Another letter from another previous correspondent, inspired by yesterday's letter from a pastor:

Reading the post today it occurred to me that the pastor you are talking to is completely right for the people that I deal with on a daily basis also. I live in a trailer park in East Tennesse. . . I am a bookkeeper for a small tax business and I do the bookkeeping for very small businesses - sales tax, payroll, business tax - that kind of thing. The people they pay are exactly the people who need health insurance - waitresses, cooks, painters, cleaning services, concrete and paving guys but they won't understand how it works and they won't give up buying a "little more distraction" as Kacey Musgroves sings in "Merry Go 'Round", in order to have health insurance. Your pastor friend is also right that it won't be a conscious decision - they'll just kind of fall into it. I also have to tell you from ground level 4% of your income is huge - you can have insurance or beer for the weekend (or other distraction of choice) - guess which one they're going to choose? I also have the exact same problem as the pastor with Liberal wonks - they have no grasp at all of logical consequences. I can't think they have ever actually met any of the poor people that they seem so anxious to help. Because poor people just don't operate they way they seem to imagine.

I'd like to hear more from people who have first-person experiene doing financial work with the folks that Obamacare is going to serve.  If you're one of them--or have other relevant experience--you can email me at mcmeganmoney@gmail.com

The Guardian dropped quite a scoop last night: the NSA has been collecting phone records from millions of Verizon customers. The full extent of the order is not entirely clear, but this much is: if you are a Verizon customer, the National Security Agency may know who you have called, when, and approximately where you were when you called them. But don't think you can necessarily rest easy just because you're on AT&T. We don't know if there were other orders for other telecom providers.

This is not the first time we've heard this: similar stories broke under the Bush administration. But now we know that this is an indiscriminately bipartisan vice. Regardless of who's in the White House, they will secretly collect massive pools of data on U.S. citizens. As an intelligence official told Wired magazine last year, "Everybody's a target; everybody with communication is a target." Let that sink in: your government views you as a target for surveillance because you talk to other people on the phone. Welcome to the 21st century.

Liberals blamed Republican police-state tactics back in 2006; now some conservatives are happy to blame Obama's arrogance and overreach. Libertarians, of course, have grimly wished a pox on both their houses of Congress. But these are at best accomplices to the crime. The criminal mastermind is us, the American people, the ones who demanded that our public servants do anything to make us safe.  

A pastor who occasionally corresponds with me about financial issues wrote in response to some of what I've been writing about Obamacare over the last few days.  I found his letter very interesting, because he's working with the target demographic:

I was the pastor/CFA/MBA who wrote you a note some time back about EITC wrinkles. Your last couple of Obamacare/ACA posts bring up something that from my experience I think is just being completely missed.

I work with what I’d call median Americans. Incomes right around the median. Family structure and dysfunction right around the median. You get the picture. And to work on spiritual issues often requires dealing with financial ones at the same time. (Often they are the same problem.) Everything that I’ve seen about the ACA and its implementation seems completely divorced from how say 35%+ of these median Americans function on a daily basis. The ACA and every wonk assumes rational people who can make good financial decisions. Instead what you have is people with $100K of school debt because it compounded when they stopped paying it, who are leasing a new car, who have an interest only mortgage (or a HELOC to help them pay the original mortgage), who have at least 3 credit cards maxed, maintain a pay-day loan they got scammed into, and yet find cable with HBO and an iPhone 5 with all you can eat plan necessities. It is not that on a median salary it is not possible to live a good and prudent life; it just requires some restraint and a minimum amount of simple rules. (Rules like Dave Ramsey talks about, or Benjamin Franklin divorced from the Christian content). But this is what the ACA mandate and cost is going to mean to many of these people: do I keep HBO & Cable, my iPhone, or buy medical insurance? Which bill that I already have must be done without? They will refuse to even think about that.

On top of that, if they recognize Obamacare at all what they think it means is “universal free health care” with emphasis on the free. When you try and say that it will cost them at least 4% of their income, they go directly into denial.

What I’m saying is that for a large minority of people opting out of the ACA probably won’t even be a conscious choice. It will just happen because of the complexity, the upfront sticker cost and the lack of ability to make good financial decisions. They will deal with it later when they file taxes which won’t be until September, because when their tax guy tells them they won’t get the refund they were expecting, they will file the automatic deferral to “put it off” for a little while. My only political axe to grind is that Liberal wonks just never design anything for reality. (I figure it is because they haven’t had to rub shoulders with it since high-school, and even then many went to places where reality doesn’t intrude.) They have no idea how bad this is going to be.  

He's certainly right that most journalists don't know a lot of folks whose household income is likely to top out at $48,000 a year.  So it's good to have the perspective of someone who counsels those folks every day.  4% of your annual income doesn't sound like a lot to me to spend on health insurance.  But of course, I'm not pulling shifts at Walmart.  And what he is saying to me does roughly mesh with what I know about consumer finance.  

