Where the Money Is

Here is a bit from a post by Paul Krugman on his blog where he thinks about the choice between taxing the ultra-rich and cutting Medicare eligibility. Guess where you find the bigger pot of money:

So, what we learn from IRS data is that in 2007, before the Great Recession depressed everyone’s income, the top 0.1% had around $1 trillion in taxable income. Now, even confiscating that whole sum wouldn’t eliminate our current deficit, especially since the top 0.1% already paid something like a third of that total in taxes. But then, no single action would close our current budget gap — not even the complete elimination of Social Security or Medicare.

What you want to ask is how much higher taxes on the super-elite might contribute to deficit reduction, as compared with the kinds of things politicians are actually proposing.

So let’s suppose that it was possible to collect an additional 10 percent of that super-elite’s income in taxes, to the tune of $100 billion a year. How would this stack up against the kinds of things on the table right now?

Well, consider the idea of raising the Medicare eligibility age — a move that would create vast hardship. According to the Congressional Budget Office (big pdf), when fully phased in this would save … $42 billion a year.

I could multiply comparisons, but the point is that higher taxes on the very rich could make a significant contribution to deficit reduction. They couldn’t eliminate the deficit on their own, but what could? There’s real money up there, and those making it should be bearing a share of the burden.

The political right says "no new taxes" but are quite happy with cutting Medicare eligibility. The political left is happy with raising the taxes on the ultra-rich but want to keep the health care benefits for the poor.

So who will win this battle? I hope that the left wins. But my cynical side says that the rich have so corrupted politics in the US that the political right will win.

Anti-Science is Alive and Well

People prefer to "believe". They don't like slow and painful study and rational thinking, calculation, experimentation, theory building aka "science". That requires 20 years of education and only really dedicated and really smart people can access the edges of science these days. That sidelines the masses and they don't like that one bit.

So people believe in magic. They believe in "spirit" and "soul" and the "power of positive thinking". They believe in "holistic medicine". They have their religions.

I worked in a high tech company and was appalled to discover that even people with PhDs in science believed in such madness as "homeopathy". These were smart people, well educated people who had worked hard to understand technology and science and yet they gave in to magical thinking.

Here's what magical thinking will "achieve". From Yahoo! News:

Five share $340,000 in holistic healer case that left woman a quadriplegic

The Canadian Press – Fri, 11 Nov, 2011

RICHMOND, B.C. - Five B.C. residents, including a woman nearly killed by arsenic poisoning and left a quadriplegic, are sharing more than $340,000 as a result of a settlement involving a self-proclaimed holistic healer.

Money from the settlement came from property seized from the defendant and sold under the B.C. government's civil forfeiture legislation.

The government says the defendant, Selena Tsui, was not charged in the case after the Crown concluded there was no substantial likelihood of conviction on any criminal charges.

The government says between 2000 and 2004, Tsui told at least a dozen people she was qualified to diagnose and treat diseases, including mental conditions, when in fact she had no formal training.

One of her clients, identified only as E.L., began taking a concoction she believed contained mushrooms and herbs, but had extreme arsenic levels, and she suffered respiratory and renal failure, cardiac arrest and paralysis.

She was taken to hospital, put on life support and given a five per cent chance of survival, but her life was eventually saved.

The real world is complicated. It isn't a simple morality story. It isn't something that "a good heart" and a "strong will" can conquer. It requires hard work, sophisticated technology, advanced math, and a long education in a specialist area of science. But people love quacks with no training yet who have an "aura" about them, or can "channel spirits", or have a commanding presence and claim a direct line to "God".

Right now, Europe and the United States are in the hands of quacks. Serious economists know that austerity budgets only prolong a depression. A Keynesian approach is needed. But Obama and the European leaders would rather call in the witch doctor to shake bones over the economy and prattle some debt reduction "confidence building" mumbo jumbo rather than rely on the math, the models, and the sophisticated economic theories (the ones prior to the Chicago school and "freshwater" economists turned into lunatics and ran economics off the rails).

It is tragic living in a world where some plague is raging and the scientists and the doctors have the technology to manipulate DNA to create a vaccine to cure it, but the "authorities" (political, religious, civic, etc.) all cry out for "prayer" and "abstinence" and "a submission to God's will" or some "alternative medicine" rather than to science to cure the plague.

We live in a dark time. Carl Sagan wrote a book in 1995 before he died in which he worried about this modern anti-science trend. The book was called The Demon-Haunted World. We live in that magical thinking, irrational, and anti-science world. Millions die every year because of this stupidity. That is what people who want "quick solutions" have created by preferring magical thinking to the difficult path of rationalism and science. Tragic.

The Great Libertarian Gamble

You really should read a post by Brad DeLong in his Grasping Reality with Both Hands blog that outlines the irony of Ron Paul talking about the "freedom" to have medical care. It ends up that his 2008 campaign manager died destitute from pneumonia because he didn't have medical insurance!

Back in 2008, Kent Snyder — Paul's former campaign chairman — died of complications from pneumonia. Like the man in Blitzer's example, the 49-year-old Snyder was relatively young and seemingly healthy[1] when the illness struck. He was also uninsured. When he died on June 26, 2008, two weeks after Paul withdrew his first bid for the presidency, his hospital costs amounted to $400,000. The bill was handed to Snyder's surviving mother, who was incapable of paying. Friends launched a website to solicit donations….

After Snyder's death, Paul posted a message to the website for his Campaign for Liberty — a pre-Tea Party organization which served Paul as both presidential marketing tool and platform to promote his non-interventionist, free market ideals. He wrote:

Like so many in our movement, Kent sacrificed much for the cause of liberty. Kent poured every ounce of his being into our fight for freedom. He will always hold a place in my heart and in the hearts of my family.

And that, friends, is what freedom is really all about.

It is good to see that Ron Paul exercised his "freedom" to let his campaign manager die in debt. No obligations. The libertarians only contract between each other and obviously there was no clause in their deal to cover medical emergencies. So the campaign manager got to exercise his "freedom" to die from pneumonia.

How the Left Has Become the Right in America, and the Right Has Gone Nutty-Right

It is really sad when a creep to the right by the left wing party in a nation means that in roughly 20 years it implements previously right wing policies and get attacked as being "too left" for doing that.

Here is a Paul Krugman post to his NY Times blog pointing out the true history of "Obamacare":

Conservative Origins of Obamacare

Here’s a useful resource for tracking the history of the ideas embodied in the Affordable Care Act.

The essence of Obamacare, as of Romneycare, is a three-legged stool of regulation and subsidies: community rating requiring insurers to make the same policies available to everyone regardless of health status; an individual mandate, requiring everyone to purchase insurance, so that healthy people don’t opt out; and subsidies to keep insurance affordable for those with lower incomes.

The original Heritage plan from 1989 had all these features.

These days, Heritage strives mightily to deny the obvious; it picks at essentially minor differences between what it used to advocate and the plan Democrats actually passed, and tries to make them seem like a big deal. But this is disinformation. The essential features of the ACA — above all, the mandate — are ideas Republicans used to support.

The political right in the US has now moved further right from conservative and cranky right wing to kooky and insane right wing politics.

Ignorance is Bliss

Here are some bits from an interesting paper entitled "Reconstituting the Submerged State: The Challenges of Social Policy Reform in the Obama Era" by Suzanne Mettler. What I find amazing is the profound ignorance of so many Americans about government entitlements. So many are convinced that they are paying taxes and getting "no benefits" because they are ignorant of the very programs that provide them benefits:


Here is the introduction to her paper:

President Barack Obama came into office with a social welfare policy agenda that aimed to reconstitute what can be understood as the “submerged state”: a conglomeration of existing federal policies that incentivize and subsidize activities engaged in by private actors and individuals. By attempting to restructure the political economy involved in taxation, higher education policy, and health care, Obama ventured into a policy terrain that presents immense obstacles to reform itself and to the public’s perception of its success. Over time the submerged state has fostered the profitability of particular industries and induced them to increase their political capacity, which they have exercised in efforts to maintain the status quo. Yet the submerged state simultaneously eludes most ordinary citizens: they have little awareness of its policies or their upwardly redistributive effects, and few are cognizant of what is at stake in reform efforts. This article shows how, in each of the three policy areas, the contours and dynamics of the submerged state have shaped the possibilities for reform and the form it has taken, the politics surrounding it, and its prospects for success. While the Obama Administration won hard-fought legislative accomplishments in each area, political success will continue to depend on how well policy design, policy delivery and political communication reveal policy reforms to citizens, so that they better understand how reforms function and what has been achieved.

And from the conclusion of the paper:

When Obama first declared his candidacy and then as he assumed the highest office in the land, he promised that his presidency would help Americans to “reclaim the meaning of citizenship,” “restore our sense of common purpose,” and “restore the vital trust between people and their government.” While efforts to reconstitute the submerged state may have appeared distant from or antithetical to such goals, it is crucial to their achievement because to the extent it has succeeded, it diffuses the power of special interests relative to that of the public. Now, if the Obama administration can successfully reveal the remaining aspects of the submerged state to citizens through new features of policy delivery, it may help enable them to participate in a more meaningful way.

Sadly, I don't see any real success by Obama in making the "submerged state" visible. I must confess that I'm not even aware of any concerted effort by the Obama administration to make it visible. For example, if Obama wanted to make the role of government policy in people's lives he would have pushed harder for the "public option" instead of allowed control of health care to be captured by the insurance industry. In Canada it is absolutely clear that health policies and health spending is fully in the control of the government and directed through the electorate's choices in political representation. There is nothing like that in the US.

Mettler claims that Obama is strenuously making the submerged state visible:

In the realm of social welfare issues, Barack Obama set out to transform existing policies within the submerged state. He sought to harness this vast set of arrangements and to make it more inclusive and responsive to the needs of ordinary citizens, and to curtail the extent to which it channels public funds toward powerful sectors of the economy and affluent citizens. This has been an ambitious reform agenda. Such change requires the reconstitution of long-established relationships between government and economic actors.

I just don't see it.

I applaud the idea of making the role of government more visible in order to weaken special interest groups and give citizens a greater sense of the role of government in their lives, but I just don't see that he has made much real progress. I wish he had. But I just don't see it.

The Failing of the American Social Contract

Presumably humans form governments to facilitate living in large societies that provide sufficient benefit to justify the "burden of government". If not, people would still be running around as hunter-gatherers fending for themselves, their immediate family, and maybe the local tribe (aka living as "libertarians").

Here is a post by Paul Krugman in his NY Times blog pointing out that the governance of America is failing its citizens. Life expectancies are falling despite the advances of medicine:

Live Free And Die

During the Bush years, every time a new estimate of life expectancy came out I would get letters saying “Hah! You say things are terrible, so how come life expectancy is rising, huh?” This was, of course, stupid: medicine continues to progress, the long-term decline in smoking has reduced lung cancer, etc.. Life expectancy is rising just about everywhere in the world; sharing in that trend is no big achievement.

On the other hand, failing to share in that trend IS a big achievement, in a bad way. And via Kevin Drum, we have this:

Click to Enlarge
I guess the geography of the decline speaks for itself.

To follow up on the original article about life expectancies and the source of the above graphic, read this article by Noam N. Levey for the Los Angeles Times which identifies the proximate cause of the decline in longivity as:

The grim trend is fueled largely by smoking, high blood pressure and obesity, according to Murray and other population health experts.

But I agree with Krugman. The radical right/libertarian cry of "life free or die" implies a basic distrust of government and the institutions that allow humans to share risk (welfare bureaucracies!) and share knowledge (state-funded education!). Worse, libertarianism has fueled the rabid tax cut mentality of the political right that has driven the widening income inequality.

The geographic patterns in the graphic above say to me the problem is not just ideology, it is the consequence of a "trickle down" "trickle up" economic policy that has allowed the rich to get richer while the poor get poorer. The areas of life expectancy decline are precisely those areas of the US where poverty is rampant.

Here is the key observation from the LA Times article that confirms this assessment:

The widening gulf between the healthiest and least healthy populations is partly due to wealth. A key finding of the data is that "inequality appears to be growing in the U.S.," said Eileen Crimmins, a gerontologist at USC who also co-chaired the 2011 National Academies panel on life expectancies. "We are different than other countries."

Other countries have not seen the same breakdown in social institutions and the same ferocious growth in income inequality. The anglo-saxen countries have trailed the US with growing income inequality, but they haven't yet taken to ideology-driven dismantling of social institutions like the Americans.

Half Measures and Unserious Proposals

Paul Krugman in a NY Times op-ed points out that Lieberman's proposals to "fix" the US Medicare system are laughable and grossly inadequate:

Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.

And so it was with Senator Joseph Lieberman’s proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.

Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn’t actually do that. But more to the point, our goal shouldn’t be to “save Medicare,” whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.

I'm disappointed in Krugman. He doesn't go far enough. Any serious proposal to finally slay the deficit dragon of Medicare needs to redefine eligibility age up to something seriously secure, say 150 years of age. That would immediately stop the drain on public funds. Right now nobody would qualify. So expenditures would stop. And that is exactly what everybody on Capital Hill want. The focus is debt right? No politician seriously has a thought to medical care. That's ridiculous.

Time to stop the half measure and the unserious proposals. A permanent fix is to redefine benefits to not start until the retiree has attained 150 years of age. That will turn Medicare from a loss centre to a new "profit centre" for the government!

It just takes some politicians with backbone to grasp this solution. I'm sure some "family values" social conservative has the cojones to make this definitive legislative proposal and help Washington slay this deficit beast! This will free up money for the more socially beneficial goals of additional tax cuts for billionaires and millionaries, the very people who will power the economy to new highs. Everybody knows that only when you give money to the really rich do you give it to people who will immediately run out spend it, invest it, give it away, and super-charge the economy!

Don't waste your time reading Krugman's explanation of how Medicare saves money. Who believes a pinko like Krugman when they can get truth distilled right from the lips of a great patriot like Sarah Palin? Who needs a better sourch for truth than Glen Beck or Rush Limbaugh? Why believe a Nobel-prize winning economist talking about economics? Everybody knows those academics are pointed-headed know-it-alls who couldn't fight their way out of a wet paper bag. Trust the "brain trust" of the Tea Party: Michele Bachman, Tim Pawlenty, Sarah Palin, etc. Now these are people who didn't waste any time trying to learn stuff out of books. These are "original thinkers" who get their best ideas out on the street with "real people".

Something More Important than Weiner's Wiener

I get annoyed with how the media finds silly stuff, minor stuff, personal stuff far more important than really important political and economic stuff. There are 14 million people without jobs. That means there are roughly 30 million people hurting badly, struggling to put food on the table, or to keep a roof over their head. But the press makes all the time in the world for stories about immature idiots who sexting.

Here is a post by Paul Krugman which puts this in its place:

The Case of the Mystery Study

Oh, wow. From Greg Sargent:

The other day, the consulting company McKinsey released a startling study claiming that 30 percent of employers are planning to stop giving health insurance to their workers as a result of the Affordable Care Act. The study received a good deal of press coverage and was widely bandied about by conservative politicians and media outlets as proof that conservative warnings about the law are coming to pass.

But as a number of critics were quick to point out, McKinsey’s finding is at odds with many other studies — and the company did not release key portions of the study’s methodology, making it impossible to evaluate the study’s validity.

There’s now been a new twist in this story.

I’m told that the White House, as well as top Democrats on key House and Senate committees, have privately contacted McKinsey to ask for details on the study’s methodology. According to an Obama administration official and a source on the House Ways and Means Committee, the company refused.

One has to assume that there was something terribly wrong with the study. At any rate, nobody should be citing it until or unless McKinsey comes clean.

Oh, and if you ask me, this is a lot more important than some sex scandal.

Update: The plot thickens. Brian Beutler reports:

But multiple sources both within and outside the firm tell TPM the survey was not conducted using McKinsey’s typical, meticulous methodology. Indeed, the article the firm published was not intended to give the subject matter the same authoritative treatment as more thorough studies on the same topic — particularly those conducted by numerous think tanks, and the Congressional Budget Office, which came to the opposite conclusion. And that’s created a clamor within the firm at high levels to set the record straight.

“This particular survey wasn’t designed in away that would allow it to be peer review published or cited academically,” said one source familiar with the controversy.

All sources were granted anonymity, in order to be able to speak candidly about the controversy.

Reached for comment today, a McKinsey spokesperson once again declined to release the survey materials, or to comment beyond saying that, for the moment, McKinsey will let the study speak for itself. However, McKinsey notes that the survey is only one indicator of employers’ potential future actions — that the conclusions remain uncertain and employers’ future decisions will ultimately depend on numerous variables. The three authors of the report were not immediately available for comment.

Another keyed-in source says McKinsey is unlikely to release the survey materials because “it would be damaging to them.”

Both sources disagree with the results of the survey, which was devised by consultants without particular expertise in this area, not by the firm’s health experts.

This is a scandal. McKinsey is obviously putting together political propaganda to sabotage the Democrat's health care bill by putting out a rumour that private companies were abandoning their health care plans. This kind of "dirty tricks" campaign is sleazy. It should be getting top billing. But nope. The "media" has decided that idiotic can't-keep-it-in-their-pants behaviour deserves top billing. Oh, and the media has joined the pitchforks-and-torch crowd wanting to "string 'em up!"

Funny... here is a list of Republican Congressional sex scandals over the last half dozen years. In none of these cases did the Republicans mount a campaign screaming "you must resign!" and the media didn't join in hounding the legislator out of office. Why the uneven behaviour? Why is Weiner selected for "special treatment"?

