A Law School Is Finally Closing
This week, the world of legal education reached a new and dismal milestone when California’s Whittier College announced that it would finally close down its law school after years of declining enrollment.
This is a first, I'm told. According to an American Bar Association spokesman, no fully accredited law school has ever—ever!—outright shut its doors before.
Like many of its peers, Whittier Law School was rocked by the collapse of law school applications that began in 2011, after widely reported horror stories about the stagnant legal job market started driving away the country's directionless liberal arts grads. It counted just 132 students in its first-year class in 2016, down from 303 in 2010, according to Law School Transparency. And while law school enrollment stabilized overall last year, Whittier's was down another 9 percent. Its graduates' employment stats were fairly abysmal, too: Only 21 percent of its recent alums obtained long-term, full-time legal jobs in the months after graduation, while almost 28 percent were unemployed.
The closure won't be immediate. In an open letter, Whittier's board of trustees said the five-decade-old school of law would not accept any new students for the coming year, but would give current enrollees an opportunity to finish their degrees. “At the appropriate time, the program of legal education will be discontinued,” the letter said. The board apparently sprung the news on a group of astonished students at an “emergency meeting” that left some in tears. Meanwhile, faculty members have sued to stop the closure—because, well, they’re lawyers.
Whittier isn't the only institution that's fallen prey to the law school bust. In 2015, Hamline University's School of Law merged into its Minneapolis-area neighbor William Mitchell College of Law. And in November, Indiana Tech Law School—which had received partial accreditation from the ABA—said it would shut down after four extremely disappointing years in action.
But Whittier is, again, the first fully accredited law school to simply go bust rather than find itself absorbed by a rival. While many people have thought a reckoning like this was inevitable, others weren't so sure. A few years ago, Steven Davidoff Solomon, a law professor at the University of California–Berkeley who contributes to the New York Times, made a small bet with me that no accredited law schools would go under before 2018. He argued, in part, that universities would prefer to keep even ailing law schools open and generating revenue rather than shut them down and leave their expensive facilities empty. Nobody wants a shell of a building on campus, after all.
But apparently Whittier found something else to do with its real estate. In January, it sold the land its law school was built on for a $13 million profit,* according to the faculty's lawsuit. The professors, who apparently believed the proceeds would go back to their school, now claim in their lawsuit that the college is profiting illegally from the transaction. But however that case turns out, it seems pretty obvious now that there's no economic law that will keep a failing educational institution open.
*Correction, April 21, 2017: This post originally stated that the land was sold for $13 million total.
Republicans Are Trying to Reanimate Trumpcare Again. Their Plan Still Sucks.
It appears that House Republicans are once again attempting to reanimate the corpse of their much-hated health care bill, this time in the hopes that they can give President Donald Trump some semblance of a legislative victory to brag about in time for his 100th day in office. Politico has posted an outline of the deal, which was negotiated by Rep. Tom MacArthur, a leader of the moderate Tuesday Group, and Freedom Caucus Chair Mark Meadows, who on his better days sort-of-kind-of speaks for Congress's fringier conservatives.
The “Macarthur Amendment”—as this bargain is being called—doesn't include many dramatic new ideas. Mostly, it appears to set down on paper a formula Republicans were reportedly discussing two weeks ago, which would give states the ability to opt of the Affordable Care Act's key insurance-market regulations, including the essential benefit rules that require health plans to cover certain categories of medicine, such as hospitalization, mental health, and maternity care. In order to do so, states would be required to apply for a waiver from the federal government, promising that their changes were intended to “reduce premium costs, increase the number of persons with healthcare coverage, or advance another benefit to the public interest in the state”—which seems broad enough to be perfectly meaningless. I'm sure that's the point.
The amendment's major compromise appears to involve Obamacare's community rating restrictions, which currently prevent insurers from charging customers more for coverage if they have pre-existing conditions. In order to waive those, states will have to first establish a high risk pool of subsidized insurance for the sick, for which Trumpcare would provide at least some funding. So, Mississippi and South Carolina would be required to offer at least a minimal insurance safety net for people with health problems before effectively shutting them out of the normal individual market.
