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

Which Is More Important, China Or Syria?

by Barkley Rosser {originally published at Econospeak)

Which Is More Important, China Or Syria?

For the world as a whole and the US in particular, when it is put like that it is pretty obvious: China.  It has the world’s largest population, largest economy in PPP terms, a rising military, expanding interests around the world, including making territorial demands on several neighbors, not to mention being a nuclear superpower as well as cyberpower, and more.  Syria has a population of 22 million and an economy half the size of Puerto Rico’s.  It is not a major oil exporter.

However, last week it certainly looked like Syria was more important.  President Trump meets with President Xi at Mar-a-Lago, and almost nothing is reported about the meeting other than some vague remarks.  Important matters such as trade policy (the US has initiated an  anti-dumping suit against China in steel), South China Sea issues, North Korea nuclear testing issues (US has just sent a major naval group towards the place), issues over currency management (with Trump long charging China with currency manipulation, even though it is now widely accepted that while they did it in the past the Chinese are not doing so now), climate change (where China is becoming world leader on the international policy stage while Trump claims that global warming is a “Chinese hoax”).  They barely had a press conference, and what really went on in the meeting remains largely mysterious.

So, wow, much better to have the headlines and the commentaries taken up with the apparently one-shot firing of 59 Tomahawk missiles at a base in Syria, after apparently warning both the Russians and the Syrians we were going to do it, in response to a chemical attack in Syria that killed about 80 civilians, including some children.  This was certainly a bad attack, but it remains unclear if it was the Syrian military or some rebel groups, although probably it was the government, and if it was the government, it is unclear if it was done by some local commander on his own or with the explicit orders of President Assad, and if the latter, was it done with the foreknowledge of their allies, the Russians, and most especially President Putin.  The Russians and Iranians are claiming that the rebels did the chem weapons attacke and are denouncing the US attack.  But who really knows?  I sure as heck do not, and I  am not sure anybody in the US government knows either, especially given the 25 reasons that have since been given for this by various administration officials.

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Only So Much To Go ‘Round

The Sandwichman commented the other day on The Economist article, “Britain’s Green Party proposes a three-day weekend.” Regrettably, though, I didn’t pay much attention to their “rebuttal” to the alleged assumption of a fixed amount of work:

In fact, if people worked fewer hours, demand would drop, and so fewer working hours would be on offer.

I have seen stupid explanations before of why there is not a fixed amount of work. Layard, Nickell and Jackman argued that if work time reduction and redistribution succeeded in reducing unemployment, it would be inflationary and that would probably cause the central bank to intervene to re-establish the “non-accelerating inflation rate of unemployment.” That’s pretty stupid but not nearly as stupid as what The Economist article claimed as “fact.” Pardon me for repeating the whole dreadful argument:

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Thank God it’s Boilerplate!: The Economist is lumping its labour

by Sandwichman

Thank God it’s Boilerplate!: It’s Thursday and The Economist is lumping its labour

The Economist and Jonathan Portes are at it again. “Lump of labor! Lump of labor!” The occasion? A proposal for a four-day workweek announced by the U.K. Green Party at their convention this week in Liverpool.

 The Economist pretended to find “two problems” with the Greens’ proposal:

The Greens’ proposals encounter two problems. First, the theory. They argue that the reduced hours worked by some could be redistributed to others in order to lower underemployment. They thus fall prey to the “lump of labour fallacy”, the notion that there is a fixed amount of work to be done which can be shared out in different ways to create fewer or more jobs. In fact, if people worked fewer hours, demand would drop, and so fewer working hours would be on offer.

Second, the cost. Increased productivity could cover some of the costs of paying a five-day wage for a four-day week, suggests Sarah Lyall of the New Economics Foundation, a think-tank. She points to a Glasgow marketing company that did just that, and experienced a 30% leap in productivity. But that is an astonishing increase to expect across the board.

First the theory: why does the idea of redistributing work require a “fixed amount of work to be done”? I can cut up a pie in many different ways. I can also cut two, three, many pies in different ways. In what sense does redistribution imply a constant amount? It doesn’t.

