Mike Konczal

Roosevelt Institute Fellow

Recent Posts by Mike Konczal

  • Our Big Financial Reform Report, "An Unfinished Mission," is Now Live!

    Nov 12, 2013Mike Konczal

    It's finally live! Here is the full report, along with pdfs for the individual chapters.

    An Unfinished Mission: Making Wall Street Work for Us

    A Report by Americans for Financial Reform and the Roosevelt Institute

    Edited by Mike Konczal and Marcus Stanley

    Published November 12, 2013

    More than five years after the financial crisis, there is still an open debate about what it would mean to have a financial sector that works for the benefit of the real economy, and how close we are to achieving that. In An Unfinished Mission: Making Wall Street Work For Us, Americans for Financial Reform and the Roosevelt Institute explore the policy questions that remain, both within and beyond the scope of the Dodd-Frank reforms.

    CLICK HERE TO DOWNLOAD THE FULL REPORT (PDF)

    Table of Contents:

    Follow or contact the Rortybomb blog:

      

     

    It's finally live! Here is the full report, along with pdfs for the individual chapters.

    An Unfinished Mission: Making Wall Street Work for Us

    A Report by Americans for Financial Reform and the Roosevelt Institute

    Edited by Mike Konczal and Marcus Stanley

    Published November 12, 2013

    More than five years after the financial crisis, there is still an open debate about what it would mean to have a financial sector that works for the benefit of the real economy, and how close we are to achieving that. In An Unfinished Mission: Making Wall Street Work For Us, Americans for Financial Reform and the Roosevelt Institute explore the policy questions that remain, both within and beyond the scope of the Dodd-Frank reforms.

    CLICK HERE TO DOWNLOAD THE FULL REPORT (PDF)

    Table of Contents:

    Follow or contact the Rortybomb blog:

      

     

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  • Announcing Our Big Financial Reform Report Launch, November 12th in DC!

    Oct 25, 2013Mike Konczal
    Hey everyone. One reason I've been on radio silence for the past bit is that I've been gearing up for the launch of a big report on financial reform. Roosevelt Institute has teamed up with Americans for Financial Reform to produce An Unfinished Mission: Making Wall Street Work for Us, which will focus on how financial reform should evolve in the next several years.
     
    I'm one of the editors as well as a contributor, and I have to say I'm really excited about the content. We have Saule Omarova (whose research blew up the aluminum trading story) contributing on bank activities, Stephen Lubben on the challenges remaining with resolution authority, John Parsons on where the derivatives market stands, I'll be covering capital requirements, and many, many more.
     
    I can't be more excited about this, and we are having a big launch event in Washington D.C. on November 12th in the Russell Senate Office Building. We have Senator Elizabeth Warren keynoting it, and we'll have copies of the report available.
     
    The important thing is that you RSVP if you want to make it. Email: Nov12UnfinishedMission[at]gmail[dot]com to RSVP.
     
    I think there's some remarkable stuff going on with the Senate Banking Committee these days, and a serious reexamination of where financial reform is coming from and where it is going by many different people. I think this report will help provide a roadmap on what still remains, and where it needs to go.
     
    What: An Unfinished Mission: Making Wall Street Work for Us
     
    When: Tuesday, November 12, 10 a.m.-1:30 p.m.
     
    Where: Russell Senate Office Building, Room 325 Washington, D.C.
     
    Keynote Speaker: Senator Elizabeth Warren
     
    Contact EmailNov12UnfinishedMission[at]gmail[dot]com to RSVP.
     
    This event is free and open to the public.
     
    PROGRAM
     
    10:00 a.m.     Opening and Introductions
     
    10:10 a.m.     Making the System Safer
     
    Stephen Lubben (Seton Hall Law School)
    Mike Konczal (Roosevelt Institute)
    Marcus Stanley (Americans for Financial Reform)
     
    11:00 a.m.     Protecting Customers in the Financial System
     
    Mike Calhoun (Center for Responsible Lending)
    Jennifer Taub (Vermont Law School)
    Ron Rhoades (Alfred University)
     
    12:00 p.m.     Rethinking Bank Activities and Oversight
     
    Saule Omarova (UNC School of Law and Cornell University Law School)
    Wallace Turbeville (Demos)
    Brad Miller (Center for American Progress / Former House Member)
     
    KEYNOTE: Senator Elizabeth Warren
    1:00pm – 1:30pm
     
    The full report will be made available online at that time if you can't make it.
     

