A Key Obamacare Enrollment Number Just Came Out, and It’s Ugly
The number of Americans who signed up for health insurance on Obamacare's federal marketplace fell this year compared with last, according to a new report from the Department of Health and Human Services. In total, shoppers selected 9.2 million plans on healthcare.gov during the open-enrollment period that ended Tuesday, compared with 9.6 million the previous year.
This is very bad news for the Affordable Care Act and is certain to fuel Republican claims that the law is collapsing in on itself.
Now, this is not the final tally for Obamacare enrollment. Last year, some 3.1 million additional customers bought plans on the state-based exchanges. We won't see the equivalent figures for this cycle until March, according to the Centers for Medicare and Medicaid Services.* Nonetheless, it's enough to conclude that total sign-ups will probably end up down.
Practically, that means insurers may end up losing more money than they expected this year, thanks to a thinner, possibly sicker customer base. That, in turn, could lead to higher premiums in 2018, or persuade more carriers to drop out of the market entirely. Insurance providers need to decide whether they will participate in the next open-enrollment period within the next couple of months, when they'll be required to file notices with state insurance regulators. Many were already concerned about whether the Trump administration would continue funding key pieces of the law; the enrollment drop could compound those issues.
Politically, this is also a gift to Republicans like House Speaker Paul Ryan, who has long claimed that Obamacare had entered the unraveling cycle of rising premiums and falling enrollment known as a death spiral. It was easy to dismiss his rhetoric because, despite the 22 percent average price increases on this year's individual market, enrollment was on pace to rise overall as recently as late December. Now it's down.
Liberals will argue that Republicans and the Trump administration sabotaged enrollment. (Sample headline from blogger Charles Gaba: “Congrats, Trumpublicans: Your ACA sabotage efforts 'worked' beautifully.”)* And, frankly, even though it can't be proven beyond all doubt, that's my suspicion about what happened. Talk of repeal may have dissuaded some customers from signing up. The Trump administration also quashed millions of dollars of last-minute advertising during the final week of open enrollment, though it backed off a plan to also end outreach efforts like reminder emails and automated phone calls. Between the news about the ACA's impending doom and the weakened recruiting drive, it's entirely possible that Trump may have undercut the markets.
So Democrats will have their talking point. Republicans will have theirs. And the individual health insurance markets will be a little closer to peril.
*Correction, Feb. 3, 2017: This post originally misidentified the Centers for Medicare and Medicaid Services as the Center for Medicaid and Medicare Services. It also misspelled Charles Gaba’s last name.
The Conditions at Bangladeshi Apparel Factories Are Still Horrible. What Happens to Workers Who Speak Up Might Be Worse.
At least 24 garment workers and labor leaders in Bangladesh remain in police custody without bail Friday, more than a month after being arrested during a spontaneous wave of walkouts by thousands of workers at factories in the industrial hub of Ashulia. The protests began at a factory called Windy Apparels, which makes clothes for Swedish clothing giant H&M and British retailer Tesco. I visited Ashulia in late October for the Nation Institute Investigative Fund and Slate, and wrote about the death of a 23-year-old seamstress at Windy Apparels, Taslima Akter, who collapsed on the factory floor after being denied sick leave for weeks. Less than two months later, the factory where she worked has become the epicenter of the country’s largest wage protests in years.
On Dec. 11, about two dozen workers at Windy walked off the job, after factory management refused to address concerns they had been raising since Taslima’s death. Their primary demand was for an increase in the monthly minimum wage of $67 to roughly $200—a figure closer to a living wage in a country where the minimum wage has failed to keep pace with rapidly rising inflation. Labor advocates told me that their demands also included a stop to the arbitrary abuse and firing of workers, six months of paid maternity leave, and, to prevent a recurrence of a death like Taslima’s, allowing workers who fall ill to take the paid sick leave they are guaranteed by law. As the first small group of workers walked out of the factory, many of their co-workers joined them, and as word spread in the days that followed, workers from as many as 40 other factories took to the streets in a series of wildcat strikes.
