Kevin Drum

Quiz of the Day: What Is This Map?

| Thu Jul. 9, 2015 1:59 PM EDT

This map was released today as part of a 14-page research report. What is it?

Here are your choices:

  1. Donald Trump's claim of how many states Republicans will win if they nominate him for president.
  2. The creeping spread of socialism in Barack Obama's America.
  3. Other than white, the predominant color in each state's flag.
  4. Which states make it easy to look up health care prices.

Yeah, the answer is #4. Red means your state got a letter grade of F. In other words, 45 out of 50 states do exactly nothing to make health care pricing transparent for their residents. Here's how this plays out in real life:

If any single fact illuminates why reining in health care spending is going to be easier said than done, it might be this: we don't even really know why a typical, low-risk childbirth costs $1,200 at some hospitals and $12,000 at others.

....In Massachusetts, a state that passed a law in 2012 to make health care costs more transparent [but still gets a grade of F anyway. –ed.], a research team trying to track down the price of a simple left knee MRI without a contrast dye found themselves transferred to six or seven departments and playing phone tag for days. Among 22 hospitals in a survey by Barbara Anthony, a senior fellow at the Pioneer Institute, a free market public policy think tank, it took anywhere from 10 minutes to nearly a week and a half to get an answer. If it's that difficult to figure out how much it will cost to get a short scan to look at your knee, good luck trying to pin down the cost of the miracle of life.

Is there any other significant area of life where it's virtually impossible to find out how much something will cost before you decide to buy it? I sure can't think of one.

The full report is here, but it warns that "you will find little progress since last year and, in some cases, regression." Sounds like a fun read.

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Will the Real Death Panel Please Step Forward?

| Thu Jul. 9, 2015 12:31 PM EDT

Death panels are in the news again. But it's confusing. First, here's the proposal:

Federal health officials are proposing that Medicare begin paying doctors to discuss end-of-life issues with their patients, six years after the “death panel” controversy erupted in the early days of the debate over President Obama’s health-care legislation.

....Sarah Palin, the Republican vice presidential candidate in 2008, ignited a political firestorm in 2009 when she denounced a provision in the health-care legislation that would have allowed Medicare to reimburse doctors for discussing living wills and other end-of-life issues with older patients. She said it would create a “death panel” that could decide who received care. The provision was removed from the final Affordable Care Act legislation.

But is this really Sarah Palin's "death panel"? Here's what she actually said:

Who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course. The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama's "death panel" so his bureaucrats can decide, based on a subjective judgment of their "level of productivity in society," whether they are worthy of health care.

Later on, Palin said that she was referring to the idea of paying physicians to discuss end-of-life preferences with older patients. But that sure doesn't sound like what she was talking about. It sounds like she was talking about rationing care, and that's always been code for the Independent Payment Advisory Board—IPAB—which was tasked with keeping Medicare costs below a certain target. Here is National Journal a few weeks ago:

If a "death panel" never rationed health care, did it really earn the name?

That's the question for Congress this week: The House soon will vote to repeal the Independent Payment Advisory Board established by the Affordable Care Act, dubbed at various times a "death panel" and rationing board by its opponents.

...."These 15 political appointees will make all the major health care decisions for over 300 million Americans," then-Rep. Michele Bachmann said in 2011 during one of the Republican presidential debates. "I don't want 15 political appointees to make a health care decision for a beautiful, fragile 85-year-old woman who should be making her own decision."

So which one is the real death panel? Neither one, of course. It was all nonsense from the start. But apparently federal officials are going to take a crack at bringing back the one we killed, while Congress is going to take a crack at killing the one we kept. So we could end up with two death panels or with none.

But wait! There's more! You may recall that Republicans are also suspicious of evidence-based medical research. They were convinced that "comparative effectiveness" research was just a stealth measure to take treatment decisions out of the hands of local doctors and instead centralize them in the hands of green-eyeshade DC bureaucrats. In other words, a death panel. So there are actually three death panels. They're everywhere!

But don't worry about it. End-of-life counseling has always had bipartisan support, and only lost it in the frenzy of passing Obamacare. It's bound to come back eventually. And IPAB is simply a board tasked with recommending ways to keep Medicare spending under legislative targets. It does no rationing, and everyone knows it. However, Medicare spending has been so low recently that the board has had nothing to do. That's the only reason it might be killed off. (Though President Obama has promised to veto any attempt to get rid of it.)

For more on all this, check out Michael Mechanic's explainer on the end-of-life controversy here.

This Year, Everyone Is In Disarray

| Thu Jul. 9, 2015 11:18 AM EDT

Democrats in disarray!

The ongoing debate over trade legislation within the Democratic Party between pro-business and pro-labor forces has put deep divisions in the party on public display....It is in this context that many in the labor movement, and on the left generally, view the Trans-Pacific Partnership, now in the final negotiating stages, as an unmitigated disaster. From this vantage point, Republicans who vote for trade agreements are working on behalf of their corporate supporters. Democrats who support the TPP are worse, however, seen by many as traitors to their constituents.

....While the left is ascendant, the likely scenario for a resolution of the intraparty disagreement over trade is as follows: Until she secures the nomination, Hillary Clinton will voice the level of criticism of the TPP necessary to prevent the issue from serving as a mobilization tool for her rivals. Then, if she actually wins the presidency, she will most likely follow the path of her predecessor....After winning the presidency as an adversary of free trade, Obama in office became an advocate.

Republicans in disarray!

The party is warring over funding for disease research, bickering over an education bill and deeply divided on the possible renewal of the Export-Import Bank, an object of scorn among the far right.

....The broad disagreement on so many fronts lately is striking. Congress is almost certain, again, to fail to come to a timely agreement on a long-term highway bill. Republican leaders had to abruptly pull the emergency brake on a sweeping reauthorization of the Federal Aviation Administration, amid a tiff about privatizing air traffic controllers. As if all that wasn’t enough, a showdown over government funding is fast approaching.

....All of this acrimony has led some top Republican officials to wonder whether they’ll ever be able to get things in line.

So who's in more disarray, Democrats or Republicans? Sounds to me like the answer is Republicans, though I suppose it depends on just how bitter the TPP fight gets. In any case, Congress is off for the entire month of August, so most of this stuff won't blow up until September. Just in time for a government shutdown! Booyah!

Quote of the Day: Jeb Bush Is Still Chasing Economic Unicorns

| Thu Jul. 9, 2015 12:40 AM EDT

From Jeb Bush, asked about his economic plans:

My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see. Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and, through their productivity, gain more income for their families.

Lots of people are mocking Bush for suggesting that Americans don't work long enough hours. But aside from being tone-deaf, he didn't really say anything wrong here. Economic growth is the product of hours worked and productivity growth, so he got that right. It's true that Bush's use of "productivity" in the third sentence is a bit confusing because he's suddenly using it in its generic sense, not its formal economic sense, but that's no more than the slight clumsiness that's inevitable in live settings.

In any case, an aide later explained that when Bush talked about longer hours, he was referring to the underemployed and part-time workers, not suggesting that Americans in general needed to work more weekends. That's fine. No one has a problem with that. The real issue here is different: Bush is once again merely stating economic platitudes. He wants 4 percent growth. Of course he does. Everyone wants that. He then repeats himself: he wants higher productivity and he wants the underemployed to work more hours. It's like saying his goal is to lose weight, and then "explaining" that this means more exercise and fewer calories. No kidding. But what's the plan for making it happen? That's what we're interested in.

I know, I know: lower taxes will supercharge the economy blah blah blah. Eventually he'll have a 20-page white paper that's about 19 pages of argle bargle and one page outlining his brilliant new tax plan. Wake me up if he ever says anything that goes beyond fantasyland.

Quote of the Day: Second Thoughts Now Plaguing Greece

| Wed Jul. 8, 2015 11:22 PM EDT

From Iosif Perdikaris, a Greek pensioner who can no longer find insulin at any of his local pharmacies:

“How am I supposed to manage my diabetes without my insulin?” Mr. Perdikaris screamed at the pharmacist.

He said he was starting to regret voting against creditors’ terms for a bailout in last Sunday’s referendum.

“I voted ‘no’ and now look at this,” he said. “I can’t get my medications, and next week we may be using drachmas.”

This is just the start.

American Corporations Are Getting Flabby. They Need More Competition.

| Wed Jul. 8, 2015 9:48 PM EDT

Greg Ip says American corporations could use more competition. Preach it, brother:

In a perfectly competitive world, firms ought to exploit [...] cheap borrowing costs to add profitable new capacity and products, until all the added competition pushes profits down. That’s not happening.

....The main reason companies are reluctant to invest is that economic growth has been sluggish....Yet companies may also feel less compelled to invest because they face less pressure from competitors....Across the country, the rate of new-business formations has been trending down for decades.

....While the most comprehensive data on market concentration is available only until 2007, it supports the picture of ebbing competitive vigor. That year, the four biggest firms controlled at least half of the market in 40% of individual manufacturing sectors, up from 30% in 1992, according to Rineesh Bansal of Deutsche Bank: “The story of American business over the last generation…is one of declining competition.”

.....What could explain growing market concentration? John Kwoka of Northeastern University says that in the past 20 years, the Federal Trade Commission has become less likely to challenge mergers in industries with five or more big competitors, while maintaining stiff scrutiny where just a handful of competitors prevail.

As Ip says, the main reason for weak investment and slow startup growth is the sluggish state of the economy. But that only explains the past few years, and these trends have been going on for decades.

I remain uncertain about why there are so many fewer startups than there were 30 or 40 years ago. Some of it may be simply less demand for mom-and-pop businesses like restaurants and dry cleaners as chains have gobbled up more and more market share. Some of it may be increased regulatory barriers of various kinds. Some of it may be that outside of glamorous places like Silicon Valley, where VC money reigns supreme, ordinary bank loans to start a small business are harder to come by. I'm just not sure. I've read a number of reports about this phenomenon, but they typically show little except the gross numbers. There's simply not enough detail broken out to come to any firm conclusions.

Consolidation among big companies is a little easier to explain. There have always been incentives for big companies to merge, and those incentives are probably even stronger in an economy where competition is global. Still, in the past there was a strong pushback against that trend from antitrust authorities. That changed a few decades ago when Robert Bork convinced everyone that reduced competition per se wasn't a problem. As long as a merger would benefit consumers, it should be allowed.

That's a seductive argument, but I suspect it's lethal in the long run. If you look at the history of innovation over the past couple of centuries, there's little question that fear of competition—from both startups and from mature competitors—has been a key ingredient. If you let competition degrade, even with the best of intentions, you're going to pay for it eventually—and "eventually" may come sooner than you think. In fact, those chickens are already coming home to roost, and things are only going to get worse if we don't (a) start getting serious again about antitrust and (b) figure out why startup activity has declined. A dynamic economy needs both.

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Today's Assignment: A Definition of Family That Everyone Can Love

| Wed Jul. 8, 2015 2:44 PM EDT

Will Saletan tweets unhappily that his son was "marked down 5 percent on a high school health test because he chose this 'incorrect' definition of family." David French is unhappy too:

How reassuring that our educators — in their infinite wisdom — have expanded the definition of “family” to “a collection of individuals who care for and about each other.” But to paraphrase The Incredibles — If everyone is family, then no one is. I’ve “cared for and about” my classmates in high school, college, and law school. I’ve “cared for and about” my colleagues at every job I’ve held. I guess we’re all family now.

Look, this is probably just a lousy question. Even Saletan and French, I assume, would agree that answer C is obviously incorrect. Adopted children are family. In-laws are family. Stepfathers are family. "Related by blood" just flatly doesn't work.

On the other hand, yes, answer E seems mighty broad—though I'm not sure if there's any decent way to succinctly define family at all. I'll note that my dictionary needs four separate definitions just to encompass the usage we're talking about here (i.e., not including crime syndicates, taxonomic classifications, etc.).

But there's no need to get too outraged about this. There's certainly value in teaching our kids that sharing DNA isn't the exclusive definition of family. And while we should probably be able to do better than answer E, the more I think about it, the harder it gets. Anyone want to take a stab? We all promise not to laugh.

Router Failure Grounds Entire United Fleet

| Wed Jul. 8, 2015 1:30 PM EDT

Greece is in trouble. China is in trouble. Puerto Rico is in trouble. The New York Stock Exchange has been shut down over a "technical issue." And United Airlines has halted all its flights:

United midday on Wednesday said that the grounding had been caused by a computer-network router that malfunctioned, which disrupted its passenger reservations system. That meant that many passengers couldn’t check in for their flights. The disruption affected some places more than others, but it covered the entire network, which was why United decided to ground its entire mainline and United Express fleet worldwide.

Yikes! The malfunction of a single router torpedoed United's reservation system for an entire day? That must be a pretty delicate network they're running there.

If Iran Talks Fail, Iran Will Likely Become a Nuclear Power

| Wed Jul. 8, 2015 12:01 PM EDT

Zack Beauchamp points to a valuable piece in Foreign Affairs today about the Iran nuclear negotiations. In it, Dalia Dassa Kaye reminds us that failure wouldn't just mean a return to the status quo that existed before talks began. It would, instead, almost certainly lead to conditions on the ground that are far more dangerous than they were before we even started:

The first and most dangerous scenario is that Tehran could break out of the interim nuclear agreement, the Joint Plan of Action, which has essentially frozen Iran’s nuclear program for nearly two years. With no promise of lasting and more significant sanctions relief, Iran may decide to resume its nuclear enrichment program at levels that reduce the time it would need to weaponize its nuclear program.

....To make matters worse, unless it is clear that Iran is at fault for the breakdown in nuclear talks, the current broad international support for sanctions against Iran could weaken....Key international powers, and even some in Europe, may tire of self-imposed restrictions, especially if Iran appeared to have negotiated in good faith. So, Iran could find itself less isolated over time, especially if Congress rejected the deal, leaving the United States to blame for the failure. Indeed, this is the worst-of-both-worlds outcome—few constraints on Iran’s nuclear program and dissipating international pressure on Iran.

A return to military escalation with Iran is also more likely in a no-deal Middle East. Iranian hardliners’ arguments that the West was never really interested in a deal with Iran will appear vindicated....This could lead to an expansion of Iran’s already destabilizing regional activism, particularly in Iraq, Syria, and in its relationship with Hezbollah.

As Beauchamp points out, sanctions against Iran were never going to last forever, either with or without a deal. That's just real life when an effective sanctions regime requires the cooperation of dozens of countries, including some who have iffy relationships with us in the first place, like China and India, and others who simply aren't willing to play along forever in a losing cause, like Japan and South Korea. So the question is whether to let the talks fail, in which case the sanctions will almost certainly crumble in as little as a year or two, or to strike a deal, in which case the sanctions will go away but we'll get something in return.

The alternative is to let the talks fail and then restart them in search of a better deal. But this is a fantasy. If these talks fail, there aren't going to be new talks. What will happen is that sanctions will slowly decay and Iran may well decide it no longer has any incentive to halt its nuclear weapons program. If you're willing to deal in the grown-up world, rather than the fantasy neocon world, those are your choices. Go ahead and take your pick—but don't pretend there are magic unicorns just over the horizon if only we showed a little more toughness. There are no unicorns.

Greece Puts Off Day of Reckoning Another 24 Hours

| Wed Jul. 8, 2015 11:06 AM EDT

Greece submitted its proposal to the Troika today to extend its bailout program for three years. It was one page long. Here's an excerpt:

As you might expect, this is going over like a lead balloon. The Inspector Javerts of the eurozone will not be put off with vague promises of reform. Until they see details, and see them in a way that Greece can't wriggle out of, they will just sit stony-faced and wait. The response of Guy Verhofstadt, leader of the European Parliament’s liberal party, was typical: “You are talking about reforms but we never see concrete proposals of reforms,” he said, in a speech that was greeted with loud applause. The previous night, Angela Merkel told reporters without emotion that "the conditions for starting negotiations on a program in the framework of the E.S.M. continue not to exist."

So now Thursday is the day of reckoning. The only good news for Greece, I suppose, is that Treasury Secretary Jacob Lew kinda sorta spoke up in favor of the Greeks, insisting that Greece's debt was unsustainable and needed to be restructured as part of any deal. It remains to be seen whether anyone in Europe cares about Lew's opinions.