As the healthcare debate plays out, we're all getting to see in real time the fundamental political contradictions that make it so hard to get anything done.  The big lesson learned from the Clinton debacle of 1994 is that people who currently have insurance from their employer don't want it touched.  Ditto for senior citizens covered by Medicare.  So Democrats are making sure they aren't touched: in fact, they're repeating like a mantra that if you like the insurance you have now, you can keep it.  No one's going to take it away.  No one's going to so much as look at it crosseyed.

Fine.  But two-thirds of the country already has health insurance through their employer and another big chunk are on Medicare.  If these aren't going to be touched, then why should they care about healthcare reform?  In particular why should they be willing to pay higher taxes for something that won't help them out in any way?

No reason, really.  So instead Dems are promising to increase "access" and cut costs.  The former is basically welfare and gets only anemic support.  The latter is not only unproven, but doesn't do much to excite most people anyway.  Sure, they'd like it if their copays went down, but mainly they just want healthcare and they don't care how much it costs.  Mickey Kaus comments:

1) As is so often the case, overpolling seems to blame....I suspect [Obama aides] saw what they wanted — and they wanted to focus on costs. It's possible to take polls that show something very different2) Is "access" the right word to test-as opposed to "security"? "Access" makes it sound as if you are focusing on the problem of the uninsured — i.e. charity, to many middle class Americans — as opposed to security for everyone. If they polled "access," that may have stacked the deck from the start; 3) "Maybe" they "overcorrected from the Clinton model"? Maybe?

I sympathize with the Obama folks.  How do you promise to leave most people alone and also convince them to support major change?  It's a tough nut.  And putting aside whether the Obama team overcorrected or not, it's still true that "security" didn't get the job done for Clinton.  So what's the answer?  In a nutshell, fearmongering.  Like so:

Rather than overall cost....the selling point of national healthcare is freedom from the endlessly gnawing problems of our current jury rigged system. For example: HMOs that make it hard to see a specialist. High and rising copayments. Fear of losing coverage if you lose your job. Long waits for non-urgent care. New (and usually worse) healthcare coverage every time your HR department is told to find a cheaper plan.

And more: Small businesses that have a hard time attracting good employees because they can't afford to offer health coverage. Big business that are on the verge of bankruptcy because of skyrocketing health costs. Lack of choice in physicians because you're limited to whichever medical groups have signed contracts with your company's insurance carrier. Losing your longtime family doctor because your company switches insurance carriers and you can only see doctors on your new carrier's approved list.

And yet more: Fear that preexisting conditions won't be covered if you take a new job. The risk of financial ruin if someone in your family has a truly catastrophic illness. Crowded emergency rooms that have essentially become clinics of last resort for the poor. Being forced to go on strike year after year because your employer relentlessly tries to gut your healthcare benefits every time your union contract gets renegotiated. 43 million people who lack health coverage of any kind.

Reducing healthcare costs ought to be a goal of any national healthcare plan, and a truly national plan is probably the only way we'll ever accomplish that. But that's not the way to sell it. Freedom from fear, freedom from pain, and freedom of choice are the ways to sell it.

Fine.  I'm cheating.  That was me a couple of years ago.  But I still think it's the right sales pitch.  And even if it's not as highminded as Obama might like, it has the virtue of being true.  For most people, healthcare reform isn't so much about insuring their health now as it is about insuring their health tomorrow.  If they understood just how precarious that is, they'd be a lot more enthusiastic about healthcare reform today.

Prosecutors in Cambridge, Mass., won't pursue charges against Henry Louis Gates, Jr., the Harvard scholar arrested last Thursday after trying to enter his own house.

UPDATE: Gates spoke to the Post Tuesday afternoon and told them, understandably, he's "outraged."

The Senate just voted to cut funding for the plane. The final vote count was 58-40. 

Support for the Levin-McCain amendment stripping F-22 funding was looking iffy last week, so the White House's eleventh-hour lobbying effort must have paid off. One key swing vote was Sen. John Kerry, who was expected to support the plane, but ultimately voted to end its production—he was one of the very last senators to vote.

Also worth noting: Among those who voted to keep the production line running was Sen. Daniel Inouye, chair of the Senate Appropriations Committee, where the bill moves next. (Apparently a phone call from Joe Biden wasn't enough to change his mind.) Over in the House, defense appropriations committee chair Rep. John Murtha already preserved money for the plane in a mark-up behind closed doors last week.

Chart of the Day

This comes from Foreign Policy magazine, which ranks the world's countries every year to figure out which ones are stable and which ones aren't.  According to FP, a grand total of 37 countries are minimally stable this year.  The entire rest of the world is either borderline or in outright chaos:

The financial crisis was a near-death experience for insurgency-plagued Pakistan, which remains on IMF life support. Cameroon has been rocked by economic contagion, which sparked riots, violence, and instability. Other countries dependent on the import and export of commodities — from Nigeria to Equatorial Guinea to Bangladesh — had a similarly rough go of it last year, suffering what economist Homi Kharas calls a “whiplash effect” as prices spiked sharply and then plummeted. All indications are that 2009 will bring little to no reprieve.

Instead, the global recession is sparking fears that multiple states could slip all at once into the ranks of the failing. Now more than ever, failed-state triage could become a grim necessity for world leaders from the United Nations and World Bank to U.S. President Barack Obama’s White House. All of which puts a fine point on an old and uncomfortable dilemma: Whom do you help when so many need it?

Delaying Guantanamo

The latest on Guantanamo:

Obama administration officials said Monday they would not meet self-imposed deadlines for deciding what to do with scores of detainees too dangerous to release from the prison in Guantanamo Bay, Cuba.

....The officials said they had made substantial progress in reviewing the cases of the approximately 240 prisoners at the facility, and had decided that dozens of detainees were eligible for transfer to other countries or were suitable for trial.

But the officials acknowledged that two reports that were supposed to be delivered to the president by Wednesday — one on how to overhaul the nation's detention policy and another on interrogation policy — would not be ready...."We want to get this right and not have another multiple years of uncertainty," one senior administration official said in a background briefing with reporters at the White House.

Well, that's probably right.  It is a complex problem, and they do want to get it right.  But it's not really as complex as all that, and there's a far more likely explanation for the delay: after the bipartisan meltdown when this first surfaced in May, Obama realized that it's a political issue so explosive that it could easily derail his entire domestic agenda if he lets it detonate in public again. Passing healthcare reform and climate change bills will be hard enough as it is, and he's probably made a cold-blooded calculation that it's better to slow-roll Guantanamo than it is to endanger either of his centerpiece domestic initiatives.  It's not pretty, but it's politics.

Smart People Talking

Listen (and watch!) as Dayo Olopade and John McWhorter talk about Sonia Sotomayor, "wise Latinas," and race in America. They are really smart and interesting. (The first clip is mostly about Sotomayor, the second one is broader):

(via Conor Friedersdorf)

Why do independent central banks (ICBs) generally produce low inflation?  Alex Tabarrok says it's because bankers tend to get appointed to run ICBs and bankers have a bias toward low inflation.  Megan McArdle says no, it's because nobody holds Congress accountable for the performance of ICBs, which gives them the freedom to appoint people who will do things they don't have the guts to do themselves.  Matt Yglesias isn't sure that the Fed is really an ICB in the first place: it was pretty clearly politicized in the 70s and produced high inflation, and it was quite likely politicized in the oughts and helped produce an economic meltdown.

These all sound like reasonable points to me, and I don't think they're mutually exclusive.  Maybe they're all right.  But I'm curious about something else: what does the academic literature say about the performance of ICBs in advanced economies in the first place?  There must be a considerable amount of research on this point.  If we take some measure of "independence" and compare that to various measures of medium-term economic performance (inflation, wage growth, GDP growth, unemployment, etc.), what do we find?  Does independence really matter very much?  Is there some specific aspect of independence that matters more than others?  Can some friendly econoblogger summarize the literature for us?

Defending the F-22

The Senate is debating the Levin-McCain amendment to terminate the F-22 fighter jet right now, although if you joined the debate halfway through you might be forgiven for thinking that they were talking about an economic stimulus bill.

