Sunday, March 28, 2010

On healthcare, again ...again

Well since I rely heavily on The Economist as my primary news source, it should come as no surprise to find that I'm essentially echoing their views, albeit in a much less eloquent way. For those of you that aren't avid readers of the news magazine, its important to note that even given these critiques The Economist supported the passage of this bill based on the humanitarian imperative of insuring more people. I can't link to the article for non-subscribers, but here are a few excellent excerpts from their business commentator who puts it far better than I did (feel free to ignore my previous post as this pretty much sums it up):

"Obamacare has taken the most idiosyncratic feature of American health care - the fact that the onus for providing health insurance falls first and foremost on companies rather than on individuals- and set it in concrete."

"Left-wingers point out that employer-provided health care fails to control costs ... conservatives argue that costs would come down if individuals rather than companies were responsible for their own insurance. But Mr. Obama insisted from the first that Americans who liked their existing cover would be able to keep it"

"General Motors complains that providing health care adds $1500-2000 to the cost of every car it produces in America" (!!!)

"... employees feel no compunction about undergoing expensive treatments, since the company pays. The fact that employer-provided insurance is untaxed blunts employers' incentives to control cost"

and finally

"overhauls of something as complicated as America's health-care system only come once in a generation."

Let's hope they're wrong.

Saturday, March 27, 2010

On health care, again

In a word: ambivalence.

So health care passed and depending on who you talk to its either turned this country into an egalitarian paradise or a fiscal nightmare. Both claims are equally ludicrous.

I'm not happy with the legislation that passed because, as I saw it, there were/are two goals to health care reform. We wanted to stop spiraling costs from destroying both private pocketbooks and public entitlement programs, and we also wanted to finally join the rest of the civilized world by insuring most citizens. Well, we've successfully accomplished the latter goal, but even the most ardent supporters of this reform bill have to admit utter defeat on the first.

My lack of happiness stems from our lack of doing what I saw as the more important goal: changing the incentives in this perverse system in order to cut costs. As I saw it, bringing down health care costs would allow more people to afford it and thus bring more people into the system. Bringing more people, however, into a clearly broken system just puts a heavier strain on policies that have been failing for quite some time and will continue to do so.

My lack of outright unhappiness comes from the fact that I don't see broadening the social safety net as an inherently bad thing. I'm glad more people are insured, and it seems that this bill did it in a relatively responsible way. I still think the fiscal aspect is highly overstated: almost everyone compares this bill to the Massachusetts plan which isn't necessarily failing but has far exceeded even the wildest of initial cost estimates. As such, it has turned to the federal government for help, but the federal government won't have that luxury.

The cost estimates from the CBO rely heavily on the ability of congress to approve taxes and recommendations in the future, such as the 'Cadillac Tax' that is supposed to become effective in 2018. This can, and most certainly will be undone with the stroke of a pen once 2017 rolls around and thus the budget estimate becomes meaningless. Likewise, supposed cost cutting measures come from a panel that will set guidelines regarding the efficacy of certain treatments that are contingent on congress signing into law. We all know how well that will work, it's hardly been 6 months since the recommendations for mammograms caused outright vitriol across the country.

Nevertheless, I'm glad to live in a country where more people will be insured and I don't think the effect on growth will be that horrendous. Make no mistake about it though, these taxes will have a net detrimental effect. Caterpillar predicts 100 million in added costs, AT&T: 1 Billion. Yes we'll insure people with that money, but it will absolutely come at the expense of jobs and productivity. I'm okay with that, but it's essential to keep in mind.

The real issue now is how to get at cost. Unfortunately, and I hope I'm wrong on this, passage of this bill makes further reform even less likely if only for the fact that people are sick of hearing about health care. We do, however, need tort reform. We absolutely do need to take away the tax breaks for employer provided insurance. This ridiculous system serves only to obfuscate health care costs and prevents individuals from being able to accurately weigh the costs and benefits of certain health plans and procedures. We would all be much better off if our paychecks were a bit larger and we could use that money to shop around for our own insurance plans like they do in every other non-single-payer country in the developed world. Increasing transparency and bridging the information gap at this microeconomic level is crucial to fixing our macroeconomic problem.

Politically, I laugh in the face of angry Republicans on this one. They claimed the system was broken and provided abslutely no concrete fixes. How hard would it have been to say at the health care summit, here: this is our plan. But they didn't. Instead they talked about tort reform, and even then it was far to late. They had the chance to get these good ideas into the Senate Finance Comittee's initial bill, but they belly ached and left the processs completely. The sad thing is that tort reform would have been great to add to this bill, as would have been the end of employer tax breaks. I think the bill would have been far better with some of these Republican ideas, none of which were at odds with this existing legislation.

