Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.
Later this morning, President Obama will speak in the Rose Garden about the rollout of Obamacare. He'll be surrounded by people whom Obamacare has already helped. But he'll be speaking about the fact that they are the exception, not the rule.
The Obama administration expected glitches when they rolled out HealthCare.gov. And, at first, they thought that's what they were seeing. There was a sense of exultation as the site buckled under the initial traffic. It was like a restaurant that opened to lines stretched around the block. Or, to use the Apple metaphors the administration favored, an iPhone that sells out within minutes of release.
Three weeks later, the exultation has been replaced by urgency and anger. It's clear now that the site's problem isn't demand. It's that the site itself is broken. Consumers can't get in on the front-end. Insurers aren't getting the right information on the back-end.
The traffic problems may well have been a blessing in disguise for the Obama administration: If everyone had been able to buy health insurance, the insurers would be getting tens of thousands, and maybe hundreds of thousands, of garbled or flatly incorrect applications. The results of that could've been catastrophic, as people would believe they had purchased health insurance they never actually got, or would've ended up on a plan different then the one they chose.
The problem here isn't just technological. It's managerial. The White House's senior staff -- up to and including the president -- was blindsided. Staffers deep in the process knew that HealthCare.gov wasn't ready for primetime. But those frustrations were hidden from top-level managers. Somewhere along the chain the information was spun, softened, or just plain buried.
The result was that the White House didn't know the truth about its own top initiative -- and so they were unprepared for the disastrous launch. They didn't even know they needed to be lowering expectations. In any normal corporation, heads would roll over a managerial failure of such magnitude and consequence.
And perhaps heads will roll. But for now, the White House is focused on trying to make HealthCare.gov work. Their frustration is they believe the product itself is great. Premiums came in well below the Congressional Budget Office's forecasts. The White House believes that if consumers could simply shop for the insurance they'd be pleased with both the selection and the prices. The problem, as they see it, is with the shopping experience. And the bright spot is the shopping experience is, in theory at least, an easier problem to solve.
Over the weekend, the Department of Health and Human Services posted an apology of sorts for the troubled launch and promised "a tech surge" to fix it. "Our team is bringing in some of the best and brightest from both inside and outside government to scrub in with the team and help improve HealthCare.gov," they wrote.
Inside the White House, there's realism about the size of the challenge, but also optimism that it will be fixed. They know, however, that time is running short. HealthCare.gov probably has about a month before the problems of the web site infect the product itself.
The nightmare scenario looks something like this: The web site continues to be a mess through the fall. As such, only the people who need insurance most - -older, sicker people -- go through the trouble of signing up. Younger, healthier people come once or twice and then never again. The risk pools fill with more expensive applicants and, in year two, premiums spike. The result is that, 12 months from now, Obamacare has a working web site, but a more costly, less appealing, product.
The administration has some good news to report. Load times really are falling. Some insurers are reporting improved data transmission -- though there's still a long way to go. And at least the White House knows there's a problem, and can direct their energies towards fixing it or givings consumers workarounds. One smart change made to HealthCare.Gov, for instance, is the newly prominent "Apply by Phone" option, which routes customers to the call centers -- those, at least, are working.
But this wasn't how it was supposed to go. This wasn't the speech President Obama wanted to be giving. By October 21st, he wanted to be able to tell Americans how Obamacare was working, not explaining why it wasn't.
Wonkbook's Number of the Day: 5 million. That, according to one tech specialist, is the number of lines of software code that may need to be rewritten before the HealthCare.Gov system is fully functional.
Wonkbook's Quote of the Day: "We weren't talking about systemic risk. We were talking about stupidity risk," said Brian Barish, president of Cambiar Investors, an asset manager, of the debt ceiling.
Wonkbook's Graph of the Day: One of the first graphs ever.
Wonkbook's Top 5 Stories: 1) saving Obamacare; 2) JPMorgan pays up; 3) what the shutdown cost the taxpayer and the economy; 4) Snowden's trove just keeps going; and 5) NJ's first day of same-sex marriages.
1) Top story: If Obama doesn't save Obamacare, no one else will
HealthCare.gov’s glitches prompt Obama to call in more computer experts. "The Obama administration said Sunday that it has enlisted additional computer experts from across the government and from private companies to help rewrite computer code and make other improvements to the online health insurance marketplace, which has been plagued by technical defects that have stymied many consumers since it opened nearly three weeks ago...President Obama is expected to address the site’s technical problems — “troubles that he and his team find unacceptable” — at a White House event Monday to highlight the law, according to an administration official who spoke on the condition of anonymity because the event has not yet taken place...The remarks Sunday, and Obama’s expected comments Monday, represent a slight strategic shift for an administration that has repeatedly refused to say publicly exactly what is wrong with the site or what is being done to fix it." Amy Goldstein in The Washington Post.
