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

Secular Stagnation: A Three-Decade Overcorrection

Larry Summers’ recent speech (and Paul Krugman’s paean to it) have brought the issue of secular, decades-long stagnation to the front of the econoblogosphere agenda. Tyler Cowen, of course, made it prominent some time ago. But he posited a tech cause: we’ve picked the low-hanging innovation fruit. Summers, Krugman, et. al. suggest that policies and institutions (fiscal and monetary) are much more central.

I’m with them. In the 70s we saw an economic correction for arguably overvalued labor wages, a painful correction the economy enforced via inflation and (with Volcker’s help) unemployment — driving down labor compensation both nominal and especially real. (Even Ed Lambert, commie pinko that he is, has found real compensation per hour was overvalued given the state of the economy back then.)

And just about the time that that imbalance was clearing out in the 80s, we saw the rise of policies and politics systematically designed and deployed to destroy and restrict real labor wages and compensation. Those policies have achieved exactly that proximate goal, brilliantly. They have not, of course achieved their purported ultimate goal: bigger pie, rising boats, city on the hill. All that rot.

Instead we’ve gotten thirty years of secular stagnation.

The eternal economic justification for those policies? The imbalance that existed, briefly, thirty years ago, and which mostly corrected itself.

But those policies and politics have continued for three decades, always justified by resort to “70s-stagflation” hysteria.

It doesn’t take long before a stopped clock is very, very wrong.

Cross-posted at Asymptosis.

Comments (4) | |

Socialism At Its Finest

The Grey Matter Blog does a nice little bar chart on insurance profitability; “Socialist” Obamacare a boon to insurance companies” since the passage of the PPACA in 2010. I gotta say this is nothing like what I would have expected to happen; but, I have to acknowledge my other blogger-foil’s told-you-so remarks to me repeatedly.

With all of those socialism programs we liberal put out there, who would have thought the healthcare insurance racket would do so well under government regulation? Only one insurance company failed to outperform the S&P.

Insurance

Comments (12) | |

How the Democrats Should Deal With the AnthemBlueCrossCare Issue. Really.

Today, the House of Representatives will take up GOP Rep. Fred Upton’s proposal to ”fix” Obamacare by undermining it, and the vote is being widely cast on a referendum on whether Dems will continue distancing themselves from the law. Meanwhile Senate Dems are also still considering fixes of their own that could undermine it, though that’s subsided.

The Morning Plum: For Democrats, it’s gut check time, Greg Sargent, Washington Post, this morning

The Washington Post’s Ruth Marcus is not among my favorite political pundits, but the apt title of her column today–Obama’s political malpractice–sums up not just the current Obamacare-related debacle but my abiding assessment of Obama dating almost to the outset of his presidency.  Marcus’s column makes the point that Obama’s attempts, such as they have been, to gain control of this spiraling situation just make the situation worse. But that’s par for his course.

Actual smart and competent congressional Democrats and party leaders–four senators who come quickly to mind are Elizabeth Warren, Sherrod Brown, Jeff Merkley, and Dick Durbin–need to grab the reins and use Democratic Party funds to establish a massive phone bank, and rent small neighborhood offices, where people who have received cancellation notices of their teensy-coverage plans can get quick easy assistance in learning of their actual options.  These Dems need to get the word out, loud and clear, that insurance agents are engaging, en masse, in misleading these people by, most conspicuously but not exclusively, telling them that the particular “replacement” policy they are offering or suggesting is the individual’s cheapest option.

I call it AnthemBlueCrossCare, because nearly every one of these misleading cancellation letters that I’ve read about is from one or another state’s Anthem Blue Cross or Blue Cross company; I keep wondering whether that is the only company that has been offering these teensy-coverage policies, or whether instead this company has just perfected the strategy to a science.

Occasionally, some diligent journalist will actually investigate the situation and will find that the individual or family actually has options that provide better coverage at about the same or less cost.  The 46-year-old woman, for example, who chafes at being forced to buy a plan that includes maternity care can get a plan for that costs the same or less than the one being cancelled that does not.  But by now, largely thanks to mainstream news media organizations such as the New York Times that have credulously published the Anthem-Blue-Cross-is-canceling-my-policy-and-only-offering-one-at-a-500%-increase-in-premiums-and-I’m-forced-under-pain-of-prison-to-not-look-elsewhere-for-health-insurance anecdote–and thanks (surprise, surprise!) to Obama’s failure to inquire into the actual options of these anecdotal victims–journalists’ refutations of these stories is, as my mother would say, like pushing back the sands.

But surely actual smart congressional Democrats and party leaders recognize that what matters to these people is not being able to keep their current plan but in not having to pay more, or a least not a lot more, to get acceptable coverage.  The 46-year-old woman who doesn’t want to pay for maternity coverage or, as she complains, coverage for stage-four-cancer treatment, or for sex-change surgery (surely something that represents most of the additional 500% increase in premiums from Blue Cross that this woman inferred was her only option since Blue Cross didn’t mention any other, because of the commonness of this surgery), might be happy to pay, say, an extra $100 a month for doctor and hospitalization coverage–which apparently her soon-to-be-cancelled policy does not include, since if it does it would have been the best-kept-secret-about-the-best-insurance-for-the-price-in-this-entire-country; hospitalization coverage for $100 a month!–in case, y’know, she needs an appendectomy or surgery for a broken ankle.