Of course, I opposed Obamacare, so I'm more likely to get letters from folks who are worried about it.  So if you do consumer finance work with folks at the median income, and you think it's going to be great, email me!  I'll post those letters, too.

Is Obamacare about to unleash a wave of entrepreneurship?  A National Journal article, based on a new report from the Robert Woods Johnson suggests that it will.  The researchers estimate that as many as 1.5 million new people may enter self-employment now that they can count on getting insurance.  If they're right, we could certainly use the boost: young firms are responsible for a disproportionate share of job creation, and they're also the engine of creative destruction in the American economy.  And since the financial crisis, new firm creation has declined.

But will it actually happen?  A reader asks, in re the National Journal piece "What should we all think about this?"

That it's certainly possible, in theory.  Obamacare is supposed to do away with what economists call "job lock": people who stay in a steady corporate-type job because of the health benefits.  Though it's hard to estimate how big the effect is, most of the researchers who have investigated the question have ended up concluding that it's substantial.  

I mean, it makes intuitive sense, right?  You can imagine a guy who's got a great idea for a startup, but whose wife has multiple sclerosis, making it imperative for him to maintain health coverage.  So long startup, then.  You can easily picture that guy waking up in 2014 and deciding that now that he no longer needs to worry about health insurance, it's time to take the plunge.

There's been some pretty fierce back and forth in the preceding week over the question of "rate shock": the hefty increase in insurance premiums that people--particularly young and healthy people--can expect to pay for health insurance come 2014.   I don't really want to recap here, so if you want to follow the blow-by-blow--and the blows got pretty fierce--Will Wilkinson has a pretty good summary over at The Economist.  

I don't really want to play referee, either, but I'll try.  I think a fair summary would be that some older and/or sicker people will find health insurance cheaper and easier to obtain, while some young people will find it a lot more expensive than they were expecting.  People who supported Obamacare think that the former is important and the latter is relatively trivial, while people who opposed Obamacare believe the reverse.  People who supported Obamacare are very angry at people who opposed it for emphasizing the rate shock, rather than pointing out all the benefits to other people, which would obviously present Obamacare in a much more favorable light.  People who opposed Obamacare think since Obamacare was sold on the grounds that it would make insurance cheaper for everyone except rich people, the fact that a lot of non-rich people will apparently pay more deserves some individual focus.  And since the supporters do not regularly caveat their articles extolling the benefits of Obamacare with a note about all the bad possible side effects, it's hard to argue that the opponents are obligated to do the opposite.

Who's right?  At some level, this is a theological debate, not a technical analysis.  I am going to argue that rate shock does matter, for a number of reasons.  Then you can decide for yourself which aspect matters more.  

The most basic reason that rate shock matters is that I don't think young single people were expecting it.  It's true that during health care reform, the reformers acknowledged that some people would end up with a big health insurance bill they hadn't had before.  But I wouldn't say that they exactly emphasized this aspect.  The implication that I, for one, took away from their analyses was that the subsidies would substantially reduce the cost for even quite middle class people.   Maybe a successful young IT contractor living in a nice condo would have to pay a few thousand dollars for the insurance he hadn't been buying, but I was under the impression that your average scraping-by clerical worker would pretty much have their bill covered, or reduced to some negligble sum.

Here in the District of Columbia, where I live, housing prices have become . . . well, I believe that the technical term economists use is "totally insane".  A house (admittedly, an unusually large one) just went for nearly a million dollars in Trinidad, a neighborhood that five years ago was being sealed off by police with roadblocks because of the gang warfare.  One block over from us, unrenovated houses with only marginally more space than ours are selling for 50% more than we paid in 2010.  People who don't own homes yet are beginning to despair that they will ever be able to afford anything besides an attractively placed refrigerator box beneath the 14th Street Bridge.  People who own homes alternate between gleefully calculating their paper gains, and reminding each other that it can't possibly last.  Those of us with a wonky bent are prone to say things like "When Bernanke finally raises interest rates . . . "

This often spurs sour talk that Washington is booming thanks to Obama's massive federal expansion, but we aren't the only ones having these conversations. Home prices are rising by double-digit percentages across the country.  The New York Times is dispensing advice on how to win a bidding war in the brutally competitive local market. Even Las Vegas and Phoenix are having a boom.  Pick your explanation for the phenomenon: is it a bubble, or merely the inevitable recovery from the panic of 2009?  (As traders like to observe, even a dead cat will bounce if it falls from a great height.)  Or is it, as I've suggested, the handiwork of Helicopter Ben Bernanke, keeping interest rates low by airdropping oodles of cash into the financial markets?  

