Carts, Horses and Healthcare

Tyler Cowen takes a valid premise, and then gallops off in the wrong direction.

The proposals now before Congress would require just about everyone to buy health insurance or to get it through their employers — which would generally result in lower wages. In other words, millions of people would be compelled to spend lots of money on something they previously did not want, at least not at prevailing prices.

That is the unfortunate result of our current "no new taxes" culture. It would be better for the poor, as well as for uninsured and underinsured working Americans, if a sensible tax reform funded basic insurance. People could still choose between plans, but we wouldn't have to worry about subsidies or whether the cost of insurance will be too onerous on people of limited resources. Obviously, forcing people to buy insurance for a price they deem to high - let alone at a cost beyond what they can reasonably afford - could (would) create a lot of resentment.

However, I think his argument that national healthcare amounts to a tax that would discourage the poor from trying to earn more is absurd. First, I don't know of many people who even think that way - "No, boss, I'm turning down that raise because due to its effect on my health insurance subsidy I'll only put half of it in my pocket". (Without digressing into the vagaries of the human mind, there's evidence that earning "more than the next guy" is a much more compelling factor than take-home pay.) Second, people don't always have the luxury of turning down a promotion, even if they want to. Third, people actually do recognize that raises and promotions are incremental - this year's raise may not be as much as you would like, but maybe next year's will be better. Fourth, most people are happy to pocket extra money, even if they would prefer to have more.

But I digress. The argument he offers that I find to be most flawed is this:

We’re often told that America should copy the health care institutions of Western Europe. Yet we’re failing to copy the single most important lesson from those systems — namely, to put cost control first.

Which European nation, in adopting a national healthcare plan, put cost control first? It seems to me to have been quite the opposite - that national healthcare plans were implemented in order to properly serve the needs of the nation's population, and that concerns about cost control arose considerably later. It may well be that, once a nation has implemented a national healthcare plan, cost control becomes a leading consideration, but the plan still comes first. If anything, doesn't Cowen's argument support the idea that the best way to make cost control a priority is to extend insurance to everybody through a nationally managed program?

Medicare vs. Private Plans

Robert Samuelson, whose prior commentary on healthcare reform issues is pretty atrocious, again takes on the subject. A brief response to a couple of his points:

The public plan's low costs would be artificial. Its main advantage would be the congressionally mandated requirement that hospitals and doctors be reimbursed at rates at or near Medicare's. These are as much as 30 percent lower than rates paid by private insurers, says the health-care consulting firm Lewin Group.

You know what I would love to see, and what people like Samuelson would probably hate to see? A full, public disclosure of private insurance company reimbursement rates. You see, Medicare reimbursement rates are public - anybody can access and review them. Health insurance companies keep their reimbursement rates under wraps. I'm really not convinced by the argument that "Medicare rates are 'as much as' 30% lower than our secret rates" - it's easy to cherry pick an outlier to make such an argument. Let's see the real numbers so we can determine for ourselves whether Medicare truly undercompensates the doctors... who voluntarily accept it... or if the insurance industry is again playing games with statistics or "making stuff up" to subvert the debate.

As for administrative expenses, any advantage for the public plan is exaggerated, say critics. Part of the gap between private insurers and Medicare is statistical illusion: Because Medicare recipients have higher average health expenses ($10,003 in 2007) than the under-65 population ($3,946), its administrative costs are a smaller share of total spending.

You see, administrative costs go up when plan members don't get sick and don't make claims. To enjoy cost savings in administration, you need to insure people who get sick a lot, go to lots of different doctors, hospitals, and other treatment facilities, and create an avalanche of claims for reimbursement each time. This is why private insurance companies were so eager to insure the elderly prior to Medicare, and why they complain so bitterly that the government excludes them from that market - or inadequately subsidizes their participation.

Likewise, Medicare has low marketing costs because it's a monopoly. But a non-monopoly public plan would have to sell itself and would incur higher marketing costs.

Medicare Advantage plans don't compete with Medicare? Private prescription plans for seniors don't compete with Medicare? Wow, when you ignore the facts and make stuff up, you can make all sorts of interesting arguments.

Even Hacker concedes that without reimbursement rates close to Medicare's, the public plan would founder. If it had to "negotiate rates directly with providers" -- do what private insurers do -- the public plan could have "a very hard time" making inroads, he writes. Hacker opposes such weakened versions of the public plan.

But wait a minute. Don't a lot of private insurance plans avoid the need for actual negotiation - or even a lot of the difficult, costly work in developing reimbursement rates - by tying the scope of their coverage and their reimbursement rates to Medicare rates? If Samuelson is deferring to Jacob Hacker as an authority on this subject, perhaps he should start by reading what Hacker has to say:

Over the last two decades, moreover, Medicare has increasingly emphasized improved payment methods and rigorous reviews of technology and treatment, and it has made increasing investments in quality monitoring and improvement. Revealingly, private plans generally use the public Medicare plan’s criteria for covering treatments as their standard of medical necessity, and they have adopted many of Medicare’s innovations in payment methods. As Robert Berenson and Bryan Dowd note in a recent Health Affairs article, “Traditional

As for "marketing expenses"....

In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people - half the number with private insurance - would switch to the public plan.

When half of people with private insurance say, "I don't know how much a public plan will cost or what it will cover, but it has to be better than this ****," why does Samuelson find it so troubling that the industry will face competition?

If We Assume a Slippery Slope....

It's not that Fred Hiatt's editorials are usually good, but he usually hides behind the anonymity of his editorial board when he makes his most inane arguments. So I was a bit surprised when he regurgitated some of his recent anonymous inanity in an editorial to which his name is attached.