The retaliation was swift and severe, led by factory owners who are members of the powerful trade association, the Bangladesh Garment Manufacturers and Exporters Association and the Ashulia police. Within 10 days, the strike was over, 85 factories were shuttered—most of which had not been involved in the strike—and, according to a consortium of human rights groups, at least 1,500 workers were fired or forced to resign. Most of them are now having trouble finding work in Ashulia, according to labor activist Kalpona Akter of the Bangladesh Center for Worker Solidarity, and believe that they have been blacklisted. Owners of eight factories, including Windy Apparels, filed criminal complaints against labor leaders with the Ashulia police, accusing them of vandalism, looting, and assault—despite scant evidence of any violence during the protests. One television journalist, Nazmul Huda, was arrested for his coverage of the strike, charged with inciting the unrest and spreading false information.
International labor rights organizations have condemned the arrests as part of the government’s strategy of using arbitrary detention to halt labor organizing, describing the ongoing crackdown as a “clear step backwards” for the garment industry. Many of those detained are being held under the draconian Special Powers Act of 1974 that allows for detention without charges for up to six months. Three of the detained labor leaders are being held under cases filed in 2015 for unrelated incidents of political violence that occurred two years ago. While the new cases only list 14 people by name, the charges could cover several hundred more, according to the consortium of human rights groups, leaving open the risk of more arrests in the future. A labor lawyer told the New York Times that “when they find someone they want to put in jail, they enter that person’s name into the case.”
The factories reopened in late December, but a “really intense” security presence is everywhere, Jennifer Kuhlman from the Dhaka office of the Solidarity Center, an international affiliate of the AFL-CIO, told me: not just in Ashulia, but also in other industrial areas across the country. She said the arrests, the mass firings, and the continuing heavy surveillance by police have created a climate of fear among workers and labor organizers. Akter, from the Bangladesh Center for Worker Solidarity, told me by phone that the group’s Ashulia office was shut down last month and that one of her organizers, Mohamed Ibrahim, who is among those arrested, reported having been blindfolded and subjected to death threats while in police custody. She herself had to go into hiding for two weeks, she said, fearing that she too might be arrested. She said the crackdown has had a chilling effect on organizing and it’s become even harder than it was before to address workers’ concerns. The only intervention that could make a difference now, she told me, is for brands to step in and demand that their suppliers drop all charges and reinstate the fired workers.
The eight factories that filed criminal complaints, according to data compiled by Workers Rights Consortium, make clothing for dozens of global brands, including H&M, Gap Inc. (the parent company of Gap, Banana Republic, Athleta, and Old Navy), the VF Corporation (parent of North Face, Jansport, Vans, and Eagle Creek), Walmart, and Inditex (which owns Zara). Six of the eight factories are suppliers for H&M, which has a global framework agreement with the unions IndustriALL and IF Metall to support factory-level unions within its supply chains.
I asked H&M what kind of pressure they were putting on their suppliers. In an emailed response, H&M press officer Ulrika Isacsson said they were in “close dialogue with several stakeholders, including suppliers” and referred to a joint letter they sent to the prime minister of Bangladesh last month, along with 20 other brands, urging the government to protect workers’ rights, which gave, she said, “special attention to the legitimate representatives of the workers who were arrested.” She added, “We take a positive view on wage increases and we are prepared to pay the necessary prices.”
Scott Nova from the Workers Rights Consortium in Washington told me H&M is not acting responsibly and could be doing far more. “If global retailers threatened to halt garment orders until the unionists are released, people would be out of jail by tomorrow,” he said by email. “Instead, they languish in dank jail cells while the factory owners whose false complaints put them there keep pumping out clothes for H&M, Zara and the rest.”
This post originally appeared at the Investigative Fund.
Trump Is Trying to Preserve Financial Advisers’ Right to Rip Off Clients Saving for Retirement
Until Friday, it seemed like millions of retirement savers would soon be forced to suffer the indignity of getting investment advice that was actually in their best interest. It was all the fault of the Obama administration. Financial advisers had long had the freedom to offer investment guidance that favored their own financial interests, so in 2016 the Department of Labor issued a rule that was set to take effect this April, one that would have ordered advisers to put their clients first.
But no worries! President Donald Trump signed on Friday an executive order ordering further study of the regulation, known as the fiduciary rule. The Labor Department told Reuters that it was studying its “legal options” for delaying implementation of the measure.* It’s now very reasonable to assume the measure will never happen, or will be realized in extremely watered-down form. Many in the financial services industry, not to mention the Republican legislators who have carried water for them on this issue for the better part of a decade, are jubilant:
But for the rest of us, it’s just another reminder that Trump is a creature of that swamp he promised to drain.