Interest rates must have something to do with it . . . after all, people generally calculate how much house they can afford by looking at the potential mortgage payment.  Say you're a two-career couple with a combined household income of $175,000 looking at a lovely formstone-covered fixer-upper in DC's historic Eckington neighborhood, close to all major amenities such as the Big Bear Cafe, the NoMa metro stop, and the Exxon Mobil station at Florida and North Capitol Avenue.  The house is listed at $540,000.  What will you actually be willing to pay?

Assuming that this couple has no children and are sensibly putting at least 10% of their annual income into their 401(k), they should be bringing home about $9750 every month.  They probably have a student loan or two, and because we said they're sensible, they don't want more than a third of their income to go to housing costs.  That means a monthly mortgage payment of no more than $2850 a month, to leave room for insurance and property taxes.  (Property taxes in the District are thankfully very low).  

In a wide-ranging interview, Michael Douglas says that his throat cancer was probably caused not by a misspent youth of drinking and smoking, but by HPV. Yes, HPV, the same virus that causes cervical cancer. The same virus that got Texas Gov. Rick Perry in trouble when he tried to make vaccination for it mandatory.

In general, I'm not in favor of expanding the power of the state over private decisions. But I make an exception for public-health issues—genuine public-health issues where you're stopping epidemics from spreading, not noninfectious pseudoepidemics like obesity and smoking. So I sided with Rick Perry: girls should be vaccinated for HPV. The chance to prevent more than 12,000 annual cancer diagnoses, and 4,000 deaths, is worth the very small risks of side effects.

But as Michael Douglas's case illustrates, Rick Perry did get one thing wrong: he left out boys. Thanks to the rise of oral sex, we now know that HPV doesn't just cause cervical cancer; it can also cause throat cancer. Ear, nose, and throat doctors are now seeing more and more cases of throat cancer in younger men, caused not by drinking and smoking, but by human papillomavirus.  

HPV-linked throat cancer is still rarer than cervical cancer, but it's also more dangerous, because there's no throat equivalent of a Pap smear. Cervical cancer has a very high survival, because most women now get regularly checked for it, so it's caught early. Throat cancer, on the other hand, tends to get caught when you have a lump large enough to be noticeable, or a bloody cough, or some other symptom that says "this has already gotten really bad." 

Last week, professional golfer Sergio Garcia joked about having Tiger Woods for dinner and serving him fried chicken.  Oh, ho, ho!  Black people sure do love that fried chicken, don't they?  Garcia has since apologized, but the uneasiness remains.  How can a professional in this day and age think it's okay to make racist jokes in public?  

We'll never know what he was thinking, except that whatever it was, it was pretty stupid.  So NPR turns to a question that we possibly can answer: where did this stereotype come from, anyway?

After all, it's a fairly weird stereotype.  I mean, while I haven't done a survey, I'm sure that most black people love fried chicken, because everyone loves fried chicken except vegetarians and women from New York who have convinced themselves that they don't like anything with more than 15 calories.  Fried chicken is sublimely delicious when done right, and even when it's done wrong, it's not bad.  How did people get the idea that loving tender, crispy fried chicken was some strange thing that only racial minorities do?

I asked Claire Schmidt for help. She's a professor at the University of Missouri who studies race and folklore. Schmidt said chickens had long been a part of Southern diets, but they had particular utility for slaves. They were cheap, easy to feed and a good source of meat.

How tough was the city I grew up in?  This tough: even our easter egg hunts sparked riots.

Easter Egg Hunt Turns Into Melee

New York (AP) - Central Park's annual easter egg hunt for children degenerated into a struggle of the biggest and the pushiest Saturday when organizers tossed the prizes up for grabs, starting a stampede that left five youngsters and a policeman injured.  

Blast from the past courtesy of my Dad, who cannot recall why he declined to take me to the Easter Egg hunt, but certainly remembers being glad to have missed the melee.

My former colleague Garance Franke-Ruta has the goods:

Shulman was cleared primarily to meet with administration staffers involved in implementation of the health-care reform bill. He was cleared 40 times to meet with Obama's director of the Office of Health Reform, and a further 80 times for the biweekly health reform deputies meetings and others set up by aides involved with the health-care law implementation efforts. That's 76 percent of his planned White House visits just there, before you even add in all the meetings with Office of Management and Budget personnel also involved in health reform.

Complicating the picture is the fact that just because a meeting was scheduled and Shulman was cleared to attend it does not mean that he actually went. Routine events like the biweekly health-care deputies meeting would have had a standing list of people cleared to attend, people whose White House appointments would have been logged and forwarded to the check-in gate. But there is no time of arrival information in the records to confirm that Shulman actually signed in and went to these standing meetings.

