Moral Hazard Myth

In the New Yorker this week, Malcolm Gladwell takes on health insurance in America. Needless to say, it's awful—especially for those who can't afford it. In particular, this vivid description of what it's like not to have health insurance deserves the full blockquote treatment:

Gina, a hairdresser in Idaho, whose husband worked as a freight manager at a chain store, had "a peculiar mannerism of keeping her mouth closed even when speaking." It turned out that she hadn't been able to afford dental care for three years, and one of her front teeth was rotting. Daniel, a construction worker, pulled out his bad teeth with pliers. Then, there was Loretta, who worked nights at a university research center in Mississippi, and was missing most of her teeth. "They'll break off after a while, and then you just grab a hold of them, and they work their way out," she explained to Sered and Fernandopulle. "It hurts so bad, because the tooth aches. Then it's a relief just to get it out of there. The hole closes up itself anyway. So it's so much better."

People without health insurance have bad teeth because, if you're paying for everything out of your own pocket, going to the dentist for a checkup seems like a luxury. It isn't, of course. The loss of teeth makes eating fresh fruits and vegetables difficult, and a diet heavy in soft, processed foods exacerbates more serious health problems, like diabetes. The pain of tooth decay leads many people to use alcohol as a salve. And those struggling to get ahead in the job market quickly find that the unsightliness of bad teeth, and the self-consciousness that results, can become a major barrier. If your teeth are bad, you're not going to get a job as a receptionist, say, or a cashier. You're going to be put in the back somewhere, far from the public eye. What Loretta, Gina, and Daniel understand, the two authors tell us, is that bad teeth have come to be seen as a marker of "poor parenting, low educational achievement and slow or faulty intellectual development." They are an outward marker of caste.

How did we get to this point? Gladwell points out that one idea more than any other has taken hold of American policymakers when it comes to health care and thwarted real reform: namely, the idea of "moral hazard." People will do unhealthy things, the theory goes, if health insurance becomes universal. Instead Americans need to be buried in co-payments and deductibles and gatekeepers so that they only get the care that they absolutely need and no more. But, as an old RAND study pointed out, when people are forced to pay more out of pocket, they tend to cut back on care they really need. (Although Gladwell neglects to point out that, on average, health did not deteriorate among those who had higher copayments in the RAND experiment—the problem is that looking only at "averages" can obscure some real casualties; also, this result remains fairly controversial.)

Meanwhile, as the horrifying tooth anecdote above reveals, patients aren't always the best judge of what constitutes "necessary" care. So the uninsured cut back on dentist visits, thinking that those at least are expendable, and as a result, their health and life deteriorates. (By the way, this is also a pressing argument for dental coverage, which is even rarer than health insurance, but no less important.) The conservative idea—lauded by, among others, George W. Bush—that people don't pay enough for their own care is fundamentally flawed. As Gladwell nicely puts it, these are people "who regard health insurance not as the solution but as the problem." America, as a whole, will get increasingly richer and richer in the future. There is no reason why we shouldn't spend that wealth in making sure that this isn't a country where people are pulling out their own teeth with pliers down in the basement.

NWA Woes

I am very upset today over the Northwest Airline debacle. That Northwest could bust a strike by bringing in scab mechanics was bad enough. But now it seems that they are also simply going to eliminate 1,200 plus union jobs. Indeed, the airline's spokesperson said,

the airline is considering the legally thorny question of whether to make the 1,200 replacement mechanics it hired to keep flying through the strike into permanent employees.
In short: if you are a worker you have no right to freedom of speech, freedom to collectively bargain, or freedom to protest working conditions – your company can simply dismiss you, eliminate your union job, and hire someone else.

I suspect the NLRB will let them get away with it, too. Under Bush, the NLRB has been extremely pro-strike-busting and anti-workers' rights. They even recently upheld a company rule that banned employees from "fraternizing" away from the job, denying workers the freedom of assembly.

The corporate heads want to keep workers down, want to keep them separate and isolated, and want to keep them from collectively asking for fair wages and benefits.

