After Trumpcare, Medicare Part M

Here’s a thought: as soon as we defeat Trumpcare, Democrats in both houses introduce Medicare Part M (for Middle-Aged), covering people ages 50-64.

A. It’s good politics:

1. These are the people who were going to be hit the hardest by Trumpcare premium increases. Offer them a better deal and they’ll support us–and people this age vote!

2. It sounds more moderate than Medicare for All, while also making a solid step closer to single-payer, which the Republicans have managed to make sound like pie-in-the-sky socialism with a side order of end-of-the-world.

B. It’s good policy:

1. These are the sickest people in the Obamacare exchanges–move them out of the pools and premiums go down.

2. BUT they’re healthier than most people now on Medicare: put them into that risk pool and the premiums go down there, too.

DON’T believe Trump when he says Obamacare is collapsing.

DON’T believe pundits who say the Democrats have no platform/positions: this plus increased minimum wage plus let’s get out of Afghanistan is platform a-plenty.

WaPo Story on Medicare Hospice Benefit

WaPo had a story on Dec 27, 2013 with a nearly irresistible click bait  headline “Hospice firms draining billions from Medicare.” Like much health policy that focuses on the end-of-life, the story raises some valid points, but gives in to the sensational and turns away from the far more difficult reality of the counterfactual: current hospice policy as compared to what?

Medicare policy is inextricably end-of-life policy due to the fact that more than 80% of the people who die each year in the United States are insured by the Medicare program. That is because Medicare insures virtually all persons age 65 and older, and everyone eventually dies.What care should the elderly receive? Does care increase life span? Does it improve quality of life? How much does it cost? Who should decide if the intersection of these questions are worth it? These are very difficult questions to answer. Our country cannot even bear to ask them. So, we look for examples of malfeasance being the problem, in large part because as long as we focus there we don’t have to stare at that set of questions above and imagine our mother, wife, brother or ourselves being the one about whom the questions are posed. Continue reading “WaPo Story on Medicare Hospice Benefit”

Pollack and Kleiman video chat on gun violence

We’ve had a tough week of gun violence. First there were the killings at the Washington Naval Yard. Then there was the shooting of thirteen people in Chicago’s Back of the Yards neighborhood. Miraculously, no one died in that Chicago incident. It remained plenty revolting. Firefighters were hosing the park down in the middle of the night so kids wouldn’t have to walk past the gory scene on the way to school the next morning.

I have more human sympathy than your average person for a young person who joins a gang or gets caught up in the underground economy, or for a nineteen-year-old who packs a gun because he fears his peers. I just can’t process someone shooting a three-year-old boy in the face with an assault weapon. The boy will survive, though he will require plastic surgery.

To state the obvious, I am sick of the depravity caused by the usual stupid code-of-the-street or turf crap.

Mark Kleiman and I chatted by video to discuss a range of issues occasioned by these incidents. Highlights are shown below.

Adapting to Fire Risk

For those who reject, my Climatopolis vision that individuals (if they face market and social incentives) will adapt to emerging climate change risk then take a look at this quote from this Sunday’s NY Times.  

“California has been a leader in adopting building codes and brush-removal regulations, but for the most part, despite the clear evidence from Cohen’s published research, municipal governments in the western United States have been slow to follow. Some people don’t want to cut down trees; others don’t want government telling them what to do with their property. Cohen said that when he took his research to urban firefighters, he didn’t find an enthusiastic audience. His experience with fire departments that had not been “kicked multiple times” by wildfire has been that they don’t want to be the ones telling homeowners they’re part of the problem; his impression is that urban firefighters prefer instead to say, “This fire was so big and fast, there was nothing we could do to save your house.” And that’s true, as far as it goes. But until people grasp or act on what Cohen has demonstrated — that homeowners would not need to rely on firefighters as much as they do if their houses were better built and maintained and the properties around them were prepared to withstand fire — changes to forest management and firefighting policies are unlikely to significantly improve matters.”

Attracting and Retaining the Skilled

UC Berkeley’s Enrico Moretti has published an excellent piece in the Wall Street Journal.

“Since 1980, data show that the economic success of a city has been increasingly defined by its number of highly educated workers. Cities with many college-educated workers and innovative employers started attracting more of the same, and cities with a less educated workforce and less innovative employers—such as traditional manufacturing—started losing ground.