Indeed, of the 157 events Shulman was cleared to attend, White House records only provide time of arrival information -- confirming that he actually went to them -- for 11 events over the 2009-2012 period, and time of departure information for only six appointments. According to the White House records, Shulman signed in twice in 2009, five times in 2010, twice in 2011, and twice in 2012. That does not mean that he did not go to other meetings, only that the White House records do not show he went to the 157 meetings he was granted Secret Service clearance to attend.

As I said, the conspiracy theory version never made any sense.  This does.

Curtis Morrison, the fellow who recorded Mitch McConnell's campaign meeting, has an article about it in Salon.  During which, as Julian Sanchez pointed out on Twitter, he seems to confess that he couldn't hear the conversation from out in the hall.  

I don’t need to tell you what a weapon the pocket video camera has become. Bartender Scott Prouty changed the trajectory of the entire 2012 election when he captured Mitt Romney in his now classic “47 percent” speech. You just never knew when a politician was going to open his mouth and accidentally reveal his true agenda. And as I held my Flip up to the window, that’s what I was hoping for, but I soon realized that the video I was capturing was the back of a projection screen, and only the audio was of value. So I held the Flip closer to the door vent instead of the window, and began recording the 11:45 minutes of footage later released by Mother Jones.

I was sweating. My heart was racing. I tried to record backup audio on my phone, but my cheap replacement phone would only let me record voice memos of one minute in length. Every time the minute was up, the phone would beep, which was excruciating for the person crouching by a door vent. When a gentleman walked out of the campaign headquarters and into the hall, I put my Flip and phone back in my pocket, and headed to the elevator.

Shawn was already there. We made our escape.

America has recovered less than half of the wealth it lost in 2008, after adjusting for inflation and population growth.  That's the dismal finding of new research from the St. Louis Fed.  Worse, that recovery has been very uneven.  As the stock market has regained lost ground, affluent families have recovered most of what they lost.  But for the rest of the country, whose wealth primarily came from housing, repair of the household balance sheet has been much slower.  

The losses have been particularly acute among minorities.  Look at the difference between the white and Asian experience, on the one hand, and the black and Latino experience on the other.  Even controlling for education, minorities lost a lot more.  

Over at the Washington Post, Harold Pollack has a rather shocking graph, showing the intensity of law enforcement efforts, vs. the street price of heroin and cocaine.  Summary: putting people in jail doesn't seem to have much effect:

Of course, that doesn't necessarily tell us that enforcement isn't reducing drug use.  For most drug users, illegal drugs have three costs:  

1.  The cash price of the drug

Last week, conservatives were saying that former IRS head Douglas Shulman had been to the White House 118 times, while his predecessor had visited the Bush era White House only once.  I didn't write about it because I idly assumed that this reflected some underlying change in administration management style or legislative priorities; perhaps, for example, he'd been there talking about Obamacare implementation and changes in tax enforcement.  

But the Daily Caller has now compiled a list of White House visits by various administration officials, and Shulman sure does seem to visit a lot more than other folks.  

If Obamacare was driving this, I'd expect to see Kathleen Sebelius had had more visits than Shulman.  (Interesting that, in fact, the Commerce Secretary goes to the White House more than the Secretary of HHS.)  If it was tax policy, I'd expect to have seen Geithner there more often.  

OPEC meets in Vienna on Friday, a meeting that will, according to the Wall Street Journal, be a mite testy.  The last few years have been flush for the cartel, with oil prices well above their historical average.  Now fracking is changing all that--and hammering open fissures in the cartel that been temporarily plugged with huge wads of petrodollars.  

On one side are members like Saudi Arabia, who you can think of as OPEC's central banker.  Saudi Arabia sits on top of a vast reservoir of high quality oil that is cheap to pump and cheap to refine.  It's not literally true that you can just stick a pipe down in the desert and have oil come-a-gushing, but it might as well be.  Because they have such a huge quantity of cheap, good oil, Saudi Arabia is the low-cost producer.  They also manage their production very intelligently--Aramco, the state-owned oil company, is very well run, and the Saudi government hasn't pumped every spare petrodollar into their economy.  Which means that when the price falls, Saudi Arabia can afford to cut back production a bit.  

Here's the thing about cartels: without legal enforcement, they pretty much never work. The incentive to cheat, and take extra profits by producing a little more than your quota, is too high . . . so pretty soon everyone is cheating, and your cartel doesn't really exist any more.  

OPEC has managed to flagrantly violate this general economic truism for a few decades now.  Saudi Arabia is one of the main reasons that it's been able to hold together for so long, even after the price crash of the mid 1980s.  Until the Chinese economic boom drove global oil demand right up against the limits of the industry's pumping capacity, causing prices to spike, Saudi Arabia's excess capacity kept prices roughly stable, in the neighborhood of $25-$35 a barrel.  Which, probably not coincidentally, is well under the break-even price for shale oil projects.