Okay, well, Obama apparently recognizes this too.  He just can’t trouble himself to assign a few people within the administration to, maybe, look into these anecdotes and report on their accuracy.  But the Democratic Party can pick up the slack, and the actual smart and competent congressional Democrats need to start aggressively picking up the slack and making that happen and getting out the word.

I’m sure they recognize by now that the next three years must be devoted to aggressively picking up the slack on a veritable slew of important policy matters and presenting facts and policy proposals clearly, loudly, and often, to the public.  Sure it would be nice to have the president do this, but the president won’t do this, probably because he can’t do this. I mean that literally; he lacks not only the desire but also the ability to do it.  But it’s critical that it be done.

And that it start en force immediately.

Tags: , , , , , , , , , , , , , Comments (13) | |

The Greater Grandfathering of old policies in the ACA

The many cases of people receiving cancellation letters from their health insurance companies which include the claim that the policy will be cancelled as of Jnuary 1 because of the ACA and which offer insurance at much higher premiums have caused a political crisis for Obama nd other Democrats.

I have a number of confused thoughts on the issue. The bottom line is that I am enthusiastic about the Landrieu/Merkeley proposal (dclick the link the post is excellent) for reformed reform.

I will start with policy — what is to be done.

Comments (7) | |

Deserving to be poor

Via Economist’s View, Paul Krugman notes a pattern in out post racial rhetoric:

So what’s this all about? One reason…, Daniel Little suggested in a recent essay, is market ideology: If the market is always right, then people who end up poor must deserve to be poor. I’d add that some leading Republicans are, in their minds, acting out adolescent libertarian fantasies. “It’s as if we’re living in an Ayn Rand novel right now,”declared Paul Ryan in 2009.

But there’s also, as Mr. Little says, the stain that won’t go away: race.

In a much-cited recent memo, Democracy Corps … reported on the results of focus groups held with members of various Republican factions. They found the Republican base “very conscious of being white in a country that is increasingly minority” — and seeing the social safety net both as something that helps Those People, not people like themselves, and binds the rising nonwhite population to the Democratic Party. And, yes, the Medicaid expansion many states are rejecting would disproportionately have helped poor blacks.

Comments (0) | |

2008… Let me be clear: I will not do either. Candidate Obama

Via Business Insider:

While campaigning for President in 2008, candidate Barack Obama promised to not alter the way that cost of living adjustments were calculated for Social Security, a policy that is now a key feature of his 2014 White House budget.

Addressing the AARP in September 2008, then-Senator Obama drew a major contrast between his policies and those of his Republican rival John McCain:

John McCain’s campaign has gone even further, suggesting that best answer for the growing pressures on Social Security might be to cut cost of living adjustments or raise the retirement age. Let me be clear: I will not do either.

But things have evidently changed. A critical element of the President’s new budget involves cutting cost of living adjustments through the adoption of chained CPI — a policy that will result in compounding benefit cuts for current and future retirees:

Comments (10) | |

Privitization of the Royal Mail Service…winners and losers

Via the ?Real News:  Privitization of the Royal Mail Service Interview of John Weeks,( a professor emeritus of the University of London and author of the forthcoming book The Economics of the 1%: How Mainstream Economics Serves the Rich, Obscures Reality and Distorts Policy).

Brings to mind this process: Grim outlook of US post office buildings:

Currently, at least 12 post offices have been sold or put on the block in Northern California. A public hearing on a contested proposal to sell Berkeley’s main post office is scheduled for later this month.

Along with the move to five-day mail delivery, selling post office buildings is part of the Postal Service plan to save $20 billion over the next three years. More than 600 buildings have been “earmarked for disposal” nationwide, at a savings of $2.1 billion, according to the Postal Service’s 2012 report to Congress.

Comments (4) | |

Dead people and Social Security

Dean Baker was polite in responding to another story from the Washington Post in the campaign to discredit the program:

That’s what the headline of the front page Washington Post story might have read if the purpose was to inform readers. Instead the lengthy piece (which covers the whole back page) told readers that Social Security paid out $133 million in benefits to people who were dead over the last three years.

While it is useful to weed out such improper payments, this piece likely led many readers to wrongly conclude that such payments are a major cost to the program. They are not. Nothing about the finances of Social Security would be noticeably changed if the amount of such improper payments were immediately reduced to zero.

If the Washington Post followed the NYT’s commitment to putting big numbers in context, it would have expressed $133 million as a share of the $2102 billion paid out in benefits over the relevant time frame. That way readers would realize that these mistakes have little impact on the program’s financial condition.

Comments (4) | |

The Truth About Obamacare’s Exchanges

Maggie Mahar at The Health Beat Blog writes bout the exchanges.

Paul Krugman: “There are two remarkable things about this kind of doomsaying. One is that the doomsayers haven’t rethought their premises despite being wrong again and again — perhaps because the news media continue to treat them with immense respect.”

If you Google “Obamacare,” “Exchanges,” and “Disaster,” more than 20 million articles will pop up.

One month into a six-month enrollment process, the Media Pundits have spoken.

In truth, there are two tales to be told: one that is getting widespread coverage, and one that is not.

The stories that you are Not hearing come from folks like Michael Cadigan, the president of a New Mexico law firm who enrolled his firm’s four employees the day his state’s Exchange opened. “I thought it was going to be an administrative nightmare,” he confesses. Instead, he quickly found a policy “that will cost $1,000 less a month than I’m currently paying.”

 

Tags: , Comments (5) | |