Relevant and even prescient commentary on news, politics and the economy.

JEFF JACOBY ON DRUG PRICES

Jeff Jacoby had an interesting article in the Boston Globe on Sunday where he argue that if the demand for something doubled the price must increase—it is basic introductory economics.

http://www.bostonglobe.com/opinion/2015/04/25/supply-and-demand-not-profiteering-why-overdose-drugs-cost-more/IjJAbWF

His argument is so typical of how so many columnist and/or bloggers demonstrate that a little knowledge is a dangerous thing.
In basic theory many economist draw supply and demand curve that show if demand doubles the price will increase. But most are aware that this is actually a special case where all the assumptions of the perfect competition model  hold.  But, practical economists realize that this is a special case and that there are many exceptions to this theory.
Specifically, Jacoby writes that a doubling of a demand for a medical drug must lead to a price increase.
But the drug industry is a clear case where introductory economic analysis does not work because the drug industry is one of those industries where much of the cost of bring a new product to market is sunk or fixed cost. The specific sunk or fixed cost in the drug industry is the fortunes spent on research, development and testing before a new drug can be brought to market. These expenses are capitalized and incorporated into the price of a drug. The rough and ready rule of thumb is that these sunk or fixed cost account for about half of the price of a new drug. Exactly how much of this sunk cost is incorporated depends heavily on the estimate of how large the market for the drug will be. For example, if a drug firm has $1 billion in these sunk cost and they expect to sell two billion units of the drug they can assign $0.50 to the price of each pill for the sunk cost and another $0.50 for other costs of manufacturing, distribution, advertising, profits, etc., etc., so the final price is $1.00 per pill. But if the demand suddenly doubles, as Jacoby writes, the price does not have to increase. Rather the $1billion in fixed or sunk cost can now be spread over four billion units rather than original two billion units so the cost per unit falls from $.50 to $0.25. Consequently, the drug firm can cut the price of the drug from $1.00 per pill to $0.75 per unit and still make more profits than they did when the price was $1.00.
Jacoby’s analysis is a classic example that if so many bloggers or public pundits knew half as much as they though they knew, they would be geniuses. But the real problem is that the Globe editorial staff allows such shoddy analysis to gain the credibility it gets from being published in a highly regarded paper like the Boston Globe.
Jacoby claims that the doubling of demand for the drug Maloxone completely justifies the more than doubling of the price from $19.56 to $41.43 and that state officials should not investigate that increase. But maybe,  just maybe, the state officials know something that Jacoby does not know.

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Civil Disobedience and the Mailman

Reposted from Save The Post Office edited and administered by Steve Hutkins, a literature professor who teaches “place studies” at the Gallatin School of New York University.

Ruskins Gyrocopter

run75441: Tampa Bay News notes “96 percent of people think that Something Should Be Done about reducing the influence of money in politics. Only 9 percent think that something can be done.” In turn Ruskin mail carrier Doug Hughes decided to do something about it. “He announced his intentions to the local paper, wrote an email to info@barackobama.com, talked to the Secret Service to assure them that, although he was going to fly through the no-fly zone illegally, he did not intend for anyone to be hurt and that his intention was simply to protest.” Hughes objective was to deliver 535 letters to Congress.

From the Tampa Bay News, “Ruskin gyrocopter pilot says postal officials are telling him not to talk to media,” April 20, 2015

The Ruskin mail carrier who last week flew a gyrocopter into restricted airspace over Washington D.C., to make a political statement says he has been put on paid leave with the U.S. Postal Service with orders not to discuss his story with the media.

“I was informed by the acting postmaster—and he sounded like he was reading from a script—that I was on administrative leave pending an investigation,” Hughes wrote in an email to the Tampa Bay Times.

“I am NOT allowed on postal property without advance permission and I can only enter the building through the front if I do visit with permission. (This injunction always precedes a termination.) I asked about the nature of the administrative leave—it’s with pay BUT I’m not allowed to talk to the media AT ALL.”