Although my money is with Change to Win's focus on organizing new workers, its events like the Northwest strike that remind us how much new labor legislation we need and that perhaps there is room for Sweeny's agenda as well.

By the way, Curly Tales of War Pigs who has been extensively covering the NWA strike points the way to the Star Tribune's strike photo gallery. I highly recommend it.

Excerpts from the message boards:

Let her give these speeches from Canada--I surely hope not a penny of my tax dollars ever goes to this misguided, delusional woman.

Come on. She is obviously delusional....She is a disgrace.

...deranged individuals should be quietly led to treatment, not encouraged to dramatize their delusional ideas for the evening newscast.

I hope she wakes up from her delusional dream world before her life is entirely destroyed.

I see her as just another delusional lefty, of no major political significance.

The woman is obviously delusional with grief and is being used.

She's a liar and getting more delusional by the minute.

His [Casey] mother on the other hand is a self-serving, delusional, anti-semetic *#@! who's so covered in her own mud that we don't need to sling any.

Perhaps...the media whores supporting and encouraging a grieving mother in her delusional thinking truly believe that they are on a mission from God.

Can you say "delusional"? The Cindy-haters sure can, and do, all over the Web. "Delusional" is a psychiatric term which refers to having a false belief that is held in spite of overwhelming evidence to the contrary. Some examples would be: The world is safer since we invaded Iraq; The war is going really well and Iraq is on the way to stability; George W. Bush cares about your children...that sort of thing.

Anyway, as long as we're getting psychiatrtic (which I like to do--I'm a psychotherapist), this is as good a time as any to look at the unconscious defense mechanisms, as defined by Drs. Sigmund and Anna Freud. The two defense mechanisms that are considered the most primitive (that is, they are developed in very early childhood) are denial and projection.

Denial is an unconscious refusal to accept a reality. It is often used in the service of the ego, in order to protect us from overwhelming pain. For example, it is denial that causes us to go about our business in a robotic daze after we have experienced a tragedy. But it is also the an unconcious inability to acknowledge that the tragedy even occurred. Projection is the attribution of our undesirable characteristics onto others. An angry parent, for example, may accuse her child of hostility. Troubled marriages are sometimes based on projective identification by both partners.

I believe that the emergence of Cindy Sheehan has triggered in many a deep need to defend against what she represents. She is not a politician. She is not a talking head. She is a woman whose son is dead, and he is dead because Cheney, Wolfowitz and their pals want to take over the world, and because an alarming number of Americans really hate dark-skinned people and love SUVs. These are not suitable reasons for Casey Sheehan to have died at the age of 24. And the simple truth is: If Cindy Sheehan's son can die in Iraq or some place like it, Betty Bushlover's son or daughter can die there, too. And if that happens, Betty Bushlover and her countrywomen need to believe that their kids died for freedom and democracy and honor and all the abstract things we go on about when we have a war, even if that war is really about something ese.

Ms. Sheehan is called "delusional" every time she speaks. Sounds like denial and projection to me.

We have the ability to take him out, and I think the time has come that we exercise that ability. We don't need another $200 billion war to get rid of one, you know, strong-arm dictator. It's a whole lot easier to have some of the covert operatives do the job and then get it over with.

This is the latest from the Nicaragua Contra-supporting, Charles Taylor-supporting founder of the Christian Coalition of America, which calls itself "the largest and most active conservative grassroots political organization in America."

According to its website, the 700 Club gets a million viewers a day, which isn't that many, but Robertson' sphere of influence is much wider than the numbers indicate. The Christian Coalition distributed 70 million voter guides prior to the 2004 election, and it actively lobbies both Congress and the White House. Its main goals appear to be the destruction of women's rights, the destruction of gay rights, and the further blurring of the line between church and state.

In a 700 Club commentary, Robertson talks about the unpardonable sin (which, for non-Christians, is the blaspheming of the Holy Spirit), and says that the one who has committed it is "the one who has turned against Jesus, reviled Him, and become so depraved that he would claim that God's spirit is Satan."