Sen. Chris Dodd (D-Conn.) just delivered a real stemwinder opposing the amendment. His main point: killing the F-22 will cause the loss of up to 95,000 jobs in the middle of a recession. Now Sen. Murray of Washington is talking about the importance of protecting "family wage jobs." Both devoted a few sentences, at most, to the actual purpose of the plane.

A few points:

* No jobs will be lost mid-recession because even if the Senate approves the McCain-Levin amendment, the production line won't shut down until 2011.

* Lockheed Martin, which makes the F-22, has said that it can shift many workers to another of its planes, the F-35. The DoD nearly doubled its order of F-35s in this budget. Now, it's almost certain that some workers will lose their jobs for geographical reasons—Lockheed may add jobs in Texas, for instance, where much of the F-35 work is done, but shed them in New England, where a lot of F-22 manufacturing occurs. But the overall economic effect of cutting the program is not the disaster Murray and Dodd are claiming it to be. The DOD estimates that the F-35 will create 44,000 new jobs in 2010—many more than the number of people who are directly employed on the F-22. A Lockheed Martin executive told market analysts last year that workers on the F-22 assembly line can be redeployed to other planes and that the company's portfolio is "probably good as we've ever been." Even the plane's most vigorous congressional defender, Sen. Saxby Chambliss (R-Ga) has conceded that "jobs is probably not going to be an issue."  In fact, the Center for American Progress estimates that the overall effect of the Obama budget could bring a net increase in direct defense jobs.

Today's Washington Post offers a rundown of the huge amounts of lobbyist and industry cash Sen. Max Baucus (D-Mont.) has raised recently by virtue of his key role in drafting health care legislation. Baucus raised some $3 million from the health and insurance sectors between 2003 and 2008, according to the Post. The Senator refused to comment for the article, but his spokesman, Tyler Matsdorf, offered up this gem:

[Sen. Baucus is] only driven by one thing: what is right for Montana and the country. And he will continue his open process of working together with the president, his colleagues in Congress, and groups and individuals from across the nation to get this legislation passed.

If members of Congress don't like the public questioning what drives them, they could always set up a robust public financing system for elections and stop taking corporate and lobbyist money. Until then, people are going to wonder about what motivates them when they take millions of dollars from the industries that are most affected by their legislation.

Elizabeth Warren, the chair of the Congressional Oversight Panel (the group keeping an eye on the bank bailouts), has a long post on the Baseline Scenario about President Barack Obama's proposal for a Consumer Financial Protection Agency that would regulate financial products. It's worth reading in full, but I noticed that Warren was incredibly explicit about the problems with the current regulatory system:

For decades, the Federal Reserve and the bank regulators (the OCC and the OTS) have had the legal authority to protect consumers.  They have brought us to this crisis by consistently refusing to exercise that authority.

Stephanie Mencimer wrote about this very phenonomon back in January. It's an argument I've heard from economists like Dean Baker: the regulators had the authority to take steps to stave off the crisis—they just didn't use that authority. It's certainly interesting to hear that same argument coming from Warren. She thinks the regulators didn't do their jobs because of "two structural flaws" in the system:

The first is that financial institutions can now choose their own regulators.  By changing from a bank charter to a thrift charter, for example, a financial institution can change from one regulator to another.  The regulators’ budget comes in large part from the institutions they regulate.  If a big financial institution leaves one regulator, the agency will face a budget shortfall and the agency will likely shrink.  Knowing this, financial institutions can shop around for the regulator that provides the most lax oversight, and regulators can compete by offering to regulate less.  Regulatory arbitrage triggered a race to the bottom among prudential regulators and blocked any hope of real consumer protection.

The second structural reason that prudential regulators failed to exercise their authority to protect consumers is a cultural one: consumer protection staff at existing agencies find themselves at the bottom of the pecking order because these agencies are designed to focus on other matters.  At the Federal Reserve, senior officers and staff wake up every morning thinking about monetary policy.  At the OCC and OTS, agency heads wake up thinking about capital adequacy requirements and safety and soundness.  Consumer protection issues are—at best—an afterthought.

Warren thinks that an independent consumer financial protection agency would go a long way towards addressing those flaws. If it somehow gets past industry lobbyists and actually becomes law, we'll get a chance to see if she's right.

UPDATE: There's also a YouTube video, apparently: