Thoughts on Obamacare Ruling

Conservatives may well be bummed that the Court didn't bail them out on Obamacare but this was ultimately a good ruling.  The Court respected the political process and did actually put some constraints on how the commerce clause is used.  This goes back to the political process though, and this is where conservatives failed back when Obamacare was passed.  There was one argument that was risible on its face and this is the one Conservatives hung their hat on: nothing needs to be done, everything is ok. 

Obamacare is bad law (though, I think in 10-20 years might be acceptable do to the impact of the cadillac tax finally taking hold) but not unredeemable.  There needs to be a risk pool and a mandate is the simplest and most elegant way of pooling risk.  Where the mandate is troublesome is that the level of coverage mandated is onerous for middle class families.  There are two manners in which this can be remediated (and both should be done)-

1. Equalize the tax treatment for those receiving their health care through their employer and those paying for it themselves (preferably by capping and phasing out the tax exlusion).  There will be a decent subset of the population who makes enough money to not qualify for meaningful subsidies but not so much that paying 15k for a family plan is a realistic option.

2. Which brings us to our second action item.  Reorganize Obamacare and the subsidies around catastrophic plans.  If your insurer has to pay for the first dollar the coverage will be that much more expensive. It is stupid to add parties to routine (or non-routine) predictable expenses.  When purchase something through a third party as opposed to the provider directly you have to pay enough so that both parties can keep their lights on.  That is the principle reason why premiums are so high.  If you have a high deductible your premiums will be a fraction of the cost and the premium savings will be sufficient to cover the deductible*.  The net result will be the subsidies will be less and the mandate will be much less onerous as it will be much easier to avoid.

Republicans have a decent shot of winning the Presidency, the Senate, and the House. Everybody needs real insurance and a decent society provides for this. 

*Most folks would rarely come close to reaching their deductible limit and thus would be paying for most of their care out of pocket.  Again, the premium savings make this eminently doable.  Where this approach is more difficult from a cash flow perspective is for the chronically ill.  While the numbers may not be different if you are reaching the full deductible (they may in fact be less), first dollar coverage functions almost like a forced savings program.

Obama Gay Marriage Announcement

I think it is great that Obama has endorsed gay marriage (only three years after Dick Cheney and after Joe Biden flushed him out but it still counts).  Apparently he is confident that he doesn't need Ohio to win the presidency (I think he is correct on this point).  What I haven't understood is why Republicans haven't sought to finesse the gay marriage issue through a libertarian or federalism angle.  Well, that is not true, I do understand why, you can simply oppose gay marriage as means of bashing gays....but.. I have always thought the right could coalesce around something along the lines of the following:

"We believe that two consenting, unrelated adults should be able to form a union as they see fit.  Many people in this country are religious and consider marriage a sacrament and the exclusive realm of the church.  As such, we don't think the state should call it marriage but rather a civil union whether it be hetorsexual or same-sex and that the same benefits and privileges should attach all civil unions whether they be heterosexual or same-sex". 

Obviously you leave gay bashing on the table which so many on the right apparently can't resist. However, I do think there are a lot of folks who are beholden to a soft or more benign form of bigotry that this would obviate and maybe move them forward in their acceptance of the gay community a bit as well.  my two cents.

Samsung Galaxy Note

I was at Best Buy and saw the Samsung Galaxy Note. It is massive. While a phone it is so large that really it is closer in size to being a small tablet. I don't know that it would fit in anybody's pants' pockets. That said, the screen is absolutely brilliant. Amazing colors and resolution. I can imagine this phone may appeal to women (it will fit just fine in a purse) and people that can palm a basketball.

The Land of the Free

Our Prison system:
'Hulin’s case was unusual: most prisoners who get raped do not write letters to the warden. It isn’t hard to see why: resisting an inmate who claims your body as his own, or, worse, acquiring a reputation as a “snitch,” can turn an isolated incident into months of serial gang rape. Just ask Roderick Johnson, a petty thief who was attacked by his roommate shortly after arriving at a Texas prison. Johnson asked to be transferred to a different section of the facility, and got his wish. But news of Johnson’s physical availability had spread throughout the complex—after you’re raped once, you’re marked—and he was soon enslaved by a gang. In addition to passing Johnson around among themselves, Johnson’s new overseers sold his ass and mouth to a variety of clients for $3 to $7, a competitive enough price that it resulted in multiple rapes every day for the eighteen months that Johnson spent in prison. When he went to the authorities, they laughed and told him to “fight or fuck.”'

To The People of Colorado, Minnesota, and Missouri

You will never see men with the last names Taint or Smegma win the presidency...neither will Rick Santourum.

The People of Florida

unlike the Republican primary voters of South Carolina do not hate America.

To the People of South Carolina

Not since Fort Sumter have you done something so stupid.