Which isn't really much of a relief. At least in its current form as a bullet-point outline, the MacArthur amendment says nothing about how much money states will need to spend on their new high risk pools. In the past, these fall-back insurance options for the sick have been notorious for high premiums and long waitlists, mostly because legislatures haven't been willing to pony up enough funding to make them work properly.
As I've written before, allowing states to opt out of Obamacare's insurance regulations in order to bring down the cost of coverage is probably a more intellectually coherent policy approach than the bizarre mish-mash Paul Ryan & Co. initially dreamed up for the American Health Care Act. But it's probably best to take the broad view here. Ultimately, House Republicans are talking about mere tweaks to a monstrous piece of legislation that would leave millions uninsured. It still guts Medicaid. It's still designed to bring down the cost of insurance for young and healthy Americans by forcing the old and sick to pay more. Depending on how they eventually structure Trumpcare's insurance subsidies, some states could find their individual insurance markets transformed into hotbeds for scams.
And, it might be dead of arrival in the Senate, anyway. Aside from the fact that some Republican moderates will probably feel squeamish about yanking health care from their constituents, many of the regulatory changes House members are demanding might not be permissible under the upper chamber's reconciliation rules, which Republicans are relying on to avoid a filibuster. These on-again-off-again negotiations may be for naught.
In any event, the world's world's most agonizing zombie movie is still stumbling on.
Bill O’Reilly Is Only Done in Broadcast if He Wants to Be
Bill O’Reilly has returned from his Italian holiday without a day job. On Wednesday, Fox News axed the most popular host on cable news following an advertiser walkout over O’Reilly’s alleged history of sexual harassment, which he and the network had kept hidden by paying millions in lawsuit settlements. For now, though, O’Reilly still has his lucrative book-writing, his live appearances, and, of course, his millions.
And he may yet continue to darken America’s screens.
O’Reilly possesses a fan base that clings to him with Bieberian levels of devotion. His audience is more than happy to whitewash his bad behavior, blaming the victims and the liberal media, showering him with love and denial. They won’t all follow O’Reilly to his next act, but plenty will.
So what’s O’Reilly’s next step? How does he monetize (such a 21st century word for such a 20th century character) his rabid fans, the people who made sure his ratings went up even as advertisers began jumping ship? The answer is OTT.
That’s over-the-top, a term used to describe not O’Reilly’s bombastic style, but rather the technology for delivering television over the open internet. (In olden days, the cables to connect the devices that allowed for internet-based transmission literally snaked over the top of the TV set, hence the name.)
O’Reilly is one of the few media stars with enough name recognition and the sort of devoted fan base to make a standalone TV network a realistic possibility. Glenn Beck did it, and O’Reilly is arguably far more popular than Beck.
Launching an OTT network—as Donald Trump might have done had he lost the election—is not rocket science. There are plenty of high-quality software and hardware solutions that would allow him to launch a network quickly and easily, and to actually produce his show, at least in DIY style, all O’Reilly really needs is a couple of cameramen, stage lights, and microphones that can handle really, really loud voices.
He’d also need to decide on a business model—a monthly subscription plan; a transactional model, where each show is available individually; or, more likely, a hybrid, where subscribers save money over the cost of individual downloads, while also providing O’Reilly with a recurring revenue stream.
Throw in some red, white, and blue graphics and an easy-to-remember URL and you’re pretty much set. A deal with the larger streaming devices like Roku, Apple TV, and Amazon Firestick would help—assuming they don’t deem an O’Reilly channel too toxic to host—but otherwise a basic Chromecast, to stream the show from the web browser to their TVs, would work for his fans. (And really clear, really well-thought-out instructions: O’Reilly’s audience, after all, skews older.) Perhaps like Glenn Beck, O’Reilly would decide to expand his show into a full-on network, adding other like-minded commentators, and otherwise make a go of it as a digital property.