It is another restriction that Hughes said he intends to violate. He said the move amounted to a “gag order” that he did not respect.

A spokeswoman for the U.S. Postal Service said she could not discuss Hughes’ employment status.

“I can confirm that he is a rural mail carrier,” said Enola Rice, the USPS regional communications director for Central Florida. “We don’t discuss the status of employees. All I can do is confirm that he is an employee.”

* * * * *

From NBC News,“Gyrocopter Pilot, Doug Hughes, Frustrated His Message Isn’t Getting Through,” April 19, 2015

Hughes spent a night in jail after Capitol Police arrested him. The ultralight aircraft and its cargo—a U.S. Postal Service bin carrying the letters—were seized.

Hughes’ Russian-born wife, Alena, told the AP that her husband acted out of patriotism for the United States.

Asked Sunday if he too thinks he’s a patriot or simply crazy, Hughes said. “Everyone gets to make up their own mind about me, that’s what I’d say.”

“But do you consider yourself a patriot?” a reporter asked.

“No, I’m a mailman,” he said.

* * * * *

From his Letter to Congress, Doug Hughes, April 15, 2015

“The unending chase for money I believe threatens to steal our democracy itself. They know it. They know we know it. And yet, Nothing Happens!” —John Kerry, 2-13

In a July 2012 Gallup poll, 87% tagged corruption in the federal government as extremely important or very important, placing this issue just barely behind job creation. According to Gallup, public faith in Congress is at a 41-year record low, 7%. (June 2014)

Kerry is correct. The popular perception outside the DC beltway is that the federal government is corrupt and the US Congress is the major problem. As a voter, I’m a member of the only political body with authority over Congress. I’m demanding reform and declaring a voter’s rebellion in a manner consistent with Jefferson’s description of rights in the Declaration of Independence.

* * * * *

FromHugh Hewitt’s radio show, Interview with Senator Lindsey Graham, April 15, 2015

Hewitt: Look, today gives a whole new definition of the term going postal, and I want to start there. 61-year-old Florida mailman, Doug Hughes, landed a gyrocopter on your Capitol, your office front lawn this morning. Do you think he should have been shot out of the sky before he got that close to the Capitol?

Graham: Yes. He should have been subject to being shot out of the sky. I don’t know why he wasn’t, but our nation is under siege.

Radical Islam is a threat to our homeland. There are probably radical Islamic cells in our backyard already. And if somebody is willing to, you know, approach vital government infrastructure, they should do so at their own peril.

I don’t know if he’s mentally ill. I’m glad he’s alive in that regard, if he’s mentally ill, but we’ve got to be more serious about our national security.

* * * * *

From “Hardball,” Chris Matthews, April 16, 2015

I have an idea for Congress and the Capitol Police. Instead of charging this guy on the helicopter, gyrocopter, why don`t you give him community service? And his community service can be one hour. And his one hour should be spent addressing a joint session, a joint meeting of the Congress. He should walk in there and tell them why he did that. And that must all be there to watch it`s. That can be his community service and we can all watch. If they put this guy in jail, what a bunch of clowns that would be to do that.

* * * * *

From Civil Disobedience, Henry David Thoreau (who went to jail for refusing to pay his taxes to protest slavery and the war with Mexico), 1849

Must the citizen ever for a moment, or in the least degree, resign his conscience to the legislator? Why has every man a conscience, then? I think that we should be men first, and subjects afterward. It is not desirable to cultivate a respect for the law, so much as for the right. The only obligation which I have a right to assume is to do at any time what I think right…

Unjust laws exist; shall we be content to obey them, or shall we endeavor to amend them, and obey them until we have succeeded, or shall we transgress them at once?

Men generally, under such a government as this, think that they ought to wait until they have persuaded the majority to alter them. They think that, if they should resist, the remedy would be worse than the evil.