Time for a Quarterly Blog Post- Republican Strategy Edition

Romney, multimillionaire, King of Private Equity, Creative Destroyer of Jobs, barring some unforseen campaign mishap (per Edwin Edwards- being caught in bed with a dead girl or a live boy), will be the Republican Presidential nominee. As Romney is filthy rich he will be particularly vulnerable to charges of being out of touch or being in bed with Wall Street. The latter charge may or may not be accurate but is a bit spurious considering his opponent, the President, will in all likelihood obtain more campaign contributions than Romney from Wall Street (probably including Bain, Romney's old firm) and considering that under President Obama those Too Big to Fail firms have simply gotten bigger and are at the current rate becoming Too Big to Save. That aside, one way for Romney to mitigate this weakness is to propose a revenue neutral financial transactions tax. As it is revenue neutral this shouldn't piss off the base much and if he were to propose the proceeds go towards offsetting the employer portion of the payroll tax to stimulate hiring such a proposal would also appeal to moderates and some disenchanted Democrats. Anyhow, Romney Campaign, you are welcome.

Financial Transactions Tax

Tom Harkin and Peter DeFazio are introducing a Financial Transactions Tax (or a Tobin Tax). They should be commended for doing so and Republicans should engage them (though they are unlikely to do so). We will need greater revenues but in the short term the revenues could be used as an offset to the employer portion of the payroll tax providing a greater incentive to firms to expand hiring.

Wilson Carey McWilliams: Theorist of Occupy Wall Street in 1988

The following quotation is from McWilliams' essay, "The Discipline of Freedom," published in 1988 in the volume To Secure the Blessings of Liberty: First Principles of the Constitution, edited by S.B. Thurow. This paragraph could have been published today and it would be rank among the best descriptions of our time:

Contemporary citizens confront a political world dominated by organizations so powerful that they amount to private governments. The media and the other great private associations have a considerable power to shape the market, to set terms for social life and to mold political opinion. Ordinary citizens, in practice, have little or no ability to create alternatives; these private governments can be controlled only by equally gigantic public bureaucracies. But private governments are often so important that government, at least in the short term, cannot allow them to fail. This is not a matter of ideology . . . . At a certain level and size, the great private governments virtually become institutions of the republic. The relative invulnerability of private governments, however, emphasizes the distinction between such organizations and the small businesses and individuals who can be and are allowed to fail because they are not important to the republic as a whole. The lesson is not lost on citizens: for individuals, public life is a sphere of indignity as well as of weakness, a sphere of activity in which only a few are heard and still fewer matter.

Occupy/Disrupt

I am actually heartened by both the Tea Party and the Occupy Wall Street (and growing number of cities) movements. Both of these movements are corrupt in their own way (the tea party pretty quickly was in part coopted by old school republican aparatchiks and it looks like the Occupy movement is in the process of being coopted by public sector unions) but have at their core been a vessel for the average person to express their disatisfaction (often rage) with the status quo and actually be heard. Our current fiscal situation is not sustainable, we narrowly avoided a developing economy syle financial crisis on the basis of our credibility (bulit up over two hundred years)which we have now spent, record numbers are unemployed with no prospects in sight...in short we are mired in the worst type of failure, one which are elites are largely responsible for. I think the more disruption the better. Wall Street is not creating jobs but creating rents which they are capturing and steering more capital away from productive uses and into their private coffers. Wall Street is a boil that needs to be lanced.

On Occupy Wall Street and Capitalism

The response to the Occupy Wall Street protest in New York City from right-wing talking heads has been to portray the masses of people as against capitalists and capitalism. As many others have pointed out, there is little truth in this charge. But that really doesn't matter, since the point of ascribing to them a hatred of capitalism is to portray them as politically essentially a sterile movement with nothing to offer. They are anti-capitalist in a vehemently destructive sense -- they want to get rid of Wall Street jobs and the job creators! -- or so many republicans would have you believe. What the right wants you to see as a passionate hatred of capitalism, is actually people who have dared to entertain and have come together to nourish their hope for making America a country in which workers can earn a living, raise a family, afford education and health care, and retire. The protesters do not hate capitalism; they hate the plutocratic undoing of democratic politics in which vast numbers of people - the 99% - are supposed to matter more than vast sums of money.

Random Musings on Christie and Palin Announcements

When Gov. Chris Christie announced he wasn't running I imagine the President and his campaign advisers sighed a sigh of relief. When Sarah Palin announced she was running I imagine the President and his campaign advisers sighed a sigh of disappointment.

