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What will GOP learn from Cantor’s defeat?


What will GOP learn from Cantor’s defeat?

Likely, not much.

The establishment has a difficult time analyzing and adapting to such ground shifting events. And make no mistake: Eric Cantor’s defeat was earth shattering.  He becomes the first Majority leader ever to lose a primary race.  EVER.  And he is the highest ranking party member to lose a primary race since 1899.

In my lifetime, there is not really an analogous primary result.  People have compared this to then Senate Majority leader Tom Daschle’s Senate election loss, but that was a general election race…a whole different ballgame.

Fundamentally, Cantor was not a bad conservative.  I still believe he is a good man, and a good Republican.  In fact, he had terrific ratings from conservative groups.  He was for lower taxes, smaller government…generally a pretty strong conservative.

What Cantor lost in recent years was any connection to the base…and his own constituents. And ultimately…that matters.  For years, people in his district felt he spent far more time catering to Washington D.C. interests than their own.  Even before this cycle, Cantor was no loved in the district, because…he made no effort TO be loved.

My faith in the Republican Party’s leadership is at an all-time low, and the voters of VA-7 seemed to agree with my assessment.  This is a party that spends an inordinate time worrying about what Democrats, the media, and others say about it…instead of listening it its own members, and actually moving the needle on conservative policies to move the country forward.

If the GOP leadership walks away from this event with only excuses why Cantor lost, it will further deepen the divide in the party, and furthermore, will do nothing to further the conservative cause.  The party doesn’t necessarily need to move right or center to win elections.  More than anything, it needs to listen to the American people, focus on the few issues people care about…and then fight.

I don’t see that happening, because we still require a leadership purge within the party.  There are many things our party must help the country transform on, whether it be the economy, taxes, immigration or health care.  But our current leadership cadre might be out of their depths on those issues. And fundamentally, Cantor’s loss was simply a symptom of that larger problem.



Why Do We Have A Veterans Administration?


Why do we have a Veterans Administration?

Fundamentally, this is the key question we should be grappling with, since it became public that dozens of Veterans died waiting to get health care in the Phoenix VA system.  And this is far from an isolated incident; this is an epidemic that exists in facilities all across the nation.  VAs have long been unresponsive, uncaring, and unwilling to our nation’s military veterans.

President Obama campaigned on this issue in 2007.  In his 2008 platform, he stated the following, among other things:

  • Allow All Veterans Back into the VA: Reverse the 2003 ban on enrolling modest-income veterans, which has denied care to a million veterans.

  • Strengthen VA Care: Make the VA a leader of national health care reform so that veterans get the best care possible. Improve care for polytrauma vision impairment, prosthetics, spinal cord injury, aging, and women’s health.

Has this been the case?

Of course not.  Although Obama and Democrats have focused on health care reform, they did little to change the fundamental broken system within the Veterans Administration. In fact, if anything, letting the problem largely fester has worsened issues, while blindly increasing funding, likely has led to more morbidity and mortality in some dysfunctional facilities.

The problem with all of Obama’s promises at this point is that none of it accepts a fundamental, basic fact: the VA has long been broken.  These problems existed long before Barack Obama rose to the Presidency.  It is a system whose internal dysfunction cannot simply be fixed by added funding or minor reforms.  And it is highly unlikely that the bureaucrats in this administration are going to fix a long-standing problem without massive changes that other bureaucrats in other administrations failed to accomplish.

I do believe the VA could be fixed.  It would take an extensive, persistent effort to change the management, culture, philosophy, and underlying tenets of warped system.

I fundamentally don’t believe this administration is willing take on that challenge.

Are they willing to accept that public sector unions have been a major source of the dysfunction? Are they willing to accept the payment model breeds inefficiency?  Do they understand that there is layer after layer of administrators in the system whose only job is self survival in the bureaucratic mire that is the VA?

That is why I ask a simple question:  Why do we have a Veterans Administration?  The original cause was to provide health care access to our military heroes, because there was no other easy access.  However, with the Affordable Care Act, we now have another method to provide that care, do we not?

So then, why do we maintain a duplicate system that, as can easily be demonstrated, not working?

Surely, there are some portions of the VA that will have to be maintained.  Special units that focus on battlefield injuries, as stated in Obama’s platform, which no private hospital would be able to deal with, must be maintained.  I am sure there are other examples.

But for the vast majority of our nation’s Veterans, access to the private sector would be far more responsive and sufficient for their needs.  The VA could simply provide them ample vouchers (on top of the subsidies already available through the ACA) to fund the maximum coverage on the Obamacare exchanges…and allow them to enjoy the fruits of our private sector health care system.

So why do we have a Veterans Administration? I bet this question has never been asked or answered in the West Wing or Oval Office. And that fundamentally is why this administration will never succeed in fixing this problem.


Memorial Day: Freedom is not Free




Time For Radical Changes At The VA


I feel sorry for former General Eric Shinseki.  By all accounts, he was an excellent military man, competent, stalwart, and honest.  And because of that, he was chosen to head the Veterans Administration.

The place where political careers go to die.

Shinseki came to the VA in Obama’s first term with a lot of pomp and circumstance; those days are long gone.  With a myriad of scandals plaguing VA hospitals and medical centers across the country, the Obama Administration is now in full crisis mode, and things are likely to get far worse.

Although Press Secretary Jay Carney tried to make the ridiculous argument that the President only found out about these problems from ‘media reports’, the reality is Senator Obama was quite aware of these problems.  In fact, one of his first attacks on then President Bush as ‘candidate Obama’ was regarding the VA.  Here is Mr. Obama in 2007:

“When a veteran is denied health care, we are all dishonored,” Obama said. “When 400,000 veterans are stuck on a waiting list for claims, we need a new sense of urgency in this country.” He also promised more resources and better management to fix the problems seen at the VA. “As president, I won’t stand for hundreds of thousands of veterans waiting for benefits. We’ll hire additional claims workers.”

Well, the utter failure is quite clear.  The waiting lists that Obama referred to 7 years ago have grown, not shrunken.

Funding does not appear to be a issue. Spending has increased all but one year since Obama spoke so eloquently.  Since FY2008, the VA budget has grown by 78 percent in six budget cycles, to $150.6 billion. On than 2012 when spending slightly decreased because of the sequester, the VA budget has averaged a 8% increase yearly.

However, the most recent revelations that started in Phoenix, and have now permeated through out the VA system, cannot be ignored.  In Phoenix alone, 40 deaths are attributed to the long, unresponsive waiting lists.  The number of deaths are sure to grow as we get more evidence and transparency.

I feel bad for Gen. Shinseki.  The VA was a bloated, destructive government bureaucracy long before he walked into the quagmire.  And initially, I was opposed to his firing over this.

That is no longer the case.  His failure, either because of lack of competence or simply because the Herculean task of fixing a fundamentally broken government health care system is an impossible task, is quite clear at this point.  He should step aside in any case.  His retirement would at the very least provide the media attention necessary to force the Administration to act decisively. And possibly, with the right type of reformer, we could see actual productive improvements to the VA.  Hope springs eternal.

It is time for real action at the Veterans Administration.  We have as a country waited too long; and our Veterans are still waiting.


Now Modi Must Deliver



Narendra Modi and the BJP appear to be headed for a landslide victory in national elections in India.  As polls have showed for months, the ruling Congress Party is headed for its largest defeat in history.

As of this monring, the BJP and its allies were leading with 326 of 543 seats, according to India’s Press Information Bureau, giving the party and its partners in the center-right National Democratic Alliance (NDA) a clear mandate in the next government.

And that mandate came with a massive turnout.  A record number of voters participated in world’s largest election, a mammoth five-week process that ended on May 12. Over 66% of eligible voters cast their ballots, compared with 58% in the last vote in 2009.

Modi faces numerous challenges from the start.  The first is the lagging economy.  India continues to grow, but at a pace far too slow to raise its hundreds of millions of poor into the middle class.  Inflation, along with stagnant foreign investment, are key issues the BJP must face in coming months.

Politically, Modi must move past his obvious issues with the large Muslim population.  Appointing Muslims to some key positions may cause some internal political strife, but would display a willingness to procede in a purely secular manner.

Because of the massive electoral success, Modi will not have to placate to numerous troublesome local apparatchiks as much as expected.  His power of strength hopefully will force the various factions to unite, or choose to leave the ruling coalition all together.

Whether Modi is successful may largely be decided by small, but important, political decisions in the coming weeks.  His relationship with Muslim, his relationship with the West, and whether the financial climate improves because of faith of business leaders in the political process will all depend on it.


Liberals Losing The Climate Change Argument


President Obama on Tuesday released a wide-ranging report on the effects of climate change on the nation.  In it, the administration claims that Americans are already feeling the impact of global warming, through changes in ranging rom hurricane damage worsened by rising seas, to allergies prolonged by extended pollen seasons, to corn and soybean yields depressed by hotter-than-average summers.

I find many of their claims dubious.  In fact, their claims actually directly contradict many of the findings in the newest United Nations IPCC report.

Nigel Lawson, in an excellent piece in the National Review, spells out the IPCC findings:

The latest (2013–14) IPCC Assessment Report does its best to ramp up the alarmism in a desperate, and almost certainly vain, attempt to scare the governments of the world into concluding a binding global decarbonization agreement at the crunch U.N. climate conference due to be held in Paris next year. Yet a careful reading of the report shows that the evidence to justify the alarm simply isn’t there.