But it is the fault of the government itself that the remedy is worse than the evil. It makes it worse. Why is it not more apt to anticipate and provide for reform? Why does it not cherish its wise minority? Why does it cry and resist before it is hurt? Why does it not encourage its citizens to be on the alert to point out its faults, and do better than it would have them? Why does it always crucify Christ, and excommunicate Copernicus and Luther, and pronounce Washington and Franklin rebels?

* * * * *

From Court Statement, Doris “Granny D” Haddock (who walked across the country at age 90 to advocate for campaign finance reform), May 24, 2000

Your Honor, the old woman who stands before you was arrested for reading the Declaration of Independence in America’s Capitol Building. I did not raise my voice to do so and I blocked no hall….

In my 90 years, this is the first time I have been arrested. I risk my good name—for I do indeed care what my neighbors think about me. But, Your Honor, some of us do not have much power, except to put our bodies in the way of an injustice—to picket, to walk, or to just stand in the way. It will not change the world overnight, but it is all we can do.

So I am here today while others block the halls with their corruption. Twenty-five million dollars are changing hands this very evening at a fund raiser down the street. It is the corrupt sale of public policy, and everyone knows it.

I would refer those officials and those lobbyists, Your Honor, to Mr. Bob Dylan’s advice when he wrote: “Come senators, congressmen, Please heed the call. Don’t stand in the doorway, don’t block up the hall.”

* * * * *

From OpenSecrets.org

Contributions and Lobbying

* * * * *

From Christopher Shaw, Preserving the People’s Post Office, 2006

UPS and FedEx are heavy hitters in Washington, D.C. The Center for Responsive Politics reports that FedEx has been the largest single corporate political donor over the last fifteen years. It has handed out a total of $21,409,229 in political contributions since 1989, and in the 2004 election cycle it shelled out $1,819,669.

“For years,” says Charles Lewis, founder of the Center for Public Integrity, “Federal Express has had a reputation for being one of the most aggressive special interests in Washington.”

The Center for Public Integrity reports that FedEx has spent $20,740,000 on lobbying the federal government from 1998-2004, and is second only to UPS when it comes to postal issue lobbying.

When it was time to pay for President George W. Bush’s 2005 inaugural, “FedEx was good for $250,000. But so was UPS.”

“This inauguration is bought and paid for by corporate America,” said Joan Claybrook, president of Public Citizen. “These businesses consider such gifts to be investments, with payback expected.”

The Wall Street Journal has called FedEx “a major lobbying force in Washington.”

“I was stunned by the breadth and depth of their clout up here,” said campaign finance reformer Senator Russell Feingold (D-Wisconsin).

* * * * *

From Title 39, CFR 447.21, “Prohibited conduct”

(d) No employee shall engage in criminal, dishonest, notoriously disgraceful or immoral conduct, or other conduct prejudicial to the Postal Service. Conviction of a violation of any criminal statute may be grounds for disciplinary action by the Postal Service in addition to any other penalty imposed by or pursuant to statute.

* * * * *

From 5 U.S. Code § 7324, “Political activities on duty; prohibition”

(a) An employee may not engage in political activity—

(1) while the employee is on duty;

(2) in any room or building occupied in the discharge of official duties by an individual employed or holding office in the Government of the United States or any agency or instrumentality thereof;

(3) while wearing a uniform or official insignia identifying the office or position of the employee; or

(4) using any vehicle owned or leased by the Government of the United States or any agency or instrumentality thereof.

* * * * *

From Postal Service Standards of Conduct, 665.16

Employees are expected to conduct themselves during and outside of working hours in a manner that reflects favorably upon the Postal Service. Although it is not the policy of the Postal Service to interfere with the private lives of employees, it does require that postal employees be honest, reliable, trustworthy, courteous, and of good character and reputation. The Federal Standards of Ethical Conduct referenced in 662.1 also contain regulations governing the off–duty behavior of postal employees. Employees must not engage in criminal, dishonest, notoriously disgraceful, immoral, or other conduct prejudicial to the Postal Service.

Conviction for a violation of any criminal statute may be grounds for disciplinary action against an employee, including removal of the employee, in addition to any other penalty imposed pursuant to statute. Employees are expected to maintain harmonious working relationships and not to do anything that would contribute to an unpleasant working environment.

* * * * *

From Theodore Roosevelt, “Address at the Pilgrim Memorial Monument, Provincetown, Mass.,” August 20, 1907

It may well be that the determination of the government (in which, gentlemen, it will not waver) to punish certain malefactors of great wealth, has been responsible for something of the trouble; at least to the extent of having caused these men to combine to bring about as much financial stress as possible, in order to discredit the policy of the government and thereby secure a reversal of that policy, so that they may enjoy unmolested the fruits of their own evil-doing. . . .

I regard this contest as one to determine who shall rule this free country—the people through their governmental agents, or a few ruthless and domineering men whose wealth makes them peculiarly formidable because they hide behind the breastworks of corporate organization.”

* * * * *

From Franklin D. Roosevelt, “Address Announcing the Second New Deal,” October 31, 1936

For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.

We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.

I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.

* * * * *

From Paul Blumenthal, “The Chamber Of Commerce Is Fighting Fiercely To Stop The Scourge Of Corporate Transparency,” Huffington Post, April 22, 2015

This spring, shareholders in more than 100 companies will introduce resolutions calling for greater disclosure of corporations’ political and lobbying activity. Six major companies—Dean Foods, Eastman Chemical, H&R Block, Marathon Oil, U.S. Steel and Valero Energy—have already reached agreement with New York state Comptroller Thomas DiNapoli, who oversees the third largest pension fund in the nation, to adopt political spending disclosure policies in exchange for the comptroller’s office withdrawing its resolutions.

But don’t consider that a sign that corporate America is learning to live with transparency. Over the past two years, three of the usual suspects—the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers—have joined together to try to discredit the purpose of disclosure policies and the advocates calling for them.

Aided by the editorial page of The Wall Street Journal, the three big business groups have sought to undercut activist investors and pro-disclosure groups through public campaigns and private meetings with corporate executives.

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Social Security Works…A friendly review from a different perspective

by Dale Coberly

Social Security Works  by Nancy Altman and Eric Kingson

A friendly review from a different perspective.

I have great respect for Altman and Kingson for the work they they have done writing this book.  I disagree with their ultimate “fix” for Social Security (it ain’t broke), but I want you to read the book.  I want everyone to read it.

This book does a  comprehensive job  explaining Social Security and the lies of those who are trying to destroy it.  I do have a different point of view and reach a different conclusion,  but you should read their book so you can understand the problem.  It would be far better for you to disagree with me and agree with Altman/Kingson than to leave yourself at the mercy of the Big Lie being told by the haters of Social Security and the politicians and press who have been bought or fooled by them.

The book demonstrates conclusively that Social Security is not going broke. And so far from being a “burden on the young,” it is perhaps the only thing standing between today’s young and terrible poverty in their own old age.  They describe the situation in America today in which all forms of reasonably secure retirement savings are under attack or already destroyed. The attack is orchestrated by a few very rich people who are either true believers in “free enterprise’ (as opposed to what they call “socialism”) or they are simply looking at the huge profits they can make by forcing everyone into “the market” and collecting fees while the workers take all the risks.

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The Solid Information Factor

Angry Bears are, I’m sure, familiar with the 27 % crazification factor. . Although a joke, it does pop up rather often in opinion polls.

I think there might be another constant — I am tempted to call it the sanity factor or sanification factor. It is the fraction of the general public which accepts a uncontestable fact which contradicts general prejudice.

For example, what fraction of US adults correctly answered “decreased …” when asked

CBS News/New York Times Poll, Sep, 2010
So far, do you think the Obama administration has increased taxes for most Americans, decreased taxes for most Americans, or have they kept taxes the same for most Americans?

This is a statement about the Federal tax code and how it had changed between January 20 2009 and September 2010 . It is not contestable.

Another uncontestable fact is that CBO estimates of the cost of the Affordable care act have been reduced since it was signed into law. What fraction of US adults know this ?

The answer is 8% .

ARRA tax cuts (search for “taxes” between 8/15/2010 and 10/1/2010 )

ACA costs

While looking for the ARRA tax cut link I found

Respondents were asked their impression of what
“most economists who have studied it estimate”
about the economic impact of the stimulus. Only
8% thought that most economists estimate it has
saved or created several million jobs. Eighty-eight
percent thought that most economists estimated it
has only saved or created a few jobs (68%) or
even caused job losses (20%).

The problem we have is that, even if only 27% of us are crazy, only 8% of us are paying attention.

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Why Marco Rubio Reminds Me of Sarah Palin*

*This is a slightly edited version of a post I posted here yesterday afternoon and have removed.  There’s also an addendum about an op-ed piece by Martin O’Malley in today’s Washington Post.

—-

Okay, so all you politics obsessives probably heard about a comment Martin O’Malley made to NPR’s Morning Edition host Steve Innskeep during an interview earlier this week, in response to a question about Marco Rubio’s claims about “active government.” Here’s the exchange:

Inskeep: “[Rubio] argues that an active government actually keeps people frozen at their economic status because if you are well off, if you can afford a lawyer, if you can deal with regulations, you can maneuver through government and stay prosperous. And if you are not so well off, it’s harder to work the system. Is there some truth to that? You were a big city mayor; you know how government works.”

O’Malley: “No, I don’t think there’s any truth to that.  It is not true that regulation holds poor people down or regulation keeps the middle class from advancing. That’s kind of patently bulls—.”

Well, at least we know that O’Malley knows how to get news media attention, so big points for that.  And we also know that he’s ready, willing and able to respond appropriately and effectively to the incessant, generic big-gummint-is-the-problem trance-inducing mantra.  Even bigger points for that.

But while Innskeep wasn’t actually quoting Rubio and was instead paraphrasing, the exchange highlighted a notable, but not widely noticed, hallmark of Rubio as politician: He routinely says things that are incoherent or that are flatly false as a matter of underlying fact.

Such as that Iran, a Shiite society, and ISIS, a Sunni terrorist group, are in cahoots and Obama doesn’t want to stop Iran from developing a nuclear military capability because Obama doesn’t really want ISIS defeated.  (Something like that; I can’t remember the specifics from earlier this year, but that was the gist of it.)

And such as his federal-budget proposal that will cut, but (unlike the other presidential-nomination contestants’ proposals) won’t completely gut, programs that assist low-income families and individuals; that will significantly increase defense spending; that will eliminate the estate tax; that will lower capital gains and corporate taxes; that will impose no new or higher tax rates at all; and that will balance the budget in 10 years.  (President Houdini!)

And such as that an active government keeps people frozen at their economic status because if you are well off, if you can afford a lawyer, if you can deal with regulations, you can maneuver through government and stay prosperous. And if you are not so well off, it’s harder to work the system.

Yep.  It’s the EPA, the SEC, and the National Labor Relations Act that are keeping all those minimum-wage workers and their families from moving up the socioeconomic ladder!  Rubio, a son of blue-collar employees, succeeded despite having been forced by the federal government to go to public rather than private universities and to pay his tuition using the student loans he applied for at gunpoint. So it can be done, even in the face of active government.  It’s just much harder.  And more dangerous.

One thing I remember fondly about the nervous reactions of some conservative pundits during the fall 2008 campaign season when it became clear that Sarah Palin was not a wise choice as McCain’s running mate was a comment by a dismayed Peggy Noonan, a longtime Republican pundit who was George H.W. Bush’s chief speechwriter.  Noonan wrote about Palin (I believe these were her exact words): “She just … says things.”  (Ellipses Noonan’s.)

Rubio, too, just … says things.  He sort of … babbles.  He seems to have no filter—for coherence, for accuracy, for plausibility—through which he passes his thoughts before expressing them.

Yup.  Be sure to click that “for coherence” link.  The auto-industry bailout kept those auto-industry workers and their families from advancing because they couldn’t hire lawyers to help them navigate their continued employment in their auto-industry jobs.  Got it.

When I read about O’Malley’s response to Innskeep a couple days ago, and therefore also read Innskeep’s question to O’Malley, I wondered whatspecifically (assuming that Innskeep’s paraphrase or summary of Rubio’s statements were accurate reflections of those statements), Rubio was referring to.  What in heaven’s name is he talking about?  What federal statutes and regulations are keeping people who can’t afford fancy lawyers—or any lawyer at all—frozen at their economic status because they can’t maneuver through federal government regulations?

Well, I now have my answer, albeit not from Rubio.  By chance, I happened upon a three-day-old commentary this morning in the Los Angeles by winger columnist Jonah Goldberg, written in reaction to O’Malley’s comments to Innskeep, in which Goldberg purports to speak for Rubio. The column is titled “Martin O’Malley’s modern-day know-nothingness,” and its first several paragraphs recite the history of President Millard Fillmore’s party, the Know-Nothings.”  (Goldberg doesn’t mention Fillmore, but I happen to know that his party was the Know-Nothing Party.)  He throws in some stuff about the history of the original federal minimum-wage law, which he thinks kept people frozen at their economic status because they couldn’t afford lawyers to help them navigate the intricacies of that statute.  (Something like that.)

But then he gets down to brass tacks.  The tacks being that O’Malley is too ignorant to know that some professional and trade licensure education requirements unjustly and unjustifiably  keep lower-income people from entering those professions and trades and that even the application forms are obnoxiously long, complex and burdensome.  And that O’Malley is blind to the fact that small banks, which are the traditional lenders to small local businesses, are disappearing en masse, and that this is because of … huge Dodd-Frank compliance costs.

Well, at least the second of the two—the banking one—involves federal laws.  Of course, the real reason that small banks no longer are competitive with, say, JP Morgan Chase, Citibank, Bank of America and Wells Fargo is the deregulation of the finance industry, mainly the repeal in the 1990s of the Glass-Steagall Act of 1934 that prohibited commercial, federally insured banks from engaging in investment banking and other securities trading—including in derivatives.  Goldberg and Rubio may not have noticed, but the en masse demise of so much of the community banking industry began back then and continued as a result of the financial collapse of 2008-10.*  Y’know, the financial collapse precipitated by financial-industry deregulation and, regarding derivatives, no-regulation.  The financial collapse that caused the economy and, consequently, many, many, many small businesses to collapse.

Yeah, that one.  Some people who lost their jobs and therefore no longer could pay their non-subprime mortgages (including to community banks), and many small-business owners whose businesses failed because of the crash of the economy no longer could repay their business loans. To community banks.

As for the first of Goldberg’s two big-gummint complaints—that some professional and trade licensure education requirements unjustly and unjustifiably  keep lower-income people from entering those professions and trades and that even the application forms are obnoxiously long, complex and burdensome—he’s spot-on that it’s an outrage.  He just needs to explain why, since these are state and local licensure requirements and applications, and are unrelated in any respect to federal regulation—and Rubio’s running for president, not state or local office—he thinks it’s O’Malley rather than, say, he who is a Know-Nothing.  Here’s betting that O’Malley, unlike Goldberg, does know that professional and trade licensure education requirements and applications are determined and administered not by the federal government but by state and local ones.

And here’s also betting that O’Malley knows that since the very purpose of these inappropriate bars to jump over and hoops to jump through is to keep competition in these professions to a minimum.  And that he knows that the obvious agitators for these mandated regulatory hoops are the beneficiaries of minimal competition—i.e., those already in these professions or trades or in ones that compete with the unduly restricted ones—and that Democratic officeholders are no more likely that Republican ones to push for these laws and regulations.  He  might have suggested to Goldberg that, before Goldberg demonstrated his ignorance, he check out who’s giving campaign contributions to whom.

But it’s Rubio, not Goldberg, who’s running for president.  So the next time that Rubio argues that an active government actually keeps people frozen at their economic status because if you are well off, if you can afford a lawyer, if you can deal with regulations, you can maneuver through government and stay prosperous–and if you are not so well off, it’s harder to work the system—he’s asked for, say, specifics.  As in: What in heaven’s name is he talking about? Maybe he’ll just refer the questioner to Sarah Palin for details. Or to Mitt Romney.

—-

NOTE: O’Malley has a terrific op-ed piece in today’s Washington Post about the student-loan issue, in which he discusses the broader effects of the current situation on the economy and on American society and advocates for the solutions that Elizabeth Warren has been proposing. He also details his own actions as Maryland government regarding that state’s public university and community college costs.

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Nick and Joe are doing their best to beat back Milton Friedman et al

Nick Hanauer, Joseph Sitglitz videos.

This is the latest presentation Nick Hanauer has made regarding the upside downness of our economy and the backward, selfish thinking that has gotten us here. In this one he is talking to his “plutocrat” friends:

We plutocrats need to see that the United States of America made us not the other way around. That a thriving middle class is the source of prosperity in capitalist economies, not a consequence of it. And we should never forget, that even the best of us, in worst of circumstances are barefoot by the side of a dirt road selling fruit.

He takes on economics and how it is used today by plutocrats to reinforce their positions:

…for thousands of years, these stories were called divine right. Today, we have trickle down economics. How obviously, transparently self-serving all of this is.

 

Then comes Joseph Stiglitz talking about the cause and fix for income inequality.  This is based on his latest book.     He lays the cause to the “supply side” economics and thus the results of politics and policy.  It was a “disaster”.

The financial sector in recent years has been more active in taking money out of corporations than putting money into the corporations.  The flow is going the other way.

It is nice to hear someone talking about the solution in a comprehensive way.  A way that reflects understanding society and its economy in the same manor we have come to understand the environment.

Wouldn’t you just love to see them together on one of the Sunday morning shows around at table with say Senator Warren and Sanders and on the other side the Koch brothers and say Paul Ryan, McConnell and Boehner?  Maybe a Chicago School boy or girl?  Let’s throw in Jack Lew or who ever is the latest to hold that position.  How about someone from labor and the US Chamber to balance it out?  Better yet, how about simply a table of Nick, Joe, Warren, Sanders, Labor and Robert Reich maybe also Paul Krugman.  Forget the fair and balance act.

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Moving the goal posts on ACA success (w/update)

Right. So the the same day that I posted about the substantial fall in the uninsured rate for adults that we have seen since Obamacare went into effect, a conservative writes at the Wall Street Journal making exactly the same arguments that Matt Yglesias had refuted. Cliff Asness writes in the WSJ:

That more people would be insured was never in dispute. If you mandate that people buy something, penalize them if they don’t and give it away to some, more people will end up with it. The proper response to this is: Duh.

So, as I said, Yglesias had already refuted this, giving a number of examples of conservatives who predicted there would be no reduction in the number of uninsured Americans. Today, Paul Krugman takes us to Jonathan Chait’s response to Asness, where of course he piles on more examples of conservatives predicting a failure to improve the uninsured rate. Then he goes further. Asness wrote that a critical issue was “how many people covered by ObamaCare were previously uninsured.” You can probably guess Chait’s answer: “Well, that’s why you measure the net number of uninsured people, not just the gross expansion of coverage under Obamacare.” Which leads us back to the chart showing the substantial fall in the uninsured rate that was in my last post (and Yglesias’, Krugman’s and no doubt many more besides).

