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Obamacare is Working, and It Will Probably Continue to Work

| Mon Jul. 14, 2014 12:12 PM EDT

Tyler Cowen isn't satisfied with current answers to the question of how well Obamacare is working. But although no one has firm answers to the questions he asks, I think we know more than he implies we do—especially when you widen your scope beyond just the details of the Obamacare transition over the next few years. Here are a few quick responses to his questions:

1. Five to ten years from now, how much do we think employment will have gone down as a result of ACA?

Take a look at Europe. The answer almost certainly is (a) perhaps a little, but not much, and (b) it's going to be swamped by other factors anyway. In fact, if Obamacare eventually leads to the end of employers being responsible for health insurance, it could end up helping employment. More generally, though, if you're worried about employment trends, then health care taxes and mandates should be the least of your concerns. They're just a blip by comparison to everything else going on.

1b. How will the effort to introduce greater equality of health care consumption fare if wage and income inequality continue to rise?  Will this attempt at consumption near-equalization require massively distorting incentives?

No. Even if we move to full universal health care, it will likely raise marginal tax rates by something in the neighborhood of 6-7 points. That's nothing to sneeze at, but the bulk of it will replace current spending by employers and will do little to distort anything. The remainder is simply too little to introduce more than a modest amount of distortion in a $15 trillion economy.

2. Will ACA even have improved overall health in America?

Probably a little bit, but not a lot—though it depends on how you measure it. Especially in the under-65 age group, for example, it will do little to reduce mortality. However—and this is something I can't repeat often enough—this is not the main point of universal care anyway. The main point is to improve quality of life and reduce the life-shattering financial consequences of serious medical emergencies.

3. Given that prices in the individual insurance market already seem to have gone up 14-28 percent, and may go up more once political scrutiny of insurance companies lessens, what is the overall individual welfare calculation from this policy change?

Actually, prices will probably go up less in future years. The initial increase was a one-time response to the new requirements of the law, especially the addition of lots of sicker people to the insurance pool. In the future, given the competition between insurance companies, increases are likely to roughly match the rate of health care inflation.

4. Given supply side constraints, how much did ACA increase the consumption of health services in the United States?

We don't know yet. But obviously the answer is that, yes, any kind of universal health care entitlement will increase consumption. Once again, though, look at Europe. We have decades of experience in lots of different countries with a wide array of different forms of universal health care, and in every case health consumption is lower than in the US. There may well be birthing pains associated with Obamacare, but in the longer run there's simply no reason to think that it inevitably has to lead to a significant increase in consumption.

5. How much of the apparent slowdown of health care cost inflation is a) permanent, b) not just due to the slow economy, and c) due to ACA?  Or how about d) the result of trends which have been operating slowly for the last 10-20 years?

Obviously historical evidence is never conclusive, but the historical evidence we have points very, very strongly to a permanent slowdown. There's a lot of variability in medical inflation, but one of the most underreported trends in health care reporting has been our steady, 30-year-long decline in medical inflation. There's no special reason to think this is suddenly going to change.

If I were allowed only one answer to all these questions, it would be this: Just look at the rest of the world. Health care is not an area where we're confined to econometric studies and CBO models. There are dozens of countries that have implemented national health care in dozens of different ways, and we can look at how they've actually done in the real world. Almost universally, the answer is that they've done better than us on virtually every metric. Unless you really, truly believe that the United States is a unique outlier to the laws of economics, there's very little reason to believe that national health care in America would fare any worse.

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Sacramento Should Leave AB32 Alone

| Mon Jul. 14, 2014 11:20 AM EDT

The LA Times scratches its editorial chin today over the prospect that California's cap-and-trade program will increase the price of gasoline next year:

Gas prices already have risen by close to 50 cents a gallon since the beginning of the year, for reasons that have nothing to do with AB 32. The prospect of adding 15 cents more — though it's relatively minor compared with the overall price increase — is daunting to many drivers. Assemblyman Henry T. Perea (D-Fresno) has introduced a bill to delay the extension of the law to transportation fuels for three additional years.

