Author: hamilton1788

On the 45th President Don.

The emperor has no clothes on.

He’s dumb as a rock.

You can go set your clock.

In three years and change he’ll be gone.

Transport yourself back to 2009.  Obviously, the Great Recession was the biggest concern on everyone’s mind, but there was another serious and growing problem:  the cost of health care, and consequently health insurance, was spiraling out of control.  ACA was the Democrats’ response to this situation.

ACA had two purposes.  The first was to reduce the rate of increase of unit costs by creating a variety of experimental cost control mechanisms.  The second was to make health insurance more widely available through a system based on community rating, government subsidies funded primarily by taxes on the wealthy, and the individual mandate.

Did it work?  Not entirely.  The Medicaid expansion was crippled by a Supreme Court decision.  Young and healthy people did not enter the market in the numbers predicted by the Obama Administration.  It was difficult to make the system work in poor rural areas with relatively few providers.  And yet, overall, you would have to say that ACA was a success, because the percentage of uninsured fell to a record low, and the cost curve was bent, if not broken. Medicare, for example, is in much better financial shape today than was expected ten years ago.

Today, the GOP proposes to replace ACA with AHCA.  How do the two stack up?

Obamacare         vs.           Nobamacare

Wealth shift        Rich to poor              Poor to rich

Cost control        Pilot programs          Demand suppression by price

Uninsured          Big decrease               Big increase

Beneficiaries      Poor and sick             Healthy and wealthy

And the winner is . . . What do you think?  People who could already afford insurance, or who don’t need it, are the only ones who stand to gain from AHCA. Even many of the GOP House members who voted for the bill don’t like it.  But hey, it makes Trump look like a winner and facilitates a larger, permanent tax cut for the rich, and that’s what really matters!

 

Admittedly, there were no Mexican-American families in the town in which I grew up, but I don’t remember seeing any widespread national publicity given to Cinco de Mayo during my youth, either.  Today, the airwaves are full of commercials for it, and the occasion is used as the pretext for a big party all around the country. We are not the worse for it.

We are a nation of immigrants.  As a result, the culture is constantly evolving. We steal shamelessly and joyfully from the traditions of other countries.  My favorite example of this is the fact that the Boston Pops always plays the 1812 Overture at the end of its 4th of July concert.  What does a piece of music written to celebrate the expulsion of Napoleon from Russia have to do with us?  Nothing, and everything.

For a Reactionary, this means it is logically impossible to pick a particular time at which American culture existed in its purest form, before it was defiled by the Other.  From what I have read recently, it would appear that the current date of choice is the 1920’s, but you can be certain that the Reactionaries of the day were complaining about all those damn Germans speaking their own language and drinking way too much beer, about southern and eastern European immigrants, and about Irish Catholics.  Going back even further, the anti-immigrant Know Nothing Party was created in the 19th century.  The process has never stopped, and probably never will, which means the efforts of Reactionaries to save a static idea of America from outsiders is ultimately a lost cause.

There is no doubt in my mind that the late October surprise had an impact on the outcome of the election.  I am also certain, however, that Comey’s concern about the effects of nondisclosure after a Clinton victory were completely justified.  To be honest, if I had been in his position, I probably would have done the same thing.

It appears that the Republican leadership’s plan is to get something (anything) through the House today, to subsequently sneak a more moderate version of it past the Senate parliamentarian on a bare majority vote, and then to rely on the pressure of the moment to bring the Freedom Caucus to heel during the negotiations between the two houses.  You wouldn’t want to bet the ranch on it working, but it certainly isn’t impossible.

So we have to imagine how the system would work in states dominated by the GOP, given the new waiver provisions in AHCA.  My home state of Florida is a good example.   To give you some idea of how our state government works, consider that when Rick Scott was elected governor, I only half-jokingly said that he would view the elderly, sick, and unemployed as underperforming assets who should be securitized and sold to unsuspecting German investors.  Our government turned down billions in stimulus money during the Great Recession and refused to expand Medicaid.  That is the attitude that will prevail when the new system is unveiled.

The pertinent questions are as follows:

1.  Will age be considered a pre-existing condition by the insurance companies?  It is my understanding that AHCA waivers apply to pre-existing conditions, but not to age;  insurance companies will still be subject to some limits on their ability to charge higher fees on the nearly old.  From the perspective of the companies, that would make no sense.  In the real world, expect them to scrutinize the applications of the nearly old much more strictly.

2.  How will the system work in states that obtain the pre-existing conditions and essential requirements waivers?  The current version of the exchanges will have no reason to exist, as the fundamental premises behind them will be gone.  It will be necessary for consumers to search individual company web sites on the internet.  Lengthy application forms and physicals will be required again. Anyone with a pre-existing condition who is subject to a massive surcharge will then have to apply to the state for permission to participate in the high risk pool. The state will be free to impose whatever conditions it wants on that participation:   work requirements; drug tests; means tests; low lifetime benefits limits; high deductibles; and so on.

3.  Will states like Florida actually apply for the waiver?  Ideologically, you would expect Scott and his friends in the Legislature to ask for the waiver. Politically, it could be a different story.  The waiver will damage the interests of millions of nearly old people, the majority of whom vote for Republicans.  Will ideology prevail over self-interest?  I’m not sure.

4.  What would the economic impact of the waiver be on Florida?  People old enough for Medicare won’t be affected, at least in the short run, but people aged 50 and above will be.  I suspect you would see the beginning of an exodus of the nearly old from the state, and a reduction in the number of new retirees.  The economic impact would be severe, and completely negative.

Would our government shoot itself in the foot purely for the pleasure of ending an entitlement program that it considers odious, because it redistributes wealth to people it considers unworthy of the benefits?  It’s an open question.

 

During the campaign, I repeatedly asked what happens when you elect an autocrat who doesn’t know his ass from a hole in the ground?  What does the man on horseback do when he turns out to be just a man on golf cart?  So far, the answer is that he just lies about his record, complains about the crooked media, and relies on his base to get by.  As a result, many commentators are concluding that the concerns about Trump’s illiberalism were unfounded, and that the only threat to the republic is his incompetence.

It’s too early to tell.  Yes, our checks and balances are holding under normal circumstances.  Will they continue to hold in a crisis–most notably a war or a major terrorist attack?  That will be a far greater test, and I’m sure it’s coming.

Unlike Trump, Mitt Romney is unquestionably sane and competent.  I didn’t vote for him, and I make no apologies for that, but I couldn’t help wondering whether we would be better off today if he had won in 2012 and been reelected in 2016.

It’s a close call.  Here’s my analysis, on an issue-by-issue basis:

1.  Obamacare revisions:  Romney was ideally suited to build a bridge between his party and the Democrats, given his history with the issue.  My guess is that it would have been possible to come up with a scheme which provided more flexibility to states that operated in good faith to find alternatives, but otherwise kept Obamacare in place.  If so, the issue would have been put to bed by now.

2.  Taxing and spending:  There would have been no tax increase on the wealthy, and defense spending might have increased somewhat, but there would have been no dramatic changes.

3.  Environmental issues:  Little would have been accomplished, but the government would not have been run by climate change deniers.

4.  Iraq, Syria, and IS:  Public opinion would have prevented any large scale military interventions in this part of the Middle East.  Romney was more interested in domestic policy, anyway.  We might have taken a somewhat stronger line against Assad, but we wouldn’t have gone to war with him.

5.  The Iran deal:  It wouldn’t have happened.  Instead, Netanyahu would have persuaded Romney to join him in “cutting the grass.”  We would be at war with Iran today.  Gas prices would be much higher.

6.  Russia:  Romney might have sent more weapons to Ukraine, but that is not a certainty, since he would have understood that Putin would escalate to match us, and then some.  Otherwise, no change.

7.  The Supreme Court:  Someone like Gorsuch would have been nominated and approved with minimal fuss in 2016.  The Supreme Court filibuster would still be in place, for whatever that’s worth.

8.  China:  We might have been more aggressive in our opposition to the fill islands.  Otherwise, no change.

 

On the whole, we would have been a bit worse off on January 19 than we actually were, but we would not have been looking at President Trump the next day. How do you balance past gains with future dangers?  You decide.

If Low Energy Abe had read my book, the Civil War might have been averted. Sad!

As evidenced by a recent CNN interview with Rep. Mo Brooks, mainstream Republicans believe that poor health is predominantly caused by bad voluntary lifestyle choices, and that wealth redistribution to address the needs of unhealthy people is consequently inappropriate and downright immoral.  That said, even the GOP would admit that luck–genetic and otherwise–plays a major role in one’s health, which is why they have never seriously attempted to repeal the emergency room mandate.  And, in addition to that, they have an alternative to community rating:  high risk pools.

High risk pools have existed in many states, beginning in the 1970’s.  As a solution to the problem of people with pre-existing conditions, they have, by all accounts, been a dismal failure.  Since they violate the Republican non-redistribution principle, and they haven’t worked, you might well ask yourself why the GOP supports them today.  The answer is simple:  community rating is effectively an entitlement program, but high risk pools are a welfare program.

Community rating is essentially driven by opacity and ignorance;  since the insurance companies can’t require people to take physicals and do surveys, no one knows who is being subsidized, and by how much;  the process just happens invisibly through the operation of the market.  As a result, the beneficiaries of the system do not feel like charity cases.  With high risk pools, on the other hand, the physicals and the surveys would return, the identity of the charity cases would be known, and the government would be free to attach whatever conditions it wants on people in the pools in order to reduce its liabilities, including work requirements, drug tests, high deductibles, and very low overall limits on expenditures.

That, in a nutshell, is what this debate is all about;  the GOP wants recipients of medical subsidies to feel the shame attached to accepting government benefits, and to keep those benefits as low as possible.  Otherwise, how can we afford all of those juicy new tax cuts?

 

Republicans presumably value their safety from arbitrary violence as much as I do, but the Trump Administration, unlike its predecessor, is embracing Duterte. Why?

I think there are two reasons.  First, the GOP tends to view drug abuse as being a moral failure, not a public health problem, which can be solved by vigorous law enforcement.  (Alcohol abuse, of course, is on a completely different moral plane.)  Second, Duterte didn’t increase the size of the state to deal with the issue-he privatized it!  Yes, murdering drug dealers and abusers in the Philippines is properly viewed as a public-private partnership;  the government provides the lists, legal immunity, and some resources, and the private sector takes it from there.

No wonder Trump likes it; it looks like his infrastructure plan.

Of course, the problem with privatizing criminal justice, apart from the question of whether the sanction is proportional to the crime, is that it permits private parties to act on inadequate evidence, and even to serve their own selfish interests under the pretext of fighting crime.  And so, what you have in effect is the St. Bartholomew’s Day Massacre in slow motion.

 

I wrote this months ago suspecting that it would become timely at some point.  I wasn’t disappointed.

In the Footsteps of Duterte

In the footsteps of Duterte

Our leader wants to tread.

The Philippines

Will be his dream.

The bad guys all shot dead.

There’s no need for due process;

Vigilantes do it faster.

Who cares if all the lawyers think that this is a disaster?

 

In the footsteps of Duterte

Both leaders love to swear.

They brook no opposition,

So cross them if you dare.

One day they’re bashing China,

The next they’re making deals.

Don’t believe a thing you see;

Not much of this is real.

The GOP civil war broke out in earnest just a few hours after Clinton’s unexpectedly narrow victory in the election.  The establishment blamed Trump and his white nationalist supporters for the loss;  Trump, for his part, insisted that he would have won but for the lack of support from the “cuckservatives.”

Never one to take defeat lying down, Trump almost immediately started touring red states and holding huge rallies at which he bashed the media, the establishment, and the “rigged” election more and more ferociously.  The rallies became increasingly angry and violent.  There was open talk of creating a third party, and even of a coup attempt.

Clinton saw opportunities here.   Her inaugural address combined olive branches to the Republican establishment (she focused on infrastructure and corporate tax reform) with a demand that the leadership openly renounce Trump and his violence. Ryan and McConnell, desperate to keep the party together, spoke only in vague generalities about Trump and appealed to the base by promising relentless pressure on the new administration.   New investigations were promised, no support was provided even for GOP-friendly initiatives, and the blockade of Merrick Garland continued.

A showdown loomed over the debt ceiling.  Would the GOP finally splinter for good over funding the government?  For their part, facing a very difficult election in 2018 with a largely exhausted party, some Democrats were starting to murmur that it would almost have been better if Trump had prevailed, because only power would give him the opportunity to finally discredit himself and his cause.  I say “almost,” because he might blow up the country in the interim; it wasn’t worth it.

Reactionaries have traditionally supported large regressive GOP tax cuts even though virtually all of the benefits flow to wealthy businessmen, for two reasons. First, they believe in “starving the beast;”  any spending cuts that follow, they assume, will fall mostly on minorities and the undeserving poor.  Second, after all, it’s money that the wealthy people earned that is just being returned to them; it’s not an odious redistribution program.

If, as I suspect, some form of the Trump plan ultimately becomes law, the Reactionaries may be in for a rude surprise this time, because when the deficit explodes, the fiscal hawks are going to be gunning for their treasured entitlement programs:  Social Security and Medicare.  Trump has promised not to cut those programs, but he has plenty of people around him who disagree, and in the face of a soaring debt, where else can he cut?  Discretionary programs other than defense have already been slashed;  there is no other place to go.

In other words, be careful what you ask for, because you might get it.

 

Yeah, being a man on golf cart isn’t all that it’s cracked up to be.  It’s just not fair that you have to actually govern instead of doing a victory lap for four years.

Imagine that you are the CEO of a large American manufacturer.  You survived the Great Recession by cutting costs and hoarding cash.  Today, you’re sitting on a cash mountain, your share price is pretty high, and the investors are happy.

The Trump tax cut figures to increase your net profits by about 10%.  What do you do with the extra cash?

Here are your options:

1.  Pay higher wages to your employees.  Are you kidding me?  The workforce has been cowed by threats to cut jobs through automation and offshoring, and you don’t have a union.  The shareholders would be furious.  It won’t happen.

2.  Invest in additional production capacity.   Why?  Where are your new customers?  Overseas, you see stagnant growth, an overpriced dollar, and protectionism;  at home, you see an aging population that is more interested in saving than spending, and a hollowed-out middle class.

3.  Return the money to your shareholders in the form of dividends.  But they like higher share prices better, and they would just use the money to finance the exploding federal deficit, anyway.

4.  Purchase a competitor or buy back shares to increase the value of your stock.  Now we’re getting somewhere.

5.  Just sit on the cash and listen to the applause from your shareholders.  Another viable option.

There are plenty of other problems with the tax cut, but this is the core issue.  It just won’t generate the kind of growth that Trump is predicting.