Making it harder for financial services firms to profit at the expense of their clients should be a no-brainer. It is such an easy call, in fact, that many of the criticisms of it amount to gibberish. Gary Cohn, the former Goldman Sachs president who now directs Trump’s National Economic Council, told the Wall Street Journal this week that expanding the fiduciary standard “is like putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.” Huh?
While many of us assume our financial advisers only offer the best possible advice, most actually work to something called the suitability standard, which allows them to give less-than-perfect advice and not say so. The Obama administration thought such behavior was costing Americans $17 billion a year. The new rule was going to force the more stringent fiduciary standard to apply to all advice governing retirement savings, like IRAs.
The concern of the wealth-management industry was that the financial razzamatazz that earns them the most money in commissions and fees is rarely in clients’ best interests. Less than 1 percent of investors are able to outguess the markets year in and year out, and that includes professional money managers. As a result, they’ll do best placing clients’ money in low-fee, passively managed index funds, ones that simply seek to replicate the results of such market measures as the S&P 500. The new rule would have forbidden financial advisers from, say, selling their clients more expensive and (to borrow Cohn’s weird analogy) less nutritious mutual funds and other investments without telling them about the benefits of simpler, cheaper, and healthier options. But you still could have put your retirement funds in the financial equivalent of tasty junk food. It’s just that the Obama administration was guessing you wouldn’t want to do so once this was all explained to you.
So what now? The administration can change a regulation, but it almost certainly needs to open the proposal to public comment first. And it’s also quite possible someone will take the administration to court. The fiduciary rule was, after all, a finalized rule. Even if that happens, Friday’s action by Trump gives the Republican-dominated Congress time to pass legislation rolling back the Obama-era retirement savings initiative, something it’s tried to do in the past.
To be fair, many financial services firms have already made changes to be in compliance or near-compliance with the now-stalled standards. Merrill Lynch, for one, announced it would soon no longer allow its advisers to take commissions for retirement account investments. But that’s a small comfort. There’s nothing to stop the financial services industry from backsliding over time.
Moreover, just as not all bosses offered raises or salary changes in advance of the Obama administration’s now-stalled overtime regulations, not all financial services firms assumed the enhanced retirement guidelines were a done deal. Last month, Paul Reilly, the chief executive officer of Raymond James Financial, said it’s possible his firm was “lucky” that it hadn’t announced any changes to customers. “We certainly don’t want our advisers to have to make changes they’ve already made … to go back and undo them,” he told financial analysts.
In particular, many in the variable and indexed annuities industries had held out hope for a delay of the rule or even full outright revocation. Sen. Elizabeth Warren released an updated version of a report Friday morning of her 2015 look at the industry, documenting the goodies companies offer up to insurance agents for selling their wares. Assurity Life Insurance Co., for instance, rewards its top sellers with a stay in a Dublin hotel in the spring of 2017 right now. Not shockingly, the flier promoting the gimme warns recipients that it is “NOT TO BE FORWARDED TO CONSUMERS.” No kidding!
One last point: It’s easy to say “Democrats good, Republicans bad” here, but things aren’t so simple. Yes, Trump is directly and primarily responsible for the action, but the Obama administration and congressional Democrats played a role too.
The Department of Labor initially proposed buffing up the standard during Obama’s first term only to encounter fierce pushback from the financial industry, which lined up both Democratic and Republican members of Congress to back it. Even Sen. Bernie Sanders signed a letter early in the process questioning the impact of a revised version of the rules. Momentum behind the effort didn’t pick up until Warren began speaking out about the rule.
Trump clearly took a lesson from this. He’s not waiting around to take action. He’s been in office for two weeks and he’s signed more than a dozen executive orders, albeit somewhat sloppily. Still, the next Democratic president, whoever he or she is, should take note.
*Correction, Feb. 5, 2017: This post originally misstated that the executive order delayed implementation of the fiduciary rule for 180 days. The final order instructed officials to conduct further study of the rule.
Donald Trump’s Excuse for Gutting Wall Street Regulations Is Hilariously Flimsy
President Donald Trump signed an executive order Friday instructing his administration to start rolling back Dodd-Frank's banking regulations. This was not a surprise. Republicans have hated the financial reform law, which was passed in 2010 in the wake of the housing bust and Wall Street’s meltdown, from the moment it was signed.1 Trump spent a whole campaign saying he'd dismantle the legislation. Now the president is following through.
