I found Doug Mataconis’s post today at Outside the Beltway about the substantial support for Puerto Rican statehood concerning. Basically, two-thirds of Americans support statehood for Puerto Rico and seven-eights of Democrats.

I don’t think they’ve thought it through. Puerto Rico is a terrible candidate for statehood. The median family income there is less than half what it is in the present state with the lowest median family income (Mississippi). The per capita public debt in Puerto Rico is higher than all but three states (Alaska, Massachusetts, New York). I know of no territory with a violent independence movement that has ever been admitted to the Union. It is culturally more different from the mainland than any state previously admitted. Only 20% of the people there speak English well. The last time we admitted a state with such a big cultural difference was when Utah was admitted to the Union in 1896 and a concession was wrung from Utah as a condition for statehood that papered over the difference. More than 100 years later there’s still a struggle over it.

My preference would be independence for Puerto Rico, accompanied by a very large going away present, say, paying off the commonwealth’s debt.

Congress has the authority to admit new states to the Union without anybody else’s approval. Next time the Congress is controlled by Democrats don’t be surprised if, however bad an idea it is, we gain a 51st state.

I don’t usually do this but I think that this op-ed by Mark Chenoweth and Peggy Little at the Wall Street Journal is sufficiently important I’m going to quote it in full:

The Office of Management and Budget issued a memo recently reminding all federal administrative agencies that “the Constitution vests all Federal legislative power in Congress.” That may seem obvious, but agencies often regulate Americans beyond their lawful authority and without accountability. Our organization—the New Civil Liberties Alliance—has petitioned 18 agencies to adopt a permanent rule prohibiting such unconstitutional regulation.

One agency head, Hester Peirce of the Securities and Exchange Commission, outlined the problem in a bracing speech she delivered days before the OMB statement. She faulted the commission’s staff for abusing tools like “no-action letters” and “guidance” to create “secret law,” free from judicial or legislative review.

No-action letters are meant to clarify to the addressee if its behavior is subject to regulation, but too often agency staff use them to craft law at will. Ms. Peirce noted that when these letters—which are publicly available—are issued in tandem with nonpublic guidance, all the issuances can start to constitute their own obscure and ever changing body of law.

No-action letters are drafted by unelected, politically unaccountable agency staff and even on their own can have wide reaching, deleterious impacts. No-action letters issued in 2004 cleared financial corporations of regulatory liability as long as they cast their clients’ shareholder proxy votes on corporate governance issues according to recommendations from purportedly independent, third-party advisers. Those letters helped create a cottage industry in proxy-advisory firms, which themselves had glaring conflicts of interest, exerted undue influence over corporation policies and governance, depressed returns to shareholders and eviscerated informed voting. These letters were withdrawn last fall, but the damage was extensive and long lasting.

Guidance—which refers to a variety of documents that can be issued publicly or privately—can be dangerous on its own. The most notorious example is the Education Department’s 2011 “Dear Colleague” letter, which mandated that universities use a lower burden of proof in sexual-misconduct investigations. Another is the Federal Trade Commission’s use of consent-decree guidance to go after businesses victimized by data-security breaches. Congress has never passed a law to give the FTC this power, and the FTC has never adopted a formal rule outlining data-security duties. Yet for all intents and purposes, the FTC’s consent decrees are binding.

The harder rules are to navigate and understand, the easier it is for staff to expand them lawlessly and capriciously. SEC staff members adjust minimum capital requirements for broker-dealers on an ad hoc, unaccountable basis through phone calls and emails.

Bureaucrats even delegate some of their power to private third parties—such as the Financial Industry Regulatory Authority and the Sustainability Accounting Standards Board—that lack any rule- or lawmaking power at all. Regulators have in effect created a market for private lawmaking. With enough money, private citizens can pay a cadre of lawyers to convince agencies and quasi-private regulators like Finra to establish bespoke regulations that neither Congress nor agencies has formally approved.

This isn’t a government of laws but a body of men making secretive rules for the favored few. “For the sake of integrity,” Ms. Peirce calls for the SEC to examine and reform its practices. Other agencies should follow her advice too.

My opinion is that Congress has been derelict in its duties for generations and if the Congress isn’t willing to put the details into the law the law should be limited to what they are willing to put into the law. Otherwise we do not have a liberal democratic government. We have an authoritarian unanswerable bureaucracy.