    Follow or contact the Rortybomb blog:

      

     

    Hey everyone. One reason I've been on radio silence for the past bit is that I've been gearing up for the launch of a big report on financial reform. Roosevelt Institute has teamed up with Americans for Financial Reform to produce An Unfinished Mission: Making Wall Street Work for Us, which will focus on how financial reform should evolve in the next several years.
     
    I'm one of the editors as well as a contributor, and I have to say I'm really excited about the content. We have Saule Omarova (whose research blew up the aluminum trading story) contributing on bank activities, Stephen Lubben on the challenges remaining with resolution authority, John Parsons on where the derivatives market stands, I'll be covering capital requirements, and many, many more.
     
    I can't be more excited about this, and we are having a big launch event in Washington D.C. on November 12th in the Russell Senate Office Building. We have Senator Elizabeth Warren keynoting it, and we'll have copies of the report available.
     
    The important thing is that you RSVP if you want to make it. Email: Nov12UnfinishedMission[at]gmail[dot]com to RSVP.
     
    I think there's some remarkable stuff going on with the Senate Banking Committee these days, and a serious reexamination of where financial reform is coming from and where it is going by many different people. I think this report will help provide a roadmap on what still remains, and where it needs to go.
     
    What: An Unfinished Mission: Making Wall Street Work for Us
     
    When: Tuesday, November 12, 10 a.m.-1:30 p.m.
     
    Where: Russell Senate Office Building, Room 325 Washington, D.C.
     
    Keynote Speaker: Senator Elizabeth Warren
     
    Contact EmailNov12UnfinishedMission[at]gmail[dot]com to RSVP.
     
    This event is free and open to the public.
     
    PROGRAM
     
    10:00 a.m.     Opening and Introductions
     
    10:10 a.m.     Making the System Safer
     
    Stephen Lubben (Seton Hall Law School)
    Mike Konczal (Roosevelt Institute)
    Marcus Stanley (Americans for Financial Reform)
     
    11:00 a.m.     Protecting Customers in the Financial System
     
    Mike Calhoun (Center for Responsible Lending)
    Jennifer Taub (Vermont Law School)
    Ron Rhoades (Alfred University)
     
    12:00 p.m.     Rethinking Bank Activities and Oversight
     
    Saule Omarova (UNC School of Law and Cornell University Law School)
    Wallace Turbeville (Demos)
    Brad Miller (Center for American Progress / Former House Member)
     
    KEYNOTE: Senator Elizabeth Warren
    1:00pm – 1:30pm
     
    The full report will be made available online at that time if you can't make it.
     

    Follow or contact the Rortybomb blog:

      

     

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  • What Kind of Problem is the ACA Rollout for Liberalism?

    Oct 23, 2013Mike Konczal

    “This massive IT launch sure came in on time, under budget, and without headaches” is a statement that nobody has ever said. But even controlling for that, Healthcare.gov looks to be having a disastrous launch.

    People are naturally asking about the practical and political implications of this disaster. Is it a problem for the Affordable Care Act as a whole, with its mixture of individual mandates and risk-pooling? Is it a political disaster for President Obama and the Democrats? Does this show us major problems in the way that government procures its contractors?

    These are important questions, but some are asking a bigger one: is this a problem for liberalism as a political governance project? Does this rollout failure discredit the core goals of a liberal project, including that of a mixed economy, a regulatory state, and social insurance?

    Conservatives in particular think this website has broad implications for liberalism as a philosophical and political project. I think it does, but for the exact opposite reasons: it highlights the problems inherent in the move to a neoliberal form of governance and social insurance, while demonstrating the superiorities in the older, New Deal form of liberalism. This point is floating out there, and it turns out to be a major problem for conservatives as well, so let's make it clear and explicit here.

    So what has gone wrong? People are still trying to figure this out. There are the general problems of doing too much with too little time and resources and rolling out a big final product rather than smaller incremental pieces. These are things that, while problematic, don’t particularly have a political story to tell.

    However, four bigger problems jump out.

    The first has to do with means-testing the program. The biggest front-end problem is that users, before they can register, must “cross a busy digital junction in which data are swapped among separate computer systems built or run by contractors.”

    Why is that? It is because the government needs to determine how much of a coupon it’ll write each person to go and buy private insurance. Beyond the philosophical components of means-testing (what the philosopher Jonathan Wolff calls “shameful revelations), the actual process requires substantial coordination between multiple government agencies with very different infrastructures.

    As the GAO notes, “the data hub is to verify an applicant’s Social Security number with the Social Security Administration (SSA), and to access the data from the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS) that are needed to assess the applicant’s income, citizenship, and immigration status. The data hub is also expected to access information from the Veterans Health Administration (VHA), Department of Defense (DOD), Office of Personnel Management (OPM), and Peace Corps to enable exchanges to determine if an applicant is eligible for insurance coverage from other federal programs that would make them ineligible for income-based financial subsidies.”

    Rather than just being an example of bureaucratic infighting, each of these pieces of information is necessary to determine how aggressively the government should subsidize the private insurance individuals will buy, and the entire process will stall and fall apart if one of these checks isn’t completed quickly.

    This by itself might not be a problem; however, the second issue is that the means-testing is necessary to link individuals up with individual private insurers. As the Washington Post notes, the back-end problems are in part the result of the site being “designed to draw from the offerings of private insurers, each with their own computer systems, rates and offerings.” And though this may be getting better, a serious concern has been inaccurate data being transmitted to the insurance companies. Which is to say that the emphasis on creating a digital marketplace where individuals get means-tested and can then pick and choose among insurers requires syncing on both ends, which is a difficult process.

    So what? A third issue, and a major reason this is freaking people out, is that the first two problems could introduce adverse selection, as only the most needy will wait, and wait, to take advantage of the programs. As Yuval Levin has emphasized, the “danger of a rapid adverse selection spiral is much more serious than they believed possible this summer.”

    And the fourth and final issue is that the federal government has had to pick up so much slack from rebelling states that didn’t want to implement health care. The state-level exchanges that were actually implemented appear to be doing okay, or at least significantly better. But the general problem is that “More than 30 states refused to set up their own exchanges, requiring the federal government to vastly expand its project in unexpected ways.”

    So this tells a story. Let’s refer to these features of social insurance, which are also playing a major role in the rollout problems, as “Category A.” Now, what would the opposite of this look like? Let’s define the opposite of this as “Category B” social insurance. And let's take these two categories and chart them out:

    What we often refer to as Category A can be viewed as a “neoliberal” approach to social insurance, heavy on private provisioning and means-testing. This term often obscures more than it helps, but think of it as a plan for reworking the entire logic of government to simply act as an enabler to market activities, with perhaps some coordinated charity to individuals most in need.

    This contrasts with the Category B grouping, which we associate with the New Deal and the Great Society. This approach creates a universal floor so that individuals don’t experience basic welfare goods as commodities to buy and sell themselves. This is a continuum rather than a hard line, of course, but readers will note that Social Security and Medicare are more in Category B category rather than Category A. My man Franklin Delano Roosevelt may not have known about JavaScript and agile programming, but he knew a few things about the public provisioning of social insurance, and he realized the second category, while conceptually more work for the government, can eliminate a lot of unnecessary administrative problems.

    Some of the more cartoony conservatives argue that this is a failure of liberalism because it is a failure of government planning, evidently confusing the concept of economic “central planning” with “the government makes a plan to do something.”

    However, the smarter conservatives who are thinking several moves ahead (e.g. Ross Douthat) understand that this failed rollout is a significant problem for conservatives. Because if all the problems are driven by means-testing, state-level decisions and privatization of social insurance, the fact that the core conservative plan for social insurance is focused like a laser beam on means-testing, block-granting and privatization is a rather large problem. As Ezra Klein notes, “Paul Ryan's health-care plan -- and his Medicare plan -- would also require the government to run online insurance marketplaces.” Additionally, the Medicaid expansion is working well where it is being implemented, and the ACA is perhaps even bending the cost curve of Medicare, the two paths forward that conservatives don’t want to take.

    I’ll be discussing this more, but the choice between Category A and B above will characterize much of the political debate in the next decade. It’s important we get more sophisticated analysis of what has gone wrong with the ACA rollout to better appreciate how utilizing “the market” can be far more cumbersome and inefficient than the government just doing things itself.

    Follow or contact the Rortybomb blog:

      

     

    “This massive IT launch sure came in on time, under budget, and without headaches” is a statement that nobody has ever said. But even controlling for that, Healthcare.gov looks to be having a disastrous launch.

    People are naturally asking about the practical and political implications of this disaster. Is it a problem for the Affordable Care Act as a whole, with its mixture of individual mandates and risk-pooling? Is it a political disaster for President Obama and the Democrats? Does this show us major problems in the way that government procures its contractors?

