For More Information See Other Side

Remember those old joke cards with “For More Information See Other Side” on both sides? Apparently, the guy who invented those is responsible for unrolling the PPACA.

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Do We Really Want Daily Briefings on Healthcare.gov?

Former Obama Administration healthcare advisor Ezekiel Emanuel says the administration should be giving detailed daily briefings on the status of the Healthcare.gov web site:

Former White House health care adviser Ezekiel Emanuel said Monday that administration should be giving “wonky” daily briefings on what is wrong with the health care exchange website — and how they’re going to fix it.

“I think they need to have daily briefings and they need to give us milestones over the next four weeks as to what we should look for for improvement. Reassurance verbally is not worth much at this point,” Emanuel said on MSNBC’s “Morning Joe.”

He wants to know what the problems are, what’s being done about them, and when they’re resolved. I think that this illustrates why we should be cautious about physicians becoming involved in politics.

Who would give such a briefing? To whom? 99% of the people, including Dr. Emanuel, wouldn’t understand a detailed technical briefing. Additionally, he’s assuming that such a briefing would build confidence rather than tear it down, something of which I’m unconvinced.

On a peripherally related subject, I have a hypothesis on the 476,000 healthcare insurance exchange enrollments we’ve been hearing about. I wonder if the number hasn’t been reverse engineered. Perhaps they did the same calculation I did. 7 million enrollments needed divided by 200 days (until March 31, 2014) is 35,000 per day. Multiply that by 18 (the number of days elapsed) is 630,000. Back that off by a third to compensate it for the well-publicized problems and, voila!, 476,000. A number that’s not so high as to be incredible and not so low as to induce panic.

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Upgrading My Cable Modem

This morning I did something I’ve been putting off for months. I replaced our more than ten year old DOCSIS 1.0 cable modem with a new, DOCSIS 3.0 cable modem. My Internet service provider, Comcast, began sending me nastygrams more than six months ago, warning me that they were going to drop DOCSIS 1.0 at the end of October and I’d need to upgrade to a new compatible cable modem.

I’ve been renting my cable modem from Comcast. I figured that the reduced fingerpointing in case of problems was worth the few bucks a month they charged me. A couple of months ago I finally bit the bullet and asked them to send me a new cable modem. I was quite disappointed when they sent me a low end, El Cheapo modem (compared to the SB4100 it was replacing). Then I dragged my feet for a bit more.

The other day when I was at Costco I saw an SB6141 cable modem (they’re generally highly rated) on sale so I bought one.

I installed our last cable modem before self-install was even an option that Comcast offered. I let the technician they’d sent out fumble around for a half hour or so, gently nudged him out of the way, and installed it myself. It, too, was a replacement so it was no sweat. I’ve installed installed a half dozen others for friends and neighbors since then. The process has never gone completely smoothly and in some cases disastrously badly. Another reason I was dragging my feet.

Well, I disconnected the old modem, replaced it with the new, attempted to go through the installation process, it failed (as usual), and I called Comcast. A half hour later the new cable modem was working.

As soon as I had Internet connectivity back, I did a bandwidth test. My bandwidth had almost doubled, from roughly 15 MBps downloads to 30 MBps downloads. I’ll keep my fingers crossed.

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Is That City Hall’s View of Chicago?

In the middle of a post at City Journal with the obvious enough thesis that it’s better to be well-off than poor in Chicago I saw this:

Over the last few years, violent crime in Chicago has made international headlines. Though the city as a whole has seen a significant drop in crime since its early-nineties peak, analyst Daniel Hertz has demonstrated that significant areas of the West and South Sides actually experience more murders than they did even at the peak of the crack epidemic. Unlike New York, where former war zones such as the South Bronx have made radical improvements in safety, many of Chicago’s most dangerous neighborhoods have only gotten worse. Meanwhile, gentrified North Side areas are safer than New York City.

Safety levels in Chicago can no longer be plotted on a single bell-shaped curve for the entire city. Today, that curve is split into two—one distribution for the wealthy neighborhoods and one for the poor ones. A lack of resources is part of the problem: the police department is understaffed. Emanuel campaigned on a pledge to hire new police officers, but he quickly backtracked, claiming that he only meant to put 1,000 more officers on the street through reassignments. While the city budget is tight, failing to increase police strength during a murder epidemic is a profound statement of civic priorities.

That’s a prescription you run into pretty frequently—we just need more police officers—but I wonder whether there’s an actual basis for it. Only three major cities have more police officers per 10,000 population than Chicago does: Washington, DC, Newark, and Baltimore. To my eye there’s no easily identifiable relationship between the ratio of police to population and crime rates.

I think the better case is that Chicago’s police force is mismanaged. That fits, too, with the general thesis of the post: Rahm Emanuel’s view of the city has no room for the poor.

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The Jefferson Myth

There’s a post at Media Myth Alert that explains why Thomas Jefferson’s having fathered a child by Sally Hemmings, a Negro slave, is far from proven fact. Indeed, the preponderence of evidence points away from that conclusion, something that cannot be proven solely on the basis of DNA testing.

The movie clip above ends with the quote “When the legend becomes fact, print the legend.” That’s mostly what the press does.

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476,000 Apply for Healthcare Insurance Under the Exchanges

It’s being reported that 476,000 people have applied for insurance either through the state-run exchanges or the federal government’s Healthcare.gov since the enrollment period began on October 1:

Administration officials say more than 476,000 health insurance applications have been filed through federal and state exchanges. The figures mark the most detailed measure yet of the problem-plagued rollout of the insurance market place.

However, the officials continue to refuse to say how many people have actually enrolled in the insurance markets. And without enrollment figures, it’s unclear whether the program is on track to reach the 7 million people projected by the Congressional Budget Office to gain coverage during the six-month sign-up period.

[…]

Of the 476,000 applications that have been started, just over half have been from the 36 states where the federal government is taking the lead in running the markets. The rest of the applications have come from the 14 states running their own markets, along with Washington, D.C.

Politico looks at the number in somewhat more detail:

The Associated Press, which first reported the creation of 476,000 applications Saturday, said the numbers were roughly divided between people who had managed to create accounts on the HealthCare.gov federal site, which is serving 36 states, and the state-run exchanges. Neither White House nor HHS officials would give any further details or breakdown Saturday evening.

Several of the state exchanges, such as Kentucky and Washington state, are operating fairly smoothly. Some are still having problems, but overall the state-based systems are working better than the massive federal one. The health law as written in 2010 assumed that the states would run their own exchanges, with the feds only available as a backup. But many states, mostly with GOP governors, opted out, forcing HHS to build a far more massive and extensive enrollment system than it had contemplated, and Congress rejected several requests for additional implementation funds.

The Advisory Board, a business group that tracks health industry developments, tallied up the state figures available as of Friday and found that about 192,000 people had applied, and roughly 55,000 had selected a health plan (although not all of them had paid in advance for the plan, so technically enrollment wasn’t completed).

Also left unanswered is how many of those just under half million are actual potential healthcare insurance exchange customers and how many are eligible for Medicaid. In the final analysis there are only three numbers that matter: how many people are insured under the exchanges, what percentage of them are young and healthy, and what percentage of those insured under the exchanges were previously uninsured.

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What Can You Expect From a Half Billion Dollar Web Site?

The technical criticisms of the Healthcare.gov web site are becoming more strident:

WASHINGTON — The federal health care exchange was built using 10-year-old technology that may require constant fixes and updates for the next six months and the eventual overhaul of the entire system, technology experts told USA TODAY.

“The application could be fundamentally flawed,” said Jeff Kim, president of CDNetworks, a content-delivery network. “They may be using 1990s technology in 2.0 world.”

Recent changes have made the exchanges easier to use, but they still require clearing the computer’s cache several times, stopping a pop-up blocker, talking to people via Web chat who suggest waiting until the server is not busy, opening links in new windows and clicking on every available possibility on a page in the hopes of not receiving an error message. With those changes, it took one hour to navigate the HealthCare.gov enrollment process Wednesday.

Those steps shouldn’t be necessary, experts said.

“I have never seen a website — in the last five years — require you to delete the cache in an effort to resolve errors,” said Dan Schuyler, a director at Leavitt Partners, a health care group by former Health and Human Services secretary Mike Leavitt. “This is a very early Web 1.0 type of fix.”

Multiple problems are noted and they go on to suggest that the site may need a complete do-over.

It’s well known that design teams need to be small and cohesive and, frankly, it’s hard to have a small, cohesive design team with a web site with as many moving parts and as many players involved in the development as Healthcare.gov.

An additional problem. In a sense every computer program is a map of the designers’ and/or developers’ minds. The more complicated the problem that the program attempts to solve, the smarter the designer must be to see the inherent simplicity in the problem. There are some problems so complex that nobody is that smart.

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Where Will New Federal Revenues Come From?

In the light of the new Congressional panel on debt reduction, part of the agreement to end the shutdown, I thought it might be interesting to reflect on the revenue side of the federal budget’s equation. President Obama has repeatedly said that increased revenues were a necessary part of any debt reduction package:

WASHINGTON — Be skeptical. Be very, very skeptical.

That was the reaction from nearly all corners to the talk of convening yet another round of bipartisan negotiations to reduce the nation’s long-term debt. The idea has resurfaced as a way of resolving the standoff between President Obama and the Republican-controlled House over reopening the government and increasing its legal borrowing limit, perhaps for months or even just weeks.

But even if the current talks soon resolve the immediate impasse, which did not look likely on Saturday, any renewal of negotiations for a long-term fiscal plan will run into the same underlying problem that has doomed efforts for the past three years.

Republicans refuse to raise additional tax revenue, and until they do, Mr. Obama will not support even his own tentative proposals for reducing spending on fast-growing social benefit programs, chiefly Medicare. During a White House meeting with Senate Republicans on Friday, he reiterated that the two go hand in hand, according to people who were there.

The Republicans’ usual retort is that the president has already received additional revenues (in 2012) without accepting any cuts to entitlement spending.

I’d like to examine the question from a different angle. How could additional revenues be realized?

The most obvious answer is by increasing the tax rates on the highest income earners but that doesn’t really answer the question. The objective, presumably, is not just to raise marginal tax rates for the sake of increasing them but to increase effective revenues. Sadly, higher marginal tax rates, particularly on the highest income earners, have not historically been a reliable way of raising effective revenues. Consider this table from the Tax Policy Center of the Brookings Institution and the Urban Institute, reporting federal taxes as a percent of GDP from 1934 to the present. In only three years, 1944, 1945, and 2000, have federal revenues exceeded 20% of GDP.

Now, that’s not a physical law but it’s almost as good as one. It’s a political reality. Americans will accept the federal government’s extracting 20% of GDP from the economy at a time of national existential crisis or they’ll accept it briefly during a boom that looks like it will go on forever but it will be followed by a move to cut taxes. Is it possible that higher federal revenues would become politically acceptable? Anything is possible but the history of the last 80 years says it’s pretty darned unlikely.

The other obvious answer is via growth. Increased national income will increase federal revenues without increasing the proportion of GDP that goes to the federal government. Sadly, no one really knows how to do that. Paraphrasing my old economics prof, we know how to produce shortages but we don’t know how to produce growth.

As of this writing federal spending is hovering around 25% of GDP and expected to increase while revenues are around 17%. Growth is less than 2% per year. Can we all agree that persistent federal spending in excess of 25% of GDP with persistent federal revenues plus growth at less than 20% of GDP constitutes a problem?

I do not believe that increasing the marginal tax rates on the highest income earners in the absence of robust growth in the economy will increase effective federal revenue, largely because, other than under the conditions I’ve outlined above, it never has. The more income is in the hands of the highest income earners the more difficult it becomes to extract from them.

If you really want reliable increased federal revenues, you really need to increase taxes on those in the bottom 90% of income earners rather than on those in the top brackets. That can be done most easily by increasing FICA. IMO that’s a perverse policy.

Another alternative would be some sort of a consumption tax—either a VAT or a national sales tax.

So, let’s return to my question. How can what President Obama is insisting on be accomplished? How can effective federal revenues as a percentage of GDP be increased?

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The End of the Shutdown

The shutdown of the federal government is over and the debt ceiling has been increased:

On the brink of a debt default and after more than two weeks of a federal government shutdown, Congress finally approved a plan Wednesday evening to temporarily end both crises and restore some measure of normalcy to Washington.

The eleventh-hour deal was brokered by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky. It will fund the government through Jan. 15 and lift the debt ceiling through Feb. 7. It also officially reopened the government, allowing federal employees to head back to work Thursday.

The president has won. The Republicans have lost.

But what has been won?

The shutdown is over. The debt ceiling has been raised. In a few months a Senate panel will submit some suggestions for deficit reduction that the president will reject. We’ve seen this movie before. Some believe that the American public is so disgusted by the outrageous performance of the Congressional Republicans it will result in a Democratic wave in the midterm elections. Peter Beinart sees things a bit more as I do:

The promise of the Obama presidency was not merely that he’d bring Democrats back to power. It was that he’d usher in the first era of truly progressive public policy in decades. But the survival of Obamacare notwithstanding, Obama’s impending “victory” in the current standoff moves us further away from, not closer to, that goal.

It’s not just that Obama looks likely to accept the sequester cuts as the basis for future budget negotiations. It’s that while he’s been trying to reopen the government and prevent a debt default, his chances of passing any significant progressive legislation have receded. Despite overwhelming public support, gun control is dead. Comprehensive immigration reform, once considered the politically easy part of Obama’s second term agenda, looks unlikely. And the other items Obama trumpeted in this year’s state of the union address—climate change legislation, infrastructure investment, universal preschool, voting rights protections, a boost to the minimum wage—have been largely forgotten.

I don’t see that any new coalitions have been built or the framework established for future agreements.

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What Type of Good Is an iPhone?

There are reports that the latest cost-reduced Apple iPhone 5c isn’t selling as well as had been hoped:

The “c” in the iPhone 5c might now stand for cut.

After some drastic price cuts at Walmart and other U.S. retailers, the Wall Street Journal reports that Apple’s is cutting the production or orders for its lower-end phone with its suppliers.

Apple has told its Taiwanese assemblers that it will be cutting this quarter’s orders on the lower-end handset, according to the Journal’s Lorraine Luk. One of the assemblers, Pegatron, was told to cut orders by 20 percent and the other, named Hon Hai, was told to cut by a third, Luk reports. Additionally, Apple has told a component supplier that it would cut parts production by 50 percent.

Apple declined to comment on the reports when reached by ABC News. The company hasn’t released sales numbers of its newest iPhone 5s and 5c phones yet, but did announce that it had sold a combined total of nine million of the newest phones just in the launch weekend.

However, the $199 5s, which has a better camera, faster processor and the new fingerprint sensor, has clearly been more popular than the $100 5c, which comes in a selection of colors but has last year’s specifications. But analysts say that might not be a bad thing for the company if customers are opting for the 5s instead.

That’s made me wonder what kind of economic goods Apple’s products actually are. A “positional good” is a product or service at least part of whose value is derived from its ranking in desireability relative to substitutes. A “Veblen good” is a product or service whose demand rises with its price. Goods can be both positional goods and Veblen goods.

Do iPhones provide more bang for the buck? Or is there a status component in iPhones that makes them a positional good? Or if you cut the price of an iPhone would demand actually fall?

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