...One of those people: U.S. tech chief Todd Park. "President Barack Obama is scheduled to speak at 11:25 a.m. tomorrow in Washington to address the technology troubles, according to a White House official. Park, a co-founder of medical technology companies Athenahealth Inc. and Castlight Health Inc., is assisting in trying to fix healthcare.gov, Jason Young, a spokesman for the Department of Health and Human Services, said in a phone interview today...Parks’s involvement may be a sign the White House is asserting more control over the project. Park spent the first week of October sleeping on the floor of his office as he tried to get healthcare.gov off the mat." Alex Nussbaum and Alex Wayne in Bloomberg.
@markknoller: In remarks in the Rose Garden at 1125am/ET, Pres Obama will assert that ObamaCare is about much more than a troubled website.
...But, when you ask specialists, they say it'll be weeks before HealthCare.gov works as it should. "Federal contractors have identified most of the main problems crippling President Obama’s online health insurance marketplace, but the administration has been slow to issue orders for fixing those flaws, and some contractors worry that the system may be weeks away from operating smoothly, people close to the project say. Administration officials approached the contractors last week to see if they could perform the necessary repairs and reboot the system by Nov. 1. However, that goal struck many contractors as unrealistic, at least for major components of the system. Some specialists working on the project said the online system required such extensive repairs that it might not operate smoothly until after the Dec. 15 deadline for people to sign up for coverage starting in January, although that view is not universally shared. In interviews, experts said the technological problems of the site went far beyond the roadblocks to creating accounts that continue to prevent legions of users from even registering. Indeed, several said, the login problems, though vexing to consumers, may be the easiest to solve. One specialist said that as many as five million lines of software code may need to be rewritten before the Web site runs properly." Sharon LaFreniere, Ian Austen, and Robert Pear in The New York Times.
Primary source: The improvements to HealthCare.Gov. HHS.Gov.
What's going wrong inside the exchanges? "CMS officials and the large insurers thought at first that the garbled data being automatically sent to insurers must be a function of some very simple problems of format incompatibility between the government and insurer systems, but that now seems not to be the case, and the problem appears to be deeper and harder to resolve. It is a very high priority problem, because the system will not be able to function if the insurers cannot have some confidence about the data they receive...An extension of the enrollment period for coverage, now set to end on March 31, seems to be almost taken for granted. A delay of the individual mandate penalty—which effectively begins in the middle of February—is not thought to be a crazy idea...The nightmare scenarios, the “unthinkable options,” involve larger moves than that—like putting enrollment on hold or re-starting the exchange system from scratch at some point. No one seems to know how this could work or what it would mean, but everyone involved is contending with a far worse set of circumstances than they were prepared for. This is a major disaster from their point of view, not a set of glitches, and they simply do not know how long it will take to fix. They dearly want to see progress day by day, but they are generally not seeing it." Yuval Levin in National Review Online.
We know 476,000 Obamacare applications have started. We don’t know how many will finish shopping. "These numbers tell us that about half-million people are interested in shopping on the marketplaces. But they don't tell us much about how many people will actually sign up. There are two significant steps that stand between filling out an application and purchasing a health plan: Finding out what program you're eligible for, and actually selecting an insurance plan. Measuring enrollment is a difficult proposition. Most health insurance plans don't count shoppers as enrolled until they've actually submitted a check for their first month's premium...This is actually a difficult metric for the White House to measure, since it's the insurance plans - not the federal government." Sarah Kliff in The Washington Post.
A few more details on those 476,000 Obamacare applications. "The way that this administration official described it, there are essentially three steps in applying for insurance through the marketplaces. The first is submitting an application that has information on income, state of residence, size of family and other personal details...The second step is eligibility verification: The federal government needs to check whether you qualify for the benefits you are seeking...When that comes back, the process moves to step three: Shopping for a health insurance plan...The 476,000 shoppers that the Associated Press wrote about have submitted full applications, this administration official said. In that sense, they're done with the first step in the process." Sarah Kliff in The Washington Post.
