I was gratified to read about President Trump’s executive order requiring agency and departmental heads to come up with a comprehensive plan for reorganizing the federal government. It’s long overdue.

It did make me wonder, however, about the last such initiative now a generation old—President Clinton’s “Reinventing Government” project. As it turns out, as noted in this article at Governing, “Reinventing Government’s” legacy is mixed:

There’s no question states and localities function differently today than they did 25 years ago. Performance management systems, though not universally beloved, have become widespread. Departments and agencies routinely measure customer satisfaction. Advances in information technology have allowed governments to develop and share outcomes more easily than ever before. Some watchdog groups consider linking outcomes to budgets — also known as performance-based budgeting — to be a best practice. Government executives in many places talk about “innovation” as if they were Silicon Valley executives. This represents real, undeniable change.

Yet despite a generation of reinvention, government is less trusted than ever before. Performance management systems are sometimes seen not as an instrument of reform but as an obstacle to it. Performance-based budgeting has had successes, but they have rarely been sustained.

I always found the idea amusing that people whose entire careers had been within government could successfully emulate the strategies that businesses have used to become more effective. Cats like warm, cozy fires but they’re incapable of managing their own.

Besides the incentives are just too different. We’ll see occasional spasms of reform, frequently coinciding with election years or changes in administrations, but not what’s really needed.

What’s really needed is a culture of continuous improvement, the sort of thing pioneered by Toyota a couple of generations ago. That’s not something that can be done in a short spurt of effort.

As should come as a surprise to practically no one, the evidence that H-1B visas push wages in technology down is mounting, as reported by John Simon at the Wall Street Journal:

A new research paper on the effects of the H-1B visa program on workers suggests the influx of skilled foreign workers has historically led to lower wages and employment for American tech workers. Such findings could further inflame debate around immigration of high-skilled workers, but some economists caution against making too much of the result.

Economists from the University of Michigan and the University of California, San Diego, analyzed employment, wages and other factors over an eight-year period ending in 2001. They found that, while the visa program bolstered the U.S. economy and corporate profits, tech-industry wages would have been as much as 5.1% higher in the absence of the H-1B visa program and employment of U.S. workers in the field would have been as much as 10.8% higher in 2001.

Giovanni Peri, an economics professor at the University of California, Davis, said the new research is noteworthy, but would like to see more studies on the issue. Mr. Peri’s own research on immigration of highly skilled workers—not solely H-1B holders—found overall positive effects on wages across a variety of job sectors.

John Bound, a professor at the University of Michigan and one of the authors of the new study, said he and his fellow researchers focused their paper on the 1994 to 2001 period because it was the longest stretch of time when employers claimed all available H-1B visas. However, in an earlier paper, they found that a similar model did “a good job capturing the movement of wages and employment in the 2001 to 2011 period,” Mr. Bound said.

“There is little reason to believe the overall impact of high-skilled immigrants on the U.S. economy has changed dramatically since 2001,” he said.

There’s more than one issue at stake here. The obvious one is that importing workers pushes wages down among the workers already here with whom they compete. It remains puzzling that importing foreign CEOs doesn’t seem to push down wages among the highest paid. Apparently, there are some things that human beings were not meant to know.

However, another issue is that incentives matter. Hypothetically, let’s say that there’s one sector (technology) in which wages are demonstrably being held down by importing foreign workers and another (health care) in which the number of foreign workers being imported is small enough not to have wage effects and is highly subsidized to boot?

Assuming that the ability to master complex scientific and technical concepts is limited in the population, it seems obvious enough to me that more young people will find themselves pursuing careers in the second field while avoiding the first than would otherwise have been the case.

Also notable: when you reduce the compensation in technology and taking into consideration that most start-ups are self-financed, it seems inevitable that you’ll have fewer start-ups than would otherwise have been the case.

Predictably, Sens. John McCain and Lindsey Graham take to the pages of the Washington Post to argue for increasing our troops in Afghanistan and continuing the war there:

Make no mistake: Afghans are fighting ferociously to defend their country from our common enemies. At the same time, we must recognize that the United States is still at war in Afghanistan against the terrorist enemies who attacked our nation on Sept. 11 and their ideological heirs. We must act accordingly.

