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

What is the secret to joining the rich country club

Steve Roth writes What is the secret to joining the rich country club at Evonomics:

By Steve Roth

There’s a curious fact about the wealth and growth of nations that you rarely see mentioned: No country has ever joined the modern, high-productivity, rich-country club without massive doses of redistribution, and universal government programs for social support and financial security. Not one. Ever.

You can get a rough feel for the scale of those programs here (the OECD countries pretty much constitute the “rich-country club”):

graph

There are a zillion other measures you could plot, but they paint roughly the same picture. In this measure, the richest countries all devote fifteen to thirty percent of GDP to social spending. As Bruce Bartlett pointed out recently, Germany — a darned “conservative” country that is thriving today, and which rode out our recent economic Great Whatever better than almost any other country — started building its welfare state more than 150 years ago.

Now contrast these countries to all the countries that have eschewed those freedom-sapping, serf-ifying government programs, and that have emerged as thriving, prosperous utopias of liberty.

Name one.

Why hasn’t it happened? Not even once.

If countries like that were in fact so economically efficient, shouldn’t we expect to have seen at least one of them emerge, and surge ahead of all the rest — outcompeting all the others, in a very Darwinian sense? Isn’t that the prediction that libertarians and conservatives are making? How can we explain the complete and abject failure of those predictions?

An explanation is perhaps not far to find. Market capitalism — especially modern “holding-company capitalism,” in which corporations own corporations which own corporations, ad infinitum — inevitably concentrates wealth and income into fewer and fewer hands. It’s just the nature of the beast. Along with its immense, world-changing, manifest benefits, market capitalism labors under that inescapable burden.

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DID MAYA MACGUINEAS of CRFB LIE on TIME magazine website OR WAS SHE JUST FOOLIN’ AND DID ANYONE NOTICE

by Dale Coberly

 

DID MAYA MACGUINEAS of CRFB

LIE on TIME magazine website

OR WAS SHE JUST FOOLIN’

AND DID ANYONE NOTICE

 

Maya MacGuineas is president of the Committee for a Responsible Federal Budget (CRFB) which reliably confuses the Federal Budget with the Social Security program.   CRFB claims to want to cut government spending to balance the Budget,  but it spends most of its time arguing for the need to cut Social Security.

Social Security is not funded by the federal budget.  It is paid for entirely by the people who will get the benefits.

In MacGuineas op-ed on TIME magazine’s website

https://act.myngp.com/el/826676200205584384/2618988919232268288

she says a number of things reasonable people could agree with.  This is not surprising,  a  technique of expert liars is often to draw you in with reasonable, and true, statements and then lead you to false, and dangerous conclusions.  MacGuineas does lead you to false conclusions without necessarily “lying,”  and I will get to those.  But I’d like to begin with a statement which she made that is not true which I find particularly egregious.

“My goal would be to both ensure that those who depend on the program are protected, while also balancing the growing cost of Social Security with other pressing priorities — from programs for children, the vulnerable, public investments, and shoring up our education and worker retraining systems”.

While it may be doubted that MacGuineas is sincere in her concern for “programs for children, the vulnerable, public investments, and shoring up our education and worker retraining systems,”  Social Security has nothing to do with funding for any of these programs.  Social Security is paid for entirely by the workers who will get the benefits.  It subtracts not one dime from the federal budget. Except, of course, when the Congress is obligated to REPAY the money it BORROWED FROM Social Security.

MacGuineas could no doubt find funds for her favorite programs by taking a gun and demanding your wallet.  This would be exactly the same as cutting Social Security to find the money to pay for someone else’s favorite program. Taking money from SS and using it to pay for other programs would not cut your “taxes” one dime.  Neither would it cut “the budget.” All it would do would to leave you “busted, dead broke”  when time came for you to retire.   This is a shell game”  “Lookee!  We’re going to cut SS in order to spend on other programs.  This will save you money, see!” The reason the SS tax was created as dedicated funding with a separate trust fund,  was to make sure the money collected for Social Security was not confused…is not fungible…with other government money.

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Still Not a Win and Just a Delay

The biggest lie coming out of the Senate today:

“’One of the major problems with Obamacare was that it was written on a strict party-line basis and driven through Congress without a single Republican vote,’ McCain said. He added that Congress must now ‘hold hearings, receive input from members of both parties, and heed the recommendations of our nation’s governors.’”