One insurer's view. "Friday afternoon, I spoke with someone in the insurance industry who's overseeing his company's integration with the federal insurance marketplaces in a number of states. "I've never seen a project go this poorly," he said. "But then, I've never been part of one this grand in scope."...The good news, he said, is "the quality of data coming from the exchanges is getting better." Which isn't to say the problems are anywhere near solved. There's still plenty of duplicate data and corrupted data coming in. But they've definitely seen an improvement over the last few days." Ezra Klein in The Washington Post.
An early bit of lightness: There is a new "Downfall" parody mocking the Obamacare exchanges. Sample line: "Now everybody is going to associate Obamacare with the worst Internet experience since the dancing baby."
What are the White House's chances of fixing this in time? "The 476,000 applications filed disproportionately come from a handful of states; California, Kentucky, New York and Washington may well be responsible for one-third of the applications on their own. The number of actual enrollees remains just a fraction of the applicants; while at least 192,042 applications had been filed across the 14 states and Washington D.C., only 54,575 people had picked a plan, pointing to the lag time in processing. A significant number of people applying—and signing up for coverage—are ending up in the Medicaid program, not private insurance." Dan Diamond in Forbes.
@KipPiper: Delayed Spanish language Obamacare site apparently won't go up next week. On back burner pending fixes. Not heard ETA.
Republicans say Kathleen Sebelius will have to answer for healthcare exchanges. "Two key Republican lawmakers on Sunday called on Health and Human Services Secretary Kathleen Sebelius to testify before a congressional committee about recent problems with the roll-out of the health-care exchanges required under President Obama’s signature health law. But they stopped short of saying she should resign immediately over the troubles. Sebelius has declined to appear this week in front of a House committee investigating issues with the federal Web site for the exchange." Josh Hicks in The Washington Post.
How the uninsured can help Obamacare: signing up. "[P]eople do not turn to government programs because they believe in them. They turn to them because they need them, and the market is not meeting their needs. When your alternative is not something excellent but nothing, you use whatever is there...Yet the fact remains that there are uninsured who need health insurance, and they will need it whether or not it is easy to get." Garance Franke-Ruta in The Atlantic.
New legal challenge to Obamacare. "Federal judges in Washington, D.C., and Virginia will consider whether the text of the statute prevents the administration from offering subsidized health insurance to millions of low- and middle-income Americans. The 2010 federal law says people qualify for subsidies if they obtain health insurance through an exchange "established by the state." But dozens of states refused to set up their own marketplaces, leaving the task to the federal government...On Monday, a federal judge in Washington will consider whether the Internal Revenue Service exceeded its authority when it issued a rule last year making clear that subsidies should extend to coverage acquired through federal exchanges." Joe Palazzolo in The Wall Street Journal.
Why the Obama administration shouldn't talk about putting the 'best and brightest' on fixing Obamacare's IT. "People mangle this all the time, but David Halberstam's classic book The Best and the Brightest is about how a bunch of smart guys blundered the country into the Vietnam War. This is not the reference you want to make when launching your ambitious initiative." Matthew Yglesias in Slate.
...And the Obama team's campaign to spin coverage. "If anyone doubts that the Obama administration selectively released figures about healthcare.gov to its liking—while not releasing others requested by the media and watchdogs, look no further than the Twitter stream. Within minutes of when the Associated Press story broke on Saturday night about nearly 500,000 applications through healthcare.gov, top White House officials were highlighting it. While the story says, “The officials did not want to be cited by name and would not discuss the health insurance rollout unless they were granted anonymity,” it’s pretty clear the leak had high-level blessing." Charles Ornstein (of ProPublica) in his blog.
Inside the Fox News lie machine: I fact-checked Sean Hannity on Obamacare. "First I spoke with Paul Cox of Leicester, N.C. He and his wife Michelle had lamented to Hannity that because of Obamacare, they can’t grow their construction business and they have kept their employees below a certain number of hours, so that they are part-timers. Obamacare has no effect on businesses with 49 employees or less. But in our brief conversation on the phone, Paul revealed that he has only four employees...I don’t doubt that these six individuals believe that Obamacare is a disaster; but none of them had even visited the insurance exchange. And some of them appear to have taken actions (Paul Cox, for example) based on a general pessimistic belief about Obamacare." Eric Stern in Salon.
Interview: Princeton's Uwe Reinhardt on health economics. Steve Goldstein for HealthWorks Collective.