From the start, the Obama administration has said that health-care reform has to make health care both more accessible and less costly . If Congress does the first without the second - guarantees a new entitlement without controlling costs - it will bankrupt us, because health-care costs are rising faster than the overall economy is growing.

Hiatt distinguishes the cost of wars from the cost of healthcare, arguing that we can spend ourselves into deficit oblivion over wars "because wars end", but what of the military budget? Even excluding the cost of the wars in Iraq and Afghanistan, Hiatt should be wringing his hands over the inevitability that the military budget will bankrupt us. After all, the same slippery slope argument applies to any category of spending where costs are increasing faster than inflation. I would infer first that Hiatt doesn't recognize that slippery slope reasoning is not logically sound,¹ and second that his concern about deficit spending is based primarily (perhaps exclusively) on whether he supports or opposes the government action at issue.

Hiatt suggests that only two things are needed to eliminate healthcare inflation.

• First, we need to tax the middle class and try to economically pressure employers to diminish the quality of healthcare plans available to their employees. This is the Gingrich model - the idea that if you force employees to pay for their healthcare out of pocket, they will be more selective about what care they obtain and costs will decline. Never mind that there's no evidence that this will work and, with the experience so far with low-coverage, high-deductible plans that costs for healthcare consumers will in fact go up.

• Second, we need to have Congress "cede its power to regulate the minutiae of Medicare coverage" - because, um, it would be better if that were done by magic or something. (Hiatt doesn't explain.) Seriously, healthcare inflation for Medicare is lower than inflation for all other healthcare, yet Hiatt thinks we can solve the world's problems by making some sort of undefined change to "the minutiae of Medicare coverage". Where's his call for private insurers to "cede [their] power to regulate the minutiae of [health insurance] coverage"?

Hiatt continues his silliness by arguing that a public plan won't actually save money over private plans:

If, as advocates sometimes argue, a public plan operates without favoritism, it will be simply one more entrant in the marketplace. Like other companies, it will have marketing and administrative costs. In some markets served by few private plans, it could offer a useful alternative. But it won't radically reduce costs.

People who are truly sick like their Medicare coverage. I know of few people who don't have gold-plated insurance who, following a serious illness, think highly of their private insurance plans. People see value in both having available, and having as a competitor to private insurance, a plan that won't spend huge amounts of money trying to deny coverage it owes under contract. The extraordinary misconduct and, at times, overt fraud committed by insurance carriers should give anybody pause about whether reform could be achieved without a public alternative. Hiatt may be correct that a public plan that competes with private plans doesn't produce much in the way of cost savings, but it could produce a lot in terms of peace of mind. (And if Hiatt were truly in favor of cost savings, he would be looking at various other nations' successful efforts in that regard, rather than throwing up a smokescreen in the defense of our nation's abject failure to control healthcare spending.)

I doubt that a public plan will face much in the way of marketing costs. Everybody will know what it is, where to find it, and what it offers. Besides, how much marketing does Hiatt believe private insurance companies direct at the uninsured and underinsured markets? At least if we're talking about legitimate companies.

If, as advocates argue at other times, the point is to insure sick people whom private companies, despite all regulatory efforts, find ways to shun, the public plan could offer a valuable safety net. But that wouldn't save money.

I've previously pointed out that it is ill-advised to pursue the approach that to be acceptable, any healthcare reform bill must fix every defect of the current system. Here, Hiatt extends that argument to an absurd level, suggesting that it's not enough that the bill fix all problems in the aggregate, but that each and every element of the bill advance all three goals (universality, cost control, and patient choice). At the same time, he does not propose how things would be better in the absence of a public plan - and proposes nothing to pressure private insurance companies or healthcare providers to reign in costs.² If Hiatt believes what he's suggesting, he's an idiot. If he doesn't, yet still expects you to buy his argument, he thinks you're an idiot.
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1. It could be that Hiatt knows his logic is childish and flawed, but that he doesn't care. He later presents another slippery slope argument, whereby a public plan gradually bankrupts every private insurance plan and becomes the only option based upon an entirely speculative set of future events and assumptions. Perhaps he imagines himself as a silver-tongued advocate, whose sophistry and illogic will not be detected by his readers....

2. Granted, this could be because he doesn't care about the inflation caused by the private side of the market, and favors a system in which private insurers maximize their profits even at the expense of the three ostensible goals of healthcare reform.

Budget Mendacity From the Washington Post

Have you ever seen Willie Wonka & The Chocolate Factory? Recall Gene Wilder's "protests" when the various naughty children engaged in acts that he knew would lead to very unpleasant consequences? Somehow Fred Hiatt's gang brought that image to mind with their argument that their acceptance of massive deficit spending for the wars in Iraq and Afghanistan is consistent with their insistence that healthcare reform be revenue neutral.

In principle, all wars should be paid for, just like all other federal spending. We criticized President George W. Bush for sticking with tax cuts rather than calling for national sacrifice after Sept. 11, 2001, and for failing to fund the wars in Iraq and Afghanistan.

So we start with a general statement of principle, with no indication that the Post has any interest in standing behind that principle. Hiatt's editorial board protested, Willie Wonka-style ("Oh! I wouldn't do that... I really wouldn't"), at some point in the past and, having given lip service to their principles, proceeded with full-throated advocacy of the wars and their escalation.

If Mr. Obama were to propose offsetting the cost of additional troops in Afghanistan with a gasoline or carbon tax, we would support it.