    These are important questions, but some are asking a bigger one: is this a problem for liberalism as a political governance project? Does this rollout failure discredit the core goals of a liberal project, including that of a mixed economy, a regulatory state, and social insurance?

    Conservatives in particular think this website has broad implications for liberalism as a philosophical and political project. I think it does, but for the exact opposite reasons: it highlights the problems inherent in the move to a neoliberal form of governance and social insurance, while demonstrating the superiorities in the older, New Deal form of liberalism. This point is floating out there, and it turns out to be a major problem for conservatives as well, so let's make it clear and explicit here.

    So what has gone wrong? People are still trying to figure this out. There are the general problems of doing too much with too little time and resources and rolling out a big final product rather than smaller incremental pieces. These are things that, while problematic, don’t particularly have a political story to tell.

    However, four bigger problems jump out.

    The first has to do with means-testing the program. The biggest front-end problem is that users, before they can register, must “cross a busy digital junction in which data are swapped among separate computer systems built or run by contractors.”

    Why is that? It is because the government needs to determine how much of a coupon it’ll write each person to go and buy private insurance. Beyond the philosophical components of means-testing (what the philosopher Jonathan Wolff calls “shameful revelations), the actual process requires substantial coordination between multiple government agencies with very different infrastructures.

    As the GAO notes, “the data hub is to verify an applicant’s Social Security number with the Social Security Administration (SSA), and to access the data from the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS) that are needed to assess the applicant’s income, citizenship, and immigration status. The data hub is also expected to access information from the Veterans Health Administration (VHA), Department of Defense (DOD), Office of Personnel Management (OPM), and Peace Corps to enable exchanges to determine if an applicant is eligible for insurance coverage from other federal programs that would make them ineligible for income-based financial subsidies.”

    Rather than just being an example of bureaucratic infighting, each of these pieces of information is necessary to determine how aggressively the government should subsidize the private insurance individuals will buy, and the entire process will stall and fall apart if one of these checks isn’t completed quickly.

    This by itself might not be a problem; however, the second issue is that the means-testing is necessary to link individuals up with individual private insurers. As the Washington Post notes, the back-end problems are in part the result of the site being “designed to draw from the offerings of private insurers, each with their own computer systems, rates and offerings.” And though this may be getting better, a serious concern has been inaccurate data being transmitted to the insurance companies. Which is to say that the emphasis on creating a digital marketplace where individuals get means-tested and can then pick and choose among insurers requires syncing on both ends, which is a difficult process.

    So what? A third issue, and a major reason this is freaking people out, is that the first two problems could introduce adverse selection, as only the most needy will wait, and wait, to take advantage of the programs. As Yuval Levin has emphasized, the “danger of a rapid adverse selection spiral is much more serious than they believed possible this summer.”

    And the fourth and final issue is that the federal government has had to pick up so much slack from rebelling states that didn’t want to implement health care. The state-level exchanges that were actually implemented appear to be doing okay, or at least significantly better. But the general problem is that “More than 30 states refused to set up their own exchanges, requiring the federal government to vastly expand its project in unexpected ways.”

    So this tells a story. Let’s refer to these features of social insurance, which are also playing a major role in the rollout problems, as “Category A.” Now, what would the opposite of this look like? Let’s define the opposite of this as “Category B” social insurance. And let's take these two categories and chart them out:

    What we often refer to as Category A can be viewed as a “neoliberal” approach to social insurance, heavy on private provisioning and means-testing. This term often obscures more than it helps, but think of it as a plan for reworking the entire logic of government to simply act as an enabler to market activities, with perhaps some coordinated charity to individuals most in need.

    This contrasts with the Category B grouping, which we associate with the New Deal and the Great Society. This approach creates a universal floor so that individuals don’t experience basic welfare goods as commodities to buy and sell themselves. This is a continuum rather than a hard line, of course, but readers will note that Social Security and Medicare are more in Category B category rather than Category A. My man Franklin Delano Roosevelt may not have known about JavaScript and agile programming, but he knew a few things about the public provisioning of social insurance, and he realized the second category, while conceptually more work for the government, can eliminate a lot of unnecessary administrative problems.

    Some of the more cartoony conservatives argue that this is a failure of liberalism because it is a failure of government planning, evidently confusing the concept of economic “central planning” with “the government makes a plan to do something.”

