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FOCUS | The Structure of Obamacare Print
Wednesday, 19 November 2014 11:00

Krugman writes: "The big revelation of this week has been how many political pundits have spent six years of the Obama administration opining furiously about the administration's signature policy without making the slightest effort to understand how it works."

Paul Krugman. (photo: NYT)
Paul Krugman. (photo: NYT)


The Structure of Obamacare

By Paul Krugman, The New York Times

19 November 14

 

he big revelation of this week has been how many political pundits have spent six years of the Obama administration opining furiously about the administration’s signature policy without making the slightest effort to understand how it works. They’re amazed and in denial at the suggestion that it has the same structure as Romneycare, which has been obvious and explicit all along; they are shocked, shocked to learn that it uses the mandate as an alternative to taxing and spending, which has always been completely obvious and open.

Let me expand on the second point, by referring to my own publicly available class notes from 2012. To explain Obamacare, I started with a schematic representation of how single-payer health care works:

Then I showed a schematic of ObamaRomneycare — it calls it that right on the slide — and showed that to a first approximation it delivered the same results, but with a much smaller amount of money flowing through the federal budget

READ MORE

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FOCUS | The GOP Must Be Crazy Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=11104"><span class="small">Charles Pierce, Esquire</span></a>   
Wednesday, 19 November 2014 10:08

Pierce writes: "The Keystone XL pipeline must be built only so that the people who oppose it are defeated. The Keystone XL pipeline must be built because it is no longer a construction project, it is an article of the conservative faith."

Now we get to see just how crazy they are. (photo: Getty Images)
Now we get to see just how crazy they are. (photo: Getty Images)


The GOP Must Be Crazy

By Charles Peirce, Esquire

19 November 14

 

ur old friend, the Keystone XL pipeline, the continent-spanning death-funnel that would bring the world's dirtiest fossil fuel down through the most arable farmland in the hemisphere and to the refineries along the Gulf Coast, and thence to the world, has revealed in itself an incredible capacity to make people act stupidly. It has moved beyond being a public policy issue among the ascendant Republican party, and within the movement conservatism which is that party's only remaining animating force. It has moved beyond being a financial windfall for the plutocrats whose money has been rendered the lifeblood of our politics, on both sides, but especially among the Republicans, who share a few more of the plutocracy's ultimate goals than do the Democrats. Among the Republicans, and among their most fervent political zealots, the pipeline has become an ideological fetish object, something to which fealty must be paid, a measure of loyalty and devotion to every other part of the political faith, a lasting symbol of triumph over the other side, like the steles erected in Mesopotamia or the pyramids. Its essential utility, its negligible economic impact, the environmental peril presented by the toxic goo it will carry through the fragile breadbasket of the country, the demonstrable bad-faith and neglect of the foreign corporation that will benefit from it, the blatant disregard of all potential (and, I would argue, inevitable) catastrophes inherent in the project -- all of these are beside the point. The Keystone XL pipeline must be built because it is the Keystone XL pipeline. The Keystone XL pipeline must be built only so that the people who oppose it are defeated. The Keystone XL pipeline must be built because it is no longer a construction project, it is an article of the conservative faith.

(As to the Democratic supporters of the project, their motives are of a more purely self-centered variety. Mary Landrieu wants to keep her job, or set herself up for a fat new one at some lobbying firm. Heidi Heitkamp is an oil sheikh, and Joe Manchin wants to demonstrate to the entire extraction industry that he's on board and open for business. As for the president, if he really believes that folding on this will buy him goodwill somewhere else, as the story in the New York Times implies he does, he'll just never, ever learn, will he?)

I first heard of the Keystone XL pipeline not long after I opened this shebeen along the docks of Blogistan. I went to cover the incredibly useless Florida Presidential Straw Poll in the autumn of 2011. At that gathering of the faithful, every one of the speakers talked about the necessity of building the pipeline. (It was also at this event that I first became aware of another conservative signifier -- Agenda 21, the secret UN plan to steal all our golfs.) Most of them cited economic benefits that long since have been debunked. But all of them cited the pipeline as a demonstration of our national resolve to defeat tree-hugging hippie environmentalists. All modern conservative politics blow away on the wind without some Other at which to direct their dark energy. But this was something different. This wasn't fervor animating an idea. This was devotion to an actual object -- a sludge-bearing Arc de Triomphe to demonstrate the inalienable right of some Americans to despoil America without serious consequence.