Kentucky is trying to prove that Obamacare can work. "Some 34,000 had begun applications, and more than 11,000 had signed up for plans, making Kentucky one of the most successful state-run insurance marketplaces under the new federal health care law...In a state where dislike of President Obama runs strong and deep, Mr. Beshear, a Democrat, has positioned himself as a champion of the Affordable Care Act, out ahead of public opinion. It has endeared him to the White House at a time when news of the problem-plagued federal exchange, HealthCare.gov, has been embarrassing and damaging. “My message to Kentuckians is simply this,” Mr. Beshear said in his office in the State Capitol. “You don’t have to like the president; you don’t have to like me. Because this isn’t about him, and it’s not about me. It’s about you, your family and your children. So do yourself a favor. Find what you can get for yourself. You’re going to like what you find.” Kentucky is the only Southern state to operate its own insurance exchange as well as expand Medicaid coverage for the poor. It is an anomaly on the polarized political map, and a test of whether bitterness over the law will dissolve if people decide it effectively provides affordable health care." Trip Gabriel in The New York Times.
@Noahpinion: Obamacare is awesome. Haters, give it a rest.
AARON: Healthcare reform can be done. "When only four jurisdictions out of fifty-one handle all enquiries, however, the clear message is that much work remains to be done. Another message should be equally loud and clear, however: the challenges of implementing the ACA can be met. Massachusetts implemented a law much like the Affordable Care Act. A Republican governor and a Democratic legislature, leaders in business and labor, hospital executives and physicians, all worked together and met them." Henry J. Aaaron for the Brookings Institution.
DOUTHAT: Obamacare, failing ahead of schedule. ". Like the Bush administration in Iraq, the White House seems to have invaded the health insurance marketplace with woefully inadequate postinvasion planning, and let the occupation turn into a disaster of hack work and incompetence. Right now, the problems with the exchange Web site appear to be systemic — a mess on the front end, where people are supposed to shop for plans, and also a thicket at the back end, where insurers are supposed to process applications...If this happens, there will be a lot of schadenfreude on the right at the spectacle of technocratic failure. But the wreck of the exchanges may actually be worse for conservative policy objectives than a more successful rollout would have been. That’s because while conservatives think the Obamacare exchanges are overregulated and oversubsidized, they are actually closer to the right-of-center vision for health care reform than the Obamacare Medicaid expansion." Ross Douthat in The New York Times.
Music recommendations interlude: Creedence Clearwater Revival, "Who'll Stop the Rain," 1970.
LEONHARDT: Seeing things in red and blue after all. "The great irony of Barack Obama’s political rise is that it depended on what turned out to be his single biggest political miscalculation. From the moment he appeared on a national stage — in his 2004 “there is not a liberal America and a conservative America” speech — he held himself out as the leader who could transcend the partisan divide and win over Republicans...Mr. Obama trounced the Republicans last week with a Hillaryesque strategy of holding firm and winning an argument, not by finding common ground. He, his advisers and Congressional Democrats decided from the start that trading changes to the health care law for the reopening of the government and the lifting of the debt ceiling would merely encourage Republicans to create future showdowns." David Leonhardt in The New York Times.
DIONNE: Give up on the Grand Bargain. "Please stop touting a “grand bargain.” There can be no grand bargain right now because Republicans are not inclined to agree to any new revenues and Democrats rightly won’t concede anything on the big retirement programs unless revenues are on the table. Pushing for a grand bargain now will only invite disappointment. And those who seek one even if it contains no new revenues will be revealing that their true priority is slashing Social Security and Medicare rather than achieving sustainable fiscal balance. But Republicans and Democrats could come together around what we might call confidence-building measures, a Cold War term sadly appropriate to the moment." E.J. Dionne in The Washington Post.
COWEN: Driving a new bargain on disability policy. "One way forward would look like this: Federalize Medicaid, remove its obligations from state budgets altogether and gradually shift people from Medicaid into the health care exchanges and the network of federal insurance subsidies. One benefit would be that private insurance coverage brings better care access than Medicaid, which many doctors are reluctant to accept. To help pay for such a major shift, the federal government would cut back on revenue sharing with the states and repeal the deductibility of state income taxes...At the same time, I’d recommend narrowing the scope of required insurance to focus on catastrophic expenses. If insurance picks up too many small expenses, it encourages abuse and overuse of scarce resources." Tyler Cowen in The New York Times.
