitarian approach and at the same time would turn over to private insurers a decent-sized potential market for nonbasic health care. It wouldn't stop their squawking, but it might reduce it. [E.A.]

Would Medicare offer tiered service? It wouldn't. ... Tiered service also threatens to undermine the social-egalitarian benefits of universal health insurance. Instead of everyone waiting in the same waiting room, there might be a different waiting room for every purse and purpose. ... 4:48 P.M.

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One good thing the Presidental Task Force on Autos did--force some UAW patronage desk workers to actually start building cars again:

Unlike their nonunion rivals, the Detroit Three have paid for a small union bureaucracy at each plant to handle grievances, conduct union elections and support labor-management initiatives. Those people didn't work in the plant.

Now in the leaner post-bankruptcy environment, the UAW is eliminating at least 300 positions across its 23 Chrysler locals, according to several local officials. General Motors expects the initiative will affect less than 1% of its 52,000 U.S. hourly employees, according to Childers Arb.

This would fit with Rattner Departure Reason # 8. .... But note the fine print at the end of the story, disclosing that GM will not eliminate useless patronage positions where they are "required under the local labor contract." Oh. How many of them are there? ... P.S.: So the brother in law of some union official has been sitting behind a desk for 20 years. Now he's on the line, and pissed off about it. Do you want to buy the car that he'll build? ... [via TTAC] 4:46 P.M

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Matt Yglesias on the road not taken in health care reform. ... 4:44 P.M.

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3, 4, 5, 6, 7, 8 Rattner Theories

Phase Out: Why is Steve Rattner resigning from the Obama administration so soon? Remember that when he quit his investment firm to take his auto czarito job he sent out an email declaring he was leaving Wall Street to begin "a new phase of my life, in the public sector." Short phase. Why? Some theories: 1) The pay-to-play scandal is embarrassing. Obama let him do his job through the bankruptcy and then quit gracefully when fewer people would be looking. 2) Also, he needs to spend his efforts making sure the "unlikely" charges against him stay unlikely; Update: "NY AG probe of Rattner ... heats up"--Reuters; 3) He's too much of a press hound for the Obama crew**; 4) He's enough of a press hound to know that if he quits now he can get some suckup stories about how he's "going out on top;") 5) Indeed, the glamour work of the auto task force is done. All that's left to do is watch the bailed out auto companies fail to meet expectations, and quite likely fail period. It's either up or out for an ambitious guy like Rattner. There was no up. So it's out. 6) Ron Bloom always had the power. Rattner was the front man. That wasn't about to change. 7) He shares Sarah Palin's career adviser; 8) Ron Gettelfinger never liked him anyway. Also: Rattner is skeptical of auto unions and it's the union's show now. 9) Pinch needs him. 10) He wants to direct. 11) Obama and Geithner want to dramatize that "day-to-day management of these companies" is back "in the hands of the private sector"--and Rattner was the walking, leaking personification of government intrusion. 12) This extremely unverified but widely viewed undernews, about which I know nothing and which even its source blogger writes might be "inflammatory nonsense"!  ...

P.S.: Full kf Rattner cache here. ...  

P.P.S.: No doubt his old firm, Quadrangle, will welcome him back with open arms! ...

**-- An example of Rattner's facility at self-promotion might be the number of journalists who think Ron Bloom was "his deputy." I don't think that was exactly the case. See this delicately worded press release. ... 2:54 P.M.

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WaPo's Michael Shear follows the Kinsley source-greasing formula with comic fidelity, says Omri Ceren. Not true! Shear is greasing up about 20 staffers at once. A challenging profit environment demands that journalists exploit economies of scale. ...Update: Actually, Kinsley seems to have anticipated that change too:

"Obama has changed the rules," [a character called the source-greaser-in-chief] says. "Everyone he appoints is so wonderful that there aren't enough positive words to describe all of them. My job is to centralize the sucking up and make sure that each subject gets a fair share of the available adjectives."

2:52 P.M.

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kf is Stupid: 4 Health Care Questions

As a health care non-maven, I have four problems with the New Republic's strangely ungalvanizing description of a world without a "public option":  

1) Jacob Hacker and Rahul Rajkumar suggest that, without a public option, a "59-year-old self-employed man with diabetes, or a 48-year-old single mother with breast cancer" won't be able to find private insurance "they can afford." But under the Dem reform plan, even without a public option, wouldn't "[i]nsurance companies ...be required to offer the same coverage to everyone, regardless of medical history"? If so, why won't these 59-year-olds with diabetes be able to find plans they can afford as much as 59-year-olds without diabetes? Is it because private insurers will resort to subtle tricks--e.g. offering free workout rooms, or long steep stairways--to attract only the healthiest customers? Which brings us to ...

2) The existence of a public plan--sustained "completely through enrollee premiums and federal premium assistance"-- is supposed to "keep the private insurers honest" and "control costs." OK. Suppose the public plan uses its purchasing power and lower administrative expenses to cut its prices to 20% below the leading private plans. What will the private plan do? Will it match the public plan by cutting costs--or pursue even more vigorously subterranean strategies to cherrypick the healthiest customers with perks? Or a combination of both? Clearly, faced with pressure on profits, it can respond with "good" behavior or "bad" behavior. But if we could rely on private insurers to have only "good" responses, we wouldn't need health care reform, right?  

3) What of the 59-year-olds with diabetes? Well, they always have the non-cherrypicking public plan! Which they will presumably choose, raising the public plan's costs. So there are two forces at work on the public plan's pricing.

One lowers costs, perhaps--an ability to forego administrative and marketing expenses and an impulse to use purchasing leverage to bid down payments to doctors and hospitals.

One raises costs--the tendency of public plans to attract the sickest patients.

Which of these forces will be greater? I don't know. But Hacker and Rajkumar don't tell me. It's not inconceivable that the public plan will confront a vicious circle of adverse selection, in which it attracts sick patients, driving up costs and premiums, which causes healthy patients to flee, requiring even more premium hikes, etc.--right? Remember that according to Hacker & Rajkumar the public plans will operate on a level playing field with no special subsidies from the government. If they have higher costs how are they going to avoid charging higher prices? And then how are they going to keep the private plans "honest"?  

4) TNR's whole disaster scenario--what will happen if there's no public plan to provide competition--seems beside the point. If the disaster  starts to happen, we can always set up the public plans later, no?

What am I missing? ... P.S.: I'm still for a "public" alternative, just so everyone has the security of knowing there's at least one insurer they can go to who won't try to game them out of coverage in the fine print of a 25 page agreement. I just don't understand how the economics is supposed to work. ... 9:00 P.M.

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Has Steve Rattner gone native? ... 11:59 P.M.

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Iran: The Non-Gandhian Way?

Steve Clemons appears to be urging a non-Gandhian approach on the Iraqi opposition. ...  4:06 P.M.

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Psst! Tsi-ay Inda-Kay Orking-Way: What if they came out with a study showing that No Child Left Behind is working--raising test scores without hurting high- or low-achievers--and nobody paid attention? (Except Education Week). ...   4:05 P.M.

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New Chrysler owner FIAT tries its hand at viral advertising. ... [Thanks to reader J.] 4:04 P.M.

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Rattner: 'We're Not Going to Fail ..."

Micheline Maynard on GM: 1) Rattner: "We're not going to fail ." I would say that lets us say he failed if he fails! Specifically, it rules out the "We're giving them a shot but if they collapse in a couple of years at least we delayed it" defense.. .. 2) Rattner's problem has always been his high profiling in the press. Yesterday he was quoted boasting about not failing in the same newspaper in which his (possibly more powerful) auto task force colleague, Ron Bloom, was attempting to strike a lower key note in testimony to Congress.... 3) The government isn't going to run GM--it's a "passive shareholder"--but according to Rattner it is going to change GM's culture. OK!. ...4) So here's how the culture will change, if I read Maynard right: By empowering GM's holdover old guard managers who are steeped in the old culture to make decisions without consulting the holdover old guard CEO, Fritz Henderson. Sounds like a dramatic "wholesale restructuring" to me. . .. 5) This delegation of power to the existing bureaucrats will also be accompanied by "a deeper level of scrutiny" from the board of directors. But no second-guessing, of course. ..  

Meanwhile at FIAT/Chrysler: Sergio Marchionne is speed dating ...  

And I have buried the lede: Robert Farago has an amazing, Washington-Monthlyesque explanation for GM's "crap interiors." I don't quite believe it. But if true, it should be a segment on "60 Minutes" ... 2:39 A.M.

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Jennifer Rubin gives her trademark optimistic analysis (from an anti-Wagner Act union perspective) of the prospects for "card check" compromise. ... The CW is less optimistic, I think. ... 2:07 A.M.

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With Friends Like Ezra Klein ...

The cost reforms, by contrast, are being done cautiously, cooperatively, and with a focus on Medicare. ....

Which is why it's a bit bizarre to read Postrel writing that "if more-efficient government management can slash health-care costs by addressing all these problems, why not start with Medicare?" When it comes to cost, they actually are starting with Medicare. They hope that the efficiencies work and are voluntarily adopted by private insurance. But there's no actual mechanism to make that happen.

My impression (which could be wrong!) is that there are two sorts of cost savings Orszag has in mind. 1) A bunch of "scoreable" Medicare and Medicaid cuts** that will save $5-600 billion over 10 years and (along with some revenue increases) pay for expanding health coverage over that period; and 2) A collection of more ambitious "game changer" reforms*** that aren't part of that next-10-year calculation but will "lower the rate of health care cost growth" in the long run. These game changer reforms are not limited to Medicare and Medicaid, as I understand it--indeed, I think it is Orszag's position that you can't do them if you limit them to Medicare and Medicaid.

This latter assertion appears to be a central pillar of "Orszagism," which is defined the claim that (as Ryan Lizza puts it) "health-care reform is deficit reduction,"-- that without Obama's sweeping health care reforms we just can't "bend the cost curve" down enough in the long run. If the "game changers" could simply be limited to Medicare and Medicaid, you could simply implement them without reforming the rest of the health care system--Postrel's point--thereby more or less totally undermining Orszagism. Expanding health care coverage and cutting long-term federal health-related budget costs would be two distinct, separable policy initiatives (one reliably expensive, one seemingly speculative).

The assertion--that you can't just do the cuts in Medicare--isn't really defended in Orszag's recent posts, though he promises more dialogue in the future. Orszag also has to convince people that a) his "game changers" actually will cut costs--in Medicare, or anywhere b) without compromising health or medical progress and c) without engaging in the nasty treatment-denying behavior HMO's got in trouble for a decade or so ago. ... Update: I forgot d)--and they'll cut costs so much that they'll more than compensate for the obvious ways universal health insurance will increase long-term health costs (i.e., by increasing the number of consumers demanding medical services and enabling them to exert political pressure, not necessarily illegitimate, to pay for particular expensive treatments, including treatments Orszag's various cost-conscious reforms might deny). ... Best of luck to him.

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** As described in a recent presidential letter, these "scoreable" shorter-term cuts include

reducing overpayments to Medicare Advantage private insurers; strengthening Medicare and Medicaid payment accuracy by cutting waste, fraud and abuse; improving care for Medicare patients after hospitalizations; and encouraging physicians to form "accountable care organizations" to improve the quality of care for Medicare patients ....

Plus "another $200 to $300 billion" in Medicare and Medicaid savings to be announced soon. ...

***--The "game changers," as described by Orszag, include

steps such as health IT, research into what works and what doesn’t, prevention and wellness, and changes in incentives so that Americans get the best care not just more care. 

2:42 A.M.

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It's Pedal to the Metal for the New Chrysler! Obama spokesperson: "We are delighted that the Chrysler-Fiat alliance can now go forward, allowing Chrysler to re-emerge as a competitive and viable automaker." [E..A.]  Viable? Competitive? Hello? We are writing this down. Words like that will be remembered in two years, if Chrysler even makes it that far. ...    2:41 A.M.

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Arianna vs. the Anti-Objectification Cheesecake Police: All the best fights are intra-left these days. ... P.S.: kf last month, City Paper this month. ...   2:27 A.M.

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John Dickerson: "Did Google do it for Deeds?" No. ... 2:18 A.M.

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GM Design Chief Ed Welburn did not not not accuse a HuffPo blogger of racism (sorry TTAC). ... But he did cite his grotesquely cheesy, cartoonish new Camaro as an example of what can be created in GM's "cutting edge 21st century environment." ... Welburn seems like a nice guy. But I would say the Camaro is a firing offense (though,, if he's a UAW member, it will take 6 unexcused Camaros). ... 2:16 A.M.

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Conspiracy Saturday Edition

U.S. Pushed FIAT Deal on Chrysler (WSJ): Chrysler execs were lobbying for an alternative merger with GM even in late stages, apparently. Obama's task force wanted FIAT. ... P.S.:You have to wonder if the Obama team knows the FIAT deal it promoted won't work, and arranged it simply as a way to delay the inevitable--while it actively avoided a merger that would foist Chrysler on GM, because GM does have at least a chance to survive after bankruptcy and doesn't need Chrysler's baggage. (Why make Chevy responsible for the Sebring?) ... P.P.S.: Note that this isn't paranoia, but posinoia--the nagging suspicion that people in power are doing seemingly bad things for secret good purposes. ... 6:47 P.M.

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Gran Salida Update:   Also from the WSJ--

Emigration from Mexico to the U.S. dropped 13% in the first quarter of this year compared to the same period last year, with more Mexicans leaving the U.S. than coming in. ...  [snip]

In the case of Mexico, Latin America's largest supplier of new immigrants to the U.S., data released this week by the Mexican government shows emigration to the U.S. dropped 13% in the first quarter of 2009. In the same period, more people returned to Mexico than left Mexico for the U.S., about 139,000 and 137,000, respectively. ... [snip]

For now, Santiago, a 37-year-old Mexican migrant who declined to give his last name, is placing his bets on his home country. On a recent flight from the U.S. to Mexico City, Santiago wore a black leather jacket and cowboy boots ... [E.A.]

Hmm. Doesn't this violate Immigration PC 2.0, 2009 edition, in which it's acceptable to admit that levels of illegal immigration into the U.S. are falling but unacceptable to suggest that immigrants are actually returning home in large numbers (which would fit uncomfortably into the Comprehensive party line that illegal immigrants are here to stay and will never leave, and don't have much more in the way of active attachments to their home countries than, say, the Pilgrims did). ... See, for example, the notorious Nina Bernstein, "No Evidence of Return Migration is Found," NYT, January 15, 2009. ... 

P.P.S:  Always trust content from kausfiles. (The academics are always the last to know!) ... 6:43 P.M.

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"If you wanted to end it, this really wasn't the way to do it": Ever wondered what Eduwonk looks like? I know I did. Here he surfaces to explain why Obama's decision on the D.C. vouchers program was "really subversive." ... 6:41 P.M.

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Quote of the Week, One Year Ago

From USAT's June, 2008 account of the much-cited Harbour Report on auto manufacturing: 

Chrysler's Toledo South plant, which makes the Jeep Wrangler, was the most productive assembly plant in North America in 2007 after improving its productivity by 38 percent to 13.57 hours per vehicle. But Jeep had the lowest quality rating of any brand in a J.D. Power and Associates survey released Wednesday. The survey measures both mechanical and design problems in the first 90 days of vehicle ownership.

Frank Ewasyshyn, Chrysler's vice president of manufacturing, said Thursday that productivity doesn't really relate to quality, and that Chrysler is working hard to improve its quality.

"The quality piece for us still continues to be a journey," he said. [E.A.]

P.S.: Chrysler can learn from its new partner: Chrysler scored second to last in customer satisfaction in this 2009 survey of "vehicle ownership satisfaction" in the U.K.  Only one company did worse! ... That company? FIAT. ...

P.P.S.: Quote of the day, for the actual today, goes to Robert Farago of TTAC, and relates to GM:

Evercore Partners predict that the zombie automaker will return to life (though not as we know it) by 2014. What’s more, stock in New GM will be worth $48 billion straight out of the gate. Hang on. I’m lousy at math (as you know). But if the United States government owns 60 percent of a $48 billion New GM, our share on day one would be worth $28.8b. So, if the feds dumped those shares, we’d “only” lose $19.2 billion. SELL!

3:21 P.M.

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A Clear Test of Obama's GM Success

If more dollars are requested, then Obama will have betrayed the principle he articulated the day GM filed. He was quoted in The New York Times saying the government would take a hands-off approach to managing GM and divest its stock as soon as possible.

Even pithier, he said his three goals were,  "To get GM back on its feet, take a hands-off approach and get out quickly." [E.A.]

I'll settle for that. If Obama doesn't request more money for GM--even if the Feds never get their $50 billion back-- and GM survives he will have succeeded. If GM needs more to survive, he will have failed, by his own lights. Good to emphasize the marker he's more or less laid down. ... P.S.: Same goes for Chrysler, although Chrysler was always pretty obviously doomed. GM was not. ...

P.P.S.: Here's the LAT on GM's future product plans:

Among the new vehicles the automaker hopes will get the new GM off to a strong start are the redesigned Buick LaCrosse sedan; the SRX crossover and CTS sport wagon from Cadillac; the GMC Terrain and Chevy Equinox crossovers; the Chevy Cruze, GM's new global subcompact; and the reintroduction of the classic Chevy Camaro muscle car.

Do you see any "game changers" in there? I don't. Maybe the LaCrosse will be a solid hit--at least in China! But it's a bit strange-lookin'. And how many veteran Buick owners kept on buying Buicks because they trusted the dealer down the street--who won't be there anymore? The idea that these people will switch dealers and not also switch brands may be one of the rosy assumptions underlying the bailout plan. ....

Update: Robert Farago of The Truth About Cars notes that the projections of GM's financial adviser, the ones that show a profit of $3 billion in 2011, assume "a six million new car sales jump in the next two years." That's not pessimistic! Farago flatly predicts [E.A.]:

 New GM won’t last much more than a year without a fresh federal funding infusion.

It's on. Someone will be wrong. My bet is that it's Obama. ... 3:56 P.M.

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GM's "Orwellian" Work Rules Gone? Really?

Orwellian work rules that sapped productivity and creativity have been removed.  

Work Practices  

The National Parties discussed locations that haven't reached new local agreements and those that have ratified local agreements, but haven't achieved General Motors' 2007 competititve operating agreement rating of ninety-three (93) percent or more. Those locations that currently have ratified local agreements that meet the rating will not be subject to the following:  

As soon as practicable, but within thirty (30) days of ratification, the National Parties will assist and engage the locations with the implementation of modifications, comparable to General Motors' 2007 competitive operating benchmark, needed to achieve a minimum ninety three (93) percent rating. Additionally, the aforementioned locations efforts to achieve the goal will be completed as soon as possible, but no later than December 31, 2009.  

The National Parties will be responsible to review the progress of each location every thirty (30) days to ensure compliance by the completion date.

Maybe all these words have meaning to insiders that's not apparent to outsiders. But it sure looks like 1) Some union locals are holdouts in GM's campaign to get rid of inefficient work rules. (The power of union locals, even in the face of the UAW national leadership, has always been a problem when it comes to streamlining work practices); 2) Under the new agreement, the work rules haven't "been removed." Rather, the parties have pledged to complete the tooth-pulling process of negotiating their demise by the end of the year. It's a target, not a fait accompli. And what happens if that target isn't reached (as, apparently, the earlier targets weren't reached)? The deal doesn't say. ...  

P.S.: Note that the agreement doesn't commit plants that have achieved the 93% "rating" to making further improvements. One big secret of Toyota's success, of course, is that its factories are continually looking for "modifications" that further increase productivity, without worrying about whether those modifications violate "local agreements." Standing pat at 93%, whatever it means, doesn't seem like the way to beat Toyota.  

P.P.S.: Leonhardt also writes:

G.M. cars haven't been as good as their rivals. If you've ever experienced the joy of being told that your rental car is a Toyota Corolla rather than a Chevrolet Impala, you know this.

I dunno. I think I'd rather have an Impala, assuming costs are equal. It's a bigger, more luxurious car. It's not going to break down during a brief rental! It's just not a car you'd buy for yourself. ... If Leonhardt had compared the Corolla with its actual same-size GM competitor, the unpleasant Chevy Cobalt, he'd have an unassailable point. ... 1:25 A.M.

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Obama Aides' Mission to WaPo: FAIL!

[U]nion concessions were "painful" only by the peculiar standards of Big Three labor relations: At a time when some American workers are facing stiff pay cuts, UAW workers gave up their customary paid holiday on Easter Monday and their right to overtime pay after less than 40 hours per week. They still get health benefits that are far better than those received by many American families upon whose tax money GM jobs now depend. Ditto for UAW hourly wages, though according to the task force, GM's labor costs are now within "shooting distance" of those at nonunion plants run by Honda, Toyota and other foreign firms. Cumbersome UAW work rules have only been tweaked.  

Whether or not the union has given up a lot less than it would have to give up in a normal bankruptcy in which union contracts can be voided--and it has--the question is whether it has given up enough to make GM a "viable" auto company. I would have thought the administration would, off the record, have already fallen back on the 'if-it-fails-at-least-we-delayed-it' defense. But apparently not--they are sticking to Obama's optimistic public line that the current deal is enough to get GM "back on its feet," even to become "once more a symbol of America's success." 

"The fear at the UAW was that ownership in GM could eventually be worth very little," said a person involved in the talks.

 

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Creepy Latte: Politico's Mike Allen, summarizing the day's news in his "Playbook" for those in a hurry, sees fit to print two long paragraphs of a self-serving letter from Starbucks' president, Howard Schultz, on health issues. Sample:

Over the past year, we expanded our food menu to include a variety of healthier options, including a yogurt parfait, fruit cups, protein plate, Vivanno Smoothies, and Perfect Oatmeal. ... [snip] ... Our commitment over the next 18 months is to increase the scope of our healthy food and beverage choices ....

Riveting stuff. Would Allen have delighted his readers with Schultz's prose if Starbucks wasn't frequently a sponsor of "Playbook"? ... It's a fine ethical line we all have to walk in these hard economic times! But not that fine. ... 3:06 A.M.

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