The Decline of Local Government

You might want to take a look at this piece by Simon Haeder at The Converation. In it he explores the history of public hospitals in the United States and the effect that Medicare and Medicaid have had on them:

The U.S. could potentially even have ended up with a British-style, government-run health care system. Yet, the country went a different route. Instead of expanding, public hospitals have been closing since the 1960s in large numbers. How come?

In my recent academic paper on the subject, I analyzed the creation and closure of public hospitals in California, the state with one of the most extensive public hospitals system in the nation. My findings indicate that when state and federal governments extended health coverage through programs like Medicaid and Medicare, all but the most well-resourced local governments in turn began closing their hospitals.

My findings bear implications for policy debates today. Advocates for any large-scale health reform effort such as Medicare-For-All should be mindful of the eventual unintended side-effects they may trigger.

That may be surprising to some but it isn’t to me. It’s completely consistent with what I’ve been saying. Federalization neuters local governments. It doesn’t expand the services available at the local level but decreases them for most people.

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We Can’t Afford the Future

As I read this piece at City Journal on the explosion of crimes against property in San Francisco it occurred to me that we are evolving not only into a country of haves and have nots but one that is so expensive to maintain that we can’t afford it. Our system assumes a common understanding of the basic of right and wrong, e.g. the Ten Commandments, that the behavior of most people is restrained by conscience, and that the authorities need only deal with a low level of crime.

I’m concerned that we are evolving towards a society that requires a level of police presence that would make East Germany’s Stasi or Ceaușescu’s Securitate seem laissez-faire by comparison. Who benefits from the world to which we are evolving? Only criminals as far as I can see. The poor bear the brunt of crime. The rich pay the costs of keeping the crime away from themselves.

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The Triumph of Robert E. Howard

I did not become a fan of Game of Thrones. The series killed off the only character in which I had even the slightest interest at the end of its first season. It was too grim and too perverse for me.

But who would have thought that series finale of a sword and sorcery fantasy television series would have made national headline news? Somewhere Robert E. Howard is smiling.

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The Stopped Clock

At the New York Times Omer Aziz urges support for President Trump’s immigration plan. Here is the kernel of the piece:

When an immigration system becomes overburdened, even immigrants and their children can become pessimistic. I have heard Canadians of Hungarian, West Indian and Pakistani origin all express frustration that more recent arrivals have jumped the line. Part of this is the very human tendency of immigrants to pull up the drawbridge after they have crossed over. Part of it is a sincere belief that the integrity of the system that brought them here should not be corrupted.

In the United States, the vicious cycle of unlawful migration and heightened xenophobia has been going on for decades. It’s what led to Mr. Trump’s election in 2016, and if Democrats cannot propose reasonable alternatives on immigration, they will lose again. No amount of multicultural sloganeering will assuage Americans’ concerns that the system is broken.

It is not unreasonable for the United States to adopt a system similar to those of countries we resemble like Canada or Australia. We are all geographically large, primarily English-speaking former British colonies. Letting the perfect be the enemy of the good, as Democrats seem predisposed to do on this issue, does provide a trap. While exercising their hatred of all things Trump, they also portray themselves as radicals out of touch with the concerns of many Americans.

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Alternative Medicine

The media love a horse race—a competition between stark alternatives. Although the present discourse presents the future of medicine as between maintaining the status quo and “Medicare For All” there are other alternatives. In an op-ed in the Wall Street Journal John Carlson explains one of them:

If Todd Gibbons from Poulsbo, Wash., has an aching shoulder or needs a physical, he can call and schedule an appointment on a day’s notice, maybe the same day. His physician is also available for phone consultations and even makes house calls. It all costs Mr. Gibbons $150 a month to cover his family of five.

Costs are so low and coverage so good because the Gibbons family goes to Vintage Direct Primary Care—a medical practice that treats patients for routine care and procedures for a monthly membership fee. Virtually every routine service—from electrocardiograms and pap smears to stitches and physicals—is included. There are no office-visit fees or copayments. All physician services and procedures offered at Vintage are covered, and all without the use of health insurance.

Without third parties taking money and adding overhead, Vintage can offer medications and lab tests not covered by the monthly fee at wholesale prices. A cholesterol blood test is $3.20 for a Vintage member, but $22 at other in-network providers, according to Fair Health Consumer. Drugs are cheaper. Vintage buys directly from three national wholesalers, which compete to provide medications at the best possible price for any given patient, and Vintage resells them at cost. A 30-day supply of the generic equivalent of 40 mg Lipitor for cholesterol is $3.30 at Vintage. At Walmart it’s $9. Sildenafil, the generic for Viagra, is 37 cents a pill. The next cheapest option in Poulsbo is Safeway at $2.13. Over-the-counter drugs are also cheaper and available in-house at Vintage. Cetirizine allergy pills (the generic version of Zyrtec) are 6 cents a tablet at Vintage, about half the Walmart price.

Costs are low and transparent. The monthly fee, whether paid by employer or individual, is predictable and easy to budget. Patients still need high-deductible insurance or cost-sharing pools to cover nonroutine procedures and care. But complementing a direct primary care plan with one of those two options is still the cheapest coverage.

For example, Atlas MD in Wichita, Kan., works with more than 100 small companies that have formed partnerships with Allied National insurance to create plans based on clinics coupled with catastrophic-care policies. Josh Umbehr, owner and medical director at Atlas, says these companies save 30% to 60% by switching from traditional health insurance plans.

Tax incentives currently discourage employers from switching to direct primary care plans. One possible fix would allow patients to use health-savings accounts to pay for membership. The IRS could make this change by redefining a direct primary care membership as an eligible HSA expense.

Cutting the middlemen out of daily health care won’t solve all of the medical system’s problems. But altering the tax code to encourage employers to use direct primary care could help control or even shrink costs. Most important, it would improve the quality of care by letting doctors spend less time filling out paperwork for reimbursement and more time helping patients.

Think of direct primary care as extending the recurring revenue model adopted by Microsoft or Netflix to health care. It sounds a bit like what HMOs were supposed to be but instead became something completely different. As noted in the op-ed direct primary care doesn’t cover every conceivable health care expense but it does cover a lot of people’s everyday experience with health care. And it would allow insurance to be limited to covering insurable risks.

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Congratulations

One of my nieces just completed a full ironman triathlon. Her finishing time was 5:24:16.

I don’t know whether to congratulate her or be worried for her. I settle on congratulations. Congratulations!

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The Price of Pritzker

Dan Petrella and Jamie Munks of the Chicago Tribune report that Illinois Gov. J. B. Pritzker is preparing an infrastructure spending bill to submit to the legislature:

Gov. J.B. Pritzker is set to unveil a six-year, $41.5 billion plan to repair Illinois’ crumbling roads, bridges, public schools and university buildings in a massive proposal that calls for nearly $1.8 billion in new taxes and tax increases, according to documents provided to lawmakers at a Friday briefing.

Dubbed Rebuild Illinois, it would be the state’s first large-scale infrastructure improvement program in a decade and would result in higher costs for everything from ride-sharing to cable and streaming services, as well as a significant hike at the gas pump.

The long-awaited proposal, which comes as lawmakers are working to finalize the state budget before their schedule May 31 adjournment, received a lukewarm response from some of the governor’s fellow Democrats and pushback from some Republicans. The preliminary drafts distributed Friday follow behind-the-scenes negotiations with a bipartisan group of lawmakers. Changes are expected even before Pritzker makes a formal announcement next week.

Anyone who has driven from Illinois into Indiana, Wisconsin, or Iowa cannot help but notice the marked difference between our neighboring states’ roads and ours and a lot of Gov. Pritzker’s plan is, apparently, devoted to roads and bridges. One might want to mull over why Illinois’s roads and bridges are in such obviously worse shape than, say, Iowa’s. I think it’s because every available dollar is being used here to pay present and past public employees.

The governor intends to pay for part of his plan by raising taxes:

Pritzker’s outline includes doubling the state gas tax to 38 cents per gallon from 19 cents; tiered increases in vehicle registration fees based on the vehicle’s age; a $250 annual registration fee for electric vehicles; a $1-per-ride tax on ride sharing; and a 7% state tax on cable, satellite and streaming service.

Other taxes being discussed include a new 6% tax on daily and hourly garage parking, a 9% tax on monthly and annual garage parking, and an increase in taxes on manufacturers and importing distributors of beer, wine and spirits.

but he intends to let future generations pay for most of the cost:

The largest share of the program, $17.8 billion, would be funded through state bonds, while more than $7 billion would come from regular revenue. The plan counts on more than $10 billion in federal funding and $6.6 billion from local governments and private sources.

Let the feeding frenzy begin! Every county and particularly Cook County, Will County, DuPage County, and Lake County will be vying for as much of the spending as they can corral.

How many people will still live in Illinois 30 years from now when the bonds mature?

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Addressing the Border Crisis

At the Rand Blog Blas Nunez-Neto proposes four measures to address the crisis at our southern border. I agree with two of them and 50% ain’t bad. Here they are:

  1. Expanding the use of non-restrictive detention options for families. This could include large increases in the use of minimally invasive tools that can allow families to be released while ensuring that they can be located and notified about their court cases. It could also include creating statutory guidelines and expanding the capacity to detain families in non-restrictive facilities. These guidelines could ensure that facilities that handle families have humane conditions and feature age-appropriate protections and learning opportunities for all detainees.
  2. Ensuring that families have access to counsel. Individuals who have counsel are far more likely to show up for their immigration court cases than those who do not. As part of any reform of the asylum system, Congress could consider whether this benefit outweighs the costs of requiring that all asylum seekers have access to qualified counsel.
  3. Creating new processes to allow some of these families to apply for visas to come to the United States while they are still in their home countries. If policymakers believe that these migratory flows are likely to continue, they may consider providing legal mechanisms for families from these countries to come the United States.
  4. Adding capacity to the immigration court system. The current backlogs in these courts are the byproduct of a broken and under-resourced system. Congress could closely review the entire system to identify the bottlenecks that have led to these record backlogs and increase the number of immigration judges who are qualified to hear asylum cases.

I agree with #3 and #4. I think that the adverse consequences of the other two are likely to outweigh the intended effects.

They say that acknowledging you have a problem is the first step on the road to recovery. I guess that referring to the situation on our southern border as a crisis is a step in the right direction.

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Perverse Outcomes

Decisions to make the children of people coming into the United States illegally safer have had the perverse consequence of endangering them. At CNN Priscilla Alvarez reports that DNA testing of “families” suspect of being nothing of the kind has found an alarming percentage of frauds:

The Department of Homeland Security is considering next steps in DNA testing on the southern border, following a pilot program that concluded last week.

DHS ran the DNA pilot program to help identify and prosecute individuals posing as families in an effort to target human smuggling. The Rapid DNA testing, as it’s known, involves a cheek swab and can, on average, provide results in about 90 minutes.

“We’re continuing to analyze the results of the DNA, analyze where we think it’d be appropriate in the processing line,” said Alysa Erichs, acting executive associate director of Immigration and Customs Enforcement’s Homeland Security Investigations.

ICE has briefed acting DHS Secretary Kevin McAleenan on the DNA testing, Erichs said.

Before the DNA pilot program, ICE Homeland Security Investigations personnel had been deployed to the border in April to investigate human smuggling and the use of fraudulent documents to “create fake families.” There are now 130 Homeland Security Investigations personnel at the border.