I found William Galston’s column on drug prices in the Wall Street Journal interesting. He focuses on insulin:

For the 7.5 million diabetics who use insulin regularly, prices have risen rapidly. A standard measure is total costs—prices paid by consumers plus payments by insurers. A recent study in the Journal of the American Medical Association found that from 2012-17 the total costs of the three most popular insulin products sold in the U.S.—Humalog, NovoLog and Lantus—had risen by 117%, 118%, and 150%, respectively. To restrain the growth of overall premiums, insurers have increased copayments and deductibles, which helps explain why the out-of-pocket cost of insulin has risen so quickly. These increases cause many patients to use less insulin than the prescribed dose, risking disability and early death.

These trends would be easy to explain if insulin were a new drug protected by patents, but it isn’t. Medical insulin was first produced nearly a century ago. Since then, incremental improvements in safety, effectiveness and convenience have impeded the creation of a generic insulin industry. Generic-drug companies also haven’t considered it worthwhile to invest in the manufacturing techniques needed to produce versions of insulin whose patents have expired. An additional barrier comes from legal and regulatory protections for biologic drugs, including thickets of patents.

Without a generic form of insulin on the market, manufacturers can hike prices for each new version of the drug, even when it represents only modest improvements over versions available decades ago. (An article in the Lancet—a leading British medical journal—points to the lack of evidence on whether the newest products are safer or more effective than the insulins widely used in the 1990s, for which the patents have expired.) And because only three companies— Eli Lilly , Novo Nordisk , and Sanofi —command the lion’s share of the U.S. insulin market—a price increase initiated by one of the companies is often mirrored by the others, denying consumers the benefits of competition.

When I hear this what I hear is that the number of producers is limited, the industry has substantial barriers to entry including regulatory barriers as well as substantial initial investment, and the oligopoly that can produce insulin will not do so unless the price is significantly higher than what would otherwise be the market-clearing price for insulin. That sounds like a classic market failure to me which means that it requires government intervention. It is, like most market failures, a case in which government action is required to offset the consequences of other government actions.

Since I think that we should continue to regulate pharmaceuticals and I don’t think we should subsidize the pharmaceutical oligopoly, that limits the potential solutions. That’s why I ask my question: should the federal government manufacture insulin?

In his New York Times column Thomas Edsall repeats some of the things I’ve been saying around here for some time. Progressives represent a rather small proportion of the Democratic Party and an even smaller proportion of the whole electorate. Black voters are more likely to be moderates or conservatives than they are progressives. Democratic members of the Congress are farther to the left than the party rank and file and, importantly, whether it’s true that the squeaky wheel gets the grease may or may not be true but the media, even more left-leaning than the Democratic members of the Congress, give a lot of attention to the issues favored by the left wing of the party.

First, the numbers. Democrats can be divided into three groups, roughly equal in number:

The first two groups are made up of those who say they are “very liberal” and those who say they are “somewhat liberal.” Both groups are two thirds white and have substantial but for the Democratic Party below average minority representation. They are roughly a quarter African-American and Hispanic.

Those in the third group are Democratic primary voters who describe themselves as moderate to conservative. This group has the largest number of minorities; it is 26 percent black, 19 percent Hispanic, 7 percent other nonwhites, and it has the smallest percentage of whites, at 48 percent.

Overall, the Pew Research Center found in 2016 that Democratic voters were 57 percent white, 21 percent black, and 12 percent Hispanic. The remaining voters were Asian-American and other ethnicities.

A separate Brookings study found that 2018 Democratic primary voters were 54.6 percent white, 24.1 percent black, 9.0 percent Hispanic, with the rest Asian-American, American Indian and others.

The Brookings number feels right to me but that might be regional. Now the issues:

The three ideological groups favor different sets of policies. On the left, the very liberal voters stress “the environment, protecting immigrants, abortion, and race/gender,” Khanna emailed me, while the moderate to conservative Democrats are “more concerned with job creation and lowering taxes.”

You might find this interesting:

In addition, Khanna continued, there is a “real differentiation by reported ideology on the question about federal health care for undocumented immigrants.”

In this case, the very liberal group was in favor, 75-25, the somewhat liberal Democrats split, 52-48, and the moderate-conservative group distinctly opposed, 61-39.

or this:

Furthermore, Goldberg writes, black and Hispanic Democrats are more likely to part ways with white liberals “when it comes to contemporary social and gender-identity issues, including views of the #MeToo movement.”

