My Plum Line post today was about House Republicans, so check that out if you're interested. But I also have lots of good stuff for your long weekend:
1. At the new Vanderbilt blog, John Geer argues that Newt's Iowa collapse was probably the work of elite GOP opinion, not attack ads. Also, Josh Putnam responds to my question about Republicans and New Hampshire, and Jordan Ragusa thinks about South Carolina and candidate incentives.
2. E.J. Graff on rape statistics and why getting it right matters.
3. The recent Defense Authorization bill was apparently more complex than it appeared; Adam Serwer is on it.
4. Some hashtag archeology, from Nancy Scola; sort of odd that @dbernstein and @Graniteprof didn't rate a mention.
5. Speaking of which, David S. Bernstein on how the press corps on the campaign trail has changed, and Meryl Gordon on progress -- and lack of progress -- in gender equality.
6. Parties matter. Matt Yglesias explains why that helps anticipate a possible Mitt Romney presidency. Michael Cohen looks at Romney and the other candidates on foreign policy, and Conor Friedersdorf follows Sarah Palin's theories about Romney and the press. Nate Silver argues that the Bain attacks could hurt Romney in November, and explains how. Good post.
7. Brad DeLong explains why raising the Medicare eligibility age is a bad idea.
8. I definitely agree with Andrew Rudalevige, who throws some history and cold water on Barack Obama's ideas for government reorganization.
9. No JSTOR for you! Alexis Madrigal has the numbers, and why it matters.
10. Kevin Drum, king of all media.
11. Pictures of old Washington. The part people live in.
12. And two baseball links: Christina Kahrl is terrific as usual on Jack Morris, HOF candidate; BP's Colin Wyers is good on myths, images, and steroids.
Enjoy!
Friday, January 13, 2012
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Silver makes the interesting argument that Romney's Bain problem may continuously haunt him. I suspect this will be so because Bain casts doubt on much of Romney's narrative, and it may make insiders reconsider parts of Romney's history that Romney probably doesn't want revisited. May be no better example than Massachusetts health reform in 2006.
ReplyDeleteWe all agree with Newt Gingrich that Romney has been running for President for at least a decade, no? Given Romney's obvious ulterior motive of being a Republican President, the 800-pound gorilla wrt Mass. health reform, which for some reason no one addresses, is what the hell was Governor Romney thinking?
Maybe this crowd doesn't ask the question, as they assume that Romney secretly shares their progressive goals. Even if that were true, could he not anticipate the baggage that legislation would bring for his Presidential ambitions?
One of the interesting things about the ACA debate was that opponents framed their arguments in vague terms like socialism, coming between me and my doctor, or the fave, death panels. People are too self-conscious to admit the truth; that they don't like the ACA because it will probably lead to worse care for them personally than their present-day gold plated corporate health care coverage.
A few intrepid reporters did mention that the ACA presented a risk for those well-situated workers, since their gold-plated health plans are currently prohibitively expensive to their employers. The idea was that the ACA would eventually make it too easy for employers to save a ton of dough by passing their employees out of their gold-plated health plans over to the inferior, but probably still okay, government plan.
So the "problem" with ACA, for those who were willing to speak honestly, was that it jeopardized the world-class health care of employees by making it too easy for companies to achieve giant cost savings in dumping employees on government health care.
Wait a second. What type of entity makes obscene profits by dumping costs out of the P&L of acquisitions? Private equity like Bain Capital?
While Governor Romney no longer worked for Bain Capital in 2006, given the way the consulting world works, he no doubt retained a huge residual interest in the firm's profits, which stood to gain tremendously from health reform providing one more avenue for vultures to dump costs out of acquirees.
I haven't done research to confirm this theory; to my knowledge no one is really discussing it though.
Yet.
This post ignores that Romneycare was the "Republican" market-based solution to the problem of uninsured workers. The "liberal" solution was the single-payer system, or Medicare for all. I don't think Romney should have foreseen that this "Republican" solution would become so reviled.
DeleteLook at some of the components of Romneycare: competing private insurance plans with different levels of coverage/co-pays/premiums are supposed to bring savings and accountability.
The mandate (a funny word for compulsion or requirement) is problematic for Republicans, but any person whose studied the math of these plans knows that it's necessary to get all risk groups in the plans. If the healthier opt out, the costs balloon for the PRIVATE companies, so they have to start excluding pre-existing conditions and bad risks and charge high prices, and ...then you're back to our current broken system.
One final point, I don't think Romney pushed health care reform on Massachusetts to benefit corporations. I think the people of Massachusetts (and health care outfits) wanted to do something about the rising number of uninsured and the crowding in ERs. It's quite a stretch to see it as a sinister plot by a former Bain executive. Here a link to the Wikipedia article. As a Massachusetts resident, the Wiki account seems fair (though I wasn't paying particularly close attention.)
@ModeratePoli, thank you taking up my argument. One of the neat things about this community is that you can engage in some hyperbole, throw out the inflammatory rhetoric, and it doesn't start a flame war. That's helpful for me personally, as my stream of consciousness is usually similar to my post above, so its great when folks don't take the inflammatory bait.
DeleteThat said, while I don't know how private equity works, I have in mind that a company like Bain Capital would have a really cool server with all 21,000 publicly-traded companies (NYSE + OTC) and many thousands more private. They would then sort these companies by attractiveness, presumably with a screen for "too high labor costs" and another for "too expensive production".
In principle, legislation like Romneycare (and more worryingly, the ACA) presents another screen for the raider, specifically, "too high health care expenditure (that can be dumped on the state)"
As is often the case with hyperbole, I don't have any data for this, but I would be quite curious to know whether there's any evidence that 'excess health care cost' was added as a corporate raider screener post-Romneycare.
One more, if you'll indulge me: so the Great Recession has left the US with a mostly intractable unemployment problem, which the Obama Administration has done much to address, with little to show for it. Perhaps this is due to general corporate uncertainty. Or maybe Team Obama is clueless. Or, perhaps, its Mitt Romney's fault.
ReplyDeleteIts been widely reported that cash on the balance sheets of US corporations is at historically high levels; its also been reported that if enough of that cash were reinvested in workers, bringing the cash totals down to traditional norms, enough folks could be hired to bring unemployment back to historic averages around 4-5%. So what gives?
Suppose your company had the opportunity to hire 100 new knowledge workers at a fully loaded cost of $15 million. Suppose further that your company knew for certain that those workers would generate an additional $30 million in operating profits, comprised of $100 million in revenues less $55 million of product cost and the $15 million of labor costs. A great investment!
Know what Bain Capital sees in that situation? $100 million of new revenues that can be sustained, at least in their short time horizon, without needing to retain that $15 million of additional labor cost. Your CEO knows that Bain Capital knows this. Your CEO also likes her job. So will those folks get hired, even though in a Bain-free vacuum they are highly accretive to the company's bottom line?
Perhaps we are seeing the answer to that question every day in the business news.