The latest round is that yesterday Asness responded to Chait. Here is where the goal post move comes in:

In contrast the rise in coverage is heralded by a myriad of Obamacare supporters as one of two major pieces of proof the law is working. But, how can something we knew before the fact be proof of anything?

Did you catch that? If we predict that something good will happen as a result of a new law, and that good thing happens, it doesn’t count as proof that the law was good. This is silly. We didn’t actually know the insurance rate would fall, but we had economic models that told us it would. So not only is the fall evidence that the law is working, it’s evidence that the models were right!

Somebody wake these people up.

UPDATE: @HaroldPollack points me to a new J.D. Power survey finding that people who signed up for insurance on the exchanges were more satisfied (696 out of 1000) than people with non-exchange plans, usually through employers (679 out of 1000). People re-enrolling on the exchanges scored even higher, with a score of 744 for people who re-enrolled on the Exchanges. Private plans offering multiple options were able to reach the 696 average for Exchange enrolees, which means that companies offering one insurance option had to be doing substantially worse than 679. Not surprisingly, new enrolees for 2015 were a large 55 points more satisfied than 2014 enrolees, who of course went through the disastrous rollout of healthcare.gov.  So people like their subsidies and they like their actual insurance policies, on average. Maybe that’s why Republican Senators are getting antsy that there will be hell to pay if the Supreme Court rules for the plaintiffs in King v. Burwell.

Cross-posted from Middle Class Political Economist.

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Michigan

I just posted a comment in the Comments thread to Bill H’s post on Michigan from Tuesday, and on a whim, because these issues hit a nerve for me, I’m reposting my comment as a full post here:

I love this post.  It hits upon a few of my obsessions, but especially these two: The lack of metropolitan-area public transportation (the complete absence of it or the utter inadequacy of it) in so many large metro areas in this country, and the local (rather than state or federal) funding of public education.

The public-transportation issue is just so in-your-face stunning in southeastern Michigan.  Detroit, for idiotic it’s-the-Motor-City reasons, is the only large Rustbelt city that has no rapid-transit system.  The most obvious—and I mean, it’s really, really obvious—way to revive Detroit and turn southeastern Michigan back into a thriving region is a system of fast, reliable, reasonably comfortable regional public transportation.  A sort-of diamond-shaped system running from Detroit to Ann Arbor to Lansing to Flint, through Pontiac, and back to Detroit would work miracles in a lot of people’s lives.  Add on a tail that runs from Detroit south through an area known as Downriver (which is mostly so-called working-class white) to Toledo, and ….

Michigan’s a surprisingly pretty state—lakes, rivers, tributaries galore—and it’s very green (literally).  It has large expanses of beautiful beaches.  It has two major public research universities and good regional state university system that includes a large one in Detroit.  It should not be a state in decline.

As for one of Bill’s larger points—this country’s obsession with complete local control over really important, basic government functions, and states’ rights to violate individuals’ rights at will—this plays a huge role in this country’s loss of economic competitiveness and its loss international esteem.  In no other democracy or advanced economy in the world do parents have to obsess about what school district this or that prospective home is in.  Does anyone think that, say, Canadians or Germans or Australians or the French worry about school districts?  Has anyone in this country stopped to think of why they don’t?

Nice post, Bill.

One thing Bill mentioned that I didn’t discuss in my comment is that Michigan (like several other states) tends to vote Democratic for president but Republican for government and state legislators.  That’s very largely a function of the fact that in modern times most states elect their statewide officeholders—governor, attorney general, etc.—in non-presidential-election years, and the drop-off in the number of Democrats who vote in those elections is dramatic.

So ALEC controls most state governments.

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