Even today, every practical argument in favor of the pipeline has been rendered threadbare. Poor David Brooks makes a try in The New York Times today, attempting to hilarious effect to cast the opponents of the pipeline as the true Luddites in the drama.

Usually presidents at the end of their terms get less partisan, not more. But with his implied veto threat of the Keystone XL oil pipeline, President Obama seems intent on showing that Democrats, too, can put partisanship above science. Keystone XL has been studied to the point of exhaustion, and the evidence overwhelmingly suggests that it's a modest-but-good idea. The latest State Department study found that it would not significantly worsen the environment. The oil's going to come out anyway, and it's greener to transport it by pipeline than by train. The economic impact isn't huge, but at least there'd be a $5.3 billion infrastructure project.

Actually, science says that the stuff that the pipeline will carry is best left in the ground. Journalism says that the State Department report was put together by a firm with close business ties to TransCanada, the Canadian corporation that is the only entity in the world that actually will profit from the project. And, when I first heard about the project, at that 2011 tent revival down in Florida, there was talk of thousands and thousands of good-paying jobs and gas prices down into the double-digits again. Now, thanks to the delay, and to the laudable agitation by the likes of Bill McKibben and the Bold Nebraska crew, even TransCanada admits that it's the permanent jobs that will total in the double digits, and Brooks can only meep about an economic impact that "isn't huge," and that the pipeline is merely a "modest-to-good" idea.

The economic impact isn't huge, but at least there'd be a $5.3 billion infrastructure project.

Yeah, we can't get a highway bill passed, and our bridges are falling down, and the entire rest of the world is leaving us behind on high-speed rail, but we should put in a pipeline as an "infrastructure project," and that's not even to mention the well-paying clean-up jobs that will appear as soon as the thing leaks and poisons the Ogallala Aquifer. But Brooks's muted assessment of the pipeline's benefits are not his real reason why it should be built. According to him, the pipeline should be built as a demonstration that the president "gets" the message sent a couple of weeks ago by 52 percent of the 38 percent of eligible voters who bothered to get off the couch. The pipeline should be built as a symbol of a new commitment to "governing." It should be built as the ultimate hippie punch. It should be built simply because it...is. Throw the bone into the air, David. Maybe it will turn into a spaceship.

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The Fed Needs Governors Who Aren't Wall Street Insiders Print
Wednesday, 19 November 2014 07:25

Warren and Manchin write: "We joined the Senate Banking Committee to try to make the banking system work better for American families."

Senator Joe Manchin (D-WV), right, with Senate Banking Committee colleague Elizabeth Warren (D-Mass.) (photo: AP)
Senator Joe Manchin (D-WV), right, with Senate Banking Committee colleague Elizabeth Warren (D-Mass.) (photo: AP)


The Fed Needs Governors Who Aren't Wall Street Insiders

By Elizabeth Warren, Joe Manchin, The Wall Street Journal

19 November 14

 

With two vacancies to fill, Obama should pick nominees who will look out for Main Street, not the big banks.

e joined the Senate Banking Committee to try to make the banking system work better for American families. That’s why we’re concerned that the Federal Reserve—our first line of defense against another financial crisis—seems more worried about protecting Wall Street than protecting Main Street. Fortunately, this is one problem the Obama administration can start fixing today by nominating the right people to fill the two vacancies on the Fed’s Board of Governors.

The Board of Governors is responsible for supervising the country’s biggest banks. It’s also responsible for overseeing the regional Federal Reserve banks, including the Federal Reserve Bank of New York. For decades, the Board of Governors and the New York Fed have been responsible for supervising Wall Street banks, but after the 2008 crisis and the regulatory lapses it revealed, Congress gave the Fed even more oversight authority. According to the new chair of the Board of Governors, Janet Yellen , the Fed’s obligation to supervise the big banks is now “just as important” as its better-known obligation to set interest rates and conduct the country’s monetary policy.

