Month: February 2012

I heard about Jonathan Gruber’s Health Care Reform comic book on the Internet, so when I saw it in my library’s New Item Shelf I checked it out. It almost looks like a parody, as some opening pages show a movie-theater marquee announcing with great fanfare: “Everyone will be able to afford insurance… And we will do all this while reducing the federal deficit!” (There is a crowd of people yelling “Yay! Hoo-raay!”) But it’s a very serious graphic novel by a very serious MIT economist who wants to explain to laypeople how the “Affordable Care Act” is supposed to work.

Gruber does an admirable job explaining both the problems of the current American health care system, and the ways Obamacare will try to fix that. It also provides helpful context for understanding news about health care reform (like the recent birth control hoopla). From a technocrat’s point of view, or if you’re optimistic about the things government can do, this book makes the ACA look like an intelligent and pragmatic attempt to fix a real problem. There are a few things I find reasonably hopeful, and a few things I find commendable (like experimenting with five different methods of cost control with the flexibility to adjust these methods as we figure out what works. Reminds me of the Little Bets book I’ve been reading, and it’s pleasantly surprising to see the government trying to be more flexible than usual.)

But from my bias, it also makes the bill look like an insanely complex technocratic mess. To cite just one example: it explains how employers with 50+ employees that do not provide insurance plans will face fines of $2,000 per employee, and how this is supposed to incentivize employers to provide plans. Will this encourage 49-person businesses to delay hiring another person? Who will be deciding whether or not that incentive is effective enough, and how much the fine needs to be changed as time goes by to keep the proper incentives aligned? But that’s just an example of arbitrary complexity, and not a “problem,” per se; it’s just how government regulation works. However, I do have ten real problems with the health care reform comic book based on information it provides that either lacks context or is wrong or outdated:

10. Death Panels. “What about death panels…?” “There are no ‘death panels.’ That’s a political contrivance. It was a myth designed by reform opponents to scare people away from the facts.” (136)

The “death panel” talk came from statements in the health care bill about “end-of-life” counseling. Many conservatives exaggerated such statements or took them out of context, but it’s a little disingenuous to completely write it off as a “political contrivance” and a “myth.” But, hey, maybe Gruber just didn’t have room to explain that…

Continue reading 10 Problems With the Health Care Reform Comic Book

I don’t usually like to comment on things like candidate tax plans, since they rarely see the light of day and actually affect anything, but I had several reactions to an article I read about a plan from Obama this morning.

The New York Times says, “Obama Offers to Cut Corporate Tax Rate to 28%.” The United States is frequently cited as having the highest or one of the highest corporate tax rates in the world, and as a result, corporate tax revenue has actually been shrinking as businesses play international accounting games to avoid that rate. (A few months ago Twitter joined the technology trend and set up an office in Dublin, Ireland.) I know Republicans have been complaining about that tax rate for years, so it’s nice to see Obama now joining the effort to lower it.

Of course, Obama can’t resist trying to do it in a government-optimizing technocratic manner. He wants to lower the maximum rate from 35% to 28% but give “preferences to manufacturers that would set their maximum effective rate at 25 percent.” He probably thinks that’s a brilliant way to “help” out our manufacturing industry; I think it’s one of those arbitrary differences that causes unintended consequences and invites definition lobbyists. Hey, maybe non-manufacturing businesses will start buying those newfangled 3D printers so they can get classified as “manufacturing” and get the lower rate!

Continue reading Reactions to Obama’s Corporate Tax Plan

Everyone knows that the American federal government is going broke. What is not as well-known is that many American cities are going broke even faster. Reason is talking about the extreme case of Harrisburg, PA (h/t Classical Values), whose dictatorial mayor squandered funds buying hotels and sports teams. But many more cities are getting swamped in pension obligations to their retiring public employees. They promised generous benefits that they now can’t afford to pay, but in many cases they aren’t allowed to cut back on those contracts, so other parts of city budgets must suffer.

The St. Louis Post-Dispatch has been doing some scathing reporting the last couple of weeks on the extreme pension collection of its city firefighters. Somehow 48% of them are retiring “disabled,” which gives them even more annual benefits than they would get otherwise, all tax-free with automatic annual raises. But many of them are conveniently working other jobs or living out very active hobbies while they collect more than $40,000 a year in “disability” pension payments from the city. Hopefully reporting like this will keep St. Louis from following Central Falls, RI, which filed bankruptcy last year after “retirees failed to accept cuts in pensions and benefits.”