That won't do at all....The state must give drivers strong incentives to take fewer trips, carpool, use public transit and purchase electric or fuel-efficient vehicles. At the same time, state officials must remain sensitive to the effect a price increase will have on low-income and working-class Californians, especially those who commute long distances in areas where robust public transportation systems have not been built.

....The best solution to this dilemma was proposed this year by Senate leader Darrell Steinberg: Rather than extending AB 32, impose a carbon tax on gasoline, at least for a transitional period. But make it revenue-neutral by giving the money back to taxpayers — and especially low-income taxpayers — through tax credits on the state's personal income tax.

Huh? Why should we replace one tax with another, and then rebate some of it to low-income taxpayers? If that's what we want to do, why not just keep the cap-and-trade fees we already have and offset them with Steinberg's tax credits? What am I missing here?

Nothing Left to Steal?

| Mon Jul. 14, 2014 10:57 AM EDT

Megan McArdle points out that cars are a lot harder to steal than they used to be:

Other forms of crime are also getting less lucrative. “Small-time marijuana dealer” is no longer a viable career option in several states. Robbery is also getting tougher. As credit card transactions have come to dominate cash, the potential return from mugging someone, or knocking over a gas station, has fallen dramatically. Even burglars are facing some challenges: Expensive televisions are now too big to carry unless you bring a dolly and a truck, home theater systems are often wired into the wall, and at least in my circles, women don’t wear as much fancy jewelry or mink as they used to. For a while, small electronics made up the cash gap for burglars, muggers, and purse snatchers, but cell phone manufacturers are putting in “kill switches” starting in 2015, which will torpedo that market.

Well, perhaps in years to come thieves will turn to technology to improve their productivity. I don't know how, but then again, we rarely predict technological revolutions in advance, do we? Maybe new smartphone apps will allow thieves to target more lucrative mugging victims? Or geolocation apps will predict which homes are likely to contain the most easily fencible items? Or maybe sophisticated data mining operations will produce new and innovative opportunities for blackmail. Beats me. But somehow offense and defense always seem to keep up with each other, don't they?

This Video of a Sudden Freak Hail Storm at the Beach Is Insane

| Mon Jul. 14, 2014 9:11 AM EDT

This video was reportedly taken at a beach in Siberia Saturday. It is terrifying.

Imagine just being at the beach, enjoying your weekend, when all of a sudden IT'S THE END OF THE WORLD!

(via Digg)

Your Almond Habit Is Sucking California Dry

| Mon Jul. 14, 2014 6:00 AM EDT

California farmers will reap a record 2.1 billion pounds of almonds this year, the USDA estimates—about three times as much as they did in 2000. That's great news for the world's growing horde of almond eaters, because the state's groves supply 80 percent of the global harvest. As this chart shows, California has been planting more and more almonds over the past two decades:

And those almonds are miniature cash cows:

But in the long term, the almond boom may prove bad news for everyone who relies on California's farms for sustenance. You might have heard that the state, supplier of half of US-grown produce, is locked in its worst drought on record. Meanwhile, it takes 1.1 gallons of water to produce a single almond, as my colleagues Alex Park and Julia Lurie have shown. You don't have to scramble to figure how many almonds make up 2.1 billion pounds to realize that that's a hell of a lot of water.

Germany Just Won the World Cup—and Celebrated With This Epic Selfie

| Sun Jul. 13, 2014 7:11 PM EDT

Just after beating Argentina 1-0 in the final game of the 2014 World Cup, Germany's Lukas Podolski and Bastian Schweinsteiger snapped one the most epic selfies ever.

 

 

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Economic Growth Looks Pretty Grim These Days

| Sun Jul. 13, 2014 11:16 AM EDT

Via James Hamilton, the Atlanta Fed is now making its GDP forecasts publicly available. As you can see, they've gotten steadily more pessimistic since April and are now predicting a growth rate of 2.6 percent in the second quarter.