He continues

My research shows that scientists and software engineers are not the only ones who thrive as a result. Using data on nine million workers in 320 U.S. metropolitan areas, I found that for each new innovation-job in a city, five additional jobs are created—not only in professional occupations (lawyers, teachers, nurses) but also nonprofessional occupations (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San Francisco, there are five new job openings for baristas, personal trainers, therapists and taxi drivers. The most important effect of high-tech companies on the local economy is outside high-tech.”

Moretti calls this the “local multiplier effect”.   Those mayors who can deliver high quality of life will be able to attract and retain the skilled and then will enjoy the tax base benefits that Moretti sketches.    The city competition for the skilled does not have to be a zero sum game if  mayors implement policies that “grow more local” skilled people.  Here then, we must embrace the Heckman Agenda and also change the rules that govern local public schools to allow them more flexibility in educating kids.    Since the RBC has a taste for “doom and gloom”,  this case study of Detroit by George Galster will interest you.

Somebody else

A friend writes to suggest that George Zimmerman’s detention on domestic-violence charges offers me the opportunity to crow. I am reminded of a fine old Bert Williams song that I once heard Dave van Ronk perform.

Ivory bones with ebony dots
oft lead to cemetery lots.
A game last night brought on a fight
that ended up in pistol shots.
I was the furthest from the door;
the others all got out before.
Upon the floor a man lay dead,
and through the transom someone said—

Somebody will have to stay behind.
Someone must remain.
And later, when the police arrive,
explain why this, our brother,
is no longer alive.
The man who stays and sees it through
will gain celebrity.
It’s a wonderful chance for somebody.
Somebody else, not me.

Apocalypse Soon?

Yale’s Paul Sabin revisits the Ehrlich vs. Simon bet on limits to growth.  His nuanced piece makes many reasonable points.  Towards the end of his piece he says some things that I strongly disagree with.  I know that the readers of this blog will agree with him, so let’s have some fun.  Here is a direct quote which I will “deconstruct” after the fold;

“Mr. Simon liked to argue that new problems prompt solutions that ultimately leave people better off than before. But we cannot surmount our challenges if we simply deny that they exist.

Instead of using science as a resource for human betterment, conservatives who reject the evidence of human-caused global warming prevent the very creative problem-solving that Mr. Simon advocated. And if environmentalists like Mr. Ehrlich hadn’t urged action back in the 1970s, would all that creativity have been channeled into the cleaner air and water that we enjoy today?

We face choices about our future direction. As Mr. Ehrlich and many other environmental scientists have documented, by pouring carbon dioxide into the atmosphere, we put things we value and love in danger, from the coral reefs to the Jersey Shore, from homes threatened by wildfire to farms endangered by drought.

And even if Mr. Simon is right that humans can adapt and prosper on this rapidly changing planet, we have to ask ourselves whether the risks and inequalities of this change are desirable.”

Continue reading “Apocalypse Soon?”

Never heard of this dude, but it’s kinda fun watching him read my investment advice

Faithful readers may remember my comment in an earlier conversation with Helaine Olen regarding the financial industry’s basic dilemma: The best advice fits on an index card, which is available for free at the library. Commenter Alex M asked for the actual index card. Although I was originally speaking in metaphor, Alex’s question led me to produce my own version of the index card, manufactured in less than five minutes using only materials found in my kitchen. That led to this picture and post.

Last night, Sendhil Mullainathan reposted my little investment guide. Justin Wolfers, Joe Weisenthal, and Huffington Post gave me 1.5 minutes of fame.

But my favorite recitation comes from someone I have never met, certified addiction recovery coach Luscious Conway. It would have been nice had he mentioned me in the video, but hey–I’m there.

Transforming Luddites into New Urban Artisans

I am in Singapore working at NUS but I continue to read the New York Times.   David Autor and David Dorn have written an important piece about the role that computers have played in hollowing out middle class jobs.   They end on an optimistic note;

There will be job opportunities in middle-skill jobs, but not in the traditional blue-collar production and white-collar office jobs of the past. Rather, we expect to see growing employment among the ranks of the “new artisans”: licensed practical nurses and medical assistants; teachers, tutors and learning guides at all educational levels; kitchen designers, construction supervisors and skilled tradespeople of every variety; expert repair and support technicians; and the many people who offer personal training and assistance, like physical therapists, personal trainers, coaches and guides. These workers will adeptly combine technical skills with interpersonal interaction, flexibility and adaptability to offer services that are uniquely human.

