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

Repeal ACA Rejected Again – Updated

July 25, 2017: There is a lot of bad dialogue going on in the news these days. In my last three posts, I have tried to point out what can be passed by Repubs with just 51 votes and what requires 60 votes. Much thought being given to defunding Planned Parenthood and the Mandate(s). If Repubs chose to follow Reconciliation and not nuke it and/or the supermajority vote, both of the defunding and the elimination of the Mandate(s) are not going to happen. The Parliamentarian decided on 60 votes for each to pass.

“The discussions came as the Senate rejected 45-55 a straight repeal of Obamacare with a two-year delay in implementation to allow Congress to work out a replacement. Seven Republicans opposed the measure.”

In the 2015 bill, Republicans had attempted to kill the mandate. The parliamentarian had ruled it could not be done in Reconciliation. “In 2015 the Senate revised the ACA repeal reconciliation bill passed by the House after the Parliamentarian ruled that it could not repeal the individual and employer mandates under the Byrd rule, amending the bill to repeal only the penalties imposed by the mandates.” This would require sixty votes to accomplish if not amended. The Senate could eliminate the monetary penalty.

July 26, 2017: Sens. Lamar Alexander, R-Tenn.; Shelley Moore Capito, R-W.Va.; Susan Collins, R-Maine; Dean Heller, R-Nev.; John McCain, R-Ariz.; Lisa Murkowski, R-Alaska; and Rob Portman, R-Ohio, joined all Democrats to defeat the amendment, which would have given Congress two years to devise a replacement to the 2010 Affordable Care Act.

July 27, 2017: Not going to raise the flag in honor of McCain voting “no” as he should have done this long ago. McCain’s reasoning for voting against the repeal and/or amend is false.

“McCain said that he’s repeated time and time again that one of the ‘major failures’ of Obamacare was that it was “rammed through Congress by Democrats on a strict-party line basis without a single Republican vote.’

‘We should not make the mistakes of the past that has led to Obamacare’s collapse, including in my home state of Arizona where premiums are skyrocketing and health care providers are fleeing the marketplace,’ McCain said.”

Republicans had every opportunity to participate in designing the ACA and refused to do so. That premiums are increasing have two reasons. The lack of control of the rising cost of the healthcare industrial complex and the blocking of the Risk Corridor Program by Sessions, Upton, and Kingston.

– People have been claiming McCain is a maverick and he bucks party lines. Not really as he goes with the flow 87% of the time. He just took an opportunity to stick it to Trump and some others. The real Maverick who voted “NO” was Susan Collins who votes the party line 60% of the time.

July 28, 2017: Now Trump again has threatened to kill the ACA by blocking the CSR subsidies to those between 100% and 250% FPL attacking the low income citizens.

– In passing the blame around for the Republican failure to repeal and amend the ACA; Congressional Idiot Louis Gohmert crawls out from under his rock. “I pray for Senator McCain, for his health, his full recovery from the cancer but it doesn’t give him the right to make people suffer more under the current ACA,”

– Always the positive aww shuck guy Paul Ryan: “‘We were sent to Washington to fulfill the pledges we made to our constituents. While the House delivered a bill to repeal and replace Obamacare, unfortunately the Senate was unable to reach a consensus,’ Ryan said in a statement Friday. ‘I am disappointed and frustrated, but we should not give up. I encourage the Senate to continue working toward a real solution that keeps our promise.'”

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Being Prepared and One Person’s Memories . . .

It has been a long time since I participated in Scouting events. Never been to a Jamboree; although, we did take a bunch into the Pubelos for a hike and rafting on the Arkansas. Hiking up the mountain in a cold rain certainly showed who was prepared to meet the elements of being outdoors with minimum shelter. Those of us who had fleece jackets, rain gear, and equipment stowed in water resistant packs were almost prepared for anything, which could happen weather-wise.

Preparedness has taken a new meaning today. The politics of the country have demanded such from we as adults as well as boys and young men who listened to a speech given by a President under fire. After listening to the President speech some such as “ James Oates, a 44-year-old assistant Scoutmaster on New York’s Long Island” believe Scouting is just about “growing strong, independent, entrepreneurial young men” and giving them experiences so they can make their own decisions.