Could someone please give Robertson the offering of a mirror?

Calling for violence has become common among Christian extremists such as Robertson. Jimmy Swaggert said he would kill any gay man who looked at him "that way" (in his dreams). The remark was followed by applause from his congregation. James Dobson advocates the harsh physical punishment of children and brags about beating his dog. Christian extremists picketed Matthew Shephard's funeral with signs that read AIDS Cures Fags. Women's health clinics are bombed. In a community twenty miles from my home, a cross was burned in front of a yoga clinic. Christians gave comfort and shelter to Eric Rudolph.

Extremists will always be with us, and they will always have followers. But while Americans are constantly asking mainstream Muslims to please denounce Islamic extremists, no one is asking mainstream Christians to do something about Robertson, Falwell, Dobson, Rudolph, and their ilk.

Carlos Watson's opinion piece for CNN on predatory lending does raise much needed awareness about a serious problem that, as he rightly argues, gets little attention from national politicians and the media. However, his call for national legislative action, not to mention political posturing, is misguided.

Recent studies from Harvard and the University of North Carolina, as well as reports from other financial experts, estimate that each year more than 10 million poor and elderly Americans are being scammed out of $50 billion in exorbitant fees and unconscionably high interest rates imposed by unscrupulous lenders.

...Surprisingly, no national politician is holding a primetime national press conference to discuss this epidemic. In an era in which steroid use and Terry Schiavo have taken center stage in politics and the media, it is noteworthy that no senator is threatening a filibuster, and no elected official has suggested a hunger campaign to protest the injustice of predatory lending.

...According to various studies, while most middle-class Americans borrow money at rates ranging from 5 to 15 percent, many poor and elderly people are being charged exorbitant fees and annualized interest rates of 50 to 100 percent -- or more -- when they buy televisions or homes, cash their paychecks or take out small loans.

The concept of high-interest loans is nothing new, but unscrupulous check cashing stores, payday loan facilities and rent-to-own facilities have grown dramatically over the last decade -- perhaps fourfold.

And significantly, it is not just corner shops in low-income neighborhoods that specialize in this practice. Indeed, New York Attorney General Eliot Spitzer recently announced that he is investigating some of the biggest names in global banking -- including Bank of America, Citigroup, Wells Fargo, and HSBC -- for steering minorities and others toward high-interest loans.

Especially with Republican majorities in both houses of Congress, national legislation would be weak at best, if not a boon for predatory lenders. I can almost hear the violins mewling in the background while the more bank-friendly members of Congress tell the sad tale of how hard it is to make a good profit off high interest loans to the working poor these days. The bank lobby would certainly make sure it had as many sympathizers as possible.

In California, for example, where state and local governments passed laws regulating the high-interest loan industry, one mortgage company in particular funneled enough money to pay off dozens, if not hundreds, of loans into both political parties' coffers.

A giant Orange County mortgage company accused of duping low-income homeowners has pumped more than $7 million into California politics since 2002, including contributions to Republican Gov. Arnold Schwarzenegger, Democratic Attorney General Bill Lockyer and dozens of other state legislators, members of Congress and political committees.

Ameriquest's top executive, Roland Arnall, also has been one of President Bush's top fundraisers, generating $12 million for the president's political efforts during the past four years. On July 28, Bush nominated Arnall, a billionaire who was ranked No. 106 in the 2004 Forbes magazine list of the wealthiest Americans, as ambassador to the Netherlands.

Since Schwarzenegger took office in 2003, he alone has pulled in more than $1.5 million from Ameriquest, Roland Arnall and his wife, Dawn. Ameriquest also has given $1.5 million to groups backing the governor's political efforts and, along with the Arnalls, has contributed $1.5 million to the California Republican Party.