But not if he proposed such taxes to fund healthcare reform - for that, Hiatt and his crew want new taxes on the middle class. But take a step back in history to the budget surpluses G.W. inherited and frittered away on tax cuts for the wealthy and a ruinously expensive war of choice in Iraq - why not let some of those tax cuts expire to fund the war? Or to fund healthcare reform?¹

Hiatt and his crew then argue that the budget games they're using to avoid funding the wars in Iraq and Afghanistan are analogous to arguments that future savings in healthcare costs should be considered when calculating the cost of a reform bill. An obvious flaw in this argument is that, at least in any modern western society, the state cannot avoid healthcare costs. It's perfectly appropriate in that context to consider how reforms might bring about savings, and how that will relate to future expenditures. When the government chooses to spend vast amounts of money on a war of choice, the baseline for spending is $0 and (unless you endorse some modern form of loot and plunder) there's no way to achieve "savings" by making that number negative.

Further, the Post combines spending for the wars in Iraq and Afghanistan, suggesting that "savings" that may be achieved from possible troop reductions in Iraq could be applied to the increased budget for the war in Afghanistan, thus bringing about a net "savings". If the Post believes this argument, then it has justified in spades what it deems to be the "creative accounting" behind the healthcare reform bill. Further, money is fungible - why not apply the Post's imagined "savings" from Iraq to healthcare reform, and pass the Post's proposed new taxes to fund the war in Afghanistan? ("Did we just say we opposed sticking with the Bush tax cuts for those wars, so that we wouldn't run up huge deficits? Well, that was so five minutes ago.")

The Post continues with a similar quality of logic:

All this assumes that defense and health care should be treated equally in the national budget. We would argue that they should not be, for two reasons. One is that wars, unlike entitlement programs, eventually come to an end. A guarantee of health care for all, particularly in the context of steadily rising costs, will bankrupt the nation if not matched by a steady stream of revenue.

Sure, wars end... Even the Hundred Years War came to an end. I suspect, though, that the Iraq war would have wrapped up sooner or perhaps not been launched at all if G.W. had told the wealthy, "Sorry, you won't be getting those tax cuts after all, and estate taxes will not be reduced." The Post's tax proposals are consistent with this - they're big on picking the pockets of working Americans, but in relative terms the proposals they're presently endorsing will have a small impact on the wealthy.

Since wars do end, it's reasonable to ask "When will these wars end, and how much will they cost?" The best answer we're likely to get from Hiatt and his boys is probably Jackson Diehl's² "Nothing's anything like Vietnam" argument - a shrug. Who knows, who cares, it's probably best not to even ask - and don't mention long, costly wars we entered with no vision of how we would achieve victory or an exit strategy, because they're nothing like what will soon be our longest war ever with no end in sight."

The Post's slippery slope argument on healthcare costs is amusing, given the Post's strong opposition to the cheapest alternative to the status quo - a robust national healthcare plan, even a single payer plan. I find it childish to suggest that the inevitable consequence of providing health insurance to every U.S. citizen will be that the nation is bankrupted. It's not at the level of "death panels", but it's still a dishonest, fear-based argument.

The point hidden behind the hypocrisy and logical fallacy is actually a good one - when we're committing to an indefinite expenditure we should consider how we are going to pay for it. But the Post's definition of what expenditures are of a limited nature is reminiscent of how the Supreme Court has interpreted the Constitution's provisions on copyright - anything that's less that indefinite in duration is "limited". When there's no end in sight to war spending, and no plan or strategy that will bring an end to that spending, the open-ended nature of the commitment makes it little different than entitlement spending - infinity is not so much different from "infinity minus one".

The Post's last argument is that wars are necessary to defend our nation and its people, while healthcare reform is not. Again we have dubious logic - that any money spent on wars and the military, no matter how spent, is necessary to the defense of the state. Would Fred Hiatt expand that "reasoning", Candian Bacon-style, to a war of choice against Canada? Some wars aren't all that important to our defense. Jackson Diehl just got through suggesting that the wars in Iraq and Afghanistan are less important "in its consequences for the United States" than was the Vietnam War - we ended the war, the North took control of the country, it's still a communist nation, and... Americans can easily and safely visit Vietnam as tourists, and we have normalized diplomatic and trade relations. How would that have been improved by giving the Vietnam War an indefinite³, deficit-funded blank check?

Combining the Hiatt crew's assertion, "the nation's security must be the president's first priority", with Diehl's insistence that our current wars are less important than Vietnam, would the Post endorse a decision to end both the Afghanistan and Iraq wars on the ground that they're less important than Vietnam and we did pretty darn well despite having ended that war with an outcome falling far short of victory? Or would we hear Diehl shriek, "Any analogy to Vietnam is imperfect - continue the war forever (less a day) if necessary to win!" With Hiatt chiming in, "At any cost... to the middle class and future generations."

Since we're focusing on the question of what bankrupts a nation, potentially leading to collapse, it seems reasonable to ask this question: In the history of the world, how many nations or empires have collapsed under the weight of healthcare costs (or any other public benefit), and how many have collapsed under the weight of costly wars and imperial overreach? Sometimes wars end because they bankrupt the proponent.

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1. Here, they may be channeling Lionel Hutz. It says we argued "No New Taxes'? They got that all wrong. It's supposed to say 'No! New Taxes!"

2. Jackson Diehl is deputy editorial page editor of The Washington Post.

3. Limited only by the Post's assertion that all wars eventually end.

A New Twist on Learning From History

From what Jackson Diehl has written, it appears that the new lessons of history are:

1. Unless the current event is exactly like the historical event, there's nothing to be learned from history.
2. If somebody has drawn a historic analogy that proves flawed, it conclusively proves that any comparison of the current event to the history event is flawed.
3. If somebody claims that a particular lesson is to be learned from a specific historic event, and you disagree, you can reject the idea that anything can be learned from the historic event.
4. Absent a perfect analogy, anybody who analogizes a current event to a historic event is being unhelpful.

