The Obvious

I see that Tom Friedman has noticed the same things I have which I think means that they are obvious. From his most recent New York Times column:

I was shocked that so many candidates in the party whose nominee I was planning to support want to get rid of the private health insurance covering some 250 million Americans and have “Medicare for all” instead. I think we should strengthen Obamacare and eventually add a public option.

I was shocked that so many were ready to decriminalize illegal entry into our country. I think people should have to ring the doorbell before they enter my house or my country.

I was shocked at all those hands raised in support of providing comprehensive health coverage to undocumented immigrants. I think promises we’ve made to our fellow Americans should take priority, like to veterans in need of better health care.

And I was shocked by how feeble was front-runner Joe Biden’s response to the attack from Kamala Harris — and to the more extreme ideas promoted by those to his left.

He goes on:

Dear Democrats: This is not complicated! Just nominate a decent, sane person, one committed to reunifying the country and creating more good jobs, a person who can gain the support of the independents, moderate Republicans and suburban women who abandoned Donald Trump in the midterms and thus swung the House of Representatives to the Democrats and could do the same for the presidency. And that candidate can win!

I agree. Glenn Reynolds has been saying much the same thing somewhat less kindly for some time: all the Democrats need to do is not act crazy and they can’t even do that.

Maybe the candidates are right. Maybe there is an overwhelming but unevidenced groundswell of public opinion in favor of Medicare For All, the Green New Deal, late term abortions, open borders, a debt jubilee for educational debt, and extending public benefits to illegal migrants. Maybe Americans really want to see a good fight between whatever Democratic candidate ultimately wins the nomination and Donald Trump rather than the “more normal” country polls have suggested. Or maybe all of those things just represent the views of a relatively small number of activists, what’s true but unevidenced is that people who tell pollsters they disapprove of Trump will vote for him anyway because the alternative is so much worse, and that Donald Trump may well become yet another presumably unpopular president who carries more states in his re-election bid than he did when he won the first time.


Objects Are Larger in the Rear View Mirror

Although I agree with the thrust of Charles Sykes’s Politico post to the effect that the Democratic presidential candidates who are embracing a long laundry list of radical positions are doing themselves no good for the general election, there is one particular with which I disagree:

President Richard Nixon, while lacking Trump’s theatricality and instability, was regarded with fear and loathing by much of the country.

I fear that Mr. Sykes’s memory is deserting him. According to Gallup, Nixon’s approval rating ranged from 50% to 63% throughout 1972. That is an approval rating of which more recent presidents including Clinton and Obama can only dream. Nixon’s approval rating only began to plummet for good in 1973 after he had been re=elected when the Watergate revelations hit the news media. On Nixon’s handling of the Vietnam War in particular his approval rating was higher than that of Lyndon Johnson, his predecessor.

I never voted for Nixon but I do remember what the late 1960s and early 1970s were like pretty vividly (except 1969 about which my memories are fuzzy for reasons I’ll explain another time).

By the standard Mr. Sykes is setting both Bill Clinton and Barack Obama were both feared and loathed by much of the country. What I think is fairer to say is that Nixon, Clinton, and Obama were all despised by a relative handful of activists, loved by others, and most of the American people didn’t give a damn one way or another.

What really happened in 1972 is that activists, caught within their own echo chamber, convinced themselves that Richard Nixon was much less popular than he really was, put forward a nominee whose views were out of step with what most of the American people believed, and went on to lose every state other than Massachusetts including Mr. McGovern’s home state. No Democratic president of the post-war period has won 49 states. It wasn’t dirty tricks that won the 1972 election. It was taking the temperature of the country incorrectly that resulted in a resounding defeat.

That’s what Democrats need to consider. Don’t assess your chances based on what your own most extreme supporters believe.


Who Wants It?

In his latest Wall Street Journal column Walter Russell Mead is concerned about Erdogan’s Turkey’s leaving the Western orbit, such as it is:

The potential defection of a major ally like Turkey poses a significant challenge to NATO, not least because the alliance has no legal means to expel members that default on their obligations. While Mr. Erdogan’s purchase of the Russian system requires a serious response, and the delivery of F-35s must be put on hold, Washington should move cautiously.