On health, for example, it lamely concludes that “the world-wide burden of human ill-health from climate change is relatively small compared with effects of other stressors and is not well quantified” — adding that so far as tropical diseases (which preoccupied earlier IPCC reports) are concerned, “Concerns over large increases in vector-borne diseases such as dengue as a result of rising temperatures are unfounded and unsupported by the scientific literature.”…

The IPCC does its best to contest this by claiming that warming is bad for food production: In its own words, “negative impacts of climate change on crop yields have been more common than positive impacts.” But not only does it fail to acknowledge that the main negative impact on crop yields has been not climate change but climate-change policy, as farmland has been turned over to the production of biofuels rather than food crops. It also understates the net benefit for food production from the warming it expects to occur, in two distinct ways…

Moreover, as the latest IPCC report makes clear, careful studies have shown that, while extreme-weather events such as floods, droughts, and tropical storms have always occurred, overall there has been no increase in either their frequency or their severity. [Bolded added] That may, of course, be because there has so far been very little global warming indeed: The fear is the possible consequences of what is projected to lie ahead of us. And even in climate science, cause has to precede effect: It is impossible for future warming to affect events in the present.

Now, this gets to the heart of the matter as I see it.  The White House’s shrill report does not appear to be based on solid science.  Even the IPCC, which clearly believes in the global warming thesis, doesn’t support the wide-ranging claims of the administration.  Numerous well-regarded reports have not demonstrated the type of causation that President Obama claimed yesterday.  But the goal of the administration was not to promote further understanding of the science behind their argument; no, their goal was to scare people into agreeing with them, regardless of the science.

Let us even put aside the science for a moment.  The politics of global warming are a perfect example how to politicize a movement that could potentially gain traction, and force it into submission. The Left has for the better part of three decades (at least) made this a war of ‘us vs. them’.  There is no compromise or middle ground for the extremist progressives on climate change.  They require full capitulation, or claim the end of the world is upon us.  And as such, what you develop is a religious type of fanaticism that cannot be reasoned with.

In turn, such extremism begets extremism.  The political Right now opposes virtually any solution that begins with the words ‘climate change’.  For good reason or not, when your opponents compare you to Holocaust deniers, it is highly unlikely you are going to agree with them on anything.

Even worse, the entire concept of ‘settled science’ bandied about by Obama and other Democrats is demeaning to…well, to ‘Science’ itself.  Science by definition is NEVER SETTLED. It is a continuing search for truth; real truth.  Even if anthropogenic global warming is a scientific truth, its effects on our world still is not a settled science. To claim so shows a lack of understanding of what science truly is.

Any science whose modeling is so incorrect on a regular basis should not be so arrogant as to claim they have ‘settled’ the debate.  Whether it is global cooling from the 1970s, Ted Danson saying we have 10 years to live…20 years ago, or Al Gore in 2008 claiming the polar ice cap would melt by 2013, claims from the left repeatedly fall short, and make their position look ludicrous.


Sean Davis of The Federalist points out the reason for this shrill debate:

As the old legal adage goes: When you have the facts, argue the facts; when you have the law, argue the law; when you have neither, just accuse your adversary of hating science and hope that nobody will listen to what they have to say about your consistently wrong forecasting models. And if that doesn’t work, blatantly manipulate and torture the English language and hope that nobody will notice.

The real problem with all of this? There is certainly a chance that the Left is right.  I am a skeptic, but I by no means reject the possibility that man-made global climate change could prove to be catastrophic.  There is plenty of data that, if causation proves to be accurate, show that we are unalterably changing the planet. I personally think that the chance of the catastrophic changes most progressives believe is quite small, but I fully accept that the probability is greater than zero.

Frankly, I honestly believe even LIBERALS think that chance is small.  In a world where liberals claim that we are facing Armageddon, but the most powerful liberal voices continue to live in enormous mansions and burn carbon at an astronomical rate while driving fancy cars or flying all over the planet, it is somewhat difficult to take their claims seriously.  They would have far more credibility if they gave up their luxuries, lived in a small home with renewable energy, and made wholesale sacrifices.  You don’t see many liberals doing that; which makes me believe that their own true beliefs on the facts of ‘warming’ are far less  determined than they first appear.

I do think that conservatives opposition to many of the environmental policies is wrong as well.  Absolute opposition to any policy debate is almost always incorrect. Instead, conservatives should propose their own solutions to maintain the environment, based on conservative values.  That would further the debate far more than vehement opposition.

Conservatives have potential solutions that can make a difference. I have, for more than two decades now, been an advocate for promoting a 0% tax on green technologies, similar to the 0% sales tax on internet sales that promoted the web boom.  Guarantee 0% federal taxes (instead of inefficient subsidies) on solar, wind, etc., including on capital gains investments into such ventures.  Nothing would promote capital flow and innovation into those fields, and then let the market do its job.  I think most conservatives could support a ‘Green’ policy such as this.

There are other conservative answers that could make things better. Expansion of nuclear power, with ‘smarter’ regulations that could reduce the cost of production; a push for cleaner coal, because coal will continue to be a major producer of electricity in this country and around the world for decades to come; tax incentives to power companies to produce less CO2, instead of regulatory penalties for producing too much; and a slow, steady march of improving efficiency through out the country.  This doesn’t even discuss the more controversial topics, such as how frakking and our natural gas boom has decreased America’s carbon footprint over the past decade.

Compromise positions on any of these could make progress; maybe slow progress, as far as the Left is concerned, but progress nonetheless.

If liberals really want to make progress on climate change, they will have to agree with a few ground rules. One, no wholesale rapid change to the economy will occur, because…that is not how this country works.  Sorry, the ‘Tom Friedmans’ of the world, you are not going to get your huge carbon tax.  Two, your conservative opponents may not agree with you, but they are not the enemy; either we work together, or don’t work at all. Three, there are significant, practical small changes we can make that will make a difference, that conservatives would agree too, if they were not so vilified. And four, don’t make the science out to be more than it truly is, because it does more to demean your position than strengthens it.

I am sure liberals have far more complaints about the conservative position; fair enough. I stipulate to the fact that I am attacking liberals here more than my own conservative brethren. I leave it to my liberal colleagues to do that yeoman’s work.

But liberals continuing these scare tactics and extremist positions that require full adherence to their belief system is clearly a loser in the eyes of the American public.  They will accept progress, but they will not accept extremism.  I believe it is fair to say that liberal unscientific positions and extremist rhetoric is hurting, not furthering, the cause of advancing greater environmental action and awareness.  We all should do better.  We really can do better.


Health Care Saves Lives, But What’s Next? The Oregon vs Massachusetts Conundrum


A new study in the Annals of Internal Medicine will help reopen the discussion about what extent health insurance decreases mortality and morbidity.  What the underlying meaning and importance of these results will long be debated.

Well respected researchers Benjamin Sommers, Sharon Long, and Katherine Baicker evaluated the mortality rates in Massachusetts in the period after the passage of Romneycare, and compared the health results to similar surrounding Northeastern states.

They estimate that overall mortality in Massachusetts declined 2.9 percent relative to control counties between 2007 and 2010.  Additionally, death from causes that are ‘amenable’ to health care (such as cancer, heart disease, etc, which potentially can be treated by the health care system) declined 4.5 percent.

This ultimately translated to the saving of 1 life out of every 830 people in the population. As expected, the populations that had the greatest increase in health insurance access showed the greatest improvement. 

There has been past debate about whether expansion of health care coverage saves lives. There were mixed results from various studies over the past few decades regarding this subject, but overall, I have never doubted that adequate access to health care should improve health care outcomes.

Jonathan Cohn does point out the obvious quandary: what about the Oregon Medicaid study? If you recall, the Oregon study was a randomized study that showed that those that received Medicaid did not show better health outcomes than those that received no insurance coverage at all. How could this possibly correlate with the findings of this new Massachusetts study?

There are several possibilities that arise.  The first is that the improvements in mortality in Massachusetts did not come from the Medicaid population at all, but from those that purchases private insurance.  The Massachusetts study does not discriminate between the two populations, so we simply don’t know where the mortality benefits came from, or if they were truly equal across the board, regardless of the type of insurance obtained.

A second possibility (one that researchers Aaron Carroll and Austin Frakt have argued) is that the Oregon study sample size was too small to draw any firm conclusions about demonstrable health effects, and that if the study was large enough, we would have seen these same demonstrable positive effects.

The problem with both of these guesses is that they are central (albeit minor) deficiencies in these two excellent studies, as the authors of both studies themselves readily admit.

My guess (and right now it is only a guess because we have limited evidence at hand) is that health insurance of all types likely decreases morbidity and mortality…even Medicaid.  However, I also would guess that the efficiency of those types of insurance in providing adequate care varies greatly; that would correlate with the findings of the Oregon Medicaid study as well.

However, as we go forward, I think there will be a larger issue that we will have to face, one that Austin Frakt mentioned and I seconded on Twitter:  what is the cost/benefit ratio of these expenditures?

One thing that the Massachusetts study fails to tell us is if there is a demonstrable difference between Medicaid and other private insurance, as the Oregon study seems to imply. We simply don’t know the answer to that, because the evidence is lacking, other than the Oregon study itself.  Why is this important?  Currently our data on the ACA expansion of insurance coverage shows that the largest decrease of the number of uninsured likely came from placing people on the rolls of Medicaid; if this is the case, will we see a similar effect as that in Massachusetts, where a higher percentage of people received private insurance?

Secondly, there is a horrible, utilitarian, actuarial question in all this:  How much does the Massachusetts study suggest is the cost of saving a single life?  As stated above, the improvement would theoretically save 1 life out of every 830 people in the population.  If the average cost of health insurance for every person is approximately $4,000, then the cost of saving that single life, per year, is $3,320,000.  Is that worth it? Don’t ask me; that is a question for people in a much higher pay grade than mine.

