Headline of the Day

It’s from Gizmodo: Game of Thrones Star Joins Board of Cryptocurrency Startup for Vegans, and No We Didn’t Just Throw Darts at a Wall Covered in Buzzwords”.

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The Same But Different

I found this piece by Ricardo Alonso-Zaldivar at the Associated Press on just how lavish the proposed “Medicare For All” plans are by comparison with the systems of other countries mildly amusing:

WASHINGTON (AP) — The “Medicare for All” plan embraced by leading 2020 Democrats appears more lavish than what other advanced countries offer, compounding the cost but also potentially broadening its popular appeal.

The plan from Vermont Sen. Bernie Sanders would charge no copays or deductibles for medical care, allowing only limited cost-sharing for some prescription drugs. It would cover long-term care at home and in community settings. Dental, vision and hearing coverage would be included.

But while other countries do guarantee coverage for all, the benefits vary significantly. Canada, often cited as a model, does not cover outpatient prescriptions and many Canadians have private insurance for medications. Many countries don’t cover long-term care. Modest copays are common.

I’ve addressed that topic in the past. The reality of many of these other countries’ plans is that in many cases copays are actually larger than they are here.

“Medicare for All proposals would leapfrog other countries in terms of essentially eliminating private insurance and out-of-pocket costs, and providing very expansive benefits,” said Larry Levitt, a health policy expert with the nonpartisan Kaiser Family Foundation. “It raises questions about how realistic the proposals are.”

I guess there are several ways of looking at what’s been put on the table. I take thre proposed plans seriously because they are the only yardsticks I have. If their proponents don’t like their being taken seriously, they should put more serious plans on the table.

It reminds me of Salena Zito’s comment about Trump’s supporters during the 2016 election. Should we take the supporters of “Medicare For All” literally, seriously, or neither? Do we need to wait until they actually hold a majority in the Congress before we know what’s being proposed?

The article does suggest what we should make of the “democratic socialists” who claim that when they say “socialism” they don’t mean Stalin they mean Sweden, which they say with a straight face, ignorant of the details of Sweden’s system.

The relatively parsimonious plans of many other countries would never garner popular support here not to mention they’d be condemned as racist, sexist, classist, or all three.

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Anybody Have a Guillotine Handy?

For most people the idea of an “inner child” evokes innocence, playfulness, and wonder. Not me. My inner child is more like Chucky. This story reported by NBC News brings out my inner child:

When they aren’t working or taking care of their autistic children, Melissa Eaton and Amanda Seigler are moles.

Eaton, 39, a single mother from Salisbury, North Carolina, and Seigler, 38, a mom to six in Lake Worth, Florida, have spent much of their free time in the last three years infiltrating more than a dozen private Facebook groups for parents of autistic kids. In some of these groups, members describe using dubious, dangerous methods to try to “heal” their children’s autism — a condition with no medically known cause or cure.

The parents in many of these groups, which have ranged from tens to tens of thousands of members, believe that autism is caused by a hodgepodge of phenomena, including viruses, bacteria, fungal infections, parasites, heavy metal poisoning from vaccines, general inflammation, allergies, gluten and even the moon.

The so-called treatments are equally confused. Some parents credit turpentine or their children’s own urine as the secret miracle drug for reversing autism. One of the most sought-after chemicals is chlorine dioxide — a compound that the Food and Drug Administration warns amounts to industrial bleach, and doctors say can cause permanent harm. Parents still give it to their children orally, through enemas, and in baths. Proponents of chlorine dioxide profit off these parents’ fears and hopes by selling books about the supposed “cure,” marketing the chemicals and posting how-to videos.

Anybody have a guillotine handy? I recognize that people whose kids have autism are often desperate for respite let alone a cure but to injure one’s own children administering quack cures promoted by opportunistic halfwits. I have no words.

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The Reverse Voltaire Strikes Again

As I’ve mentioned before my former business partner once said something I’ve come to refer to as “the reverse Voltaire”: I may agree with what you say but I will deny to the death your right to say it. Former Chicago Mayor Rahm Emanuel takes to the pages of The Atlantic with an op-ed a column (he’s been made a contributing editor). Here’s its conclusion:

Every time Democrats look at a problem, they think of a program. And while those programs often point the way forward, Democrats need to focus their energy on convincing the middle class that they share their values more than just their economic interests. There is more to voters than their wallets. To do that, Democrats need to prove to them that they know the difference between right and wrong, and that begins with owning the terms accountability and responsibility. Democrats need to be the ones demanding that those who fall short, no matter how privileged, be made to answer for their own decisions. Every one of us should have to live by the same moral and ethical codes. The nation’s elite shouldn’t have any special license to take the easy way out.

Do I really need to go through the catalogue of particulars for why Rahm Emanuel is such a bad spokesman for that particular message? He made millions selling his political contacts to the very bankers he decries in the piece. He became mayor of Chicago with no relevant prior executive experience and certainly missing the personal qualities for the job on the basis of being connected. I’m sure he thought becoming mayor of Chicago was a sinecure, a steppingstone to the presidency. Once he had the job he proceeded to do a pratfall. Just compare Chicago’s credit rating before he took office with what it was after he took office.

His major plan for Chicago was gentrification, supporting a number of progams to encourage well-heeled people to move into the city. It hasn’t been very effective. I am confident that Chicago’s population as measured by the decennial census will be a shock to many but probably not the former mayor. I could go on.

But he’s right here and I hope that Democratic politicians take heed. I presume that he’s angling for a position in the Biden campaign and in a presumptive future Democratic administration.

One word of criticism. The best example of exactly the sort of elite arrogance that we’re suffering from right now is not the war in Iraq. It’s granting China Most Favored Nation trading status and its admission to the WTO. Both occurred under Bill Clinton’s watch but we mustn’t criticize the Bubba. Dare I mention that both Joe Biden and Hillary Clinton voted in favor of the Iraq War? Claiming they didn’t realize that we would actually go to war or that they were misled doesn’t pass the smell test.

Is that the sort of taking responsibility that he means? Accountability and responsibility start at home. I’ll believe him when he takes some and those he supports start taking some.

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Risks and Rewards

Nouriel Roubini, dubbed “Dr. Doom” during the Aughts for his prophetic warnings of a global financial crisis, takes to the The Guardian to warn of an incipient global trade “Cold War”:

The US blames China for the current tensions. Since joining the World Trade Organization in 2001, China has reaped the benefits of the global trading and investment system, while failing to meet its obligations and free riding on its rules. According to the US, China has gained an unfair advantage through intellectual property theft, forced technology transfers, subsidies for domestic firms and other instruments of state capitalism. At the same time, its government is becoming increasingly authoritarian, transforming China into an Orwellian surveillance state.

For their part, the Chinese suspect that the US’s real goal is to prevent them from rising any further or projecting legitimate power and influence abroad. In their view, it is only reasonable that the world’s second-largest economy (by GDP) would seek to expand its presence on the world stage. And leaders would argue that their regime has improved the material welfare of 1.4 billion Chinese far more than the west’s gridlocked political systems ever could.

Regardless of which side has the stronger argument, the escalation of economic, trade, technological, and geopolitical tensions may have been inevitable. What started as a trade war now threatens to escalate into a permanent state of mutual animosity. This is reflected in the Trump administration’s national security strategy, which deems China a strategic “competitor” that should be contained on all fronts.

and

The global consequences of a Sino-American cold war would be even more severe than those of the Cold War between the US and the Soviet Union. Whereas the Soviet Union was a declining power with a failing economic model, China will soon become the world’s largest economy, and will continue to grow from there. Moreover, the US and the Soviet Union traded very little with each other, whereas China is fully integrated in the global trading and investment system, and deeply intertwined with the US, in particular.

We have been in a trade war for nearly 40 years; until recently it has been in essence a rout with the U. S. yielding the field to competitors. A response from the United States is long overdue. The decline in jobs from 1980 to 1990 reflects competition with Japan. The decline in jobs since 1990 and, in particular, since 2000 when China was admitted to the WTO reflects competition with China.

However, let’s change the story that Dr. Roubini is telling. In the United States trade has been portrayed as having practically nothing but benefits for the people of the United States. The truth is more complicated. There are winners and losers. Who has benefited from the status quo ante? In my assessment

  1. The Chinese leadership
  2. The Chinese people
  3. American top management and other stockholders
  4. Ordinary Americans

in descending order of gain.

Consider the chart at the top of this post. It illustrates the change in vehicle prices over the years. If you cruise over to the Bureau of Labor Statistics, its CPI tells essentially the same story. Whether in nominal or real terms the price of vehicles has not collapsed. The most you can say is that they’ve been pretty flat. Said another way consumers are not capturing most of the economic benefit of trade. I could go through a litany of other goods and it would tell a similar story. Consumer prices are not collapsing, they are rarely even declining. The economies of cost that are being realized through trade are not being realized by consumers.

Adding fuel to the fire the great ignored factor is that trade has risks as well as rewards as this graph illustrates:


Most of those who have lost their jobs as a result of trade or, alternatively, been rehired in jobs that paid less, have been ordinary Americans.

My proposal is that rather than considering developments through the metaphor of trade war we should be thinking in terms of risk and reward and those who are dismayed at the prospect of the United States trying to change the trend of prices that aren’t falling but wages that are by rebalancing trade need to propose alternatives to restricting trade that would have that effect. I think that Chinese mercantilism tells us that there are no such policies that won’t meet counter-moves from the Chinese but I have an open mind.

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The Decline of Local Government

You might want to take a look at this piece by Simon Haeder at The Converation. In it he explores the history of public hospitals in the United States and the effect that Medicare and Medicaid have had on them:

The U.S. could potentially even have ended up with a British-style, government-run health care system. Yet, the country went a different route. Instead of expanding, public hospitals have been closing since the 1960s in large numbers. How come?

In my recent academic paper on the subject, I analyzed the creation and closure of public hospitals in California, the state with one of the most extensive public hospitals system in the nation. My findings indicate that when state and federal governments extended health coverage through programs like Medicaid and Medicare, all but the most well-resourced local governments in turn began closing their hospitals.

My findings bear implications for policy debates today. Advocates for any large-scale health reform effort such as Medicare-For-All should be mindful of the eventual unintended side-effects they may trigger.

That may be surprising to some but it isn’t to me. It’s completely consistent with what I’ve been saying. Federalization neuters local governments. It doesn’t expand the services available at the local level but decreases them for most people.

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We Can’t Afford the Future

As I read this piece at City Journal on the explosion of crimes against property in San Francisco it occurred to me that we are evolving not only into a country of haves and have nots but one that is so expensive to maintain that we can’t afford it. Our system assumes a common understanding of the basic of right and wrong, e.g. the Ten Commandments, that the behavior of most people is restrained by conscience, and that the authorities need only deal with a low level of crime.

I’m concerned that we are evolving towards a society that requires a level of police presence that would make East Germany’s Stasi or CeauÈ™escu’s Securitate seem laissez-faire by comparison. Who benefits from the world to which we are evolving? Only criminals as far as I can see. The poor bear the brunt of crime. The rich pay the costs of keeping the crime away from themselves.

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The Triumph of Robert E. Howard

I did not become a fan of Game of Thrones. The series killed off the only character in which I had even the slightest interest at the end of its first season. It was too grim and too perverse for me.

But who would have thought that series finale of a sword and sorcery fantasy television series would have made national headline news? Somewhere Robert E. Howard is smiling.

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The Stopped Clock

At the New York Times Omer Aziz urges support for President Trump’s immigration plan. Here is the kernel of the piece:

When an immigration system becomes overburdened, even immigrants and their children can become pessimistic. I have heard Canadians of Hungarian, West Indian and Pakistani origin all express frustration that more recent arrivals have jumped the line. Part of this is the very human tendency of immigrants to pull up the drawbridge after they have crossed over. Part of it is a sincere belief that the integrity of the system that brought them here should not be corrupted.

In the United States, the vicious cycle of unlawful migration and heightened xenophobia has been going on for decades. It’s what led to Mr. Trump’s election in 2016, and if Democrats cannot propose reasonable alternatives on immigration, they will lose again. No amount of multicultural sloganeering will assuage Americans’ concerns that the system is broken.

It is not unreasonable for the United States to adopt a system similar to those of countries we resemble like Canada or Australia. We are all geographically large, primarily English-speaking former British colonies. Letting the perfect be the enemy of the good, as Democrats seem predisposed to do on this issue, does provide a trap. While exercising their hatred of all things Trump, they also portray themselves as radicals out of touch with the concerns of many Americans.

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Alternative Medicine

The media love a horse race—a competition between stark alternatives. Although the present discourse presents the future of medicine as between maintaining the status quo and “Medicare For All” there are other alternatives. In an op-ed in the Wall Street Journal John Carlson explains one of them:

If Todd Gibbons from Poulsbo, Wash., has an aching shoulder or needs a physical, he can call and schedule an appointment on a day’s notice, maybe the same day. His physician is also available for phone consultations and even makes house calls. It all costs Mr. Gibbons $150 a month to cover his family of five.

Costs are so low and coverage so good because the Gibbons family goes to Vintage Direct Primary Care—a medical practice that treats patients for routine care and procedures for a monthly membership fee. Virtually every routine service—from electrocardiograms and pap smears to stitches and physicals—is included. There are no office-visit fees or copayments. All physician services and procedures offered at Vintage are covered, and all without the use of health insurance.

Without third parties taking money and adding overhead, Vintage can offer medications and lab tests not covered by the monthly fee at wholesale prices. A cholesterol blood test is $3.20 for a Vintage member, but $22 at other in-network providers, according to Fair Health Consumer. Drugs are cheaper. Vintage buys directly from three national wholesalers, which compete to provide medications at the best possible price for any given patient, and Vintage resells them at cost. A 30-day supply of the generic equivalent of 40 mg Lipitor for cholesterol is $3.30 at Vintage. At Walmart it’s $9. Sildenafil, the generic for Viagra, is 37 cents a pill. The next cheapest option in Poulsbo is Safeway at $2.13. Over-the-counter drugs are also cheaper and available in-house at Vintage. Cetirizine allergy pills (the generic version of Zyrtec) are 6 cents a tablet at Vintage, about half the Walmart price.

Costs are low and transparent. The monthly fee, whether paid by employer or individual, is predictable and easy to budget. Patients still need high-deductible insurance or cost-sharing pools to cover nonroutine procedures and care. But complementing a direct primary care plan with one of those two options is still the cheapest coverage.

For example, Atlas MD in Wichita, Kan., works with more than 100 small companies that have formed partnerships with Allied National insurance to create plans based on clinics coupled with catastrophic-care policies. Josh Umbehr, owner and medical director at Atlas, says these companies save 30% to 60% by switching from traditional health insurance plans.

Tax incentives currently discourage employers from switching to direct primary care plans. One possible fix would allow patients to use health-savings accounts to pay for membership. The IRS could make this change by redefining a direct primary care membership as an eligible HSA expense.

Cutting the middlemen out of daily health care won’t solve all of the medical system’s problems. But altering the tax code to encourage employers to use direct primary care could help control or even shrink costs. Most important, it would improve the quality of care by letting doctors spend less time filling out paperwork for reimbursement and more time helping patients.

Think of direct primary care as extending the recurring revenue model adopted by Microsoft or Netflix to health care. It sounds a bit like what HMOs were supposed to be but instead became something completely different. As noted in the op-ed direct primary care doesn’t cover every conceivable health care expense but it does cover a lot of people’s everyday experience with health care. And it would allow insurance to be limited to covering insurable risks.

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