And as usual, Trump’s rhetorical justification is both hilarious and transparently divorced from reality. “We expect to be cutting a lot out of Dodd-Frank because, frankly, I have so many people, friends of mine, who have nice businesses who can’t borrow money. They just can’t get any money because the banks just won’t let them borrow, because of the rules and regulations in Dodd-Frank,” Trump said at a Friday morning meeting with CEOs.
So Trump's “friends” can't get credit. Because of Dodd-Frank. The premise here is that financial reform has hamstrung commercial lending. Meanwhile, back here on Earth-1, commercial and industrial lending has risen to an all-time high since 2010.
Even as a percentage of the economy, lending is back to levels not seen since the 1980s.
Maybe the problem is that Trump's “friends” are in commercial real estate? Maybe this is an industry-specific drought? Nope—sure doesn't look like it.
Perhaps the problem is large banks. They've been hit with higher capital requirements and with more stringent oversight are having trouble? Maybe they're stuck in the spiderweb of onerous federal regulation?
Is there a problem with community banks? Perhaps. Lending by the little guys has rebounded far more weakly compared with bigger financial institutions.
But that doesn't necessarily mean that Dodd-Frank is at fault. Community banks have seen their market share eaten by large and nonbank lenders. And so, as this graph from a 2016 Federal Reserve Bank working paper shows, overall credit to small businesses rose healthily in the years after financial reform.
So I'm going to go out on a limb here. Maybe the fact that Donald Trump's “friends” can't get credit says more about them than it does anything about Dodd-Frank. Or maybe he's just talking out of his (presumably) orange-tinted ass.
1Often forgotten: The bill won votes from three Senate Republicans, including current member Susan Collins of Maine, which just goes to show that nominally bipartisan legislation isn't really that much safer from criticism than bills jammed through on a party-line vote. But I digress.
Obama Left Behind a Pretty Strong Economy for Donald Trump to Ruin
The Bureau of Labor Statistics released on Friday the first jobs report of Donald Trump's presidency. Except it sort of isn't. The government would have gathered its data before the inauguration, so in a sense Friday morning's figures are really the last snapshot of the Obama economy. You could argue that Donald Trump's election was already having some sort of an effect—small business optimism went up a bunch after the election, markets were trading on his tweets, his agenda was shaping up—but it's not as if our Dorito in chief was making policy yet.
So what did we learn from the report? Mostly that Trump inherited a reasonably strong economy, which is now his to ruin. The U.S. added 227,000 jobs in January and has averaged 183,000 over the past three months. The unemployment rate is basically level at 4.8 percent. Labor force participation rose slightly. Average hourly earnings are up 2.5 percent over the year. I think there's still room for improvement (or some slack, as labor economists would say): The raw employment rate among 25-to-54-year-old Americans—the one jobs stat that I think our unemployment-rate-truther president should follow—has been stuck at 78.2 percent for four months now, and should be able to go higher. But things are more or less OK.
Prime-age EPOP steady at 78.2% for fourth month. pic.twitter.com/3IcGHBfcON— Jed Kolko (@JedKolko) February 3, 2017
Some political commentators like to argue that Donald Trump is now in a worse position than if he were coming into office during a weaker economy, since he'll be blamed for any downturn. But do you remember 2009? I am pretty sure Obama would have preferred it if item No. 1 on his to-do list wasn't “save the United States from plunging into a new depression.” He did that, to an extent, and the aftershocks still paved the way for the Republican takeover of Congress in 2010. Granted, not every recession is going to be the Great Recession. And you could argue Ronald Reagan lucked out taking office in the middle of a Federal Reserve–induced double-dip recession, since he got the credit once Paul Volcker stopped throttling the economy with high interest rates. But getting the country out of a slump can be hard. And we have absolutely no evidence at this point that Trump is capable of thinking through or executing any kind of counter-cyclical macroeconomic policy should the economy hit the skids—and he hasn't even appointed a chair for the Council of Economic Advisors to help him figure it out.
Reassuringly, this economic recovery has shown itself to be pretty impervious to political nuttiness over the past several years. I mean, if the debt ceiling showdowns didn't send it way off course, the day-to-day lunacy of the Trump administration probably won't either.
So our new president has started off his term in office on the economic equivalent of the bunny slope. Let's see if he can stay upright.