Two recent reports highlight that the Fed isn’t very good at supervising certain banks. In September, Carmen Segarra, a former bank examiner at the Federal Reserve Bank of New York, released secret recordings she had made of meetings at the New York Fed in 2012. The recordings revealed that New York Fed employees had identified concerns with a proposed Goldman Sachs deal with Banco Santander , calling it “legal but shady.” The New York Fed didn’t attempt to make Goldman address these concerns. The recordings also showed Ms. Segarra’s superiors pressuring her to soften her finding that Goldman did not comply with federal regulations on conflicts of interest. While the recordings offered important new insights, they ultimately confirmed the old suspicion that the Fed is too cozy with big banks to provide the kind of tough oversight that’s needed.

An October report from the Fed’s Office of Inspector General provided additional confirmation that the Fed is failing to oversee the big banks. The report found that the New York Fed had failed to examine J.P. Morgan Chase’s Chief Investment Office—the office that incurred over $6 billion in losses in the infamous 2012 “London Whale” incident—despite a recommendation to do so in 2009 from another Federal Reserve System team. The report concluded that the New York Fed needed to improve its supervision of the biggest, most complex banks.

Lax supervision isn’t an abstract or academic problem. The stakes couldn’t be higher. Just this summer, the Fed and the Federal Deposit Insurance Corp. determined that 11 of the country’s biggest banks had no credible plan for being resolved in bankruptcy. That means that if any one of these banks makes more wild bets and loses, the taxpayers would have to bail it out to prevent the economy from crashing again. We’re all counting on the Fed to monitor the big banks and stop them from taking on too much risk, but evidence is mounting that this faith in the Fed is misplaced.

While there will be a congressional hearing this week to examine what’s wrong at the Fed and to consider changes in the law, the administration shouldn’t wait for Congress to act. The president is responsible for nominating people to serve on the Fed’s seven-member Board of Governors. Currently, two of the seven seats on the board are vacant. The president has the opportunity to move the board in a new direction—and to make that change for the long haul, since governors can end up serving terms of 14 years or more.

The president should use that opportunity to address the Fed’s supervisory problem. The five sitting governors have a variety of academic and industry experience, but not one came to the Fed with a meaningful background in overseeing or investigating big banks or any experience distinguishing between the greater risks posed by the biggest banks relative to community banks. By nominating people who have a strong track record in these areas and who have a demonstrated commitment to not backing down when they find problems, the administration can show that it is taking the Fed’s supervision problem seriously. Nominating Wall Street insiders for the Board of Governors would send the opposite message.

If regulators had been more willing to protect Main Street over Wall Street before 2008, they might have averted the financial crisis and the Great Recession that hurt millions of American families. So long as the Fed and other regulators are unwilling or unable to dig deeply into dangerous bank practices and hold the banks accountable, our economy—and our country—remains at risk. The administration has a chance to protect the families that are still struggling to recover from the last financial crisis. It should not pass it up.

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On Media Outlets That Continue to Describe Unknown Drone Victims as "Militants" Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=29455"><span class="small">Glenn Greenwald, The Intercept</span></a>   
Tuesday, 18 November 2014 12:55

Greenwald writes: "Days after the Times article, most large western media outlets continued to describe completely unknown victims of U.S. drone attacks as 'militants' - even though they (a) had no idea who those victims were or what they had done and (b) were well-aware by that point that the term had been 're-defined' by the Obama administration into Alice in Wonderland-level nonsense."

Glenn Greenwald. (photo: Salon)
Glenn Greenwald. (photo: Salon)


On Media Outlets That Continue to Describe Unknown Drone Victims as "Militants"

By Glenn Greenwald, The Intercept

18 November 14

 

t has been more than two years since The New York Times revealed that “Mr. Obama embraced a disputed method for counting civilian casualties” of his drone strikes which “in effect counts all military-age males in a strike zone as combatants…unless there is explicit intelligence posthumously proving them innocent.” The paper noted that “this counting method may partly explain the official claims of extraordinarily low collateral deaths,” and even quoted CIA officials as deeply “troubled” by this decision: “One called it ‘guilt by association’ that has led to ‘deceptive’ estimates of civilian casualties. ‘It bothers me when they say there were seven guys, so they must all be militants. They count the corpses and they’re not really sure who they are.’”