There are always decisions to be made in life; but, Mr. Trumps complaints at a Scout event is neither the time and place for them. Besides, Trump’s complaints are false.

One always has to be prepared for the prospect of “fake news. Mark Twain had his fill when a competing newspaper reported of his ill health and loss of mental clarity. “ June 2, 1897, beneath the headline, ‘Mark Twain Amused,’ the Journal skewered the Herald’s story and offered Twain’s timeless denial: ‘The report of my death was an exaggeration.’” History has it a cousin J.R Clemmons was ill. There are always those times when the news has been skewed due to be the last person at the receiving end. In Trump’s case, everything is declared fake unless he says it and even then, what he says is mostly wrong or made up.

Trump ridicules former President Obama and the ACA to the crowd before him. There is no decision making to be made when it comes to helping and caring for other people. This is part of the Scout Law to help other people at all times and the Scout Oath. It does not become a political exception or a decision to be made as Mr. Oates would have us believe or as Trump falsely comments about. One has to wonder about who in Trump’s audience will lose the healthcare on his account and false information disseminated. Healthcare for all is a moral obligation for this industrialized and wealthy country.

Scouting is not just a “cocktail party with all the hottest people in New York” attending, it is supposed to incorporate everyone whether hot or not, etc. With that message to his audience, Trump is carving out what he believes the population of this country should be today. If you do not fit, you do not belong here.

“A Scout is trustworthy, loyal and we could use some more of that (loyalty) I could tell you that.” We could also use some Truthfulness, which is also a part of the Scout Law. I am not saying “more” truthfulness; I am saying we need truthfulness from Mr. Trump.

If you get a chance, go and listen to this speech. This is a speech for all times, a lesson in how to purposely not recognize your audience for who they are, ignore them, and give a speech meant for others to suit your political agenda.

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First Vote to Amend and Repeal Rejected

The first vote in the Senate to amend the PPACA was rejected.

“Senators voted 57-43 late Tuesday to reject the plan in the first vote on an amendment to the bill. Those voting “no” included nine defecting Republicans. The vote underscored problems Republicans will have in winning enough votes to recast Obama’s statute.

The rejected proposal included language by Senate Majority Leader Mitch McConnell erasing the Obama law’s tax penalties on people not buying insurance and cutting Medicaid.

Language by Texas Republican Sen. Ted Cruz would let insurers sell cut-rate policies with skimpy coverage. And there was an additional $100 billion to help states ease costs for people losing Medicaid sought by Midwestern.

By 57-43 — including nine GOP defectors — it blocked a wide-ranging proposal by McConnell to erase and replace much of the statute. It included language by Sen. Ted Cruz, R-Texas, letting insurers sell cut-rate policies with skimpy coverage, plus an additional $100 billion to help states ease out-of-pocket costs for people losing Medicaid sought by Midwestern moderates including Rob Portman, R-Ohio.”

Senate blocks proposal to repeal ‘Obamacare’

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Money makes the world…

Even though Angry Bear has as an audience of people who are more than beginners in economic thought,  I think it worthwhile to pursue basic stories about what we demand and value from our way of life, which includes the “economy”.

I had a recent experience where an acquaintance came up to me and asked about Angry Bear and then proceeded to explain what formed the basics of his economic narrative. In rough form and I think my summation accurate enough for casual conversation: Capital is like stocks, debt is like bonds, and rents are had by all…government (I think he meant taxes and ?), companies arbitage?, monopolies (profits and ?). He also asked who I read to get my information (I assume he was asking for a reference or two for Econ 202 information).

I actually wasn’t sure how to respond given his perceptions and also I wasn’t sure how great an interest he had in sorting out his stories or math on economics…I had mine, but there needs to be common ground somewhere. At least we had not begun with the tweet kind of economics spouted by political figures and slogans for PR campaigns.  And he actually might be interested and willing to re-think basics. What might the format be to encourage him to be more thoughtful?

I think this worth pursuing beyond the tired story line of avoiding Uncle so and so at Thanksgiving dinner or the neighbor who has clearly and unequivocally bought into simple political memes.   Barkley Rosser’s Could the US default due to a Complexity Catastrophe? offers another example.