Continue reading Backward Government: Help Individuals, Hurt the Community

In the wonderful world of Internet politics, it’s common for people to freak out about an outrageous story that seems less outrageous as more information comes out. But all this really does is reveal our biases, and even though I’ve known that for awhile, I can now offer quantitative evidence for it thanks to Reddit.

Earlier this week libertarians and conservatives were going ballistic about a North Carolina preschooler who was forced to eat cafeteria nuggets because a state inspector determined her home-packed turkey sandwich and banana wasn’t nutritional enough. The story hit all the right buttons: the government setting arbitrary standards about health, the government wasting money, the government messing with children and usurping the right of the parent. It made me angry, and I was planning to whip up a blog post about the increasing tyranny of government around the United States, combining this story with the ones about the LA County frisbee fine and the Amish milk farm shutdown.

Continue reading Chicken Nuggets and Climate Research

I’ve seen some headlines recently that Obama will give waivers to ten states that aren’t meeting education standards. No Child Left Behind, (in)famously passed by George W. Bush, said that students had to be “proficient in math and reading” by 2014 or the school systems would face penalties. Now that the deadline is actually in sight, educators say that goal is “unrealistic” and the penalties are “unfair,” and the Obama administration is talking about granting waivers “if they adopt certain education reforms in exchange for greater flexibility in deciding how to measure school performance.”

Ah, here we go again. Remember the 1,500 temporary Obamacare waivers granted by Health and Human Services? (After a lot of attention, they said they were stopping, but then they didn’t). When this health care waiver stuff was happening, I found a very long but very fantastic article by Richard Epstein about the ways that “government by waiver” is a corrupt and expensive threat to democracy.

The most direct problem with granting waivers is that it’s an arbitrary process that invites lobbying and corruption, and Epstein provides a frustrating litany of theoretical reasoning and historical examples. We saw claims that Democratic unions were getting favored in the health care waivers. With the education waivers, it looks like they’re deciding that ten states might get them. But by what criteria? From Epstein’s article:

What about employers who do not have the resources to navigate the waiver process? What about those lacking the political connections to make their concerns heard in Washington? And what happens when the one-year waivers run out? Will they be renewed? Under what conditions? And what rights will insurers have to waive then in order to avoid going out of business?

That last sentence reveals a second, related problem. The arbitrary process of waiver-granting often requires that you surrender certain rights to get the waiver. Epstein talks about how this has happened with the HHS, the FDA, the FCC, and more. Today we are seeing that with the education waivers too: “in exchange for greater flexibility in deciding how to measure school performance.”

First, the government gives you unreasonable requirements. Then you have to convince the government that these requirements are unreasonable. Then they might grant you an exemption from those unreasonable requirements, but only if you have the right connections and if you are willing to give up certain rights. Epstein explains how this bait-and-switch undermines our justice system:

Continue reading Government By Waiver Strikes Again

Tyler Cowen talks brilliantly about the fallacy of “mood affiliation,” which usually involves feeling an urgent need to counter optimism or pessimism towards a certain topic. It overlaps with “confirmation bias” and “cherry-picking,” and I find myself committing this fallacy quite often. For instance, I think climate scientists have engaged in alarmist predictions that are already failing to come true, so I like to dismiss as exaggeration any evidence of negative things happening to the environment. When you suffer from mood affiliation, you are so opposed to an extreme viewpoint that you feel the need to argue against anything that even comes close to that viewpoint for the fear that it helps validate the extreme viewpoint, even though the truth may lie somewhere between.

One topic that attracts mood affiliation from all over the spectrum is the threat of violence from radicalized American Muslims. I certainly believe there are those who overplay this threat, from conservative Republican voters fretting about Sharia law and TV shows about Muslims, to neo-conservatives looking to justify war, to the federal government making excuses to creep onto our freedoms via the TSA and other civil liberty intrusions. They are the pessimists in this exercise. Osama bin Laden is dead, al Qaeda is weakened, and it’s been ten years since 9/11. What do we still have to be afraid of?

Continue reading Violent Muslims and Mood Affiliation