But what bothered even some intelligence officials at the agency carrying out the strikes seemed of no concern whatsoever to most major media outlets. As I documented days after the Times article, most large western media outlets continued to describe completely unknown victims of U.S. drone attacks as “militants”—even though they (a) had no idea who those victims were or what they had done and (b) were well-aware by that point that the term had been “re-defined” by the Obama administration into Alice in Wonderland-level nonsense.

Like the U.S. drone program itself, this deceitful media practice continues unabated. “Drone strike kills at least four suspected militants in northwest Pakistan,” a Reuters headline asserted last week. The headline chosen by ABC News, publishing an AP report, was even more definitive: “U.S. Drone in Northwest Pakistan Kills 6 Militants.” In July, The Wall Street Journal‘s headline claimed: “U.S. Drone Strike Kills Five Militants in Pakistan’s North Waziristan.” Sometimes they will turn over their headlines to “officials,” as this AP report from July did: “Officials: US drone kills 7 militants in Pakistan.”

Since its 2012 report, the Times itself has tended to avoid the “militant” language in its headlines, but often lends credence to dubious official claims, as when it said this about a horrific U.S. drone strike last December on a Yemeni wedding party that killed 12 people and wounded at least 15 others, including the bride: “Most of the dead appeared to be people suspected of being militants linked to Al Qaeda, according to tribal leaders in the area, but there were also reports that several civilians had been killed.” Other U.S. media accounts of that strike were just as bad, if not worse. The controversies over the definition of “militant” are almost never mentioned in any of these reports.

A new article in The New Yorker by Steve Coll underscores how deceptive this journalistic practice is. Among other things, he notes that the U.S. government itself—let alone the media outlets calling them “militants”—often has no idea who has been killed by drone strikes in Pakistan. That’s because, in 2008, George W. Bush and his CIA chief, Gen. Michael Hayden, implemented “signature strikes,” under which “new rules allowed drone operators to fire at armed military-aged males engaged in or associated with suspicious activity even if their identities were unknown.” The Intercept previously reported that targeting decisions can even be made on the basis of nothing more than metadata analysis and tracking of SIM cards in mobile phones.

The journalist Daniel Klaidman has noted that within the CIA, they “sometimes call it crowd killing…. If you don’t have positive ID on the people you’re targeting with these drone strikes.” The tactic of drone-killing first responders and rescuers who come to the scene of drone attacks or even mourners at funerals of drone victims—used by the Obama administration and designated “terror groups” alike—are classic examples. Nobody has any real idea who the dead are, but they are nonetheless routinely called “militants” by the American government and media. As international law professor Kevin Jon Heller documented in 2012, “The vast majority of drone attacks conducted by the U.S. have been signature strikes—those that target ‘groups of men who bear certain signatures, or defining characteristics associated with terrorist activity, but whose identities aren’t known.’”

Coll also describes the critical work of Noor Behram, a photojournalist who has spent years traveling to drone strike scenes in North Waziristan to document—as a 2011 Guardian profile put it—”that far more civilians are being injured or dying than the Americans and Pakistanis admit”; that “the world’s media quickly reports on how many militants were killed in each strike” even though “reporters don’t go to the spot, relying on unnamed Pakistani intelligence officials”; and that “for every 10 to 15 people killed, maybe they get one militant.” Coll describes the propagandistic process that continues to shape U.S. media reports on these strikes:

I picked up a photo that showed Behram outdoors, in a mountainous area, holding up a shredded piece of women’s underwear. He said it was taken during his first investigation, in June, 2007, after an aerial attack on a training camp. American and Pakistani newspapers reported at the time that drone missiles had killed Al Qaeda-linked militants. There were women nearby as well. Although he was unable to photograph the victims’ bodies, he said, “I found charred, torn women’s clothing—that was the evidence.”

Since then, he went on, he has photographed about a hundred other sites in North Waziristan, creating a partial record of the dead, the wounded, and their detritus. Many of the faces before us were young. Behram said he learned from conversations with editors and other journalists that if a drone missile killed an innocent adult male civilian, such as a vegetable vender or a fruit seller, the victim’s long hair and beard would be enough to stereotype him as a militant. So he decided to focus on children.

