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Saudi Succession Shuffle

Saudi Succession Shuffle

A not unexpected event has just been announced: 31-year old Prince Muhammed bin Salman bin Abdulaziz al-Sa’ud has been elevated from Deputy Crown Prince of Saudi Arabia by his father, 81-year old King Salman bin Abdulaziz bin Abdul-Rahman al-Sa’ud, to replace his 57-year old cousin, Prince Muhammed bin Nayef bin Abdulaziz al-Sa’ud.  The former Crown Prince is Minister of the Interior, a position he inherited from his father, the late Prince Nayef, who was Crown Prince prior to current King Salman, but died before the most recent king, Abdullah bin Abdulaziz bin Abdul-Rahman al-Sa’ud died at age 90 in 2015, so Salman got to be king and now has moved his younger son up ahead of his somewhat older nephew.  Muhammed bin Salman (MbS) is also Defense Minister, the position his father had taken in 2011 on the death of Prince Sultan, who was then also Crown Prince, with Salman prior to that serving as Governor of Riyadh province for 40 years.  MbS has by all accounts been running things in Saudi Arabia recently, being behind the aggressive war in Yemen that has gone badly and also probably the main orchestrator of both Donald Trump’s visit to Saudi Arabia and the move to diplomatically and economically isolate Qatar.  Juan Cole describes MbS as being “sloppy” and “unwise,” but he may be in position now to rule Saudi Arabia for a long time to come if this appointment is not reversed somehow by other members of the Saudi royal family.

It is possible that the trigger for this elevation has been reports in the last few days of the US Secretary of State, Rex Tillerson, and Secretary of Defense,  Mad Dog Mattis, turning increasingly against the campaign against Qatar pushed by MbS, despite Donald Trump’s repeated support for it via Twitter.  Not only did Tillerson sell Qatar a bunch of F-15s a few days ago, but yesterday Tillerson demanded that the Saudis and Emiratis (from UAE) present their specific demands of the Qatar regime.  It has been two weeks since they initiated this campaign against Qatar, with the clear support of Trump, but indeed they have neither issued specific demands that by satisfying them Qatar could bring about an end to this diplomatic and economic embargo, nor have they presented a shred of evidence of the Qataris financing terror groups, the supposed justification for all this, although pretty much everybody knows that it is a more general annoyance by the Saudis with their not just going along with whatever the Saudis want as well as in particular the Qataris being too friendly with Iran, although even the anti-Iran Tillerson and Mattis realize that the US is allied de facto on the ground in the war against ISIS, which the Saudis have done near zero to support, not to mention Qatar hosting the US major air base that is being used in the campaign against ISIS/Daesh.

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McConnell’s AHCA Kabuki

he McConnell Obamacare repeal and replace “discussion draft” is worse than I imagined possible even taking into account that it would be worse than I imagined possible. I fear he made sure it was horrible so moderate Senators could win staged battles and claim they had saved people (needless to say I am not the first to write of this possibility).

I guess a vox explainer is always useful and Sarah Kliff is very smart thorough and reliable.

The bill is surprisingly aweful in two ways. First it doesn’t slow the phasing out of the ACA Medicaid expansion over 7 years but rather does it in 3 (from 2021 through 2024). Several relatively non reactionary Republican senators stressed how important of 7 year phaseout was to them. Also the bill contains no additional funding to deal with the opioid addiction crisis. Many of those senators specifically proposed this increased funding.

I fear that this is all theater. That the so called moderates will get their 7 years and their opioid treatment funding and then vote yes. Not including them in the “discussion draf” will make this more dramatic, allow the self described moderates to claim credit, and give them cover.

The Senators in question are almost saying this is their price.
I will include phone numbers in case any reader is interested in calling to say he or she is not falling for it. All are from the very useful

https://www.trumpcaretoolkit.org/

The Senators include
Robert Portman of Ohio (202-224-3353) who wrote
portman

This almost explicitly says his price is an extended Medicaid phaseout and, especially, money for treatment of opioid addiction.

Shelley Moore Capito of West Virginia (202-224-6472 called senator Capito with the accent on the a not on the i as in the Italian word for understood)
She has a very strong position on increased opioid treatment funding. West Virginia (like Ohio) is hard hit by the epidemic.

Her web page includes

Earlier today, I posted a link to the health care discussion draft on my website for all West Virginians to read. Over the course of the next several days, I will review the draft legislation released this morning, using several factors to evaluate whether it provides access to affordable health care for West Virginians, including those on the Medicaid expansion and those struggling with drug addiction.

Which, again, is very clear. I want to mention that I guessed there was a press release similar to Portman’s before checking, and why, lo and behold, there is (it’s almost as if they coordinated).

Dean Heller of Nevada (202-224-6244 is another self described moderate (and up for election in 2018 and very vulnerable)

His web page has

“Throughout the health care debate, I have made clear that I want to make sure the rug is not pulled out from under Nevada or the more than 200,000 Nevadans who received insurance for the first time under Medicaid expansion. At first glance, I have serious concerns about the bill’s impact on the Nevadans who depend on Medicaid. I will read it, share it with Governor Sandoval, and continue to listen to Nevadans to determine the bill’s impact on our state. I will also post it to my website so that any Nevadans who wish to review it can do so. As I have consistently stated, if the bill is good for Nevada, I’ll vote for it and if it’s not – I won’t.”

Again quite clear. The phrase “the rug is not pulled” is almost explicit that slowly sliding it out from under them would be OK. The reference to Sandoval is important, as Sandoval is very popular in Nevada and signed a letter opposing the House AHCA and generally arguing for bipartisan compromise (so did Gov. Kasich of Ohio whom Portman didn’t mention).

update 3: This is interesting. John Ralston is a very highly respected expert on Nevadan politics. He tweeted

“I don’t think so. And will say he [Heller] votes No after consulting with @GovSandoval.”
replying to another top reporter, Ronald Brownstein, who tweeted “#AHCA reduces # covered by Medicaid in NV by 45%. #SenateHealthCareBill proposes > l/t cuts. Can @SenDeanHeller vote Y? @RalstonReports”
end update:

OK how about Lisa Murkowski (202-224-6665 only interested in voice mail from Alaskans) ?
Nothing yet. I actually find this promising. She might not have decided on the price of her vote.

Finally (for moderates for now) Susan Collins of Maine (202-224-2523) Nothing on the McConnell discussion draft yet. A lot on the Opioid crisis (very bad in Maine too). Also “bipartisan” is her favorite word. Actually the web page section on health looks OK. Her voting record doesn’t. Collins and Murkowski strongly support funding for Planned Parenthood. Neither have said they will vote no if the elimination of that funding stays in the bill (most likely they propose an amendment and it goes down 50-51 including Pence). I do not want to count on Senator Collins growing a spine.

update: Collins spoke with the press instead of having a staffer write a press release. Her comments as reported by Tierney Sneed are mildly interesting

Sen. Susan Collins (R-ME) gave the Senate health care bill released Thursday a mixed review, but zeroed in on its major cuts to Medicaid as a potential problem for her.

She took issue with how the Senate bill, starting in 2025, used a rate of growth for federal funding for Medicaid that is significantly slower than the typical increases of costs for the program.

“I’m very concerned about the inflator that would be used in the out years for the Medicaid program,” she told reporters in the Capitol a few hours after the bill was released. “It’s lower than the cost of medical inflation and would translate into literally billions of dollars of cuts.”

She added that she was concerned about how the cuts would negatively affect rural hospitals or prompt states to restrict Medicaid eligibility.

This might amount to something. Unlike “pulling the rug out” Heller, Collins is talking about the long term and a huge amount of money. The ceiling on Medicaid spending amounts to a huge cut over 10 years. It is they key measure used to finance the bill’s tax cuts for the rich. Unlike the 3 year Medicaid extension phase out it can’t be fudged. The case for Heller, Capito, Portman Kabuki is strongly supported by the fact that they don’t specifically address the ceiling.

It is vital that people who had no problem before the ACA understand that they will have huge problems if the AHCA passes, because of the huge cuts of legacy (pre-ACA-expansion) Medicaid spending. The fact that Collins discusses this would be a hint that she might actually vote no (if she weren’t actually Senator Susan Collins (R-Maine) who always always caves).

end update:

update 2: Collins is stealing the stage. I think she is torturing us. She said she can’t vote for a bill which deprives tens of millions of health insurance (I’ll believe she can’t if she votes no and not before)

ehd update 2:

Separately 4 right wing Senators said the McConnell draft is too close to the ACA: Ted Cruz, Mike Lee, Ron Johnson (Wisconsin) and Rand Paul (Kentucky).

I think Paul might really mean it. He is extreme and resistent to party discipline. Also the ACA has benefited Kentucky enormously. Blocking the repeal bill would be good for Rand Paul (and Mitch McConnell). Blocking it for not being extreme enough could be crazy like a fox 11- dimensional Aqua Buddha chess.

Ron Johnson has been hinting a no for a long time. He was just re-elected. Here I think that senators with 6 safe years might be more likely to vote no. Failure to pass a bill with hurt Republicans in the short run. Passing a horrible bill will hurt them in the long run.

I’m pretty sure Cruz and Lee are play acting. My guess is that they said no to establish a bargaining position — if McConnell is the right most position, the bill will move further left than if they pretend they might vote no. I read somewhere thatCruz had an individual statement in which he made it almost clear he was going to get to yes.

Summing up, I have no prediction for how this will end. But I do very strongly suspect that Heller, Capito and Portman will win two (staged) battles and get 7 year phaseout and some opioid money, declare victory and vote yes.

update 4: My prediction was wrong (as usual). Heller denounced the bill. He described many of its horrible aspects, definitely including the long term cuts to legacy Medicaid. This is not an issue which can be fudged, because the amount of money involved is huge. He still might cave, but it would be an authentic cave not a staged victory. This is very good news. Also there is even better news reported by The Washington Post

Sen. Dean Heller (R-Nev.) announced that he could not vote for the legislation without revisions, singling out the measure’s long-term spending cuts to Medicaid as the reason for his opposition. The announcement caught some Republicans in Senate Majority Leader Mitch McConnell’s orbit by surprise.

If McConnell had been counting on Heller, his count could be off. In particular, he might have counted to 49 and assumed he could get one more from a senator unwilling to decide the victory for the Democrats. Heller’s announcement takes pressure off of her (she is named Lisa or Susan).

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Hoxie on “Fixed Group Demand Theory” (the “lump of labor”)

From Robert F. Hoxie, Trade Unionism in the United States, 1917:

There is much scorn of unionists by economists and employers because of this lump of labor theory with its corollaries. This scorn is based on the classical supply and demand theory and its variants. Supply is demand. Increased efficiency in production means an increase of social dividend and increased shares, which in turn increase production and saving. Therefore, the workers cut off their own noses when they limit output or limit numbers. The classical position is undoubtedly valid when applied to society as a whole, if there is any such thing, and in the long run. But the trouble is that, so far as the workers are concerned, there is no society as a whole, and no long run, but immediate need and rival social groups. 

The fixed group demand theory is as follows: The demand for the labor of the group is determined by the demand for the commodity output of the group. The community—wealth and distribution remaining the same—has a fairly fixed money demand for the commodities of a group. It will devote about a given proportion of its purchasing power to these commodities, that is, if the prices of the group commodity are higher, it will buy less units and vice versa, but expend about the same purchasing power. Therefore, the demand for the labor of the group, profits remaining the same, is practically fixed, and increasing the group commodity output means simply conferring a benefit on the members of other groups as consumers without gain to the group itself. Therefore, to increase the efficiency and the output of the group will not increase the group labor demand and group wages. Decreasing the efficiency and output of the group will not decrease the group labor demand and the group wage. 

Increasing the number of workers tends to decrease their bargaining strength relatively and to lower the total wage and the wage rate. Increasing the efficiency and the output of the workers is equivalent to increasing the group labor supply, and so tends to lower the group wage and the wage rate. Decreasing the number of workers tends to increase their bargaining strength relatively and so to increase the group wage and the wage rate. Decreasing the efficiency and output of the workers tends to increase their bargaining strength relatively and so to increase the group wage and the wage rate. The introduction of labor saving devices is equivalent to increasing the labor supply and so lowering the wage rate. Limitation of output through shorter hours, etc., i.e., decreasing the supply of labor, increases bargaining strength and tends to increase the wage. Strikes and trade union insurance funds are means of temporarily withdrawing labor supply and so of increasing bargaining strength and increasing wages. In practice the group demand theory is simply the application by the unions of the principle of monopoly, admittedly valid. But this theory only in part explains union efforts to limit both individual and group efficiency and output and to limit numbers. These policies in part rest on other theories and considerations. 

Robert F. Hoxie committed suicide on June 22, 1916. For an overview of his important but neglected contribution to economic thought see Charles R. McCann Jr. and Vibha Kapuria-Foreman, “Robert Franklin Hoxie: The Contributions of a Neglected Chicago Economist” Research in the History of Economic Thought and Methodology, Volume 34B, 2016.

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McConnell’s AHCA Bill Text and WP Interpretation

I have not had a chance to read through this; but, I thought I would put this out here for all of us to read, Senate Version AHCA McConnell

Updated this post with the changes proposed in the McConnell Senate Bill as taken from today’s Washington Post.

Washington Post Version

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How Senate Republicans Plan to Dismantle Obamacare; Washington Post; Haeyoun Park and Margot Sanger – Katz; June 22, 2017

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Here is Andrew Coulson Series on Virtues of Privatization

Diane Ravitch offers more on schools in America:


Here is Andrew Coulson Series on Virtues of Privatization

by dianeravitch

Watch libertarian Andrew Coulson’s film, now showing on some, not all, PBS stations around the nation.

It was paid for by libertarian foundations that support privatization. The lead funder–the Rose-Mary and Jack Anderson Foundation– is a conduit for the Koch brothers and DeVos family foundations.

http://www.pbs.org/show/school-inc/

Here is my response.

Carol Burris and I will soon be posting a point by point refutation.

Please let PBS know what you think.

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American carnage?

Institute for New Economic Thinking Lance Taylor describes his thinking on the great divide.  Worth a look:

President Trump, in his inaugural address and elsewhere, rightly says that over the decades since 1980 American household distributions of income and wealth became strikingly unequal. But if recent budget and legislative proposals from Trump and the House of Representatives come into effect, today’s distributional mess would become visibly worse.

First, I will sketch how the mess happened, then I will propose some ideas about how it might be cleaned up. I will show that even with lucky institutional changes and good policy, it would take several more decades to undo the “American carnage” that the president described.

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George Borjas on the New Immigration Meme

George Borjas, perhaps the US’ pre-eminent immigration economist notes:

Maybe it’s just me because I instinctively read in between the lines whenever I read anything about immigration, but I’m beginning to detect such a seismic shift in the immigration debate. We all know the party line by now: Immigrants do jobs that natives don’t want to do. As a result, natives do not lose jobs, and natives do not see their wages reduced. And anyone who claims otherwise is obviously a racist xenophobic moron. They obviously don’t like immigrants, and they obviously are not educated/credentialed enough to understand and appreciate expert opinion.

The flurry of immigration restrictions proposed by the Trump administration demands a switch in tactics–with a corresponding switch in the argument linking immigration and wages. The party line must now be that less immigration is bad. But how can one show that in simple-to-grasp economic terms that can be mass-marketed to the masses? By far the simplest way is to come up with examples that less immigration raises labor costs and makes us miserable because everything becomes more expensive.

Borjas goes on:

There is no upper bound to the hypocrisy of experts. It might be a lot of fun to keep track of this over the next few years, watching the dominos fall and all those “immigration-does-not-affect-wages” experts fall all over themselves as they switch to proving the economic awfulness of Trump’s actions because fewer immigrants mean higher labor costs, higher prices, more inflation.

But don’t hold your breath for any admission that they were wrong in the past. They will instantly switch to the former party line the minute the Trump immigration restrictions fade into history.

I have nothing to add.

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New book on investment incentives will help shape policies debates for years to come

Lifted from Middle Class Political Economist is the announcement related to  Angry Bear Dr. Kenneth Thomas video series

Wednesday, June 29, 2016

New book on investment incentives will help shape policies debates for years to come

This past week I received my chapter author’s copy of a new book from Columbia University Press, Rethinking Investment Incentives: Trends and Policy Options. Based initially on the November 2013 conference on investment incentives at Columbia Law School, the contributors were put through their paces to upgrade their conference presentations into proper papers. The result is what Theodore Moran of Georgetown University calls in the Foreword “a who’s-who of experts across this broad span of topics.” He predicts, and I concur, that the work presented in this book will help drive policy discussions around the globe.
The book is divided into four parts. The first discusses theoretical debates on definitions and the effect of these incentives on (especially) foreign direct investment. The second section provides a global overview of the use of incentive incentives, both in major economies and in developing countries. Part III includes practical tools for ensuring program effectiveness as well as value for money. This includes a chapter on cost-benefit analysis, a methodology of which I am highly skeptical. As I have written before, if you end this analysis at the state (or city!) border, you miss many of the indirect job losses inflicted at competing companies by the addition of new subsidized competition. Indeed, according to economist Tim Bartik, very few subsidy programs have positive *national* effects, even if they have positive local effects that will be the only thing considered in the cost-benefit analysis.
Finally, the fourth part of the book considers ways to reduce the competitive use of investment incentives to attract investment. My chapter falls in this section, considering the control of subnational incentives in Australia, Canada, and the United States. (Spoiler: Most of the record is not pretty; Australia was an exception but the policy expired in 2011.) A variety of supranational regulatory efforts, including most notably that of the European Union, are considered in a chapter by Lise Johnson.
Have I teased you enough yet? This book is a must-have if you are interested in investment incentives and economic development; co-editors Ana Teresa Tavares-Lehmann (University of Porto, Portugal), Perrine Toledano, Lise Johnson, and Lisa Sachs (all of the Columbia Center for Sustainable Investment) are to be congratulated for the fine product.

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Many places in America are essentially devoid of doctors

Via Kevin MD Dr. Kenneth Lin writes another article on disappearing rural medical care.  this is part of the article…

I recently attended a conference in Savannah, Georgia sponsored by the Association for Prevention Teaching and Research.

Since I haven’t spent much time in Georgia outside of Savannah and Atlanta, the welcoming plenary on improving health outcomes for the state’s rural and underserved populations was eye-opening. According to Dr. Keisha Callins, Chair of the Department of Community Medicine at Mercer University, Georgia ranked 39th out of 50 states in primary care physician supply in 2013 and is projected to be last by 2020. 90 percent of Georgia’s counties are medically underserved. Mercer supports several pipeline programs that actively recruit students from rural areas, expose all students early to rural practice and community health, and provide financial incentives for graduates who choose to work in underserved areas of the state. But it’s an uphill battle. Even replicated in many medical schools across the country, these kinds of programs likely won’t attract enough doctors to rural areas where they are most needed.

When people talk about places where doctors won’t go, they tend to focus on international destinations, such as war zones in Syria or sparsely populated areas of sub-Saharan Africa. It’s hard to believe that many places in America are essentially devoid of doctors, and access to medical care is as limited as in countries where average income is a tiny fraction of that in the U.S. Providing health care coverage for everyone, while important, won’t automatically ensure the availability of health professionals and resources in rural communities. In a recent JAMA Forum piece, Diana Mason discussed the financial struggles of rural hospitals that support community health alongside primary care clinicians, which may become more acute if budget cuts to rural health programs and grants occur as proposed in President Trump’s budget.

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