An African-American comes to be President and Republicans vow from day one to obstruct. McConnell made it his “single most important thing to achieve is for President Obama to be a one-term president.” There was no intent to ever work with Barack Obama then or Democrats today.

Lets not forget, the Republicans have until EOM September to pass a bill under Reconciliation to change the ACA. October 1 is a new budget year and the Republicans will have to decide whether to change those parts of the ACA using Reconciliation or pass Tax Reform using Reconciliation. They can not do two Reconciliations in one budget year. One or the other will have to wait.

Besides blocking the Risk Corridor Program which caused much of the premium increase since 2015, insurance companies to lose money and withdraw from healthcare exchanges, and Coops to go bankrupt; President Trump has threatened to withhold CSR subsidies for out-of pocket expenses to those 100% – 250% FPL with Silver Plans. This subsidy goes directly to insurance companies. Withholding it will cause premiums again to increase and more companies to withdraw from the exchanges.

The second biggest lie coming out of Congress comes from a Congressman who relied on SS benefits to put him through college and who hopes to deny healthcare to his constituents and others as well.

“’The Senate’s got to pass a bill for us to even move the process forward,’ Congressman Ryan said. ‘That’s the next step. So, we’re hoping that they can achieve that next step so that we can bring real relief.’”

This is what Trump means by making the ACA fail or worst than what has occurred to date with Republican meddling in it.

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Shootings by Police Officers: Self-Control and More

I stumbled on a recent paper in the Police Quarterly entitled “Quick on the Draw: Assessing the Relationship Between Low Self-Control and Officer-Involved Police Shootings.”

The authors are Christopher M. Donner, Jon Maskaly, Alex R. Piquero, and Wesley G. Jennings from Loyola, U of Texas at Dallas, U of Texas at Dallas and U of South Florida, respectively.

Quoting from the paper:

While the extant literature on police use of deadly force is voluminous, it is fairly limited with regard to the influence of officer characteristics. Moreover, this is the first known study to explore an individual-level criminological theory(i.e., self-control) in the context of police officer-involved shootings. In building on previous studies linking low self-control to negative police behavior more generally (Donner et al., 2016; Donner & Jennings, 2014), this study uses data from a sample of 1,935 Philadelphia police officers to investigate the extent to which Gottfredson and Hirschi’s (1990) general theory can predict officer-involved shootings specifically.

Based on theory and related research, it is hypothesized that officers with lower levels of self-control will be more likely to have used deadly force because police shooting incidents would provide low self-control officers (those who are more impulsive, self-centered, short-sighted, thrill-seeking, and easily provoked) with an opportunity to engage in a behavior that it is often spontaneous, can provide immediate gratification, is adrenaline-inducing, and can provide an outlet for frustration.

Methods
Data and Sample
In this study, we use data collected by Greene et al. (2004) for an National Institute of Justice (NIJ)-sponsored study on police integrity in the PPD. The initial collaboration between Temple University and the PPD began in an effort to help create an information system that would assist the PPD with integrity oversight. To aid this process, baseline information concerning possible predictors of negative police behavior was needed. The data set includes background files, academy training records, and personnel information for 2,094 police officers across 17 academy classes from 1991 to 1998. Due to missing files and incomplete academy training among some officers, the final sample of cases included 1,935 officers. Additional methodological details may be found in Greene et al. (2004).

On average, the sample was almost 27 years of age (range: 18–55), and approximately two thirds of the sample was male. There was virtually equal representation among White (44.5%) and Black (46.0%) officers, and the sample included a smaller number of Hispanic (7.4%) and other race or ethnicity (2.1%) officers. The average education level and length of service was 13 and 3 years, respectively. About one fifth (21%) of the sample was married and one tenth (10.9%) had a parent who served in law enforcement. Additional descriptive statistics may be found in Table 1.

The paper goes on:

Dependent Variable
Greene et al. (2004) were granted access to various databases maintained by the PPD Internal Affairs Division and Police Board of Inquiry. Specifically, these databases contained information relating to, among other things, citizen complaints, officer-involved shootings, other internal investigations, and depart-mental disciplinary actions. These data were collected in the Year 2000; thus,officers in the sample had been out of the police academy for roughly 2 to 9 years. The outcome variable of interest in this study, police shootings, is measured dichotomously (0 = No; 1 = Yes) and reflects whether an officer had ever been involved in a police shooting in which they discharged their firearm.

The primary independent variable, low self-control, was constructed from selected behavioral indicators contained within an officer’s Personal Data Questionnaire (PDQ).2 Individuals, who apply to be a Philadelphia Police Officer and pass the entrance examination, are referred to the Background Unit of the police department. Here, qualified applicants are given a PDQ.The PDQ collects self-reported background information, including among other things the applicant’s identifying information, family background, residence history, educational history, employment history, credit history, military record, motor vehicle history, adult and juvenile criminal history, and drug-use history. This information is validated through an interview with a background investigator, a full background investigation, and subsequently a polygraph examination.

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Some Thoughts on ACA and BCRA

I’m not sure if this is worth posting here, but I have some thoughts on health care reform reform.

The Republican arguments have become absurd in interesting ways.

HHS secretary Price said something which makes no sense: “the Senate health care bill strengthens and secures Medicaid for the neediest in our society,” putting the program, which serves more than 70 million low-income people, on “a path to long-term sustainability.”

Republicans regularly describe cuts to Social Security pensions or Medicare benefits as needed to “strengthen and secure” those programs. In those cases, the argument isn’t absurd, because OASDI and Medicare plan A have trust funds which might run out. It makes no sense in the case of Medicaid which is financed by general revenues. I think the dedicated financial streams and trust funds make Social Security and Medicare vulnerable. It is possible to convince people that the trust funds reaching zero will cause something like the bankruptcy of a firm (and also people tend to assume that claims on bankrupt firms are worthless when historical recovery ratios average around 70 cents on the dollar).

The argument for dedicated taxes and trust funds, which I have read here among other places, is that otherwise the programs are like welfare and would be unpopular. The massives support for Medicaid demonstrated now that Republicans are trying to cut it undermines this argument.

Also in the same article Sen Cornyn flat out lies “Mr. Cornyn acknowledged that “there’s uncertainty about what the final outcome will be.” Asked what would happen if the bill did not pass, he said: “I assume we’ll keep trying. But at some point, at some point, if Democrats won’t participate in the process, then we’re going to have to come up with a different plan.” Of course Democrats have begged to participate in the process and have been excluded by Republicans. Robert Pear quoted the lie without noting that it is false. I think this is bad journalism. Also Cornyn is hinting that they might have to (shudder) try bipartisan negotiation. His statement would only make any sense if it were rephrased “If Democrats will participate in the process”. “Keep trying” means keep trying to pass a bill while completely excluding all Democrats. Cornyn is admitting that it was a mistake to be 100% partisan. He wants to blame the Democrats. The result is not just a lie, it is garbled nonsense based on a lie.

Finally Rand Paul is insane. He actually said “it keeps the fundamental flaw of Obamacare. It keeps the insurance mandates that cause the prices to rise, which chase young, healthy people out of the marketplace and leads to what people call adverse selection, where you have a sicker and sicker insurance pool and the premiums keep rising through the roof.” This is so crazy that I can’t think of a reply. All the claims are false — the BCRA would lead to adverse selection, because they eliminate the mandates. The idea that mandates cause selection is plainly insane. It is hard to understand how the statement could be generated by a human brain. And the ACA might survive because of that nutcase. Insane extremism causes sane policy in Bizarro World.

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Trump: the endgame (op-ed)

Trump: the endgame

There was some economic news last week which is important for the long term, and I’ll try to post about it later today or tomorrow, but in the meantime …
I’m as interested in the latest Trump-Russia tidbit as the next person, but really, don’t we all already know the endgame?

Remember during the campaign, no matter what devastating gaffes Trump made, he always rebounded into the low 40%’s? Well, about the same thing has been true for the last 5 months.  No matter what the news, Trump’s approval rating is 38% +/-3%:

So here, as a public service, to save you all the sturm und drang of the next 3 years, I present you in narrative form with the endgame:

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Bizarro World

At least 40 Republican Senators and possibly the critical 50 have decided to stand up to the lobbyists, the interest groups and big business. They are willing to vote for the Cruz amended BCRA which would not just repeal Obamacare, but also destroy US individual market health insurance. If they do so, they stand up to many of the most powerful lobbies including the AMA and the AARP (but not the NRA or AIPAC). Most importantly, they reject the very firm claims and fierce arguments of the relevant health insurance industry lobby AHIP

AHIP (and BCBS) wrote an extraodinarily passionate and detailed letter to the Senate which included “this provision will lead to far fewer, if any, coverage options for consumers who purchase their plan in the individual market. As a result, millions of more individuals will become uninsured.” Notice the future indicative (which I will never ever use). The claim is definite and made with absolute confidence. They express 100% confidence that enacting the reform (with the Cruz amendment) will cause a disaster.

The amazing thing is that AHIP is demanding that its members be regulated. They are asserting that they will damage the country if allowed ““As healthy people move to the less-regulated plans, those with significant medical needs will have no choice but to stay in the comprehensive plans, and premiums will skyrocket for people with preexisting conditions”. This correctly asserts that AHIP members will cherry pick if they are allowed to. AHIP correctly assumes that AHIP members will destroy the health insurance system for short term gain if allowed. It’s like a serial killer cherry picker writing “stop me before I medically underwrite again”.

It is bizarre for an industry to demand regulation to protect consumers from them. The suspicion must be that the concern for the general public is an excuse for support for regulation which helps incumbents or limits competition. The second Bizarre thing is that I personally don’t doubt the sincerity of the lobbyists advocating regulation in the public interest of the members of the lobby. For one thing, their claims are obviously correct and at least an overwhelming majority of independent experts agree. In fact, I haven’t read a defence of the Cruz amendment by ultra hack Avik Roy (I think there is one by uber hack Stephen Moore). I don’t think that an honest case can be made that an industry lobby isn’t sincerely acting (this time) in what it’s officers consider to be the public interest.

But strangeness beyond strangeness, it seems possible that 50 GOP Senators will ignore all serious independent analysis and all of the relevant interest groups. I don’t recall the last time so many Republicans seriously considered standing up to big business. I don’t think it is really surprising that Republicans finally say no to an interest group when that interest group says the public must be protected from the socially damaging profit seeking which shareholders will fore on them.

Everything is updide down in Bizarro World.

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Will the Reign of Witches Pass?

“our present situation is not a natural one.”

Many want to change to the popular vote to elect a president as HRC the loser in the election received more popular votes than the election winner and lost in the Electoral College. There are activities going on today with regard to the EC and how it’s vote will be determined in the future. The EC vote is being driven by the numbers of Congressional Representatives in each state plus the Senators. Since the number of House Representatives has been frozen at 435, the bias in power and representation has been slowly shifting to lower population and/or small states.

City Limits Org. quotes David Birdsell on the bias we are experiencing in our government. “ By 2040, 70 percent of Americans are expected to live in the 15 largest states, which are also home to the overwhelming majority of the 30 largest cities in the country. By extension, 30 percent of Americans will live in the other 35 states. Bluntly meaning, 70 percent of Americans will be represented by 30 Senators and 30 percent of Americans represented by 70 Senators.”

I could not find the direct article to support the 70% of the population living in 15 states by 2040 other than the quote on City Limits Org. I was able to construct my own Excel spreadsheet using 2016 numbers off of Wikipedia – U.S. states and territories by population.

Congressional Districts 2
Using the Wikipedia numbers, I found 66% of the US population resides in the 15 largest states. If population continues to grow at

its present rate, I would think we would be at 70% of the population in 15 states well before 2040. Well so what, what does this mean (redundant alert)? 66% of the United States population living in 15 states are represented by 30 Senators and the other 34% of the population in 35 states are represented by 70 Senators. In the Senate, ~ two thirds of the population in the US is underrepresented in the Senate by design. Nothing is going to change this dynamic, as the Senate was established by the framers of the constitution to give equal representation by state. In other words, we are stuck with the present Senate representation by state. Article V states:

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Nation “Too Broke” for Universal Healthcare to Spend $406 Billion More on F-35


Nation “Too Broke” for Universal Healthcare to Spend $406 Billion More on F-35

f-35_
(Photo: Forsvarsdepartementet/flickr/cc)

The nation’s most expensive weapons program isn’t done showing U.S. taxpayers how much it will ultimately cost them, with Bloomberg reporting Monday that the F-35 fighter jet budget is now predicted to jump by a cool $27 billion.

“Think about [F-35’s] $405 billion price tag when a family member dies of a preventable disease. Get angry.”

Though the estimated future cost of the program had previously hovered at a mind-boggling $379 billion, an updated draft that could be submitted to Congress as early as today will reportedly exceed $406 billion—a nearly 7 percent increase.

The new cost increases may come as a hit to President Donald Trump, who has bragged about his ability to get weapons manufacturers to offer the Pentagon “better deals.”

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