How much could O’Reilly make? If just over one-quarter of the 3.76 million people who watched his show on Tuesday, April 4 signed up for a $10 monthly subscription, he’d be grossing $10 million each month—or $120 million a year.
In order to launch a successful OTT network, you need to have the sort of devoted audience who will follow you into uncharted waters, fans who will gladly download your app and pay for the privilege. As such, O’Reilly is one of a small number of celebrities who could pull something like this off. There’s Oprah. Howard Stern. Maybe Rachel Maddow or Jerry Seinfeld.
The most enticing thing for O’Reilly might be this: He wouldn’t need to rely on the advertisers who were scared off by his alleged extracurricular activities. He just needs the support of his loyal fans. When you’ve got a built-in audience of millions, the options are fairly endless. (Then again, given the fleeting nature of fame in America and the advanced age of O’Reilly’s fan base, he probably would want to make his move fast.)
Critics of O’Reilly are cheering the end of his cable news dominance. But given the possibilities, he’ll only really disappear if he wants to do so.
What Is France’s Election Really About? It’s the Economy, Idiote.
France’s closely watched presidential election, whose first round occurs this Sunday, has been framed as a referendum on globalization, immigration, and France’s place in the world. Marine Le Pen, the anti-immigrant candidate of the National Front, would certainly like it to be seen that way. As President Trump did here, she thrives on an intensely gloomy view of her country’s present. The French agree, according to a 2016 poll: Four in five say the world is getting worse; just 3 percent say it’s getting better.
The French election is certainly about all of those things. But at its core, it’s about something simpler: jobs, or the lack thereof. C’est l’économie, idiote.
Emmanuel Macron, the centrist, ex-banker front-runner, says he’s the jobs candidate. He earned the ire of the unions by saying an Uber driver working 70 hours a week had more dignity than a man without work. François Fillon, the pro-business, anti–gay marriage Russophile running just behind him and Le Pen, also says he’s the jobs candidate. And so does Jean-Luc Mélenchon, the surging communist who wants to cap all incomes at 400,000 euros. In their own ways, they all want to put more French to work.
Polls indicate that jobs not only are the No. 1 issue for French voters but have been the No. 1 issue for months. And the polling surge of Mélenchon—whose voters, more than those of his peers, say their primary issue is work—feels like as much an expression of frustration with the system as a belated reaction to an issue previously submerged by louder, more provocative conversations about the EU and assimilation. (Though for what it’s worth, support for Le Pen also correlates neatly with the unemployment rate.)
France is famous for many things, but the glorification of work is not one of them. It’s not that the French don’t work hard; the country’s labor productivity is as high as in the United States or Germany. But many of them don’t work long hours. (Some of them, famously, don’t answer email on the weekend.) The number of hours worked per year and per employed individual is low, which the left sees as a victory. After all, what is progress if not workers spending more time with family and friends?
Not everyone has shared in those gains, however. Strong worker protections make employers reluctant to make new hires. As a consequence, the country’s rate of temporary employment is considerably above the OECD average, and young people suffer through years of stages, or internships, before landing full-time work. Last summer, President François Hollande pushed through a deeply unpopular labor law offering incremental reforms to the system, which generated massive street protests. Workers wanted to protect what was theirs.
That fiasco helped end Hollande’s political career and sank the chances of his deputy, Manuel Valls, who lost the Socialist Party primary to the leftist Benoît Hamon. Hamon said he would repeal the labor law but later (in a general election pivot) said he would come up with a new and better labor law. Hamon, who supports a universal income, argued the French needed to take a more nuanced view of traditional employment as a bedrock of identity. He is polling as an afterthought.
“France has in effect made a structural choice for unemployment,” the New York Times’ Roger Cohen wrote last week. “Everyone knows this. But because attachment to the model is fierce, honest discussion tends to be taboo.” Except not everyone wants that debate to remain under the surface.