As of Friday, Homeland Security Investigations teams, which consist of agents and specialists, had interviewed 562 families who presented some indication of fraud. Homeland Security Investigations identified 95 fraudulent families through interviews and 176 fraudulent families through fake documents.

The administration has argued that the limit on how long migrant children can be held in detention is a pull factor because it guarantees release, prompting some individuals to pose as families.

The prospect of an interview or, more recently, a DNA test has led some migrants posing as families to concede that they are not related, Erichs said. In cases where migrants have conceded that they have no familial connection, ICE has referred the adults for criminal prosecution and turned over the minors to the care of the Health and Human Services Department.

In other words when it becomes known that travelling with a child eases your way into the United States, inevitably more people seeking to enter the United States travel with children. DNA testing has now demonstrated that some of the children with whom these people are travelling are not their own.

What will become of these children once these “families” are admitted? Will they be abandoned? Sold? Given to relatives already in the United States? How could we ever know? This entire situation has left us in the position in which there’s a moral imperative to keep families together and a moral imperative to separate them.

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Part Right

At The American Interest Matthias Küntzel says that the Germans are being naïve about Iran:

As early as 1995, when President Bill Clinton prohibited American firms from trading with Iran because of the regime’s nuclear ambitions, it was Germany that systematically counteracted the American efforts to impose international sanctions. Hossain Mousavian, then the Iranian Ambassador in Germany, wrote that Tehran was “aware in the 1990s of Germany’s significant role in breaking the economic chains, with which the USA had wrapped Iran . . . Iran viewed its dialogue and relations with Germany as an important means toward the circumvention of the anti-Iranian policies of the United States.”

Washington, however, persisted in its efforts. As former Secretary of State Warren Christopher detailed in his memoirs, “We constantly prodded them [the Germans] to distance themselves from Iran and to suspend trade, as we had done . . . Unfortunately, the struggle to stop our allies from doing business with Iran has not yet succeeded.”

When I was working in Germany in the 1970s I was surprised by the array of Iranian goods in German stores. They were something not seen in the United States. The relationship between Germany and Iran goes back even farther:

In the mid-1920s, Germany was the founder of Persian industry, providing Iran with the backbone of its industrial infrastructure and the trained personnel needed to run it. Between 1933 and 1941, according to the scholar Yair P. Hirschfeld, the Nazi share of Iranian imports rose from 11 to 43 percent while the German share of Iranian exports rose from 19 to 47 percent. (Another aspect of the Nazi period, which continues to be important in Iran, was pointed out in 1996 by Iranian President Rafsanjani: “Our relations have always been good. Both [peoples] are of the Aryan race.”)

In 1952 West Germany again became Iran’s leading trading partner, a position it held almost continuously until 1979. After the Islamic revolution, West Germany’s trade with Khomeini’s Iran rebounded from 2.8 billion Deutsche Marks in 1980 to 7.7 billion in 1983. “It is striking to see how Persia’s new rulers are specially favoring German firms with orders, given that German business leaders and politicians had kowtowed to the Shah with special fervor,” wrote Der Spiegel at the time.

In the following years, Germany remained not only Iran’s most important high-tech partner but also its most trusted one.

I don’t think the Germans are naïve at all. I think they’re cynical, amoral. Without the Germans the Iranians would never have gotten their nuclear enrichment program off the ground, the Pakistanis would never have developed a nuclear weapon, and German technology formed the basis of Saddam Hussein’s chemical and biological weapons program. The Germans are convinced with a confidence born of experience that the United States will do nothing about their misbehavior and, indeed, will come to their aid if they get in trouble.

All of that having been said I think the recent saber-rattling against the Iranians is misplaced. We should make our notional allies aware that, if they’re threatened by the Iranians, they’re on their own. They need to come to their own modus vivendi with the Iranians. IMO prudence would dictate that they impose and enforce economic sanctions of their own against the mullahs and the Revolutionary Guard and certainly not enable the Iranians.

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