Now, there are two way to look at this. The glass-half-full view is: Whew! That huge GDP drop in Q1 really was a bit of a blip, not an omen of a coming recession. The economy isn't setting records or anything, but it's back on track.

The glass-half-empty view is: Yikes! If the dismal Q1 number had really been a blip, perhaps caused by bad weather, we'd expect to see makeup growth in Q2. But we're seeing nothing of the sort. We lost a huge chunk of productive capacity in Q1 and apparently we're not getting it back. From a lower starting level, we're just going to continue along the same old sluggish growth path that we've had for the past few years. All told, GDP in the entire first half of 2014 hasn't grown by a dime.

I am, by nature, a glass-half-empty kind of person, so feel free to write off my pessimism about this. Nonetheless, the GHE view sure seems like the right one to me. It's just horrible news if it turns out that during a "recovery" we can experience a massive drop in GDP and then do nothing to make up for it over the next quarter. It's even worse news that the unemployment rate is going down at the same time. I know that last month's jobs report was relatively positive, but in the longer view, how can unemployment decrease while GDP is flat or slightly down? Not by truly decreasing, I think. It happens only because there's a growing number of people who are permanently left behind by the economy and fall out of the official statistics.

But hey. This is just a forecast. Maybe the Atlanta Fed is wrong. We'll find out in a couple of weeks.

Mexican Government: Freight Trains Are Now Off-Limits to Central American Migrants

| Sat Jul. 12, 2014 1:20 PM EDT

On Thursday, a freight train derailed in southern Mexico. It wasn't just any train, though: It was La Bestia—"the Beast"—the infamous train many Central American immigrants ride through Mexico on their way to the United States. When the Beast went off the tracks this week, some 1,300 people who'd been riding on top were stranded in Oaxaca.

How do 1,300 people fit on a cargo train, you ask? By crowding on like this:

Central Americans on the Beast, June 20 Rebecca Blackwell/AP

After years of turning a blind eye to what's happening on La Bestia, the Mexican government claims it now will try to keep migrants off the trains. On Friday, Mexican Interior Secretary Miguel Ángel Osorio Chong said in a radio interview that the time had come to bring order to the rails. "We can't keep letting them put their lives in danger," he said. "It's our responsibility once in our territory. The Beast is for cargo, not passengers."

The announcement comes on the heels of President Obama's $3.7 billion emergency appropriations request to deal with the ongoing surge of unaccompanied Central American child migrants arriving at the US-Mexico border. Many Central Americans take the trains to avoid checkpoints throughout Mexico—and the robbers and kidnappers known to prey on migrants. But riding the Beast can be even more perilous. Migrants often must bribe the gangs running the train to board, and even then, the dangers are obvious: Many riders have died falling off the train, or lost limbs after getting caught by its slicing wheels.

Why, though, hasn't the Mexican government cracked down sooner? Adam Isacson, a regional-security expert at the nonprofit Washington Office on Latin America, says the responsibility of guarding the trains often has fallen to the rail companies—who usually turn around and argue that since the tracks are on government land, it should be the feds' problem. (Notably, the train line's concession is explicitly for freight, not passengers.)

In his radio interview, Osorio Chang also signaled a tougher stance against Central American migrants, in general. "Those who don't have a visa to move through our country," he said, "will be returned."

For more of Mother Jones' reporting on unaccompanied child migrants, see all of our latest coverage here.

Here Is a Video Of a Crane Destroying a Truck

| Sat Jul. 12, 2014 12:37 PM EDT

So, as the Daily Dot points out, this video is almost certainly staged, but who cares? It's nuts.

 

There's New Information on What Happened in Benghazi and It Discredits GOP Claims

Sat Jul. 12, 2014 6:00 AM EDT

David Corn and Michelle Bernard joined Chris Matthews on MSNBC's Hardball to discuss the latest Benghazi scandal bubble burst.

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter.