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Barack Obama: a noble failure

(Dan here…NDd takes a shot at evaluating the President Obama legacy.)

by New Deal Democrat

Barack Obama: a noble failure

Let me preface this essay by saying that I voted for Barack Obama twice, in both 2008 and 2012. In fact in 2008 I supported him in the primary against Hillary Clinton, who I believed had a ceiling of support at about 52% or 53% even under even under the most favorable of circumstances (which certainly seems correct now!). I believed Obama was simply more capable of winning the Presidency, and I believed he could overcome his weaknesses and grow into the job.  By and large he did, but it took 5 full years before he finally gave up on his central, failed approached to governance.  I believe that failure is going to cause him to be ranked, over time, in the bottom half of all Presidents.

“There is no red or blue America,” Barack Obama declared in the 2004 convention speech that first brought him fame.  His presidency was largely based on that premise.  I think very few people would agree with that statement now.  This worldview was epitomised in his 2009 Inaugural Address:

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas, that for far too long have strangled our politics.

….[E]verywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act ….
….
What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply.
For we know that our patchwork heritage is a strength, not a weakness…. [W]e cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve ….

But on that very same day in 2009, Mitch McConnell and other GOP leaders also met, and resolved a strategy of total intransigence, to deny Barack Obama any bipartisan victories whatsoever.

Asked about that strategy early on, Obama replied that if Republicans would not come to the table with him, then they would miss the chance to have their imprint of the solutions to big problems. Rather than be shut out, they would negotiate with him for bipartisan Great Solutions.

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Aurora, Colorado; Republican Congressional Representatives in Action

In Colorado, on Saturday, Republican Rep. Mike Coffman held an event for his constituents at a
Coffman a public library in Aurora, Colorado. At least 150 constituents showed up, most of them hoping to ask Coffman about his recent vote to repeal the Affordable Care Act and his plans for a replacement. But only about 70 people got to meet with Coffman: Despite booking a large room with ample space, Coffman allowed in only four constituents at once for five minutes at a time. When the crowd grew restless, police put up crime scene tape and Coffman snuck out the back door—six minutes before the event was scheduled to end.

Coffman co-authored a Denver Post op-ed on Friday urging the full and immediate repeal of the ACA. About 419,000 Coloradans have gained health care coverage since the enactment of the law, and many of them stand to lose their insurance if it is repealed. Yet Coffman has not proposed a clear replacement for the law, an issue constituents hoped to ask him about on Saturday. “I am potentially going to lose my health insurance,” Berthie Ruoff told NBC 9 while she waited to meet with her representative. “I’ve had a preexisting condition. I’ve had breast cancer. What’s going to happen to me? My spouse who had health insurance passed away. What do I do? You know, what am I supposed to do?”

But neither Ruoff nor many other constituents who stand to lose coverage had an opportunity meet with Coffman. When it grew clear that Coffman would refuse to meet with a majority of those at the event, the crowd channeled its agitation into patriotic songs:
This show of unity, however, did not impress Coffman. Indeed, it appears to have scared him: Rather than address the crowd, Coffman had police officers secretly escort him out of the back door before the event was set to conclude.

A few people noticed Coffman sneaking out and attempted to address him. “Next time,” one woman pleaded, “please be sure you hear all your constituents!” Coffman ignored them, hopped into a waiting car, and drove away.

“Have a good afternoon!” yelled another exasperated woman.

GOP Rep. Sneaks Out of Townhall Meeting, Mark Joseph Stern, Slate, January 15, 2016

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Millions Are Uninsured

When People claim “Millions Are Uninsured Under the PPACA,” it is a garbage statement meant to elicit a negative reaction without going into the detail of who is uninsured and why. Repeatedly Charles Gaba, Maggie Mahar, Commonwealth Fund, Urban Institute, Kaiser Foundation, etc. have explained the numbers and the whys of the uninsured, most of which are not the fault on the PPACA.

