Photo Detective Work

I’ve mentioned before that I had a lot of my dad’s old slides digitized early last year. None of the pictures was indexed and they weren’t organized in any way—chronologically, by subject, nothing. Figuring out what some of them were or when they were taken has taken a certain amount of detective work.

Take the picture I’ve reproduced above, for example. I believe it to be a picture of Wright’s Tavern in Plymouth, Massachusetts, an 18th century tavern where the Concord Minutemen met prior to the Battle of Lexington and Concord in 1775.

But I’m not sure.

If it is Wright’s Tavern, it was probably taken around 70 years ago, when my parents were on their honeymoon or on the New England trip my dad took before my parents were married.

If anyone reading this post can substantiate my guess or can propose an alternative, I’d appreciate it.


Another Way in Which the Roman Catholic Church Stands Apart

Asking the important questions. Here’s an article by Joanne M. Pierce at The Conversation that explains why the Roman Catholic Church bans gluten-free Communion wafers. Kidding aside, it’s estimated that as much as 1% of the population is affected by celiac disease, genuine gluten intolerance. I understand the history behind it but by maintaining its position the Church is cutting some Catholics out of a vital part of being a Catholic.

Most Protestant denominations do not share this prohibition nor do Orthodox churches and their orders are just as valid as ours. To the best of my knowledge it isn’t an issue of dogma but of doctrine and discipline. It’s something that could change.


The Most Dangerous Game

I recommend you read Zachary Keck’s article at the National Interest on the stand-off between India and Pakistan, undoubtedly the most dangerous confrontation in the world and most likely to produce a nuclear war, North Korea notwithstanding:

With the world’s attention firmly fixated on North Korea, the greatest possibility of nuclear war is in fact on the other side of Asia.
That place is what could be called the nuclear triangle of Pakistan, India and China. Although Chinese and Indian forces are currently engaged in a standoff, traditionally the most dangerous flashpoint along the triangle has been the Indo-Pakistani border. The two countries fought three major wars before acquiring nuclear weapons, and one minor one afterwards. And this doesn’t even include the countless other armed skirmishes and other incidents that are a regular occurrence.

There was one thing in the piece that irritated me. It was the last sentence of this paragraph which I’ve highlighted:

At an event at the Stimson Center in Washington this week, Feroz Khan, a former brigadier in the Pakistan Army and author of one of the best books on the country’s nuclear program, said that Pakistani military leaders explicitly based their nuclear doctrine on NATO’s Cold War strategy. But as Vipin Narang, a newly tenured MIT professor who was on the same panel, pointed out, an important difference between NATO and Pakistan’s strategies is that the latter has used its nuclear shield as a cover to support countless terrorist attacks inside India. Among the most audacious were the 2001 attacks on India’s parliament and the 2008 siege of Mumbai, which killed over 150 people. Had such an attack occurred in the United States, Narang said, America would have ended a nation-state.

I believe that’s

  1. a typographical error
  2. geopolitically incorrect and
  3. reflects a lack of understanding of what a “nation-state” is

Here’s the definition of a nation-state. A nation-state is a state whose citizens are culturally, linguistically, and ethnically homogeneous. Neither Pakistan, India, nor the United States are nation-states. Japan is a nation-state. Albania is a nation-state. The United States isn’t.


The History of Health Care Insurance

Embedded within the review of Elizabeth Rosenthal’s book on the business of American health care and reforming it at the New York Review of Books there’s a handy summary of the history of health care insurance in the United States:

The American system was not always like this. Rosenthal gives a lucid and revealing history of American health care beginning with religious institutions ministering to the sick and dying in the nineteenth century. Absent effective treatments like antibiotics and anesthetics, therapy was not very costly, and recovery largely depended upon the body’s natural systems of resistance and repair. In the early 1900s, as clinical knowledge and treatment advanced, medications and surgeries were developed, and costs increased.

The question for hospitals at the time was how to cover expenses, not how to make money. The archetype for today’s insurance plans, developed at the Baylor University Medical Center in Dallas in the 1920s, was never intended to generate profit. It began when the hospital accumulated large numbers of unpaid bills for its services and decided to offer the local teachers’ union a deal: for six dollars a year, members “who subscribed were entitled to a twenty-one-day stay in the hospital, all costs included.” But there was a deductible: the insurance took effect only after a week of hospital costs pegged at $5 daily.

Baylor’s plan spread across the country and was given the name “Blue Cross.” The aim of this insurance was to protect patients from bankruptcy and to sustain hospitals and the charitable religious groups that supported them. Employer-based health insurance arose as a “quirk of history.” The federal government ruled in 1943 that no taxes would be levied on the money paid for employee health benefits. “When the National War Labor Board froze salaries during and after World War II,” Rosenthal writes, “companies facing severe labor shortages discovered that they could attract workers by offering health insurance.” After the war, in many other countries, a national health care system came to be regarded as a public good. But in the US, many viewed government-based health insurance as a form of socialism, and despite several attempts, proposals for such a system never could pass Congress.

As more Americans gained coverage, for-profit insurance companies sprang up to compete with the nonprofits Blue Cross and Blue Shield. The “Blues”—which coordinated their efforts starting in the 1940s and formally merged in 1982—accepted everyone, and all members paid the same rate no matter how old or how sick they were. (By the 1960s, more than fifty million Americans had hospital coverage from Blue Cross.) “Unencumbered by the Blues’ charitable mission,” Rosenthal writes, the private insurers “accepted only younger, healthier patients on whom they could make a profit.”

In the 1970s and 1980s, the rise of for-profit insurance companies like Aetna and Cigna made it difficult for the Blues to compete. In 1994, “hemorrhaging money,” Blue Cross and Blue Shield became for-profit as well. “This was the final nail in the coffin of old-fashioned noble-minded health insurance,” Rosenthal writes. The for-profit California Blues “gobbl[ed] up” their fellows in a dozen other states and, renamed WellPoint, emerged as the second-largest insurer in the country. Premiums rose rapidly. “WellPoint’s first priority appeared no longer to be its patient/members or even the companies and unions that used it as an insurer, but instead its shareholders and investors,” Rosenthal writes. This truth is often obscured; insurance companies market themselves in the media as caregivers, confusing the public, but they are not. The companies are fundamentally investment vehicles, maximizing profits to boost shareholder value.

Before the Blues turned into for-profit companies, they spent 95 percent of premiums on medical care. To increase profits, the Blues, along with other insurers, now spend as much as 20 percent of their premiums on marketing, lobbying, and administration.

There are several things worth pointing out in that history. At its inception health care insurance had all the features of an insurance program. Risks were defined on both sides of the transaction. There was a risk pool.

Note, too, that the transition from not-for-profit to for-profit took place as the menu of successful treatments rose. From 1920 to 1960 there were no open heart surgeries or transplants and joint replacement surgeries were rare. The start of the boom in for-profit health care insurance was coincident with the establishment of Medicare.

There are lot of other noteworthy tidbits in the piece but this one stood out for me:

Rosenthal points out that “total cash compensation for hospital CEOs grew an average of 24 percent from 2011 to 2012 alone.”

If anyone can outline a health care system in which hospital CEO pay can increase by 24% per annum year over year indefinitely, I’d be very interested in hearing about it. And with a suspicious mind like mine it’s hard to avoid noting that the health care exchanges under the Affordable Care Act opened for business the year after that enormous jump.


Storm Clouds

The graph of return on equity from 1952 to 2017 above is from Deutsche Bank courtesy of Barry Ritholz. Let’s take a little poll.

  1. There is no relation between return on equity and economic downturns.
  2. Return on equity always declines in an economic downturn, reaching a bottom near the end of the downturn. We are very likely to be entering an economic downturn now and returns will decline a little more before recovering.
  3. Not every decline in returns on equity is accompanied by a recession. Returns on equity could recover a little before declining even more during the next recession.
  4. This time is different.

IMO B-D may all be true. What is clear is that there is too much money chasing too little return.


Try Again

Mark Galleoti opens his piece at Foreign Policy using the rhetorical device irony: Trump is right that NATO is obsolete. However, in the body of the piece it becomes clear that he means that our definition of NATO is obsolete rather than the alliance itself. He does this by asserting that cybersecurity should be added to NATO’s mission and implying that when you add the line items in the budgets of our European NATO allies for policing and security spending, their defense spending doesn’t look quite as bad. He does this by sleight of hand, omitting U. S. spending on policing and security from his accounting.

Sadly, the opposite is the case. Using Mr. Galleoti’s own figures, our European NATO allies spend between .6% of GDP (Norway) and 1.5% of GDP (Bulgaria) on policing and security. In the United States we spend 3% of our GDP on policing and security. In other words adding policing and security spending to military spending makes our NATO allies look worse not better.

My suggestion to Mr. Galleoti is that he try again. NATO is obsolete because our objectives have changed, our priorities have changed, and our European NATO allies insist on maintaining their free rider status. He’ll need to come up with a better argument.


JCPOA Working As Intended

I disagree with Timothy Stafford’s assessment of the Joint Comprehensive Plan of Action, the “Iran deal” in his piece a the National Interest:

In a legally required letter to Speaker Paul Ryan on April 18, Secretary of State Rex Tillerson confirmed that Iran is in compliance with the terms of the Joint Comprehensive Plan of Action (JCPOA). The next day, he told reporters that the deal represented a “failed approach” that will not prevent a nuclear-armed Iran. One might be tempted to attack such doublespeak as indicative of the administration’s general tendency to say one thing and do another. Yet on this count, Tillerson is correct. Iran is in compliance with the JCPOA, but the JCPOA isn’t working. Why?

In short, because compliance is not enough.

IMO the deal was intended to accomplish two things: it was intended to kick Iran’s nuclear weapons development program down the road for the term of the agreement and it was intended to provide President Obama with a foreign policy legacy. It has accomplished and is accomplishing both of those goals in the “poison pill” manner characteristic of President Obama’s domestic accomplishments.

In the case of the JCPOA the poison pill took the form of all of the benefits to Iran coming at the outset with any benefits to the U. S. coming later.

In other words IMO Mr. Stafford’s objection is to the plan. That ship has sailed.


Free Trade

In all likelihood you’ve never heard of the Jones Act, nearly a century old now. At RealClearPolicy William Murray reviews its consequences today:

As the Mercatus study notes, there were 2,926 large ships in the U.S. commercial fleet in 1960, making up 16.9 percent of the world fleet. By 2016, that number had fallen to 169 ships, only 0.4 percent of the world fleet. U.S.-flagged ships carried 25 percent of U.S. international trade in 1955; by 2015, the share had dropped to 1 percent of total exports.

In any other industry, this sort of economic decline would have set off klaxons and drawn a major political response. In a 1999 study, the U.S. International Trade Commission estimated the Jones Act cost U.S. consumers $1.32 billion annually, its requirements being the equivalent of a 65 percent tariff on shipping services.

So where’s the outrage? Both the Interstate Highway System and cheaper aviation have made massive inroads into interstate commerce over the past century. Meanwhile, U.S. export and import businesses simply use cheaper foreign-flagged vessels. It also helps that U.S. airlines aren’t prevented from purchasing aircraft from Europe, Canada, or Brazil nor U.S. truckers from buying German or Japanese-made big rigs. While no one would propose banning airlines or truckers from relying on these foreign industries, this is precisely what the Jones Act does for the U.S. shipping industry.

There are thousands of such laws. Generally, they injure U. S. consumers to benefit a small number of Americans. Sometimes their adverse effects extend beyond that as with our cotton subsidies which hurt farmers in developing countries.

You can see why although I’m an advocate of free trade I chafe at the treaties that are being marketed as free trade these days. They aren’t free trade. They’re picking winners and losers.


The Nexus of Culture and Opportunity

I wonder if J. D. Vance is preparing to seek elective office. Read his introduction to the Heritage Foundation’s Index of Culture and Opportunity, reproduced at Daily Signal, of which this is a snippet:

We speak about education and workforce development, the skills gap, automation and offshoring, and trade deficits in part because these things are easier to measure. We can put a number on the time necessary to retrain a worker and the productivity gains of doing so.

It is harder to measure culture and how it affects the people who occupy it, and judging by much of our recent discourse, it is harder still to talk about culture.

But talk about it we must, because the evidence that culture matters should now overwhelm any suggestion to the contrary.

We know, thanks to the work of experts like Nadine Burke Harris, that childhood trauma and instability make it harder for children to concentrate at school, deal with conflict successfully, or form stable families themselves later on.

We know that two of the biggest factors driving regional differences in upward mobility are the prevalence of single-parent families and concentrated poverty, indicating that both family and neighborhood structure matter in the lives of our nation’s working class.

We know that declining participation in civic institutions like churches destroys social capital and eliminates pathways to the middle class in the process.

We know that the expectations that children have for themselves can drive their performance on standardized testing and a host of other endeavors.

Acknowledging these correlations does not discount the importance of a vibrant economy or wise public policy, but these realities should inform our debates about policy, both its promises and its limitations.

and tell me it doesn’t sound like it. While the sentiments expressed in it may be deemed “dog whistles” by some and even considered offensive in progressive enclaves in New York and San Francisco, they’re also probably popular far outside party Republican circles, especially among those who think they’re being ignored and left behind by the Creative Class.


What Won’t Happen

At his Washington Post op-ed historian Michael Kazin points out something which will disappoint Donald Trump’s supporters and with which I agree. Based on past experience with presidents who won by a minority of the popular vote, Trump is very unlikely ever to become popular or even become more popular:

The four previous presidents who finished second in votes cast all struggled to convince Americans that they were doing a good job. Each battled the perception that his victory was undemocratic and illegitimate; each soon lost the confidence of his own partisans in Congress and led an administration that historians regard as a failure. Each faced an uphill struggle to keep his base happy and mobilized while also reaching out to the majority, which preferred policies his voters detested. Most, like Trump so far, did not even try to square that circle.

The previous four presidents who faced that situation were George W. Bush, John Quincy Adams (also the son of a president), Rutherford B. Hayes, and Benjamin Harrison. There are simple reasons that popular minority presidents never become popular: they come with an array of enemies and very few friends. So, for example, as my blogfriend Marc Schulman documented in his now-defunct blog American Future, by December 2001 the New York Times had begun a relentless campaign against George W. Bush that didn’t end until he left office.

Trump has further aggravated that situation by declaring war on practically everyone in Washington: the Washington establishment, the civil bureaucracy, the news media, the list goes on.

Unless there is some precipitating event that produces a “rally ’round” effect, as the attacks on September 11, 2001 did for George W. Bush, Donald Trump is, as a consequence of his initial lack of popularity, relentless anti-Trump media campaigns, constant revelations, and his own personality and conduct, unlikely ever to become popular even fleetingly. However, unless there is an opposite precipitating event as I’ve noted before, he’s unlikely to lose enough of his supporters to risk impeachment. So that’s something that won’t happen, either. Expect to have Donald Trump to kick around for four or, heavens forfend, eight years.