COWAN AND KESSLER: The middle class gets wise. "In 2011, there were 3.2 million more people enrolled in higher education than there were in 2006. This 18 percent increase in enrollment was the largest such jump since the end of the Vietnam War...[T]he income mobility problem that drives policy makers nuts disappears for those who get a degree. Over the past few decades, those born into the middle three income quintiles were more than twice as likely to reach the top income quintile if they possessed a college degree compared with those who did not. The steepest mobility gains came from those in the second poorest quintile. Nearly two-thirds of these working-class Americans jumped to the richest quintile (37 percent) or the next richest quintile (27 percent) on the basis of earning a college degree." Jonathan Cowan and Jim Kessler in The New York Times.
CROVITZ: Why tech's "minimally viable" is a concept D.C. should learn. "The idea is to introduce products with limited features to learn what works and what doesn't work. Proponents say this approach has a better chance of ultimate success than trying to get everything done at once. This is the opposite of how Washington often operates, as the ObamaCare debacle illustrates. Democrats have also taken an all-or-nothing approach to immigration reform, a top Silicon Valley priority. With comprehensive reform looking unlikely, technology leaders should urge the minimally viable approach as the best way to get smarter, more economically beneficial and more humane immigration policies." L. Gordon Crovitz in The Wall Street Journal.
POLLACK: The triumphs of disability policy. "Our nation has opened its heart and its wallet to millions of our fellow citizens who live with intellectual disabilities. In popular culture, law, and social policy, we have come a very long way. As a result, millions of people are now living more productive and dignified lives." Harold Pollack in The Washington Post.
LUCE: It is stupid to believe in a brainless Tea Party. "In the past two years, the Tea Party has converted Mr Obama’s fiscal stimulus into a sharp budgetary contraction – a key aim of the movement. It might be wrong-headed. But its success hardly qualifies it as stupid...The Tea Party speaks for tens of millions of mostly non-urban whites, mostly middle-aged and older, who believe Mr Obama is redistributing their hard-earned nest eggs to younger, less deserving, Americans. Their embittered sense of alienation has driven a selfish and destructive politics in Washington." Edward Luce in The Financial Times.
Wonkbook will die from Alzheimer's interlude: New science on sleep.
2) JPMorgan pays up
JPMorgan reaches $13B deal with the Justice Department. "J. P. Morgan & Co. has reached a tentative deal with the Justice Department to pay a record $13 billion to settle a number of outstanding probes of its residential mortgage-backed securities business, according to people familiar with the decision. The deal, struck Friday night, doesn't resolve a continuing criminal probe of the bank's conduct...The deal includes $4 billion to settle claims by the Federal Housing Finance Agency that J.P. Morgan misled Fannie Mae and Freddie Mac about the quality of loans it sold them in the run-up to the 2008 financial crisis, another $4 billion in consumer relief, and $5 billion in penalties paid by the bank, according to people familiar with the decision...The agreement hasn't been completed and some particulars are still being discussed, such as the final wording, these people said. If completed, the deal would represent the largest settlement the U.S. government has reached with a single company." Devlin Barrett and Dan Fitzpatrick in The Wall Street Journal.
Interview: Gary Gensler explains how financial reform is going. Mike Konczal in The Washington Post.
Deal with JPMorgan spurred by a phone call. "On Sept. 24, four hours before the Justice Department was planning to hold a news conference to announce civil charges against the bank over its sale of troubled mortgage investments, Mr. Dimon personally called one of Attorney General Eric H. Holder Jr.’s top lieutenants to reopen settlement talks, people briefed on the talks said. The rare outreach from a Wall Street C.E.O. scuttled the news conference and set in motion weeks of negotiations that have culminated in a tentative $13 billion deal, according to the people briefed on the talks...The government, these people said, had already balked at the bank’s two initial offers: $1 billion and $3 billion...At the meeting, the people briefed on the talks said, JPMorgan executives raised the offer to $11 billion, $4 billion of which would serve as relief to struggling homeowners. But Mr. Holder wanted more money to resolve the civil cases." Ben Protess and Jessica Silver-Greenberg in The New York Times.
Dimon's goal: earn back D.C.'s trust. "When top bankers assembled at the White House in early October, J.P. Morgan Chase & Co.'s James Dimon found his assigned seat in the corner, far from his usual perch across from President Barack Obama. Mr. Dimon, who in previous gatherings had been quick to share his opinions with the president, was reserved and said little during the meeting, according to people who attended. Mr. Dimon's placement didn't go unnoticed by his fellow chief executives, who saw it as a symbolic shift meant to underscore the depths to which J.P. Morgan has fallen in Washington's eyes...To win back Washington's trust, Mr. Dimon is holding frequent meetings with the bank's lead examiners at the Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency." Deborah Solomon, Scott Patterson, and Dan Fitzpatrick in The Wall Street Journal.