The development of California's current predatory lending laws reveals another reason why national legislation could create a legal regime that's more lenient towards high-interest money lenders. Earlier this year, the Supreme Court of California, in a 4-3 opinion drafted by Janice Rogers Brown, struck down a local Oakland ordinance prohibiting predatory lending on the theory that a state anti-predatory-lending law preempted it. In American Financial Services Association v. City of Oakland, Brown disregarded express legislative intent to not include a preemption clause in the state legislation, which was more favorable to predatory lenders than Oakland's ordinance, and ruled that the state law was so expansive, it implied an intent to preempt any local legisation on the topic. Janice Rogers Brown's legal philosophy is a story for another post, but her approach to the law is the prevailing one on the Supreme Court right now. National legislation would by necessity fail to address the specific local loopholes predatory lenders have found and used to their advantage.

The amazing thing about predatory lending is that the transactions happen in the open and are usually completely legal. Plenty of legitimate businesses have cropped up in urban areas across the country whose sole purpose is extract crushing interest rates from poor, elderly debtors. These businesses adapt to lax laws, and exploit any loophole they can. Far be it from to predict how broadly the Court's going to interpret the Commerce Clause in any given situation, but even the Lopez five (or four plus Roberts) will have hard time arguing that predatory lending does not have a substantial effect on interestate commerce. This would allow them to hold that broad, vague national legislation preempts tighter state and local ordinances, which would ultimately not help your average American in need of a loan with manageable interest payments.

All this is to say, the laws surrounding high-interest lending beg for reform, but it is probably more effective at the state or local, rather than national, level.

UPDATE...Brad Plumer points out in comments that Mother Jones Magazine had an article about national predatory lending chains earlier this summer. He challenges my preference for leaving regulation to the states. What do you think?

Worker protests for the nationalization of the oil industry in Ecuador have subsided for the time being, but as Agitprop notes, that is not likely to quell the fears of the Pentagon or the State Department as they sweat over the rise of such anti-globalization movements in Latin America.

The Ecuador protests are only the latest round, but for the past year Bolivia has had its own upheaval as workers and indigenous groups have been rightfully asking for a bigger cut in the country's natural gas wealth. With Bolivia having some of the most appalling poverty in all of Latin America, the people have a right to expect that the $120 billion in natural gas underneath their feet should be directed towards improving their miserable condition.

Of course, the corporate elite in the U.S. don't see it that way, and neither does Washington. They want nothing more than to secure Bolivia's natural gas wealth for U.S. corporations. And the U.S. military build up in Paraguay in the past month has fueled speculation that U.S. intervention to forcibly put down such democratic uprisings may be in the near future.

Spencer Ackerman recently took a trip down to Guantanamo Bay, and returned with a long piece for the New Republic on why the detention facility ought to be shut down: "Guantanamo is more than just an image problem: it is a moral, legal, and strategic one as well." We've dealt with the moral and legal arguments pretty much ad nauseum here at MoJo, so I'll highlight some of his arguments for the strategic problem with Guantanamo. First, the US probably isn't receiving much in the way of solid intelligence from the facility:

Despite the mantra that Guantánamo houses "the worst of the worst," Qatani, the thwarted hijacker, is the highest-ranking Al Qaeda detainee acknowledged to be at Camp Delta. Senior Al Qaeda captives--such as Khalid Shaikh Mohammed, the mastermind of September 11, or terrorist-recruiting chief Abu Zubaydah--are held at undisclosed locations across the U.S. detention apparatus. What's left are largely what one former White House counterterrorism official dubs "the ash-and-trash jihadi picked up in Afghanistan," as opposed to the "honest-to-God, cardcarrying members of Al Qaeda--operatives who are worth a shit." Many detainees picked up in Afghanistan in the first year after September 11, 2001, and taken to Guantánamo were initially captured by Northern Alliance fighters looking to settle scores and collect rewards….

What those 130 or so inmates have to offer, however, is still questionable. Most of Guantánamo's population has been in the camp for its entire three-and-a-half-year existence, and, according to Kaniut, only about ten detainees have arrived in the past year. "Obviously," says a recently retired senior intelligence official with counterterrorism experience, "the longer he's there, the less he has to tell you in terms of fresh actionable stuff. After a certain time, it becomes historic research data." That's not to say that information can't be useful. As the former White House official explains, the detainees might still be able to reveal "how do people interact, how do they communicate, what ethnic group will work with another ethnic group, where are the fault lines within the organization ... pieces of the jihadi and Sunni extremism jigsaw puzzle."

But, as the former official cautions, even those pieces lose their worth after awhile. And that's because the jigsaw puzzle is changing. Simply put, Al Qaeda in 2005--as both a terrorist network and a broader jihadist movement--looks very little like Al Qaeda in 2002. Most Guantánamo detainees were captured on the Afghan battlefield. Yet Al Qaeda's center of gravity is increasingly moving out of Afghanistan and Central Asia: In a series of classified reports this year, the CIA has warned that the next wave of the global jihadist movement lies with new recruits who travel to Iraq to gain on-the-job training killing U.S. forces and Iraqi civilians before returning to their homes in the Middle East, North Africa, and, increasingly, Europe--to say nothing of those who, as is likely with some of the culprits of last month's thwarted London attacks, taught themselves terrorism in the relative isolation of the British midlands. And Pentagon officials have testified to Congress that jihadists captured in Iraq can't be sent to Guantánamo Bay, because Iraqis must be treated in compliance with the Geneva Conventions. Guantánamo's population, in other words, can tell us next to nothing about this "Class of '05" problem--the future of Al Qaeda.

Meanwhile, the "evidence" produced in Guantanamo remains inadmissible in European courts, which in turn undermines Europe's ability to do any sort of effective law enforcement:

In January, for example, British officials arrested Moazzam Begg, Feroz Abbasi, Martin Mubanga, and Richard Belmar--British nationals who had been recently released after being detained for three years at Guantánamo--immediately after they stepped off a plane at Heathrow Airport. As London's then-police chief, Sir John Stevens, explained, information American officials had shared with their British counterparts indicated that the men were truly dangerous. "There was no other course of action--we would not have been doing our duty--if we had not arrested them and questioned them," Stevens said. There was only one problem: No information from Guantánamo Bay was admissible in British court, because it had been obtained under dubious legal circumstances. Despite the palpable worries British authorities had about them, all four walked out of a police station the next day, free men.

The issue is not one of European weakness in fighting terrorism, as conservatives often suggest: Investigating judges like Spain's Baltasar Garzón and France's Jean-Louis Bruguière have been relentless in hunting down Al Qaeda affiliates in their countries. Rather, European counterterrorist officials, politicians, and publics simply will not accept the Bush administration's legal contentions about abusive interrogation and indefinite detention, and they won't change their judicial systems to accommodate Washington. And, since Al Qaeda's evolution means that it is European officials who will increasingly have to combat the jihadists, this transatlantic disconnect runs the risk of allowing probable terrorists like the London four to go free.

The thing of it is, Guantanamo isn't necessary for anything. Congress could just as easily pass a law allowing for, say, a set period of time during which detainees go through interrogation, and then have charges brought against them. As Spencer notes, both Great Britain and Israel have very similar laws, and those countries have been dealing with terrorism for quite some time. That's the approach any democracy should take towards national security: If the laws on the books don't do enough to stop whatever threat needs stopping, then make some new laws and take a vote. Instead, however, the White House seems fixated on maintaining its executive authority at all costs, even if it leads to very real moral, legal, and strategic failures.

Gas Optional?

The city of Austin, in conjunction with its electric utility, Austin Energy, unveiled a new program Monday, entitled Plug-In Austin", that aims to create a market for plug-in hybrid vehicles. The goal is to support the mass production of plug-ins by committing to a bulk purchase of vans for its municipal fleet, as well as to encourage other major cities to make similar efforts.

One neat component of Austin's plan is that much of the city's energy comes from wind farms in West Texas. Austin Energy currently gets 6.5 percent of its power from renewable sources, most of that from wind. The utility is aiming for 20 percent by 2020. To date, their efforts have resulted in bigger sales of renewable energy than any other utility in the country, and numerous awards. Meanwhile, the Sprinter runs a diesel engine, meaning that it could harness bio-diesel and other renewable fuel sources as those start to come on-line. Although such fuels are used only in very small numbers at present, several studies, including this one by the Natural Resources Defense Council suggests that there is enough biofuel potential to meet half our production requirements by 2050, creating futuristic visions of a largely renewable transportation system.

Considering that four out of five Americans live with 20 miles of their jobs, and that Austin officials estimate the electricity load at night is only half that during peak hours during the day, many consumers could drive their daily commute with using a drop of gas, fill up at night, and do it again the next day without stressing the grid. Of course, if they ran out of juice, their plug-in would run like a conventional hybrid.

Northwesterly Spin

Northwest Airline's mechanics went on strike on Saturday to protest coming job cuts and other concessions that the airline says are necessary for continued operations. Since Saturday, a number of articles have trumpeted the airline's ability to keep airborne, due to some unions' willingness to cross pickets, Northwest's innovative usage of pre-trained "replacement" workers, and supervisors filling some shifts. Here are takes from the New York Times and USA Today. Apparently NWA stock is going up because operations are going so "smoothly" despite the strike.

But according to one business travel columnist, Northwest's own online flight tracker suggests that's anything but the case. He's run the numbers, finding that the airline is only having about 50 percent of arrivals come in on time. That's a substantial decrease from NWA's June number of 72.5 percent on time arrivals - the most recent numbers available from the Department of Transportation. The blog-like full report is reserved for paid subscribers, but one of the mechanics' locals is apparently reposting it. He also notes that cancellations are starting to crop up, and will continue to as flight crews' federal "duty time" limits are eaten away by mechanical related delays. It seems that judgments about the genius of Northwest's plan could be premature.

"If I have to sacrifice my whole family for the sake of our whole country and world, other countries that want freedom, I'll do that."

These are the dramatic words of former Marine Gary Qualls, whose son, Marine Lance Cpl. Louis Wayne Qualls, died in Iraq last fall at the age of 20. Qualls is a friend of Crawford gift shop owner Bill Johnson, who established the pro-Bush/pro-war camp that is now opposing Camp Casey in Crawford, Texas.

Qualls, you'll recall, is the man who removed the cross with his son's name from the group crosses set up along the road that leads to Bush's ranch. Speaking on Air America last week, Cindy Sheehan said that Qualls had been quite friendly with her, had drunk a beer with her, and told her he didn't share her views, but wanted to make sure his son's cross was there with the others. The next day, he took it down.

Aside from any feelings we might have about people who support the war in Iraq, there are other issues in this story that bear noting. One is Qualls' uber-patriarchal presumption that he somehow has the power to "sacrifice" every member of his family. He has a 16-year-old son who wants to enlist, and Qualls is solidly behind his son's desire. One imagines that if the adolescent were eligible, his father would pack his bags for him.

The other item of interest is that the author of this AP article about Qualls, Angela K. Brown, begins by referring to the pro-Bush camp as "patriotic." Reporters and anchorpeople have done this over and over for the last couple of years, and no one stops them.

Qualls is in agreement with Brown. He recently said of the protesters at Camp Casey: "They're not really very patriotic. They're trying to bring people down. They're trying to demoralize the factors of being an American."

I have no idea how you "demoralize a factor," but I do get the part about trying to drag people down. It's as though the alleged president of the United States were a cheerleader and Sheehan was confronting the empty content of his cheers. The reality is that Bush is a cheerleader--it appears to be the only skill in which he has ever had any training--and it is indeed a real drag to remind the flag-waving patriots that American soldiers are dying for Halliburton and PNAC. Because most of them don't know what PNAC is. And none of them wants to believe that their children and spouses and brothers and sisters and friends were killed for greed, oil, and a misguided political agenda. Or that the war has made the world, including America, less safe.