Request line: Paging Dan Ruppel

Dear Dan:

What the hell is this all about? You know probably infinitely more than I do about Yemen, and as neocons across the political sphere start roiling up their war erections about this latest failed terrorist attack and the countries that need to suffer because of it, I figure we should probably all, you know, learn at least something about it.

Love,
David

PS: Shave your beard.

Unsurprisingly, I am not sanguine

Dave, your side is now in the hot seat. And, I guess, I will finally weigh in on “the most important piece of social legislation since the Social Security Act passed in the 1930s.”

I lament the death of the public option. Without it, the bill feels somewhat rudderless. Public subsidies to private industry are stupid and wasteful, and represent further rent-capture on the part of insurance companies. That having been said, I agree with Dave that momentum is not an inconsequential force in politics. I have no empirical basis from which to argue with the cost-projections made by the CBO, either, though it seems that it rests on more assumptions than hard evidence. If there was just some kind of sign that this process would continue to move forward, I would be a little more eager to pop the Moet. My feeling, however, is that the Democrats are completely platzed. It took everything they had to push this train wreck through and they didn’t start with much in the first place. Harry Reid, poor old sod, was in such a tizzy from exhaustion that at one point he even—if temporarily--voted against his own bill.

So I’ll come out and say it: I think that this bill is a mistake. I say that as a person for whom healthcare reform has an immediate and meaningful impact. My parents are in their 50’s and skirting the poverty line, so that healthcare is completely unavailable to them. I have no idea how generously they will be subsidized, but, at $13,000 for a family policy, it’d better be legendary or my family is gonna take a severe hit on this one.

After falling upon it with outrageous savagery, I’ve since warmed to the stance taken by This American Life in its pair of shows on reform. The problem in healthcare does not lie, I don’t think, in the structure of the insurance industry. The problem is in pricing, which means the problem is caused by doctors and hospitals. Case in point: the cost for a single scan by an MRI machine in Japan is US$98. In stark contrast, it's two grand a pop here in New York, as my mother was aghast to discover. This disparity is not due to the availability of MRI machines, though per capita Japan has slightly more MRIs than the US. It’s simply because per unit costs for MRIs are not as high in Japan as they are in the United States. Something in Japan curbs the Japanese healthcare industry’s rent-seeking and that is to the benefit of the consumer, and it isn't public insurance. The majority of healthcare spending is done by some 2,000 private entities, though there is a substantial contribution (31.7%) by the government--a share that is still far below the 42.9% of spending done by public agencies in the United States. Yet Japanese healthcare is cheaper.

The Netherlands is exceptional in that it has a completely privatized healthcare system, as I've mentioned before. Premiums average US$300 a month. Again, this could only be possible if the per unit cost of healthcare services was low, so that insurance companies would have no need to charge outlandish premiums. Once more, something exists there to curb the rent-seeking of healthcare providers, and it does so regardless of the for-profit structure of the Dutch insurance industry.

It’s no secret that I am not a fan of privatization. I would prefer public provision of insurance, if only because it would be responsive to legislative, rather than market, pressures. Public power has the ability to distribute losses and gains in a socially beneficial manner. A public institution can operate without making a profit, or even at a loss, and thus can ensure the wide and equitable availability of strictly economically inefficient public goods (such as health) to the greatest number of citizens. That, to me, seems more compatible with the stated aims of democracy than the shareholder-driven incentives of private limited-liability concerns.

That having been said, in the United States, where the public soil has been so irradiated by ignorance and meritriciousness, you have to be a pragmatist if you want anything of worth to grow. Maybe we do like the Dutch, and have a privatized healthcare system. As the Netherlands demonstrates, that’s not incompatible with the goals of universal provision and low costs. The key is to control prices. And that’s exactly why this bill is a wash: it does nothing to shift the power to set prices to the government.

Every single healthcare system worth a damn on this green earth has an agency that sets prices: every single one. Whether in systems with high participation by the private sector (Switzerland, the Netherlands, Japan), a balance between the two (Germany) or low to non-existent private competition (France, England), there is always a public price-setting authority. The extent to which each national regimen exercises this power varies. Drugs are almost always price-controlled, but services, such as MRIs, may be the prerogative of individual suppliers. Regardless of national idiosyncracies, rent-seeking behavior under all of these healthcare systems is severely circumscribed by the public power to fix prices. The government, in effect, sets the absolute limit on the profitability of healthcare providers, and they work within that range. They are subordinate to the legislature, and to public goals in healthcare provision.

And why should governments set prices? Isn’t price-fixing horrendously inefficient? What about lines at gas stations in the 70’s or queues at Soviet stores? The proper response to these oft-trotted out tropes is that price fixing only leads to deadweight loss (the difference between quantity supplied and quantity demanded) if the conditions of perfect competition hold: that is, if no provider has the power to influence the price of a good and if markets clear immediately i.e. prices and quantity supplied change based on exogenous and endogenous movements of supply and demand. Healthcare services, however, always and everywhere do not obey these rules (actually, you’d be hard pressed to find many industries that do, but that’s a whole different subject). The healthcare industry is, I would say, much more appropriately approximated by the model of monopolistic competition.

Monopolistic competition is usually explained, and only briefly, in my experience, as its very existence makes many mainstream economists squirm, as occurring in sectors of the economy that are influenced by geography. The restaurant business is the example that was most often cited to me. Restaurants provide a broadly similar service—food—and there are many suppliers in any given market, but, in their pricing patterns, they do not obey the rules of perfect competition—prices do not trend towards equilibrium. The reason for that is that geography is an extremely important factor when one makes the decision of what restaurant to eat at. We don’t get a list of every pasta and burger joint in the metro area, compare prices, and then go with the one that’s cheapest. I’m not gonna take the 6 to Parkchester just because I know that gyros are a dollar less than they are around the corner from me. We accept to some degree price-setting behavior by suppliers because there’s a non-monetary residual in our choice-making: convenience.

Hospitals are like restaurants. I may know that a hospital in Trenton will charge $2100 to fix my broken army, as opposed to St. Vincent’s, across town, which will charge $2500. That will not affect my choice to go to St. Vincent’s in the slightest if it’s a block away from me when my bone snaps. Doctors and hospitals are naturally monopolistic because location is important to consumers of their services. This fact is only exacerbated in the United States where, through their aggressive rent-seeking behavior, they have gained even greater influence over prices. This American Life singled out hospital groups as being some of the most powerful actors in American healthcare, and they were right to do so. In effect, hospital groups combine many local monopolies into one gigantic regional monopoly. Knowing that demand for healthcare services is highly dependent on geography, and on trust (we like seeing the doctors we know), a hospital group has nearly free reign in choosing what to charge its customers for enormous swathes of America. It isn’t a stretch to think that insurance companies, wanting to retain their paying customer base, and knowing that their customers consistently demand services from certain hospitals, will cave into that hospital’s—or group of hospitals’—demands.

This systemic imbalance could easily be solved by a single-payer system, of course. No hospital would be powerful enough to argue with the federal government. But we’re nowhere near single-payer, and, if we really want to reform healthcare in a meaningful, i.e. cost-reducing way, we have to attack those who set prices first, and only then move on to the secondary industries that respond to those prices. I already said in my previous post on This American Life’s healthcare special that acknowledging the negative impact of doctor and hospitals on cost-control does not imply that the insurance industry is thereby excoriated. Private insurance companies are grossly inefficient: in effect, all they manage to do is pass on the effects of obese rent-capture by hospitals to consumers with a 5-10% mark-up for themselves. But by focusing solely on them, we constrain our ability to lower prices by a maximum of 10%. If we set our sights on the price setters, we could achieve real savings in healthcare, the kind of savings—say 30-50%--that could make healthcare work. And, by reducing the economic power of one sector of the economy, we’d correspondingly reduce its political power and therefore its future ability to alter the legislative status quo to protect its inequitable share of national rents.

I’m afraid that, in this bill, all I see is a lot more faucets for the bad guys to drink from. Ben, you did a commendable job in trolling through the CBO’s report and it’s clear from your post that there is some reason to think that prices will at the very least be stabilized, if not, for the large group market, decreased. The kind of savings that are being projected are such a drop in the bucket, though, that I just don’t feel any rush of enthusiasm. The fact remain that American healthcare is outlandishly expensive, and that cannot be solved by targeting the insurance industry. Do we content ourselves with plugging the hole with public subsidies for an indefinite period of time? Unless some meaningful reform comes out of this process it just, to my mind, will be a whole new headache down the road.

To Be Fair, This Was Probably The First Time

I've heard that it takes a big man to admit when he is in the wrong. And so doing my best impression of a big man, I will admit once again that I was indeed mistaken, incorrect, blind to reason, or, with the humble clarity of Alan Greenspan, "I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak." Except unlike Greenspan, I actually mean it. So to speak.

In the comment I left on Dave's first post written on the subject of my incontrovertible wrongness, I wrote the following (and yes, I am not only stooping to pull a quote from the comment thread of this blog, but my very own): "My reason I objected to the bill [sic], both in political and policy terms, was that I assumed it would not work as promised." Which I realize is a bit like offering as an excuse, "I know that I was wrong, but to be fair, I was making incorrect assumptions." And with a grammatical typo to boot.

The point I was trying to make however is that I wrote that first blog post without having seen the CBO evaluation of the bill, or Nate Silver's evaluation of their evaluation, or anything resembling reasonably concrete estimates of any kind. Which was of course very unprofessional of me. But more importantly, what I am laboring to say is that my reaction to the bill was based solely on what I read about its contents. And though I am no expert on health care economics or policy, I concluded from a purely deductive approach (uniformed, if you want to be a dick about it, but since the dickishness is all mine, let's say a priori) that there was no way, no-how that this bill would be able to put any downward pressure on premiums and would most likely do just opposite.

But according to the CBO (and notable angry internet number cruncher, Nate Silver) that is 100% objectively incorrect. "But I still don't really get it," I wrote. "How do premiums and overall costs get reduced without a) more competition or b) stricter regulations?" And I wrote that not as a way to deflect the fact that I was wrong, but because I was and continue to be legitimately puzzled. The numbers themselves, as graphically presented in Dave's post below, provide incontrovertible proof (unless you want to argue with the methodology of the CBO, which I do not) that America looks less screwed with the bill than without.

I arrived late to the number party, but now that I've finally shown up, better late than never, I'm curious where the numbers come from. Because think about it as if you didn't know better: the mandate assures that the insurance industry has a captive market (if demand for health insurance wasn't inelastic before 2014, it sure as hell will be after), restrictions on anti-consumer activity will force insurance companies to accept higher costs and, there is no longer a single public entity that can increase competition at the national level--how do premiums not shoot through the roof?

I've tried my best to read through the CBO report on the Senate bill's affect on premiums. Or at least, through as much as my attention span would carry me. Here is what it says about premiums in general:

In general, the premium for a health insurance policy equals the average amount that an insurer expects to pay for services covered under the plan plus a loading factor that reflects the insurer’s administrative expenses and overhead (including any taxes or fees paid to the government) and profits (for private plans).
[...]
Although the factors affecting premiums are complex and interrelated—and thus can be difficult to disentangle—this analysis groups the effects of the proposal on premiums into three broad categories:

• Differences in the amount of insurance coverage purchased
• Differences in the price of a given amount of insurance coverage for a given group of enrollees, and
• Differences in the types of people who obtain coverage in each insurance market.

The most popular and, at least for me, obvious issue here is that of market concentration. The public option was supposed to increase competition, and the absence of a viable replacement (though as I understand it now, licensed non-profits are permitted by the bill to operate on a national level) seemed to many, myself included, like the removal of a vital restriction on premiums. The issue of competition is opaquely categorized under the second category "Differences in the price of given amount of etcera." And what struck me is how minimal a factor it is assumed to be under the CBO analysis. So called "rents" or, to use an inconvenient term, "premiums," higher prices derived simply from the fact that consumers don't have many other options in a particular market, are implicitly considered, but are not given much weight.

But that doesn't mean that the report dismisses the issue entirely. It should also first be noted that, again according to the CBO, the establishment of an exchange itself, which gives consumers the ability to compare the various health insurance plans available to them side by side, in which information would at long last be centralized and its presentation standardized, and in which the administrator of the exchange (the government) has ability to curtail abusive practices, namely sudden premium increases, will, with or without a public option, increase competition and therefore both lower cost and perhaps improve quality.

So yes, competition does seem to play a role in reducing premiums, but not by much. Why? As far as I can tell, that isn't explained in this particular CBO report. As many of you may recall, Uwe Reinhardt had his particular explanation. But easy explanations aside, I suppose it may just be an empirical fact:

[T]he authors [Leemore Dafny, Mark Duggan and Subramaniam Ramanarayanan]

then considered the specific impact of the 1999 merger of two insurance industry giants, Aetna and Prudential Healthcare. The two insurers were active in most local markets, but their share of the markets varied significantly in different areas. They find that after the merger, premiums increased in accordance with the overlap of market share. Extrapolating from that result, the researchers estimate that consolidation increased premiums "in a typical market" by 2.1 percent. "Our results confirm that Americans are indeed paying a premium on their premiums," the authors conclude. "However, consolidation explains very little of the steep increase in health insurance premiums in recent years. While 2.1 percent is large in absolute terms -- and large relative to industry profits -- "it pales in comparison to the doubling in real premiums for our sample during the same 1998-2006 time period."

So evidently, at least below a certain threshold I would imagine, market concentration doesn't exert a major impact on prices--at least not one like the do-or-die proponents of the public option insist exists.

Moving on to the issue of the mandate, this is only discussed in terms of how it will reduce and not raise premiums. According to the report, the mandate will draw in predominantly those who occupy the venn-diagram of people who explicitly choose to go without health insurance and people who are not covered by their employer, rather than, as I assumed, those who have otherwise been excluded from the market for financial or health reasons. This first group described by the CBO report is made up disproportionately of young people, who in turn are disproportionately healthier and thus less likely to incur major medical costs, as opposed to the excluded second group mentioned above, those whom I assumed would be making up the bulk of the new insurance industry customer base, who are in opposition to the first, very high-risk. Additionally, it is also stated by the report that the influx of the 30-40 million insurance customers will increase slightly the economies of scale at the disposal of certain insurance companies. Both these factors should reduce premiums if they affect them at all.

Lastly, there is the issue of certain prohibitions and restrictions on current anti-consumer cost-saving measures used by the insurance companies, namely recision and discrimination from coverage based on risk. Without concurrent premium controls of some kind, I had assumed, the logical result would be higher household health care costs, either in the form of higher premiums, lower quality care, higher deductibles, high co-pays, etc.*

In some respects, the CBO report agrees (imagine my surprise). For "nongroup" purchasers of healthcare specifically (individual buyers who don't get their insurance through their jobs), the mandated higher standard of coverage** would indeed increase premiums: "premiums would have to increase to cover the resulting costs."

On the other hand, this requirement would evidently have very little affect on so-called "group" markets, both small and large, since those basic standards of coverage are usually met anyway when insurance is purchased en masse by an employer. In addition, administrative costs can also be expected to decline, according to the report, since a higher degree of standardization will limit the legal, claim review, and other costs required to implement discriminatory care of this kind. I would assume, however, (though this isn't stated either way in the report and as mentioned above, my deductive thinking has been flawed lately) that the savings achieved by this latter effect (the standardization of plans) won't completely offset the higher costs incurred by the insurer in covering the other-wise excluded group of elderly diabetics (costs that are presumably transferred at least in part to the customer); if that were the case (if it were the case that the insurance companies spent more on risk-mitigating administrative costs than they saved through exclusion of coverage as a way of mitigating that risk) those companies would presumably have standardized contracts on their own as a practical cost-cutting measure.

On the other hand, and to come back to a previous point, some of the net cost increases incurred by insurance companies forced into offering standardized, non-exclusionary contracts would be absorbed by the influx of those same young folks alluded to above (that's people like us by the way), who will enter the individual market and make that particular risk pool a little less risky than it otherwise would be, thus offsetting at least in part the sickly geezers.

I should maybe take this moment to point out the obvious: from the perspective of many individual buyers, this whole discussion is moot. As Dave pointed out, the subsidies provided under the Senate bill are fairly generous, with those at up to 400% of the poverty line receiving some kind of assistance, and so for households, the price tag will be lower regardless. That means less bankruptcy, less medical debt, and less overall misery. I am usually anti-misery. But as explained in the CBO report, the total cost (the sum cost for the insured individual plus that absorbed by the provider plus the subsidies) will decline or remain about the same everywhere except in the much smaller individual market (up to a -3% decline for the "large group" market, between +1 and -2% change for the "small group" market, and a 10-13% increase for the 57% subsidized nongroup market).***

So there it all is: how you get lower or constant premium prices without a comprehensive and easily understood approach (e.g. the public option). Factors cited in the overall analysis include increased competition resulting from the creation of the exchange, largely cost-reducing externalities resulting from the mandate, increased economies of scale, reduced administrative costs through standardization, and the taxation of higher cost plans.

My overall impression is the following: the bill recognizes (or at least implies the Senatorial perception) that the bulk of the problem with American health insurance is in the relatively small nongroup market. As philosophically flawed as employer-based health insurance might be, those who get insurance from where they work receive on average pretty good healthcare. The bill therefore has very little affect on the group market premiums, though the affect that it does exert seems to be largely downward. The market that is seriously affected, the nongroup market, will consequently see its premiums increase. But along with that increase comes an enormous improvement in quality of coverage (in terms of transparency and stability certainly) and a boatload of subsidies. Because the nongroup market represents such a small (though under the bill expanded) portion of the entire market, those subsidies can, according to the larger CBO assessment, be paid for and them some with the revenue acquired through exchange participation fees, taxes on certain plans, penalties on non-participants, and fat shaved off Medicare and elsewhere. The larger fiscal issue wasn't really what I was looking at in this post, but I thought I should mention all that if for nothing else than logical continuity.

This is all getting a little complicated, I realize, and forgive me for all the details. If there was a single provision in the bill that I could point to and declare, "That is what I missed all along!" I would do so. But fundamentally I think it was the lack of elegance to Senate's solution that led me to assume from the get go that the whole endeavor was, as I put it in my previous post, "horseshit." Without a satisfying single cost-reducing mechanism, it was hard for me to understand how a series of piece-meal reforms could really stand in the way of that generational trend, premium inflation. I suspect that this is the reason that so many people on the left assume the bill can't work. Big glaring problems call for big glaring solutions.

But at a certain point, and I suspect that this point comes when the vast majority of experts have crunched the numbers and demonstrated beyond a reasonable non-conspiratorial doubt that there is a flaw in the model that you perceived is the critical functioning structure that defines how the world works, so to speak, it's probably best to concede the point.

So, having satisfied myself, I happily concede the point.

*I should also admit here that I certainly overstated (out of ignorance, not bad faith) the lack of regulation regarding premium that I expected to result from a ban on discriminatory coverage. As the report explains on page 13: "Administrative costs would be reduced slightly by the general prohibition on medical underwriting, which is the practice of varying premiums or coverage terms to reflect the applicant’s health status; nongroup insurers incur some administrative costs to implement underwriting." (emphasis added)

**Page 1: "Policies would have to cover a specified set of services and to have an “actuarial value” of at least 60 percent (meaning that the plan would, on average, pay that share of the costs of providing covered services to a representative set of enrollees). In addition, insurers would have to accept all applicants during an annual open-enrollment period, and insurers could not limit coverage for preexisting medical conditions."

***These estimates were made before the exclusion of the public option, but as is explained on page 15 of the report: "the provisions regarding a public plan would not have a substantial effect on the average premiums paid in the exchanges."

The choice

From Igor Volsky.

Don't kill the bill!

I wrote a brief response to Ben's anti-HCR post in the comments but I wanted to expand on it a little, because this may be one of the first instances in like a year when there has been much of any daylight between my opinions and those of someone else on this blog. Also, this may be the most important bill the Democratic party has put forward in decades, and I think the kill-the-bill folks are not really taking a sound, reasoned, long-term view. And for the most part, I will stick to the political calculation, because the policy is a) fairly murky and b) still really unknown to us, as the bill still needs to go through reconciliation. Ben's policy objections to the bill are based on the premise that the bill will force people to purchase insurance, only to face hiked-up rates and eventual bankruptcy as a result. My response to this is as follows: Nate Silver, as well as this this but basically most things Ezra Klein has said.

The Obama administration, to the degree that it can actually influence the design and scope of legislation, is focused on a few more big-ticket items: a jobs bill, financial regulation reform, and some kind of cap-and-trade system. These are all "progressive" things, in that each bill is hoping to change something that I assume we would all agree is bad in order to replace it with something better. And in each case, they will require near-Herculean efforts by the Democrats to pass. It's just a simple reality of our times that the Republicans have no real interest in assisting in anything the Democrats do, even if they may privately believe that these efforts are worthwhile. This strategy worked in 1994, and the GOP is betting it will work again.

Now, each of these bills will be difficult to pass. You know what would make them even harder to pass? Killing a bill that's been in the works for 7 months because it doesn't go far enough on an issue that one could and should arguably go very far on. Momentum is a very real thing in politics, and at the end of the day the only way to build momentum is to get results. Pass this bill and move on to the next, and things may just get a little easier. In the long-term, a legislatively successful progressive movement will only develop in America if it produces, you know, actual bills. If the Democrat collapse in a pile of idiocy in the next couple of weeks and the bill fades away, what kind of message does it send the public about the governing abilities of the Democratic party?

Ben's counter-argument here is that if the bill actually worsens the health care situation, then it will have precisely the opposite effect I'm outlining above. Americans will get angrier, the overall progressive legislative agenda will atrophy, and we'll lose our chance to convince the country that progressive policies are both sane and good for the country. This, of course, assumes the American public will suffer as a result of the bill: in reality, most Americans will remain unaffected. The 30 million who get health insurance and a chunk of generous subsidies as a result will be pretty happy, those with insurance already will start getting subsidies as well, and Medicare will stay the same. And let's be honest: after the bill passes, it's unlikely that the Republicans will be able to make much political hay out of it, even if it does the opposite of what the OMB says it will and bankrupts a number of already poor Americans - a still-bad health care environment in 2014 would really only make it clear that more government involvement (in the form of a public option) would be necessary. Think about it: could Republicans really argue that deregulation or a reduction in government subsidies would fix that kind of system? While I've already been convinced that this scenario is highly unlikely (in other words, I think the bill will do what the OMB says it will), even if things do head down this path I don't know how Republicans could do much of anything with it.

So the choice, as I see it now, is as follows: fight and destroy this bill, which is certainly something progressives could do very easily (not without political cost, but it wouldn't be procedurally difficult), or suck it up, accept the realities of American politics, and gear up for the next fight. One option guarantees the demise of the progressive movement as a potential force in Washington, squandering an opportunity that's been decades in the making. The other option means accepting that, at this moment in time, we can't get what we want, but we can still help a lot of people who really need it.

UPDATE:
Two additional pieces of data:
1. The individual mandate, the requirement that insurance is legally required for every individual, is waivable on a state-by-state basis if the state can meet cost containment as efficiently as the mandate is supposed to. In other words, if the individual mandate turns out to do what Ben speculates it might, then states will not have a hard time abandoning it.
2. The senate bill denies insurance companies the ability to cap or limit the amount of money a customer receives for medical expenses on a yearly or lifetime basis. This is actually a case of, as Jonathan Cohn notes, progressive pressure succeeding. Insurance companies will be benefiting from the individual mandate in terms of their customer base but they're probably not salivating over the notion of losing both rescission and their ability to cap.

Kill the Bill!

I don't know how the Republicans do it. Sure, as an opposition party they've had little more to do this year than periodically consult the “Fuck Off” section of the thesaurus, but even when they were charged with the task of actually running the government not so very long ago, they made this whole business of policy-making look pretty easy. With the efficiency of a lightly regulated market, they were able to turn both chambers of Congress into well-oiled factories of catastrophic legislation. Even taking into account their post-midterm attempt at Social Security, I can't think of any major piece of legislation, 2000-2008, that made the party that particular party in power look quite so inept, divided, and easily manipulated as the Democrats look right about now as they squabble over the remaining uncompromisable remains of the healthcare bill. And this is still Obama's first year. And in principal, we have 60 senators.

That isn't to say that I do not understand the current dilemma. Progressives, Liberals, the remaining wing of the Democrat Party that has not yet disgraced itself—whatever you'd like to call the political community that wants to see meaningful reform of the American health system pass—is divided between those that have by now completely worn out the expression about the perfect being the enemy of the good and those that scratch their heads wondering where this allusive “good” might be found.

One of the easy things about being a progressive spectator of American politics, and something that usually leaves matters uncomplicated for lazy and relatively uncreative political minds such as mine, is that it is usually very easy to discern which is the right side of a debate with a cursory glance at the roster of pundits and politicians on either side. If you find yourself in the company of mustache-twirling oligarchs and the clinically retarded, you're conclusions may need rethinking.

But this debate is different. On the side of the self-proclaimed realists sit, to name a few, Paul Krugman, Ezra Kline, and Congressman Anthony Weiner. Occupying the not-good-enough camp, on the other hand, stand the likes of Howard Dean and Wendell Potter. These are all people with whom I usually agree and, in any event, respect enough to entertain their ideas. And so, before justifying my own thinking on this issue, I'll provide the caveat that I have by no means heard, listened to, or watched all the available analysis, that my mind is open to the notion of its own analytical shortcomings, and that, it goes without saying, I would love to hear what everyone has to say either in response to this post specifically or on the topic in general.

Having said all of that, I think the bill is horseshit. On Thursday, Paul Krugman wrote the following:

At its core, the bill would do two things. First, it would prohibit discrimination by insurance companies on the basis of medical condition or history: Americans could no longer be denied health insurance because of a pre-existing condition, or have their insurance canceled when they get sick. Second, the bill would provide substantial financial aid to those who don’t get insurance through their employers, as well as tax breaks for small employers that do provide insurance. (NYT)

Let me address the first point. As I'm sure many of you have already read, while outright discrimination from coverage of the elderly and those with preexisting conditions is indeed banned (and a big hurrah for that), insurance companies will not be prohibited from charging exorbitant rates to compensate themselves for the mandated assumption of that additional risk. This much should seem obvious: force a company to provide a good or service that it refuses to otherwise provide and, in the absence of additional competition or sufficient regulation, that company will demand a higher price. And while I may be overstating the point in this case (there are caps on how much a given insurance company can charge older patients and patients with certain common pre-existing conditions), at 300% and 50% above the average respectively, these provisions do not at first glance seem tight enough to prevent an ever-increasing number of high-risk American from falling into bankruptcy and poverty.

On Krugman's second point, the issue of financial assistance strikes me as a kind of band-aid over a fundamentally flawed and unsustainable system. Rather than the government providing health insurance directly to the public or at least making a government-sponsored option of some kind available to those who wish to buy-in, the best the bill has to offer is that it will spend hundreds of millions of dollars of tax revenue in order to help the uninsured purchase coverage at higher, private-sector prices. In doing so, the government will be spending more money on less (and certainly less reliable) coverage, a substantial portion of which will end up as private profit, rather than supplying the insurance directly at the lower prices that not any non-profit institution, but the biggest one around, would be able to provide. Don't get me wrong, I am glad that financial aid is included in the bill. But the fact that it needs to be included at all—that a bulk of the American population will not be able to buy insurance themselves and that there will be no government option made available to them—strikes me as a reason to reject and not endorse the bill.

Most insulting of all is the argument that with the mandate to purchase coverage, the United States will for the first time and at long last achieve universal healthcare. I don't think I need to elaborate on this point except to say that delivering a captive market to an increasingly concentrated industry without providing additional competition (and in some cases provoking further concentration) or price restrictions is not what most advocates of universal coverage had in mind.

As I see things, the strongest argument that supporters of the bill in its current form offer is a political one. Bernie Sanders made the case on Countdown the other night:

We’ve all got to deal with the reality that if this bill goes down, what does it mean politically in this country. When is the next time legislation is going to come up which will increase health care reform for 30 million people, provide insurance, deal with some of the major abuses in terms of pre-existing conditions. (ThinkProgress)

On a similar note, Krugman draws the familiar analogy to messy conception of Social Security:

Thus Social Security originally had huge gaps in coverage — and a majority of African-Americans, in particular, fell through those gaps. But it was improved over time, and it’s now the bedrock of retirement stability for the vast majority of Americans.

I understand, even sympathize, with this point of view. Legislative imperfection ought to be tolerated if it means getting a foot in the door. But based on my reading of the bill, the analogy is inappropriate. As awful as racial discrimination obviously is, the failure to provide black Americans with social insurance did not contradict or undermine the stated purpose of the institution of Social Security as a whole. The basic function of Social Security is to deduct contributions from the wages of current workers to pay the entitlements of the retired. That this mechanism was initially only available to white Americans is morally inexcusable, but from either a political or practical perspective, that exemption did not undermine the solvency or effectiveness of the system for its participants.

My worry is that in passing a bill that expands coverage without providing a release valve on either household costs (with increased competition of some kind, pricing caps on providers, or strict premium guidelines) or long-term debt growth (changing the way which Medicare pays for care, allowing younger and statistically less risky American to buy-into a government program), the Democrats will not only produce a piece of legislation that fails to adequately address (and perhaps exacerbates) many of the ills of the American healthcare system, they will undermine the credibility of the entire party and of all those who call for healthcare reform in the future. In other words, bad policy will translate into bad politics which, of course, means worse policy. I worry that this bill will not be a necessary baby-step in the right direction, but a substantial leap backwards.

Everything I've said so far strikes me as obvious, but then again, ideas tend to seem perfectly rational and well-thought out when they're coming out of your own mouth. And so here's to hoping that I am wrong, that I'm missing a key aspect of the legislation, that the Democratic Party really is on the verge of passing something great, and that Obama, who has all along seemed so deliberately fixated on snatching back meaningless legislation from the jaws of reform, is actually half the statesman he promised to be in 2008.

Preteen pillows are a gateway drug

None of what Roger Cohen says in this short Times piece on Japan is novel. What I like about it is that it turns out to be a very intelligent way to summarize a lot of old but still relevant analysis.

As Patrick Smith puts it in “Japan: A Reinterpretation,” to be “an otaku is merely the final word in private individuality. It is to reject anyone who would diminish the protected ego and to acknowledge an inability to achieve the intimacy of authentic human contact.”

...

My sense is that four factors have contributed to this: wealth, postmodernism, conformism and despair. Japan is rich enough, bored enough with national ambition, strait-jacketed enough and gloomy enough to find immense attraction in playful escapism and quirky obsession.

Alright, the first part of that is a quote taken from another writer, but it's smartly chosen. And, along with the four points that follow, he hits the nail right on the head. We all were born too late to think of Japan in optimistic terms. What has really characterized it in our lifetimes has been an extremely peculiar, and tenacious, malaise. Even as external debt has grown in excess of 200% of GDP, with GDP itself declining in both real and nominal terms, Japan has pushed the envelope of the fantastic and the grotesque to Herculean maxima. The worse their passivity has made things, the more passive they've sought to become.

What Cohen identifies in his piece, and what is idiosyncratic to the Japanese, is how circumscribed their escapism is. It's not that they've begun jumping ship in droves; emigration from Japan is so negligible as to be statistically insignificant. They stay safely onboard even as water steadily rises from the lower decks. I imagine them stowed away in the darkest part of the hold, laid out in neat rows, all eyes focused on a single screen. There, they watch a collection of pictures replayed in endless success, pictures of themselves crowded into lifeboats or leaping into the sea.

Remember Suicide Club? I know that the Japanese do kill themselves more than most folk, and so maybe it's a subject less taken up by analogue realities, but for how many people would a movie like that have been exactly what they'd never have the courage to reify? By comparison, could you imagine there being a large enough market in North America for a movie with little more to it than an endless number of high schools offing themselves in an exponential cascade of ghastliness? Somebody fronted the money believing there'd be mass appeal in the message.

The disastrous thing about escapism is that is, if paradoxically so, nevertheless an engine of conformity. Indulgence in fantasy protects us from making the much more difficult decision to resist or defy social conventions. The Japanese have not lost their reputation for an obsessive adherence to the rules, even as they've become notorious for the bizarre and revolting in controlled mediums such as films. The malaise has, with the aid of technology (according to Cohen), pushed everyone inward, leaving intact a regime of rigid external normality. There is then a feedback effect: as the status quo continues to go unchallenged, more people choose to retreat, until real resistance is, as it is now, unheard of.

The moral of Cohen story is that we're all headed in the same direction, thanks to our own techno-fetishism. Since we lack the same time-worn institutions of social etiquette as the Japanese, and because our national project hasn't (or hadn't, before last September) been derailed in the same loud and obvious way, a strong antithesis against which to contrast our mechanical obsessions has been less apparent. We nevertheless are prone to committing the same fallacy and ending up in much the same position. It's not necessarily a new or controversial message, I'll admit. Still, in the light of Japan's stale emiseration, the need to bear it in mind feels acute.

In the Spirit of Copenhagen: A Disappointing and Poorly Organized Post

So much for good timing.

I had hoped to write this blog post, my very first from this side of the international dateline, against the back drop of the Copenhagen Summit. It behooved me, I thought, in breaking my short hiatus from The Chorography to write something, if of not superior quality than at least with a degree of topicality. This blog, I had planned to note, has so far spilt very little of its proverbial ink on the topic of climate change. Maybe, I was then going to ponder, this is a reflection of that issue's lack of ambiguity (at least within this group). Or maybe with people like Bono parading around Africa in aviators and playing a poor man's Thomas Friedman for the New York Times, to even broach the topic (and on a blog of twenty-somethings no less) would be to risk cliche-ridden didacticism and embarrassing predictability and a comment section left forever empty, the blogospheric equivalent of a cleared cafeteria table. Or maybe, I was going to conclude my extensively thought-out and unnecessarily longwinded introduction, we as a group just aren't particularly interested in the topic. And then, at long last, I would lay out an undoubtedly clever segue into my actual point.

But it looks like, at least for the time being, I can skip all of that. As you've probably all read by now, the summit has been suspended and may very well be on the way to a formally acknowledged, Robert's Rules of Order sanctioned collapse. If even the most cynically pessimistic of you are disappointed by the fact that the governments of the world can't even agree on what will and will not be discussed at a conference on a topic as monumentally important as this one, imagine how disappointed I am at the loss of an awesome lead-in.

So, of less and less relevance by the hour, here are some people arguing on the internet about cap and trade.

Last week, the well known climatologist James Hansen wrote an opinion piece for the New York Times laying out the case (or at least, his case) against CAP. Send in the blockquotes:

Because cap and trade is enforced through the selling and trading of permits, it actually perpetuates the pollution it is supposed to eliminate. If every polluter’s emissions fell below the incrementally lowered cap, then the price of pollution credits would collapse and the economic rationale to keep reducing pollution would disappear. (NYT)

There are many convincing arguments that can be made in opposition to cap and trade. If I understand Jansen correctly, his would not one of them. The point of a cap and trade regime (or at least, half the point) is that there is a cap. "[T]he economic rationale to keep reducing pollution...disappear[s]" for only as long as polluters are emitting under the cap. Once the cap is reached, prices begin to climb (if not long before that). In terms of the overall emissions, this really isn't that different a concept than simply setting a restriction on all carbon pollution. That a price mechanism is involved doesn't change that the fixed quantity remains a fixed quantity.

More convincing are those arguments made by Jansen (and others; a more entertaining presentation of this side of the argument comes from Annie Leonard. Here's a link*) that current proposals (Waxman-Markey) are full of political give-aways that effectively neuter the intent of the bill. And I tend to agree. With permit give-aways, rather than a permit auction, and offset provisions, it does seem likely that a lot of carbon will find a way to seep through those loopholes.

What I don't understand however is how both Jansen and Leonard can use the failings of a particular bill to condemn the entire concept in all of its manifestations. I suppose they may believe that the concept of CAT itself is inherently susceptible to political manipulation, but how is that so different from carbon tax, the most commonly suggested policy alternative?**

Peter Dorman takes up this issue in particular (as a part of an extensive and readable defense of cap and trade over at Econospeak):

A comparison between a nasty, highly compromised carbon cap and a pure, hypothetical carbon tax is meaningless. Once the carbon lobby gets its hands on a tax, the picture will be just as ugly. You can bet that whole industries will be exempted from the tax. You will be able to dodge the tax by making contributions to tree-planting or some other activity across the globe (offsets). The tax revenues will go into the same special interest trough that permit revenues have trickled into. And of course the tax will be much, much too low.

For his part on the other side of the Op-Ed page, Paul Krugman takes the Jansen article to task. With more optimism then most, he writes that even a cap and trade, as "nasty" and "highly compromised" as the one from the House, is better than the political alternative, which he assumes perhaps correctly to be nothing.

For here’s the way it is: we have a real chance of getting a serious cap and trade program in place within a year or two. We have no chance of getting a carbon tax for the foreseeable future. It’s just destructive to denounce the program we can actually get — a program that won’t be perfect, won’t be enough, but can be made increasingly effective over time — in favor of something that can’t possibly happen in time to avoid disaster. (NYT)

Most of the advantages Krugman identifies in a CAP system have very little to do with its economic or environmental merits, but its political palatability. On the economics, Krugman tries to make the point that Jansen doesn't really understand what he's talking, that the entire theoretical argument is irrelevant, because in principal a fixed price for carbon (a tax) and a fixed quantity of carbon (a cap) have the same economic affect. In principal.

What this ignores is that econometrically speaking, there is enormous uncertainty about how our national (to say nothing of the global) economy will react to a particular restriction on carbon emissions. If, for example, carbon reductions of any amount will come at an extremely high cost, an absolute cap at any amount below the current emissions trendline will produce equally high permit prices. If, on the other hand, those first marginal reductions come at a very low price (that is, it really is just a matter of insulating your warehouse and buying a few scrubbers) a cap just below the trendline will lead to very modest prices. And so, in the case of uncertainty, the same cap may correspond to two very different hypothetical tax rates. So in principal, the two regimes may be the same, but in principal only.

So far all the participants in the argument above have been operating under the assumption that, to paraphrase Al Gore, the issue of climate change is fundamentally a problem of political will. That is, given the right price, the economy can be re-incentivized to produce to impliment the existing technical methods and innovate and/or invent the new ones necessary to reduce emissions to any amount. But the most compelling argument that I've heard against a cap and trade regime (and only possibly because I heard it incessantly for four months) was that offered by Chris Green, a professor of mine (and Elias') at McGill, who dismissed that line of thinking completely. As he argued, the reason that cap and trade worked so well in reducing sulfur emissions over the course of the last two decades was because the technology to make those reductions was already available and relatively cheap to deploy. Putting a small price on sulfur emission was able to sufficiently jump-start an economy-wide adjustment away from sulfur-intensity that was already technically feasible but, outside the CAP framework, not profitable.

Such is not the case with climate change, according to Green. As far as alternative energy goes, none, not separately and not together, can produce anything near the energy we consume through the burning of fossil fuels. Which is to say that we cannot begin to seriously reduce our carbon emissions unless we a) deliver some serious technical innovation to the areas of solar, wind, biofuel, hydro, nuclear, etc, or b) accept large scale economic decline for at least the short-term.

As the argument goes then, the emphasis should not be on seriously reducing carbon now but instead, beginning to stabilize the growth of global emissions while diverting enormous amount of capital towards R&D in the above mentioned areas. And because of the aforementioned uncertainty regarding the relative adaptability of the U.S./Global economy to carbon shortages (Green was of the mind that the demand curve for carbon was highly inelastic and therefore a cap below a certain point--and at what point we don't know--would be likely to result in destabilizing permit prices), a carbon tax was the better, more straight forward source of that capital.

And so, as in all debates in economics (or anywhere now that I think about it), where one falls on this issue depends entirely on the set of assumptions brought to the table. Unless of course you're in Copenhagen, in which case you've already left the table.

* As far as I could tell, there are no skulls in this video. Sol will probably hate it anyway.

** For what it's worth, according to James Boyce, a pretty good looking cap and trade bill has been introduced in, of all places, the U.S. Senate.

He ain't pretty no more

Someone smashed Berlusconi in the grill, kid. My commentary on this thing that is so absolutely sublime will be glib, because there is nothing that I could say that would make it any more perfect. I will venture, however, that if he hadn't been spoiling for an emergency trip to the dentist, he certainly could have tried a bit harder to make that clear. Claiming, for instance, that it was he to whom credit was due both for preserving the world financial system and for ending hostilities between Russia and Georgia last year was just plain lazy--he might as well have paid the crowd to plum crack him in the gob.

My only complaint, really, is that more such incidents of spontaneous physical violence don't occur over here. Why hasn't someone caught Orrin Hatch on the steps of the Capitol building and kicked his colon out? It's not like we live in Taiwan, where furniture in parliament has to be bolted to the floor to keep it from being belted into someone's skull. We can't expect this kind of corporal justice to be self-applied. If the spirit of America truly is its manly opposition to the abuses of state, then let's really let the stars-and-bars fly and kick the living shit out of both the House and the Senate. And, as an added bonus, an extended stay in any DC area hospital might cast health care reform in a whole new light for our newly chastened political class.

A man can dream, can't he?

The Dubai, or maybe Belgium, of drugs

Here's another excellent video from Vanguard Journalism, the TV show that did that piece on Oxycontin trafficking in Florida I linked to back in October. It is excellent both because it is very well done, and also because it succeeds in making a point I've been trying to make with various degrees of success ever since I read McMafia last year. Whenever I am asked why I have such contempt towards people who use cocaine, this video is the answer I try to convey. Our generation of North Americans is completely oblivious to the horrible effects of our vices - the lives lost or ruined, the cities destroyed or communities split into warring factions - and nothing is more representative of this ignorance than cocaine. Coke is a stupid person's drug, a stupid person who is willfully blind to their place and privilege in the world, who pays no real price for their enjoyment, who puts tremendous suffering on the backs of people they will never see or have to deal with, all so they can enjoy their night slightly more than they already are. While I have this general sentiment towards all illegal drugs that aren't made in North America, coke stands out for me. If there were a just God with a good sense of humour, the dudes at the beginning of this documentary would wake up one day on a farm in South America, slaving away at gunpoint day in day out to make enough coke to pay for some drug kingpin's exotic animal petting zoo.

I love the smell of hubris in the morning

Alley-oop:

After nine years of research and collaboration, a group of entrepreneurs and scientists – many known to h+ readers –- are disclosing their plan “to start saving up to 100,000 lives lost to aging every day, by 2029.” A Longevity Summit in November 2009 -- organized by Kekich -- brought together a number of researchers on human aging and longevity for a discussion on the state-of-the-art research, the implications of their discoveries, and round table, cross-disciplinary discussions that may lead to new and accelerated results.

...

The goal of the summit was “to devise scientific and business strategies with the goal of demonstrating the capability to reverse aging in an older human by 2029.” Many at the conference believe that humans are approaching something Aubrey De Grey calls “longevity escape velocity” (see the h+ article “Aubrey de Grey on ‘The Singularity’ and ‘The Methuselarity’” in Resources). This is the point at which the yearly advances in procedures for extending human life expectancy result in adding one year to the human lifespan –- potentially making death-by-aging a choice rather than a date with destiny.

I don't feel the need to explain why, if this is not just snake oil and hooey, it is bone-chilling even in comparison to the usual raft of fucked-uppery that lurks in my RSS feed. You can see in this piece, and I suppose that you could predict even before reading it, that a set of values utterly non-salutary to the social good has informed the decision to develop these God-and-the-universe-defying techniques. "'Devise scientific and business strategies,'" is about as far as you need to go in the second paragraph to realize that this will not be available either to us or the likes of the sunken-stomached villagers from the beginning of Temple of Doom.

And even if it was, why? Why the fuck would anyone ever think that this was a good idea? The problem is not that we can't keep enough people alive. It is not even nearly that. Not that the poor will be the ones living forever. But who is supposed to be the benevolent immortals who watch over them? I can't discover any language in the above piece, or on the Manhattan Beach Project's website, that does not suggest that anyone who can pay for these procedures will get them. Think about what that means. We could live in a world of an undead Republican party. Monsanto's Hugh Grant will have all the time in the world to patent every living variety of plant and animal. People for whom it should not currently be legal to breathe will never go away.

And it's all because the only mediating good we can think of, the only thing we can possibly lay hands on to distribute a very strange and (I would think) mixed honor such as this one, is money. We are so reduced in our capacity for complex ethical thought and discussion that we can't even begin to come up with a better rationing system. Hey, just bought a Porsche? You seem like the kind of guy who'd like to see the sun implode 50 G's from now.

Two nights ago, over burgers and Belgian fries with sweet garlic mayo, I had the old technology-versus-ethics discussion with a friend of mine who is studying to become an engineer. Engineering is what I would call an enabling profession: though not inherently evil, by abandoning completely the question of ethics in favor of transactional technical improvements, it allows people with bad ideas to carry them out with a maximum of efficiency and a minimum of conscience. My friend is, thankfully, not of this stripe, though his fellow students, who he mentioned in our discussion, were more typical of the genre. When confronted with any sort of social problem, their response was inevitably "Science will cure this." Technological progress is of course infinite and will always deliver the right sort of tool to ameliorate the negative externalities of my decision-making. Nothing else is needed.

It occurred to me then, as it has in the past, that while we are spellbound by the rapid evolution of articulate mechanism, we've abandoned entirely any hope of a similar progress in ethics. It's an old story, but the logic of the economist has won the day: in order to shield ourselves from the oddly venomous accusation of idealism, and this is especially true in the case of tertiary institutions, we take the cynic's view that man is essentially anti-social, in the sense that his choices are weighted in favor of positive individual, and negative social, outcomes. By negative social outcome I mean the result of an action that reduces the welfare (and of course 'welfare' is difficult to operationalize, requiring as it does the selection of some indicators of well-being over others) of more than one other. We're selfish and cruel and violent, and we won't waste time getting one over our fellow man, etc. The magic of technological progress is that it can address this failing by handling the effects of our behavior outside of ourselves. We are therefore free to act as we always would, while our material and institutional arrangements pick up after us.

This sort of thinking is rife with absurdity, but that is really unsurprising because at its heart it is remarkably shallow. I won't discuss, for instance, negative feedback (incremental improvements in technique allowing poorer behavior, requiring further improvements, and so on), though it is itself a fascinating consequence of this strain of ethical nihilism. No, my interest is really in the idea that ethics can ever be set aside. You see, it's not that that idea of coordinating our decision-making based on a set of maxims, either received or heuristic, is so outlandish. No, what is outlandish is to suppose away these maxims in the first place.

What is an ethical principle? First, none of what I am going to say here will be noticeably profound, and a lot will be left unsaid. For a deeper treatment of ethics I suggest the old masters or, in a pinch, the Stanford Encyclopedia of Philosophy. Naturally there are other ways in which to regard the use-value (or essential and immutable inutility) of ethical principles; I've chosen this particular interpretation because it is germane to my subject. To borrow language from Michael Walzer (Spheres of Justice, by the way, was the only good book that I read for class at McGill), an ethical principle is a mediating good. A quality that is valued under a particular system of ethics can be thought of as a 'good' that opens up access to other 'goods.' 'Good' is to be taken in a broad sense as denoting both the economic sense of a material good or service, as well as goods acquired or enjoyed socially but not essentially objectified, such as markers of status. Aristocratic birth under the medieval social consensus (to which only a few consented), which allowed exclusive access to land, is a good example of this. There are many more: rhetorical finesse in Rome, small feet for Chinese women of the Song through Qing dynasties, bear skins for Norse berserkers (which, in fact, means exactly that), and maleness across a majority of agricultural and post-agricultural societies are all mediating goods. The plurality of mediating goods has been a fact of human existence since a time that Dave knows a lot more about than me.

At least, it has been a fact until now. In contemporaneity it has the honor of being perhaps the only mediating good of any consequence goes to money. Today, we use, for practical as well as ideological reasons, money for the valuation of most other goods. And this is exactly where the issue of ethics crops up, whether we like it or not. Because what those who scoff at ethics as a means for achieving positive social outcomes forget is that all transactions require a mediating good, and so we will fall back on one whether we like it or not. In other words, our decision-making is implicitly ethical, whether or not you call it that: if I choose to accept money in an exchange, I do so not just for practical reasons--money guarantees very narrowly my survival--but because I am following an acquired maxim that money is important, and therefore more of it is a good thing for me. Money is an ethic just as virtue or small feet is. And because the value of it is transparent to us does not mean that its importance is not artefactual, just like any other mediating good. It can be competed against by other mediating goods.

Which is exactly why ethical progress is such a vital tool for effecting positive social outcomes, and why disavowing it has been unquestionably disastrous. We are engaged in a ceaseless struggle with technological progress because it appears to be an externality-generating nightmare, and we don't seem to see that the problem is that it lacks an appropriate set of mediating goods to restrain the development of, and access to, it. No single good should ever be in that position, and money is a poor choice for a monopoly: that it is quantifiable begs hoarding and therefore inequality, and its acquisition is strongly weighted towards secondary mediating goods--avarice, atomism in decision-making--that themselves produce negative social outcomes. Fundamental to all positive social outcomes is a 'fair' distributive heuristic. Either we all benefit from our good decisions or we all suffer from our bad. By emphasizing any one mediating good, we invite a catastrophic concentration of access to other goods, and eventually a severe overabundance of externalities that lead to social failure. With a Gini score worse than Turkmenistan's, the United States, for one, fits that bill swimmingly.

But this talk is all so vague, you'll inevitably complain: I've proposed no alternative, which begs the question of whether or not there could be one. What proof is there that ethical progress is even possible--that, in other words, the development of socially-positive mediating goods is possible? The best answer to turn to a cross-cultural survey of decision-making arrangements. Though it may seem trite given how often people inclined to agree with my position turn to it, there is a reason that Scandinavian social systems work, and that reason is not merely a fiat of institutional design. Scandinavians aren't led around by a perfect combination of social mechanisms and incentives. Those are helpful, but in reality they are an expression, and a reinforcement, of a substratum of mediating goods--of ethical principles--that distribute fairly, with reference to the constraints of environment and technical progress, access to social goods. And it's not just the chicken Swedes who've accomplished that. A vast collection of ethical consensuses (again, not always consented to) have served, to more or less successful degrees, to mediate access to important goods given their social environments. Say what you want about medieval Christianity, but, in the face of barbaric violence and the ruination of the Roman Empire, it managed to challenge the dominant contemporary mediating good, violence, strongly enough to reestablish something of a social order, even if we wouldn't necessarily want that order for ourselves. Islam in Spain functioned oppositely, but to similar effect: it eliminated the profession of the Christian faith as the dominant mediating good, and all of the ethical baggage that came with it, allowing for some degree of social pluralism and with it access to a host of intellectual goods that brought about a renaissance in thought.

If we can be immortal--it feels absurd to write that, even though I recognize that it isn't anymore--then immortality is a new good. It is, of course, a very idiosyncratic good, and, just in its social bearings, one of tremendous profundity. To allow access to it through a single mediating good is dangerously unsound. To have that good be money, which is already so unevenly distributed, is plainly criminal and moreover borderline psychotic. Money is useful, if not extremely so, in the limited sphere of rationing material goods. It requires something more substantial to make decisions of immortality's calibre. If we have to choose who lives forever, I'd rather, and I think we can all agree here, it be a Martin Luther King, Jr. than a Warren Buffet. But as things stand, it will be the other way, and, believe me, if such a thing as the end of aging is possible, it will be. It took one lifetime to make the fortune, after all. Imagine how many could be spent enjoying it.

Tarsands and Canadian Sovereignty

This is really cool, and I can't really add all that much to it. However, I am loathe to post something without having at least put a little analysis or thought of my own in, so I will say that the yanks among us should pay close attention to the argument that is bubbling just under the surface of most of the video - that the tarsands represent a serious threat to Canadian sovereignty. As much as I have resisted my country's clumsy attempts at patriotism over the years, I am a softie and probably not alone in preferring that Canada remain free and un-American as long as is possible. I don't think I'm alone in that sentiment, and I expect that, as paranoid as it may seem, the question of Canadian sovereignty will serve the anti-tarsands folks well - maybe even better than the environmental tack. It may seem like a pretty tenuous connection, that the people who exploiting the tarsands are NAFTA supporters/beneficiaries, but it's realer than you'd think. Albertans, especially those involved in oil and gas, have very, very little interest in Canada and its well-being, and they would stand to gain the most from its decline. I have eavesdropped on a disconcertingly high amount of executive power lunches in downtown Calgary where secession, annexation, or some combination of the two were heartily endorsed.

Sigh.

Ezra Klein brings word that the Senate has officially abandoned all pretense of a distinction between a cloture vote and a real one:

Breaking a filibuster is a bit of a time-suck. You have to call a cloture vote, then wait for 30 hours while that cloture vote "ripens." That's fine if you only have to do it every once in awhile, but if it's on every amendment, often multiple times a day? No good.

Recognizing this, Harry Reid struck an agreement with Mitch McConnell: Amendments to the health-care bill would require 60 votes for passage even if there was no filibuster. Orrin Hatch's amendment stripping some of the Medicare, for instance, failed because it only netted 57 votes. John Thune's amendment attacking the CLASS act lost with 51 votes.

Separately, Matthew Yglesias notes that the senate has quickly become the largest obstacle to enacting popular progressive legislation in the United States:

The House of Representatives has already given us a good climate bill and a good universal health care bill. They seem poised to vote out a financial regulatory package quite soon. In the senate, none of those things have happened. They’re closest on health care, but instead of voting on a bill on Monday morning they’ll be doing . . . additional procedural antics more suitable to an elementary school student council goofing off than a crucial public institution of what’s still the world’s leading power.

I can't really blame Reid for caving to the current strain of thinking that assumes 60 votes to be the default necessary majority rather than a recently beefed-up claw hammer in the obstructionist toolkit, but it sure is frustrating. Despite a 60-seat majority in an 100-seat legislative body, 55 of which would vote through the current health care bill in a heartbeat, the Democrats remain at the mercy of a bunch of climate denialists, fearmongering hypocrits, and salivating opportunists from tiny states with small populations and extreme opinions. While I can't envision a scenario in which health care fails and then subsequent major pieces of progressive legislation succeed (ie. if we don't get a health care bill, there will be no cap-and-trade and no financial reform of any consequence), this problem isn't going away once the Senate lumbers on to the next issue. I really don't know how the Democrats will be able to get anything done, ever, without a serious overhaul of the Senate itself.

Freakonomics, by Merely Existing, Confirms Rational Choice Models!

In response to Dan's excellent post, I felt I would offer up an article I highly recommend at yet at the time of reading it couldn't think of a good post in which to pass it on. This was written a couple years ago, in response to the ridiculous success of Freakonomics, but based on what I've heard and read about Superfreakonomics (leaving aside the climate change/geo-engineering chapter, which has borne the brunt of outrage, deservedly), it remains a solid criticism of Dubner and Levitt's recent work. In it, Noam Scheiber makes a couple of excellent points, drawing from his time as a Master's student in economics. First, he notes that economic academia has, thanks to the efforts and success of Levitt and others like him, become something of an "academic parlor game":

With the 2005 publication of Freakonomics, the breezy exposition of Chicago economist Steven D. Levitt's oeuvre, the rest of the world has come to see that economists are capable of spectacular feats of cleverness--and to a degree I couldn't imagine back in my poseur days. In the search for what's known as "clean identification"--a situation in which it's easy to discern the causal forces in play--Levitt has turned to such offbeat contexts as Japanese sumo-wrestling and the seedy world of Chicago real estate. He has studied racial discrimination on "Weakest Link," a once-popular game show, and reflected on the scourge of white-collar bagel-filching. This has, in turn, inspired a flurry of imitators, including papers on such topics as point-shaving in college basketball, underused gym memberships, and the parking tickets of U.N. diplomats.

Within the frequently tedious body of economics scholarship, these papers stand out as fantastically entertaining. Judging from the dizzying sales of Freakonomics and the thousands of lecture halls across the country now bursting with econ majors, they've also been wildly successful at ginning up interest in the discipline. But it does make you worry: What if, somewhere along the road from Angrist to Levitt to Levitt's growing list of imitators, all the cleverness has crowded out some of the truly deep questions we rely on economists to answer?

Scheiber makes a distinction between long, tedious, number-crunching economics and Levitt's brand of flashy, too-clever, get people talking research - noting that, like the good rational actors that they are, economists see the numerous benefits in opting for the parlor game over the grind. The problem, in the long run, is that the grind is much, much more likely to produce useful (if uninteresting) data.

Schieber's second point is that Freakonomics-style research doesn't do a huge amount to advance economics as a discipline:

One growth industry in recent years has been what you might call the lookie-here paper: a small-scale setting for observing some broad principle of economics. Many of these papers deal with sexy topics like corruption and, well, sex. One top journal recently published a paper deducing that Iraq had received billions in kickbacks from rogue buyers under the Oil-For-Food program. Another recent paper, this one in the Journal of Political Economy, demonstrated that johns in Mexico pay prostitutes more for unprotected sex than sex with a condom. Both of these findings may be of journalistic interest. But the fact that Saddam Hussein would try to profit from a scarce commodity, or that people might pay extra for services they value more, will surprise no one who has opened an economics textbook lately.

In economic terms, Schieber argues that Levitt has opened up a wide gap between the kind of academic work that one would consider a "common good" (ie. beneficial to the discipline and non-academics) and the kind of work that economists are more likely to pursue for self-interested, careerist purposes (flashy, headline-grabbing, affirming of previously agreed upon theories).

Now, I don't know a great deal about the shape and scope of modern academic economics, but this whole thing reminded me an awful lot of the kinds of bunk theories archaeologists will from time to time trot out to get a TED talk or a blurb in National Geographic (two that I immediately come to mind, and which I have no doubt vented my spleen about before, are the Aquatic Ape Theory and the "First Americans were actually Europeans" argument). I'm sure every social science faces similar problems. Thanks to publish-or-perish policies and the viral nature of the media, getting something controversial out there and getting tons of heat for it, regardless of the type of heat it is, is a sound strategy - as they say, all publicity is good publicity.