Three points:  For this new “nimble economy” to replace lifetime jobs will require some capitalist magic;

1.  Health insurance will need to be portable across jobs.   Read Dr. Madrian’s paper on job lock.  

2.  Internet services in providing kosher “rankings” of quality of different artisans will have to be developed.  In a fair world, a good artisan will be able to objectively signal to potential customers that she offers high quality services per $ she charges.

3.  This will be a risky world as self employed workers may still face periods of low demand.  In the Keynesian model, consumption today is a function of income today (do you remember:  C = a + b*Y?) .  If we take this model seriously, this means that artisans could face very volatile consumption as their incomes bounce around over time.  Since people prefer smoothed consumption over time,  such artisans will have to become shrewder life time consumers and explicitly embrace the permanent income hypothesis of consumption.   In this age of behavioral economics featuring myopic consumers, the nudgers will have to think about how to incentivize the Homer Simpsons to save for a rainy day.

In this age of product differentiation and celebrating the individual, it makes perfect sense that new artisans will arise in cities around the world.  Such services are often non-tradeable and this means that these producers will locate close to the final consumers.  Such final consumers will often be the 1% and in this sense they create jobs.  Read Moretti’s Local Multipliers paper.


Media bias and the Hostile Media Effect

Yes, media biases are real and worth studying. No, Groseclose did not find the right way to do that study.

Responding to the post about Max Boot and the Groseclose studies of “liberal media bias,” commenter Dilan Esper writes

In my experience, everyone thinks the media is biased against their side. Which is why I find “media bias” arguments to be among the dullest and most silly arguments out there.

Commenter “rachelrachel,” supporting Dilan, points to the documented “Hostile Media Effect”: most participants in a dispute feel that their side has not gotten a fair shake in the way that dispute is reported.

Dilan and rachelrachel think that ends the argument. I disagree. There are matters of fact to study; it’s just that studying them is very hard.

Almost all sports fans think the officials are biased against their favorite teams. But not all of them are wrong. There are examples of clearly biased officiating, based on personal animus, institutional pressures, the desire to please the “home” crowd, or simple corruption. So if someone tells you his team got cheated by bad officiating, you can’t just say “Everyone believes that” and let it go. He might be right.

In that case, I can imagine doing a study using independent analysis of game films to determine whether a given official, or the officiating in a given game, actually showed bias against one team.

Studying the political biases of the media – and it would be flat-out silly to say that no such biases exist – is hard both because there’s no neutral third party to judge and because the underlying facts are themselves in dispute, with only a few of those disputes resolvable the way the question of whether a player stepped outside the field is resolvable.

Of course it’s true that both libertarianism and Scandanavian-style social democracy are disfavored in American political reporting. Of course it’s true that “free trade” gets a good press and labor unionism gets a bad press. Of course it’s true on specific issues – e.g., welfare or education policy or public pensions – one side sometimes claims the mantle of “reform” and has that favorable label applied uncritically to its proposals by the media. Of course it’s true that proposals with very strong expert support but without strong organizational or economic bases – higher alcohol taxation, for example – never get a hearing at all. Other issues – whether smoking causes lung cancer in the reporting if the 1960s and 1970s, whether football damages brains and whether anthropogenic global warming poses a major threat to human welfare today – are treated as “controversial” even though the controversy is largely manufactured and the fact of the matter not subject to much legitimate dispute.

Megan McArle and Tyler Cowen read the newspapers and notice that that the viewpoint they favor doesn’t get a fair hearing, and in fact is often presented in such distorted form that they barely recognize it as their own. This is a source of huge frustration. When someone makes an academic-sounding noise that seems to vindicate their daily observation, it’s not surprising that they should eagerly embrace that finding.

Nor is it unreasonable, once that attempt has been discredited, for them to continue to seek out academically acceptable evidence that will convince those who don’t hold their viewpoint of what’s bloody obvious to anyone who does.

What is unreasonable, it seems to me, is to treat the positions of the contemporary Republican party and the positions of the contemporary Democratic party as the only two positions that deserve a hearing, to assume that they are equally valid, and to demand that the media be “neutral” as between them. Any analysis based on those three choices – Groseclose’s, for example – can only produce a nonsensical result.