• Chris Lee – was sexting pictures of himself, but he removed himself too quickly to let much public outrage build (this is the closest to the Weiner scandal)


• Mark Souder – had an affair with a staffer


• Chip Pickering – had an affair, didn’t resign, but chose not to run in the next election


• John Ensign -- he not only had an affair with a staffer, but he had his parents pay hush money to the husband!


• Vito Fossella – guilty of drunk driving, having extramarital sex, and fathering a bastard


• Larry Craig – caught for lewd behaviour in an airport restroom (he claims it was all a misunderstanding about his desire to have a ‘wide stance’), this was attempting to procure gay sex by a politician who publicly called for laws against gays!


• Mark Foley – who sent text messages to underage boys (like Weiner, but worse because it was both underage and it was “gay” sex which of course Foley publicly said was “unacceptable behaviour since the official stance of the Republican party is anti-gay)


• Ed Schrock – solicited sex from a male prostitute


• Don Sherwood – had an extramarital affair and on top of that he physically abused the woman!


• David Vitter - had an extramarital affair and his name was in the little black book of the infamous Washington DC madam Deborah Jeane Palfray while selling himself as a "family values" man who was for "abstinance education" and against gay marriage.

The above is taken from this long, long list of sex crimes by both Republican and Democratic parties.

For the braying crazies hot on Anthony Weiner's case:

1. Polls show that his constituents want him to stay in office and to continue to represent him. For anybody other than a constituent to try and deny the democratic rights of those citizens to be represented by a person of their own choice fails to understand the principles of democracy and the Constitution of the US.


2. All those Christian "family values" types who want to crucify Anthony Weiner should pull out their Bibles and read John 8:7 "If any one of you is without sin, let him be the first to throw a stone at her." Hypocrites!

Why can't the media perform its real job: inform the public on important issues so that the electorate can wisely choose its representatives? Why feed the salacious in-the-gutter mind of the lowest common denominator? Why join in a partisan, one-sided attack? Why distract the electorate with a stupid sex scandal when much more important issues affecting 30 million people immediately that the whole society indirectly (via the recession and collapsing economy)?

Facts, Just What the Political Right Refuses to Believe

Everybody knows that health care in Canada is a disaster and that people here feel oppressed by their "government" system. They want to flee however they can to the comfort and care of the "far superior" American system free-enterprise system. Right? Well, here are the facts:


Yep... that tiny, tiny sliver are the ones who successfully escape the clutches of a vicious Canadian government plan and go down to the US and let themselves get fleeced by a rapacious US medical system. Instead of "suffering" under the free medical care in Canada, you can see that "a significant slice" of Canadians rush off at first opportunity to take advantage of the obviously "superior" American system of medical care.

If you don't mind having your brain cluttered with facts rather than prejudices and superstitions, try reading this report.

Oh, and you might find this post on The Incidental Economist blog of interest.

Report on Heath Care

Here is an international report on health care delivery by the Commonwealth Fund. It has some interesting facts. For Canadians, it should be alarming that our ranking from 4th best has slipped to 6th best under the right wing Conservative party:

Click to Enlarge
And here is the summary breakdown of the evaluation of health care systems. The US is by far the most expensive and delivers really substandard results. Americans should be ashamed:

Click to Enlarge
Bottom line: Canada delivers roughly the same low quality health care but with better access and longivity results and at half the cost that Americans pay.

Meanwhile, here is a peek at health care politics in America. The lunatics run the asylum. This is from a post by Paul Krugman in his NY Times blog:

What’s In A Name?

A lot, or at least that’s what Republicans think. Greg Sargent reports that they’re demanding that a TV station stop running ads saying that the GOP wants to end Medicare; the claim is that this is a lie, because the new program the GOP wants to impose in place of Medicare is still Medicare.

As Greg says, this is important — because if they can get away with this, it will amount to a serious infringement of free speech, preventing people from running truthful ads.

Because the fact is that Republicans are trying to end Medicare. The program we now call Medicare is one in which the government acts as your insurer, paying your major medical bills; coverage is guaranteed to all seniors. The program Republicans want gives you vouchers and tells you to go buy your own insurance, if you can. That’s not at all the same thing.

Oh, they’re also trying to stop anyone from calling it a voucher plan — but that’s what it is.

What about the claim that the Ryan plan actually does guarantee coverage, because it says that insurers can’t turn you down? That’s based on word games. What the plan says is that you can’t be turned down because of medical history — it imposes community rating. But it says nothing about requiring that insurers sell coverage at a price you can afford. And the Congressional Budget Office analysis of the Ryan plan makes it clear that it would put insurance coverage beyond the financial reach of many seniors.

So you can call the new thing Medicare; you could also call an onion a rose. But a non-rose by the same name does not smell as sweet.

Fiction is More Popular than Fact

The mainstream media in the US doesn't see the job of journalism as reporting "facts". That is too déclassé for the post modernist reportage now favoured by US media. Why get down in the mud and squirm around in facts and analysis when you can shape reality by letting ideologues spout theory as fact?

Dean Baker with his Beat the Press blog provides an excellent example:

Umm, Representative Ryan's Plan Does Turn Medicare Into a Voucher Program

The Washington Post reported that House Budget Committee Chairman Paul Ryan won applause from the Republican freshman caucus when he criticized President Obama for saying that Ryan's Medicare plan would turn the program into a voucher system. The Post should have reminded readers that Ryan Medicare plan does turn the program into a voucher system.

Ryan's plan gives beneficiaries a fixed amount on money that they can use to buy insurance in the private market. This is what most people would consider a voucher system. The Congressional Budget Office's projections indicate that it would raise the cost of buying Medicare equivalent policies by $34 trillion, approximately 5 times the size of the projected Social Security shortfall.

Read the original post to get the embedded links.

It is astounding that a political party can publish as "plan", vote on it, and then claim that it isn't what the words on the paper say it is. But I guess that is simply "effective leadership" if you are the party of George Bush who could go to war in Iraq claiming that it wouldn't cost the taxpayers anything but has now rung up about $2 trillion in total costs. A war, by the way, built on the big lie that Saddam Hussein was supporting al Qaeda and that he has "weapons of mass destruction". Lies that let him stampede Americans into a completely wrong-headed, destructive, wasteful war that has left hundreds of thousands of Iraqis dead and given a huge strategic advantage to Iran, sworn enemy of "the great Satan", i.e. the US.

With political "leadership" like this, what is to be surprised in having them announced that the Ryan voucher plan is "not a voucher" plan?

Revealing the True Soul of US Television "News" Commentary

I've been bothered by how obviously right of centre the supposedly "liberal media" truly is in the US. There are many TV shows where they invite Republicans to bash Obama but no Democrats to defend him. Of they will have a panel of 3 right wing nuts to 1 "liberal" who gets shouted down by the stacked deck of "commentators".

Here's an article from the Washington Monthly that notes this same thing at Meet the Press this week:

It was quite a roundtable on “Meet the Press” yesterday. Viewers got to see a Republican strategist, a conservative pundit, a conservative Democrat, and an ostensibly center-left columnist who thinks that Democrats are big meanies when it comes to Medicare.

It was “Must See TV” for viewers eager to see a soul-crushing discussion.

...

It’s exasperating, but it’s worth reemphasizing what too many establishment types simply refuse to understand: Democrats are telling the truth. Indeed, Dems are doing what the media is reluctant to do: offering an accurate assessment of the Republican plan for Medicare. If voters find the GOP proposal frightening, the problem is with the plan, not with Democrats’ rhetoric.

I’m at a loss to understand what, exactly, Ruth Marcus, David Brooks, and their cohorts would have Dems do. Congressional Republicans have a plan to end Medicare and replace it with a privatized voucher scheme. The proposal would not only help rewrite the social contract, it would also shift crushing costs onto the backs of seniors, freeing up money for tax breaks for the wealthy. The plan is needlessly cruel, and any serious evaluation of the GOP’s arithmetic shows that the policy is a fraud.

Which part of this description is false? None of it, but apparently, Democrats just aren’t supposed to mention any of this. One party is allowed to present this agenda, but the other party is expected to sit quietly on their hands.

With a constant barrage of right wing media telling people that entitlements are sinking the ship of state under a flood of debt. But not a mention of big Bush tax cuts for the rich or the uncosted wars in Iraq and Afghanistan.

The message that Medicare can't be afforded is this year's flavour-of-the-day. Remember how in 2006 Bush tried hard to sell the message that Social Security is "broke", that is is "just IOUs", that the big budget deficits mean that the "only choice" is to cut entitlements like Social Security, it isn't hard to believe that most people think there is no hope and are willing to sign up for raising retirement to 78 and cutting benefits in half so that the government can go back to handing out more tax cuts to billionaires and millionaires who, this time, will cross their hearts and hope to die pledge that when they get these cuts they will churn out a lot of "trickle down" wealth so the bottom 90% can finally see a light at the end of the tunnel. Ridiculous.

Robert Reich served on the board of Social Security and constantly blogs to point out that the program is solvant with only a minor shortfall some 20 years out which is absolutely meaningless because nobody can predict with certainty if the economy will leap ahead by 5% next year or sink by 2%. But Republicans beat the drums of doom and sell the new religion of "gotta cut entitlements".

No wonder US politics is skewed so hard right. The media spouts right wing nonsense 24/7. They present a centre-right panel as "balanced". Tragic.

Healthcare Debate Flashback

CNBC's Mark Haines suddenly died this week, so some videos have been put on the web to celebrate his "take no prisoners" approach to dealing with guests on his show. Here's an example from August 2009 where he doesn't let Martin Feldstein from Harvard make some ridiculous complaints about the Democrat's health care plan.

Haines nails him with this one perceptive point: "Your argument is something that is easy to make by somebody who has money." Feldstein sees the world only from the lofty air of a rich Harvard professor who ignores the fact that a third of the people have no health care because they can't afford it. For Feldstein that isn't "rationing" that is a "choice". Yeah, sure...



Feldstein ends with the ridiculous claim that a health care plan would remove the ability of the rich to pick doctor, treatment, etc. Nonsense. The rich will always have choices. The whole point of the health care bill was to remove the lack of choice for those without the money. They don't get treatment because they can't afford it. That is a terrible "choice" but Martin Feldstein is quite happy with that kind of "choice".

Here's a bit from a September 2008 interview, he has it with a right wing spin doctor and comes right out and says "I find that one-sided crap insulting":



I like the way Mark Haines called them as he saw them. This reminds me of the classic joke about three umpires discussing their role in the game of baseball.

• The first umpire says, “When the pitcher pitches there are strikes and there are balls, and I call them as they are.”


• The second umpire says, “When the pitcher pitches there are strikes and there are balls, and I call them as I see them.”


• The third umpire says, “When the pitcher pitches there are strikes and there are balls, but they are nothing until I call them.”

I'm almost willing to say that these comments and their commentary was nothing until Mark Haines called it.

A Question of Philosophy?

Here is a post by Dean Baker on his Beat the Press blog that reveals what the press knows about "philosophy":

The Wall Street Journal Tells Us It's All About Philosophy

The news media keeps trying to tell us not to worry about who gets the money, the issue is one of philosophy. The WSJ picks up the task today telling readers that the difference between conservative and liberal budget plans:

"The big takeaway is this: The debate over how to reduce the deficit is truly a philosophical one about the size of government."

Is that so? The Congressional Budget Office tells us that it will cost $34 trillion (5 times the size of the projected Social Security shortfall) more to provide Medicare equivalent policies through private insurers than through the traditional government Medicare program. This would be additional money paid by taxpayers and beneficiaries to insurers and providers. Is the desire to hand this money over to these groups a question of philosophy?

Go read the original post to get the embedded links.

I should point out that the role of the media in a democracy is also a question of philosophy, but obviously these Wall Street Journal types have never bothered to study the issue. They know as much about philosophy as the average dog knows about higher mathematics. Zilch!