Two sections of the population have suffered from the French system: young people and the first- and second-generation French who compose the country’s permanent underclass. (There’s a lot of overlap between those two groups.) Only 28 percent of French 15- to 24-year-olds work, a figure not much more than half the percentage in the U.S. or the U.K. Of course, many of them are in school. Still, the youth unemployment rate—measuring French who want to be in the workforce but aren’t—is around 25 percent. In the nation’s troubled banlieues, incredibly, that’s the general employment rate, and for young people, it ranges higher. For them, the daily grind of the trentes glorieuses, “Métro, boulot, dodo” (subway, work, sleep), is altogether unfamiliar.
There’s a narrative out there that France is on an even more ominous trajectory than the United Kingdom and the United States, whose elections upturned the status quo, because in France the youth is leaning right. The latest surveys don’t bear that out. Separate polls undertaken by the newspapers Paris Match and L’Express each show that support for Le Pen among French voters under 25 is hovering between 12 and 15 percent, down from 25 to 30 percent in January. (Her support rises with voters’ age until falling among seniors, some of whom may remember her father Jean-Marie Le Pen’s more reactionary positions, while others may be worried about pension shocks if France leaves the European Union.)
Those numbers suggest French youth flirted with Le Pen as an alternative to the status quo. (In January, the race looked like a three-way between Le Pen, the conservative Fillon, and the law-and-order socialist Valls.) Now, with Mélenchon and Macron (a centrist but political upstart), they have three. Only against Fillon do polls project Le Pen taking more than 40 percent of the vote in the second round.
None of this is to say that the problem of the banlieues, whose blend of cultural isolation and economic deprivation has spurred hundreds of young Frenchmen to leave for Syria and fight for ISIS, does not figure heavily in her popularity. France made 424 terrorism arrests in 2015, the most recent year for which statistics were available, as many as Germany, the U.K., Belgium and Spain combined. At a rally on Wednesday, Le Pen said that immigrants were making France a “squat,” and that she would make France more French.
But there’s another way in which the prospect of higher employment deflates Le Pen’s appeal. Her critique of immigrants to France, and the country’s large Muslim minority, is cultural. Macron, by contrast, has campaigned in those areas as the candidat du travail. He—like the rest of the French left—clings to the hope that a good number of France’s assimilation problems boil down to economics.
L.A.’s New Ad Campaign Has a Message for Tourists: This Isn’t Trump’s America
Like a college admissions brochure, the advertisement for Los Angeles parades the city’s diversity. As in the actual Los Angeles, no one seems to be working, no one is wearing a suit, and everyone is hanging out outside. It’s a tourism ad, but there’s no Disneyland, no Griffith Observatory, no Getty. It has no dialogue or voiceover but concludes with a message: “Everyone is welcome."
What’s on display here, first and foremost, is an L.A. lifestyle that speaks in part to the way we travel today—leaving our boutique hotels or Airbnbs in search of local experiences, armed with a Wallpaper guide to shops and architecture or just a smartphone with Yelp to seek out food to Instagram. “Touristic shame is not based on being a tourist but on not being tourist enough,” wrote the sociologist Dean MacCannell in 1976. The shame was in not tapping into a deeper, more authentic urban experience, the kind evinced by, or at least simulated in, this advertisement.
But if the ad is designed to play to a tourist’s desires, it is also designed to play to his or her fears. Tourism officials in Los Angeles are worried about a “Trump slump” prompted by the president’s rhetoric and policy. The city has experienced six straight years of tourism growth, but its forecasts suggest that may come to an end this year.
And so Los Angeles has drafted a campaign that stresses its diversity and hospitality but little else you’d expect from a traditional city ad. The spot will run in Canada, Mexico, Australia, the United Kingdom, and China—whose tourists, spooked by the headlines, may be reconsidering plans to visit the states.
The consultancy Tourism Economics predicted that over the next three years, Los Angeles County could see 800,000 fewer foreign visitors than normal and lose $736 million in direct spending by tourists. Still, it’s not clear the “Trump slump” exists yet. A decline in tourism to the U.S. in the fourth quarter of 2016 was probably spurred mainly by higher prices (a strong dollar, a big oil rebound). Los Angeles hasn’t yet seen bookings decline.
But, says Ernest Wooden Jr., the head of the Los Angeles Tourism and Convention Board, there are discouraging signs in the pipeline, reflected in data on flight searches, for example. “Not 100 percent [of flight searches] will translate to bookings, but certainly a percentage will,” he said. Some tour companies have also reported reduced interest.
While the countries covered by Trump’s still-stymied travel ban comprise a tiny fraction of U.S. visitors, the perception of an unaccountable airport police force—and a country with inhospitable xenophobic leadership—has traveled widely. Some well-publicized airport detentions included those of French historian Henry Rousso, Australian children’s book author Mem Fox, and Mohammed Ali Jr., the (American) son of the late heavyweight champion. The Trump administration has also planned to require international visitors to surrender their passwords and other sensitive data to border officials, and has banned electronic devices on flights on certain airlines from certain countries.
Los Angeles is not the first city to try to make the best of the bad press. In February, NYC and Company, the marketing organization for the five boroughs, launched a new international campaign called “New York City—Welcoming the World.” Tourism Economics gave a similarly dire message to New York, projecting the number of international tourists would fall for the first time since 2008. Billboards representing New York values will appear in the United Kingdom, Germany, Mexico, and Spain.
It’s the synergy of resistance-as-politics and resistance-as-brand. As Pepsi showed us all last week, harnessing political energy to sell things can be difficult. Especially when you don’t actually want to make a political statement. This is the line Los Angeles is walking: “We’re trying to deal with this situation in as apolitical a way as we can muster,” says Wooden.
But at least in the case of Los Angeles, I think it works—in part because, as we saw in the Super Bowl, virtually anything with more substance than the Kendall Jenner spot can be read as political during a time of heady partisanship. And the L.A. ad, which features a disabled man and a gay couple among other Angelenos (half the cast was pulled off the street), does feel anti-Trump.
And a city, too, has considerably more leeway than a product. After all, metropolises like Los Angeles and New York have made efforts to stall the president’s policies and shelter his targets. PepsiCo CEO Indra Nooyi, meanwhile, sits on the president’s business council.
Other cities have also trumpeted their role in the resistance, so perhaps it’s only a matter of time before we see it reflected in their branding materials. Which raises the possibility that all of America’s major cities might soon be striving to distinguish themselves to foreign tourists by emphasizing how similar they are.
Betsy DeVos Is Wasting No Time Screwing Over Students Who Borrow Money for College
Secretary of Education Betsy DeVos has been sending some chilling signals lately about how she plans to deal with America’s $1.3 trillion student debt burden. On at least two separate ocassions now, her department has scrapped Obama-era reforms that were designed to protect borrowers from being gouged or misled by the companies responsible for collecting their loans. All told, DeVos seems less interested in protecting former students than in protecting the predators that have fleeced them for profit.
The trouble signs started flashing in March, when the Department of Education gave a group of student debt collectors permission to once again start slapping heavy fees on delinquent borrowers who were trying to catch up on loan payments. The practice had effectively been banned during the Obama administration. In a pleasantly unexpected turn, all of the organizations affected by the move announced that they would not bring back the penalties. But the incident was still disturbing, both because it demonstrated DeVos’ willingness to side with businesses over borrowers and because it may have involved a astounding conflict of interest.
The controversy centered on a slightly obscure group of nonprofits known as guarantee agencies, which are responsible for collecting and rehabbing defaulted loans that were made as part of the government’s old, bank-based student lending scheme (though the program was discontinued in 2010, there are still hundreds of billions of dollars of loans still outstanding from it).
Up until 2015, when the Obama administration determined the practice was illegal, these organizations were notorious for charging high fees to borrowers who had defaulted on their debts but promised to pay up on them within 60 days. These penalties—equal to 16 percent of a borrower’s total loan balance—could be punishing. In one notable case, a Kansas woman sued the country’s largest guarantee agency, United Student Funds, after it charged her $4,500 in fees just to bring her loan current. But following the Obama administration’s clampdown, United Student Funds filed its own lawsuit claiming the penalty fees should have been permitted under the law. That case lingered on through this year.
Neiman Marcus Is Experiencing a Retail Apocalypse of Its Own Making
The woes of American retailers aren’t confined to those that cater to the struggling middle class, whose incomes haven’t budged in ages. Retailers that cater to the carriage trade are having a tough go, as well. Polo Ralph Lauren recently announced it would shutter a massive store on Fifth Avenue. And now, as Suzanne Kapner and Ryan Dezember reported in the Wall Street Journal Monday, Neiman Marcus seems to have run into some trouble. The Dallas-based chain, long known for its Texas-over-the-top holiday catalogue, obsequious customer service, and tastefully glitzy stores, would seem an unlikely victim of the current economic environment. But it offers a surprising sort of case study in late capitalism.
How do you lose money operating a fabled emporium of extreme consumption in an era of extreme inequality and highly conspicuous consumption? Neiman Marcus is showing us how.
In 2013, Neiman Marcus was sold by one group of obscenely rich people—the private equity firms Warburg Pincus and TPG—to another, a consortium of the private equity firm Ares Management and the Canada Pension Plan Investment Board. Even though the company was already laden with debt, this seemed like a good idea. With wealth concentrating ever more, and growing faster than the rate of growth, America’s grasping upper class would have more money to spend. By swaddling them in loving customer service and appealing to snobbery, Neiman Marcus would be able to sell the rich all sorts of goods at very high margins. It could jack up prices year after year and the customers wouldn’t mind. And in theory, online retailers posed less of a threat to the department store’s business. After all, part of the point of buying the stuff that Neiman Marcus sells is to be seen buying it in public. And many luxury-goods manufacturers tightly control the channels through which their products are sold.
So here’s the theory: As rich people got returns on their investments, they would spend money at Neiman Marcus’ holdings—42 Neiman Marcus stores, two Bergdorf-Goodmans, and a bunch of outlets. That would enable the really rich owners to pay off the really rich bondholders, and then cash out by selling the company to the public. Everybody wins!
Delta Will Reportedly Now Pay Nearly $10,000 Before It Tries to Force a Passenger Off a Flight
As the talk of United Airlines’ violent, authoritarian public relations disaster seems to be dying down, other airlines have taken efforts to distance themselves from the carrier’s problems. Now Delta just announced it is willing to do something United was not: Pay a ton of money to convince passengers of overbooked planes to disembark.
The Associated Press obtained an internal memo from Delta that gave its supervisors permission to offer almost $10,000 to incentivize travelers to give up their seats on overbooked flights, a large increase from its previous cap of $1,350. If gate agents are handling the overbooking instead of supervisors, they are now allowed to offer as much as $2,000 in compensation, up from $800—the amount United offered David Dao, the man who was forced off their flight.
Democrats Are Already Trying to Make Themselves the Party of Protecting Air Travelers
The pain of transportation fiascos tends to be sharp but short-lived, but the story of David Dao—the 69-year-old doctor wrestled off a United Airlines flight by the Chicago Aviation Police—may be different.
“That was horrible,” President Trump told the Wall Street Journal on Wednesday.
On Thursday, Dao’s lawyer said his client had suffered a concussion, a broken nose, and lost his two front teeth when he lost his seat on a flight to Louisville on Sunday evening.
Enter the Democrats, who appear to be seizing a moment of bipartisan outrage to advance a hastily drafted set of airline regulations. For starters, Dems on the House Transportation Committee have asked Transportation Secretary Elaine Chao to share the results of her department’s investigation into the incident.
Trump Tells Reporters He Might Blow Up Obamacare if Democrats Won’t Negotiate With Him
Well, he finally went there.
In an interview published Wednesday by the Wall Street Journal, Donald Trump effectively threatened to sabatoge the entire individual health insurance market if Democrats refused to negotiate with him over an Obamacare replacement. The president said he was debating whether to continue making crucial payments to insurers that help keep down the cost of coverage for low-income customers. House Republicans have sued to cut off the “cost-sharing reductions” subsidies; if Trump stops defending the case and halts the funding, the Affordable Care Act’s insurance exchanges could well collapse.
“I don’t want people to get hurt,” Trump told the Journal’s reporters. “What I think should happen—and will happen—is the Democrats will start calling me and negotiating.” Welcome to the Tony Soprano school of health policymaking.
So, how did we get here? For a long answer, check out my piece on the cost-sharing reductions from two weeks ago. The shorter version is this: Under the Affordable Care Act, insurers are required to offer health plans that limit out-of-pocket expenses like co-pays and deductibles for poorer enrollees. In return, the federal government pays them directly to cover the extra cost. Without that money, carriers would be on the hook for billions. The problem is that congressional Republicans, in an attempt to sabatoge Obamacare, refused to appropriate funding for the subsidies. The Obama administration went ahead and distributed them anyway, arguing the payments were authorized elsewhere in the health care law, and the GOP sued to stop them. While the last administration may have had a surprisingly strong legal position, a district court judge ruled in favor of the House GOP, and the suit went up on appeal, where it's now sitting.
The key thing to realize is that, if the cost-sharing reduction payments disappear, insurers are almost surely going to pull out of the market. The law would require them to offer underpriced plans without any compensation from Washington. They could theoretically sue for their money in the Court of Federal Claims, but that route could take years, and it’s unclear how many of them would have an appetite to burn cash during an extended court battle.
Earlier this week, the New York Times reported that the administration was “willing to continue” the payments this year to keep the market stable. But then the Department of Health and Human Services released an unusually tart and politically tinged statement suggesting that no such decision had been made. “We have not been contacted by Democrats to help save Obamacare, perhaps because they consider Obamacare to be a losing cause. Democrats need to help solve this failed Obamacare plan,” it read. According to Politico, the statement “was personally ordered by an incensed Trump, who feared that the Times story hurt his negotiating position.”
So now we’ve devolved into a hostage situation. Trump, for his part, is barely keeping up the ruse that this is about legal authority. On the one hand, he told the Journal reporters that Obama “wasn’t allowed” to make the payments. But then he refused to say definitively whether he’d make the payments. Instead, he lashed out at the Democrats. “Schumer should be calling me up and begging me to help him save Obamacare,” Trump told the Journal. “He should be calling me and begging me to help him save Obamacare, along with Nancy Pelosi.”
Then, he more or less owned up to the political nature of the whole gambit.
Mr. Trump said Democrats should be motivated to find negotiate on health care because “they own Obamacare.”
Still, he acknowledged that dynamic is quickly shifting.
“That’s part of the reason that I may go the other way” on the insurance payments, he said. “The longer I’m behind this desk and you have Obamacare, the more I would own it.”
Trump is sort sabatoging himself rhetorically here. By admitting he might “go the other way” if he thinks people will blame him for the health care market’s collapse, he’s pretty much acknowledging that the whole thing in his hand. That entirely undercuts the administration’s official line that Obamacare is merely about to fail on its own. He’s totally giving up the plot. Not that the game made much sense to begin with. After all, the only reason we’ve reached this point is that Republicans refused to allocate money for part of the program, then sued to stop the payments, which insurers may still actually be entitled to.
The president is also sort of undercutting his whole bluff by saying he might make the payments in the end. I mean, don’t start a game of chicken by admitting that, yeah, you’re kind of thinking about swerving.
But that also might not matter. Insurers need some certainty by this summer, when they have to start submitting rate increase requests for 2018. If Trump is still threatening to blow the whole market by then, they might just start to flee no matter how weak and unbelievable his mafioso impression might be.