Explainer: Economic data coming your way this week. Amrita Jayakumar in The Washington Post.
Can macroeconomics make progress? "The good news for economists, and the policy makers who rely on their advice, is that there are at least three reasons to expect advances in the profession. First, the issues most relevant to economic policy-making are getting more attention...[Macroeconomics] is back, infused with a new appreciation for business cycles, which chart a rising or falling economy, as well as for finance...Lastly, the next generation of macroeconomists will be armed with far more powerful research tools...Today, more powerful computers and better access to data make it possible to test hypotheses on a much wider scale and design policies accordingly." Brenda Cronin and Ben Casselman in The Wall Street Journal.
The most detailed, technical explanation of how high-frequency trading works we've ever read. "The reality is that automated trading is the new marketplace, accounting for an estimated 77 percent of the volume of transactions in the U.K. market and 73 percent in the U.S. market...If your order is executed on a large queue, then you have a free option to collect the spread. If one of your orders on the opposite queue is executed, then you collect the difference between the price at which you bought the asset (bid side of $9) and the price at which you sold the asset (offer side of $10). In the event the queue you were executed on gets too small, you can aggress the order that was behind you. This means crossing the bid/ask spread and forcing a trade to occur. If you get executed passively, you are aggressed upon by another order sitting on a queue. As long as another order is behind you, you can unwind the trade, meaning you can aggress the order behind." Jacob Loveless in ACM Queue.
More: This was part a series -- see here for the other pieces.
Alan Greenspan's new book, The Map and the Territory, is out. You can get the book here. It lands tomorrow. For now, you can read three solid reviews, each with a different perspective. NPR also published an excerpt earlier this week -- see here.
Steven Pearlstein in The Washington Post: "What we find, however, is that Greenspan’s journey of discovery brings him right back to where he began — to an unshakable faith in free markets...Those who have followed his career know that it was Greenspan who gave the green light to bank consolidation, Greenspan who pushed financial deregulation, Greenspan who advocated new global rules that would have reduced bank capital reserves and Greenspan who blocked efforts to crack down on abusive subprime lending. But if you are looking for him to accept any responsibility for the crisis that ensued, you will be sorely disappointed...Like Fred Astaire on the dance floor, Greenspan glides through the list without the slightest sign he might have had something to do with those developments."
Larry Summers in The Financial Times: "His first book was entitled The Age of Turbulence but it was published before the financial crisis of 2008. Now that we have seen what real turbulence is, Greenspan has much to reflect on. And he acknowledges having changed his mind in some quite fundamental ways...I found myself disappointed that the events of the past few years had not led Greenspan to any revision of his anti-Keynesian views on macroeconomic policy...Greenspan regards raising the US saving rate as a central priority. At a time when output appears to be constrained by demand rather than by supply and when even long-term real interest rates are at near-record low levels, it is much less clear to me than Greenspan that raising savings rates is the right growth strategy. And in an economy that is changing rapidly in ways that leave many behind, Greenspan seems much more concerned with the possibility that help for the victims will foster dependency."
Binyamin Appelbaum in The New York Times: "The rest of this book is instead devoted to a discursive tour of recent economic history, punctuated by conservative policy prescriptions...Mr. Greenspan has been talking about the weight of the economy for a few decades now, and much of this book feels similarly familiar. Accounts of the financial crisis, in particular, have assumed the character of Mr. Potato Head kits. There is a box of standard explanations, and each writer picks the ones he finds most appealing. Mr. Greenspan’s Potato Head is made up of predictable parts: He blames the government for encouraging subprime lending but absolves the Federal Reserve’s policy of low interest rates."
We're #1 interlude: What each country leads the world in.
3) Because what's a few billion among friends?
What the shutdown cost us. "“The three weeks of government shutdown will cost the economy $3.1 billion in gross domestic product from lost government services,” estimated Paul Edelstein and Doug Handler of IHS Global Insight, an economic research firm. “There will also be some impact from lost private-sector jobs tied to the shutdown, as well as a loss of consumer and business confidence resulting from the debt-ceiling showdown.”" Annie Lowrey and Michael D. Shear in The New York Times.
More: Other estimates of how much the shutdown cost, including macroeconomic effects. Josh Hicks in The Washington Post.