Finally, Mr. Edsall adds support to what I’ve been saying about taking one set of positions for the primaries and another for the general election:

In March 2012, Eric Fehrnstrom, a spokesman for Mitt Romney, was asked if the candidate’s conservative stands in the primaries “would hurt him with moderate voters in the general election?”

Fehrnstrom famously replied:

Well, I think you hit a reset button for the fall campaign. Everything changes. It’s almost like an Etch-A-Sketch. You can kind of shake it up and restart all over again.

In practice, though, with virtually everything a candidate says now recorded for posterity, it has become increasingly difficult to evade past statements.

Read the whole thing.

He doesn’t even get into the other major bifurcation in the party—between technocrats and ordinary machine politicians.

At first I thought that Francis Menton’s post at Manhattan Contrarian in defense of Trump’s tweets heard ’round the world might be promising but it almost immediately descended into gibberish. Here’s where it fails:

No mention of race there, of course. Sounds to me like an invitation to the radical Congresswomen to start behaving like grown-ups and taking some responsibility for the absurd policy proposals that they throw around so recklessly. The Green New Deal for Somalia? I can only think it would take the impoverished Somalis from mere poverty to total destitution and starvation.

Somalia’s per capita emissions of carbon dioxide are already among the lowest in the world. Less than 1% of U. S. per capita emissions. Somalia doesn’t need a Green New Deal. The Somalis are already living it. Rhetoric is being substituted for reason. Not only that but Mr. Menton is arguing against his own position.

Somalia is a great example of all sorts of things. Low carbon emissions. The implications of anarchy. What happens under radical Islam. A country practically anyone would be eager to flee.

Somalis, too, make excellent examples or at least object lessons. Despite the best efforts of that most socially conscious of cities, Minneapolis, the Somali refugees it has so graciously hosted remain terribly poor. Their unemployment rate remains stubbornly high, largely the result of cultural difference. One-third of adult Somali women do not work outside the home compared with about a fifth of adult non-Somali women. Somali poverty in Minneapolis cannot be attributed to poverty. If anything the bigotry goes the other way.

I do not care for the expression “people of color” since I think it fundamentally consists of white people wrapping themselves in the cloak of oppression that black people, the descendants of slaves, can rightfully claim. I’m not the only one who thinks that. Many blacks think so as well. While it may result in a tactical victory I think it will inevitably result in a strategic defeat, at least for black people.

I also find it outrageous that there are people embracing the “one drop” view of race, formerly the province of the most racist of whites.

Here’s the first paragraph of Tunku Varadarajan’s op-ed in the Wall Street Journal:

Of all the lazy criticisms of Brexit, the laziest is that those who voted to leave the European Union were being “emotional,” not rational. You hear it said most often in London, which voted overwhelmingly to remain.

Of course it’s emotional. Would you want it to be anything else? De gustibus non disputandum goes back 2,000 years. It has been recognized that to be human is to have irrational preferences.

Do you know what are rational (or should be)? Corporate balance sheets. When decisions about the future of a nation are made rationally you have a corporation not a nation. In the history of the world has anyone ever willingly given his life for a corporation?

After 12 paragraphs of explaining Bernie Sanders’s and Joe Biden’s positions on health care reform, in his latest New York Times column Paul Krugman comes to the point he wants to make:

So there’s plenty of room for a good-faith Sanders-Biden argument. Unfortunately, that’s not the argument they’re having.

Instead, Sanders is arguing that only single-payer can purge “corporate greed” from the system — an assertion belied by European experience — and broadly hinting that Biden is in the pocket of corporate interests. That’s a criticism you can level about some of Biden’s past policy positions, like his advocacy of the 2005 bankruptcy law. But it’s not a fair criticism of a health plan that’s actually pretty good, and which most people would have considered radical just a few years ago.

For his part, Biden is declaring that the Sanders plan would undermine Medicare. In fact, it would enhance current recipients’ benefits. And it’s a bad sign that Biden, who poses as Obamacare’s great defender, is using a G.O.P. scare tactic familiar from the utterly dishonest campaign against the A.C.A. No Democrat should be stooping to that level.

“Medicare For All” would probably raise my taxes by between $3,000 and $5,000 per year while Joe Biden’s plan would not unless it also included the responsible measure of increasing the personal income tax to fund the expansion of the ACA. I say that because I know my employer and, unless there are specific measures compelling employers to pay the Medicare premiums of employees, the entire thing would come out of my pocket. Since I’ll probably enroll for Medicare during the next open enrollment (I no longer like my employer’s employer-sponsored plan) and add a Medigap plan to that, M4A might have less effect on me than might otherwise be the case. Either way I’ll survive. After five years I’ll end up with lower savings than would otherwise have been the case.