Unfortunately, in recent years, we have tied the hands of our military in Afghanistan. Instead of trying to win, we have settled for just trying not to lose.

Time and time again, we saw troop withdrawals that seemed to have more to do with U.S. politics than conditions on the ground. The fixation with “force management levels” in Afghanistan, as well as in Iraq and Syria, seemed more about measuring troop counts than measuring success.

I wish they’d put a little meat on those bones. How many U. S. soldiers do they think are needed in Afghanistan? Why will more soldiers be able to succeed where they weren’t able to succeed in the past? It’s not as though we’ve made much progress. We’ve been fighting the war there for 16 years and arguably where we were 8 years ago except for the dead. Nearly 2,000 young Americans are dead now who might otherwise be alive.

What is needed in Afghanistan is a change in the mission rather than just mindlessly increasing our troops and fighting on. I don’t believe there is any hope of counter-insurgency succeeding there and there never has been. We need to think hard about why we’re there.

While I think there’s a case for an ongoing counter-terrorism mission in Afghanistan, I believe that the evidence supporting the possibility of success in a counter-insurgency mission is something between slim and nonexistent.

Somewhat to my surprise while reading Kevin Baker’s New Republic article on the need for so-called “Blue States”, e.g. California, Illinois, New York, Massachusetts, etc. to dissociate themselves from the rest of the country:

We won’t formally secede, in the Civil War sense of the word. We’ll still be a part of the United States, at least on paper. But we’ll turn our back on the federal government in every way we can, just like you’ve been urging everyone to do for years, and devote our hard-earned resources to building up our own cities and states. We’ll turn Blue America into a world-class incubator for progressive programs and policies, a laboratory for a guaranteed income and a high-speed public rail system and free public universities. We’ll focus on getting our own house in order, while yours falls into disrepair and ruin.

In short, we’ll take our arrogant, cosmopolitan, liberal-elite football—wait, make that soccer ball—and go home.

I found myself in material agreement with him. I grumbled a bit at this:

Truth is, you red states just haven’t been pulling your weight. Not for, well, forever. Red states are nearly twice as dependent on the federal government as blue states. Of the twelve states that received the least federal aid in return for each tax dollar they contribute to the U.S. Treasury, ten of them voted for Hillary Clinton—and the other two were Michigan and Wisconsin, your newest recruits. By the same count, 20 of the 26 states most dependent on federal aid went to Trump.

Take Mississippi (please!), famous for being 49th or 50th in just about everything that matters. When it comes to sucking at the federal teat, the Magnolia State is the undisputed champ. More than 40 percent of Mississippi’s state revenue comes from federal funding; one-third of its GDP comes from federal spending; for every dollar it pays out in federal taxes, it takes in $4.70 in federal aid; one in five residents are on food stamps—all national highs. You people—your phrase, not mine—liked to bash Obama for turning America into what you derisively referred to as “Food Stamp Nation.” In reality, it’s more like Food Stamp Red America—something your Trump-loving congressmen will discover if and when they fulfill their vow to gut the program.

smacking as it does of Germany’s complaints about the profligate, lazy Greeks. He might start thinking about the implications of a common currency, state to state balances of payments, and how California and New York’s prosperity depends on compensating for the poverty of Alabama, Mississippi, and Louisiana so that Alabamans, Mississippians, and Louisianans can buy their products.

This is the section that won me over:

We’ll turn Blue America into a world-class incubator for progressive programs and policies, a laboratory for a guaranteed income and a high-speed public rail system and free public universities. We’ll focus on getting our own house in order, while yours falls into disrepair and ruin.

That’s actually how the country is supposed to work. Rather than going to Washington and shoving our idea of paradise down the throats of the ungrateful peasants the Blue States should get their own houses in order. Illinois, where Democrats have controlled the state legislature for at least the last 40 years and the governor’s mansion as well for the last twenty, would be a good place to start.

There are a number of very interesting things about this article from Ars Technica on the malware found pre-installed on a substantial list of smartphones:

A commercial malware scanner used by businesses has recently detected an outbreak of malware that came preinstalled on more than three dozen Android devices.