    However, the smarter conservatives who are thinking several moves ahead (e.g. Ross Douthat) understand that this failed rollout is a significant problem for conservatives. Because if all the problems are driven by means-testing, state-level decisions and privatization of social insurance, the fact that the core conservative plan for social insurance is focused like a laser beam on means-testing, block-granting and privatization is a rather large problem. As Ezra Klein notes, “Paul Ryan's health-care plan -- and his Medicare plan -- would also require the government to run online insurance marketplaces.” Additionally, the Medicaid expansion is working well where it is being implemented, and the ACA is perhaps even bending the cost curve of Medicare, the two paths forward that conservatives don’t want to take.

    I’ll be discussing this more, but the choice between Category A and B above will characterize much of the political debate in the next decade. It’s important we get more sophisticated analysis of what has gone wrong with the ACA rollout to better appreciate how utilizing “the market” can be far more cumbersome and inefficient than the government just doing things itself.

    Follow or contact the Rortybomb blog:

      

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  • Live Around the Web: Gensler and Low-Wage Workers

    Oct 23, 2013Mike Konczal

    Two posts from around the internet this week:

    1. Perhaps you’ve heard this story before: In early October 2013 regulators launched an electronic trading platform. An important part of the Obama administration’s plan to build a more just economy, and a crucial part of the landmark legislation passed by the 111th United States Congress, this platform is designed to fix a market that many believed was broken. By structuring the market through a combination of incentives, mandates and regulations, the government could bring efficiency, transparency and competition to a market that was sorely lacking it, benefitting both individuals themselves and the economy as a whole. If it succeeds it will make the case for government’s role in the economy; if it ultimately fails, it could discredit the project of liberalism for decades.
     
    Many will recognize this story as the launch of the health-care exchanges under the Affordable Care Act. But it’s the same exact story for Dodd-Frank and financial reform. On October 2nd the Commodity Futures Trading Commission (CFTC) launched something called a “swap execution facility” (SEF).
     
    My interview with CFTC chairman Gary Gensler about the SEFs and derivative reform more generally is up at Wonkblog here.
     
    2. Given the range of strikes and actions by low-wage workers, particularly at big-box retailers and fast-food locations, it's important to document how wages  are just one among many things they are fighting for. Live at Al Jazeera America: America are fighting for more than just money: Strikers at fast-food chains and big-box stores demand respect and freedom from abusive labor practices.
     

    Follow or contact the Rortybomb blog:

      

     

    Two posts from around the internet this week:

    1. Perhaps you’ve heard this story before: In early October 2013 regulators launched an electronic trading platform. An important part of the Obama administration’s plan to build a more just economy, and a crucial part of the landmark legislation passed by the 111th United States Congress, this platform is designed to fix a market that many believed was broken. By structuring the market through a combination of incentives, mandates and regulations, the government could bring efficiency, transparency and competition to a market that was sorely lacking it, benefitting both individuals themselves and the economy as a whole. If it succeeds it will make the case for government’s role in the economy; if it ultimately fails, it could discredit the project of liberalism for decades.
     
    Many will recognize this story as the launch of the health-care exchanges under the Affordable Care Act. But it’s the same exact story for Dodd-Frank and financial reform. On October 2nd the Commodity Futures Trading Commission (CFTC) launched something called a “swap execution facility” (SEF).
     
    My interview with CFTC chairman Gary Gensler about the SEFs and derivative reform more generally is up at Wonkblog here.
     
    2. Given the range of strikes and actions by low-wage workers, particularly at big-box retailers and fast-food locations, it's important to document how wages  are just one among many things they are fighting for. Live at Al Jazeera America: America are fighting for more than just money: Strikers at fast-food chains and big-box stores demand respect and freedom from abusive labor practices.
     

    Follow or contact the Rortybomb blog:

      

     

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  • Live at Wonkblog: What is Actually Shutdown?

    Oct 7, 2013Mike Konczal

    My weekly post at Wonkblog is: The ‘non-essential’ parts of government that shut down are actually quite essential. Given the way parks and zoo cameras have dominated the coverage of the shutdown, I wanted to step back and summarize what exactly the federal government doesn't do in a shutdown, and how important it is. I also highlight some great journalism being done on the shutdown itself. Hope you check it out.

    Follow or contact the Rortybomb blog:

      

     

    My weekly post at Wonkblog is: The ‘non-essential’ parts of government that shut down are actually quite essential. Given the way parks and zoo cameras have dominated the coverage of the shutdown, I wanted to step back and summarize what exactly the federal government doesn't do in a shutdown, and how important it is. I also highlight some great journalism being done on the shutdown itself. Hope you check it out.

    Follow or contact the Rortybomb blog:

      

     

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