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The North Korea Food Shortage Deepens

The North Korea Food Shortage Deepens

Yeah, I know, the Iran situation is more in the headlines, but nobody knows anything and everybody is shooting off their mouths.  I shall comment on that one when things settle down a bit.

Instead I shall provide info less widely reported coming out of nkecon  on the still-unreported-in-MSM story about the increasingly bad food situation in North Korea (DPRK). There are multiple reports.  Drought has hit the principal rice growing area in DPRK.  Also, there is now a serious situation regarding potatoes, the old backup for wheat and rice failures. and generally a widely relied upon staple for DPRK diets.

The latest hot story regarding potatoes is that a couple of people have been arrested and sent to labor camps for stealing potato seeds.  Reportedly this often goes on at this time (actually May when there is a two week period when usually most planting occurs).  Most of the time these people are not themselves using the potato seeds to plant them themselves but selling them to others.  But this year the situation was much more serious last month, and these arrests are a sign of it.

As I argued earlier, this situation is probably aggravating political conflicts within DPRK.  We have seen a weird letter from Kim Jong Un to Trump even dumping on Biden. Trump has now further disgraced himself by not only praising this letter, including specifically for its Biden remarks, but even going so far as to say after Kim’s dead brother was reported to have been a CIA informant that, no, not during his presidency will we let the CIA spy on North Korea.  We shall only use DOD intel agencies to keep track of DPRK nuclear weapons programs.

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For party voting preference, which is more important, age or education? Looks like we have an answer

For party voting preference, which is more important, age or education? Looks like we have an answer

For all the slicing and dicing that has been done in voting metrics for 2016 and 2018, one quandary has stood out. We know that higher educational attainment has strongly correlated with voting for Democrats, and we also know that there was a stark age difference in votes between Clinton and Trump in 2016: a majority of voters younger than 45 voted for Clinton, while a majority over 45 voted for Trump.

But the level of educational attainment has not remained static over time. With each passing generation, more and more students are getting a college degree, and advanced degrees as well.

So are the voting patterns mainly showing us that more younger voters have college degrees? Or is it really about generational experience? For example, is a Silent Generation or Boomer college graduate more likely to vote Democrat than a GenXer or Millenial with no college? This week I finally saw a graphic that spells out the answer, and here it is:


Age is more decisive, hands down. The only anomaly that even comes close is that voters aged 30 to 44 with a high school degree were only slightly more likely to vote Democratic than voters aged 45 to 64 without a high school degree.

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A Bernie Sanders Narrative for Seniors

A Bernie Sanders Narrative for Seniors

What follows is some unsolicited advice for the Sanders campaign.

Politico has an important piece on the downside of the extraordinary age bias in Sanders’ support.  Like a teeter totter, the large advantage Sanders enjoys among younger voters is counterbalanced by his dismal showing among the older crowd.  The article reviews voting breakdowns from the 2016 campaign and current poll results, and it shows that Sanders is not just behind among seniors, but way, way behind.  His political strengths guarantee he will survive the winnowing of the twenty-odd 2020 pretenders, but sheer arithmetic suggests he will need to make significant inroads among older voters, something he hasn’t done up to this point, to overtake Biden—assuming of course Biden doesn’t overtake himself.

So how can he do this?  The first thing to realize is that he doesn’t need absolute majorities among retirees and near-retires, just enough support so his advantage among the non-elderly isn’t erased.  The second is that direct material benefits alone are never enough.  People don’t simply vote in their immediate financial interest, although of course interests play an essential role.  Economic motives are like nuclei around which layers of narrative form, but it’s the narrative—the meaning—that orients people, and an economic condition can be explained in multiple ways.  Not all explanations are equally valid, of course, but in politics that’s largely irrelevant.  So yes, Sanders can and should talk up Social Security expansion and how universal health insurance would benefit  those on Medicare too.  But that’s not a sufficient political strategy; it lacks an encompassing narrative.  This narrative doesn’t have to be one all older people will gravitate to, but it has to speak to a significant portion of them.

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75 Years After The Longest Day

75 Years After The Longest Day

Yes, I am watching “The Longest Day” on TMC.  Have not seen it for decades, but this 75th anniversary of D-Day seems to be the time to do it.  This will be a rambling post all over the place.  I note that according to the film, it was German Field Marshall Rommel who is depicted calling it “the longest day,” the day before it happened, seeing it coming.

I have been there several times, first in Fall 1953 when I was young and it was cold and rainy.  Three times in1994, 1997, and 2002 I and my wife, Marina, took students to visit the site, always impressive and moving, especially the famous cemetery.  In 1994 my late mother was with us and went around thanking veterans, who were visiting in large numbers as that was the 50th anniversary.

Unsurprisingly President Trump has been trying to get lots of attention for the celebrations of the anniversary, keen to hang out with the queen, who was actually around for the real thing, telling her how much his late mother admired her, one of the rare times we have heard him say anything about his mother.  Supposedly Macron got more applause at the Portsmouth gathering that had the queen and even Merkel apparently, although not Justin Trudeau, even though the Canadians were a major part of the invasion.  Putin was also not there (more on that later).  I am not going to waste time going on about the usual stupid things Trump has said and done other than to agree with the commentators who find it appalling that he is draping himself in this when so many things he is doing and supporting go against the ideals of those who landed there that fateful and bloody day.

 

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“While Considering Medicare For All: Policies For Making Health Care In The United States Better”

Robert Kocher and Donald M. BerwickWhile Considering Medicare For All: Policies For Making Health Care In The United States Better,” Health Affairs

Dr. Donald Berwick is the former Director of Medicare and Medicaid who talked about waste in Medicare and Doctors knowing such waste exists.

“It is unlikely that the United States will move quickly to a full publicly financed health insurance when Congress next considers health policy after the 2020 presidential election. Despite its theoretical advantages, passage of Medicare for All would require a massive political battle to make feasible the shift from private to public funding, to develop enough public trust to expand an entitlement program for all Americans, and to mitigate the disruption for many of substituting public insurance for familiar, existing health insurance policies. The transition will take time.”

Improving Affordability

Donald Berwick’s direction on Medicare was this: While US health care can and should be made more affordable by attacking waste, innovating in delivery system design, and improving productivity, these mechanisms are unlikely to achieve affordability quickly. He comes back with other comments which can be quicker in implementing.

• Lower the cost of health insurance for more Americans: Two types of financial assistance were implemented in the form of premium and cost-sharing subsidies. Sliding-scale premium subsidies reduced the monthly cost of insurance substantially when they phase in for people with incomes at 133 percent of the federal poverty level up till 300% FPL and phased out at 400 percent of poverty. 400% of income was $100,400 for a family of four in 2019. With an average silver-level insurance plan, the costs for healthcare insurance were $15,855 or 16 percent of income. It is recommended, no American should spend more than 10 percent of income on insurance premiums.

Cost-sharing subsidies were available to those with incomes up to 250% of poverty, average deductibles have risen to $3,000, and total out-of-pocket costs are capped at $7,900. The deductibles and out-of-pockets was done so as to give patients some skin-in-the-game and not abuse insurance. “Skin-in-the-game,” are regressive actions which disproportionately penalize people with chronic diseases. The authors recommend eliminating all cost sharing for people with incomes below 250% of poverty. For people with incomes from 251 percent to 1,000% of poverty, the authors suggest a sliding-scale of subsidies similar to the current program. Instead of annual appropriations, we would make these subsidies mandatory expenditures to replace annual appropriations and prevent an Executive Branch from using the funding of these benefits as a political weapon.

• Reduce insurance premium growth rates by limiting hospital prices. As I wrote in Again, Healthcare Cost Drivers Pharma, Doctors, and Hospitals, the biggest driver of healthcare cost is simply “pricing” increases reflected in hospitals and pharmaceuticals. These increases are reflected in insurance premiums. As the authors also point out, the biggest driver of premium increases has been in hospital price increases which have risen 42% between 2007 to 2014 and far greater than physician prices.

The ACO strategy has allowed hospitals to exploit the market through consolidation thereby eliminating competition to raise prices and enabling the employment of specialist doctors, making them “must haves” in insurance networks. As planned, the consolidation should have generated administrative cost synergy and quality benefits instead of enabling healthcare to consolidate and control prices. The authors believe no hospital should be able to charge prices that equal more than Medicare prices plus 20 percent, which is far less than many charge today (plus 89% on average) also far, far less than the 200 to 240% for hospitals in Michigan for catastrophic automobile accidents recently signed into law. The authors claim the plus 20% is enough revenue to offset Medicaid underpayments and provide incentive to be more productive. Indexing hospital prices to the Consumer Price Index rather than medical inflation, hospitals are not perversely rewarded for lower levels of productivity improvement than the rest of the economy. It is recommended, hospitals with greater than 40% market share in a given area would be required to contract with all health plans so that they cannot limit choice and competition.

• Make medications more affordable. As I noted in “ Again, Healthcare Cost Drivers Pharma, Doctors, and Hospitals,” from 1996 to 2013 in one JAMA study, healthcare costs increased by ~$1 trillion of which 50% was due solely to pricing increases. The big issue is the change in pricing for in and out patient hospital stays/care and pharmaceuticals. Hospital/clinic consolidations leads to the former even though insurance has been fighting for a reduction in stays. Pharmaceutical has instituted new pricing strategies which we have all read about in the news. Old drugs such as Humalog, Vimovo, and the infamous EpiPens as well as others are now vastly more expensive. This study points to pricing for pharma and service as one of the issues.

The authors recommend; a ban on rebates to all insurance markets and not just Medicare; reducing the period of market exclusivity for biologic drugs from 13 years to 7 years to enable generic competition sooner since biologic drugs are the most expensive drugs accounting for 70 percent of spending growth from 2010 to 2015; and adopting the Trump administration’s proposed international market basket pricing approach to set the upper limit for drug prices.

Improving Access

Improve the risk pool of people buying coverage and make Medicaid more universal.

• Create larger, lower-cost, healthier risk pools to reduce premiums. Reimpose the Individual Mandate to create larger, lower-cost, and healthier risk pools thereby reducing premiums. Since subsidies would be more generous, the penalty for not buying insurance would be larger. Short-term three-year plans would be eliminated. Reinstate the coverage of essential health benefits in all plans.

• Expand the use of reinsurance. Reinsurance lowers premiums by reimbursing plans for medical expenses for the most expensive patients These expenses do not have to be offset by premium increases from healthier patients.

• Improve Medicaid access. Medicaid provides comprehensive insurance for 74 million Americans and in some states, coverage is dropping as a result of work requirements besides other barriers to enrollment and reenrollment. The authors would eliminate Medicaid cost sharing as even small amounts of cost sharing can reduce the use of necessary services and increase wait times for enrolling in Medicaid coverage after losing commercial insurance. We would encourage the 14 states that have not expanded Medicaid to accept federal funds to expand their programs and urge the administration to accept waivers from these states, with the exception of work requirements, cost sharing, or other policies that undercut the core mission of Medicaid.

Improve Health Care Quality

The provisions in the ACA were designed to switch “volume” (fee for service) to “value” (getting paid for better outcomes). Accountable care organizations and bundled payments were two such innovations put in place to do such. They appear to have had mild and directionally desirable impact on both quality and cost. There is still more to learn.

The Institute of Medicine has categorized six defects in the quality of care resulting in excess cost. Problems in patient safety, unscientific variations in care leading to ineffective treatment, lack of patient-focus, unwarranted delays due to poor system designs, excessive prices due to lack of transparency and open competition, and fraud all of which lead to wasted resource, bad patient outcomes, and decreased value. The switch from volume to value will alleviate these defects.

The authors endorse the creations of the Center for Medicare and Medicaid Innovation to sponsor tests of new payment models and delivery system designs such as home and community-based alternatives to hospitalization, telemedicine, and the integration of behavioral health into the care mainstream. Renewed efforts to improve patient safety through innovations in training, equipment, and job roles.

Stakeholders have become enthusiastic in spending health care dollars to mitigate the power of “social determinants of health” such as housing, food availability, exercise patterns, precursors of substance abuse, early childhood trauma, and more. The authors strongly favor action and funding in that direction.

Other Issues

• Reform medical malpractice policy. Eliminate the excuse medical malpractice necessitates wasteful extra tests and treatments encouraging doctors to adopt risk-based payment models and more parsimonious approaches to care. I do have a problem with this as many states have put in place limits to malpractice. The authors have suggested a safe-harbor when doctors adhere to clinical guidelines and evidence-based care. Is malpractice a big issue? Public Citizen’s “ The Medical Malpractice Scapegoat;” details the data from 2015, (most recent full year for available data) the medical malpractice payments on behalf of doctors amounted to about 0.2 percent of costs for hospital and physician services and about 0.1 percent of all healthcare costs. The number of payments on behalf of doctors in 2015 was the lowest on record and is lower than what it was during Clinton or Bush.

• Protect Americans from surprise bills. The authors would require all doctors who provide care at in-network hospitals or outpatient facilities to bill patients at average in-network prices.

The authors believe this portfolio represents a set of policies that could be supported at least somewhat on a bipartisan basis and believe are likely to be effective and in the short term more politically viable than Medicare for All.

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Tariffs and Monetary Policy: Moral Hazard and Rent Seeking

Tariffs and Monetary Policy: Moral Hazard and Rent Seeking

President Trump’s threat to impose tariffs on Mexico over immigration has pushed Federal Reserve Chair Jay Powell to say that if the tariffs lead to economic growth slowing, the Fed will cut interest rates.  While the bump may be about to end, this announcement was followed by a  solid global surge of stock markets on June 4 followed by smaller increases the next day.  This sets up a moral hazard situation for Trump where if he behaves irresponsibly on trade policy (with even GOP senators basically freaking out), the Fed might bail him out with interest rate cuts.

How is rent seeking entering into this?  I note a point just made by Dean Baker, that all these tariffs Trump is imposing on his own without any Congressional approval offer him the option of allowing specific exemptions from them.  So Trump can grant exemptions to specific sectors or even firms that favor him.  So Trump’s trade wars are opening up a whole new vista for rent seeking.

Finally, and unsurprisingly, many of his trade policies look to fail to achieve their supposed goals.  This is pretty obvious for the case of the tariffs on Mexico, which by potentially weakening the Mexican economy weaken Mexico’s ability to reduce Central Americans from to the US.  Another case involves the Chinese firm Huawei, supposedly both to enhance US national security and support the US high tech sector.  But according to a story in the Washington Post, 6/5/19 reports that 61 percent of experts say that Trump’s ban on US firms supplying parts to Huawei will both weaken US national security by reducing US influence over Huawei and the whole 5G sector, with the relevant US firms being hurt.  I do not think even the Fed can bail the US economy out from this mess.

Barkley Rosser

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The sources of the next recession

The sources of the next recession

While we are waiting for the ISM May manufacturing survey and construction spending data to be released later this morning, both of which will give us important clues to Friday’s jobs report, let me write down some thoughts on the nerdy question I ruminated about this weekend: what is the most likely source of the next recession?

I should start by noting that I remain on “recession watch” for later this year, as in, a substantially heightened risk, due to enough of the long leading indicators turning negative by the end of last year. But my base case remains that there will be a slowdown without an actual recession, because those indicators haven’t gone down *enough* and some, like real M1 and some housing metrics, have already rebounded.

But I read a tweet over the weekend from a political source I respect, who essentially said, “housing’s fine, there will be no recession, end of story,” and, well, I was annoyed.

That’s because housing isn’t always the source of a recession, and occasionally, as in 2000-01, it doesn’t turn down very much at all. In fact, housing has turned down since the beginning of last year about as much as it turned down in 2000 – which didn’t prevent the 2001 recession, did it?

So what are other sources of recessions? Here’s my take:

 

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Kenneth Thomas in WSJ

Kenneth Thomas (an AB contributor) was quoted April 7  in the Journal a second time on the general question of how to solve the problem of subsidy bidding wars.  Unfortunately it is behind a paywall…but worth pointing to…

 WSJ.COM
Opinion | Pass a Law to Combat Rent-Seeking

Congress could invoke the Commerce Clause to limit destructive competition over corporate subsidies.

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North Korean Near-Famine Leads To Dead Nuclear Negotiators

North Korean Near-Famine Leads To Dead Nuclear Negotiators

It has not been officially reported by the North Korean govt, but long running rumors are now being reported by various  serious media that Trump’s big pal Kim Jong Un has recently killed the top 5 officials of his govt who set up his  failed summit with US President Trump.

According to sources I watch there has been a massive crop failure this year in the Democratic Peoples’ Republic (DPRK). The big issue there is if the local, semi-allowed private markets in ag will save the population from outright starvation. At this time this is not  known.

So this difficult situation may be partly responsible for Kim Jong Un killing the top five negotiators with the US on nuclear weapons for the summit in Hanoi.  In addition, reportedly five more senior officials have been sent to rural labor, or something like that.

The lead official word from the DPRK side is that the person Kim Jong Il killed was Kim Hok Choi, I apologize if I have misspelled his name. But I have it close, and I send my best regards to his family and the families of those others whom were also reportedly killed.  As well as this unfortunate team,  four more beyond Kim Hok Choi were executed, and five more were sent to rural labor camps, including one alleged to be a “right hand man” of Kim Jong Un.

The unclear question is how much will the unofficial private markets in DPRK will save people from outright starvation/famine. The deepest  sources ai have followed say that it is unclear.  DPKR is not a “normal” country, and we have no way to know what is actually going on there now.

Given that his nation is facing food shortages, it is not surprising that he may be facing an internal challenge, and now we see that manifested by him overcoming any inside opposition by killing these five individuals.  Reportedly five more individuals suffered being expelled to the countryside, including Kim Jong Un’ s “right hand man.”

A serious and unresolved issue at this point is how the unofficial private markets may save people there from starving to death.

Barkley Rosser

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Trump’s Latest Mexican Tariff Tirade Irks Senator Grassley

Trump’s Latest Mexican Tariff Tirade Irks Senator Grassley

Senator Grassley rebukes the latest idiocy from the White House:

President Trump dropped a trade war bomb on Thursday when he announced his intent to put in place new and harsh tariffs on goods from Mexico until the “illegal Immigration problem is remedied.” And among the many worried, negative reactions was one from Senate Finance Committee Chair Chuck Grassley, in a strongly worded statement. “Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent,” the statement begins. “Following through on this threat would seriously jeopardize passage USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country.” Putting this in the context of harming Trump’s own signature USMCA (the replacement for NAFTA) is a smart frame, an effort to show that the tariffs are in conflict with the administration’s own trade goals.

First Tramp thinks NAFTA is the worst trade deal ever but NAFTA 1.1 is beautiful. But now Trump wants to start a new trade war with Mexico because he did not get his racist wall? OK! Of course Trump is not the only one with a twitter account and Paul Krugman has joined Senator Grassley with lines like:

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