Actually, It’s a Good Thing That Travis Kalanick Quit Trump for Business Reasons
On Thursday afternoon, five days after the start of a boycott that led masses of users to delete their accounts, Uber CEO Travis Kalanick announced his resignation from President Donald Trump’s Business Advisory Council.
The council, which is scheduled to meet on Friday, includes the CEOs of a number of the country’s biggest companies, including General Motors, Pepsi Co., IBM, and Walt Disney. Those executives have been notably tepid in their responses to Trump’s Muslim ban (not a ban, not for Muslims), especially in contrast to their counterparts at Amazon, Starbucks, General Electric, and Coca-Cola—to name a few big companies not represented on the council.
And Kalanick treaded softly at first, stopping short of condemning Trump’s order in a cautiously worded statement on Saturday. Then the boycott happened. On Sunday, he released what was easily the most strongly worded statement of any CEO on the council, calling the ban “wrong and unjust.” And on Thursday, he shored up the company’s bona fides with urban America, where it does most of its business, by relinquishing his seat at the president’s table.
“There are many ways we will continue to advocate for just change on immigration but staying on the council was going to get in the way of that,” Kalanick wrote in a memo to employees. “Joining the group was not meant to be an endorsement of the President or his agenda but unfortunately it has been misinterpreted to be exactly that.”
It’s the right result, if for the wrong reasons.
Should We Worry About Trump Fudging Jobs Data?
President Donald Trump does not particularly trust official government statistics. Unfortunately, now that he's president, the rest of us might need to worry about their reliability, too.
Not to sound like a conspiracist or anything! But the question of whether the White House might try to tamper with federal economic and demographic data in order to suit its political agenda, or try to silence statisticians altogether by defunding their agencies, has definitely been in the air. After all, our new president is a notorious fabulist with an authoritarian streak who refers to the unemployment rate as a “fiction” and whose administration blessed us with phrase “alternative facts” to describe some of its most blatant falsehoods. These are the kinds of things that make people who deal with numbers for a living sweat—just a little. So, recently, we've been treated to headlines like these:
From CNN: “Will Trump Team Try to Undermine Official Unemployment Numbers?”
From the Guardian: “Statisticians Fear Trump White House Will Manipulate Figures to Fit Narrative.”
From Science: “Scientists Fear Pending Attack on Federal Statistics Collection.”
How worried should we really be? After talking with a few former government officials, here's how I'm thinking about the issue right now.
There are three broad ways that a Trump administration could really mess with our official data.
First, there's the straight-up banana republic approach: Trump could send one of his minions down to the Bureau of Labor Statistics or the Census Bureau, and tell them to doctor some inconvenient numbers. Jack Welch once accused the Obama administration of doing this, which was crazed. Even given our country's slightly changed circumstances, I do not think that it is at all likely to happen.
Second, there's the craftier approach: A new agency director could change what questions get asked on key surveys or the way certain statistics are calculated. This is a reasonably serious and immediate threat.
Finally, there's the brute-force approach: The administration and Congress could simply cut funding and force the Census or BLS to drop certain projects, or just leave their data-gathering capabilities badly degraded. This is also a reasonably serious and immediate threat.
Let's take each of those in turn.
The banana republic scenario would be a disaster, obviously. I mean, it's possible to get along in a country where government stats are transparently fabricated (see: China), but I wouldn't recommend it (see: Argentina). Democracies don't tend to thrive once the border between statistical truth and fiction has been totally obliterated. U.S. investors and the Federal Reserve also depend on certain key economic indicators, like the unemployment and inflation rates. If word got out that those were being fudged, markets would flip and monetary policymakers would be left flying blind. A panic could ensue if the public discovered that any stats were being tinkered with for that matter—say, the poverty rate or the census' data on health insurance—since the revelation would inevitably raise questions about the veracity of all of the government's official numbers. Even if nobody uncovered direct evidence of foul play, any sudden, unexplained changes in monthly or annual data series could leave doubts.