Where does one begin with experience and smart people in one’s circles of activities?

How to think like and economist of that is what you wish by Brad DeLong

I have long had a “thinking like an economist” lecture in the can. But I very rarely give it. It seems to me that it is important stuff—that people really should know it before they begin studying economics, because it would make studying economics much easier. But it also seems to me—usually—that it is pointless to give it at the start of a course to newBs: they just won’t understand it. And it also seems to me—usually—that it is also pointless to give it to students at the end of their college years: they either understand it already, or it is too late.

By continuity that would seem to imply that there is an optimal point in the college curriculum to teach this stuff. But is that true?

What do you think?

(Dan here….also lifted from comments)

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What Will It Take for Republicans to Be Able to Revise the ACA

The first section of issues McConnell and Republicans must overcome requires 60 votes due to the Parliamentarian ruling the provisions of the BCHA violate the Byrd Rule; consequently, the Reconciliation procedure requiring only 51 votes can not be used to repeal the Affordable Care Act (ACA) or waive the Byrd rule. The second set of provisions ruled upon by the Parliamentarian only require 51 or a majority vote to pass these changes.

There is little McConnell and Republicans can do to get past a supermajority vote. McConnell appears to be confident and it may also be possible to kill the supermajority vote. It will be interesting to see what he is thinking. The vote will take place this week unless canceled or rescheduled.

The provisions that the Parliamentarian ruled may be stricken if raised by a point of order include (requires 60 votes to waive the Byrd rule)

• The provision defunding Planned Parenthood;
• The provisions prohibiting the use of small business tax credits and individual market premium tax credits to pay for health plans that cover abortions;
• The sunset of an essential health benefit coverage requirement for Medicaid plans;
• The section funding cost-sharing reductions (CSRs), which the Parliamentarian ruled was redundant of current law, which already funds them (this ruling seems contrary to the lower court’s ruling in House v. Price that money had not been appropriated for the CSRs, but is consistent with the belief that the CSRs are already built into the budget baseline, thus an appropriation does not affect the deficit. A bill to clarify the appropriation situation could, of course, be passed separately from the reconciliation act;
• The six-month waiting period for individuals who have not maintained continuous coverage;
• The provision sunsetting the federal medical loss ratio requirement and allowing states to set the medical loss ratio;
• A provision, that has been removed from the most recent version of the BCRA, that might have allowed states to rollover unused Medicaid block grant funds and possibly use them for other purposes;
• The “Buffalo Bailout” which would have limited the ability of New York State to require counties other than those in New York City to contribute funding to the state’s Medicaid program (the ruling on this provision should caution against including further state-specific provisions in future versions of the legislation);
• A provision grandfathering certain Medicaid waivers and prioritizing Medicaid Home and Community-Based Services Waivers;
• A provision requiring a report by the Department of Health and Human Services (HHS) to Congress regarding the preferability of adopting a different system for reporting Medicaid data; and,
• A section requiring HHS to consult with the states before finalizing Medicaid rules,
• The provision allowing age rating at a 1 to 5 rather than the current 1 to 3 ratio, increasing premiums for older people and decreasing them for younger; and
• The provisions allowing small business association health plans that would be regulated as large group health plans, largely free from state regulation.

The Parliamentarian upheld against a Byrd rule challenge (requires majority vote to pass):

• A provision allowing state the option of imposing work requirement on Medicaid enrollees who are not disabled, elderly, pregnant, or within 60 days of giving birth;
• A provision granting $10 billion to Medicaid non-expansion states;
• The state stability and innovation fund, which imposes abortion restrictions by funding the program through the Children’s Health Insurance Program, which already prohibits abortion funding;
• A provision adjusting per capita cap targets for low-spending and high-spending states to promote equity;
• The permanent repeal of the cost-sharing reduction program beginning in 2020; and,
• A provision requiring states to include information on per capita enrollment and expenditures, psychiatric hospital expenditures, and children with complex conditions in their Medicaid expenditure reports.

There are a few more issues the Parliamentarian still has to rule upon which I have not included; but, you can find them on the link I have provided. Senate Parliamentarian Rules on BCRA July 25, 2017

Senate GOP Wins Vote To Debate Health Care, Then Loses Vote On ACA Replacement Bill July 26, 2017, Tim Jost, Health Affairs Blog

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Of the two meanings of “Neoliberalism”

Of the two meanings of “Neoliberalism”

The use of the term “neoliberal” has recently been criticized as a meaningless epithet, a tabula rasa used to disparage anyone deemed unsatisfactorily conservative.

To the contrary, I think the term “neoliberal” is fairly precise, but much like the term “liberal” itself, it has two quite different meanings depending on whether the definition descends from its original European or American incarnation.  The first variety is very right-wing. The second is centrist.

A good description of right-wing neoliberalism can be found in this article in Al Jazeera this past weekend on a right-wing awakening in Latin America:

[N]eoliberalism is … a means to an end. The state is purposefully reduced in its scope of action to a minimum – by way of policies associated with fiscal austerity, financial deregulation, free trade and the privatisation of public assets, among others – so nothing can prevent the market and its profit-oriented agents from reaching a fair point of equilibrium between demand and supply. According to those who advocate such perspective, the state is nothing but a “necessary evil”.

Similarly, Brad DeLong has said:

[R]ight-neoliberalism is the claim that social democracy was one huge mistake–that it created a North Atlantic of takers who mooched off the makers. It holds that if we got rid of social democracy, we would have a utopia because the makers wouldn’t have to carry the takers on their backs and the takers would shape up ….

This right-wing meaning, of “neoliberalism” is a reincarnation of European-style 19th Century laissez-faire liberalism, a belief that the ideal state should operate and be limited by the rule of law, and administered by neutral officials selected on merit, with the economic markets left to themselves without interference by government. Nineteenth century liberals had no problem with, for example, government  promotion of infrastructure, including things like sanitation and education. Right-wing neoliberals, by contrast, see all government bureaucracy as inherently evil — even, as we saw in the case of Flint, Michigan, in the case of basic sanitation.

Note that right-wing neoliberalism is similar to, but not quite the same as, “libertarianism.” Libertarians believe the state also has no business in the private sphere of people’s lives. Thus it should stay out of the bedroom as well as the boardroom.  Not necessarily for right-wing neoliberalism. Right wing liberalism is agnostic as to whether foreign policy is passive or imperialistic, and whether or not government intervenes in the social sphere, so long as it stays out of the economic sphere.

The second type of “neoliberalsim,” centrist neoliberalism, originates from the US meaning of liberalism, and is once again defined pretty  well by Brad DeLong:

1. Most of the time the best way to accomplish social-democratic ends will be to get the money to the people who maximally want those ends accomplished, and then let them spend it.

2. Most of the time the best way to correctly manage the market system so that it doesn’t rain destruction upon the land is to impose the appropriate anti-destruction-raining Pigovian taxes (and subsidies).

3. Most of the time command-and-control is strictly dominated by other modes of government intervention that are less vulnerable to naked rent-seeking by the politically influential.

Elsewhere he quotes John Quiggin:

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Could The US Default Due To A Complexity Catastrophe?

Could The US Default Due To A Complexity Catastrophe?

Definitely.

Front  page story in today’s Washington Post by Damien Paletta reports that “Treasury chief hurtles toward fiasco,” the fiasco being a failure to raise the US debt ceiling in time to avoid a default.  Trump has declared that Sec Mnuchin is responsible for this matter, which he should be, but somehow has not made a sufficiently definitive statement to keep his former Freedom Caucus big cheese OMB director, Mulvaney, from opining that Mnuchin is an out of it New York finance guy (Goldman Sachs even) who is not well connected in Washington, and he, Mulvaney, thinks that the dumb games he played as a Congressman threatening to default are appropriate for  somebody in charge of all this.

The deadline is approaching, although it might be somewhere between early September and mid-October, but at some point if the debt ceiling is not raised, the US will seriously default, something we have not seen, and I doubt that any deal Mulvaney might propose would get through this dysfunctional Congress.  And the article reports that while Mnuchin wants a “clean raise” before  the Congress really shuts down in August, well, according to WaPo, he does not have the “stature in Washington to press through a vote on a measure” supported by all previous Treasury Secretaries.  Indeed, the article is right that he may not be able to do so, and the US may well seriously default on its debt for the first time, something the gang that Mulvaney has belonged to has declared is no big deal. We may be about to find out if that is correct or not.

In thinking about this I have come to realize that part of the problem is that this is a very complicated issue, one that few people understand, and that this lack of understanding is self-propagating: that few understand it means that there are few who can teach those who do not understand it what it is about. The upshot is that an incredibly miniscule proportion of the US population has any remote idea what all this  is about, so are not  putting any pressure on these loud mouthed Congresspeople to behave resonably. If in fact there is a default and it leads to a global financial crisis that puts the world economy back into a serious recession, well, who could have known that, and who will be to blame?

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US Public Support for Medicaid

Prominent among the things that the out of touch elite knows about regular Americans in, say Kansas where something is the matter, is that those people oppose means tested programs almost as much as they support Social Security old age and survivor benefits and Medicare.

(Another used to be that the didn’t support higher taxes on high income people. One of my angrybear obsessions was noting the solid to overwhelming majorities in all polls dating back to 1992 who have told Gallup that “upper income people” pay less than their fair share of taxes (search for Gallup here). For roughly a decade, I have been a voice crying out in a crowded room as the fact has become too obvious to deny.)

Now Kate Zernike & Abby Goodnough at the New York Times have noted the overwhelming support for means tested Medicaid (both the ACA expansion and legacy Medicaid).
update: I should write that I think the article is excellent. I object to one clause in the article.
End update:

But even when reporting the fact, they repeat the old falsehood asserting “The shift in mood also reflects a strong increase in support for Medicaid, ”

Now the mood certainly includes overwhelming support for Medicaid. The claim that this is an increase from previous lower levels is not supported by evidence presented in the article. There is the problem that, in plain English, high and increased are used as synonyms (that is people are generally innumerate about levels and changes). But, I think, it is also true that a plain fact clearly demonstrated in poll after poll has been denied by members of the out of touch elite. Here I think highly educated urban liberals assume most of our countrymen are savage reactionaries. Also political reporters talk to Republican operatives a lot and Republican operatives both live in the conservabubble and lie shamelessly.

In any case, US public support for Medicaid has been overwhelming for many years (always click and search for Medicaid)

In 2012 the fraction who found Medicaid cuts acceptable was a Kung Fu Monkey + 1 28%

“In order to strike a budget deal that avoids the so-called fiscal cliff, would you accept cutting spending on Medicaid, which is the government health insurance program for the poor, or is this something you would find unacceptable?” 12/13-16/12

Accept 28%
Unacceptable 68 %
Unsure 3%

On the stronger position “favor” not just “accept” Bloomberg found that cuts to Medicaid crushed the Kung Fu Monkey Crazification limit

“Cut Medicaid, which is government help for medical care for low-income people”

12/7-10/12

Favor 22 %
Oppose 74 %
unsure 4 %

McClatchy Marist found an almost Kung Fu Monkey crazy 26% in favor

“Cut spending for Medicaid”

12/4-6/12

Favor 26
Oppose 70
Unsure 4

With middle choice cut some but not a lot United Technologies got 35% support.

All these polls address the fiscal cliff. They were taken roughly four and one half years ago. They show support for cutting Medicaid very similar to support for the AHCA and BCRA in recent polls.

Back when the ACA passed, support for Medicaid expansion wasn’t as overwhelming as opposition to Medicaid cuts (it was a polarized debate and it is true that it is easier to refrain from giving than to take back once given). Still there was always at least plurality support for Medicaid expansion (even in the context of Medicare cuts).

23% support for Medicaid cuts (34% for increases when discussed in the context of the budget).

In particular, the pattern makes it very cleat that hatred of “welfare” isn’t hatred of welfare as defined by economists. I don’t know of much polling, but I certainly don’t know of much public opposition to disability pensions.

There has been overwhelming opposition to Medicaid cuts for many years. Public support for Medicaid is slighly lower than public support for Medicare, but basically feelings about the two programs are similar. This fact doesn’t fit the narrative, so the fact was surpressed.

The hatred of “welfare” is based on racism and not on any particular program or belief about incentives or anything else. In context “welfare” means “Money for black people”. The pattern in public opinion polling makes this almost undeniable.

I’m going to try to avoid discussing the implications for the argument that social insurance is politically feasible while redistribution isn’t. I can’t help noting that I consider this hypothesis to have been rejected by the data.

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Another Personal Observation On Privatized Highways

Another Personal Observation On Privatized Highways

Last month I posted a personal observation on Trump’s plan to privatize infrastructure, noting especially how in the long run privately owned turnpikes in Virginia ended up in government ownership.  In the comments on that post there was discussion of the Indiana Toll Road, privatized a few years ago.  I have just ridden on it (yesterday), and I shall recount as an anecdote datum my less than pleasant experience, bad enough to make me want to avoid it entirely in the future.

I was driving west on it from Ohio.  I stopped in one of the new service areas to get some pizza.  Fancy roof, but only two eating places, Lagrange in the east.  OK, but nothing great.  I would say road condition about same as Ohio’s, but tolls higher, although not as high as in Illinois or Pennsylvania.  Anyway, I saw that I had enough gas to make it to the LaPorte service area in the western part of the state, so did not refill there or at the Elkhart one.  Nowhere did I see any signs or information about any problems with any of the upcoming service areas.

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How Keynesian Policy Led Economic Growth In the New Deal Era: Three Simple Graphs

(Dan here…lifted and reposted)

by Mike Kimel

How Keynesian Policy Led Economic Growth In the New Deal Era: Three Simple Graphs

November 22, 2011

In this post, I will show that during the New Deal era, changes in the real economic growth rate can be explained almost entirely by the earlier changes in federal government’s non-defense spending. There are going to be a lot of words at first – but if you’re the impatient type, feel free to jump ahead to the graphs. There are three of them.

The story I’m going to tell is a very Keynesian story. In broad strokes, when the Great Depression began in 1929, aggregate demand dropped a lot. People stopped buying things leading companies to reduce production and stop hiring, which in turn reduced how much people could buy and so on and so forth in a vicious cycle. Keynes’ approach, and one that FDR bought into, was that somebody had to step in and start buying stuff, and if nobody else would do it, the government would.

So an increase in this federal government spending would lead to an increase in economic growth. Even a relatively small boost in government spending, in theory, could have a big consequences through the multiplier effect – the government hires some construction companies to build a road, those companies in turn purchase material from third parties and hire people, and in the end, if the government spent X, that could lead to an effect on the economy exceeding X.

This increased spending by the Federal government typically came in the form of roads and dams, the CCC and the WPA and the Tennessee Valley Authority, in the Bureau of Economic Analysis’ National Income and Product Accounts (NIPA) tables it falls under the category of nondefense federal spending.

Now, in a time and place like the US in the early 1930s, it could take a while for such nondefense spending by the federal government to work its way through the economy. Commerce moved more slowly back in the day. It was more difficult to spend money at the time than it is now, particularly if you were employed on building a road or a dam out in the boondocks. You might be able to spend some of your earnings at a company store, but presumably the bulk of what you made wouldn’t get spent until you get somewhere close to civilization again.

So let’s make a simple assumption – let’s say that according to this Keynesian theory we’re looking at, growth in any given year a function of nondefense spending in that year and the year before. Let’s keep it very simple and say the effect of nondefense spending in the current year is exactly twice the effect of nondefense spending in the previous year. Thus, restated,

(1) change in economic growth, t =
f[(2/3)*change in nondefense spending t,
(1/3)*change in nondefense spending t-1]

For the change in economic growth, we can simply use Growth Rate of Real GDP at time t less Growth Rate of Real GDP at time t-1. The growth rate of real GDP is provided by the BEA in an easy to use spreadsheet here.

Now, it would seem to make sense that nondefense spending could simply be adjusted for inflation as well. But it isn’t that simple. Our little Keynesian story assumes a multiplier, but we’re not going to estimate that multiplier or this is going to get too complicated very quickly, particularly given the large swing from deflation to inflation that occurred in the period. What we can say is that from the point of view of companies that have gotten a federal contract, or the point of view of people hired to work on that contract who saved what they didn’t spend in their workboots, or storekeepers serving those people, they would have spent more of their discretionary income if they felt richer and would have spent less if they felt poorer.

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