Let me provide another actuarial puzzle to think about.   There have a myriad of articles regarding the utility and cost efficiency of mammography, with many of the opinions today saying mammography is not worth the cost, both in dollars and in unnecessary procedures and testing.  However, the cost of saving a single life through mammography is approximately similar or even less than the cost of saving a single life through the Massachusetts insurance expansion, if you take this study at face value.  Those calculations can vary depending on which mammography study you utilize, I fully admit. However, the controversy over the actual numbers and specifics really is not the point here; the point is, the cost of saving a single life is expensive, both using mammography, as well as in the wider health care arena.

Again, putting a dollar value on ‘a life saved’ is something I don’t want to be personally responsible for…but if we are going to have the debate, someone will have to take a stand on the question.

On a political note, I don’t think this really moves the needle in either direction.  Conservative health policy experts such as Avik Roy, Philip Klein, Scott Gottlieb and others all agree that we have to find ways to expand universal access to health care for all; fundamentally, in the many discussions we have had, what is clear is that we all believe access to HEALTH CARE decreases morbidity and mortality.  The method of obtaining that access remains in dispute.

So the problem here is not that health care makes people healthier.  Dear God, as physician myself, I hope that is the case…or I should go and find another profession. 

What all of these experts, myself included, are arguing is fundamentally a different question:  what is the most cost efficient and patient-centric method of providing that access?  The central question is how to use our limited dollars in the most efficient way to provide the maximal effect of those dollars.

Is expanding Medicaid the most efficient use of those dollars?  Are we better off moving those patients into the private market?  Are we better off moving to single payer?  Would a more patient-centric approach provide better or worse outcomes? All of these questions largely remain unanswered.

I do think that this Massachusetts study, along with the data from the Oregon study, significantly expands our understanding of how health insurance, as it currently exists in the U.S., affects mortality and other factors.  Neither study is perfect, and each has its limitations.  However, both are well done, and have been conducted brilliantly by well respected researchers; the data is sound.  The question really becomes what is the significance of that data, how does it effect the reality of health insurance as it exists today, and furthermore, how do we maximize those effects for the least amount of cost?


Piketty And Retread Of Marxism


I am no economist, nor would even claim to be an expert on economic theory.  I read a lot, and as such, did pick up Thomas Piketty’s “Capital in the 21st Century.” It is, after all, what ‘elites’ are talking about, and I like to be ‘in the know’.  I am also a glutton for punishment; at almost 700 pages, and stuffed full of loads of economic data, it is not necessarily a leisurely read.

First of all, I think Piketty’s book is quite good.  My conservative brethren may be surprised by that.  However, if for nothing else, the book is worth reading for its extensive yet very approachable history of wealth inequality over the centuries.

For those that are unable or unwilling to read Piketty’s tome, I think this quote, which has been travelling the internet, summarizes his beliefs accurately:

When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.

This ‘r>g’ equation is at the heart of Piketty’s thesis of the future of the world economy.  I won’t go into depth on it here, but suffice it to say…it is overly simplistic and largely ignores major factors that effect the world economy.

Of course, Paul Krugman is leading the charge of the greatness of Piketty. That is no surprise; not because Krugman is an economic genius, but precisely because he is a political hyperpartisan. Krugman argues that there is no substantial retort to Piketty’s predicions in his most recent New York Times piece; of course as is generally the case, Krugman is wrong.

Tyler CowenJames Pethokoukis, and a myriad of others have had thoughtful and productive responses to Piketty.  Krugman largely dismisses them without actually, you know, providing a logic case against them.

Cowen extensively talks about the historical similarities of Piketty’s work to others, such as British economist David Ricardo. Note Krugman never counters Cowen’s concerns, such as this one:

Of course, since Ricardo’s time, the relative economic importance of land has plummeted, and his fear now seems misplaced. During the twentieth century, other economists, such as Friedrich Hayek and the other thinkers who belonged to the so-called Austrian School, understood that it is almost impossible to predict which factors of production will provide the most robust returns, since future economic outcomes will depend on the dynamic and essentially unforeseeable opportunities created by future entrepreneurs. In this sense, Piketty is like a modern-day Ricardo, betting too much on the significance of one asset in the long run: namely, the kind of sophisticated equity capital that the wealthy happen to hold today.

For Krugman, these issues are ancillary to his central political faith, and thus, not worthy of retort.  The ultimate issue with Piketty’s and Krugman’s thesis is this unanswerable question: is there an example a state with increasing wealth asymmetrically favoring the top 1% is more unstable or inherently non-viable as a free nation than one where the state imposes its moral will by using political force to reallocate that wealth in such a way to fit its world vision?

I do not think Krugman nor Piketty can actually answer that question.  As is common with liberals, history and evidence is less relevant than intent; and their intent, like a religious crusade, cannot be countered with logic. Ultimately, their answer to this simple question is, “Does not matter; we will do it right this time.”

Sounds somewhat like faith in a spiritual power; that seems less than satisfying in our quest for knowledge.

Piketty’s central policy belief revolves around taxing people making over $500,000-$1 million at a 80% tax rate.  Now, what was the logical reason for this?  It is not to use that money to benefit the poor; in fact, Piketty acknowledges that because the rich will adapt to such a tax  increase, that in the end such a policy will not raise much revenue.  No, the reason is a moral, faith based one: he simply thinks it is immoral for people to be making so much money. No, he doesn’t state that in such clarity as I do here, but the meaning is still apparent to all who have read the book.

As Megan McCardle points out, none of these taxes on the rich ultimately change the reality that middle and lower classes around the world face. Their daily lives and struggles are about getting to a job that pays them enough to sustain and grow their family wealth. Taxing the rich, as history has shown, actually proves to be a detriment to these goals, because the rich will adapt to any such punitive tax structure by decreasing their productive value; and in turn, that means that they produce less innovation and technology, which is essential for the growth of the job sector that the middle class requires to thrive.

The core problem that Piketty’s thesis has is the same problem that Krugman and the central core of progressive thinkers on economic thought have today:  they believe that government would be better at determining the ‘value’ of an individual than the marketplace.

As for the ‘Marxist’ label.  Piketty never fully adopts Karl Marx’s vision.  But he does, for the most part, lean far closer to Marx than Milton Friedman.  Take this quote from the book:

“Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands, as Karl Marx believed in the nineteenth century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the twentieth century?”

Is there any question which economist is closer to Piketty’s thinking here? I think not.  Progressives for obvious reasons do not like the comparison to Marx, but the comparison is nonetheless inescapable.

Piketty’s work is still well worth a read for any economist or layman who has delved into the fundamental philosophy of economics.  This book expanded my base of knowledge and made me rethink many of my views of inequality and wealth, and for that I have to thank Piketty greatly; so few authors really provide a new way of viewing the reality of the world.

But ultimately, Piketty’s work is much like Thomas More’s Utopia; a thoughtful excercise, that philosophers can discuss in length, but ultimately does little to help anyone in the real world.  Cowen summarizes the problems here:

The simple fact is that large wealth taxes do not mesh well with the norms and practices required by a successful and prosperous capitalist democracy. It is hard to find well-functioning societies based on anything other than strong legal, political, and institutional respect and support for their most successful citizens. Therein lies the most fundamental problem with Piketty’s policy proposals: the best parts of his book argue that, left unchecked, capital and capitalists inevitably accrue too much power — and yet Piketty seems to believe that governments and politicians are somehow exempt from the same dynamic.

A more sensible and practicable policy agenda for reducing inequality would include calls for establishing more sovereign wealth funds, which Piketty discusses but does not embrace; for limiting the tax deductions that noncharitable nonprofits can claim; for deregulating urban development and loosening zoning laws, which would encourage more housing construction and make it easier and cheaper to live in cities such as San Francisco and, yes, Paris; for offering more opportunity grants for young people; and for improving education. Creating more value in an economy would do more than wealth redistribution to combat the harmful effects of inequality.

So although this is a thoughtful and valuable intellectual excercise, Piketty’s vision of the future, and his solutions to the problems that he sees ailing the world, seem to be nothing more than a retread of Marx, with a few slightly modernistic twists.  And as such, the book is interesting as coffee table conversation, and will be the center of much discussion among the elite for good reason, but of minimal use for true economic and political policy in the world we live in today.


The Modern Liberal Inquisition


The only Inquistion I approve of is one involving Mel Brooks.

History repeats itself.

It is a curious phrase, that certainly contains some truth, but is often misused.  However, sometimes, you cannot deny the practical reality of this simple statement.

The Spanish Inquisition started around the 12th century, in a goal to purge the Catholic Church of heretics.  It persisted in its quest of eliminating all types of supposed secularists, proven or not, well into the end of the Middle Ages, ultimately mutating in form to eliminate all forms of enemies of the Church, from accused sorcerers and witches, to simply our garden variety Jew or Muslim.

We have seen modern equivalents of the Inquisition, in many shapes and sizes.  Some are religious, others are secular, all are political. We have seen this pattern repeat across the globe, as one group or another tries to vanquish the threat of evil from our midst.

I wonder if we are beginning to see something similar in modern liberalism today.

The curious case of Brenden Eich comes to front pages today.  Eich is a successful IT entrepreneur.  Best known for creating Javascript and being critical in the formation of Mozilla (the company that created the popular Firefox browser and Thunderbird email client), he was recently elevated to the role of C.E.O. of Mozilla.

Little did he know he was passing through the doors of hell into a progressive firestorm.

Why did this happen? because of a relatively innocuous $1,000 donation to group pushing for California’s Proposition 8, the 2008 measure that sought to prevent same-sex unions from being recognized as civil marriages.

Yes.  The firestorm was regarding a small donation made six years ago.

Progressives, as they are wont to do, were outraged, and instantly began a campaign to oust Eich.  They formed protests and websites to unite the forces of good against the evil that is Brenden Eich.  Heretics must be vanquished, after all.

Make note of the fact that not a single employee of Mozilla or anywhere else had ever complained of Eich’s behavior. No one, either during his time a COO or in his current role of CEO, ever stated he behaved in anything but the utmost professional manner.  Homosexual colleagues had nothing but good things to say about the man.

Of course, facts are irrelevant to the progressive mob.  He had to go, in order to purify the souls of society.

Eich decided that enough was enough, and the silliness needed to come to an end, so he resigned from his post on Thursday.  I doubt that this is much of a burden for Eich, who is likely quite wealthy.  But Reihan Salam notes that even at this late date, if Eich had recanted his position, he probably could have held on to the job. Eich refused; and for that, I think he should be heralded for holding to his beliefs, which is so rare these days. Salam notes:

Agree with him or disagree with him, Brendan Eich was willing to pay a price for his beliefs. In the grand scheme of things, the price certainly wasn’t as high as that facing, say, Galileo. But would you do the same thing?

Famed editorialist Andrew Sullivan chimed in as well:

He did not understand that in order to be a CEO of a company, you have to renounce your heresy! There is only one permissible opinion at Mozilla, and all dissidents must be purged! Yep, that’s left-liberal tolerance in a nut-shell. No, he wasn’t a victim of government censorship or intimidation. He was a victim of the free market in which people can choose to express their opinions by boycotts, free speech and the like. He still has his full First Amendment rights. But what we’re talking about is the obvious and ugly intolerance of parts of the gay movement, who have reacted to years of being subjected to social obloquy by returning the favor.

As for the progressive inquisitors, they gleefully proclaimed success at the purging of this heretic, with little understanding of the gross hypocrisy and overall intolerance of their crusade.  Their church is now cleaner and purer for the victory; what else matters?  Sullivan again:

Will he now be forced to walk through the streets in shame? Why not the stocks? The whole episode disgusts me – as it should disgust anyone interested in a tolerant and diverse society. If this is the gay rights movement today – hounding our opponents with a fanaticism more like the religious right than anyone else – then count me out. If we are about intimidating the free speech of others, we are no better than the anti-gay bullies who came before us.

It is funny how many liberals, in discussions I have had in the past day or so, are bigoted enough to presume they know my position on gay marriage. Time and again, because I defend the free thoughts of another American, I am presumed to share in his beliefs.  Liberals have now reached the certainty that their way is the pure, unadulterated truth of life, and that any other path is sinful and must be purged, at all costs.

Sound familiar?

The ever-growing intolerance of liberals in America is disconcerting.   That their voices now has such force as to cause the firing of a CEO of a major company is disturbing to say the least.  Apparently American Progressives are ignorant of the true meaning of tolerance, acceptance, religious liberty, and most important, the concept of freedom of speech. Those are all secondary values to the modern progressive movement, secondary to their faith-based cause of ‘moral purity’.  Nothing ever goes out of style, so dig around your closet and pull out your Brown shirts, America.

What most Americans, like myself, actually believe is in freedom for all, equal access and opportunity, but also the fundamental belief of freedom of thought and speech as well as the freedom to be free of oppression. These are essential tenets critical to the American ideal.

Let us stipulate that conservatives in the past have not been free from this kind of behavior.  Neither have past liberals.  This cycle of stupidity continues endlessly.  However, it is stunning to watch a community that honestly fought for tolerance and acceptance for the past several decades becoming so clearly intolerant and unaccepting.

What the majority of us who believe in freedom of thought and speech do from this point on is open to debate. I think most of us feel inherently that something is amiss when a CEO is fired not for an inappropriate action while on the job, but a personal political line of thought he followed six years prior.  The ability to punish someone not for actions but for thoughts is the definition of a type of inquisition; a fascist tendency where all must conform, at serious cost, or be accused of heresy. Sadly, that is apparently where the progressive cause in liberal America exists today.


Obamacare: Where We Stand, March 31st Edition

Health Overhaul Uninsured

The March 31st deadline for enrolling in Obamacare has come and gone. How fast time flies.

It was only late last year that the March 31st hard deadline was created. Oh, you don’t recall? The March 31 deadline for signing up was created in the end of October. Initially, you needed to have active insurance by March 31st, not just successful ‘enrollment’.  Under the law, to successfully meet the rules of the individual mandate, you needed to enroll by March 1st, in order to have active insurance by the deadline of March 31st.  And furthermore, this new deadline had been held as the final date; until, of course, the Administration allowed another waiver for anyone ‘enrolled’ to complete the enrollment process well into the month of April.

In any case, this is now, technically, the day by which most have pointed to as the first real target date by which the government should be making solid progress in insuring the uninsured, and providing an adequate pool of payers into the insurance exchanges.

What we know, and maybe more importantly, what we don’t know, is critical to understanding the debate that will revolve around health care for the next few months.

So what do we know, for certain?

We know that around 7 million enrollments have gone through the exchanges by the end of March. That is admittedly a relative success in and of itself for the administration, which had such a disastrous start to the enrollment period. In my piece in the end of December, I did believe they would get the exchanges fixed, but I still thought they would be hard pressed to reach the 7 million mark.

The problem now becomes what the definition of enrollments are.  Enrollments are NOT people who have actually successfully been insured.  They ARE people who have successfully chosen an insurance policy on the exchange, and placed it in their ‘shopping cart’ on the website.

I am sure many can already see the problems with this.  First, the system has no way of telling if you are a repeat customer.  I for one have two accounts that have insurance policies in my cart, neither which I ever plan to purchase.  I was simply testing the exchange website.  Am I being counted?  I am unsure, but I do know I am receiving emails regularly to remind me to complete my purchase.

Second, until you complete the payment process, you are not insured.  HHS has clearly stated this on many occasions. Health experts such as Bob Laszweski have stated that in his discussions with insurers, he puts the ‘unpaid policy’ number at somewhere in the range of 15-20%.  My own personal discussions with insurers backs this up; and on March 30th, HHS Sec. Kathleen Sebelius stated the rate was around 10-20%.  So there is general agreement on this issue.

The rate of people insured really is the crux of the issue for the overall cause of health care reform.  The other metrics are far less important in the long run.  Several surveys, including the Gallup survey, have shown a short-term decreases in the rate of uninsured, but it is uncertain whether this is statistical noise or a true permanent trend. A new RAND corporation survey that was leaked to the LA Times has also shown a trend in decreasing the uninsured.

My own opinion is that the rate of uninsured must be dropping.  The real question is, by how much, and by what method?

Let us remember that initially, the CBO predicted that the vast majority of those purchasing health care insurance on the Obamacare exchanges would be uninsured persons, looking for access to the health insurance.  If this had been the case, then we should see a dramatic decrease in the number of uninsured.

However, it is difficult to believe this is the case. The same RAND study referred to above also shows that only about 1/3 of those on the exchanges were previously uninsured. Jonathan Cohn of the New Republic uses specific state numbers, like the enrollments in Kentucky and New York, to show that the number of uninsured is outpacing CBO predictions.  However, that doesn’t seem to be the case nationwide; I am willing to stipulate there are probably a few states that are doing well, but overall, it appears they will miss their target.   Philip Klein of the Washington Examiner points out the counter case, that is that it appears the exchanges are underperforming when it comes to insuring the previously uninsured.

Even using Cohn’s arguments, even he accepts it is highly unlikely that even a simple majority of those on the exchanges nationwide were uninsured previously.  Thus, the majority of those purchasing on the exchanges were persons who were buying insurance already, but simply were looking for government subsidies so they could get a better deal.

What does this mean in the grand scheme?  It means that the decrease in the rate of uninsured will be less than expected by many.  That doesn’t mean the rate will not decrease; Medicaid enrollments alone should decrease the rate of uninsured by a couple of millon, at least. It just means those actually purchasing insurance on the exchanges, by and large, were not the uninsured at all.

The next issue that will arise is how all of these factors affect premiums for the coming year.  I have talked about the demographics affecting the exchanges; primarily that young people have not signed up at a rate as great as expected initially.  The CBO and HHS had initially predicted that about 39% of those in the exchanges would be composed of those ages 18-35.  The average, across the nation, appears to currently be less than 30%, a number that Kathleen Sebelius now has basically accepted publicly.

This is important because, to subsidize those that are older or in poor health, the insurance pools require more healthy (and generally younger) payors into the system. Without those payors, the general cost of premiums will increase.  Liberals argue that age is a poor metric to calculate whether people are healthy or not.  This is true.  However, do they really believe that the people rushing to buy health insurance are the healthy among us, and not the ill?  There is a selection bias obviously involved here, and it is far more likely that those with poor health are the first to arrive in line for health insurance under Obamacare.

Almost everyone now stipulates that insurance premiums will rise more than the baseline expectations for 2015.  In fact, overall costs are already increasing. USA Today reported that health costs are increasing at the fastest rate in a decade…and that is before these cost pressures arise to affect premiums.

The biggest question left this year regarding Obamacare really is, how much will premiums increase?  If they increase at the same rate as the past 5 years (less than 4% a year on average) that will be a major success for the administration.  However, if they increase at a rate above 6% a year (and there are rumors the rates could increase by double digits), that could be catastrophic for the popularity of the program.

These are the core issues, though many other issues do remain.  Will people continue to be resentful to President Obama and Democrats for lying to them about being able to keep their insurance plans, and being able to keep seeing their same doctor?  Will the changes in their insurance policies make them more or less content?  Will increases in deductibles raise the ire of many Americans, who may or may not have understood those costs when they purchased their health policies?  These and many more questions remain, all of which ultimately will be more significant than the enrollment numbers of March 31st, 2014.

The only advice I can give is, be patient; only time will tell.



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