An assortment of malware was found on 38 Android devices belonging to two unidentified companies. This is according to a blog post published Friday by Check Point Software Technologies, maker of a mobile threat prevention app. The malicious apps weren’t part of the official ROM firmware supplied by the phone manufacturers but were added later somewhere along the supply chain. In six of the cases, the malware was installed to the ROM using system privileges, a technique that requires the firmware to be completely reinstalled for the phone to be disinfected.

“This finding proves that, even if a user is extremely careful, never clicks a malicious link, or downloads a fishy app, he can still be infected by malware without even knowing it,” Check Point Mobile Threat Researcher Daniel Padon told Ars. “This should be a concern for all mobile users.”

Among the brands affected were Samsung, LG, Xiaomi, ZTE, Oppo, Vivo, Asus, and Nexus. What I found particularly interesting is the number of countries in which these phones are, at least in theory, manufactured which includes at least Vietnam, China, South Korea, and the United States.

I don’t believe it. I think that somebody is fibbing. It’s pretty tough tracing the supply chains for all of these smartphones but I wouldn’t be a bit surprised if the ROMs for all of those phones were burned in the same factory and that factory is in all likelihood located either in China or Vietnam.

Last stage assembly is not “manufacturing a smartphone”. If Google is going to claim that their smartphones are made in the U. S. of A. they darned well should be made in the U. S. of A.

Over at Outside the Beltway Doug Mataconis has begun what he promises will be a series of posts on the debate over healthcare:

Initially, the inspiration for what follows here started in a discussion in the comment thread on a friend’s Facebook wall but it quickly became far too detailed for social media, so I decided to put everything into a blog post. I quickly found, though, that one post was far too insufficient to address the issues I wanted to touch on. As it stands now addressing all of the points I wanted to make would result in an unreasonably long post. As a result, what follows is the first part of what will be a multi-part series addressing just a few points I think are important in this debate.

Honestly, I have reservations about all three of his bullet points:

1. The health insurance system became unwieldy and unsustainable when it went from being something that people expected would only cover “major medical” expenses to one that covered everything.

   I think the health insurance system became unwieldy and unsustainable long before that and that the handwriting was on the wall when Medicare was enacted back in 1965.

2. Health care costs expanded rapidly due to new technology and new drugs.

   The evidence for that is weak. It just doesn’t show up on hospitals’ balance sheets. What does show up are enormous payrolls that are rising rapidly.

3. People are living longer and surviving things that used to kill people like cancer, heart attacks, and strokes.

   I’d be interesting in seeing that quantified. How big a factor is the effectiveness of care in the increasing cost of care? I don’t believe it’s quite as large a factor as Doug apparently does.

I commend Doug for reopening old wounds and entering into the discussion again.

My bullet points would be different:

• No country can afford a healthcare system that’s 17% of the economy, in which prices are increasing three times as fast as in the rest of the economy, and in which 50-75% of costs are paid for out of tax dollars in one form or another.

Not Germany (11%), not France (11%), not the United Kingdom (9%), not Switzerland (12%)—the country with the second highest rate of health care spending per capita to the United States. That’s not a matter of politics. It’s a matter of mathematics.

• We reached the point of diminishing returns to scale in healthcare a long time ago.

sources: Center for Disease Control, Centers for Medicare and Medicaid Services

Antibiotics, obviously, gave us the biggest bang for the buck. I’m a bit surprised that the adoption of Medicare and Medicaid didn’t have a more pronounced effect on life expectancy at birth. How should we interpret that?

• A lot of the demand for care is physician-generated.

I don’t prescribe my tests or my course of treatments. Physicians do.

• How much healthcare spending should be socialized?

I think it makes reasonable sense to socialize some healthcare spending but not 100% of it. We can’t afford to give everybody all of the care that he or she might want. How do we decide what we’ll pay for?

Here are some resources you might be interested in reading:

Growth in Health Care Costs, Congressional Budget Office, 2008

This report makes a number of valuable points. For example, according to its findings the most important factors in increasing healthcare costs are prices (11-22%), growth of personal income, i.e. what the market will bear (11-18%), and changes in third party payment excluding administrative costs (10%).

History of Health Spending in the United States 1960-2013, Centers for Medicare and Medicaid Services, 2015

This paper divides the history of health spending since 1960 into the following “eras”:

• Pre-Medicare and Medicaid 1961-1965
• Coverage Expansion and Rapid Price Growth 1966-1982
• Payment Change and Moderate Price Growth 1983-1992
• Cost Containment and Backlash 1993-2002
• Recent Slower Growth 2003-2013

which may look familiar since I’ve posted to the same effect myself. In other words I’m not making it up. There really was a sharp run-up in the prices of care in the 1970s.

I’ve posted a lot on healthcare over the years. Here are a curated selection of some of my more notable posts:

A short history of medical education in the United States
Making plans, health care costs, and bureaucracies
How to create a health care cartel
Baffled about health care policy
10 Points on Health Care Reform
Issues 2008: Health Care
Reforming Health Care: Okay, What Then?

I could have laughed out loud when I read Chinese Foreign Minister Wang Yi’s characterization of the situation between the U. S. and North Korea, reported here in the National Post:

China’s foreign minister urged North Korea to halt its nuclear activities and the U.S. to suspend nearby military drills, as a way to quell growing tensions and get Kim Jong Un back to the negotiating table.

“The two sides are like two accelerating trains coming towards each other, with neither side willing to give way,” Foreign Minister Wang Yi said Wednesday in Beijing. “The question is, are the two sides really ready for a head-on collision? Our priority now is to flash a red light and apply brakes on both trains.”

The Chinese could stop the Kim regime’s headlong rush to nuclear weapons capable of striking the mainland U. S. any time they cared to without threatening the regime’s collapse. Why haven’t they? My only guess is that they want the North Koreans to develop those weapons regardless of the consequences. Seems like a reckless strategy to me.

It brings to mind a somewhat different metaphor than the onrushing trains to me. In the world’s highest stakes game of “Chicken”, they’re taking the role of Natalie Wood, pictured above in a slightly fuzzy image.

This is clearly a game of “Let’s You and Him Fight” in the tragic mode. Why the Chinese think they can benefit from it eludes me.

At Bloomberg View Megan McArdle phrases the alternatives that Republicans face about the Affordable Care Act slightly differently but arrives at the same place:

You do not fix a concrete eyesore in stages. You either knock it down, or you leave it where it is and learn to live with its flaws. If Republicans want to actually do a radical renovation of our nation’s health policy architecture, then they should get a reasonable estimate of the costs, grit their teeth, and go ahead and actually build something sound, and enduring, while demolishing substantial portions of the ugly and unsustainable mess we currently have.

If Republicans cannot get up the will to bear those costs, then they should do nothing, and start preparing their rebuilding strategy while they wait for the flaws in Obamacare’s structure to bring down the individual market on its own. Neither strategy is painless, because the ossified mistakes of earlier policy making have taken all the cheap and attractive options off the table. But either is better — for America, and for the Republican Party — than setting new mistakes in stone.

For Democrats the alternatives are slightly different. They must choose which they value more: President Obama’s legacy or the welfare of the American people. And their own.

Well, this is interesting. The Chinese government has, apparently, succeeded in reducing its capital outflows. From Better Dwelling:

The world’s greatest overseas real estate binge might finally be over. According to the People’s Bank of China (PBoC), China saw its foreign exchange reserves rise to over US$3 trillion. The unexpected rise is the first in 8 months, and may indicate that the new regulatory crackdown on capital outflows is actually working. This is bad for real estate markets that have seen a sudden surge of buying activity from Mainland Chinese buyers.

China’s capital outflows turned into inflows, meaning more foreign currency went into the country than left. The PBoC found itself with US$6.9 billion more than the month before, a 0.25% increase. This comes after US$220 billion in outflows in 2016, and another $12 billion in January. While it doesn’t seem like a lot in contrast, analysts polled by Reuters expected a drop of more than US$25 billion. Analysts are now adjusting projections since this means China’s foreign reserves are a full US$31.9 billion higher than they anticipated. This could mean that China’s new capital controls are much more effective than analysts had previously anticipated.

Okay, now it’s time to play “Name That Outcome”. Name three likely outcomes and your confidence level in each of them. Some that occurred to me include:

• Nothing. It’s only temporary. (50%)
• British Columbia, California, and Florida real estate price increases will slow. (25%)
• Members of Congress will have conniptions. (100%)