Edward M. Kennedy

Today the family Senator Edward "Ted" Moore Kennedy buried him at Arlington National Cemetery after a mass. This followed a procession with the body and it lying at the JFK Library in Dorchester, and a celebration of his life last night.

When I heard the news Wednesday morning, I woke up to the radio. My clock ran a little ahead of time, and since I did not hear a headline, I had to deduce that something happened. Hoping against hope, I eventually heard the line closing the hour's news that Senator Kennedy had died overnight. As I got ready for my day, NPR went in the background, and more than once I teared up.

So many others have reflected on Ted Kennedy. The New York Times Opinionator Blog has a great collection of things people said about him. I probably cannot add much more in value, but since blogging is as much a selfish cathartic act, I will partake in my own reflections.

My contact with Ted Kennedy came from my mother who loved his two older brothers, John and Robert. She particularly held Robert in high regard and remembers his assassination quite well. Ted, marred by Chappaquiddick and his alcohol, always seemed to be a disappointment. Like so many, she constantly thought of his brothers.

Yet, Ted Kennedy rose to meet the challenge and exceeded them. What makes him so unique is that he did all of this in spite of all the problems. Yes, he grew up privileged. However, he did endure the tragedy of seeing three of his brothers killed. He had to deal with John's advisors working against his run for the Massachusetts Senate seat. As Chappaquiddick shows, he had great flaws. Yet, he reached out to people. People living in the Commonwealth of Massachusetts said that he and his wonderful staff would always work hard to help them with the little things. He really did love people, and that showed.

Beyond that, Kennedy was a brilliant legislator. He started in the Senate, and slowly worked his way up. When he lost the nomination in 1980, it may have served him well, for he dedicated himself to the work in the Senate. Kennedy developed his skills in a sort of modern era of great Senators, like Philip Hart. Kennedy always knew how to compromise legislatively without compromising his goals. He and his staff were always willing to help other Senators as well fit into the strange institution and showed a deep desire to work to find common ground for the common good. After all, one of his best friends and legislative partners was conservative Senator Orrin Hatch, with whom he often argued strenuously, but at the end of the day embraced.

The words used to describe Kennedy was the Liberal Lion. He gave voice to the weak and the powerless. He gave us all inspiration as to our abilities in many ways to transcend our petty differences and human failings. In so many ways, he reflected the type of values I held, and taught me a certain way of carrying myself in the world of policy and politics.

Talking with my mother the other day, she conceded that she finally realized now how much Kennedy had done. He was a great speaker, but he was a workhorse. So much of the best of what he did were stories of getting involved in the nitty gritty details of legislation and small feats that touched the lives of individuals. Not just through longevity, but through this practical idealism, Ted helped create for himself a practical legacy that may actually outshine his more famous brothers. Health care? Ted Kennedy is probably there. Education policy? Teddy's fingers are all over it. Civil Rights? Ted Kennedy was a protector of them.

Kennedy perhaps is one of the last great institutional members of the United States Senate still serving. With his passing, really only Senator Robert Byrd, who revolutionized Senate procedures, remains. Byrd himself is sick and deteriorating to the point of slowing down. In that sense then Kennedy's departure leaves a void in the Senate. No longer is there a Senator who serves his constituents but also transcends some larger stage and really enjoys the work of the Senate with no eye towards something more. Perhaps Senator Inouye may fit the bill of an institution, but he has less of the overt known quantity feel than Kennedy or Byrd.

As I sat that morning of his death, the most poignant moment for me came from the speech. It was the 1980 Democratic convention concession speech. Kennedy sounded more like a winner than one conceding. He outlined clearly his personal ideals and vision for America. It is political speech, but it is rousing. The last line in many ways is famous and Kennedy echoed it again during his speech in support of Barack Obama. It echoes the famous statement in Pirkei Avot about not completing the work and not being free to desist. That line caused me to lose it. Yet, it also inspired me once again to honor this man through living a life of justice and good deeds.

So I end with Kennedy's own words. Even without him here in this world, we must rededicate ourselves and realize that "for all those whose cares have been our concern, the work goes on, the cause endures, the hope still lives, and the dream shall never die."

Weird times for the Red Sox

So, it seems as though I occasionally need to get my Red Sox feelings out. So, today I write about two weird occurances over the last two days.

First was Thursday's game. Who on earth would have thought Nick Green would pitch? Here are some photos of the event. All I have to say is that it brings new meaning to the word journey man infield utility player. Technically, after all, the mound is infield, right . . . . That said, it is amusing, and you kind of have to feel good about the guy. They still lost. But, it made for a great story about a guy, you at least get the sensation is not the greatest player but has a really good work ethic.

Then last night, rain turned the game into a sloppy mess. Mr. Beckett's pitching was not nearly as good and there were some crazy plays like Mr. Varitek getting someone out on his way home. Hopefully, Mr. Beckett will find his pitching again. I try not to panic too much though.

American Exceptionalism and Health Reform

Normally, I am a big fan of American Exceptionalism. For the most part, it has done our country well, and I would argue it may act as a glue that holds our diverse society together. Unfortunately, it also leads to problems, like a flat out ignoring of important facts. Nothing has brought this to my attention more than in the current health care debate.

Today, on Meet the Press Senator Orrin Hatch (R-UT) claimed that the U.S. has the best health care in the world. (On a completely unrelated note, read Jon Cohn's response to the Hatch interview regarding numbers that would appear on the public plan by CBO. Yes Gregory did catch Hatch.).

However, signs show that this is not the case. Most recently the Robert Wood Johnson Foundation worked with the Urban Institute to publish an issue brief that asks if the U.S. has the best health care in the world. (Tip to Ezra Klein).

Here's a bit of a sample:

An analysis from the Urban Institute looks at the evidence on how quality of care in the United States compares to that in other countries and provides implications for health reform. Authors Elizabeth Docteur and Robert Berenson find that international studies of health care quality do not in and of themselves provide a definitive answer to this question.

What they do show is that the evidence for American superiority in quality of care (or lack thereof) is a mixed bag, with the nation doing relatively well in some areas—such as cancer care—and less well in others—such as mortality from treatable and preventable conditions.

And while evidence base is incomplete and suffers from other limitations, it does not provide support for the oft-repeated claim that the “U.S. health care is the best in the world.” In fact, there is no hard evidence that identifies particular areas in which U.S. health care quality is truly exceptional.

This is also not the first study to find this. Indeed, the brief itself is essentially a review of a lot of literature. Everyone has searched to find inklings that the U.S. has the best health care in the world by some measure. Only a few have found it, and it is usually confined to narrow areas and even so it is not overwhelmingly better. Note too that T.R. Reid in his new book and today's Washington Post makes a similar argument.

But, of course, there is this idea of American Exceptionalism that is so deep-seated into our culture that it makes up part of our situational milieu and reaches into our subconscious as part of our situation. It is the idea that America is exceptional. It is a leader in everything, and the best in everything. That cultural idea has roots to John Winthrop's famous "City on a Hill" idea of Boston and the colonies there serving as a new Jerusalem.

Unfortunately for wonks like me, there is really little that studies like this wonderful Urban Institute thing can do. It affects a deeper part of our situation, and the situation as Jon Hanson has often said, is much stronger than the disposition. Furthermore, I think deep down most Americans do find it troubling that we have a system that has so many individuals uninsured and that costs more than the rest of the world. Yet, we have our exceptionalism, and indeed, we have to believe that the world is just and right. The system justification theory then also kicks into the discussion, and the moves arise in this basic way

1. We have a system where millions are uninsured and cannot get coverage, and thus suffer needlessly.
2. We also have a lot of costs.
3. But the world is just, and we are the U.S., an exceptional country.
4. There must then be some sort of a reason for this matter.
5. The reason we have this problem is because people deserve it by not working hard enough and that we must be spending so much and have so much fracture that our system must do something right through innovating.

Now this is likely a poor oversimplification of what is going on, but I think my point is made. Such a sort of illogical conclusion is not something that one can easily get rid of, especially if it is deep-seated.

Unfortunately, health reform seeks to fight this, by pointing to the rest of the world saying we should become like them. That attacks our exceptionalism and that shows that our just world is perhaps not so. This leads then to resistance, and ultimately, a status quo bias.

Evolution and Religion

Today's NY Times has a great Op-Ed by Robert Wright at the New America Foundation regarding evolution and religion, a large debate that is often very complex and fraught with emotions. It is well worth reading in full. One should note that the piece is difficult and highly nuanced though.

One point Wright makes that is worth noting is that both sides make a fundamental error that is basically the same:

I bring good news! These two warring groups have more in common than they realize. And, no, it isn’t just that they’re both wrong. It’s that they’re wrong for the same reason. Oddly, an underestimation of natural selection’s creative power clouds the vision not just of the intensely religious but also of the militantly atheistic.

If both groups were to truly accept that power, the landscape might look different. Believers could scale back their conception of God’s role in creation, and atheists could accept that some notions of “higher purpose” are compatible with scientific materialism. And the two might learn to get along.

Wright makes an excellent point on how we attribute things. Both science and religion have deep seated and quite inspirational purposes. Science does achieve a very high purpose, understanding the unfolding of the natural world. Part of the reason why I wanted to go into science and actually had some mild success stemmed from that idea (I of course failed because I hated the lab, but that's another story for another time).

Also, there is the question as to what exactly is God's role in creation. That too for a believer like me is complex. God's role is not some literal creation. It may just be setting the algorithms in place. However, I think imprinting altruism into the larger evolutionary framework as an underlying phenomena that natural selection chose (and it appears in other animals) may be what is going on. I do not take creation with any literalness, as it has its textual problems (See Genesis Chapter 1 and 2). However, I do think that it is hinting at something powerful and natural, and that is something about order in the world and the capability of humans to see that order, and a way of inspiring us toward that common good.

Of course, I think Wright's piece will likely get attacks from everyone as disingenuous and wrong. I think both sides have put too much in stake in the so-called war, and each side really wants to just win. Sadly, that may be the evolution our society is taking on a lot of matters.

50 Years of the 50th State

Today is the 50th Anniversary of Statehood for Hawaii. It is perhaps one of the strangest and most complicated of all states to join the Union for various reasons. I attempt to poorly encapsulate the history of this event.

It goes back to the overthrow of the monarchy, illegally, in the 1890s. Queen Liliuokalani abdicated the thrown and white plantation owners imprisoned her in the palace as they declared a new Republic of Hawaii, with the sole point of joining the Union as a territory. As Robert Remini pointed out (I think) in his book on the House of Representatives, the U.S. was divided even during this time of high imperialism. Eventually Speaker Thomas Brackett Reed, who allowed the House not to become the morass that the Senate is, let the Annexation Bill through during McKinley's time, even though he opposed it. Soon American imperialism outright annexed Hawaii.

Oddly though, there was always a question as to whether Hawaii would become self-governing within the U.S. as a territory expanded or whether we would hold it solely as an imperial possession like the Philippines, with the hopes of one day turning it loose. On the one hand, it did have a lot of non-whites that people thought could not self govern. On the other hand, the Congress did during the annexation incorporate Hawaii, allowing the Constitution to follow the flag, unlike Puerto Rico, Guam, and the Philippines (See Downes v. Bidwell, 182 U.S. 244 (1901)). Interestingly though, there was a period where the Constitution did not follow the flag to Hawaii, but Congress's incorporation around 1903 (I think) solved that problem.

So, what was Hawaii? A colony to be governed from the metropole? Or some sort of entity that we hoped to groom to join the insoluble union of states? The question has never really been sufficiently answered.

In the intervening years, the territory saw some level of self-governance with the legislature, and an appointed but powerful governor. The Homestead Act of 1928 granting certain lands (bad ones at the time) to Native Hawaiians for rent at a very low rate. There was Pearl Harbor and the military bases. Sugar and pineapples drove the economy, but on the dawn of statehood, the new industry, tourism started to take grasp.