There’s simply no doubt that U.S. media outlets have continuously and repeatedly—and falsely—described innocent civilians killed by U.S. drone attacks as “militants.” Just last month, the Bureau of Investigative Journalism documented that “fewer than 4% of the people killed have been identified by available records as named members of al Qaeda,” directly contrary to “John Kerry’s claim last year that only ‘confirmed terrorist targets at the highest level’ were fired at.”

It’s certainly true that reporting is extremely difficult in those places where U.S. drone strikes are most common. But that’s all the more reason to exercise caution when making claims about who the victims are. Instead, these media outlets reflexively adopt the extremely dubious claims of U.S. officials and those of allied governments (such as Yemen and Pakistan) about the identity of the victims. That practice, standing alone, is indefensible enough as pro-government stenography, but the fact that it continues even two years after the Times revealed that the U.S. government has formally adopted a completely propagandistic definition of “militant” makes this behavior willfully misleading.

All of this has achieved the desired effect. Any time you discuss U.S. drone attacks, you inevitably will be told that the U.S. government is killing “terrorists” and “militants”—even though the people making that claim have absolutely no idea who the government is actually killing. It’s easy to dismiss that mindset as supreme irrationality and authoritarianism—what kind of person runs around claiming their government is killing “terrorists” and “militants” when they have no idea who the victims are?—but they’re just adopting the formula for how the U.S. government and media have consciously chosen to propagandize on this issue.

Coll’s article also discusses an oft-ignored aspect of drone warfare: its psychologically terrorizing effects on the targeted population. A joint 2012 report from the law schools of Stanford University and NYU, “Living Under Drones,” documented that “U.S. drone strike policies cause considerable and under-accounted-for harm to the daily lives of ordinary civilians, beyond death and physical injury”—specifically, they “hover twenty-four hours a day over communities in northwest Pakistan, striking homes, vehicles, and public spaces without warning. Their presence terrorizes men, women, and children, giving rise to anxiety and psychological trauma among civilian communities.” Coll’s article similarly notes:

Being attacked by a drone is not the same as being bombed by a jet. With drones, there is typically a much longer prelude to violence. Above North Waziristan, drones circled for hours, or even days, before striking. People below looked up to watch the machines, hovering at about twenty thousand feet, capable of unleashing fire at any moment, like dragon’s breath. “Drones may kill relatively few, but they terrify many more,” Malik Jalal, a tribal leader in North Waziristan, told me. “They turned the people into psychiatric patients.”

The U.S. Joint Chiefs of Staff just released their annual “counterterrorism” report and it defined “terrorism” this way:

Terrorism is the unlawful use of violence or threat of violence, often motivated by religious, political, or other ideological beliefs, to instill fear and coerce governments or societies in pursuit of goals that are usually political.

There is, to put it generously, enormous doubt about the legality of both “signature strikes” and the targeting of rescuers and mourners. The UN special rapporteur on extrajudicial killings, summary or arbitrary executions, Christof Heyns, has even said some U.S. drone attacks may constitute “war crimes.” Given their intended effects—both physical and psychological—on entire populations, there is a very compelling case to make that continual, sustained drone warfare in places such as Pakistan and Yemen meet the U.S.’s formal definition of “terrorism” found in its latest strategy document.

Correction: This post initially claimed that the bride was among those killed in the so-called “Wedding Strike” in Yemen in December 2013. In fact, the bride was injured but not killed.

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On Obamacare, the GOP Lays a Trap for Itself Print
Tuesday, 18 November 2014 12:48

Surowiecki writes: "Republican politicians are, as of now, gleeful at the prospect of the Court delivering a blow to Obamacare. But, once the economic and political consequences of those disappearing subsidies kick in, Republicans could well end up wishing King v. Burwell had never seen the light of day."