Investors are learning to shrug off Washington's antics. Is that a good thing or a bad thing? "Even as investors resign themselves to the possibility of another debt-ceiling fight early next year, many say the stock market has become largely inoculated to the dysfunction on Capitol Hill. Many investors were breezily confident throughout the latest standoff that lawmakers would reach an 11th-hour deal, as turned out to be the case. A default on the nation's debt would have been disastrous, they say, but the market's resilience is a sign that, with such brinkmanship becoming routine, investors aren't taking the fights in Washington as seriously as they used to." Dan Strumpf in The Wall Street Journal.
Interview: OMB's Sylvia Mathews Burwell on getting the government back to work. Joe Davidson in The Washington Post.
Republicans can't agree whether they'll ever threaten default and shut down the government again. "In the wake of the spending deal last week that reopened the federal government through early 2014, Republicans tried to ease concerns Sunday about the possibility of another shutdown in just a few months. Senator Mitch McConnell of Kentucky, the chamber’s top Republican who helped broker the agreement, said that although he disliked the new health care law — the sticking point in the latest impasse — there was no use in Republicans’ trying to roll it back while Democrats control the Senate and the presidency. “There will not be another government shutdown,” he said on the CBS program “Face the Nation.” “You can count on that.” But Senator Ted Cruz, the Texas Republican who was criticized by many in his own party for prolonging the gridlock, called last week’s budget agreement “terrible” and did not rule out another shutdown. “I would do anything, and I will continue to do anything I can to stop the train wreck that is Obamacare,” he said on ABC’s “This Week.”" Emmarie Huetteman in The New York Times.
Lew seems to think the game is over. "The government shutdown was costly and cannot happen again when Congress resumes fiscal talks, Treasury Secretary Jack Lew said in an interview that aired Sunday on NBC’s “Meet the Press.” "The message that we have to send going forward is that there was a turning point on Wednesday night and this won't happen again -- it can't happen again," Lew said..."The message that we have to send going forward is that there was a turning point on Wednesday night and this won't happen again -- it can't happen again," Lew said." Josh Hicks in The Washington Post.
There are real, live people who want to do it all over again. "In the aftermath of the U.S. government shutdown and a close call with default, there is a political consensus among Democrats, many Republicans, establishment conservatives, business leaders and the inside-the-Beltway commentariat: Senator Ted Cruz of Texas and Tea Party members in the House have done grievous harm to themselves and their brand...That, however, isn’t the way Deedee Vaughters and Bob Vander Plaats see things." Albert R. Hunt in Bloomberg View and The New York Times.
That's a sign of a Republican civil war. "“Let’s face it: it was not a good maneuver,” Senator Orrin G. Hatch of Utah, the senior Senate Republican and supporter of the deal that ended the showdown, said on Thursday in an interview from his Capitol Hill office. “And that’s when you’ve got to have the adults running the thing.” Around the same time, roughly a thousand miles away in Mississippi, a 42-year-old Republican state senator, Chris McDaniel, was announcing his bid to take the seat held by one of those “adults” — Senator Thad Cochran, 75, a six-term incumbent and the very picture of the Republican old guard...The budget fight that led to the first government shutdown in 17 years did not just set off a round of recriminations among Republicans over who was to blame for the politically disastrous standoff. It also heralded a very public escalation of a far more consequential battle for control of the Republican Party, a confrontation between Tea Party conservatives and establishment Republicans that will play out in the coming Congressional and presidential primaries in 2014 and 2016 but has been simmering since President George W. Bush’s administration, if not before. In dozens of interviews, elected officials, strategists and donors from both wings of the party were unusually blunt in drawing the intraparty battle lines, suggesting that the time for an open feud over the Republican future had arrived." Jonathan Martin, Jim Rutenberg, and Jeremy W. Peters in The New York Times.
Guess who else is caught in the war? Sen. McConnell. "Mr. McConnell, a 27-year veteran of the Senate, is fighting two simultaneous battles against the Tea Party and its allies. At home in Kentucky, he faces a primary challenge from the right by a wealthy Louisville businessman, Matt Bevin. And in the Senate conference he leads, he has had to contend with a rebellious group of new senators like Ted Cruz of Texas." Jeremy W. Peters in The New York Times.
