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.

I encourage you to read this article on mass incarceration in the United States at City Journal by Rafael A. Mangual. Here’s a snippet:

Because so few American prisoners are serving time for trivial infractions, aligning America’s incarceration numbers with those of, say, England or Germany would require releasing many very serious and frequently violent offenders. Yet many in the decarceration camp have been calling for just such a mass release. The #cut50 initiative, founded by activist and CNN host Van Jones, aims to halve the prison population. Scholars at the Brennan Center have called for an immediate 40 percent reduction in the number of inmates.

Check out the eye-catching infographic, “World Incarceration Rates”. We can’t accomplish Van Jones’s 50% reduction in the prison population without releasing violent serial offenders. The idea that goal can be accomplished by not putting people in jail for drug offenses is a fiction.

As I have noted before comparisons with highly cohesive countries like Germany betrays a misunderstanding of the United States. We are better compared with Mexico or Brazil than we are Germany. We are a rougher, more violent, less law-abiding country than Germany and we have violent crime statistics to match.

The demonstrations in Puerto Rico continue with varying degrees of peaceableness. What initiated the demonstrations was some nasty chat messages by the commonwealth’s governor but it goes a lot deeper than that with interrelated issues including government corruption, class, and the handling of the aftermath of Hurricane Maria.

In my opinion some of the blame for the situation in Puerto Rico lies with Congress which has authority over and responsibilites for Puerto Rico it does not have for a state. Congress has neglected its oversight responsibilities. I also think that granting Puerto Rico statehood would be a grave error.

The next shoe in the story of Iran’s provocations has dropped with Iran arresting 17 people as CIA spies. We will probably never know the real story. Britain is stepping up to the plate to a certain extent as I suggested yesterday. Iran’s seizing of a British-flagged tanker is piracy full stop. It’s not up to us to take Iran to task for it but we shouldn’t be mealy-mouthed about it.

I disagree with President Trump’s assessment that “the squad” are incapable of loving this country. I think their experience of this country is so limited that they don’t really know this country. The remedy for that is more and broader experience not nasty tweets or inciting crowds. Perhaps I have more confidence in the American people than he. I disagree with his entire approach to the matter but it’s becoming increasing clear that he’s trying to nail the four freshman Congresswomen to the Democratic Party. I think that move is likely to heighten tensions in this country which are already as high as I’ve ever seen them. It seems to working.

Oregon’s Public Employees’ Retirement Fund has reduced its stake in Berkshire-Hathaway by a 40% in reaction to B-H’s lacklustre performance. From Barron’s:

Warren Buffett isn’t close to beating the market this year, and a giant pension fund has cut its investment in Berkshire Hathaway , the investment juggernaut that Buffett helms.

Class B shares of Berkshire Hathaway stock (ticker: BRKb ) have only managed a 0.9% gain so far in 2019 through Friday’s close, in sharp contrast to the S&P 500’s 18.7% rise.

We’ve noted that Buffett suffered “a reputational and financial black eye” earlier this year as Berkshire took a $1 billion paper loss when Kraft Heinz stock (KHZ)—one of its larger investments—tumbled. Years ago, Buffett backed the combination of H.J. Heinz and Kraft Foods Group that created the company.

Oregon’s Public Employees’ Retirement Fund slashed two-fifths of its Berkshire stock investment by selling 141,822 Class B shares in the second quarter. OPERF, as the pension is known, made the disclosure in a form it filed this week with the Securities and Exchange Commission. OPERF, which recently was counted as the 42nd largest public pension in the world by assets, now owns 222,763 Class B Berkshire shares.

The reality is that they had to. The fund’s assumption is a 7.2% return. With such a large stake in B-H the company’s low returns threatens the fund’s entire structure. Look for a lot more of this especially from pension funds with higher assumptions. They will encourage greater risk-taking which inevitably will mean more losses.

Continuing on from the previous post, demography may not be destiny but it’s not nothing, either. In this post I’m going to show you four different demographic trend patterns of countries around the world and consider the implications of each. All of the graphics below are from the fascinating site, Population Pyramid. You can while away quite a few hours checking the population pyramids for different countries there.

Gradual growth

The first trend pattern I want to consider is that of the United States which is one of gradual growth.

I consider that a pretty benign, stable pattern although I recognize that some people despise population growth and think it’s disastrous. Our population is presently around 330 million and will be around 450 million by the end of the century. That’s the pattern in all majority English-speaking countries as well as in France, the Netherlands, and Denmark, among others. I think it is a statement of tempered hope for the future.

In these countries the size of the working age population will continue to grow, able to support increasing number of children and elderly people. Continuing prosperity will require prudence but it can be done. Increasing real per capital GDP would help, too.

Critical decline

The second pattern is one I’ve deemed “critical decline”. It is the pattern in Germany:

You can see why the Germans are panicked. By the end of the century the German population will have declined by a quarter. That means that a relatively small number of young people will be supporting a lot of old people. There is no really good solution to this problem. They can’t import a lot of Germans from somewhere else. They can import people but they won’t be Germans and they won’t behave like Germans do. One way or another Germany in 2100 will not be much like Germany in 2019.

That’s the pattern not just in Germany but in Japan and most of the other ethnic states of Europe, e.g. Greece, Czech Republic, Romania, etc.

Critical increase

The third pattern I’ve deemed “critical increase”. It is the pattern in Nigeria:

By the end of the century Nigeria’s population will have nearly quadrupled, from 202 million now to 750 million. It is the pattern of countries in sub-Saharan Africa with the exception of South Africa and of Egypt. It’s tempting to think that people in these countries could emigrate to Europe but I don’t believe that’s a practical solution for two reasons. Relatively few people in these countries speak any European language fluently or have 21st century schools. Emigration would solve their problems while aggravating the problems of countries who are already starting to experience critical population decline.

Sadly, I suspect that the challenges facing these countries will be corrected by the traditional means: famine, pestilence, and war. They could address their own problems by engaging in ambitious programs of education, particularly of women, and political reform but I am not hopeful. I suspect that tribal interests will overwhelm national survival. Said another way if you think the genocide in Rwanda was terrible, you ain’t seen nothin’ yet.

Gradual decrease

My final pattern I’ve called “gradual decrease”, essentially the opposite of the first pattern. It is not only the pattern in China:

but the pattern in Russia, India, Brazil, Mexico and most of Latin America, North Africa with the exception of Egypt, and the Middle East. In most of these countries in which the populations were formerly rising rapidly, the trend may continue into critical decrease or reverse into gradual or critical increase. It’s too early to tell. If China’s population is actually decreasing more rapidly than the official statistics tell us (as suggested in the article I’ve linked to), it could be in critical decrease.

One final note. Over the next 50 years we will be journeying into uncharted territory. We don’t really know what conditions are required for a country to maintain a strong economy with a declining population because populations have been increasing for millennia. Watch Japan. The Japanese continue to do pretty well with a declining population because per capita GDP continues to grow. Accomplishing that may be a challenge.

There’s an interesting article from scholar Yi Fuxian at South China Morning Post asserting that China doesn’t have the number of people claimed in the official statistics:

China’s official demographic figures, including the now-cliched “country of 1.4 billion people”, seriously misrepresent the country’s real population landscape. The real size of China’s population could be 115 million fewer than the official number, putting China behind India in terms of population.

This massive error, equal to the combined populations of the United Kingdom and Spain, is a product of China’s rigged population statistics system, influenced by the vested interests of China’s family planning authority.
To start with, the raw data of China’s population figures were “adjusted”. China’s total fertility rate, or the number of kids per woman throughout her life, dropped below the watershed level of 2.1 in 1991, from which moment the population size of the next generation would be smaller than the current one, and the average total fertility rate was 1.36 in 1994-2018, according to data from census and surveys. However, the family planning authority in charge of the country’s population control refused to believe the numbers and “adjusted” the rate to 1.6-1.8 and, accordingly, the official population size.

For instance, the real total fertility rate in 2000 was 1.22, according to a census result, but the government revised it to 1.8. Accordingly, the country had 14.1 million new births in 2000, but the government revised the figure by 26 per cent to 17.7 million. A census, which is conducted every 10 years, should provide the truest picture of China’s demographic situation. But for the 2000 census, the government was unhappy about the original finding of 1.24 billion and revised it up to 1.27 billion.

I have made my view of official revisions pretty clear, not just in China but here in the United States as well. They are always politically motivated.

I guess some people’s reaction would be who cares? Does it really matter if China has 1.285 billion people rather than 1.4 billion people or more people than India? I think it does and let me try to explain why.

The reasons it’s important have to do with the number of young people, the size of the working age population, and the dependency ratio (children and old people related to number of working age people). If China’s working age population and total population will peak in a few years with both to decline after that, it’s one thing. If China’s working age population and total population have already peaked and from here on a shrinking number of people of working age will need to support a growing number of elderly people, it has enormous implications for Chinese politics and policy. Its options will be different.

The reaction of the editors of the Washington Post to the support the Chinese have received for their treatment of their Uighur minority would be funny if the situation weren’t so tragic:

T A SESSION of the U.N. Human Rights Council this month, 22 mostly Western ambassadors joined in a letter expressing concern about China’s mass detentions in the Xinjiang region and calling for “meaningful access” for “independent international observers.” It was another tepid gesture in what has been a weak international effort to respond to Beijing’s campaign of cultural genocide against the Uighur ethnic group and other Muslim minorities.

What was remarkable was what came next. Four days later, countries recruited by Beijing delivered their own letter to the council, signed by 37 ambassadors, which endorsed what it whitewashed as a “counter-terrorism and de-radicalization” operation and claimed that “the fundamental human rights of people of all ethnic groups there are safeguarded.” The signatories included the usual global rogue’s gallery — Cuba, Russia, North Korea, Venezuela. But a dozen Muslim governments also joined in — thereby sanctioning one of the largest assaults on Islam in modern times.

The statement represents a shameful capitulation by Pakistan, Saudi Arabia, Egypt, the United Arab Emirates, Algeria and other majority-Muslim states that frequently pose as defenders of the faith — especially when it involves condemning Israel. And it offers an augur of what international affairs will look like if the Chinese regime of Xi Jinping realizes its global ambitions: a world where most states meekly submit to Beijing’s dictates and endorse its crimes.

Don’t they realize that “Muslim solidarity” is a contradiction in terms? Condemnation of assaults on Islam only apply to the United States not China and then only if they are attacks on Arabs. Beyond that the Saudis think they’re the only real Arabs.

Here’s a bigger question. Why aren’t those condemning racism condemning China? The Han Chinese leadership are among the greatest racists on the planet. Does keeping the supply of cheap consumer goods flowing outweigh the principle of opposing racism?