But, again, the idea that Steve Bannon is going to march into the Bureau of Labor Statistics and start dictating unemployment figures is pretty far-fetched. First, Trump's Cabinet is full of business types who, whatever their shortcomings may be, know the value of reliable econ data. Labor secretary nominee Andy Puzder was a fast-food CEO, and while he may have qualms with the unemployment rate as an economic indicator, he mostly just prefers other figures produced by the BLS (which is fair). Moreover, government statisticians are an intensely independent lot who abide by carefully standardized procedures, and if any political appointees tried to step on their toes, it would almost certainly leak. The number-crunchers at the BLS have an especially healthy sense of paranoia about outsiders interfering or trying to obtain numbers before they're released. “The few days before the unemployment rate is released, the people who are working on it tape newspapers over the windows so nobody can find out what they’re doing,” Jesse Rothstein, a former chief economist of the Department of Labor and professor at the University of California–Berkeley, told me. That's caution.
Katharine Abraham, a former BLS commissioner now at the University of Maryland, was similarly reassuring. “I’m not super concerned about somebody coming and trying to force the BLS to produce data that are slanted in some way. I just don’t see an avenue where that could happen,” she said. “There are too many people involved in that process for it to be in any way realistic.”
So ham-fisted manipulation is probably out as a possibility. But there are more sophisticated ways Trump could meddle with government data collection that would still be incredibly harmful.
For instance, the administration has drafted an executive order that would have the Census Bureau ask Americans about their immigration status for the first time (it currently only asks whether they're citizens). The order is sort of bizarrely written—it proposes attaching the question to the long-form questionnaire on the decennial census, a supplement that no longer exists (it was replaced by the annual American Community Survey). But the frightening intention is clear enough. From the Washington Post:
“It will drive the response rate down enormously,” said Kenneth Prewitt, a former director of the Census Bureau who is now a professor of public affairs at Columbia University. Immigrants here illegally are unlikely to answer questions about their status, he said, adding that the resulting undercount could have chilling effects.
“If you drive those people out of the Census, the consequence is that they’re not in it,” he said. “It’s a step toward not counting the people you don’t want to count. And that goes very far in redrawing legislative boundaries.”
Technically, the Census Bureau is barred by law from sharing Americans' personal information. But if you were an undocumented immigrant, or a green card holder worried about being targeted by the new administration, would you take the risk?
Intentionally driving down response rates among immigrants in order to change the counted ethnic and geographical distribution of America would be a fairly dastardly stroke. Less dramatic but still worrying: Agencies could potentially cut off researchers from some specialized data sets. (Will the Trump IRS keep giving Thomas Piketty & co. access to new tax records?) And as the Guardian's Mona Chalabi noted, political appointees could force agencies to change their press releases on new data publications to bury unflattering statistics or change their methodology for computing some figures (though, again, that might attract some unwanted attention).
Finally, there's funding. Without money, the statistical agencies can't go out and properly conduct surveys. And without proper surveys, the quality of our data will suffer. The BLS is already struggling under budget cuts and has had to abandon some ancillary data projects. Further funding reductions could eventually start to hamper its core work. The Census Bureau, meanwhile, needs a substantial budget increase so it can begin its final preparations and dress rehearsals for its 2020 count. Congress hasn't delivered yet, and if it doesn't, the agency could be forced to choose between laying crucial groundwork for the decennial census or properly fulfilling some of its other responsibilities, like the Current Population Survey (which gives us the unemployment rate).
“These last Census tests are really, really of utmost importance in ensuring that everything has been planned. That the forms you want to use, the procedures you want to use, are effective and tested,” former Census Bureau Director Steve Murdock, now a professor at Rice University, told me. “I would say you really can’t overestimate the importance of the pre-census activities.”
A less immediate but perhaps scarier possibility is that the Trump administration would attempt to defund the American Community Survey, the annual project that offers a detailed socio-economic picture of the country. The survey is considered essential by social scientists, businesses (retailers often use it to decide where to locate stores), and most sane members of Congress, since the government uses it to distribute hundreds of billions of dollars in federal funding for programs like Medicaid, Section 8 housing, and highway grants. But conservatives have soured on the survey in recent years, supposedly because they find its questions intrusive and dislike that Americans can be fined up to $5,000 if they don't agree to participate (this is meant to keep response rates higher and reduce the costs for the census, since hassling people over and over again is expensive). In 2012, the House GOP voted to defund the ACS entirely.
One of those in favor was Rep. Mick Mulvaney, Donald Trump's nominee to lead the White House's Office of Management and Budget. During a hearing in 2012, the House member from South Carolina repeatedly suggested that the government could ditch the whole survey and let the private sector pick up the slack. “Data has value to it. So what is unique about the stuff on the American Community Survey that you think that no one would want to actually get into this business?” he asked a witness. “I am thinking about doing this after I am out of Congress,” he added later. “If it is in such great demand, it costs us billions of dollars to send out 3 million of these things, I think I might be able to do it better than we do.”
To be clear, it is very unlikely that a private company would replicate the ACS in full; for starters, it covers smaller, poorer communities that aren't necessarily draws for business, and some of the questions it asks—about family structure, for instance—are more important for social science and public policy than they are commercially valuable. But if Mulvaney sincerely dislikes the survey, he'll now have a powerful perch at OMB from which to press for its defunding.
So don't worry that the Trump team will start pulling the unemployment rate out of thin air. It doesn't need to resort to straight-up supervillainy to erode the data that the world runs on.
The Corporate Reaction to the Muslim Ban Has Been Feeble. Here Are Four Companies That Did It Right.
Generally speaking, companies like to keep their politics confined to lobbying, donations to political action committees, and, occasionally, a plot to melt the polar ice caps. In short, quiet.
But on the subject of President Donald Trump’s immigration ban, CEOs seem to be finding silence an increasingly untenable option. Motivated by public outrage, the plight of employees, and a higher sense of American ideals, the heads of America’s largest companies have dared, with varying degrees of vigor, to criticize the president—despite his penchant to send stock prices plummeting with a single tweet.
The backlash began in Silicon Valley on Friday afternoon, shortly after Trump’s order was released, with a public statement from Facebook CEO Mark Zuckerberg, and continued with critiques by the chief executives of Microsoft, Google, and Apple. Netflix CEO Reed Hastings called the order “un-American.” A burgeoning boycott of Uber revealed the pitfalls of dawdling on the subject; founder and chief Travis Kalanick issued a second statement on Sunday making his opposition to the ban explicit.
Also on Sunday, the CEOs of General Electric and Nike told employees they opposed the ban. On Monday, the CEOs of Ford, Coca-Cola, and Goldman Sachs also made their opposition known to employees, in messages that were later made public.
Do liberals engage in hypocrisy when they celebrate this type of corporate political commentary? Maybe. It’s a fine line between corporate politics for the bottom line and corporate politics for a higher ideal—especially with consumer brands whose success depends on popular opinion.
Trump’s Trade Guru Just Trashed Germany. He Actually Had a Point!
Peter Navarro, Donald Trump's White House trade guru, typically reserves his harshest rhetoric for China. But Tuesday, the economist managed to cause a bit of an international stir by laying into Germany, which he accused of exploiting the United States and its fellow European Union members with the help of a “grossly undervalued” currency.
He wasn't all wrong.
Navarro made his comments in an email interview with the Financial Times, which seemingly wanted to know his thought on the Transatlantic Trade and Investment Partnership, aka the big free-trade deal between the U.S. and the EU. Navarro was not encouraging about it. As a rule, the administration plans to pursue bilateral trade deals, not big multilateral trade agreements that rope in lots of different countries. And even though the EU is a unified trade bloc, Navarro doesn't feel like a pact with all of its members would pass the White House's test. Why not? In part, Berlin.
“A big obstacle to viewing TTIP as a bilateral deal is Germany, which continues to exploit other countries in the EU as well as the US with an ‘implicit Deutsche Mark’ that is grossly undervalued,” Navarro said. “The German structural imbalance in trade with the rest of the EU and the US underscores the economic heterogeneity [diversity] within the EU—ergo, this is a multilateral deal in bilateral dress.”
The global reaction was not exactly kind. The FT itself haughtily explained that “the view Berlin is intentionally advocating a weak euro to its own economic benefit is not widely shared.” Asked about the remarks, German Chancellor Angela Merkel essentially shrugged and suggested there wasn't much her country could do to influence the euro's exchange rate, because it didn't control the EU's monetary policy. “We won’t exercise any influence over the European Central Bank, so I can’t and I don’t want to change the situation as it is now,” Merkel said. Analysts were also dismissive of Navarro. “He hasn’t understood the euro or this is a serious conspiracy accusation,” Henrik Enderlein, director of the Jacques Delors Institut in Berlin, told the Telegraph.
But all of this sort of missed the point. Based on his quote, Navarro wasn't necessarily saying the euro was too cheap across the board. Instead, he was merely saying it was too cheap for Germany. This is something virtually everyone agrees on, except for maybe the Germans themselves. Were the deutsche mark still around, Germany’s massive trade surplus, which as a percentage of its economy is actually larger than China's, would have forced up the value of its currency, leading it to import more and export less. Instead, Germany is locked into a trade and currency union with a group of economically weaker countries who keep the value of the euro down, which makes it easier for factories in Wolfsburg and Munich and Bremen to sell their wares both inside and outside Europe.
This really isn't controversial. Even Former Fed Chairman Ben Bernanke had a whole spiel about this a couple years ago. “Although the euro—the currency that Germany shares with 18 other countries—may (or may not) be at the right level for all 19 euro-zone countries as a group, it is too weak (given German wages and production costs) to be consistent with balanced German trade.”
There's also plenty Germany could do to fix its trade imbalance, but isn't. One reason it has such a large surplus from exports is that the country has an exceedingly high national savings rate—basically, Germans and their government don't spend enough. As Bernanke suggested, Berlin could dabble more in budget deficits to rev up its economy, or take action to increase workers' wages, both of which might lead to more imports. Alternatively, it could encourage more investment spending by corporations.
The status quo, though, really isn't healthy. Massive trade imbalances are not good for the global economy in the long term. Surplus countries find themselves with giant pools of savings they need to invest, which can create bubbles and financial crises. In Europe, it led cash-flush German bankscash to lend excessively to debtor nations like Greece that weren't able to pay it back. The ensuing crises, of course, led Germany and its northern neighbors to enforce painful austerity programs that helped spread mass unemployment across the continent. No one wants a repeat of that.
That isn't to say Navarro's concerns are entirely on point. The idea that Germany might be stealing a significant number of American jobs these days is a bit far-fetched. But refusing to sign a trade pact with Europe at large unless Germany becomes a more responsible actor isn't really nuts. In fact, if the message were coming from any other administration, it might serve as a necessary wake-up call.
When a Trumpkin is right, they're right.
Once Again, the Party of Small Government Is Ready to Mess With D.C.’s Local Laws
At the rally that began the Women’s March on Washington earlier this month, Mayor Muriel Bowser gave a speech that culminated in a rallying cry on behalf of U.S. mayors and against the Trump administration: “Leave us alone!”
Bowser was echoing a recent, larger chorus of home rule from left-leaning politicians in cities and states. For Democrats of a certain age, accustomed to Washington’s role as the guarantor of civil rights, this might sound novel. In D.C., this has been a theme of local politics for 50 years, and continuing proof that the GOP shibboleth of “local control” is less philosophy and more a catchphrase that can be adopted or abandoned at will.
With Republicans in control of Congress and the presidency, the House Committee on Oversight and Government Reform has drafted a plan to make sure local D.C. laws are “in line with Congressional mandates and federal law.”
It’s true that the Constitution grants Congress broad authority over the District. But the passage of the Home Rule Act in 1973 devolved a number of powers to local government. Congress took control again in the 1990s, as the District flirted with bankruptcy during Marion Barry’s four terms as mayor, but the recent trend has been toward more autonomy—aided by both the district’s growing full-time population, budget surpluses, and the catalyst of the 2013 government shutdown, which eased the way toward more local budget control.
In 2016, District voters overwhelmingly approved a measure to advance the quest for statehood, an idea to which that Republicans have long objected. Now Congress will have its revenge.
The stated mission of the Oversight Committee is to investigate the discrepancy between D.C. and federal law, though if D.C. were in violation of federal law, that could be settled in court—not by Congress. More likely, says David Super, a law professor at Georgetown who works with the D.C. Fiscal Policy Institute, a group that researches budget and tax issues in the District, the move is a pretense to take back control.
What would that look like? It might mean loosening the District's gun laws (proposed this month by Rep. David Schweikert), blocking public funds for abortion services in the District (passed by the House last week), or clamping down on the District's lax marijuana laws (the subject of previous congressional action).
Republicans justify that kind of interference by citing their constitutional mandate. But they also argue that the District, a heavily Democratic enclave with a population greater than Wyoming or Vermont, is the responsibility of their own constituents.
Here’s how Rep. Mick Mulvaney, Trump’s chief for budget chief, put it last year: “This is the people’s city, and the people of South Carolina have almost as much vested here as the people who live here.” Almost.