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The David Brooks Phenomenon: He does ‘rewrite’ for Megan McCardle! [UPDATED]

Piketty wouldn’t raise taxes on income, which thriving professionals have a lot of; he would tax investment capital, which they don’t have enough of.

— David Brooks, The Piketty Phenomenon, New York Times, today

Alexandra Petri has a trademark-funny piece today in the Washington Post that she promises tells you “[e]verything you need to know about Capital — the hot summer beach read.”  She goes on to say that although many people will buy the 700-page book, and that many already have–Amazon is out of stock!–not many of those people will actually read it.  And that most of those lucky enough to already have a copy, have not read much, if any, of it yet.

So I’m wondering: Which category is David Brooks in? As a NYT columnist he probably had access to an advance copy before the book’s English-translation release. But since his claim that Piketty wouldn’t raise taxes on income sounds suspect to me–you can figure out from that comment which category I’m in–I wonder whether, rather than read the book, Brooks just Megan McCardle’s Bloomberg View op-ed three days ago, which Petri links to, and which reads as a rough draft of Brooks’s article.

McCardle, as Petri points out, says she has not read the book.  She also says:

What hasn’t improved [since the 1970s in America] is the sense that you can plan for a decent life filled with love and joy and friendship, then send your children on to a life at least as secure and well-provisioned as your own.

How much of that could be fixed by Piketty’s proposal to tax away some huge fraction of national income from rich people? Some, to be sure. But writing checks to the bottom 70 percent would not fix the social breakdown among those without a college diploma — the pattern of marital breakdown showed up early, and strong, among welfare mothers.

Maybe not.  So how about writing checks to, say, the University of Michigan, which back in the not-that distant past, when it received roughly 80% of its funding from the state, and large research grants from the federal government, had a student body that consisted of something slightly less than 125% that were from upscale households within the state or from Manhattan and Connecticut?  How about writing checks to the Detroit Public School system, or the Lansing Public School system, of the Kalamazoo Public School system, to hire teachers who have excellent credentials and pay them well?  How about writing checks for excellent mass transit systems between rural areas, inner cities, and thriving university and research towns like Ann Arbor?

Or how about writing checks for tutors and test-prep classes and informal community learning centers for children and adults?  Or for paid apprenticeships and internships?

You get the picture.  But Brooks does not.  He writes, not for the first time, about the appalling gap between the advantages that the children of educated professionals have and the children of working class parents.  He’s spot-on on that.  But does Piketty really say that taxes on non-capital “income” of the elite should not be raised? And can Brooks explain why income from capital should be taxed at a lower rate than income from labor? In typical Brooks fashion, he doesn’t even acknowledge that it currently is.

Piketty is French.  He is neither an American citizen nor an American resident.  He has spent all but (from what I can tell) about five years of his life in France.  His Ph.D. is from the London School of Economics, and his first teaching job was at MIT; he taught there for two years, 1993-1995.  If he doesn’t expressly recommend a higher tax rate on upscale American salaries and bonuses, might that be because it is only here in the United States where top corporate executes receive such huge compensation and where certain professionals are paid disproportionately well vis-a-vis those lower on the socioeconomic scale?  Piketty’s wealth-tax proposals are not narrowly prescriptive to the United States.

Ultimately, of course, it’s the specifics of Piketty’s research, not his policy suggestions, that make the book the phenomenon that it is. But I suspect that Brooks if wrong when he says that Piketty thinks taxes should not be raised on income of high earners in the United States.  I’ll have to rely on someone who’s read the book to correct me if I’m wrong.  I wish Paul Krugman read Angry Bear.

 

—-

UPDATE:  As Bruce Webb and Dan Crawford pointedly pointed out in the Comments, there are in fact strong forensic indications (I’m paraphrasing here) that Krugman does read AB.

Bruce:

Paul Krugman DOES read Angry Bear. For God’s Sake he cited me once and has referenced other Front Pagers as well.

AB consistently shows up in lists of top 20 most influential politico-economic blogs. that not so many of those top opinion makers take the time to stay and comment is not surprising. …

Dan:

Usually AB is cited 3-4 times by PK each year.

Actually, I knew that. I replied:

OK, OK, OKayyyy. Yiiikes. Can’t you guys take a joke?!

It’s no fair, though, cuz he’s never, ever cited ME. And until he does, it’s not official that he reads AB!

Unrequited love is so painful.

It is, Paul.  It is.

[Italics added; you can’t italicize in the Comments.]

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Health Care Spending Spikes: Why?

You may have read that health care spending in the private sector picked up both in the fourth quarter of 2013, and during the first two months of this year. Recent data from the Bureau of Economic Analysis (BEA) show that during the last three months of 2013 spending on health care rose at an annual rate of  5.3%  The trend continued this year, with spending climbing 6.2%, on a year-over-year basis in January, and 6.7% in February,

This came as a surprise. Since December of 2007, after adjusting for inflation, health care outlays have been rising by only 2.6%  As former CBO director Peter Orszag observed in a Bloomberg column published yesterday,  “the sudden jump has led some some commentators to declare an end to the era of slower health-cost increases, which has lasted for the past several years. ”  Yet, Orszag notes, “Medicare spending growth is still low, even through last month. Indeed, in the first half of this fiscal year, nominal Medicare spending was only 0.6 percent higher than in the corresponding period a year earlier.”

Why have outlays risen for those under 65, but not for seniors?  BEA suggests that the jump during the first two months of this year reflects the fact that, thanks to the Affordable Care Act (ACA),  more Americans had comprehensive insurance that gave them access to a wide range of services.

Those who became insured in January and February are the folks who signed up at the very beginning of the enrollment period. No doubt many of them had been postponing needed care for a long time. As soon as they were covered, they began visiting doctors, scheduling elective surgeries, and filling prescriptions.

Going forward, won’t the fact that more Americans are insured mean that health care spending will continue to rise? Yesterday, the Congressional Budget Office (CBO) released a report that said “No.” The ACA will cost about $1 billion less than originally projected, the CBO reported, even though we will be covering more people. This is largely because premiums on the Exchanges turned out to be lower than expected.

Spending Spike at the End of 2013 May Well Be Temporary 

The uptick in January and February can be explained by pent-up demand but Americans began layout more for healthcare “well before January,” BEA points out. How does one explain the surge in private sector spending in the final quarter of 2013?

Some observers suggest that the spike in health-care spending that we saw during the last three months of 2013 may have reflected the panic that spread during the months before the ACA kicked in.. The Wall Street Journal’s  ”MarketWatch” puts it this way: spending  may have risen in the fourth quarter as consumers and companies prepared for the official rollout of the law on January 1. It might not  last.”

This makes sense.

My guess is that many people who knew that their policies were going to be cancelled in January used that insurance during the final months of 2013 because they didn’t know: a) whether they would find new coverage in their Exchange and b) whether they would like it as well as their old policy.

Keep in mind that in the final quarter of 2013, the Exchanges were not working well. Those who needed to sign up for new coverage were anxious, and the media was stirring the pot by telling them that, in the Exchanges, out-of-pocket expenditures would be sky-high. If you were thinking about having a hip replacement, you might well decide to schedule it in October, rather than taking a chance that under your new Obamacare policy, you would have to pay down a $10,000 deductible before your insurer laid out a penny for the surgery. Many people who couldn’t get through on the Exchanges didn’t even know if they would find new coverage.

In fact average deductibles and co-pays in the Exchanges would turn out to be relatively low. Only bronze plans come with high deductibles (averaging $5,081 a year). And just 19% of Exchange shoppers wound up with Bronze plans.

Sixty-two percent picked silver, and the average Silver plan calls for a deductible of  $2,905–40% lower than the average Bronze plan– and roughly $700 less than the typical deductible in the individual market pre-Obamacare.  Gold and platinum plans ask for even less cost-sharing. Many offer “zero-deductible” coverage. But in the fall of 2013, relatively few people knew the facts. They only knew what they heard on Fox. .

Meanwhile Americans who had received cancellation notices were worried, not just about out-of-pocket expenses, but about losing their doctors.  Reform’s opponents were warning that insurers selling policies in the Exchanges had created “narrow networks” of providers. Americans who bought new insurance might not be able to continue seeing the specialists they trusted. They might not have access to a hospital that they knew.This would be another reason to scheduled more appointments and procedures in the final quarter of 2013, while you could still use your old policy.

This also helps explain why Medicare spending did not rise in the final quarter of 2013: Medicare beneficiaries had little reason to worry about losing their doctors in 2014.

Going forward we may see another blip in healthcare spending as the newly insured receive care that they had deferred. But most of those who were anxious to see a doctor enrolled in the Exchanges in October, November and December, and began getting care in January and February. Those who signed up for insurance in during the final surge of enrollments are more likely to be young and healthy. My guess is that spending will slow next month.

Originated at The Health Beat Blog, Maggie Mahar

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SCOTUSblog’s Problem: It’s Not Incorporated [OK, I’m sure it is, but you get the point.]

Last week, the Senate Press Gallery denied SCOTUSblog’s application for a press pass, and advised us that it would refuse to renew the credential it had previously granted Lyle when it expires next month.  We were disappointed in that decision, and we are grateful for the support that we have received through social media, emails, and phone calls.

We thought it would be useful to write and explain the state of play regarding our credentialing.  SCOTUSblog is not now, and has never been, credentialed by the Supreme Court.  The Court’s longstanding policy was to look to credentials issued by the Senate.  We pursued a Senate credential for several years, modifying several policies of the blog to address concerns expressed by the Gallery.  Last year, we  finally succeeded – the Senate Press Gallery credentialed Lyle as a reporter for SCOTUSblog.  We then presented that credential to the Supreme Court, thinking that the issue was resolved.

But the Court declined to recognize the credential, explaining that it would instead review its credentialing policy.  The Court has not indicated when that review will conclude.

— An update on our press pass, Tom Goldstein, SCOTUSblog, this morning

I would joke about what happens to popular blogs when they start linking to blog posts by the likes of me on blogs like AB (talk about hoi polloi!)–or about SCOTUSblog’s need to incorporate so that it is an association of press citizens, or something (OK, I did do that in this post’s title)–but really, this isn’t funny.  At all.

Harry Reid, and also the Senate Judiciary Committee, should become involved the Supreme Court’s credentialing policy, which should not be left entirely to the Supreme Court to establish.

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Scotus Friday roundup

Pretty good company to be in!

Friday round-up

The Court’s decision on Wednesday in McCutcheon v. FEC, striking down the aggregate limits on contributions to political parties, political action committees, and candidates for federal office, continues to dominate coverage of, and commentary on, the Court.  Yesterday this blog kicked off its symposium on the decision with a foreword from Ronald K.L. Collins and David Skover; that was followed by commentary from Richard Hasen, Burt Neuborne, Ilya Shapiro, and Paul Smith.  Look for additional commentary today from Jan Witold Baran and Fred Wertheimer.  Coverage of the decision comes from Chris Geidner at BuzzFeed, Sahil Kapur of Talking Points Memo (here and here), ISCOTUS (video), Adam Liptak of The New York Times, PJTV (which has a video interview with me on the case), and Steven Mazie at The Economist’s Democracy in America blog.  Commentary on the McCutcheon decision comes from Dahlia Lithwick of Slate, Garrett Epps of The Atlantic, Beverly Mann at Angry Bear (here and here), and Michael Bobelian of Forbes.

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Obamacare plans bring hefty fees for certain drugs? Really? Well … it depends on what the meaning of “bring” is.

MIAMI (AP) — Breast cancer survivor Ginny Mason was thrilled to get health coverage under the Affordable Care Act despite her pre-existing condition. But when she realized her arthritis medication fell under a particularly costly tier of her plan, she was forced to switch to another brand.

Under the plan, her Celebrex would have cost $648 a month until she met her $1,500 prescription deductible, followed by an $85 monthly co-pay.

Thus begins a deeply (but apparently unintentionally) confusing, yet very important, Associated Press article titled “Obamacare plans bring hefty fees for certain drugs,” published yesterday.  (The title may be Yahoo News’s, rather than the AP’s; it’s not clear.)

“‘I was grateful for the Affordable Care Act because it didn’t turn me down but … it’s like where’s the affordable on this one,’ said Mason, a 61-year-old from West Lafayette, Indiana who currently pays an $800 monthly premium,” Kelli Kennedy, the AP writer, continues.

Where, indeed, is the affordable on this one?  The essence of the article is that many people who have chronic serious illnesses, including, as Kennedy says, cancer, multiple sclerosis and rheumatoid arthritis–and who, because of a preexisting condition,had had no access to any healthcare insurance or who, like Mason (as Mason explained to Kennedy), had insurance that did not cover treatment for preexisting conditions, are being hit by a specific of their ACA-compliant plan that they did not know about when they bought the plan: an apparently relatively new gimmick insurance companies are using, by which the company categorizes some high-cost drugs as “specialty-tier” drugs and by quietly including in their individual-market plans a 50%- “co-insurance” rate for “specialty-tier” drugs.

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World Water Day

Via the UN comes a day for us to note the role of potable water and sanitation throughout the world.  We in New England are blessed with an abundance of freshwater, but other parts of the US are beginning to face real shortages where competing interests are clashing. More posts to come on particulars.

At the world level comes this note…..768 million people lack access to improved water sources & 2.5 billion have no improved sanitation.

waterburkina

The picture  frames some of the problems parts of the world face, and what struck home was the use of an active voice for the picture….the picture is courtesy of the Barka Foundation serving in Burkina Faso in Africa.

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Americans Woke Up and Realized They are Getting Screwed. Envy Isn’t the Emotion They’re Expressing

by J Tizimeskes  (who is currently juggling a job in the private sector while studying for a Wayne State MBA, getting a blog post or two in when he can. Previously, he worked for New York State and holds a Masters in Political Science from University at Albany and a biology degree from University of Toronto.)

Americans Woke Up and Realized They are Getting Screwed. Envy Isn’t the Emotion They’re Expressing.

Arthur Brooks has a column in  NY Times that I take a bit of exception to. In it, he makes the claim that envy is on the rise in America and that this is a problem.
My central issue with this is that I believe that over the past 30 years institutional and cultural shifts have resulted in an increasing exploitation of the majority of society by those at the very top of the income scale. There is no other credible explanation for why these trends are so pronounced in the Anglo-Saxon countries, with the US an outlier among this group, and so much weaker in the rest of the developed world. While there is a small shift towards inequality that is occurring across all developed nations, probably largely the result of the vast increase in labor supply caused by the development of the third world, this international component is far smaller than the country specific shifts we have observed in the U.S., Canada, and Great Britain.
However, Brooks mentions none of this, instead trying to frame it as if there is a cultural shift towards envy being caused by politicians “fomenting bitterness” and reduced mobility resulting from regulations, taxes, and a lack of school choice (never mind that this agenda doesn’t well describe the policies of countries with greater mobility than us). He summarizes Alexis de Tocqueville, stating that:

Alexis de Tocqueville phrased it a little differently, but his classic 19th-century text contains the same observation. Visiting from France, he marveled at Americans’ ability to keep envy at bay, and to see others’ successes as portents of good times for all.

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Student Debt is Challenging the Reason for Getting that Long Sought After College Degree

What has changed for many of the college educated is finding themselves in debt longer than their parents were after college, being penalized for having student debt when going to buy homes, cars, etc., and in the end having less wealth and a lower salary when compared to those without a college education.

One reader’s comment. “I’ve been meaning to write back, but a large number of days on the road takes precedence. I disagree about the relevance of my experience working endless shit jobs while living in crappy apartments and eating pb&j to pay back my loans. That said, I do respect your opinion, and I hope you continue to share your thoughts about how entirely fucked up our priorities are as a Nation when it comes to education.

As my father who is in his late sixties recently said to me “sorry your generation got screwed”, something I’m quite cognizant of as I lose twenty grand selling a home to pursue a career. In the meantime, time to bust some ass and take care of what is in our power to affect. Patrick “Ripping Off College Students Economic Future”

The argument for a college education has always been the earning potential the 4-year degree holder has as opposed to those without a 4-year college degree. As more and more students have trouble buying into the Middle Class with the degree they have earned because of the overwhelming debt, the value of a college education has come into question considering the debt load carried by college graduates. What has changed in the last decade is tuition increases outstripping the cost of healthcare, the decline in state support for colleges, and the increased use of credit cards, home equity, and retirement account borrowing to fund college education. What remains after the piece of paper is passed out at graduation day is debt remaining with the student into his thirties and sometimes well into their forties.

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Here’s what “unaffordable” long-term leukemia care ACTUALLY looks like, Ms. Boonstra. And Rep. Peters.

Just when I thought I’d written my last post on Julie Boonstra, I read Kenneth Thomas’s post below, from Sunday.  The only comment to that post–mine, which I just posted–reads:

How very, very, very sad that there was no ACA during his years of leukemia treatments and hospitalizations, and that we still do not have single-payer.

And how ironic that he had the very same fatal illness that Julie Boonstra has.  I’d like to shove your post in her face, Kenneth.

I’d also like to see Rep. Gary Peters use this family’s situation in his Senate campaign ads in Michigan, and ask whether Julie Boonstra has any idea of what “unaffordable” means with respect to medical care for leukemia.

When she cut the first of her two ads for AFP in mid-February, Boonstra apparently was genuinely unaware of the full terms of her new Blue Cross plan and of the out-of-pocket-costs limitations legislated in the ACA.  And part of the reason why was the failure of healthcare.com to work in October and November and, apparently at least for Michigan’s exchanges, during early December–coupled with Michigan’s decision to not provide its exchange system through a webstie and run and operated by the state.

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RIP BartCop

I’m a little late on this, but I would be remiss if I did not mention the recent death of Terry Coppage, aka BartCop. Bart died March 5th at the age of 60, from complications of the flu, pneumonia, and leukemia.

Bart was one of the pioneers of the liberal blogosphere, starting out in February 1996 with an email newsletter that was converted to web pages by Marc Perkel. He gave much support to new bloggers, including luminaries like Digby and Atrios. Though I never knew him, I am in his debt as well. The affiliated site, Marty Pflugrath’s BartCop Entertainment, was the first to permanently and prominently link to me.

In his final column, Bart requested financial help for his wife to help pay for his medical bills. You can send a PayPal payment to bartcop@bartcop.com. If you still use checks, you could send a contribution to bartcop.com, PO Box 54466, Tulsa, OK 74155.

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