When I read this piece by Peter Turchin at Bloomberg on how over-educated “elites” are fostering economic and political unrest:

The roots of the current American predicament go back to the 1970s, when wages of workers stopped keeping pace with their productivity. The two curves diverged: Productivity continued to rise, as wages stagnated. The “great divergence” between the fortunes of the top 1 percent and the other 99 percent is much discussed, yet its implications for long-term political disorder are underappreciated. Battles such as the recent government shutdown are only one manifestation of what is likely to be a decade-long period.

I was struck, once again, by how incredibly prescient Joseph Schumpeter was in his analysis, which I quoted at length here. It is so obviously what we see around us I can barely fathom why there is any doubt.

Rather than dwell on the problem, why not consider solutions? Here’s Mr. Turchin’s:

In some cases, however, societies come through relatively unscathed, by adopting a series of judicious reforms, initiated by elites who understand that we are all in this boat together. This is precisely what happened in the U.S. in the early 20th century. Several legislative initiatives, which created the framework for cooperative relations among labor, employers and the government, were introduced during the Progressive Era and cemented in the New Deal.

By introducing the Great Compression, these policies benefited society as a whole. They enabled it to overcome the challenges of the Great Depression, World War II and the Cold War, and to achieve the postwar prosperity. Whether we can follow such a trajectory again is largely up to our political and economic leaders. It will depend on all of us, rich and poor alike, recognizing the real dangers and acting to address them.

Sadly, the policies we’ve embarked on do very nearly the opposite. The PPACA does not tax the top 1% of income earners. It taxes individuals and couples earning between $60,000 and $80,000 per year, redistributing it to people who earn just slightly less than that. Raising the personal income tax on the highest income earners might accomplish his desired goal but it might just tax people in the top quintile to 99% percentile of income earners and redistribute the additional revenues within that quintile and to the top 1% of income earners.

My preferred solution would

1. Limit the incomes of those dependent for their incomes on the government to a level the society is capable of bearing. That doesn’t just mean federal employees but physicians and other healthcare providers, educators, police officers, firefighters, and so on.
2. Stop encouraging, even subsidizing, people to borrow to buy educations that will prepare them for jobs that will never exist.
3. Grow, mine, drill, and produce more stuff here, even if it means imposing import duties.

The only other alternative I can see is violence.

Due to an enormous volume of Chinese comment spam my web host has blocked comments at my site. I’m working with them on it.

Update

Comments have been re-enabled.

I’ve done quite a bit of work on the site and things might be operating oddly until caches have been cleared, etc.

One of the things that I’ve done is that I’ve tried to block all IPs originating in China. We’ll see how it works out.

I hope to have new content some time this afternoon.

Testimony from Centers for Medicare and Medicaid Services Deputy Chief Information Officer Henry Chao must have sent chills down the spines of some House Democrats:

A key player in the development of the Obamacare website acknowledged Tuesday that up to 40 percent of IT systems supporting the exchange still need to be built.

The revelation from Centers for Medicare and Medicaid Services Deputy Chief Information Officer Henry Chao occurs as the administration works to meet its Nov. 30 deadline to shore up the website.

“It’s not that it’s not working,” Chao told lawmakers at an Energy and Commerce oversight subcommittee hearing. “It’s still being developed and tested.”

Financial management tools remain unfinished, he said, particularly the process that will deliver payments to insurers.

The part of the system that Mr. Chao is talking about are the “back office” functions, the portions of the Healthcare.gov iceberg that are below the surface.

I wonder if he’s ever heard of the ninety-ninety rule. 40% may require more than 90% of the total development time.

What’s the relationship between burning mouse scat and understanding the reasons for human obesity? That’s what this article is about. Looks like they’ve taken the first steps in disproving the simple thermodynamics theory of weight gain scientifically.

If you think that I’m critical of Chicago Mayor Rahm Emanuel, you should see what Kari Leydersen has to say about him:

Many pundits describe Emanuel as the epitome of the modern centrist neoliberal Democrat. The North American Free Trade Agreement (NAFTA) is often viewed as a symbol of neoliberalism, a global socioeconomic doctrine with intellectual roots in Chicago. Emanuel was a key architect of the trade agreement, which ultimately cost tens of thousands of U.S. jobs and brought social and economic devastation to Mexico.

