The Future Won’t Look As You Imagine It

When I read Justin Bachman’s eye-popping imagining of airports in 2040 I was strongly reminded of some pictures. On the left is a photograph of a busy train station circa 1900. Here’s an artist’s conception of the train station of the future, drawn about the same time:

For reference purposes here’s a picture of an actual train station in 2010.

It probably serves the same routes as it did a century ago but more slowly and with fewer passengers.

I don’t know what the airports of 2040 or 2050 or 2100 will be like. I’m pretty confident that they’ll be a lot more like the airports of today than whatever we imagine. Actually, I wouldn’t be surprised if there were no airports in 2100 because air travel had become too expensive. Be careful about projecting trends of today in a straight line into the future.

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Don’t You Know Who I Am?

Author Linda Tirado has a good essay at Talk Poverty on the “coastal elite” that I want to commend to your attention:

To be an elite is to be listened to and respected, to have autonomy, to think that your life and your work might be remembered by history. For me, it was obvious when I tipped over that line: I count national politicians in three countries amongst my friends, and if I am curious about something I can simply dial up an expert and know that my call will be taken.

That’s what power looks like now. Power is social capital that I trade on to build the networks that I need to get more social capital that I can trade for more power. That is the nature of the game, and you need an invitation to play.

Progressive circles are still not equipped to wrestle with imbalances of political power. If you ask someone on the left to explain racism or sexism or homophobia, they will be able to expound at length about how we must listen to the people who are impacted, and how those with the upper hand in any given situation must try to identify and mitigate systemic imbalances. Ask about elitism—about inequality in access and cultural power—and people have a harder time articulating it.

Consider it through the lens of the disruption that I had in my life. There are my old friends, the ones I swapped shifts with: low-income, disabled, unemployed, high-school graduates struggling to make ends meet. Then there are my new friends, the ones I made when I was elevated: politicians, household-name pundits and writers, deans of upscale schools, Hollywood stars. For me, the question of social capital is really that stark. There is Before, and After.

When I talk to my old friends about the problems of the nation, it is always personal and immediate. Will needed services like heating assistance or low-income health insurance be cut? Will I be able to keep my job if I don’t have a child care credit? Will we still have the home health nurse that takes care of my mom when I can’t be there? With my new friends, these problems are real but also somehow theoretical. Millions of people are at risk of losing these things, which everyone agrees is awful. We talk about who we might call to lobby, or what organizations are good soldiers in the fight.

It boggles the mind that people cannot see a difference in those two kinds of conversations, even as they bemoan the terrifying increases in inequality in America. I still feel an ancient rage building in my chest when I see someone on TV telling the viewing audience—most of whom will never be invited to be a pundit—that any cultural divide is the sole fault of nefarious right-wing populists.

Her key point is that rejecting the very idea that there is a “coastal elite” is symptomatic of how great the divide. Read the whole thing.

I don’t believe that we live in a democracy today. I think today’s America is an aristocracy but its aristocrats are not distinguished like the aristocracies of days of old by the ownership of land. Mostly, today’s aristocrats know people.

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Where Does the Money Come From?

Forbes says that Elon Musk is worth $15 billion, the 80th richest man in the world. Where does his money come from? As far as I can tell his last business that actually made money was PayPal and he certainly didn’t get $15 billion from his PayPal stock.

So, where does the money come from?

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Sunk Cost or Valuable Public Investment?

Conor Sen considers a question in his post at Bloomberg View that I hadn’t considered. What happens if ridesharing companies like Uber or Lyft outcompete public transportation?

If these companies can profitably poach the ridership of high-demand transit routes, they will. Which then raises important questions: If ridesharing firms can operate more effectively and efficiently than public transit agencies, should the government get out of the transit business and let private companies provide better service at a lower price? Or should government subsidize or outsource, rather than operating its own transit services? Or should government adopt the companies’ best ideas — perhaps new or different routes with different types of vehicles — and then ban the private sector from offering competing services?

If governments do none of the above, then lost ridership and revenue would further strain the budgets of public transit agencies. This would aggravate the social equity concerns inherent in an emerging two-tiered transit system.

I think you need to add to this that neither Uber nor Lyft is operating at a profit. If they can’t figure out how to do that without losing market share, it is highly possible that one or both of them will just close its doors. What happens if a city, pressed by other demands for scarce tax dollars and unable to compete with ridesharing companies, just gets out of the public transportation business and then the ridesharing company folds? Restarting shuttered public transportation is likely to be more expensive and politically harder than just keeping it going.

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So, Then What’s the Solution?

At Bloomberg View Tyler Cowen jumps aboard the “single-payer won’t solve our problems” bandwagon with me:

Americans love their personal consumption, and household savings rates have been mostly falling since the early 1980s. Those are long-term cultural trends that no health-care policy will reverse. We should be grateful for whatever cost control we can get, because it is running counter to some fairly fundamental principles of the American economy and what the American people expect out of life.

Furthermore, we shouldn’t take the lower health-care spending in many European nations as a sign of better health-care policy. It’s a reflection of a broader cultural difference. If the U.S. someday did move to a single payer system for health care, it probably would be a relatively expensive version of that idea. The U.S., of course, does have a partial single payer system through Medicare, and it is still more expensive per beneficiary than its European equivalents.

What those who believe that a single-payer system is the solution to our problems should ask themselves is, since education is for all intents and purposes already single-payer in this country, why do we spend so much more per capita than any other country in the world on education?

That leads naturally to the question then what is the solution? Health care spending is rising at a multiple of incomes or growth outside health care and, since between 60 and 70% of health care spending is government spending in one form or another it’s dependent either on the non-health care economy or borrowing. If it cannibalizes the non-health care economy, that means the rest of the economy becomes less able to support health care spending over time. Our level of public debt is already such that it, too, is reducing economic growth so borrowing is no solution, either.

We’ve either got to change how health care is distributed or how it’s provided. You can’t have artisanal production of goods sold to a mass market. Either the production or the market must change.

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A Left Populist Approach to Health Care Reform?

At Business Insider Josh Barro presents a list of proposed reforms to the health care system, by implication associating them with Elizabeth Warren. Here they are in bullet point form:

  • Impose price controls on prescription drugs.
  • Block hospital-system mergers, so healthcare providers have less power to raise prices.
  • Offer a Medicaid-based public option, so people can buy insurance that enjoys Medicaid’s low negotiated payment rates — and that can therefore offer more affordable premiums and deductibles.
  • Break up state medical cartels. Force states to allow nurse practitioners an appropriately broad scope of practice, to recognize other states’ medical board certifications, and to honor foreign medical degrees. Abolish “certificate of need” requirements that make it hard to open new medical facilities. Issue more visas to foreign doctors and nurses. These changes would make it easier to find a medical provider and put downward pressure on prices.
  • Ban surprise medical bills. A hospital that’s in your network shouldn’t be able to stick you with an astronomical bill for an out-of-network anesthesiologist you didn’t even know was going to treat you.
  • Move more drugs and medical devices over-the-counter. Warren and Sen. Chuck Grassley, a Republican, have a bipartisan bill to allow some hearing aids to be sold without a prescription. Some forms of hormonal birth control could also be made available OTC.

I won’t analyze those point by point. My criticism resembles something I said earlier today: even if fully implemented that list of reforms would do almost nothing to slowing the increase in health care costs.

“Medicaid for All” will not have the effects Mr. Barro implies. At least not as long as Medicare exists and its reimbursement rate is higher than Medicaid’s. To claim otherwise is to claim that doctors and hospitals will leave money on the table. That’s a strong claim requiring serious evidence rather than just blithe reassurances. You might extend coverage that way but not care. About 70% of physicians presently accept new Medicaid patients. Expect that to drop under “Medicaid for All”.

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Remember the U. S.’s Grand Strategy

Embedded in his most recent Washington Post column on the future of the Air Force, George Will passes along a quote from an admiral and an academic that bears consideration:

Only the United States has the capacity to be, as retired Adm. Gary Roughead and Kori Schake say in a Brookings Institution study, “guarantors of the global commons — the seaways and airways, and now the cyber conduits.”

Succinct, that is America’s grand strategy although it ignores the global financial system, a vital component of the “global commons”. Unlike Germany, Russia, or China the American grand strategy is an emergent phenomenon, derived from the actions and preferences of thousands or even millions of Americans. Our grand strategy isn’t something arrived at and imposed from above. You implement our grand strategy every time you take an overseas vacation, buy an imported car, or host a foreign exchange student.

The entire “national greatness” ideology and our wars in the Middle East have next to nothing to do with that strategy. They neither protect us nor further our grand strategy. I wish more Americans, particularly Americans who are elected to Congress or otherwise are in government service, understood that.

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The Democrats’ Agenda

Noting that many Americans see Democrats have only resistance to the Trump Administration as their agenda, in his Washington Post column Dana Milbank delineates the agenda that Congressional Democratic leaders have now set out:

As important as what’s in it is what’s not. Democrats jettisoned social and foreign policy issues for this exercise, eschewing the identity politics and box-checking that has plagued Democratic campaigns in the past, most recently Hillary Clinton’s. This will be purely an economic message.

They also resisted invitations to steer the party toward the center (as pollster Mark Penn advised) or in a more progressive agenda. This is meant to be a populist manifesto that doesn’t conform to the left/right debate but instead aims to align Democrats with ordinary, middle-class Americans fighting powerful special interests.

Titled “A Better Deal: Better Skills, Better Jobs, Better Wages,” it is expected to have many Democratic staples — tax increases on the rich, affordable college, infrastructure spending, higher wages, job training, paid family leave and the like — and a few new ones.

My concern about such an agenda resembles my reaction to plans for ending global warming. Even were they to implement 100% of their plans it would not effect the results they claim to seek. Then what?

The evidence that “affordable college” will end an imagined skills shortage is something between meager and non-existent. Look at it this way. Facebook would rather hire an Indian or Russian programmer with adequate credentials on paper for $80,000 a year than an American programmer with even better credentials for $100,000 a year.

Add to that the reality that not every American has either the preparation or ability to make use of a college education. Based on OECD figurs, the country with the highest percentage of its citizens with an associates degree or better is South Korea at 69%. Next are Japan (60%), Canada (59%), and Russia (58%). The figure for the United States is 47%. The countries with the highest percentage of their citizens with four year degrees or better are Russia (58%), Lithuania (55%), Switzerland (49%), and South Korea (47%). In the U. S. the figure is 36%.

Assume we can boost the percentage of four year degrees all the way up to 58%, ignoring that Russia has the same economic issues that we do and then some. What about the other 42% of the population? Universal basic income? Composting? In Germany 27% of the people have either two year or four year degrees and they don’t have the same problems. Higher education is a red herring and an expensive one at that. We’re already spending a multiple of what those countries are on a per capita basis on higher education. How much will we need to spend to accomplish the objective? Where is the money to come from? Taxing the rich? Do the math. There aren’t enough rich to tax to satisfy all of the spending objectives, i.e. education, health care, infrastructure spending, etc. plus meeting all of our pension obligations.

They’d better have additional plans in the works so that when they’ve implemented college for all, a single-payer system, a carbon tax, and a massive extraneous infrastructure program without solving any of the problems they’re presumably intended to fix, they have some ideas for what comes next.

The political question is that the agenda outlined above is basically Hillary Clinton sans identify politics and without Hillary Clinton. Very much the same dry, technocratic platform the Democrats have been running on since Michael Dukakis. Will Clintonism without the Clintons be enough to capture the hearts of disaffected Democrats in the age of Elizabeth Warren, Bernie Sanders, Black Lives Matter, and the antifa?

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Cause and Effect

Okay, read this post on drug expiration dates at RealClearHealth and then decide whether the main effect of drug expiration dates is to expand the market for drugs.

It reminds me of the story that a company once doubled its sales by adding a single word to the instructions on the product’s labels: “Lather. Rinse. Repeat“.

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History Is Bunk

In repeating Henry Ford’s famous remark, I don’t mean as he apparently did that there is nothing to be learned from the events that happened in the past. I think there’s a great deal to learn from them. What I mean is that most of what you’ve read about the events of the past are bunk and the farther back in time you go the worse it is.

We have a pretty fair notion of what happened in the American Civil War because there are so many contemporaneous sources, official records, and eyewitness accounts. That was 150 years ago. Go back another 150 years and we know a lot less of what actually happened during England’s First Civil War because there just aren’t as many contemporaneous sources, official records, or eyewitness accounts available.

Go back a millennium to the invasion of England by the Normans and we know much, much less. We know it happened because of the aftermath. We’ve got the Bayeux Tapestry which depicts events during the Battle of Hastings. There are basically five written sources on which we rely for descriptions of the Battle of Hastings and they vary in quality and content. None presents a complete account of the battle. We depend almost entirely on later histories written by Anglo-Norman historians who all but certainly had axes to grind for other information about the conquest.

For events in classical antiquity we frequently rely on single manuscripts that were produced a millennium or more after the events they’re describing. Believing that they are true, complete, and accurate records of actual events is the equivalent of believing everything you read on the Internet.

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