Diehl is offended at the notion that the war in Afghanistan can be compared to the war in Vietnam, arguing "No military mission since Vietnam has come close to that war in the number of casualties, or in its consequences for the United States". Those are the only two measures that are relevant? And when Diehl suggests that the consequences of the war in Afghanistan are significantly less for the United States than the consequences of the Vietnam War, is he making an argument for withdrawal?

George Will is Turning Into Grandpa Simspon

Read his opening two paragraphs. The biggest distinction between George and Abe¹ is that he wraps his rambling digression into his larger point - but one suspect's it's just a matter of time before we're reading "there are too many states nowadays. Please eliminate three".... For that matter, Will's comments on scientific issues are already often as nonsensical as Grandpa Abe's various rambles.

It's a terrific way to bury a decent point (the questionable $250 Social Security bonus checks being sent to seniors) in colorful historical anecdotes and angry fist-waving. Really, Will could have just written, "This type of giveaway will turn Social Security, a program I've always regarded as a welfare program, into a welfare program" - the rest is padding.
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1. While we're sort of on the subject, is it just me or does Dr. Nick bear a striking resemblance to Ross Douthat?

Broder Confuses Budget Decisions With Public Policy Decisions

The use of committees to allow Congress to avoid making tough decisions? Hardly a new idea. Congress has used this method to obtain recommendations on base closures¹ that must be accepted or rejected as a package, in lieu of debating and deciding the issues. It may not be a particularly courageous way to tackle the issue or deal with special interests or the concerns of Members of Congress whose states are affected, but... we're talking about Congress, so you do what you have to do.

But the idea of expanding this concept to the entire budget, eagerly embraced by David Broder, implicates a much broader set of concerns. It's not simply a context where Congress has decided the larger issues, such as recognizing that savings can be obtained and efficiencies realized by consolidating military bases, and the committee is left to work out the details. There are huge public policy decisions involved in setting tax rates, funding various government programs, and cutting or eliminating funding for various programs and initiatives.

The one barely possible benefit from this predictably futile partisan bloodbath is the opportunity it could offer to leverage support for a long-standing bipartisan effort to force Congress to confront the hard steps needed to put the nation on a safer fiscal course.

That chance was highlighted last week when Sen. Evan Bayh of Indiana and nine other moderate Democrats wrote to Senate Majority Leader Harry Reid asking that the debt-ceiling increase be tied to passage of bipartisan legislation creating a deficit-reduction commission whose recommendations would have to be quickly enacted or rejected by the House and Senate as a package.

But this proposal has nothing to do with "hard steps". Sorry, Senator Bayh, but if you were serious about this you could easily team up with your fellow "moderates" and draft up a proposal to balance the budget over a given number of years. Does Broder truly not realize that the reason Senators like Bayh want to delegate that task to a commission, reserving to Congress only an "up or down" vote, is that he doesn't want to be held responsible for either making the tough calls himself or for the consequences of those calls?

It's pretty easy to form a bipartisan commission that understands a mandate to recommend base closures that serve the nation's financial goals without detriment to its military goals. But larger tax and spending issues are much more complex, and have significant policy elements and ramifications. You can almost hear Broder's voice trembling with excitement:

But the odds are against [proponents of the commission]. Because such a commission is likely to propose both cuts in popular entitlement programs and tax increases whenever the country comes out of the current recession, those members on the ballot next November, including Reid and Pelosi, would much rather avoid any discussion of such steps.

Here, Broder highlights two things: First, that he imagines the budget commission will be composed of people who share his own policy goals - apparently focusing on increased taxes for the middle class and the slashing of programs like Medicare, Medicaid and Social Security that significantly benefit the middle class and poor. Second, that politicians shouldn't be held responsible for the consequences of "balancing the budget" by deferring significant policy decisions to what amounts to a black box - they know what goes in, they get to see what comes out, but have no input or control into what happens in the interim.

Were specific members proposed for this committee, Broder would likely either be much more excited ("They really do agree with me!") or horrified ("They want to balance the budget by increasing taxes on capital gains, having a robust estate tax, closing tax loopholes for the rich, a one-time wealth tax on the rich, by taxing corporate profits diverted through offshore companies as if they're domestic, slashing the military budget....") His support anticipates the former - and he's probably correct, that Bayh and friends have an eye on new or increased taxes on the middle class and the slashing of popular entitlement programs, but lack the backbone to simply come out and make those proposals.

Seriously, what if the committee came back and said, "To maintain Social Security and Medicare spending, and to ensure their full funding for the indefinite future, we recommend that the military budget be halved, that funding for the wars in Iraq and Afghanistan be reduced by 1/3 per year until totally eliminated in three years, and that funding for the Army be eliminated with all of its bases and facilities closed," Would Broder still be pretending that this proposal is merely about crunching numbers, and not a delegation of serious policy issues with significant short- and long-term ramifications for the country?

It must be nice to know, in advance, that no matter what Congress does it will always be somebody else's ox that gets gored.

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1. These recommendations come from the bipartisan Defense Base Closure and Realignment Commissions (BRAC).

Everything Old Is New Again

Thomas Friedman brings us some amazing news from the world of legal practice:

A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.

Apparently Friedman believes that in the past law firms have underpaid and undervalued rainmakers, and have shoved them out the door the moment money gets tight.

Friedman also shares this gem about blue collar workers:

Those at the high end of the bottom half — high school grads in construction or manufacturing — have been clobbered by global competition and immigration, added Katz. “But those who have some interpersonal skills — the salesperson who can deal with customers face to face or the home contractor who can help you redesign your kitchen without going to an architect — have done well.”

So... once everybody's a salesperson, the economy will boom? Seriously, we only need so many salespersons in any given industry, and there are only so many kitchens to redesign. And, even assuming unlimited need, there's more to being a good kitchen designer or salesperson than taking a class or two (even if you get "A's").