Turkey and the West do best when they work together. The Ottoman alliance with the Central Powers ended with dismemberment of the empire in World War I. But the rift was also costly for Winston Churchill; the Allied defeat at Gallipoli damaged his reputation and haunted him for years. The Istanbul election demonstrates that opposition to Mr. Erdogan’s increasingly erratic leadership is deepening. A century after the Great War, Washington should remember that Turkey is bigger than one man and focus on the long term.

What he fails to do is make any case whatever that the West should want to retain an irredentist, neo-Ottoman non-Kemalist Turkey which is precisely what Mr. Erdogan has been constructing. That is not the Turkey that was admitted to NATO and I do not believe it is a Turkey we should wish to defend. It is not so much that the West has abandoned Turkey, as Dr. Mead asserts as that our interests have diverged.


Those Were the Days

I found David Brooks’s most recent New York Times column largely a lament for an America that has been gone for nearly 40 years, one in which there was a liberal and conservative wing of both the Democratic and Republican Parties and they didn’t hate each other. Indeed, that might be the capsule summary of most of his columns. Here’s the kernel of his piece:

No matter how moderate or left, Democrats of a certain age were raised in an atmosphere of liberalism. I don’t mean the political liberalism of George McGovern. I mean the philosophic liberalism of people like Montaigne, John Stuart Mill, Abraham Lincoln and Frederick Douglass — people who witnessed religious and civil wars and built structures to restrain fanaticism.

Philosophic liberalism, Adam Gopnik explains in his essential book, “A Thousand Small Sanities,” begins with intellectual humility. There’s more we don’t know than we do know, so public life is a constant conversation that has no end. In the liberal view, each person contains opposites and contradictions. You flatten and dehumanize complex individuals when you see people according to crude dichotomies and assign them to tribal teams.

Liberals prefer constant incremental reform to sudden revolution. “Liberal reform, like evolutionary change, being incremental, is open to the evidence of experience,” Gopnik writes. Liberals place great emphasis on context. The question is not: What do I want? It’s: What good can I do in this specific circumstance?

Liberalism loves sympathy, suspects rage and detests cruelty. Politics is inevitably a dialogue between partial truths. Compromise is a virtue, not a sign of cowardice. Moreover, means determine ends. If you win power through rhetorical violence, and by hating those who disagree, your regime will be angry and destructive. Liberalism arose out of the fact that political revolutions, while exciting at the outset, usually end up in brutality, dictatorship and blood. Working within the system is best.

People who came of age in the past few decades did not grow up in an atmosphere of assumed liberalism. They often grew up in an atmosphere that critiques it.

Progressives are not liberals. Liberals love what the United States is and has been and yearn to make it better through gradual, gentle, and consensual change. Progressive love the United States only for what it might become under their tutelage.

If you think that is a good formula, try it out on your boss in describing how you feel about your job, on a chef in describing his preparation of a dish, on your spouse, or on your mother. I predict that in short order you will find yourself without a job, unwelcome in the restaurant, without a spouse, and persona non grata in your parents’ home.


The Right Word

There’s an old joke about a man who moved to a small Maine town at two days of age and remained there without leaving until he died at 96. On his tombstones the people put the inscription “He was almost one of us”.

Robert A. George, one of the editors of the New York Daily News, finally uses the right word in describing President Trump’s tweet of a few days ago which, imprudently in my view, seized the attention from the internecine warfare within the Democratic Party to himself:

The person who smears Mexican immigrants as rapists and murderers (even grudgingly admitting “some are good people”) is clearly a nativist bigot.

The person who initially attempted to pass by executive fiat a ban on Muslim immigrants is clearly an Islamaphobic bigot.

The person who caviled for years that the first black president — of Kenyan heritage — wasn’t really born here (despite voluminous, contemporaneous, evidence to the contrary) is clearly a xenophobic bigot.

The person who suggests that four members of Congress should just shut up or “go back” to other countries is clearly an ignorant and xenophobic bigot. Ignorant because of the “four Progressive Congresswomen” Trump alludes to, Ilhan Omar, is Somali-born, but a naturalized American; Alexandria Ocasio-Cortez is a New York-born Latina; Rashida Tlaib is a Michigan-born Arab; Ayanna Pressley is a black Cincinnati-born, Chicago-raised Massachusetts representative.

The word is “nativist”. I recognize it because I have some nativist streaks myself. For example, I think we need to devote significantly more attention and resources to American Indians (AKA “Native Americans”) and native-born blacks, particularly rural blacks, who comprise most of the people in the United States who are genuinely poor, and less to economic migrants from Mexico and Central America. Consequently, I think “the wall” is a waste of resources. What we need is a skills-based immigration system enforced in part by serious workplace enforcement and penalties on employers, much like those in Canada, Australia, and New Zealand, coupled with a public relations campaign emphasizing the impossibility of getting a job in the United States without legal immigration.

An interesting point has been raised, however. What are we entitled to expect from immigrants or those reared in immigrant households? I don’t think we’re entitled to gratitude—that would be a bridge too far. I think that at the very least they should not despise us or our history, they should be fluent in speaking the English language, they should abandon the prejudices with which they were reared, and they should not devote their lives to changing everyone but themselves.


The Least Popular Yet Fast-Increasing Government Program

I think you’d have to go some ways to find a government program less popular than the Pension Benefit Guarantee Corporation, described by Alex Pollock at RealClearMarkets:

The Ways and Means Committee of the House just approved a bill for a big taxpayer bailout of private multi-employer/union-sponsored pension plans. Many of these plans are hopelessly insolvent. In other words, they have committed to pay employee pensions far greater than they have any hope of actually paying. In the aggregate, the assets of multi-employer plans are hundreds of billions of dollars less than what they have solemnly promised to pay.

There is an inescapable deficit resulting from past failures to fund the obligations of these plans. This means somebody is going to lose; somebody is going to pay the price of the deficit. Who? Those who created the deficits? Or instead: How about the taxpayers? The latter is the view of the Democratic majority which passed the bill out of committee in a 25-17 straight partyline vote on July 10.

It combines just about everything that’s wrong with contemporary American government. Inadequate benefits. Welfare for the rich. Inadequate oversight. Short-sighted construction. Political cowardice. Taxing people who have no pensions to pay other people’s pensions. Nobody likes it but it’s indispensable. Read the whole thing. And weep.

What would be necessary to fix it? The list is so long it’s hard to know where to stop. Better oversight. Higher premiums. Making it a real insurance program with premiums proportionate to risk. Clawbacks. None of which will happen.


The Strangest Thing You’ll See Today

Courtesy of the brilliant Janis Ian. Yes, you read that right. A heavy metal knitting championship. If this is any guide and based on the Finns I’ve met, Finland must be one strange country.

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Riddle Me This

Speaking of health care, how high would the Medicare payroll tax need to be to cover the Medicare system’s shortfall, depicted above graphically? That’s the reason there will be more health care spending reform. Either we’re going to cut costs, we’re going to borrow without limit, increase personal income taxes, or we’ll raise the Medicare payroll tax and probably all four.

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Our Financialized Economy

Sports analogies don’t usually capture my imagination but I found this post at City Journal on the “James Harden economy” included some valuable insights, namely:

More serious than the decline in base hits in baseball or elegant passing in basketball is the frayed connection, in our market economy, between optimal competitive behaviors and the social goods that they are supposed to support. Corporate profits and stock-market valuations have surged for decades, while the incomes of typical workers have stagnated. Growth and wealth have concentrated in ever-narrower geographic areas. Productivity barely rises.

