Kevin Drum

Controlling Healthcare

| Thu Nov. 19, 2009 11:13 AM EST

Ezra Klein on the cost control portions of the Senate healthcare bill:

If this piece of the bill was passed on its own, it would be the most important cost control bill ever considered by the United States Congress. But you could never have passed it on its own. You needed the coverage to make the grand bargain work. Republicans like to call this bill a trillion-dollar experiment to expand the health-care system, and in some ways, it is. But it's also a multitrillion-dollar experiment to cut costs in the health-care system, and it deserves credit for that, and support from fiscal conservatives. It's easy to talk about cutting costs, but this is the chance for people to actually do it.

This is a consistently underappreciated aspect of the current reform efforts in general and the Senate bill in particular.  Are they Rube Goldberg concoctions?  Sure.  Might they fail?  Sure.  But they are, by several miles, more ambitious attempts to rein in both Medicare costs, and healthcare costs generally, than anything ever done.  Nothing else even comes close. MedPAC, Medicare growth targets, excise taxes on Cadillac plans, givebacks from Pharma, a modest public option, delivery reforms — these are all pitifully inadequate to the task, but they're also the best prospects for healthcare cost control we've ever seen.

Right now Democrats are stuck.  For short-term political reasons, Republicans have decided to demagogue cost-control because it helps them gin up opposition to healthcare reform in general.  This means Dems can't really afford to do more on this front even if they wanted to.  But at least these bills set the stage.  They put in place both goals and programs that can be built on later if America's party of fiscal conservatism ever decides to stop throwing temper tantrums and instead join in seriously addressing America's long-term fiscal problems.  That probably won't be until after 2012, but if reform passes this year at least we will have gotten started by then.

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Quote of the Day

| Wed Nov. 18, 2009 6:51 PM EST

From Barack Obama, asked what he thinks about Afghan president Hamid Karzai:

He has some strengths, but he has some weaknesses

Obama went on to say, basically, that he didn't care much about Karzai anyway: "I'm less concerned about any individual than I am with a government as a whole that is having difficulty providing basic services to its people."  Not exactly a warm, personal relationship there, is it?

Concentrating Dynamically in Afghanistan

| Wed Nov. 18, 2009 6:34 PM EST

Matt Yglesias on how we should distribute additional troops in Afghanistan:

Afghanistan is a big country. So in addition to the question of how many resources should be sent to Afghanistan, there’s the question of where they should go. Recently, the tendency has been to throw additional resources at the parts of the country where things are worse. In his latest Carnegie Endowment report “Fixing a Failed Strategy in Afghanistan”, Gilles Dorronsoro argues that this would be a big mistake. The resources being contemplated, he argues, aren’t enough to win the war in the South. Sending them there would merely guarantee that we also lose the war in the North and the East, without making much progress in the South.

Instead, he prefers to adopt a more defensive posture in the South—securing main cities where the Taliban is disliked—and focus our attention on winning what he regards as the more winnable struggles in the North and East where the Taliban is making gains but isn’t deeply intertwined with local communities.

Hmmm.  This reminds me of the crime fighting strategy Mark Kleiman outlines in When Brute Force Fails.  It's too complicated to explain the whole thing here, but basically the idea is to concentrate overwhelming force on a small fraction of the population, which then shapes up because they have zero chance of getting away with anything.  As they become better behaved, resources then move to other areas, and eventually the whole population is well behaved.

In other words, it's pretty much the crime equivalent of clear and hold, which is a counterinsurgency staple.  It's also (very roughly) what the surge did in Iraq.  The overall increase in troops from the surge was only about 20%, which seemed plainly inadequate to the task, but most of those troops were concentrated in Baghdad, and it turned out that this was enough to clean up the city.

Now, cleaning up petty crime among drug probationers is not the same thing as stabilizing Afghanistan, but some of the principles are the same.  And as I recall, whether "dynamic concentration" works depends a lot on how widespread violence is to begin with; how good your monitoring and response is; whether your resource level is high enough in the initial target areas; and how much time you have.  Those would all be excellent things to stuff into a game theoretical model to see if an additional 40,000 troops can really make a difference in Afghanistan.  As I've said before, I'm less interested in the argument over the number of troops we send there (which tends to get sterile pretty quickly) than I am in what the detailed strategy is to deploy those troops.  Still waiting on that, though.

Sleazy Web Marketing

| Wed Nov. 18, 2009 1:46 PM EST

Have you ever purchased something online, pressed the "Continue" button, and then, months later, discovered that you had signed yourself up for a membership program that was charging your credit card 20 bucks a month for something you had never heard of and never knew you were buying?  Well, guess what: these scams are a multi-billion dollar business, they're partnered with lots of brand name sites you'd think you could trust, and they do everything they can to sign you up for their "services" without you knowing about it.

More here from Felix Salmon, but make sure your blood pressure is in good shape before you click over to read about it.  Previous background about legal harrassment of a blogger who wrote about this a couple of months ago here.  (Note: blood pressure warning still applies.)

Fact Checking the Fact Checkers

| Wed Nov. 18, 2009 1:10 PM EST

So how about that big 11-person fact-check that AP did of Sarah Palin's book?  Over at CJR, Greg Marx is unimpressed:

Leaving aside the issue of resource allocation, the question is: Did the fact check deliver?

Not so much — at least not if the phrase “fact check” is going to have any specific meaning....Even accepting all of the AP’s claims, several of the cases it mentions are as much matters of interpretation and analysis as factual accuracy. And in some, the Palin statements that it scrutinizes don’t even make factual claims — meaning that there’s not much to “check.”

....This sort of thing matters because, in an increasingly contested political landscape and wide-open media environment, there really is a need for fact checking....But for the idea of fact checking to have any weight — and any hope of broad credibility — it must mean something more specific than “contesting a statement that we disagree with.” When Sarah Palin talks about “Obama’s ‘death panel,’” she’s spreading misinformation that needs to be repudiated. When she talks about being beckoned by purpose, she’s being a politician. We need to recognize the difference.

I wasn't very impressed with AP's effort either, which is why I didn't blog about it at the time.  Somerby is pretty unthrilled too.  Better fact checking, please.

Collateral Damage

| Wed Nov. 18, 2009 12:44 PM EST

Via Dan Drezner, Charli Carpenter tells us that although war crimes are down over the past couple of decades compared to historical averages, collateral damage is up.  Way up:

But collateral damage is not only increasing as a percentage of all civilian deaths. The number of collateral damage victims is also increasing over time in absolute terms. Between 1823 and 1900, 84 civilians per year on average were the victims of collateral damage. Since 1990, the number is 1688 per year — a twenty-fold increase.

Dan comments:

This finding, if it holds up, is surprising for two reasons.  First, the number of interstate wars has been trending downward for the last thirty years — so an increase in the absolute numbers of civilian collateral damage would not be expected.  Second, this bump in collateral damage also took place during a revolution in precision-guided munitions — which, in theory, was supposed to reduce the likelihood of collateral damage.

Note that these figures are only for interstate wars, not civil wars or local insurgencies.  And I wonder how much of it has to do, essentially, with reporting problems.  Intentional killing of civilians is far more vigorously condemned today than it was in the 19th century, which provides both individual soldiers and the military at large with enormous incentives to categorize all civilian deaths as "collateral."  Some of the decline in intentional murders is probably real — that widespread condemnation certainly has had some effect, after all — but probably not as much of it as we think.

Alternatively, this might just be an artifact of the time periods chosen for study.  The 1990s and beyond might have been an era of precision-guided bombs, but precision guided or not, they're still bombs, and bombs do a lot of collateral damage.  In the 19th century, it was all artillery and small arms, which are just fundamentally less likely to cause lots of collateral damage.  Still, the post-90s number is up even compared to the 1945-1989 period, so there's probably more to it than just that.

Other ideas?

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The Bailout and the Future

| Wed Nov. 18, 2009 12:22 PM EST

Paul Krugman writes about the knock-on effects of the government paying off all of AIG's obligations at 100 cents on the dollar:

Brad DeLong says that the loss of public trust due to the kid-gloves treatment of bankers has raised the probability of another Great Depression, because the public won’t support another round of bailouts even if it becomes desperately necessary. I agree — but I think the bigger cost is that we’ve greatly increased the chance of a Japanese-style lost decade, with I would now give roughly even odds of happening. Why? Because bank-friendly policies have squandered public trust in all government action: try talking to the general public about stimulus, and it’s all confounded in their minds with the deeply unpopular bailouts.

By itself, the AIG story would be damaging enough. But it’s part of a pattern — and that pattern has ended up undermining the economy’s prospects, big time.

It's surprisingly hard to disagree with this.  The most optimistic take, I suppose, is that the economy will continue to recover slowly, there won't be another big shock that requires extraordinary government action, and we'll get out of this OK.  And I suppose that's still the most likely scenario.  But public anger over the bank bailout, which was blazing earlier in the year, hasn't really abated.  Sure, the tea parties are mostly over, but anger over the bailout is still smoldering, and it's pretty likely to increase as we continue to see headline after headline about how happily Wall Street is recovering in the middle of a deep recession thanks to all those bailout dollars.  Congress could tamp down some of this anger if it enacted some serious regulatory reforms over the next few months, but what are the odds of that?  Call me a pessimist, but I don't think they're very good.

Is Spending Recovering?

| Wed Nov. 18, 2009 11:50 AM EST

Over at TNR, Zubin Jelveh puts up this graph of consumer spending and notes that it's turned up since August.  Last month it even crossed above the zero mark, meaning that consumer spending is up a bit from the same period last year.

But the great home equity ATM is gone, and that was a big part of what drove increases in consumer spending in previous years as homeowners took out enormous HELOCs to amp up an unsustainable lifestyle.  Without that, will we start seeing increases of 3.5% anytime soon?

A new study by the Boston Fed's Daniel Cooper suggests that we shouldn't be overly concerned with the impact of declining home-equity extraction on spending. Cooper argues that only the credit-constrained (that's economist shorthand for those with little access to credit) borrowed heavily against their homes to consume. He estimates that an 11% decline in housing wealth in 2008 lead to only a 0.75% fall in non-housing-related spending. In other words, declining home prices could only have a small impact on people's willingness to spend. The basic reason is that, in a given year, the majority of homeowners are not credit constrained, so a big drop in home prices shouldn't affect their spending ability (that is, if you believe Cooper and Willem Buiter's contention that the housing wealth effect is really the housing-as collateral effect).

But isn't the bigger question not the impact of one single factor on spending, but where increased spending is going to come from at all?  Basically, it can come from (a) wages going up, (b) increased debt, or (c) spending down savings.  Real wages have gone up a bit lately thanks to negative inflation, but that's strictly a short-term blip.  I don't think anyone expects wages to increase in the future at more than their historical 1-2% rate (1% if you count only cash wages, 2% or so if you count healthcare expenditures too).  Increased debt is out of the question too.  Consumers are paying down debt, not increasing it.  And savings are going up, not down.

None of this stuff has to last forever, and eventually all the deleveraging will be over and we can return to fundamental growth rates.  But even then, with debt and savings neutral, that growth rate is going to be determined by wage growth.  In the near future, at least, it's hard to see how that gets us back to 3.5%.

The Palin Index

| Wed Nov. 18, 2009 1:35 AM EST

Remember a few days ago I said that someone on the intertubes would provide us with a cheap-and-cheerful online index of Sarah Palin's index-less Going Rogue before it even hit the shelves?  I was wrong.  It didn't happen until several hours after it hit the shelves.  Here it is.

The War on Christmas Carols

| Tue Nov. 17, 2009 11:43 PM EST

Mark Kleiman tries to find common ground with Bill O'Reilly:

“Frosty the Snowman” and human rights

Heard it today while changing planes in Houston.  Even if having to hear that song isn’t covered by the Convention Against Torture, surely there’s a substantive Due Process claim about having to hear it before Thanksgiving.  I hope you will all agree with me that Something Should Be Done.

And not to get to Bill O’Reilly here, but the problem isn’t Christmas music.  They’re welcome to play Adeste Fideles and Good King Wenceslaus and the Gower Wassail and Gaudete and even God Rest Ye Merry as often as they like.  The problem is secularized ”holiday” music.  “Frosty” isn’t even the worst of the lot; that dubious honor goes to Jingle Bell Rock.

I happened to tune in to a few minutes of O'Reilly today, and sure enough, he was blathering on and on and on about some poor school principal in Massachusetts whose life he planned to turn into a living hell because school rules in her town don't allow kids to sell manger scenes at the holiday gift sale.  (Something like that, anyway.  I tuned in a little late to get the whole grim story.)  But look: isn't secular holiday music something we can all agree on?  I mean, it sucks.  It really does.  If O'Reilly could dump the whole War on Christmas schtick and instead take up a War on Christmas Music, it would be a bipartisan joy for all.