Friedman's argument is reminiscent of Charles Murray's notion that every blue collar worker can become a "Journeyman Craftsman" and earn six figure incomes remodeling the mansions of millionaires. As for hiring architects for home remodeling? Outside of Friedman's economic circle, who hires an architect to redesign their kitchens?

Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.

I would very much favor not only an educational system that was friendlier to nonconformity and entrepreneurship, but also a society that helped support both as major potential factors to the future success of our nation. But it's easy to say things like "we need more [high school and college graduates] with the right education" - what is the right education, and who is going to pay for it - not just for a reinvigorated K-12 education, but for transforming and updating our institutions of higher learning?

It's About... Losing Elections

Although Michael Gerson can't quite bring himself to being explicit in that admission, he does effectively concede that Republican obstreperosity on healthcare reform has its roots in their fear of losing elections.

Critics of all things Republican insist that these objections are merely a cover for politics - that the GOP has decided to defeat Obama, no matter what the content of his health reforms. But concerns about America adopting the fiscal practices of a banana republic are not merely an excuse, they are a wave. And it is not cynical for Republicans to recognize the ideological stakes that Obama has raised. The passage of a massive health entitlement would change the relationship of Americans to their government.

On the evidence of nations such as England, a national health system places a conservative party at a permanent ideological disadvantage. Every proposal for tax reductions is attacked as undermining the eternally hungry public health system. Every failure of that system becomes an excuse for greater spending and government involvement. The tide of government grows, and the ebb weakens, until no one can fight the flood.

This is the main explanation for Republican resistance to Democratic health reform - and the reason that Sen. Snowe is likely to remain a lonely heretic.

While Gerson supposedly fears the slippery slope that will result from an effective national healthcare program, this is the same slippery slope argument Republicans have been making since the dawn of the New Deal. Republicans have repeatedly tried to tear down Social Security, yet somehow they have managed to survive, thrive, and at times dominate the American political culture since that program's passage. The same is true of Medicare. In fact, if Gerson recalls, G.W. Bush massively expanded Medicare, without the same sort of right-wing hand-wringing about budget deficits and transformation of the American way of life.

Gerson, as usual, doesn't know much about his subject. Perhaps he has forgotten Maggie Thatcher, who somehow managed to smash unions, privatize government-controlled entities and public housing, and (get this) lower taxes during her tenure, despite the existence of that nation's National Health Service.

Similarly, his reinvention of himself as a deficit hawk the moment Bush stepped out of office doesn't exactly give credibility to his supposed concern about this nation turning into a Banana Republic. Let's see... the son of a mediocre former President takes over the country, mismanages pretty much everything he touches and runs up huge deficits, but we're at risk of looking like a Banana Republic the moment he leaves office?

But perhaps more to the point, the "deficits" of the Democratic plan could actually be remedied by following a Canadian or European model for a national healthcare plan:

• "First, it will make the average insurance plan more expensive." Here, of course, we are speaking in averages. It follows inexorably that if a pool that once excluded people for pre-existing conditions, and scoured past medical records to disqualify people for benefits based upon "undisclosed" prior conditions (both real and imagined), the cost of insurance within that pool will go up. But for people getting employer-sponsored health insurance, where pre-existing conditions are already covered, it's not likely to have an effect. This could be mitigated or remedied by regulating the insurance industry, requiring health insurance companies to operate as nonprofits, or by having a national healthcare plan that competes with or supplaces private coverage. The Republican "solution", on the other hand, appears to be to allow insurers to continue to deny coverage to people with pre-existing conditions - Gerson's "compassionate conservatism" in action.

• "Second, while Democratic reform does expand health-care access, it does little to address the issue of cost inflation". Well, here's the thing. All indications are that with a national healthcare plan we would experience both cost savings and a reduction in healthcare inflation. Yet Republicans fight tooth-and-nail against even a modest public option to compete with private insurers. Some Republicans do offer a "solution" to healthcare inflation (with no evidence that it would work), by giving everybody much worse health insurance and making people pay for more of their own care out-of-pocket; that might be a hard sell, though, for a party that's propagandized against Democratic healthcare reforms on the premise that most people like their current insurance coverage.

• "Third, the Medicare cuts assumed by the Finance Committee are dishonest." Well, maybe so, but welcome to government. I'm curious - did Gerson try to advance this concern about government honesty when he was writing speeches for President Bush, because.... But seriously, this is one of the perils of trying to have a healthcare bill that's everything to everyone - we shouldn't be trying to address every issue and concern relating to the future of healthcare in a single bill.

If Republicans truly wanted a system that demonstrably would reduce premiums, reduce inflation, reduce the overall cost of healthcare, they would be actively looking to other Western nations and insisting that we adopt a program modeled after the most successful, most competitive national healthcare plans already implemented in other nations. But for all of Gerson's hand-waving, the fact is that to the Republican Party this is all about future elections - and they see an electoral advantage in running for office in a nation where millions of people are uninsured and millions more are underinsured.

Making Airport Security See Reason

Probably not the best way, but this cartoon does highlight the absurdity of the arbitrary, appearance-oriented security rules imposed on air travelers. (I've previously commented on the issue.)

The Worst Columnist in America?

I hardly know what to make of Richard Cohen.

If Obama ends the deepest recession since the Great Depression, if he enacts health-care reform, if he succeeds in Afghanistan, then his presidency will have been remarkable, maybe even great - the triumph of intellect. The man will be his own movement.

But if he fails in all or most of that, it will be because it is not enough to be the smartest person in the room.

Unless he parts the Red Sea, in which case it's all good again? Unless the pharaoh's men make it through, in which case being smart isn't good enough again? Unless he feeds a continent with five loaves and two fish, in which case....