Shovel Ready Projects

This from Megan McArdle:
"The infrastructure stuff will be fine, if we choose good projects--America needs roads and airports and so forth. But as we discovered with the previous round, the better the project, the worse the stimulus. There are no terrific infrastructure projects sitting around, waiting to break ground next week . . . nay, not even if we streamline the regulatory red tape."
I don't entirely agree with this. While I would love to see intercity rail, upgrades at our ports (not airports), light rail and BRT in cities, these will all take time. To that extent it is true. However there are some things that are high value, that can be implemented rapidly. I think the FAST proposal (Fix America's Schools Today) is one that can deliver a high and lasting value (employment today, reduced energy consumption hereafter) and be implemented quickly. My only disagreement with the proposal as is I don't think Davis Bacon rules should apply. The same logic though could be extended beyond schools to federal buildings and state and local government properties. This would benefit a sector where employment has been destroyed (construction) and have long lasting environmental benefits. That constitutes efficient stimulus.

How to Frame a Winning Campaign Theme

You can campaign for something and you can campaign against something. This falls into the latter camp and I think has it dead on:
“It’s the collusion of big government and big business and big finance to the detriment of all the rest — to the little guys.”
Guess who said it.

Republicans, Taxes, and the Poor

Today's NYT editorial brings to mind this quotation by sociologist Zygmunt Bauman: "One cannot desire poverty for others without feeling morally contemptible; but one can desire lower taxes." Or to raise taxes on the poor.

Federal Holidays

Tyler Cowen has a post speculating on what will be the next federal holiday and who will be the namesake. This is a subject near and dear to my heart (I love vacation*, yay!). What says you my dear non-existent readers?

2012 Prediction

The election is just over a year away but I feel confident in predicting that Mitt Romney will both win the republican nomination and become our next president. The economy sucks and it is likely to muddle through at best (or tank if Europe disintegrates further as it is threatening to do). Unemployment is unlikely to rebound in the near term (I wouldn't be surprised if we are staring down 10% unemployment again by November '12). What odds would you like to give me that the stock market is above 10k? Home prices will likely be flat, maybe still declining in some places and foreclosures will continue to be stacking up. I think this means that the generic Republican (and Mitt Romney is assuredly the nearest thing) will beat President Obama handily*.

*Inconvenient fact- Romney is mormon and that gives a lot of otherwise fair-minded people the heebeejeebees and this is to say nothing of those who are not fair-minded.

Texas Jobs

Now that Rick Perry has thrown his hat into the ring his record is being rightfully dissected. One thing that has struck me is the commentary surrounding how low paying Texas jobs are. The median wage in Texas in $15.14 (28th in the nation) which would in fact be quite low in someplace like N.Y. and D.C. where the cost of living is quite expensive. In D.C. $15 an hour is what you make slogging away for some obscure non-profit and enables you to get a room in a run down group home (probably not a well maintained one at that) in a transitional neighborhood. However, in anti-zoning zealous Texas land is plentiful and land use restrictions are minimal thus you end up with cities like Houston where a single family home can be had for $130,000. I have never been to Houston so I can't speak to its vices or virtues but I would consider affordable housing a virtue. And since housing and the overall cost of living is lower in Texas the median wage gets you much further than it does somewhere like NY or LA. There are many credible lines of attack against Rick Perry--clearly he has said some things that are batshit crazy (his claim that if Bernanke and the Fed starting printing more money that that would be nearly treasonous*)-- but the low wage meme is not one.

*The treason comment and his earlier secession comment unfortunately probably reveal less about Rick Perry but rather reflect an able politician who has a good feeling for his base.

Interesting Article on Germany

David Leonhardt has a superficial but interesting piece on the Germany's relative economic success over the last couple of years. There is one sentence that I take issue with and think is a bit misleading:
"That role starts with serious regulation. American regulators stood idle as the housing bubble inflated. German banks often required a down payment of 40 percent."
First I would question the wisdom of requiring such a large down payment almost as much as enabling such low down payments as we see in the US. I don't know that society is necessarily bettered by actively discouraging home ownership. I believe governments position should be neutral but look to ensure that banks are not taking imprudent risks. At some point everyone would like to stop working and you will need shelter, not having to pay rent seems like one way to ensure an adequate retirement. In the absence of home ownership my guess is there is probably a need for higher state pensions. But that aside, it does appear that German and European regulators were very much asleep at the switch. While they did not allow German banks to lower their credit standards for German homebuyers (quite the opposite as documented above), German regulators apparently had little problem with DeutscheBank and other German banks accumulating as many bad risks on their balance sheet at considerable leverage.

What interested me also was any lack of reference to the German Kurzarbeit scheme which seems to have blunted layoffs. If you look at mass layoffs I think there are two ways to approach them (that is preventing them). The first would be to see the primary goal as propping up consumption so firms might hold off on cutting their workforce. Alternatively you can attempt to make the cost of labor cheaper. I think Kurzarbeit is very social democratic gloss on the latter. In the US the most direct and obvious way to have cut the costs of employment would have been to cut the employer portion of Social Security.