Neither plan will do a darned thing about costs since politicians don’t care about health care costs. M4A could even end up costing more than the status quo if it charges private plans the same as Medicare by increasing Medicare reimbursement rates which wouldn’t surprise me a bit.

“Corporate greed” is an inadequate explanation for why health care costs are higher in the U. S. than anywhere else in the world. Corporate greed, provider greed, patient greed, and the inefficiencies inherent in any health care system as large as ours is probably closer to the mark. Socialists always promise to stamp our human greed but somehow it always manages to survive.

I was very interested to see Democratic presidential candidate Elizabeth Warren’s proposals for dealing with “the coming economic crash at Medium but rather disappointed with the proposals themselves. For example here’s her proposal for strengthening unions:

Ensure that employees may exercise collective bargaining rights, such as by posting notices of collective bargaining rights and maintaining complete neutrality with regard to union organizing.

That’s it. Strengthening unions is an evergreen among Democratic politicians. Are barriers to organizing what have systematically weakened unions over the period of the last 40 years? Or have overseas competition and businesses moving their manufacturing to states without established unions been more important?

And I found her proposals for using “Buy American” restrictions on federal procurement to spur U. S. production of solar panels, etc. in the U. S. hopelessly naive. We cannot match the prices of Chinese-manufactured panels. We can subsidize our own manufacturers but U. S.-made panels will still be more expensive. And subsidizing our own manufacturers is likely to be a violation of our international commitments.

I’m also unsure how we can compete in world markets with a $15/hour minimum wage without massive subsidies.

The reality is that it’s darned hard for us to compete on price with the Chinese on commodity products. The only way we can do that is by a) producing and refining raw earths here which we don’t do for environmental reasons and b) lights-out manufacturing which will do nothing for manufacturing employment.

I think there are reasons for doing these things for national security reasons but that’s a different subject.

I learned something today: the State of Maryland regulates hospital prices. In a post at The Hill Chris Pope compares Maryland’s experience with that of other states nearby:

Instead, it makes much more sense to assess the effect of price regulation by looking at Maryland, which has regulated hospital prices for 45 years, and comparing the cost and quality of its health care system to that of neighboring states such as New Jersey or Pennsylvania. I recently took a comprehensive look at Maryland’s all-payer system — and no matter how you measure them, Maryland’s overall health care costs are not significantly lower than those of its neighbors. If anything, costs have increased slightly over time relative to other states.

Based on Maryland’s experience, the idea that government control will reduce hospital prices seems far-fetched. In reality, the main motive for Maryland retaining its “all-payer rate-setting” system is that it allows Maryland to claim $2 billion more in federal dollars each year. How? The state has a waiver from the nationwide Medicare fee schedule, which requires Medicare to pay Maryland hospitals based on the rates the state sets for private insurers — a provision which increases Medicare revenues that Maryland hospitals may claim from the federal government by around 40 percent for inpatient care and 60 percent for outpatient procedures.

While Maryland consistently has met various narrowly-defined targets for constraining the growth of hospital costs — which are required in order to keep the state’s special waiver — its broader performance is unimpressive. Maryland’s health care premiums, per-capita hospital costs, the rate of hospital cost growth, and the level of charity care its hospitals provide differ little from neighboring states or the nation as a whole.

Why hasn’t putting the government in charge of setting prices reduced hospital costs in Maryland? Largely for the same reason that costs have risen steadily in other states: politicians want to protect the ability of hospitals to fund and deliver expensive services to their local communities. While price regulation is sold as a method of reducing prices, it also increases them: Maryland law bans new hospitals from competing with existing facilities by offering lower prices and prohibits insurers from negotiating significant discounts with networks of preferred providers.

Left unmentioned: prices only tell part of the story. Providers are able to fill the gap left by lower prices by providing additional services.

I’m skeptical that politicians will hold the line on pricing because they have been reluctant to do so in the past. Their incentives actually point the other way—just let prices increase. I can imagine somebody not voting for their Congresscritter because they weren’t able to get the procedure they want but it’s hard for me to believe that anybody ever voted against their Congresscritter because he or she let a service continue to be provided even though it increased costs.

It will take more than a single-payer system to lower health care costs in the U. S. It will take a commitment to lowering health care costs and I just don’t see that.