A report released in May by Republican senator Marco Rubio highlights a fundamental shift underlying some of these trends: businesses are no longer the nation’s long-term investors. “Developing productive, long-life capital assets,” the report argues, is “the primary task required of any successful economy.” Market capitalism presumes that the business sector, borrowing from elsewhere in the economy, will fund the creation of these assets. But that “money circuit” has short-circuited: in aggregate, the business sector now lends more than it borrows, a practice “quite at odds with traditional models of corporate finance,” as Federal Reserve economist Roc Armenter observes.

Rubio quotes economic historian Alfred Chandler: “The continuing productivity, competitiveness, and profitability of these enterprises and of the industries and nations in which they operate depend on constant reinvestment.” But this “constant reinvestment” isn’t happening. The data show instead a “financialization” of the economy: “Nonfinancial companies’ balance sheets look increasingly like financial institutions’ balance sheets: that is, they increasingly borrow and lend for profit.” Firms generate profit growth through arbitrage opportunities like the offshoring of labor, by “rationalizing” their workforces, and by investing in financial assets or just buying back their own stock.

These are the modern economy’s “step-back threes.” They lie within the rules and they put wins on the board, but they aren’t yielding the broader benefits for which the game exists. Firms have found a new way to win, and it isn’t pretty.

Don’t blame the companies. They are merely seeking the incentives they have. If you want things to change, we’ve got to change the incentives. What “rule changes” should we implement?


It’s Not Just Patients’ Exposure to Costs

In a post at RealClearPolicy on controlling the cost of health care in the United States, James Capretta reveals that he is yet another economist who doesn’t understand the health care system in the United States. Or the one in Switzerland for that matter. Yes, Switzerland has a system that provides universal coverage based on private insurance companies. But Switzerland is a small, consensus-based country in which every policy of any scope is approved by a direct popular vote. When something becomes the law in Switzerland, you can be confident that it represents the consensus of Swiss public opinion. Additionally, incomes in Switzerland are much more equal than in the United States.

You can contrast Swiss policies with those in the United States but suggesting that because it works in Switzerland it should work in the U. S. is not well-founded.

His prescriptions open mildly enough with suggesting that pricing in health care be more transparent:

First, the federal government can help patients become autonomous consumers of medical services by simplifying the process of price comparisons. The market today is opaque, with pricing that is impossible for the average consumer to compare across providers. The federal government could help consumers by creating a list of standardized services for which pricing must be provided by all relevant facilities and clinicians. The prices attached to each item on the standardized list would cover exactly the same set of services needed to address the patients’ needs, and thus allow for apples-to-apples price comparisons. In addition, insurers should be required to make “referenced-based” payments for those services when provided out-of-network at the average of the rates they have negotiated with their preferred providers. These steps would allow consumers to become active shoppers for many medical services that can be purchased in discrete packages in non-emergency situations.

That won’t do anything about costs but it’s benign. Then he goes off the rails by proposing that Americans should have more skin in the game:

Second, the government should move toward defined contribution payments for subsidized insurance coverage instead of open-ended payments. In particular, in Medicare and in job-based insurance, plan enrollees should get a fixed level of support toward insurance enrollment that is not tied to the overall costs of the plans they select. In Medicare, this means a “premium support” model. In job-based coverage, the federal tax break for employer-paid premiums should be capped to encourage firms to provide fixed levels of support at the maximum tax-preferred level.

What he’s missing is that in the United States most health care demand is created not by patients but by physicians and there is next to no evidence that most patients are capable of economizing prudently. What the evidence actually supports is that patients may economize foolishly, resulting in an overall increase in services required.

A premium support system does not encourage or discourage insurance companies in the U. S. from doing anything for two reasons: 1) most corporate plans are self-insuring—insurance companies are only administrators and bear no risk; 2) insurance companies’ percentage of the take is presently capped.

On the surface the facts on the ground respecting the U. S. health care system suggest that Medicare For All is a better solution. My reservations about it are mostly that, confronted with angry constituents unable to get the health care they want and facing long waits for what they can get, politicians will inevitably raise reimbursement rates. How do I know that? They’ve been doing it for 50 years.