After World War II, the United Nations, which the U.S. helped create (something we often forget), created a little list of imperialist trust territories. These territories had to become either independent or incorporated. Hawaii made the list of territories.

The push was on. However, Southerners were no fan of a majority minority state. Meanwhile, back home a great deal of consternation arose among strange bedfellows. The Native Hawaiians saw an illegally taken state. White plantation owners feared of course the minority workers gaining control as they had more numbers.

However, a bill did move, and eventually a plebiscite was held with over 90% of Hawaii residents approving of statehood. Hawaii joined the union on August 21, 1959. It was removed from the UN list. This happened many years one should not too after having the U.S. Constitution follow the flag to Hawaii, and many question if the U.S. really moved out of self interest in holding the territory as a possession. One cannot say for certain what actually led to Statehood itself.

Yet, in some ways, the questions still remain. The State of Hawaii under the Admissions Act had to handle Native Hawaiian Affairs pending some resolution. That resolution still remains. The cloudiness of the territory, and the speed at which it was admitted post-UN Trusteeship, and most importantly the status of self-determination for Native Hawaiians (NB: I am not one myself) continues to raise questions for the future of the state as a whole. Will the Homestead Act survive? What is the future of the Native Hawaiians and their self-determination that the Admission Act itself implies? What will become of the last state to enter our union? Will others too finally follow or be set free?

As readers and friends may know, I have supported the Akaka Bill. My own personal feelings is still that statehood was right, and the only way for a state to leave is for consent of the American people as a whole through their representatives (states seceding on their own was answered in the period 1861-1865 though again Hawaii presents some unique questions since the overthrow and annexation was sort of more recognized internationally as a violation of customary international law). Still these questions dog me as someone who grew up in Hawaii and still cares for it.

Let us celebrate the past 50 years, let us look toward the future, and let us reflect deeply on the troubling questions too that history presents us.

Update: Paul Theroux's take (he once said "Hawaii is not a state of mind; it is a state of grace").

The Life and Death of the Public Option

A lot of people seem to have their hands up in arms about the recent Administration positions on the Public Option stemming from the Sunday morning babble. However, like so much of the debate, I think this is a matter of more heat than light.

The story really comes from this NY Times article, as well as this Washington Post report.

The Administration, however, has not really changed position all that much. They have consistently supported the public option, but never said it was a line in the sand. They have said this from the beginning.

However, both Jon Cohn and Ezra Klein point out this has been a point that the Administration has sort of held from the beginning.

Can you fault the Administration for not pushing harder on this? Probably yes. Their messaging has been below par on this, and many other health care reform matters (sadly I think the issue as framed and thought of by everyone does not play to Obama's rhetorical strengths. However, as Nate Silver points out in his posts here and here (both of which are worth reading in full) even though popular with most people, it is not popular with the people who decide all of this, a subgroup of 6 who are a subgroup of 100 people who represent states rather than people.

Yet, here's the concern. It is that the desire for the perfect turn into the enemy of the good. The public option is a good thing. Many liberals really want it. I really want it.

However, what do I want more? I want major reform that would eliminate pre-existing conditions as part of health insurance. I want subsidies for lower income individuals. I want better risk pooling in exchanges. I want some start on the cost control matter, whether through an IMAC.

In other words, even without the public option, we could get a lot of these. And what are the stakes otherwise? Well, for starters the Democrats will have dug their own graves in the midterm election and harmed their own President in a very serious way. They will also help contribute to the status quo, and cause greater problems.

Even without the public option most of the reforms I, the blogs on my reading list, and other policy people have advocated for that are contained in the bills make a major, yet not entirely sufficient step toward fixing our system. That is very important, because, I think it actually builds momentum toward fixing it. If health reform fails over what is really a much smaller aspect of the puzzle than many other matters, it becomes off limits for another generation. That is something we just cannot afford on both a moral and even a fiscal level.

Trying to Simplify Health Care

The various blogs I read have talked about these, so I'm going to do one myself for my friends too.

The first is the fine Washington Post health care cheat sheet. It is a major simplification, but it outlines exactly what is at stake, and seeks to reduce the heat and show the light.

Second is a flowchart, which many have posted before. There was the infamous House Republican Flowchart attacking the bill, and the equally if not more complicated Jon Cohn flowchart of the status quo situation.

However, now comes a flowchart that rules them all. It is again a simplification. The question is what level of granularity you look at with regard to these policies. And this seems to outline best what is at stake. Thanks to our friends at Donkeyliscious (and Nick Beaudrot in particular).

How simple can you make it?

Oh, these Red Sox

I became a Sox fan in the early 2000s, before 2003 when they almost won the ALCS and before 2004 when they won the World Series (which I really never expected).

I feel like that again. After what happened. People often say it's Fenway, which is a hitter's park. Perhaps too there is the strong psychological factor of the loyal fan base. But, we need to start winning on the road as the Globe points out.

And meanwhile, it is interesting. Our shortstop mess is really complicated as the Globe stated the other day, although I am hopeful as it does give us some flexibility.

Oh well. Time is ticking, but we can pick up some of the pieces.

Hawaii Employees, Brand Name Drugs, and Status Quo Bias

Today's Honolulu Advertiser has a worthwhile story about the State Employees Drug plans. The article essentially says that for cost savings measures various things have ocurred, many of which have angered state employees.

This highlights though an interesting question, and one that runs deeper within our framework of health care. One of the key ideas is that it requires generic drugs before one can get an exception of coverage for the brand name. You can still use the brand name if available, but you must pay both the generic copay and the price differential. Often the price differential is huge.

Study after study shows that generic drugs are just as effective as brand drugs except in certain cases. Yet, we still continue to use brand name drugs, and people often choose them. What then happens is they pay the higher brand name co-payment, but the cost is hidden, by the insurance picking up the tab.

This is not any way for a rational market to act. I sort of think that the structure of this new plan with regard to this one matter is probably the right move. It would control costs without any quality changes, and if there are problems, one can get an exception.

However, the outrage stems from a sense of the idea that "my doctor has prescribed this, and I have always taken this, why do you force me to change." That is the classic status quo bias. This bias sort of grows in our health care system, because so often it does not put pressure on people to change. Doctors too are notorious for status quo bias, often doing procedures that do not work, partly because that was how they were trained, it is difficult to stay abreast of the literature, and they often do not have any incentives to do otherwise.

Changing people's behavior is what we are trying to achieve here. The greater question that arises is if A is just as effective as B, but A costs 3 times more, why pay for A? Would not a rational market and consumer go towards B? That's sort of what this generic argument is about.

Or put another way, the state's new plan really is looking at the forgotten part of my favorite equation.

C = U x P

That would be the P. However, as I have stated earlier, and as the article itself shows, the resistance to P is much higher. Partly it is this strong status quo bias. Partly too, it disrupts in a deeper way vested interests in the system.

One final note. Liberals too should embrace cost sharing. I link back to our good friend Ezra Klein talking about various schemes in this manner.

Good Night Links

The NY Times gets down and dirty calling things lies.

And death panels are really linked to the estate tax, or rather the temporary one year of no estate tax and then the sudden revival of it at pre-2003 levels.

Joanne Kennan talks about advanced planning while Jonathan Cohn shows how others thought of the matter.

Ezra Klein interviews Karen Ignani head of America's Health Insurance Plans (AHIP).

Felix Salmon has a fascinating view of regulation of securities and wealth of the country.

Meanwhile, the scene cuts to a to lone dancer and you cry again.

The Breakdown of Civility Again

It was only a matter of time before health reform went crazy. As Steven Pearlstein said in his column:

Health reform is a test of whether this country can function once again as a civil society -- whether we can trust ourselves to embrace the big, important changes that require everyone to give up something in order to make everyone better off.

Unfortunately we are failing this test badly.

I of course get annoyed when people do not agree with me. That is human nature. But, what is worse is when people do not act civilly.

That's what these town halls have sort of turned into. It's not even the lies, but the sort of pitched rhetoric that has arrived.

The New York Times Opinionator actually aggregated the blog postings on this. There are accusations of "death panels" and people calling Obama Hitler. The comparisons like this do not help anyone.

None of this actually advances any case logically. I know emotions are more powerful, but we do need to realize that yes we have them, yes we are situational and not dispositional, and attempt to overcome that. However, we fail in these regards here.

What is the possible effect, well, in the Opinionator cites Nate Silver saying it does help. David Broder wrote a Washington Post column saying the opposite.

I do not know what that is. However, the sheer breakdown over an important issue that we must address is not good. In fact, as Pearlstein himself says, it really is telling about our society. Have we lost our ability to act like adults? And if we cannot overcome our own self-interest for a common good and have a real dialogue about the shape of this, then can a republic truly function (I mean the U.S. will likely not collapse, but the question arises as to whether our society can address difficult matters)?

Good Night Links

Leonard Bernstein and the government, from Alex Ross.

Maybe birthers are just reflecting some psychological bias.

Goldman Sach's health care subsidy at $14,777.

The Red Sox need more players who are consistent like this and not like this (though admittedly when on he is great, and I really like his effort). Perhaps this could help. Then again, problems may be more structural than we are willing to admit.

Felix Salmon really gets fed up at Community Banks.

Finally, Jon Cohn's wonderful Colbert Report Performance.

NY Times Op-Ed, and Pushing on everything

In this morning's New York Times four people wrote an Op-Ed. All are doctors. All are very familiar with the health care debate. They are Atul Gawande of New Yorker McAllen, Texas fame; Mark McClellan, Bush's FDA and CMS head as well as the brother of Bush's press secretary Scott; Elliot Fisher of Dartmouth Atlas; and Donald Berwick in Cambridge, MA at the Institute for Healthcare Improvement.

They point to something very important. They note that our health care system is designed to lead to overutlization that produces no benefit, and may create harm. The piece is worth reading in full, but two paragraphs are excepted here:

So how do they do that? Some have followed the Mayo model, with salaried doctors employed by a unified local system focused on quality of care: these include Temple, where the Scott and White clinic dominates the market, and Sayre, where the Guthrie Clinic does. Other regions, including Richmond and Everett, look more like most American communities, with several medical groups whose physicians are paid on a traditional fee-for-service basis. But they, too, have found ways to protect patients against the damaging incentives of a system that encourages fragmentation of care and the pursuit of revenues over patient needs.

[...]

In their own ways, each of these successful communities tells the same simple story: better, safer, lower-cost care is within reach. Many high-cost regions are just a few hours’ drive from a lower-cost, higher-quality region. And in the more efficient areas, neither the physicians nor the citizens reported feeling that care is “rationed.” Indeed, it’s rational.

The key here is that we want to make things more rational, not less.

And yet, there is another piece too. The market itself does not rationally price things. For example, Boston under the Dartmouth Atlas has high costs and high quality. However, its utilization is low.

A simple equation suffices.

Let C = Total Cost

Let U = Some complicated Utilization Function

Let P = Some complicated Price Function

Then as we all know

C = U x P

However, we always talk about U. What about P?

I am not saying that U is not important. It is pretty important. It is what is driving McAllen. But, P is pretty darn important too. Of course, it may also be thornier and more complicated too.

Eliminating the Deficit and Where to Go

The Tax Policy Center Blog has two posts on the deficit. The first deals with things within the personal side of the income tax using the official scorekeepers, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). The second deals with the corporate income tax.

I think both of these are very good posts, and I do think that the deficit itself is a long-term problem, although short term we probably should run a few up. See Brad DeLong's blog post on how the Keynsian view is the evidence-based view.

However, the deficit is a long-term problem, regardless if we decide to add everyone onto insurance.

The notion one should get from the two Tax Policy Center bloggers is that the issue is not so simple. It will require tradeoffs, hard choices, and ultimately, a lot more taxes for everyone, everywhere across the board.

This harps then back to one of my favorite themes. Taxes are not inherently bad. I myself paid them, and yes, while I would have liked more money, I did tend to think that my taxes were low (I'm a weirdo, what can I say). However, it was not that, it was a pride I took as a citizen of rather decent means near the median income for a family of four (which I think is around $40,000-$50,000) to help pay for the government, which I did not always agree with what they did (read wars) but still supported it as a patriotic duty.

Unfortunately that is gone. The sense of me first as I have often said spells fiscal doom.

So what can be done. Well, it seems from the estimates in the blog posts, you may have to push down on many points, and some of these points just do not make sense for what they yield and actually run against fairness. The main example is the administrations whacky idea to eliminate deductions for certain multinationals, which actually does help level the playing field it seems and would create an administrative nightmare to close. Others like carried interest tax may not actually raise a lot of money and have a complex implementation, but it at least serves some level of fairness.

But, like so many complicated problems, there is no magic bullet to the fiscal crisis. You cannot end earmarks, which is fewer than 1% of the budget. The bureaucracy is not as bloated as we like to believe, and even then, the money is not there. Medicare and Medicaid requires structural reform in delivery. And then there's the entire tax code that needs to push in all of these areas and perhaps get even more creative, like a national VAT.

Misinformation on health care

Our problem with the health care debate of course is a matter of huge misinformation. I am getting annoyed about this too. Indeed, it seems as though we Americans have managed to hold contradictory positions.

Take for example Nate Silver's graphic here.

It just does not make sense. It makes almost as much sense as the claims of "keep your government hands off my Medicare," which happens to be a big single payer system.

Now Silver's post that I stole said image from talks about misinformation about Canada and the UK. Again we hold somewhat impossible positions together. Republicans talk on and on about the whole notion of rationing care, but they rail against deficits (need I remind people that this party had a huge poorly designed entitlement expansion and they also created tax cuts that were irresponsible).

We Americans seem to want to have our cake and eat it too. We want lower taxes, but do not cut my funding for x, y, and z. We want to have everyone covered and we seemingly hate the insurance companies, but God forbid we let the government do anything.

Then again, holding such contradictory positions may just be a result of our wiring in our brains and our situation. Indeed, to go off on a tangent, the sex scandals of the moralists show this, as The Situationist explains.

Our situations then have taught us that largess from the government is desirable, and that we deserve that largess, or we just ignore that it comes from the government. Our situation teaches us that government is evil and cannot do anything right, and taxes are horrific (we compare them to death all the time). Reactance to the situation actually leads to some of these positions that are logically impossible to reach viability.

I do not know how any of this helps, but I just felt as though I had to say something.

What Work Product is Protected

Today the United States v. Textron en blanc decision came down, reversing the earlier decision saying that the spreadsheets with tax information were work product.

In some sense I expected such a result. Textron originally at the 1st Circuit had a 2-1 decision calling it work product, but the dissenting judge is apparently very well known and well regarded. He in fact pushed for the rehearing.

What this brings up is a more powerful tool for the government to use in its conflict against tax shelters. However, could this have an adverse effect in keeping tax lawyers in the dark? What will the results of today's decision be? Time will tell.

For more information go to Paul Carron's blog.

August Blues

I will not lie when I say things are looking bleak all around me.

First, the Sox have had a disastrous post-All Star break period.

Second, there is my obsession with health reform too.

So what do you do?

You try to keep things positive. It is helpful when others do it too.

Massarotti does something with his post about Terry Francona. I feel as though, regardless of how the season turns out, Francona still shows himself as a paragon of leadership.

Len Nichols at New America does something similar for health reform. He points to hope that compromises will emerge, and that we will have something comprehensive and bipartisan (although he cares more, rightly, about comprehensive rather than bipartisan).

As I have written before, sometimes redemption comes only after a long period of darkness.

An Interesting Take from the Right

I will freely admit that I am a moderate leftist. I tend to want compromise, consensus, and reasoned debate with passion, but not the insanity that we are seeing now. I fear the breakdown of civility and civil society.

David Frum, long time Republican strategist, has given a take on health reform. In a post on the New Majority site, he asks "What if we Win the Healthcare Fight?"

He writes in the bulk of his post:

The problem is that if we do that… we’ll still have the present healthcare system. Meaning that we’ll have (1) flat-lining wages, (2) exploding Medicaid and Medicare costs and thus immense pressure for future tax increases, (3) small businesses and self-employed individuals priced out of the insurance market, and (4) a lot of uninsured or underinsured people imposing costs on hospitals and local governments.

We’ll have entrenched and perpetuated some of the most irrational features of a hugely costly and under-performing system, at the expense of entrepreneurs and risk-takers, exactly the people the Republican party exists to champion.

Not a good outcome.

Even worse will be the way this fight is won: basically by convincing older Americans already covered by a government health program, Medicare, that Obama’s reform plans will reduce their coverage. In other words, we’ll have sent a powerful message to the entire political system to avoid at all hazards any tinkering with Medicare except to make it more generous for the already covered.

If we win, we’ll trumpet the success as a great triumph for liberty and individualism. Really though it will be a triumph for inertia. To the extent that anybody in the conservative world still aspires to any kind of future reform and improvement of America’s ossified government, that should be a very ashy victory indeed.

It is interesting to note that Frum himself is sort of a pragmatist, though a hard-nosed strategist. Brad DeLong, whom I got the posting from, oddly enough, is a little more acerbic in his response.

However, more than anything else, it has the ring of Pearlstein's column I linked to the other day. Both writers essentially say, that should healthcare reform fail, it is not only the Waterloo of Obama, but a Waterloo for this country as to whether we can really institute sensible reforms in the first place.

I think the fact that such discussion comes from both sides is important. Also key to note is that while Frum does not support a public option, he really does support a great deal of the thrust of health reform, including the all important regulated marketplace of exchanges. He has his list of reforms conservatives should support.

As a more liberal pragmatist see a chance to compromise here, and a lot of common ground. The question is to whether passions on both sides are willing to give up some of the heated debate, and distortion tactics, and focus on these common ground areas that we have, which will make major changes to health care.

End Of Life Distortions

One of the crazy aspects of the health care debate is that people are now arguing that we are going to create "death panels" to kill off seniors and euthanize people at the end of life. I find such, and this is a harsh word for me to use, lies quite troubling.

First off, as an Op-Ed points out, there is nothing to euthanize people in the bill. What the bill instead does is reimburse doctors to discuss with patients end of life decision making, in terms of advanced care directives, various do not resuscitate orders and the like. These are far from euthanizing.

The attacks on comparative effectiveness also is wrong. The goal is to set reimbursement and coverage decisions more effectively. We should not spend money on treatments of questionable value clinically and economically. That said, people could pay a differential in price or whatnot on their own. The basic care though that does work would fall under coverage.

Joanne Kenan has a great post a while back to sort of delves into the issue of end of life care, the most expensive, and often the most painful sort of care. Harold Pollack responds to the comparative effectiveness claims. Both these people know more than I do.

Instead of that, I want to tell a story. It involves Granny. My grandmother had diabetes. Through the excellent care of her doctors, she lived a much longer and fuller life than anyone had expected.

However, one day she went into the hospital with lung and heart problems. She recovered, and they sent her home. A few days later she reentered the hospital with the same problems. Her condition deteriorated. Over the course of the next weeks she went in and out, and we were rapidly spending time there. She was dying of heart and lung failure.

Her cardiologist finally took my mother, my grandmother's caregiver, aside. On his own he told her that every time we brought her back to the hospital, they would revive her. But, she would not get better. He described the condition as putting someone's head under water, and then when they revive her pulling her up for air for a few seconds, before forcing it back under water. He then gave us resources for hospice and palliative care.

We chose hospice. Statistics say that this choice probably means that my grandmother's life was not significantly shortened by this. It does show that patient and family quality of life though is much higher, and perhaps it is slightly cheaper.

On the cost side, it was cheaper, but that was never a consideration. I of course cannot say whether it was the same length. What I can say is that hospice care allowed my grandmother the opportunity to die rather peacefully at home. It gave my family a break from the stress of running to the hospital, and allowed us to emotionally plan for the end. Overall, we were happy with the care, and my mother, the caregiver, since then has insisted on me doing the same for her.

This is just my story, and it came from a middle schooler's perspective and was highly influenced by my mother's own pieces of information. But, it still stands out brightly in my memory. Perhaps, it is why these distortions on the end of life issue really make me mad.

Graph on HIspanics and Sotomayor Votes

Nate Silver has this great posting. It comes with this graph

Silver analyzes the strange correlation that seemingly goes against conventional wisdom. Those with larger Latino populations voted against Sotomayor. A lot of it has to do with who are those are. Many are very conservative or in leadership. Some are considering running for governor. The people who voted yes come from oddly non-Latino areas and the only substantially Latino yes Republicans is Mel Martinez, who is retiring and disappearing soon.

Again, I love statistics and graphs, but as always just looking at a graph like this as Silver points out, is not enough. What may happen beyond is also unknown.

Facts on Health Reform

My friend Joanne Kenan has a great post on these facts. You should visit it here.

Steven Pearlstein's Excellent Column

Pearlstein is generally not prone to angry outbursts. He is a good columnist for the Washington Post. However, he has had enough of what has gone on. And he uses his column as a vehicle.

This month, health care reform is the issue talked about in town halls. However, these discussions are interrupted by astro-turf (fake grass roots) activists. They have disrupted these events and even, supposedly, threatened Members of Congress.

Pearlstein essentially decides to use his column as an attack. He opens by saying:

As a columnist who regularly dishes out sharp criticism, I try not to question the motives of people with whom I don't agree. Today, I'm going to step over that line.

The recent attacks by Republican leaders and their ideological fellow-travelers on the effort to reform the health-care system have been so misleading, so disingenuous, that they could only spring from a cynical effort to gain partisan political advantage. By poisoning the political well, they've given up any pretense of being the loyal opposition. They've become political terrorists, willing to say or do anything to prevent the country from reaching a consensus on one of its most serious domestic problems.

The column then goes through the facts and attempts to dispel them. The idea that there is no choice? Wrong. The hypocrisy of complaining about costs, but refusing any of the normal ideas of either decreasing utilization and/or unit price? Exposed.

But, I would argue that the most important paragraphs are Pearlstein's last ones. The words are particularly damning:

Health reform is a test of whether this country can function once again as a civil society -- whether we can trust ourselves to embrace the big, important changes that require everyone to give up something in order to make everyone better off. Republican leaders are eager to see us fail that test. We need to show them that no matter how many lies they tell or how many scare tactics they concoct, Americans will come together and get this done.

If health reform is to be anyone's Waterloo, let it be theirs.

The rhetoric and the development of this debate, and so much of our public policy is troubling. As I have stated before, the way has turned into a screaming match. Reasonable people have become unreasonable. Everyone is in it for himself. It is me and greed.

However, such narrow-minded individualism cannot work. It must be tempered by community and shared sacrifice. No society ever functioned in that manner. A democracy functions best when ideas are discussed with passion but rational bases, sort of a modification of the old marketplace of ideas. We talk; we compromise; we reach consensus. We do not scream. We recognize the opposing views and take it into consideration and seek to still occupy the same space. We do not drown each other out.

Should this debate end because of these disruptions, it says a lot about American Society. I fear too that we will also be unable to address other disasterous problems looming on the horizon or that we have not even conceived of yet.

Massachusetts Reforms Work!

Today, the Boston Globe has an editorial that seeks to rebut many of the claims about Massachusetts and set the facts straight. Instead of it being some parade of horribles, the Globe writes instead that:

The facts - according to the Massachusetts Taxpayers Foundation - are quite different. Its report this spring put the cost to the state taxpayer at about $88 million a year, less than four-tenths of 1 percent of the state budget of $27 billion. Yes, the state recently had to cut benefits for legal immigrants, and safety-net hospital Boston Medical Center has sued for higher state aid. But that is because the recession has cut state revenues, not because universal healthcare is a boondoggle. The main reason costs to the state have been well within expectations? More than half of all the previously uninsured got coverage by buying into their employers’ plans, not by opting for one of the state-subsidized plans.

...

Whether out of ignorance or convenience, all three bashers have it wrong. Unlike the Big Dig, health reform came in on time and under budget. It will be proportionately more expensive nationally to provide coverage for the uninsured than it has been here simply because the state began the task with a much lower rate of uninsured, 7 percent, compared with the US rate of 17 percent. But a national plan that relies, as Massachusetts’ does, on both government-subsidized insurance and a mandate on employers to offer insurance or pay a penalty (in Massachusetts’ case, a very small penalty) should be able to cover nearly everyone without busting the budget.

It is important to note too that the state has started trying to tackle the more complicated matter of cost containment. Now that everyone has a stake in the game, controlling costs may actually have more political power. The QCC has recommended changing how we pay for health care. There are also cost containment hearings run by the Division of Health Care Finance and Policy (DHCFP) where the Attorney General's Office (AGO) plays a role along with other stake holders to identify cost drivers and recommend policy to bend the curve.

Not everything will work, but perhaps now everyone, every citizen in Massachusetts, has a stake in making the system work, and that influences cost.

I just wish Beacon Hill would guide the discussions of health care on Capitol Hill and across the country.

P.S. Ezra Klein makes pretty much the same argument, I discovered after writing this. And, NPR has more coverage on the payment reform proposed by the QCC.

More Problems for the LDP

The NY Times has another interesting report out of Japan. The LDP is losing its grip on the countryside. That is a particular problem, because the party depends on the countryside for its power. Much of the factors that knit Japan together during the post-war era seem to be unraveling.

Of course, the Democratic Party of Japan, while an opposition party, has never governed. One will question whether they will have success in that endeavor. Japan must make some major structural changes not only economically, but politically as well.

I do not claim any expertise in this area, but I watch this matter with fascination.

Ghostwriting and Medical Journal Transparency

Today's NY Times article on Ghostwriting is concerning.

Essentially, the problem here is that Medical Science has seen a corruption. Review articles are often the way scientists in any field stay abrest of information. There are always communications of new breakthroughs, but reviews aggregate information (like this blog) and add some analysis.

Signing off on an article written by an industry takes pushing drugs to a new level. It distorts science. Furthermore, we no longer know what we can trust and what we cannot. Doctors are now completely lost.

I do not necessarily think PhRMA is the source of all evil. Their drugs are often useful. But, practices that distort basic knoweldge is quite egregious.

Paul Testa also provides a great analysis at New America's New Health Dialogue.

Corporate Rate Reduction

Professor Daniel Halperin has posted a working paper regarding corporate tax rates at the Tax Policy Center (full disclosure: I did help him with some of the research).

The abstract reads:

Since the statutory marginal U.S. income tax rate on corporate income is higher than the marginal rate imposed by all of our trading partners except Japan, there have been a number of proposals to reduce the U.S. marginal corporate rate. At the same time, it seems likely that the top individual rate will be increased. However, a differential between marginal corporate and individual rates could reduce the overall rate of tax on corporate distributions and enable higher-income taxpayers to shelter their income from services or investments. This paper suggests that we can mitigate these problems if the lower corporate rate is denied to income from services or passive investments and if there is always a second tax on distributed income. The latter requires reducing the step-up in basis at death and the deduction for charitable contributions by the amount of undistributed earnings to prevent taxpayers from permanently escaping tax on earnings retained in the corporation. Nonetheless lower corporate rates allow reinvested corporate profits to earn a permanent higher rate of return. Setting the combined individual and corporate rates on corporate distributions higher than the top individual rate offsets this advantage and also reduces the risk that corporations will be used to shelter income.

Halperin lays out the matter quite nicely. Corporate rate reduction can lead toward some strange arbitrage matters that a lawyer thinks about. While this matter has become the cats meow for economists, few think of how the code is structured.

Reducing the rate requires us then to think about these effects to prevent shell corporations for tax shelter purposes. The idea of looking ont only at the actual corporate income tax rate, but looking at distributiosn as well and comparing that to the individual rate makes sense. I do hope a few more policy makers read this article.

Financial Product Safety and Banks

I recently posted a lovely reference that Elizabeth Warren had regarding a Consumer Financial Protection Administration (CFPA). The goal would create an agency whose sole purpose was to regulate the safety of financial products. The idea is something I have supported. A mortgage or credit card can actually do more damage to your home or health than a toaster, and yet, we regulate the toaster more tightly.

However, community banks are in strong opposition to this. Felix Salmon actually discussed why they should not have such concerns. Quoting his post:

1. Small community banks are good at boring, simple banking — think the Bailey Building & Loan. That kind of activity should pass a CFPA audit without
   breaking a sweat. Conversely, a CFPA audit is akin to a tax on size and complexity — the more opaque a bank and its products, the harder it will be to persuade the CFPA that what it’s doing is good for consumers.


2. Small community banks compete with predatory lenders, and in extremis are forced into the gutter with them. The CFPA, by severely curtailing predatory activity, moves the battleground back onto the community lenders’ own turf. More generally, the CFPA will turn formerly-unregulated lenders into regulated financial institutions, which will help level the competitive playing field.


3. The CFPA is rightly prejudiced against yield spread premiums and other hidden ways of gouging consumers, such as putting prime customers into subprime loans. Small community banks don’t engage in such shenanigans. Meanwhile, community banks are really good at old-fashioned know-your-customer underwriting, which the big financial institutions find more or less impossible.

Now, James Kwak that sort of complexifies the first point. He states that community banks did get involved in some of these dangerous products. That said, they do have boring products for the most part, and would likely not have a problem.

The real concern most people have cited is the matter of regulatory capture. The small banks fear that the agency will become captured like many other agencies and thus favor the interests of the big banks they are supposed to police. Capture is a major concern, and it is often difficult to avoid. Large businesses have greater resources to spend. Large businesses are often better connected. Large businesses usually provide the information on the market to the regulator. Caputre is inherenlty hard to avoid, but a well-designed agency, as both Kwak and Salmon point to, definitely could help.

The other concern too arises from compliance costs. If the regulations are too difficult to meet, banks with just boring products could have trouble meeting the new requirements. It takes administrative resources to comply with these matters. This issue is often linked toward capture, as compliance costs are often used by larger players to keep out the smaller ones.

However, agian, design and careful oversight by Congress and people at large, plus an initial agent who understands these issues and sets up an institutional culture that balances these matters would help. Again, this is not some sort of weird luxury here. I do think that this needs to be done. We have to consider these concerns, but small banks should really join on the train here.

One State, Two States, Red States, Blue States

The Blogosphere has suddenly awakened with the sound of a Ross Douthat column. Mind you this message appeared in other conservative publications before, and now hits the mainstream media with this column, provoking my side, the liberals and progressives, into a a series of comments.

Douthat explains that when looking during this crisis we should look to red states, and holds Texas as the exemplar. Texas has weathered the economic crisis much better than blue states he argues, holding up California as the other end.

Normally, I think Douthat actually does say worthwhile things, and he writes a well-reasoned column. However, his facts are wrong.

First, Texas is a major oil producing state. Economies based on energy, while they to saw a downturn, have tended to weather this crisis well. California where the housing bubble burst soon after the tech bubble earlier in the decade burst definitely has those problems. New York of course is the center of the financial industry, and that has caused it some problems. Even Massachusetts, which actually has not seen the worst of it, has taken a hit because of the base of its economy in financial products and health care, though the latter really does cushion some of the blow. Likely if Texas had no oil, it would probably feel a bit more like its southern resource poor neighbors.

Second, there is little correlation between red states that voted for McCain and blue states that voted for Obama and various economic factors. That really does not help us out then in terms of trends. Texas, after all, is not the only low tax state, unregulated state. Others exist, mainly in the South.

Third, Texas does provide fewer services. The result, greater inequality, and quite high rates of poverty. You are more likely to be poor in Texas, and you are less likely to get any help. As the link also shows, Texas also is not the top state in terms of growth. I think such a combination then shows a picture that is less than rosy. Growth is not as hot as the conservatives would like you to think. However, inequality is quite big. If you are poor, do not expect any health care. Work three jobs? You still get no help.

Fourth, Texas for all the talk about its low tax life and the fact it has never seen a budget crisis, did actually see a budget crisis. Yes, it had no income tax. But, it did have property and sales taxes. A couple of years ago, if I remember correctly, there was a gaping hole in the budget, and surprisingly no one wanted to raise taxes. However, this went to education, and so legislators and Governor Rick Perry, who hates taxes and even tried to return federal stimulus money, crafted a plan to . . . raise taxes. Except, it did it by imposing a new tax, a franchise tax. It fit the old maxim of "don't tax you, don't tax me, tax the man behind the tree."

On the franchise tax, many tax policy people kind of liked it, including myself. It was a base broadening effort. However, one should remember that the tax arose because Texas needed revenue, or else it faced dire circumstances. Luckily franchises and certain types of partnerships did not pay tax, so they just asked them to pay their fair share, and thus kept the merchants happy without a sales tax increase. However, the effect was the same, the tax burden in Texas rose. That burden could continue to rise too.

Finally, California does spend significantly more on services. However, it too has a lot of business. As many of the links point out, it has an average tax burden. The fundamental problem of course is that California has a lot of spending that does not go to true programs, but rather weird little siphons as a result of propositions. It is unable to levy property taxes, that would actually help spread the burden out a bit more. While both states have weak governors, Texas's weird legislature actually has a history of moving things quickly. And it does not have the same weird 2/3 rules that California has.

So, what does this say about Texas? Well, I think it says that the idea is at least more complicated than many would like to believe.

Compact Aid in Health Reform

Compact Migrants, who are essentially like Legal Permanent Residents (LPRs) in status, will now receive federal funding for Medicaid. On the ground, at least, this has no change for the benefit package. What it does do is require the Federal Government, who entered into the treaty with the Pacific Island nations, to share the burden.

Again, it is a simple matter of policy, if we want the Compact for our military purposes as a forward stationing in the Pacific, we must give up something, and this overall, I think is a small price to pay.

Honolulu's Transit Matter

Honolulu seems well on its way to develop a rail transit system, even though tax revenues have fallen in light of the recession. The issue seems to always cause a deep amount of tsuris (pain and suffering) and angry comments. However, I think that new data supports the development of the system.

First off, anyone who has traveled to Honolulu knows that fast growing suburbs on the Western and Central parts of the island have only one road into and out of downtown, and that is the H-1 Interstate. The only way of course to expand the highway or build an alternate requires the use of eminent domain, and that is rife with its own political problems.

A study by the Economist, however, finds that the cost of parking in Downtown Honolulu exceeds that of most major American cities. Honolulu even exceeds places like Madrid and Paris. Given that people in Hawaii also pay significantly more for gasoline, have to sit on the H-1 for much longer than any comparable metropolitan area of its size, and pay significantly more for parking, transit makes sense. It will not reduce traffic, but it gives people an alternative in terms of both movement and price.

Polls, Statistics, and Stories

Polls have shown plummeting numbers for the popularity of President Obama, the economic situation, and the various health care proposals out there. Many have started to sound alarm at this matter. However, numbers may not tell the whole story.

Dan Balz last week had a story that examined behind the poll numbers. What is interesting is that a swell of positive feelings seems to appear when you dig deeper. The polls do not tell the whole story.

I am a quantitative person, but it is important as always to recognize the limits of statistics, polls, models, and other matters, because so much of the richness of human decisions and life lie in stories themselves that we cannot just boil down to simple numbers in easy to analyze questions.