It's not just that this column reads like Cohen phoned it in; it's that all of his columns have the same thinly reasoned, derisive, derivative, uninsightful quality about them.

Update: More from The NonSequitur: "[Cohen i]s talking about a movie about Obama, not Obama the person, but it's not clear to him, or to us, that he's aware of the difference."

But What Does The Poll Result Mean?

Michael Gerson whines that Europeans aren't sufficiently war-like:

A recent transatlantic poll asked whether the use of force can ever be "necessary to obtain justice." Seventy-one percent of Europeans said "no," while 71 percent of American said "yes." In general, Europeans believe that nothing -- not peace, or freedom, or security, or the rights of the weak -- is worth fighting for.

The poll says "inch", and Gerson extrapolates to "mile".

One of the funny things about polls like that is how, when you start describing specific circumstances, the result can change dramatically. "You oppose the death penalty?" "Oh yes, 100%, absolutely." "What about Ted Bundy and Jeff Dahmer." "Well, except for them." The same sort of thing goes on with nebulous questions about war. While 71% of Europeans may well have disagreed with the abstract statement, "Is war sometimes necessary to obtain justice", that does not mean that the same 71% wouldn't endorse a specific war (e.g., WWII) as having done so. Further, there's a matter of interpretation. Europeans from non-English speaking countries (the U.K.'s figures being much closer to those of the U.S.) may have been interpreting that question as "Are there always steps that you can take to achieve justice without going to war?" It's an answer that sees war as one tool in the box, but that recognizes that other tools are available that may be able to achieve the same end, perhaps even with a better outcome.

By way of example, Gerson whinges about Obama's wise decision to abandon an expensive, provocative plan G.W. had to install missile defense technology in Poland and the Czech Republic. Does Gerson think those nations are particularly wise in the necessity of war? If so, then why did 75% of Poles reject the concept of war as necessary to obtain justice, making them significantly more "pacifistic" than "Old Europe"? Also, what happened to Gerson's brand of "compassionate Christianity"? Where in the teachings of his faith can I find similar scorn for pacifism?

Meanwhile, you gotta love Gerson's new anti-popularity test:

It is the combination of American power and credibility that causes other nations to change their behavior in ways favorable to our interests. But power and credibility often attract resentment, not love. President Ronald Reagan was unpopular in Europe while pursuing policies, such as the deployment of medium-range nuclear missiles, that weakened the Soviet Union.

And G.W. was unpopular in Europe while getting the U.S. bogged down in two wars, still no end in sight, and undermining our ability to militarily or diplomatically pressure nations such as Iran and North Korea. Funny, how quickly Gerson forgets the legacy of his lord and master.¹
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1. Gerson does try to slip in a plug for G.W.,

Over the past several decades, certain images of America - the Marshall Plan, the Peace Corps, the President's Emergency Plan for AIDS Relief - have demonstrated that America's conception of its global interests is neither narrow nor selfish.

And the Nobel committee, as much as Gerson tries to pretend otherwise, has recognized American contributions to world peace. In case he missed it, in 1953 they awarded the price to George Cartlett Marshall. Leaving aside his poor diplomatic and military record for the moment, G.W. might have made himself a better candidate had he not coupled U.S. AIDS relief programs with "abstinence only" programs and fought against contraception and family planning.

"Show Me The Money!"

The Washington Post continues its love-in with Michelle Rhee, with this editorial from Richard Whitmire. The editorial points out that with the rise of charter school enrollment (28,000 students) at the expense of public school enrollment (44,000 students), there's danger that Rhee won't be able to "maintain a viable-sized school district". But if charter schools are everything they're cracked up to be, why is that a problem?

The advantages enjoyed by charters, which can pick and choose their staff, are considerable. Among the 1,500 schools in New York City, the top-ranked one on the city's 2007 progress report was Williamsburg Collegiate Charter School. There's just one secret to its success, says Evan Rudall of the Uncommon Schools network, which runs Williamsburg: high-quality teachers. "The best way to find such teachers is by using the latitude granted to charter schools: interviewing hundreds of candidates, both certified and uncertified, to find out if they know their material, are enthusiastic about their subject matter, and can maintain classroom control."

The author also mentions KIPP schools. What goes unmentioned is the sacrifice that some of these teachers make to keep up with the demands of their schools. As EducationSector points out,

The big question is whether the new models can be scaled up to reach the many students who need help. The answer is, not easily. In a decade, education entrepreneurs have created at most a couple hundred very strongly performing schools, serving perhaps 55,000 of the nation's more than eight million urban students. Among the major obstacles to a broader effort: Talented teachers and principals are hard to find and burn out quickly; the schools' longer calendar and other features that are key to their success are expensive; and most of the schools have to pay for their own buildings and often receive less than their full share of state and local education aid. Lacking large infusions of philanthropy, many of the schools would founder financially, and the economic downturn has made the schools' plight even more precarious. The Harlem Children's Zone recently cut staff in the face of diminishing donations.

Talk all you want about "highly qualified teachers" motivation, school quality... but it comes back to this: You're not going to convince teachers unions to give up job security so that their teachers can work more and earn less. It's great that a handful of schools can maintain a sufficient flow of applicants that, as their faculty members wear out and burn out, they can replace them with a new set of motivated teachers. But that model doesn't scale.

Also, let's not forget that this is a model we only propose for the inner cities. I am not aware of any middle or high SES school district that is looking at KIPP and saying, "We should follow that model." Maybe they should be. Maybe they should be looking at alternate modalities such as Waldorf or Montessori and trying to figure out what those approaches do correctly. Maybe they should be looking to offer an array of choices instead of "the same" and "more of the same" (most "school reforms" after all speak of doing the same thing, but "better" or with a longer school day or school year). But interest in "what works", at least with the loudest voices for "reform", seems to be pretty much limited to the retrospective study of standardized tests, and I see little sense that they're really looking for innovation - or that most parents even in "failing schools" are demanding innovation, as opposed to school safety and order in the halls.

For all this talk about top rated schools in the public and charter school systems, let's not forget that we're still not talking about the schools our nation's political and economic elites will choose for their own kids. Before they'll consider such a thing, many will plunk down $30,000+ per year for Sidwell Friends. With diminished private donations for even the best charter schools, and the further erosion of the tax base for public schools, who's going to pay for reform? Talk is cheap in D.C., but the best schools are not.

This Was Funnier When It Was a Cartoon

Remember the Springfield Monorail?

But private prisons are completely different, right? They have to make money!

The Horror....

Although sometimes a bit (probably intentionally) unfair, and not safe for work, regretsy does a pretty good job of highlighting crafting ideas not likely to make Martha Stewart Living.

At Least We're Not Detroit

In keeping with videos on the failure of major cities that are sufficiently and sadly humorous to make it into Michael Moore's new movie,

Bob Herbert sees the pain behind the humor, commenting on Conan O'Brien's jokes about Newark.

Conan was just trying to be funny, but the reality behind his late-night humor is horrifying. In Detroit, the median sale price of a house has hovered around $8,000. Seventy percent of all murders in the Motor City go unsolved. Joblessness is off the charts. The school system is a catastrophe.

* * *

The inner cities have been in a recession for decades. They’re in a depression now. Myriad issues desperately need to be addressed: employment, education, the foreclosure crisis, crime, alcohol and drug abuse, health care (including mental health treatment and counseling), child care for working parents and on and on and on.

Sure, but there are two problems: We're not going to pour the money into the cities that it would take to fix these problems and, even if we were, there's cause to question whether that would be enough. I'm perfectly prepared to take Herbert up on his challenge to "think more seriously about what’s really going on in cities like Newark", but the answers I have (clearing out the dead buildings, consolidating cities like Detroit into areas they can afford to govern, etc.) don't really turn things around - they just make the status quo more sustainable.

Healthcare, Not Health Insurance

It's really simple, but I think this essay identifies the biggest flaw of healthcare reform as it's presently conceived. How can we end hunger?

Providing food to those without is simple, really: we'll just pass a strict law requiring all hungry people to buy some, and if they don't, fine them harshly enough to persuade even the most recalcitrant ones it's in their best interest to eat something once in a while.

Now change "food" to "health insurance," and behold: you have what Congress and President Obama want to inflict upon hapless constituents like me.

Forget health insurance – what sick or struggling Americans need is healthcare. They're not the same thing.

The essay presents an anecdote about a woman who, following reconstructive surgery on her face by volunteer surgeons, complains that the Oregon Health Plan denied payment for the procedure on the ground that it was cosmetic:

I do not want my healthcare decisions made by bureaucrats who think that having a face with a nose you can breathe with is no health issue but a mere matter of vanity.

In fairness she doesn't say "government bureaucrats"; many health insurance companies would make the same determination, if they could not deny her care on the basis that her condition was preexisting. There will be similar denials under any system of health insurance, be it single payer, entirely private, or some form of hybrid.

One of the many hazards of trying to fashion a "one size fits all" bill is that you'll end up with a suit that fits quite poorly on pretty much everybody, but unfortunately that's what our present political culture demands.

"But We're In Two Wars...."

I think Ross Douthat should write a book... perhaps he could call it "The Politics of Resentment in the Post-GW World". He seems to come just short of complaining, "But GW got us into two intractable wars and he didn't get a Nobel Peace Price. Did I mention that it's a stupid, stinky prize anyway?" And of course, there's this:

People have argued that you can’t turn down a Nobel. Please. Of course you can. Obama is a gifted rhetorician with world-class speechwriters. All he would have needed was a simple, graceful statement emphasizing the impossibility of accepting such an honor during his first year in office, with America’s armed forces still deep in two unfinished wars.

Now you'll forgive me, as I did not follow Douthat's blog, but I somehow don't think that Douthat spent the years of Bush's Presidency arguing that the wars in Iraq and Afghanistan were contrary to the larger goal of peace. I'll grant, when Douthat was seven or eight he learned that "peace is the opposite of war", but surely he has come to realize that advancing peace doesn't always mean ending a war (and sometimes it can mean starting or joining one). I'll also grant that GW's concept of preemptive war is scarcely more mature than Douthat's notions of peace, but it's difficult to believe Douthat missed the associated debate.

For that matter, did Douthat whine that Mother Teresa hadn't stopped any wars when she won the Nobel Peace Prize? When he lists various activists, courageous though they may be, whom he believes are deserving of being insulted with this irrelevant honor, who among them can he actually say has stopped a war?¹

The funny part? Had the nod gone to GW, Douthat's friends would be trumpeting it as a vindication of his wars, his "with us or against us" brand of diplomacy, and his rejection of "old Europe".² Not that I want to overuse the term "platitudinous", but...

If Obama goes from strength to strength, then this travesty³ will be remembered as a footnote to his administration, rather than a defining moment.

Figured that out all by yourself, didja?

Now he’s the Nobel laureate who has to choose between escalating a counterinsurgency in Afghanistan or ceding ground to a theocratic mafia. He’s the Nobel laureate who’ll either have to authorize military strikes against Iran or construct an effective, cold-war-style deterrence system for the Middle East. He’s the Nobel laureate who’ll probably fail, like every U.S. president before him, to prod Israelis and Palestinians toward a comprehensive settlement.

