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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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It’s the Debt, Stupid

Dan here…another post by Steve

Why Tyler Cowen Doesn’t Understand the Economy: It’s the Debt, Stupid

Steve Roth | November 16, 2015

In a recent post Tyler Cowen makes an admirable effort to lay out his overarching approach to thinking about macroeconomics, revealing the assumptions underlying his understanding of how economies work. (Even more salutary, this has prompted others to do likewise: Nick Rowe, Ryan Avent.)

Cowen’s first assertion:

In world history, 99% of all business cycles are real business cycles.

This may be true, but it is almost certainly immaterial to the operations of modern, financialized monetary economies. He acknowledges as much in his second assertion:

In the more recent segment of world history, a lot of cycles have been caused by negative nominal shocks.  I consider the Christina and David Romer “shock identification” paper (pdf, and note the name order) to be one of the very best pieces of research in all of macroeconomics.

That paper, which revisits and revises Friedman and Schwartz’s Monetary History, is clearly foundational to Cowen’s understanding of how economies work, so it bears examination — in particular, its foundational assumptions. The Romers state one of those assumptions explicitly on page 134 (emphasis mine):

…an assumption that trend inflation by itself does not affect the dynamics of real output. We find this assumption reasonable: there appears to be no plausible channel other than policy through which trend inflation could cause large short-run output swings.

This will (or should) raise many eyebrows; it certainly did mine. Because: it completely ignores the effects of inflation on debt relationships.

It’s as if Irving Fisher and Hyman Minsky had never written.

Assuming “inflation” means roughly equivalent wage and price increases, at least over the medium/long term (yes, an iffy assumption given recent decades, but…), inflation increases nominal incomes without increasing nominal expenditures for existing debt service. (Yes, with some exceptions for inflation-indexed debt contracts.) Deflation, the reverse. Nominal debt-service expenditures are (very) sticky. Or described differently: inflation constitutes a massive ongoing transfer of real buying power from creditors to debtors — and again, deflation the reverse.

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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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GOP leaders definitely knew about hacking — did they benefit too?

Via Salon, Digby writes:

GOP leaders definitely knew about hacking — did they benefit too?

McClatchy also reported that the Justice Department is looking into “whether Trump’s campaign pointed Russian cyber operatives to certain voting jurisdictions in key states – areas where Trump’s digital team and Republican operatives were spotting unexpected weakness in voter support for Hillary Clinton.” That’s an issue I’ve written about previously here on Salon, based on some post-election investigative reporting by the New York Times.

This raises once again the question of just what was going on in the Republican Party during this period. After all, it wasn’t just Donald Trump who benefited from Russian hacking. The GOP-dominated House majority was a major beneficiary as well.

Remember, the congressional leadership knew in 2015 that it was happening. Reuters has reported that the so-called Gang of Eight (Republican leaders in Congress) was told that Russian hackers were attacking the Democratic Party but that the information was so top secret they could not share it. As we know, hackers attacked the Democratic National Committee and the personal email of Clinton campaign chair John Podesta. But they also hacked the Democratic Congressional Campaign Committee, and information gleaned from that hack was put to use in some 2016 campaigns for Congress.

Also recall that one month before Donald Trump Jr. took that meeting with the Russian lawyer, House Majority Leader Kevin “loose lips” McCarthy was talking about Trump’s connections to Vladimir Putin in a room full of Republicans

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McConnell Again on Healthcare

Mitch McConnell and the Republicans in the Senate are not satisfied with the Tom Price appointed CBO chief, who insists that there are four fingers in front of his face and apparently won’t make numbers up to help take away health insurance from 22 million people.

So Mitch McConnell and the Republicans will rely upon, and I am not making this up, “ALTERNATIVE SCORING” to further the Ted Cruz amendment to Obamacare repeal through the Senate. Republicans are expecting it will take weeks to get the scoring from the CBO.”

Repubs are running out of time to repeal the ACA and achieve tax reform under reconciliation. The budget year ends EOM September. If the ACA is not repealed by then, it has to wait until next budget year. You can not do two reconciliations in one year and the other one is tax reform.

McConnell To Use Alternative Scoring for Healthcare Bill, Crooks and Liars, Frances Langum, July 13, 2017

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