Learning Something New Every Day

The other day I was shocked to see a news clip of former president Bill Clinton grabbing Paul Ryan and telling him to "keep up the fight" to cut entitlements. I was shocked. The Democrats are supposed to be for "the little people" and here is a former leader showing he sides with the rich, big business, and the Republicans. I couldn't believe my eyes.

But Dean Baker has brought me down to reality. He points out that I didn't really know the "real" Bill Clinton:

Bill Clinton, Who's Known for His Plan to Cut Social Security

In an article reporting on how the Republicans are backing away from the Ryan plan for privatizing Medicare. the NYT quoted former President Bill Clinton on the need to cut Medicare spending. Mr. Clinton was speaking a daylong conference of the deficit sponsored by Wall Street investment banker Peter Peterson.

It would have been worth reminding readers that Clinton is a big proponent of cuts to Social Security. At the deficit conference that Peterson sponsored last year, Clinton boasted that he had wanted to cut Social Security but congressional leaders from both parties blocked him. The cuts that he wanted would have reduced benefits by approximately 1 percent a year. This means that retirees in their 70s, 80s, or 90s, would be getting almost 15 percent less in Social Security benefits today, if President Clinton had gotten his way.

His desire to cut Social Security puts Clinton far outside the mainstream in the Democratic Party. In fact, it puts him far to the right of the majority of the Republican Party. It would have been appropriate to remind readers of this fact so they could put Mr. Clinton's interest in cutting Medicare in context.

Live and learn. I knew Bill Clinton was part of the New Democrats in the US and aligned with the Third Way in the UK. I knew these were more "centrist" than the Democrats in the US or Labour in the UK. But I didn't realize how right wing some of their ideology really was. I've learned something new!

How are ordinary people supposed to get a government that stands for them when the political party run people like Obama touted as a "community organizer" but really is a "Wall Street organizer" and Bill Clinton run as a "populist" when in fact he was a front for big money interest? No wonder people give up and call the two parties in the US Tweedledee and Tweedledum. They run front men who pretend to take positions while keeping mum about their real ideology.

From Wikipedia:

In politics

• During the 2000 United States presidential election, candidate Ralph Nader pointed out that George W. Bush and Al Gore were not very different in their corporate policies, and called them Tweedledum and Tweedledee.


• Helen Keller, the first deafblind recipient of a Bachelor of Arts degree and a prolific writer and left-wing activist said this of democracy in the US. "Our democracy is but a name. We vote? What does that mean? It means that we choose between two bodies of real, though not avowed, autocrats. We choose between Tweedledum and Tweedledee."


• Leading up to the United Kingdom general election, 2010, Tory leader David Cameron compared coalition-building British party leaders to "Tweedledum talking to Tweedledee, who is talking to Tweedledem."

The average Joe on the street doesn't have time to read the minds of politicians to find out what their real ideology is. The whole point of party politics is to get the party to vet the candidates so that the party name counts like a "brand" label that provides a guarantee about the product. Sadly, political parties these days are too busy cashing in and getting rich to be bothered with acting like a real political party with a real political platform and some real quality control over their candidates.

Dean Baker Spots a Bit of Blindness

Upton Sinclair diagnosed the problem with the Washington Post long before Dean Baker spotted the problem. From Wikiquote: It is difficult to get a man to understand something, when his salary depends upon his not understanding it!

Here is the problem that Dean Baker spotted in the Washington Post coverage on the entitlement debate:

Hey Stupid Seniors! The Post Says a 9 Percent Cut In Social Security Benefits Won't Hurt

It's amazing what you can learn reading the Washington Post. Today it's lead editorial told readers that reducing the annual cost of living adjustment for Social Security by 0.3 percentage points won't hurt. This would come as news to most seniors who rely on Social Security for most of their income.

This 0.3 percentage point cut is cumulative. After a person has been retired for 10 years benefits would be roughly 3 percent lower than would otherwise be the case. Benefits would be almost 6 percent lower after 20 years, and almost 9 percent lower after 30 years, when most beneficiaries will be in their 90s.

The poverty rate is highest for the oldest seniors, most of whom are women living alone. Most people think cutting benefits for this group by 9 percent would hurt, thankfully we have the Washington Post to tell us otherwise.

(This is a newspaper that has run front page stories warning that raising taxes by less than 1 percent [of income] on people earning $300,000 a year would inflict real pain.)

The rationale for the benefit cut is the use of an alternative measure of inflation, the chained consumer price index, that assumes substantial substitution between consumption items in response to prices changes. The Post asserts that this index is a more accurate measure of inflation.

Actually, the Bureau of Labor Statistics has an experimental elderly index that measures the rate of change in the basket of goods and services consumed by people over age 62. This index shows that the inflation rate experienced by the elderly increases by an average of 0.3 percentage points more than the overall CPI to which Social Security benefits are indexed.

While this is an experimental index that does not track the actual purchasing patterns of the elderly (e.g. examining the specific retail outlets where they shop and the items they purchase), those who are interested in an accurate cost of living adjustment would advocate a fuller elderly index. Those who want to cut Social Security benefits advocate using the chained consumer price index, which we know will show a lower measured rate of inflation.

Go read Baker's original post to get the embedded links.

When I read this bit about how the Washington Post's editors see "entitlements" I'm reminded of the scene in the film Titanic where the rich and leisured "gentlemen" elbow the women and children out of the way so that they can get into the lifeboats and get away from the sinking ship. These "gentlemen" mouth an ethic of a "higher morality" but when push comes to shove, they are only to eager to throw the elderly under the bus so they can afford to upgrade their 400 foot yacht next year for the 600 foot version.

And... here is Dean Baker's post on "privatizing" health care benefits:

David Brooks Calls for Improved Defenses Against Martians and Cutting Medicare

It's pretty brave of the NYT to routinely feature a columnist who is completely out of touch with reality. David Brooks has another tirade today in which he lays out his, "Medicare Survival Guide."

Brooks is very upset that the Democrats won the special congressional election in New York by telling people that the Republicans want to end Medicare. Apparently, Mr. Brooks has not read the Medicare plan that was put forward by Representative Ryan and approved by the House with the support of all but 4 Republicans. This plan replaced the current Medicare system with a voucher, which seniors would use to buy health care insurance. That certainly sounds like ending Medicare. It would be interesting to know what Mr. Brooks would consider ending Medicare.

According to the Congressional Budget Office's assessment of the Ryan plan, it would increase the cost of buying Medicare equivalent policies by $34 trillion (5 times the projected Social Security shortfall) over the program's 75-year planning horizon. Adding in the $5 trillion in costs shifted from the government, the Ryan plan would increase the cost to beneficiaries of buying Medicare equivalent policies by $39 trillion.

In pushing the defense plan against Martian attacks Ryan tells the Republicans:

"They need to lay out the facts showing that Medicare is unstable and on a path to collapse, as Representative Paul Ryan is doing."

Actually, this is not what the facts show. The projections in the Medicare Trustees report, as well as the CBO baseline budget, show that the program faces a relatively modest long-term shortfall. The amount of money needed to balance the program over its 75-year planning horizon is less than 0.3 percent of GDP, approximately one-fifth of the increase in the rate annual defense spending between 2000 and 2011.

There are important issues as to whether the assumptions underlying these projections will prove accurate, importantly limiting the increase in doctors' compensation under Medicare. However, this is a question of whether Congress will adhere to the current law, not a need to change the law.

The Brooks piece also contains the wonderful line:

"Many Democrats don’t want to go down in history as the people who did nothing while bankruptcy loomed."

Actually, they already will go down in history that way. Apparently no one told Brooks about the economic downturn. (He has probably been too busy preparing the defense against Martians.)

The Democrats, like their Republican counterparts, completely ignored the run-up in the housing bubble. The collapse of this bubble is likely to cost the country more than $5 trillion in lost output. It is also the reason for the large deficits that concern Brooks so much. Unless the Democrats can ensure that people like Brooks write the story, they are destined to go down in history as people who did nothing while economic disaster (I have no idea what Brooks means by "bankruptcy" and most likely he doesn't either) loomed.

Again, go read the original to get the embedded links.

Selectively Reporting the News

Here is a post by Dean Baker on his Beat the Press blog pointing out political bias in the Washington Post version of "the news":

The Washington Post managed to completely ignore the Congressional Budget Office's projections showing that Representative Ryan's privatized Medicare system would increase the cost of providing Medicare equivalent policies by $34 trillion over the program's 75-year planning period. This sum is nearly 7 times the size of the projected Social Security shortfall, a topic that has received an enormous amount of attention in the Washington Post. It comes to roughly $110,000 for every man, woman, and child in the country.This additional cost is money that would be transferred from households to private insurers and health care providers.

Failing to mention the enormous waste that CBO projects would result from the Ryan plan is like writing a history of the 1940s and neglecting to mention World War II, only in the Washington Post.

It is not surprising that so much of the US electorate constantly votes for the party of the top 1%. The media fails to deliver "the news" that points out the lies and manipulations used by the GOP to hoodwink the public.

Public Health Care as a Form of Slavery

To get an idea of the gap between the left and right in American politics, watch the following:



Bernie Sanders is an independent Senator who is to the left of the Democratic Party as a democratic socialist. He advocates the rights of the bottom 90% of the population, specifically a right to public health care.

Rand Paul is a right wing Tea Party Republican who is to the right of a good part of the Republican Party. He denies that a society has any obligation to the bottom 90% of the population. As a libertarian, he advocates a society with no social obligations, only "contracts", and he wants to shrink the US government so that it can be "strangled in a bathtub".

In the real world most people find themselves somewhere in the middle of this debate. To say that you have a "unrestricted right" to medical care and to take the view that each life has "infinite value" implies that you should bankrupt a society in order to provide "medical care" to a hopelessly ill patient with no "quality of life" and no hope of recovery. This viewpoint effectively says that one person's "right" trumps all others. But this is self-contradictory. Those being bankrupted have a "right" to medical care. So you can't simply give all resources to one person. There needs to be compromise!

The Rand Paul position is just as nutty. He argues that nobody has any obligation to the broader society. He views any effort to get him to contribute to society (act as a doctor under the Hypocratic oath, pay taxes, serve on a jury, etc.) all all just forms of "slavery". The only motivator for him is money. He wants you to bargain with him and come up with a contract and money before he will act. But this is ridiculous because no parent negotiates with a child or vice-versa. In a family there are rights and responsibilities. In a society there are rights and responsibilities. Money is not the be all and end all to everything.

This "debate" was polite, but it exhibits the insanity that has infected the American body politic. Neither side attempted to negotiate a compromise, a pragmatic workable compromise.

What is silly about this "debate" is that the US already has working examples of an effective public health care with reasonable limits on "rights" and a well defined commitment by the state to provide social services to give a reasonable meaning to a social right to health care. These two debate at the extremes and ignore the fact that there already are working examples of appropriate compromise solutions already in place and effectively providing public health care!

Here is a Paul Krugman comment on the insanity of the current politics in the US. This deals with the argument over raising the debt ceiling, but like the above, it shows that at least one side, the Republicans, have gone completely nuts:

...failure to raise the debt limit could act as a terrible signal about the US political system.

When you look at the US fiscal position in terms of what we’re capable of as a nation, it’s not a big problem. Never mind those big numbers you hear about implicit liabilities; we have a big economy, too. So modest tax increases and reasonable efforts to limit health care costs could bring our long-run finances into line.

But all this depends on our having the political will and cohesion to do what’s necessary. What if it turns out that we’re a banana republic, with crazy extremists having so much blocking power that we can’t get our house in order?

And failing to raise the debt limit could be widely read as a signal that we are, in fact, a banana republic.

In that case, however, what should Obama do? My answer is that despite all that, he must not let himself be blackmailed.

Partly that’s because once he gives in the first time, the blackmail will never stop. Once the crazies know that they can get whatever they want by threatening to blow up the economy, they’ll just keep demanding more and more. Obama just can’t let that dynamic get started without setting up an even worse crash down the road.

Dean Baker Asks a Simple Question

I enjoy how Dean Baker holds the media accountable for their hidden political agenda. Here is a posting on his Beat the Press blog that asks a very good question:

Will the Washington Post Ever Tell Readers that the Republican Medicare Privatization Plan Would Add $34 Trillion to the Cost of Buying Health Care in Retirement?

That is what the projections from the Congressional Budget Office (CBO) imply. And, just to be clear, this is the additional waste that CBO projects would result from running the program through private insurers. The figure does not include roughly $5 trillion in expenses that would be transferred from the government to seniors.

The $34 trillion figure comes to $110,000 for every man, woman, and child in the country. It is almost 7 times the projected Social Security shortfall. While the Post has devoted endless space (in both its news and opinion sections) hyping the need to fix Social Security, it has never once mentioned this much larger cost to the country projected by CBO. Instead its articles on the Republican Medicare plan have been entirely of the he said/she said variety and discussions of its political prospects.

A serious paper would discuss the substance. The Post's readers don't have more time to look into this issue than its reporters.

I continue to be amazed at how the media continues to pull of a sleight of hand on the public. They keep them busy with non-issues and trivialities while ignoring the big important questions. And the media never confronts the right wing politicians with their lies. It always gives them a pass. Tragic.

Calling David Brooks on the Carpet

Here is an excellent post by Dean Baker in his Beat the Press blog that points out that David Brooks doesn't know what he is talking about. This is good. It brings Brooks down a peg. Brooks is a lovely writer, but he is in love with his words and not necessarily the truth. Brooks lives isolated from the lives of the bottom 90% so he uses his imagination to "fill in the gaps". But when you are upper middle income guy, your imagination about "how the other half lives" is fully of a lot of blarney:

David Brooks Shows How Far We Have Gone from the Founding Fathers: It Used to be That Columnists Had to Know What They Were Talking About

David Brooks told readers that:

"Over the past months, there has been some progress in getting Americans to accept the need for self-restraint."

This should have hundreds of millions asking who needs "self-restraint?" Does Brooks thinks that the 14 million unemployed need more self-restraint? Do the 8 million people who want full time work but who can only find part-time employment need self-restraint? Do the millions of people who are facing the loss of their home need more self-restraint?

Brooks isn't very clear on who he thinks needs to restrain themselves but he praises Senator Alan Simpson, Representative Paul Ryan and President Obama for helping to lecture us on this need. Those familiar with the basic economic data know that the richest 1 percent have used their control of the political process to hugely increase their share of national income over the last three decades. The bottom 90 percent has seen little gain from economic growth over this period. Of course Representative Ryan wants to give more tax breaks to the richest 1 percent, so he doesn't seem to be preaching self-restraint to those who have been showing the least in recent years.

If Brooks' concern is making the welfare state sustainable, then he should be talking about fixing the health care system. It is easy to show that if per person health care costs in the United States were comparable to any other wealthy country then we would be projecting huge budget surpluses, not deficits.

If Brooks bothered to take a few minutes to study the issues he writes about then he would know this. Fortunately for him, he has job for which this skill is not required.

Brooks also claims that there is an inherent tension between economic dynamism and economic security, telling readers:

"Republicans still mostly talk about incentives for growth, and Democrats still mostly talk about economic security."

Actually many Democrats have been actively talking about more stimulatory fiscal policy, monetary policy and currency policy (i.e. a lower valued dollar). All of these policies would boost growth. It is remarkable that Brooks is apparently unaware of the large number of Democrats, including several of his colleagues at the New York Times, who have been vigorously pushing these positions.

I enjoy Dean Baker. He has taken on the Sisyphean task of correcting the errors and lies in the media. I admire his sense of duty. It is a hopeless task. Not only does the media mostly ignore his corrections, they seem to glory in their ignorance and politically motivated perversions of the truth. A guy like David Brooks makes enough to hire fact checkers and take the time to talk to people outside his bubble of affluent types. But he would rather just make the stuff up.

Brooks is the kind of guy who during the Great Depression would be saying that the real problem was that people didn't know any peppy songs. They needed to sing some lively tunes and the economy would recover. It was all those people lining up to get their money out of the banks that was scaring the rich people from investing in the economy that had caused the Great Depression. If only the unemployed would go out for a good restaurant meal once a week, the Great Depression could have been stopped in six months instead of lingering for more than a decade.

Oh... and here is a bit from another Dean Baker post that is well worth reading. This goes after The Washington Post and not David Brooks:

Those who thought that the Washington Post (a.k.a. Fox on 15th Street) couldn't get any worse, have just been proven wrong yet again. The Post ran a little primer telling readers about Medicare, Medicaid, and Social Security.

The Post tells readers:

"a GAO report found that total government health-care spending in the United States is somewhere in the middle. In the United States, spending on public health was 6.9 percent of gross domestic product in 2005, while it was 8.9 percent in France, 8.2 percent in Germany and 7.2 percent in the United Kingdom. On the lower end of the spectrum, Australia spent 6.4 percent of GDP on health care and Canada spent 6.9 percent. Some of the countries that spend more have had a demographic shift to an older population sooner than the United States."

Okay, boys and girls, can anyone see the problem with this discussion?

That's right! All the other countries included in this discussion have public health care systems. The figures cited for public health care spending comprise the bulk of their national spending on health care. Only in the United States do we have a large private health care sector that spends roughly the same amount as the public sector.

This means that rather being in the middle of the pack, as this discussion implies, we are way over the top. To pay for most of the health care needs of our seniors and our poor, our government pays almost as much Germany, Canada, and the U.K. do to provide for the health care needs of their entire population.

Of course this point should have been central to this whole primer. The reason that Medicare, Medicaid, and Social Security are projected to "usurp much of the revenue from federal taxes," is that health care costs in the United States are out of control. If the U.S. paid the same amount per person for health care as any of these other countries it would be looking at huge budget surpluses in the long-term, not deficits.