Republicans are torn over Obamacare. (photo: SEIU)
Republicans are torn over Obamacare. (photo: SEIU)


ALSO SEE: In California, That MRI Will Cost You $255 - Or Maybe $6,221

On Obamacare, the GOP Lays a Trap for Itself

By James Surowiecki, The New Yorker

18 November 14

 

few days after the midterm elections, the Supreme Court announced that it would hear King v. Burwell, a challenge to the Affordable Care Act in which the plaintiffs are arguing that people who live in states which have not set up their own health-insurance exchanges—and who therefore find their insurance through the federal exchange, Healthcare.gov—are not eligible for tax credits that the law provides. These people are currently receiving subsidies, but if the plaintiffs win those subsidies will disappear. While victory for the plaintiffs once seemed utterly improbable—it was generally accepted that Congress intended for the subsidies to be available, and the entire suit is based on a phrase that’s often described as a typo—getting a hearing before the Court suggests that, at the very least, they now have a chance. Republican politicians are, as of now, gleeful at the prospect of the Court delivering a blow to Obamacare. But, once the economic and political consequences of those disappearing subsidies kick in, Republicans could well end up wishing King v. Burwell had never seen the light of day.

The lazy description of King is that if the plaintiffs win it could “scuttle” Obamacare. It can’t. Even if the Court finds for the plaintiffs, the rules and regulations that Obamacare put in place will remain intact—insurance companies will still have to accept all applicants, without regard for preëxisting conditions, and they’ll still be prohibited from charging people with those conditions higher prices. And the tax increases that fund the subsidies and the cost-saving initiatives in the law won’t go away, either.

What a victory for the plaintiffs in King would do is create two classes of citizens when it comes to Obamacare. For people who live in one of the fourteen states that have set up their own exchanges, like California and New York, things will remain as they are now. Residents of those states will continue to be eligible for those federal health-insurance subsidies, depending on their income, which means, for most of them, that insurance will be quite affordable. And, because the subsidies make insurance so affordable, lots of healthy people (meaning mainly young people) in these states will continue to buy insurance, with the result that the risk pools in these states will be more balanced and not overloaded with people who are older or who are sick. That will help to hold down price increases in those states in the years ahead.

By contrast, life is going to get much harder for people who live in states that have not yet set up their own exchanges. They’ll no longer be eligible for the subsidies, which means that many of them will have to pay hundreds of dollars more a month if they want to stay insured. Many of them won’t be able to afford that, which means they’ll return to being uninsured. And the problems won’t end there. Plenty of healthy, young people will decide to go without insurance, gambling that they won’t get sick. As a result, the risk pools in these states will be dominated by sick people (who will try, at all costs, to remain insured). Insurance companies will respond by raising the price of insurance to try to cover their costs, and that will drive more healthy people out of the market, leading to more price hikes, and so on. What these states may end up facing, in other words, is the insurance “death spiral” that the individual mandate and the subsidies were designed to avert.

At first glance, this might all sound good from a Republican perspective. After all, if Obamacare is an unacceptable imposition on individual freedom and an unworkable intrusion into health care, anything that makes it less effective would seem to be welcome. Yet the disappearance of subsidies is going to put governors and legislatures in states that haven’t established their own exchanges (nearly every red state) in a very difficult position. After all, their refusal—mostly politically motivated—to establish those exchanges will be the reason that their citizens lose subsidies, even as people in states like California and New York are reaping all the benefits of the law. The state legislatures will also, in effect, be responsible for insurance suddenly becoming far more expensive for millions of people. Finally, the politicians will also be putting a severe dent in the bottom line of insurance companies in their state, since the absence of subsidies guarantees that insurance companies are going to lose the customers they want (healthy people with low health-care costs) and get stuck with those they don’t (sick people whose health-care costs are sure to dwarf their premium payments).

The Republican hatred of Obamacare is so powerful, and Republican politicians’ fear of being challenged from the right is so strong, that there will undoubtedly be states where governors and legislatures hold firm and basically tell citizens that they can’t have, and shouldn’t want, the free money that the federal government is offering them. (Something like this already happened, after all, when some states opted out of Obamacare’s expansion of Medicaid, even though the federal government was going to pay almost all the costs.) But, given that this will wreck the individual market for health insurance in these states, that it will (unlike Medicaid) affect plenty of middle-class voters, and that Democrats will be able to point to states where the subsidies are still intact as obvious success stories, staying true to conservative principles is going to be a very hard political sell—even in truly red states. Republican politicians have been able to reap the political rewards of inveighing against Obamacare without actually having to strip benefits from anyone. Now they’re going to have to put up or shut up. Obamacare’s opponents may win when the Supreme Court finally decides King, sometime next year. But it could turn out to be a fight they’d have been better off losing.

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