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Pence Makes Deciding Vote Allowing States to Defund Planned Parenthood

Second time Pence has cast the deciding vote in the Senate. Last VP to do so was Cheney in 2008.

VP Pence has made it no secret he is opposed to allowing women the right to decide on having an abortions. While in Congress, Pence sponsored the first bill to defund Planned Parenthood in 2007 and when it did not pass then he continued the effort until it did pass in the House in 2011.

More recently a Federal Court blocked a bill signed by then Indiana Governor Pence forcing women to have a funeral for the aborted fetus which would then go through a burial or cremation. The cost of the burial or cremation would have increased the cost of the abortion dramatically in Indiana. The court ruled Pence’s law would have blocked a woman’s right to choose.

If you remember VP Pence had used his tie breaker vote to approve Betsy DeVos as Secretary of Education. Today, VP Pence was again called upon to break a Senate tie involving the right of states to defund Planned Parenthood.

The Department of Health and Human Services under President Obama ruled organizations providing family planning and preventive health care services could not be barred by states from receiving Title X grant dollars for any reason other than those related to their “ability to deliver services to program beneficiaries in an effective manner.” It required states and local governments to distribute federal Title X funding for services related to contraception, fertility, pregnancy care and cervical cancer screenings to health providers without regard for whether those facilities also performed abortions outside of Title X. Title X funding covers services such as contraception, STD screenings, treatments and can not be used to pay for abortion services.

Weighing in after the tie-breaking vote to overrule President Obama’s Department of Health and Human Services, Senate Majority Leader McConnell had this to say:

“It was the Obama administration’s move that hurt ‘local communities’ by substituting Washington’s judgment for the needs of real people. This regulation is an unnecessary restriction on states that know their residents a lot better than the federal government.”

Not sure what needs McConnell’s real-people would have to block a woman’s decision to have an abortion which is not taken lightly by a woman and using it as an excuse to defund Planned Parenthood. It appears McConnell, Pence, and the Republicans are practicing a tyranny of a majority to disregard the rights of an individual in favor of their own views.

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Question; Have you Experienced the Same?

I was reading an article on one of the other blogs as written by an economist. In his article he discussed the 0.18% of total expenditures on one category. Then the blogger went on to describe the total expenditure as not being “18%, but rather a little less than one-fifth of 1 percent.” I asked the economist about the why of the additional explanation and whether this would be a legitimate fear that people might mistake 0.18% as being 18% and not less than 2 tenths of 1%. The answer was “yes,” he did not want the total expenditures in this category to be mistook as 18% as it was important. He went to greater length to explain it. He had experienced errors by others in misinterpreting a portion of a 1 percent as something greater than 1%.

Have you experienced the same innumeracy amongst others?

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The 27% Crazification Factor Again

New link from Steve Bennen at Eschaton reminds us of Robert Waldmann’s post from 2014:

The 27% Crazification Factor Again

Robert Waldmann | January 27, 2014

It’s that number again. As noted by Dylan Scott at TPM, according to the latest Pew poll 27% of US adults think that the Republican party “is more willing to work with the other party” than the Democratic party.For earlier appearances of 27% see Kung Fu Monkey

John: Hey, Bush is now at 37% approval. I feel much less like Kevin McCarthy screaming in traffic. But I wonder what his base is –Tyrone: 27%.John: … you said that immmediately, and with some authority.Tyrone: Obama vs. Alan Keyes. Keyes was from out of state, so you can eliminate any established political base; both candidates were black, so you can factor out racism; and Keyes was plainly, obviously, completely crazy. Batshit crazy. Head-trauma crazy. But 27% of the population of Illinois voted for him. They put party identification, personal prejudice, whatever ahead of rational judgement. Hell, even like 5% of Democrats voted for him. That’s crazy behaviour. I think you have to assume a 27% Crazification Factor in any population.

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Poor Salesman Great Grasp of Policy

I am aware of all internet traditions (with notably rare exceptions) and I think this might be another classic.