Can a moderate Republican movement rise from the ashes of the shutdown? "Asked whether a moderate Republican movement could really materialize, Rep. Steve LaTourette, who now is the president of the Main Street Partnership, was cautiously optimistic. “It’s possible, it’s going to be difficult and it’s not going to happen overnight. There is an appetite for it but it remains to be seen if we can get to there from here,” said LaTourette. “Some of the well heeled donors and the money people in the Republican Party are rethinking about directing that money to people who can actually govern. We’re getting a lot of calls and interest at Main Street, we have a big meeting up on Wall Street in November. So we will see, we are up against some well entrenched organizations.”" Kate Nocera in BuzzFeed.
Let's keep in mind that Democrats are not entirely of one mind on budget issues. But it's nowhere near as bad. "[L]iberal lawmakers and groups are worried that Democrats will negotiate cuts to Social Security benefits and other entitlement programs. The president's budget blueprint, which was released in April, proposed slowing the growth of Social Security spending by using a new measure of inflation—an idea that drew a rebuke from some lawmakers and liberal groups." Peter Nicholas and Colleen McCain Nelson in The Wall Street Journal.
Oh my god this is so great interlude: A glossary of gestures for critical discussion.
4) It's incredible how much news there was in Snowden's trove
NSA plan to log calls is renewed by court. "The Foreign Intelligence Surveillance Court released a new legal opinion on Friday that reauthorized the once-secret National Security Agency program that keeps records of every American’s phone calls...In the six-page opinion, which was signed on Oct. 11, Judge Mary A. McLaughlin said she was personally approving for the first time the extension of the call log metadata program, which must be approved every 90 days." Charlie Savage in The New York Times.
The NSA just got caught hacking the Mexican president's email. "A report classified as "top secret" said: "TAO successfully exploited a key mail server in the Mexican Presidencia domain within the Mexican Presidential network to gain first-ever access to President Felipe Calderon's public email account." According to the NSA, this email domain was also used by cabinet members, and contained "diplomatic, economic and leadership communications which continue to provide insight into Mexico's political system and internal stability." The president's office, the NSA reported, was now "a lucrative source." This operation, dubbed "Flatliquid," is described in a document leaked by whistleblower Edward Snowden, which SPIEGEL has now had the opportunity to analyze" Jens Glüsing, Laura Poitras, Marcel Rosenbach and Holger Stark in Der Spiegel.
NSA delayed anti-leak software at base where Snowden worked. "The U.S. National Security Agency failed to install the most up-to-date anti-leak software at a site in Hawaii before contractor Edward Snowden went to work there and downloaded tens of thousands of highly classified documents, current and former U.S. officials told Reuters. Well before Snowden joined Booz Allen Hamilton last spring and was assigned to the NSA site as a systems administrator, other U.S. government facilities had begun to install software designed to spot attempts by unauthorized people to access or download data." Mark Hosenball and Warren Strobel in Reuters.
NYC interlude: 100 ways to improve the subway, on a Tumblr blog.
5) Same-sex marriages begin in NJ
Gay rights supporters wage a quiet campaign to push Republicans to the middle. "[A] powerful group of Republican donors, who see the GOP’s staunch opposition to gay rights as a major problem, is trying to push the party toward a more welcoming middle ground — where candidates who oppose marriage rights can do so without seeming hateful...[An] advocacy group, the American Unity Fund, has been quietly prodding Republican lawmakers to take a first step toward backing gay rights by voting for the Employment Non-Discrimination Act. The measure, which is expected to come to the full Senate for a vote as early as this month, would ban workplace discrimination on the basis of sexual orientation or gender identity." Peter Wallsten in The Washington Post.
New Jersey gets ready for gay marriages. "Gay couples were hurriedly planning their New Jersey weddings on Sunday, including some scheduled for just after the stroke of midnight on Monday. The New Jersey Supreme Court decided Friday to allow gay couples to begin marrying on Monday while it considers a an appeal of a ruling allowing gay nuptials. Gov. Chris Christie's administration is appealing a lower-court ruling, and the issues will be decided in 2014. The court's ruling surprised some and left couples scrambling to prepare for Sunday night and Monday morning's festivities" Laura Kusisto in The Wall Street Journal.
Reading material interlude: The best sentences Wonkblog read today.
The triumphs of disability policy. Harold Pollack.
The important story you'd have otherwise missed: U.S. plans to crack down on patent trolls. Aaron Stanley in The Financial Times.
Luis Gutierrez, fierce fighter for immigration reform. Manuel Roig-Franzia in The Washington Post.
Wonkbook is produced with help from Michelle Williams.