Echoes of "math is hard". Yes, Ross, it's easier to start conflicts and to perpetuate conflicts than it is to end them. That's kind of the point. With all of Douthat's talk of "bravery", turning down the award would have been easy.⁴ Living up to it ? That's a challenge.
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1. The standard Douthat seems to be setting for Obama appears to be slightly higher than that set for any prior Nobel Peace Prize laureate, verging on a requirement that Obama end all of the world's armed conflicts.

2. Instead, while presented as an example of how "critics will dismiss his presidency", Douthat brands Obama's predecessor as "Dubya the Incompetent". I've heard the term "incompetent" associated with GW, and I think he was one of the least competent Presidents of modern history; but I've not heard anybody but Douthat use the label "Bush the Incompetent", let alone suggest that it's as resonant as "Slick Willie" or "Tricky Dick". Perhaps Douthat should be pushing a better brand. "Bush The Decider"? "Bush the Misunderestimated"?

3. "Travesty"? I hereby award Douthat the "Drama Queen of the Day" Award. I wonder if he'll try to make the case that he hasn't earned it, and shock me by bravely declining the honor.

4. To me, walking away from the Peace Prize for the reasons Douthat proposes - the possibility of being made fun of by successors to John McCain as a celebrity, or by SNL for not having accomplished his entire agenda in nine months - would at best be shallow, at worst cowardly. Brave? Hardly.

Broke is Broke

In a quality typical of its unsigned editorials addressing budgetary, education, union, or... well, pretty much any issue, the Washington Post argues that complaints about teacher layoffs in the Washington D.C. schools are misplaced:

Washington Teachers' Union President George Parker wrote a letter that appeared on this page Friday saying that his organization has tried to collaborate with Ms. Rhee. There is the suggestion that Ms. Rhee's recent layoff of 229 teachers could dampen the chance of future cooperation.

Let's review the record to examine the plausibility of those charges.

Oh, please, let's.

More than 14 months ago , Ms. Rhee offered a contract to Washington's teachers that was unprecedented in its largess. The proposal would have provided teachers with, at a minimum, a 28 percent pay raise over five years, plus $10,000 in bonuses. They would have had to give up nothing in the way of job security to obtain the raise. All Ms. Rhee asked in return was the freedom to offer, on a voluntary basis, even more money to a subset of teachers, if they would agree to have their compensation linked to performance.

Let's flash back to the offer and it's generous terms that were... kept secret - to the point that Michelle Rhee's dreams of busting the teacher's union are better documented? How in the world could that have created an atmosphere of distrust?

Labor law barred Ms. Rhee from directly explaining to teachers what she had in mind.

How... platitudinous. No, Rhee could not have bypassed the union to directly negotiate with teachers. But that falls considerably short of a mandate that she keep the details of her plan secret. More to the point, she plainly dribbled out the "good parts" to Fred Hiatt and the Washington Post editorial board, so what was her real motive for keeping the rest so tightly under wraps? (And how can Hiatt's board claim to know "all she asked in return" if they're simultaneously asserting that they have no clue what Rhee asked in return?)

But returning to the D.C. Schools budget shortfall, as you would expect, the Post begs the question. If the D.C. Schools are broke and have to lay off teachers despite not giving out those lavish raises, what basis was there to believe that the raises could be delivered in the first place, let alone sustained? Having committed to those raises, Rhee would be in the position of laying off even more teachers this year, next year, the year after.... While the Post cries crocodile tears,

We sympathize with the children whose school year has been disrupted and of course with the teachers who have been fired.

Why won't the Post's editorial board be honest that it endorsed a plan, without knowing the details, that would have caused even greater disruption and numbers of layoffs?

Healthcare Reform is Unfair to Free Riders?

I while back I made a sarcastic proposal of how a health insurance company could serve free riders:

Here's the business model: I charge a premium in the lowest permissible amount (the least expensive plan you can buy to avoid any penalty from the mandate), use that to obtain reinsurance for losses above, say, $50,000, and offer essentially no other coverage. Participants can fund HSA's, if they wish. If a participant gets through a year without making a claim, I refund... let's say 50% of their premiums. The rest goes to the cost of administering reinsurance, administering claims (something I would outsource), and profit. Coverage for pre-existing conditions? Not a problem. Unhealthy people will stay away in droves.

I've also commented on how angry it can make people when they're instructed to buy insurance in which they see no value, or inadequate value. Today, the Wall Street Journal published a letter manifesting that anger, by somebody whose insurance is inadequate under Massachusetts law - due, no doubt, to the free rider problem:

My husband retired from IBM about a decade ago, and as we aren't old enough for Medicare we still buy our health insurance through the company. But IBM, with its typical courtesy, informed us recently that we will be fined by the state.

Why? Because Massachusetts requires every resident to have health insurance, and this year, without informing us directly, the state had changed the rules in a way that made our bare-bones policy no longer acceptable.

Insurance that is adequate is available from IBM at a significant increase in cost. It's also available through state plans at a much lower cost, but of course the complaint is that any increase in cost is too much.

A song dedication for the WSJ: Free Ride.

Update: The other side of the coin:

Industry representatives put Congress and the Obama administration on notice that if health-reform legislation doesn’t send even more new customers the industry’s way or if a windfall profits tax is included, the industry would hit businesses, individuals and the government with higher premiums, effectively defeating one of the initiative’s top goals, reining in ever-rising costs.

* * *

The industry wants more of the estimated 25 million still uninsured – especially healthy, young people – to be compelled to buy policies, too. Without more healthy customers added to the mix, the industry says it will have no choice but to raise rates.

Of course, we probably won't see the WSJ complaining of the insurance industry distorting the debate, impeding any real competition, forcing costly insurance on people who are the least likely to need it, then demanding record profits as the price of their "cooperation".