In a generally very good article in Politico Tim Alberta wrote “Ryan is poor salesman with a great grasp of policy” [skip] “After he unveiled the bill, leading health care experts on the right like Yuval Levin and Avik Roy trashed it as a poorly conceived mess; ”

So having a great grasp of policy is consistent with writing an immensely important poorly conceived mess. I am googling [Ryan salesman "great grasp of policy"] which only gives 142 results. Does seem twitter has taken over the snark industry. This thread burns. Also at least 1% of the US Senate took Alberta to task.

update: I was wrong. The classic is actually

TimAlberta

So the fact that Ryan’s polics don’t withstand scrutiny shows that Ryan has a great grasp of policy. OK I fell for it. Tim Alberta is just trolling me. He. will. not. make. my. head. explode. No he won’t.

end update:

I think the crazy claim shows a few things. One is that conventional wisdom is invulnerable to evidence. Ryan has been declared a super wonk by the cool kids, so the assertion is riskless. Another is that Alberta wasn’t thinking about policy (he wrote almost nothing about the content of the AHCA). Another is that he assumes that the problem for Ryan with Levin and Roy was that he didn’t flatter them enough and not that his bill was a poorly conceived mess (the preceding sentence was “There was no such effort on Ryan’s part, and it showed. (Several allies argued he had done some outreach, but they failed to provide any specific examples.)”). Finally, symmetry is dangerously tempting. The whole crazy claim is “If the bill failed because Trump is a great salesman with a poor grasp of policy, it also failed because Ryan is a poor salesman with a great grasp of policy.” This is symmetry at the expence of accuracy. Ryan is a brilliant salesman who has a weak grasp of policy.

I foolishly said that ignoring policy and discussing inside baseball is what Politico does, then found out that they also published an excellent article by Harold Pollack “Paul Ryan Failed Because his Bill was a Dumpster Fire”

update: Ouch

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Complacency Or Community Commitment? Human And Social Capital Reconsidered

by Barkley Rosser (originally published at Econospeak)

Complacency Or Community Commitment? Human And Social Capital Reconsidered

I have been poking at Tyler Cowen’s recent book on The Complacent Class, along with those who have praised it unstintingly, with my main complaint being that what he calls complacency may really be fear.  In an exchange posted today between Tyler and Noah Smith at Bloomberg, Noah makes many of my points, saying that what people who are not moving or changing jobs are doing is seeking “safety and security,” with “complacency” sounding like “blithe optimism.” Tyler then admits that “many people are afraid,” but then says that they are still complacent because they are not reacting “with urgency.”  He also says that a lack of increased income volatility shows that they do not have reason to feel they are facing more risks than those in the past did, although it looks to me like the greater risks they face are more due to higher payments they must make for health or education rather than greater volatility of income.  But this is not what I want mostly to address here, at least further.

I wish to go back to the implications of people not quitting jobs and not moving as much as they used to. Rather than rerunning the fear versus complacency point, I want to think about how this relates to human and social capital accumulation.  In particular, I think  that while people may increase their individual human capital by moving around more, there may be an increase in social capital from people staying in one place more.  This greater social capital may result in more committing by people to the quality of their communities, more engagement in civic groups, and so  on.  It may be that the human capital part means that greater mobility improves economic growth, but this may be at the expense of better quality of life and other parts of economic growth associated with having high quality communities with high social capital.

Since I am setting up in effect a competition between human and social capital, I must admit that some of  the early work on these matters,  especially by sociologists like James Coleman and political scientists like Robert Putnam, initially argued that they were linked, that social capital enhances human capital.  Now I am not going to deny that. Certainly a person with a larger network of trusting acquaintances may be able to be more productive in their work and have essentially higher skills than someone who does not. Nevertheless, I am going to note how they may also be in conflict.

A crucial issue here involves externalities.  I  think that social capital involves and leads to more externatities than does human capital.  Or, even if I am wrong, they will involve different kinds of externalities.

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Fifty Shades of Yellow? Post-Truth Then and Now

by Peter Dorman (originally published at Econospeak)

Fifty Shades of Yellow? Post-Truth Then and Now

Simon Wren-Lewis can’t take it anymore. I’ve just read his fulminations on the blatant dishonesty of right wing media outlets in the US and the UK, untethered to any residual professional attachment to standards of evidence and nakedly in the service of political ideologues. He’ll get no argument from me about that.

But I think his distinction between post-truth outlets and the other kind (pre-truth?) is much too clean. We won’t understand the new frontier of news/fiction unless we see what connects it to the rest of the media world.

A first hint appears in his discussion of the difference between UK and German media on the issue of immigration. The nativist tabloids in the UK bombarded its readership with several stories per day that dehumanized immigrants and presented them as threats to jobs, services and civil order, while their counterparts in Germany (e.g. Bild) had heartwarming portrayals of immigrants overcoming great odds to save themselves and their families. This is true; I saw it myself when I was in Germany during the runup to Merkel’s adoption of a Welcome Culture policy.

But this was also the period during which Greece, led by Syriza, faced off against Schäuble and his EU Wall of Nein. Here the ruling interests in Germany showed their other side, and the popular press was filled with made-up atrocities about the lazy, dishonest crew in Greece whose main purpose in life was to fleece the German taxpayer. (I posted here at the time about the false news, widely reported in Germany, that Syriza, financed by EU funds, had made rail travel free as a ploy to buy votes.) Obviously the probity of German journalism was selective.

And similar post-truth spasms have characterized media outlets in the English-speaking world ever since the advent of the printing press. These were in the service of fomenting war fever (the Spanish-American War, World War I, Vietnam, and Iraq, to mention examples from US history), demonizing labor organizers and civil rights activists or whatever cause needed a bit of extra buttressing.

If there is anything new, I think it might be on one of these fronts: (1) The doctrine that deceit and manipulation are virtuous in the service of the Cause, an element of fascism and Leninism alike, has now found a home in somewhat more mainstream ideologies on the right. A self-conscious defense of making stuff up increases its effectiveness, because embarrassment at being caught out is no longer a risk. (2) Post-truth is being deployed, to some extent, against the interests of the capitalist class, particularly as it attacks globalization. It is “out of control”, the figurative loose cannon on the deck of the battleship, rolling around and capable of firing in any direction. It needs to be domesticated again.

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The Battle for Healthcare in the US

In 2026, an estimated 52 million would be uninsured in the US, a dramatic reversal from the 2016 uninsured count of 28/29 million. Pretty much, the Republicans will put healthcare back to the way it was pre-2014 if Paul Ryan’s bill is passed by Congress and Donald signs the bill in its present form.

- By 2018, 14 million could be uninsured with many of the uninsured practicing the tyranny of a minority, as John S. Mill might call it, upon the rest of the insured population as they drop out. Others will simply lose healthcare insurance as states withdraw from the Medicaid expansion and employers drop the coverage they were required to carry as they had 50 or more employees. Many of today’s insured will be unable to afford the increased premiums due to smaller subsidies. The elderly will be faced with smaller subsidies and a higher 5:1 ratio premium, which is up from the present 3:1 under the ACA program.

- Doctors, clinics, and hospitals have seen increased numbers of patients coming through the front door rather than the rear door due to the expansion of Medicaid to 138% FPL and subsidies for healthcare insurance to those under 400% FPL. My own PCP has seen many new patients who have never been to a doctor before except at the ER. With the proposed reversal of the mandate to have healthcare insurance and the dropping of Medicaid, it will fall upon hospitals and doctors to still provide stabilizing care as defined by law to all who arrive at their door. Except this time, the subsidizing payments for care for the uninsured to hospitals and clinics will not be available as it was reduced with the advent of the PPACA. It appears the AHA is not too pleased with Paul Ryan’s AHCA bill either.

- Our new Health and Human Services Secretary Tom Price had this to say; “You’re falling into the same old trap of individuals who are measuring the success of Medicaid by how much money we put into it. We ought not be measuring programs by how much money we put into it, we ought to be measuring them by whether or not they work.” Or take one aspirin and you will be alright in the morning. Interestingly, Republicans are happy with constituents paying a surcharge/mandate for not having healthcare insurance or healthcare. And if they suddenly have to have healthcare insurance, they pay the penalty to private companies rather than use it to fund subsidies. Who would have thought?

- Medicaid currently is not working according to Tom Price and as many as one in three doctors are not accepting Medicaid patients. That part is partially true. In a survey of its membership, the American Academy of Family Physicians discovered 68% of its members accepting new Medicaid patients in 2016. This is the highest level of Medicaid acceptance since 2004. The same argument was made for Medicare in the past. As Health Beat’s Maggie Mahar has said, “if Medicare is the largest business in town, are you going to ignore it or work within its confines?”

- Mr. Price argues on behalf of states claiming the granting of greater flexibility would result in better results and quality. My own observations with Michigan Medicaid when there was no Federal Government expansion disagrees with Tom Price’s claims. Michigan State Senator Joseph Hune said it all in one sentence when he stated; “I am ‘sick to his stomach with the expansion of Medicaid in Michigan.” Even with the expansion, the state legislature delayed the implementation of it to the following year so they could go on Christmas vacation and lost $thousands in Federal aid. This occurred in a state which can not fix its roads and bridges, argues about replacing Flint lead pipes, and wastes money going to 6th District COA and SCOTUS because it does not like rulings conflicting with its absurd beliefs. After all, Hune and his associates have their healthcare for life having been in the legislature for short periods of time; why should 600,000 Michigan residents matter to Hune and his associates.

Pre-Michigan expansion in order for adults to be insured and they had to be working. If they were working they had to be making just so much in order to be eligible. If they were not working, they were ineligible. Michigan and State Senator Joe Hune did their damnest to block people from access to healthcare. If this is Tom Price’s better results and quality, it did not work then and will only make it worse now.

- Joan Aker at Georgetown University Healthcare Policy Institute puts greater state flexibility into perspective:

“So in practical terms what does that mean? States could get new flexibility to limit enrollment. They could gain the ability to limit enrollment directly by imposing enrollment caps or rolling back eligibility; or indirectly by putting up barriers such as imposing work requirements or lockout periods, which reduce enrollment. States could also gain more flexibility in determining what benefits people receive (in the case of children this might mean limits on the child-centered EPSDT benefit) or on how much families have to pay for those services (including premiums, cost-sharing or spend down rules before seniors qualify for long term services and supports). In fact, one piece of this so-called “flexibility” that is included in the repeal bill would allow states to require seniors to spend down even more of their assets before qualifying for long-term care services and supports by placing restrictions on how much equity seniors can have in their homes.” We did this in Michigan already and pre-PPACA.

- The AHCA penalizes the poor and elderly more severely than the ACA did. The ACA has a penalty for not getting healthcare insurance, which is based on the income of the uninsured and is paid yearly at tax time. The AHCA also has a penalty for not getting healthcare insurance. It is based upon the premium you would pay, not income, and each person pays the same penalty regardless on income; however if you are older, the 5:1 ratio will apply to your penalty. As I showed using a Avalere* chart, a 27 year old person making $11,880 annually would be paying $695 at tax time under the ACA and under the AHCA plan $1,006 for a bronze plan.

If the insured was 50 years old and made $11,880 annually, the penalty under the ACA is determined by income and remains the same; however under the AHCA, the penalty under a Bronze plan format jumps to $1,713. This is an ~ $700 difference between a 27 year old and a 50 year old. If it is a Silver plan add ~100 dollars for a 27 year old and ~ $250 for a 50 year old. Whether 27 or 50 and making $11,880 annually; the payment is harsh and is harder to pay the larger it gets.

As I get more information I will pass it on. There is much going on at a rapid pace and it takes a bit to gather it up.

*After leaving the White House Office of Management and Budget in 2000, Dan Mendelson founded what is today Avalere firm and initially named it The Health Strategies Consultancy LLC.

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