I see commenters come to AB and outside AB discussing the uninsured. Some being legitimate bloggers claim “millions are uninsured” and some have exaggerated it even more with citing “tens of millions” with their credibility disappearing as they can not recite the make-up of or the reasons for the number as they do not know it or are trying to make a political statement. The latter being worst than the ignorance of the former.

invisible hand

There are reasons for the uninsured as detailed by Kaiser Family Foundation. For example, Republican states which do not allow expansion of Medicaid accounts for 2.6 million, undocumented citizens 5.4 million, those eligible for Employee sponsored insurance 4.5 million, and 3.0 million who could have unsubsidized insurance. Then there are 6.4 million adults and children eligible for Medicaid and another 5.3 million eligible for Premium Subsidies and for some reason have not chosen to be insured. Some states like Michigan do make it difficult to enroll in Medicaid. These are the Kaiser numbers for 2016 and they total ~27 millionfor uninsured and why. A “tens of millions” uninsured is a BS numeric when we start accounting for Republicans blocking Medicaid Expansion in states, undocumented immigrants, ESI available insurance, 6.4 million eligible for Medicaid, and another 5.3 million eligible for subsidies. Other than undocumented citizens and states blocking the Medicaid Expansion, there is access to healthcare insurance in one form or another through the PPACA, much of which exists today due to the PPACA, or Employer Sponsored Insurance. When we account , the number drop as there are those without subsidy who chose not to be insured, others who could be on Medicare or have Premium subsidies, and those who could have Employee Sponsored Insurance.

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When Did Hillary Lose the Election? In 1964.

The half-century story of Democrats’ abdication and decline

By Steve Roth. Publisher, Evonomics

On January 1, 1964, John F. Kennedy posthumously initiated the half-century decline of the Democratic Party, beginning its descent into this moment’s dark and backward abysm of slime. His massive tax cuts for the rich, implemented in ’64 and ’65, were the turning point and beginning of Democrats’ five-decade abandonment of its longtime winning formula: full-throated, unabashed, progressive economic populism. It was the signal moment when Democrats began to abandon the working and middle class. The working and middle class, betrayed and feeling betrayed, have now returned the favor.

Unapologetic progressive economic populism — starting really with Teddy Roosevelt’s slash-and-burn trustbusting, and turned up full-throttle in his namesake’s New Deal — had given Democrats three decades of electoral success. FDR lost two states and eight electoral votes in 1936. He got 523 out of 531. Over four campaigns, he never got less that 432. Eisenhower got a couple of terms as a very moderate Republican, really a progressive, but Democrats’ dominance of Congress and state governments seemed eternal.

Because: that economic populism also delivered success for America. The New Deal, combined with the government deficit spending of World War II, resulted in the greatest burst of widespread growth, progress, prosperity, and individual economic freedom in American history — before or since.

James Carville was certainly right: “It’s the economy, stupid.”

Democrats’ remaining progressivism under Johnson — civil-rights legislation, Medicare and Medicaid, and the wholesale movement of liberated women into the workforce — eventually pushed a hot middle-out economy into the demand-driven inflation of the 70s. That torrid growth brought government debt down from 120% of GDP in 1947, to 35% in 1980. (You know what happened after that.)

But even amidst that burst of growth and sustainable government finance, Democrats were abandoning the very source of their economic and electoral success. Kennedy’s top-tier tax cuts were a preemptive, voluntary abdication to trickle-down theory, before “trickle-down” even existed. When Reagan turned that dial to eleven, he was only occupying ideological ground that Democrats had ceded and abandoned to the enemy, long before. It was an epochal own-goal of historic proportions.

Democrats have been kicking the economic ball into their own net ever since. The obvious solution to the 70s inflation was to raise taxes, reducing government deficit spending, to drain off excess demand from a too-hot economy. Instead they acceded to the banker-industrial complex and the diktats of childish monetarism, again conceding the win to an economic belief system that is egregiously self-serving for the rich, and anathema to Democratic progressive economic populism.

That’s when the enthusiastic, progressive Democratic base stopped turning out in force. (Exception: Obama. For other reasons.) Progressive baby boomers have spent their whole lives voting against Republicans and their swingeing, destructive economic policies, not for inspiring Democrats. Think about the Democratic presidential candidates since 1964. McGovern was a true social progressive, but really a one-issue anti-war candidate. Bill Clinton did okay, within the confines of the post-Reagan economic belief system, which he never seriously challenged as FDR did. Obama didn’t either, in rhetoric or practice. His administration’s failure to prosecute a single prominent bankster is arguably the best single explanation for Hillary’s electoral meltdown.

Can you name one full-throated economic progressive Democratic candidate in the past half century? I’m not even asking for fire-eating. Here’s some help: Humphrey. Carter. Mondale. Dukakis. Gore. Kerry. (Are you still awake?) Aside from Obama, no Democratic candidates had the Democratic base flocking to the polls. (Compare: Republicans and their rabid Tea-Party base.) Add Hillary to that rather stultifying list.

Starting in the 60s, Democratic candidates stopped delivering an inspiring economic message. But the real failure was substantive. In their sellout to the enrich-the-rich supply-siders, Democrats abandoned the working and middle class, and the party’s winning legacy of widespread prosperity. The Democratic party elite bought into and helped promulgate an economic belief system (the “Washington Consensus”) in which distribution and concentration of wealth and income not only don’t matter, they can’t matter. The quite predicable results are upon us — decades of working-class wage stagnation, and wealth concentrations that are as high or higher than any period in modern world history.

It’s no wonder the Democratic base feels betrayed. They were betrayed.

Still: despite those decades of weak-kneed collaborationism, Democrats have obviously remained more economically progressive than Republicans. Clinton and Obama managed to raise taxes some, and Obama gave us Obamacare. And the economy has shown the results. Democratic presidents have delivered growth, progress, widespread prosperity, individual economic security, and true personal economic “freedom” that Republicans — the self-proclaimed “party of growth” — can only imagine in their fever dreams.

By almost any economic measure — GDP or income growth, job creation, stock-market runups, deficit reduction, people in poverty…choose your measure — Democrats’ economic performance has unfailingly beggared what Republicans have offered up. That is true for any multi-decade period you choose to look at since World War II, or over the last century for that matter. It’s true at the national, state, and local levels. Republicans constantly promise prosperity and growth. Democrats consistently deliver it (at least compared to Republicans). They’ve kicked Republicans’ economic asses, decade after decade.

Bigger pie? Raise all boats? Talk to the Democrats.

But nobody seems to know that. Did you? And Democrats never even say it — much less repeat it endlessly over decades, shouting it from the rooftops to stir up the base as Republicans would. The old saw is apparently right: “A liberal is someone who won’t take their own side in an argument.”

Perhaps that failure is a result of progressives’ fussy squeamishness about people getting rich. They don’t really like that word. But voters do. A third of Americans’ think they’ll be rich someday. Fifty percent of 18–29-year-olds do. (About 5% of Americans actually are rich, with more than couple of million dollars in net worth.) That squeamishness explains the persistent “anti-capitalist” strain of American liberalism, which is such an electoral disaster at the voting booth.

Democrats have much to atone for in their failure to hold the line on progressive economic principles, their failure to wholeheartedly champion and defend the working and middle classes, their sellout and abdication to the bankster class. But they also have much to crow about. Instead, though, they’ve stood by for decades while Republicans have falsely claimed the “party of growth” moniker, contrary to all historical evidence.

It is the economy, stupid. Voters, Democratic and Republican alike, will tell you in surveys about all the things they care about. But when they walk into the voting booth, they’re going to choose the person who they think will make them, their families, and those around them more prosperous, comfortable, and economically secure. They vote for candidates who they think will deliver better lives — starting with people having enough money to pay the bills. The Republicans realized that forty-plus years ago, and they’ve been winning based on that ever since. “I’ll cut your taxes and deliver economic growth.” Full stop, drop the mic.

Trump showed us that fire-breathing populism wins elections. While his brimstone reeked of many things, economic populism was at the core of his rhetorical fur ball. Even as he prepared to betray the working class at unheard-of levels, he channeled that betrayal straight onto his vote tally. “Audacity”? Obama should grab a stool and go to school.

And Bernie showed us the same thing. His campaign was unprecedented in American political history, funding a full-boat national campaign and outspending Hillary by 25 million dollars, almost completely with small donations. His message of economic populism brought in more than 200 million dollars in donations from 2.5 million people. And he turned out the enthusiastic base, in droves. Presumably he would have done so on election day, as well. Are Democratic political operatives finally beginning to take note?

There is a path out of the wilderness for Democrats. It’s the path they’ve trod before, with huge success. It involves (for once) coalescing around a core message that resonates with all Americans, repeated endlessly over years and decades. “Equality” and “opportunity,” important as they are, are weak beer on the campaign trail. Most Americans change the channel.  Tell them what they want to hear:

“We make America rich.”

The double meaning is fully intended.

 

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The Cost of Repealing the PPACA

Would love to tell you; but, Randian House Leader Paul Ryan along with most of the Republicans voted on a Bill restricting the CBO from examining what the cost would be. The vote was 234 Repubs “for” restricting the CBO to 193 (190 Dems + 3 Repubs) against restricting the CBO examining the cost automatically. I wonder why they are afraid of the CBO examining the cost resulting from the repeal of the PPACA?

An earlier June 2015 study had this information. “Excluding the effects of macroeconomic feedback—as has been done for previous estimates related to the ACA (and most other CBO cost estimates)—CBO and JCT estimate that federal deficits would increase by $353 billion over the 2016–2025 period if the ACA was repealed.” CBO Estimate. I chose the harsher number as this I believe is a fairer numeric to take into consideration. A lesser number is $137 billion over the same 10 years.

I suspect the number is higher as the Repubs are restricting the CBO from weighing in on their plans.

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Repealing the PPACA

I am back to the Henry J. Kaiser Family Foundation, as it gives an accurate assessment of what the public really wants with healthcare insurance rather than a political view. Given that Senator Sessions, and Rep. Upton, and Rep. Kingston stopped all funding of the Risk Corridor by placing a sentence in Section 227 of the 2015 Appropriations Act (dated December 16, 2014) effectively eliminating the financial assistance to Co-ops and Insurance companies; it comes as no surprise healthcare insurance premiums would rise, Co-ops would be especially hit hard and go bankrupt, and healthcare insurance companies would leave the PPACA insurance exchanges all together. For sure, we have seen healthcare insurance premiums go up due to the unregulated healthcare industry, less competition due to fallout of companies and bankruptcies, and mostly because of the impact of Section 227 of the 2015 Appropriations Act (dated December 16, 2014). This was a well-orchestrated attack on the PPACA by Republicans, Senator Jefferson Beauregard Sessions, Rep. Fred Upton, and Rep. Jack Kingston to disrupt healthcare coverage, claim to be saving taxpayers money, and shift the blame for increased out-of-pocket costs to the PPACA and President Barack Obama.

invisible hand Kaiser does a good job of tracking trends with little of the political bias you might see in other polls. The number one concern of the Democrat and Republican constituency is not repealing the PPACA; but, lowering out-of-pocket costs paid by individuals such as premiums, co-pays, and deductibles. 93% of the people polled found this to be a #1 priority followed by lowering the cost of prescription drugs (89%). For sure, Sessions, Upton, Kingston, and their fellow Republicans have aggravated the healthcare premiums costs by restricting the Risk Corridor funding and are hiding in the weeds knowing they put one over on the Dems and the voters. The opportunity was there for Repubs to work with Dems and come up with ways to lower the overall out-of-pocket cost. Republicans let it go by for political reasons and now we have the head Randian Republican Paul Ryan trying to kill the PPACA, Medicare, Medicaid, and Social Security. To replace them, you will get tax vouchers for each of those programs and a copy of “Atlas Shrugged” telling you to tough it out and be independent. This is coming from a man who has been in politics much of his life, has worked little in the private sector, went to college on Social Security Survivor benefits, and occasionally drove the OM Wiener Mobile around. Unlike ours, Representative Ryan’s congressional healthcare and retirement are a sure thing.

There are those in Congress who wish to repeal the PPACA in favor of whatever might be better as determined in their own minds. It took a long time to get to this point and the last time someone made an attempt at healthcare coverage was in the early nineties by someone named Clinton. In the early nineties, Congress did not like a President telling them what to do which is why Obama had Congress write the PPACA . . . well at least the Democrats put together the PPACA with no input from Republicans. In the chart above, 58% of the constituency favors repealing the PPACA. It is a majority; however within that majority, there are some other questions to be answered. This particular Kaiser Poll is dated December 13, 2016 so it has some relevance to invisible hand what is going on today. For example, most Americans prefer Congress to either not repeal the PPACA or at least wait until the detail of the alternative plan is revealed. The second chart gives the percentages. 75% do not want to repeal and want to know “first” what is going to replace the PPACA before repealing.

The percentage of who oppose and support the PPACA shifts with the argument being made for or against. Sometimes the phrasing of the question can determine or lead to the answer given. While healthcare is one of the top priorities for the President – Elect and Congress, repealing the PPACA is not the first or even the second actions the constituency wishes the President to take as shown by the Kaiser pie and bar charts. Overwhelming the constituency wants to know what will replace the PPACA before Congress acts. Furthermore the constituency would rather see Congress deal with lowering out-of-pockets costs first, fix pharmaceutical costs second, and deal with the Opiod epidemic before even deciding on repealing the “catastrophic event ” Mr. Trump called it today. By asking for an immediate repeal of the PPACA by Congress, perhaps Mr. Trump is attempting to distract attention away from the Senate Confirmation Hearing of Senator Jefferson Beauregard Sessions an AG candidate who has some serious issues challenging his candidacy. We can be just as lively in both political arenas.

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Risk Corridor, Healthcare Premiums, Companies Leaving the Exchanges, and Republicans

The Washington Post story “Rubio’s inaccurate claim that he ‘inserted’ a provision restricting Obamacare ‘bailout’ funds” is about a year old. Its relevance to the PPACA is in depicting how the Republicans undermined the PPACA causing many Co-ops to go bankrupt, insurance companies to leave PPACA exchanges, saddled insurance companies with $millions in debt, and is a reason for much of the premium increases. I am not pro-insurance; but, this effort to get even with Obama has set the stage for what will negatively affect millions of the insured.

I had written earlier about Rubio playing a part in cutting the funding for the Rick Corridor funding. He did play a not-so-critical part and while researching some additional information I ran across a better explanation.

The Risk Corridor program in the PPACA protects insurance companies from losses during the first three years if they did not estimate premiums properly which can happen in new markets with different characteristics. With the mandate to insure all with pre-existing conditions, keeping children on parents plans, the exchanges, etc.; the Risk Corridor program was put in place (besides two other safe guards) giving insurance companies and Co-ops a three year window to get it right. Besides looking at losses, the Risk Corridor also looked at the profits of companies who had estimated accurately, had excess profits as a result, and required them to pay a ratio of excess profits into the Risk Corridor fund to help underwrite the losses of other companies. Outside of a plus or minus 3% was the basis for whether you gave up a ratio of profits or received a ratio of funding from the Risk Corridor program. The Risk Corridor program is nothing new and was used successfully with Medicare Part D forcing the evil insurance companies to share profits with the government. It still is in place for Part D and “still” generates additional revenue for the government. I do not recall any Republicans complaining about funding for insurance companies then; but then too, Part D was Bush’s legislature while the PPACA legislation was Obama’s. Strictly politics and constituents will pay the price of it.

Depicting the Risk Corridor particulars rather than attempting to explain it in writing will give a better explanation. Click on the image to better read the chart. Please note the plus or minus 3% and then the different ratios of revenue sharing or funding from and to healthcare companies and Co-ops.

invisible hand So what happened? The Risk Corridor program works well for Part D, brings in revenue for the government, and is still in place. February 2014 found Rubio testifying to the House Committee on Oversight and Government Reform on behalf of his bill. At the same time the CBO released their evaluation of the Risk Corridor program. Instead of being detrimental and a fiscal drag, the CBO projected the federal government would collect $16 billion from health insurers. Premiums would outpace claims, $8 billion would be distributed to the plans losing money, and $8 billion in additional revenue would be left for the federal government. Another House probe suggested initially there would be a shortfall with claims exceeding premiums.

The Republicans were not sitting idle and were investigating ways to derail the PPACA. As the ranking member of the Budget Committee, Senator Jeff Sessions and the chairman of the House Energy and Commerce Committee, Rep. Fred Upton came up with a plan to attack the legality of the Risk Corridor payments. They joined forces with the Appropriations Panel Chairman Rep. Jack Kingston whose panel funds the Department of Health and Human Services and the Labor Department. Kind of get the picture so far?

Questioning whether the Risk Corridor payments were being appropriated correctly, the Appropriations Panel forced the HHS to make changes in how they appropriated funds allowing Congress to stop all appropriations. The PPACA could no longer appropriate the funds as they were subject to the discretion of Congress. The GAO issue an opinion on the legality of what the HHS was doing with funds.

GAO Letter to Senator Jeff Sessions. September 30, 2014: Discussion; “At issue here is whether appropriations are available to the Secretary of HHS to make the payments specified in section 1342(b)(1). Agencies may incur obligations and make expenditures only as permitted by an appropriation. U.S. Const., art. I, § 9, cl. 7; 31 U.S.C. § 1341(a)(1); B-300192, Nov. 13, 2002, at 5. Appropriations may be provided through annual appropriations acts as well as through permanent legislation. See, e.g., 63 Comp. Gen. 331 (1984). The making of an appropriation must be expressly stated in law. 31 U.S.C. § 1301(d). It is not enough for a statute to simply require an agency to make a payment. B-114808, Aug. 7, 1979. Section 1342, by its terms, did not enact an appropriation to make the payments specified in section 1342(b)(1). In such cases, we next determine whether there are other appropriations available to an agency for this purpose.”

Further down in the GAO letter, the GAO leaves the HHS an out of using other already available appropriations for the Risk Corridor payments to insurance companies. Classifying the payments as “user fees” was another way to retain the authority to spend other appropriations already made by Congress. Otherwise if revenue from the Risk Corridor program fell short, the administration would need approval for addition appropriations from Congress. As it was, the HHS could no longer appropriate funds to make Risk Corridor payments unless the funds were already appropriated by Congress or Congress approved new funds which was not going to happen with a Republican controlled House.

Appropriations Panel Chairman Rep. Jack Kingston put the final nail in the coffin by inserting one sentence in Section 227 of the 2015 Appropriations Act (dated December 16, 2014) which escaped notice. In the 2015 Appropriations Act, the sentence inserted said no “other” funds in this bill could be used for Risk Corridor payments.

Sec. 227. None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transferred from other accounts funded by this Act to the “Centers for Medicare and Medicaid Services–Program Management” account, may be used for payments under section 1342(b)(1) of Public Law 111-148 (relating to risk corridors).

This action blocked the HHS from obtaining any of the necessary Risk Corridor funds from any other Congressional appropriated program funds.

Nothing was said by Sessions, Upton, or Kingston before passage on what they had managed to do. It was Rubio who issued a news release saying the provision was appropriate even though he had little to do with it. In the end, Rep. Jack Kingston’s one sentence purposely created a $2.5 billion shortfall in the Risk-Corridor program in 2015 as the HHS had collected $362 million in fees. Insurers who had misjudged the market sought nearly $2.9 billion in payments, many nonprofit insurance Co-ops failed, healthcare insurance companies began to raise premiums to compensate, and some healthcare insurance companies recognizing an untenable environment created by Republicans took their losses and left the market.

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How do Americans get rich? (and stay rich?)

Originally published at Evonomics and reposted at Naked Capitalism, Angry Bear Steve Roth continues his conversation on riches, income, debt, and expectations. Steve Roth serves as Publisher of Evonomics.

By Steve Roth

How do Americans get rich?  (and stay rich?)

It’s the American dream. A third of Americans think they’ll be rich someday. More than half of 18–29 year olds think they will be.

Less than 5% actually make it.* And many of those do it the old-fashioned way: they inherit it. About 60% of U.S. household wealth is inherited. Between a quarter and a third of Forbes 400 billionaires got rich that way. It may not be the most common way to get there, but it’s widespread, and it’s surely the easiest way.

That aspiration to wealth is deeply understandable. Getting high income from a good job is all well and good, but because wealth begets more wealth — people are compensated simply for owning things — wealth is, potentially, forever. It persists, and spreads through families and dynasties. Wealth can, and often does, endure for generations.

So it’s worth asking: how do Americans accumulate wealth? And how does that vary across income and wealth classes? How do the bottom 50% accumulate wealth, for instance, compared to the top 1%?

The Distributional National Accounts

A huge aid to answering that question arrived last month. Gabriel Zucman, Emmanuel Saez, and Thomas Piketty (PSZ) released one of the most important pieces of economic research in the last century. Their Distributional National Accounts (DINAs) reveal the distribution of national income to different income classes, wealth classes, age groups, and genders (and potentially different races, etc. etc.). This has been unavailable in the national accounts, and as a result it’s absent in most macroeconomic empirical work.

Here’s one poster exhibit:

Collect the whole set.

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Why Healthcare Premiums are increasing Faster than Healthcare Costs

invisible hand In the first three years of the PPACA, a Risk Corridor Program was established to help insurers get past the initial loss phases. This is typical of startups and was used with Republican President George Bush’s Part D Drug insurance program. The PPACA had built-in protections for insurers who enrolled many abnormally sick people, provided backup payments for very high-cost cases, and protected against big losses and gains during the first three years. Due to eliminating all “pre-existing conditions” with the implementation of the PPACA, this was the protection for companies and the incentive to take on the people with health issues. Not only did it help Insurers cover their losses; but, it was an incentive for insurers not to increase premiums. Much of the funding for the program comes from the Federal Government and profitable Insurance companies paying into the Risk Corridor fund which unprofitable companies use to recoup losses. However in the first three years losses exceeded funding from profitable companies due to a Republican Congress passing laws forcing the Risk Corridor Program to be budget neutral leaving 12.6% of the necessary funds available to make insurance companies whole. As many probably know, the shortfall of funding already forced many CO-OPs to go bankrupt and resulted in Healthcare Insurance companies pulling out of the Exchanges.

Those Healthcare Companies still a part of the PPACA have gone to Federal Court to sue the administration for sustained losses. Moda Health sued the administration for $191 million due to losses in implementing the PPACA supposedly covered by the Risk Corridor Program. Moda has dropped its program in Alaska as a result of its losses and has only received ~$14 million. The Risk Corridor Program ended in 2016 and companies now face the issue of never recouping losses beyond just this.

Interesting how the Republicans have been the proverbial slugs in the process and took advantage of the crisis they created by forcing the PPACA to be budget neutral when the Part D Drug Program had no restrictions. They limited how the PPACA can fund the same Risk Corridor Program used for George Bush’s Part D Program. In September of this year, “ five Republican Senators sent HHS Secretary Burwell a letter demanding how HHS is handling a much-maligned insurance provision within the Affordable Care Act. Earlier this month, the CMS had sent a memo to health insurance companies that said the agency would not be making risk-corridor payments for 2015 because any collections would be used to cover the $2.5 billion shortfall from 2014.”

Under the PPACA Budget Neutral Act passed by the Republicans, the administration (DOJ) must now defend the law claiming they were not guaranteed the massive payouts in the first place. In November Republicans introduced the “HHS Slush Fund Elimination Act,” which restricts the Administration from using any Federal funds for the Risk Corridor Program to settle with the healthcare companies owed money.

“We are going to repeal and replace Obamacare but, in the meantime, the last thing Americans need is for the Obama Administration to sneak in one last bailout on its way out the door,” Sen. Ben Sasse (R-Neb.)”

You can see;

- Why United Healthcare pulled out of the PPACA Exchange early as it did when a Republican controlled Congress reneged on the funding for the Risk Corridor Program to cover losses in the startup of the PPACA.

- Why Healthcare Insurance companies losing money would resort to increased premiums to compensate for the lack of Risk Corridor Program funds to cover the startup and losses.

- Why the Part D Drug companies have become successful and competitive amongst each other due to their successful startup with the availability of Risk Corridor Program funds.

All of this was an effort to deny the PPACA an opportunity to be successful by a Republican Congress who would deny its constituents healthcare just to get even with a President they did not like and deny him a legacy. Risk Corridors and associated programs still exist and will continue to exist for Medicare Part D; but then, this was pre-Obama and occurred under Republican President George Bush. No one called it a bailout then.

Furthermore, do you think any healthcare insurance company would ever want to be a part of a Government Healthcare plan for the public as implemented by Republicans after they have been repeatedly screwed by Congressional Republicans?

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Election Integrity

From the beginning of this election cycle President-Elect Trump claimed the system is rigged, millions of illegal voters voted, the dead have voted, etc. That is until he won and then it was I also won the popular vote as millions voted illegally for Clinton. Historically, voter fraud has hardly been an issue and it has been measured in the tens of thousands of 1%. What is claimed to be voter fraud is usually voting irregularities or issues with the procedures and process of voting. Even though there is no evidence of wide spread voter fraud, it has not stopped states from putting in place new laws to supposedly safe guard the vote and at the same time making it more difficult to vote. Amongst those states who have installed new requirements to vote or register are “9 of the 15 previously covered in whole or in part by Section 5 of the Voting Rights Act because of a state’s history of preventing minorities from voting.

The Electoral Integrity Project is an independent academic project at Harvard University and the University of Sydney. It is directed by Harvard University Professor Pippa Norris and governed by an International Advisory Board. Using 726 political scientists based in local universities in each state, the EIP evaluated the process and procedures of voting in each state using 49 core indicators which were then grouped into 11 ranking categories. The highest attainable ranking in any one category is 100 points. The project reviews the entire electoral cycle from the pre-election stage, the campaign itself, the actual polling day, and the aftermath. The results of the 2016 election and the corresponding state rankings are in Figure 1 (click on the picture for a larger version).

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In speaking for the SCOTUS majority vote of 5, Chief Justice John Roberts repealed Section 5 of the Voting Rights Act claiming things had changed dramatically since the 1960s. Congress could no longer require states and counties to get the approval of the Department of Justice to change plans or put in place requirements for minorities to vote. The thought was the additional approval and supervision by the DOJ was no longer needed as these jurisdictions could be trusted to treat minorities fairly going forward.

State wide voting restrictions directed at minorities were viewed as a problem of the past when discrimination was blatant. With the passing of decades it was felt these States had outgrown past biases with minorities and could be allowed to govern voting rules and regulation on their own by SCOTUS. Evidence of such was not so positive and recent reviews show the states in the South had the weakest electoral performance overall in 2016. The newly passed North Carolina GOP State House laws to restrict the power of Democrat Governor Roy Cooper before he takes office suggest such thoughts of fairness were optimistic. The Rust Belt ‘Blue Wall’ states of Ohio, Michigan, Pennsylvania, and Wisconsin were also problematic. By contrast, the quality of elections in the Pacific West and New England were viewed positively.

Figure 2 shows the ranking of each state amongst the other states for “perceptions of Electoral Integrity” from the highest Election Integrity at 1 (Vermont) to the lowest Election Integrity (Arizona) at 51 (Click on the picture for a larger version).

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Vote counting, the Voting Process, and the role of Electoral Authorities were shown to be less problematic than Congressional Voting District Boundary Delineation, State Electoral laws, Campaign Media, and Political Money in the Electoral process. North Carolina comes in at #1 followed by Wisconsin, Ohio, Pennsylvania, Michigan, Texas, and South Carolina for Congressional Voting District Delineation. The aggregate for Congressional Voting District Delineation is 33 and is the lowest of the 11 categories with Electoral Laws (Voting IDs, Early Voting, Provisional Ballots, etc) being next.

It is no secret, delineation of state Congressional Districts has led to additional Congressional Representatives of a political party being sent to Congress. As an example, Michigan has had a greater than 50% Democrat majority vote since 1992 and its Congressional delegation to the House has been less than 50% Democrats. This is the result of Congressional redistricting after every Census by a Republican majority in the state. As it now stands, changes to Congressional Districts will not happen until 2022 and only if the Democrats can take back state legislatures or if courts overrule the Congressional District delineation in place now or created in 2022 after the next Census. There is a far greater issue with Republican drawn districts than Democrat.

Other issues which need sunlight and additional discussion are Campaign Media, the lack of substantive Policy Discussion during the campaign, the False Equivalency Standards of Journalism, and the overwhelmingly Negative Tone of news coverage.

If one were to compare states by political control using this data, Democrat – Controlled states showed greater “Electoral Integrity than Republican – controlled states. Figure 3 shows in the aggregate assessments of each of the eleven stages during the electoral cycle compared with which party controlled the State House. With the exception of “Reporting Results” across all the remaining stages, “the gap was substantial and statistically significant on the issues of gerrymandered district boundaries, voter registration, electoral laws, and the performance of electoral officials.” Democrat controlled states out performed Republican controlled states in Electoral Integrity.

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Taking into consideration the substantial gap and statistically significance issues of gerrymandered congressional district boundaries, voter registration, electoral laws, and the performance of electoral officials” (Figure 3), there was a clear tendency for Trump to also win more states (Figure 4) exhibiting these weaknesses. The evidence is not so clear as to state Trump won these states solely due to these issues; however, the correlation and direction pointed is clear. Perhaps as Trump claimed the election was rigged; but, it was not rigged in the manner he claimed.

There is little or no evidence there was voter fraud or votes cast illegally in 2016 as President – Elect Trump has claimed before, during, and after the election. However taking a broader vision of Election Integrity and with a review of this study, “one could arrive at the conclusion US elections suffer from several systematic and persistent problems. Donald Trump and the Republican party appear to have done well in states with the most problems.”

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It is not only the 2016 election which has had its issues. As EIP and Professor Norris have shown in other studies, there have been issues with the 2012 and 2014 elections as well. When compared to other countries, the United States has scored the worst in Election Integrity amongst similar Western Countries given the culture and history the US represents. “The US also ranks 52nd out of all 153 countries worldwide in a cross-national Electoral Integrity survey. The comparison is even worse when the issue of Congressional District boundaries ate considered as the U.S. score is the second lowest in the world.

References:

Why it’s Not About Election Fraud, Its Much Worse. Electoral Integrity Project; Pippa Norris, Holly Ann Garnett, Max Grömping

Study: Clinton-Trump Coverage was a Feast of False Equivalency, Erik Wemple

“North Carolina Is No Longer Classified as a Democracy”, Andrew Reynolds

The Truth About Voter Fraud”, Justin Levitt

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