To the extent that Emanuel genuinely wants to make the world a better place for working people, he thinks market forces and business models are the way to do it, and he clearly (and perhaps rightly) thinks that he understands these institutions far better than any teacher or crossing guard or nurse. From that viewpoint, the messy attributes of democracy—sit-ins, protests, rallies, people demanding meetings and information and input—simply slow down and encumber the streamlined, bottom-line-driven process Emanuel knows is best. But many regular Chicagoans see injustice, callousness and even cruelty in this trickle-down, authoritarian approach to city governance. They see the mayor bringing thousands of new corporate jobs subsidized with taxpayer dollars while laying off middle-class public sector workers like librarians, call-center staffers, crossing guards, and mental health clinic therapists. They see him closing neighborhood schools, throwing parents’ and students’ lives into turmoil. They see him (like Daley) passing ordinances at will through a rubber-stamp City Council, leaving citizens with few meaningful avenues to express their opposition to policies changing the face of their city.

Read the whole thing. I have never understood who Emanuel’s constituency was. Low information voters?

One more quick point about fixing Healthcare.gov. I know that lots of fans of the PPACA are banking on the idea that once Healthcare.gov is fixed everything will be just peachy and everyone will be overwhelmed by how much they like the new regime.

I wonder if they’ve considered that once Healthcare.gov is fixed whatever structural problems the PPACA has might be revealed more quickly. Unforeseen secondary effects have a way of biting you in the butt.

In his column at the Washington Post, Dana Milbank points out something that casts doubt on whether the president’s promise that Healthcare.gov will be working for “the vast majority of users” by the end of the month, the reluctance of the president or his surrogates to define what they mean by “the vast majority of users”:

A “vast majority” would presumably be somewhere between a bare majority of 51 percent and an overwhelming majority of, say, 99 percent — but officials had refused to say. My Washington Post colleagues Amy Goldstein and Juliet Eilperin solved the mystery, reporting over the weekend that a vast majority, as defined in secret by the Obama administration, is 80 percent.

Carney, at his briefing Monday, didn’t deny the figure but did his best to qualify it with all sorts of asterisks and fine print about metrics and baskets and site stability and users’ experiences and navigators and channels and something about a continuum. Sticking closely to his written notes for the briefing, he explained that although some of the 20 percent who couldn’t get HealthCare.gov to work would have technical troubles, others might have complicated circumstances or would simply prefer to sign up on the phone, in person or even by mail.

Nedra Pickler of the Associated Press pointed out that if Amazon or Kayak couldn’t serve 20 percent of their customers, “they probably wouldn’t stay in business very long.”

“You’re looking at that statistic simplistically,” Carney informed her.

When people start parsing every thing you say, wondering what you actually mean, I think it’s an indicator of a certain lack of trust.

IMO what the Administration should be concerned about most is that rather than ensuring that the web site works for “the vast majority of users” the website developers will focus their attention on making it work for “the typical user”. Search for the typical user continues.

This morning I had an early morning appointment with a client. After our meeting a VP of the company came up to me and said, “Knowing your interest, I thought you’d like to know that our company group plan is a casualty of the PPACA.” It was one of the “Cadillac plans”. He continued, “They just don’t care about us.” Meaning the folks in Washington.

Time is a limited resource. Devoting time to selecting and choosing a new company healthcare insurance plan takes time that won’t be used for getting more sales, developing new products, or making the business operate more efficiently. It will be interesting to see what effect, if any, the new regime in healthcare insurance has.

At this point I don’t think I have a single client who hasn’t been compelled to devote substantial time to Sarbanes-Oxley, HIPAA, or the PPACA.

If enacting the PPACA means that there is now a right to healthcare in the United States, it’s not because most Americans believe that it’s the government’s responsibility that everybody have healthcare insurance:

PRINCETON, NJ — The 56% of U.S. adults who now say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage continues to reflect a record high. Prior to 2009, a clear majority of Americans consistently had said the government should take responsibility for ensuring that all Americans have healthcare.

or that the PPACA’s popularity has convinced people that healthcare is a right. Indeed, not only do a majority of Americans believe that the government has no responsibilty to ensure that everybody has healthcare insurance, the percentage of Republicans, independents, and Democrats who believe that the government does not have that responsibility has increased since 2009. The trend is downward.

People in different countries believe in different things. In Russia people are uncomfortable with differences in incomes that people here aren’t. In France a broadly-defined “equality” is a high value in a way it isn’t here.

IMO some of the reasonable objectives of the PPACA have popular support. For example, I strongly suspect that most people see rescission, arbitrary cancellation of insurance, as unjust. A law banning rescission other than in cases of fraud could have been written in a paragraph.