Instead they kept them as mere ideas rather than concrete proposals and stood steadfast in their opposition to the current bill which really isn't all that bad and they know it. Just ask Mitt Romney the conservative poster child who passed an 85% similar bill a few years ago in Massachusetts. Whining about the individual mandate is absolutely shameful; this was THEIR idea in the mid 90's. You absolutely can't stop the exclusion of pre-existing conditions without the individual mandate because everyone would wait until they get sick to go sign up for insurance. Likewise, you can't break this bill into smaller chunks and tackle them one at a time as was preposterously suggested: it's clear that these policies rely on one another to be effective.

That's not to say I'm happy with the Democrats, after all, why on earth isn't tort reform in here? Just because it was a Republican idea? Clearly bowing to the unions are why the employer tax break stays put, and why the Cadillac Tax won't be implemented for 8 years, if ever. My inclination is to take the government intervention out of the system rather than add more regulation, but I know not everyone would agree. This is why I advocate less government intervention in the realm of giving tax breaks to businesses that supply health insurance. I just truthfully can't fathom the argument for this system especially in the face of an individual mandate where everyone would be forced to get health care. It's a 'less-government' idea, and why democrats can't support a single decrease in government size is mind-boggling.

In any event, we're left with a new entitlement that is mostly paid for and will help a lot of people in this country, most of whom are from lower income brackets, get access to health care. It also leaves us with a politically toxic and polarized environment which will make further reform on health and other issues more difficult. It adds more stress to an already broken system of health delivery, and it does little to curb costs and nothing increase tranparency at the microeconomic level so that individuals can make more rational decisions. The tax increases aren't crippling to growth, but considering the other inevitable tax increases that will be required to come close to balancing the bloated federal budget, they might quickly approach crippling.

With that rant, I'll leave you with some of the better articles that I've read on the issue. Most of these are critical or ambivalent, and I'm purposefully doing that because the benefits of having more people insured are clear. Reading some critiques can help us decide whether the costs (which are far less clear) are worth the benefits.

From Cafe Hayek

From The Economist
From the American Enterprise Institute

Another from AEI

And as a special treat, here is a fantastic bonus article on entitlements

Saturday, March 13, 2010

On Capitalism: a love story

Another movie review? I'm running short on things to say as of late and can't help myself on this one.

I'm not going to judge this film on its cinematography, because Moore clearly knows how to make a documentary. Rather, I'm going to briefly tirade against the dishonest, illogical drivel that makes up the films content. I'll limit myself to two case studies for the sake of brevity but I could probably annotate the entire film with counter arguments and objections to populist cheap shots (should we somehow feel convinced that Priests and actors know what the hell they are talking about with respect to the economy?).

The first is that we should somehow feel bad that airplane pilots don't make as much money as Michael Moore thinks that they should. Sure I'd love to pay them more, but does anyone think that the majority of Americans are willing to pay extra money on the cost of the airfare to pad pilot's salary? Their job requires education and great responsibility, but how else are we supposed to reward them if not by letting customers decide how much they are willing to pay for their services? Their income is decided not buy some bureaucrat or industry executive, but by the American public voting not with their hopes and wishes but by putting money where their mouth is.

Maybe low income levels will discourage young pilots-to-be from getting their pilots lisence, this dimished supply will inturn lead to a higher demand for well trained pilots who can thus demand a higher wage(!). Artificially setting their wage, however, will encourage an excess supply of people wanting to become pilots and having to compete for a limited number of jobs. We would thus have a large number of pilots, many of whom are unemployed while the rest make a great wage but are ready to be fired on a whim because there is always someone else waiting in the wings to take their tenuous job. I say that having a supply of pilots that meets demand even if their wage isn't as 'fair' as some might like is a far better option.

Moore also goes to an electronics manufacturing co-op to espouse how great it is when companies are run and owned by their members. Somehow through all of this we're supposed to forget the fact that he is in Michigan, and that the capitalist system that he denegrades throughout the film clearly allows, nay enables, this to happen. I say yes to more worker owned co-ops who pay their workers a decent wage, and I bet a majority of the population does too.

Of course, we say this, but are we willing to pay extra money for it? This co-op that he visits seems to be doing a good job, and more power to them. If they were able to produce quality goods at a low price, there would probably be a lot more of them. Even if they weren't able to bring costs down as low as large corporations, if the majority of this country really valued their manufacturing and ownership process higher, there would be more of them because they're not limited by the government or by evil corporations.

Their success is limited by how many people are willing to vote with their money and buy products produced from worker owned co-ops. I belong to a food co-op, and I pay a premium for it. But really, the fact that its across the street from my house is a prime motivator and I'm not willing to pay a 10% surcharge on a car, computer, etc. just to know that it was made from a factory that was owned by its employees. And even if I was willing to do so, I could under our terrible capitalist system...

As best as I can remember, I liked Bowling from Columbine and Farenheit 9/11. I was of course a young, idealistic, liberal college student at the time but can recall that many arguments that Moore made resonated with me to the point of being ready to grab my pitchfork and descend upon the District. The faint recollection of these other films and my agreements with them made my stomach churn as I listened to one illogical argument after another in this movie.

Oh how I hope that his earlier films really aren't this awful upon reviewing. It will make me so jaded about the entire liberal college aged crowd to which I once belonged as well as personally ashamed that I couldn't recognize poorly crafted arguments. For now, I'll simply say that this film is a two hour lesson in half baked economic populism with no understanding of economic reality and no solutions/suggestions for the areas where problems clearly do exist. Instead, we're left with a tried and true delusional argument (I hate to even use the word) about how great life was in the 50's, how ruinous it has since become, and how terrible it is when factories close down because someone else can produce a product better and cheaper.

If democratic socialism is the goal, how is it possible to not once visit or talk about Scandinavia? There is a cogent argument to be made against U.S. style capitalism. I'm not sure I agree with it but I at least acknowledge that if your value systems differ, the Scandinavian model can be an appealing alternative that trades a certain amount of technological innovation for a larger social safety net. This film, however, isn't the place to learn about it or anything else for that matter.

*posted on my blog, fingerprints.and.snowflakes*

On The Hurt Locker

Well at the risk of being too untimely, and having not written an entry in quite some time, I'm going to frantically write down a few thoughts about this years Best Picture: The Hurt Locker.

I'm ever so thankful that Up in the Air didn't win, because really at that point they might as well have given the award to Nick and Norah's Infinite Playlist. And, I'm also glad that Avatar didn't win either as its plot line was rivaled only by GI Joe (which was clearly robbed of several acting awards).

I'm happy that The Hurt Locker won. It is a deserving picture, and is one of a very select number of movies that really had me emotionally involved. This isn't to say that I felt for the characters, but rather that the tensest moments of the film were gut wrenching for me. I give a great amount of praise to any movie that can evoke a visceral reaction in its viewer, even if every now and then I shook the feeling off and felt rather ashamed at the grip that it had on me. Because after all, I can't help but feel duped when a film can successfully play my heartstrings like a harp from time to time; this to me is the very definition of trite even when done well.

Of course, I'd be amiss not to mention the content of the film which has caused quite a bit of fury in the press, namely that the movie is (apparently) completely unrealistic. As someone who never went to war, I'm not going to comment on the accuracy but I did read a few interesting analyses. All of the events depicted in this film have happened to some degree, but they have happened to different units. In that sense, the film makers weren't being completely untruthful but it does require a bit of information gathering on the audiences behalf to gain anything factual rather than emotional from the film.

Whether its okay to be untruthful in the name of art is an open debate. I personally don't think the film really built up these characters strongly, and it could have easily been shot with a different unit involved in each situation. This would presumably be much more realistic, while changing little in the way of content. But I suppose for narrative purposes, portraying all events as happening to one unfortunate unit in 50 days creates a better story; it is however at least worth acknowledging the expense of realism.

The reason that there is so much uproar is because the film is shot in a very documentarian style. In that sense, it implicitly casts itself as reality and dupes the majority of its viewing audience into the delusion that they understand the reality of life as a soldier in Iraq. Most soldiers agree that they accurately and artfully crafted the tense feeling and tenuous relationships of the military to the Iraqi civilian population. This is why it won an Oscar and why in my mind it is an artistic success that contributes greatly to the public discourse on the successes and limitations of this war and war in general.

I do however tend to agree with the 'wolf in sheeps clothing' argument about the obligations of artists. No one gave a second thought to the factual basis for Avatar, but this film clearly gives the feeling that what the viewer is watching is a direct depiction of reality and in that sense I think artists absolutely do have an obligation to adhere loosely (how loose is to loose?) to facts. I suspect that many would disagree with me here, and the good served by this film may very well overshadow its inaccuracies but its a discussion worth having.

We can all see that film makers obviously benefit by creating a feeling of realism whether through a few words at the beginning (The following events were based on a true story...) or the minimalist approach to cinematography taken by The Hurt Locker. I merely propose that there is a line, which I don't intend to properly articulate, whereby the cost of doing so (in terms of a grossly misinformed populace) exceeds the benefit (public awareness of life in Iraq in this films case).

With regards to the book 'A Million Little Pieces', I proudly fall in the camp that states that no matter how much good this book did in encouraging people to seek help from drug addiction, the author's means of doing so by presenting fiction as fact in the name of making a better story were untruthful, shameful, and should be vilified. I don't propose that The Hurt Locker goes that far (unless it starts showing up in Documentary sections), but it is treading a fine line.

If you have any other examples (I'm sure there are tons that are eluding me at the moment) where art embelishes reality for better or for worse, I'd love to hear about them and discuss the issue further.

*posted on my blog, fingerprints.and.snowflakes*