The Daily Parker

Politics, Weather, Photography, and the Dog

Where's the kaboom?

Yesterday some of my classmates fretted about how the stock market would collapse today because of health care reform passing the House.

Yawn. With half an hour to go, the NASDAQ, DOW, and oil are up; bonds are down; gold is down. All the indicators are within 1% of Friday's closes.

What a disaster:

Conservatives and Republicans today suffered their most crushing legislative defeat since the 1960s.

It's hard to exaggerate the magnitude of the disaster. Conservatives may cheer themselves that they'll compensate for today’s expected vote with a big win in the November 2010 elections.

Yeah, that's not Josh Marshall; that's David Frum. He continues:

At the beginning of this process we made a strategic decision: unlike, say, Democrats in 2001 when President Bush proposed his first tax cut, we would make no deal with the administration. No negotiations, no compromise, nothing. We were going for all the marbles. This would be Obama’s Waterloo – just as healthcare was Clinton’s in 1994.

Only, the hardliners overlooked a few key facts: Obama was elected with 53% of the vote, not Clinton’s 42%. The liberal block within the Democratic congressional caucus is bigger and stronger than it was in 1993-94. And of course the Democrats also remember their history, and also remember the consequences of their 1994 failure.

This time, when we went for all the marbles, we ended with none.

What a lovely spring day we're having in the U.S.

219-212

And we now have a 20th-century health care plan for America. Just in time.

Fifty years from now, our children and grandchildren will wonder why the vote was so close, kind of like how we today wonder about the 85 who voted against the Voting Rights Act of 1965. Or maybe the way we don't, but we should.

UpdateJames Fallows:

For now, the significance of the vote is moving the United States FROM a system in which people can assume they will have health coverage IF they are old enough (Medicare), poor enough (Medicaid), fortunate enough (working for an employer that offers coverage, or able themselves to bear expenses), or in some other way specially positioned (veterans; elected officials)... TOWARD a system in which people can assume they will have health-care coverage. Period.

That is how the entire rest of the developed world operates, as noted yesterday. It is the way the United States operates in most realms other than health coverage. Of course all older people are eligible for Medicare. Of course all drivers must have auto insurance. Of course all children must have a public school they can attend. Etc. Such "of course" rules offer protection for individuals but even more important, they reduce the overall costs to society, compared with one in which extreme risks are uncontained. The simplest proof is, again, Medicare: Does anyone think American life would be better now, on an individual or a collective level, if we were in an environment in which older people might have to beg for treatment as charity cases when they ran out of cash? And in which everyone had to spend the preceding years worried about that fate?

There are countless areas in which America does it one way and everyone else does it another, and I say: I prefer the American way. Our practice on medical coverage is not one of these. Despite everything that is wrong with this bill and the thousand adjustments that will be necessary in the years to come, this is a very important step.

Or, if you prefer, FDR:

In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms.

The first is freedom of speech and expression--everywhere in the world.

The second is freedom of every person to worship God in his own way--everywhere in the world.

The third is freedom from want--which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants--everywhere in the world.

The fourth is freedom from fear--which, translated into world terms, means a world-wide reduction of armaments to such a point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor--anywhere in the world.

That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation. That kind of world is the very antithesis of the so-called new order of tyranny which the dictators seek to create with the crash of a bomb.

Springtime in the U.S., indeed.

What today is about

One of my Duke classmates posted a Facebook status update that prompted a discussion. I thought responding in long form would be more appropriate than continuing a comment chain.

Here's the chain so far:

JP: If healthcare passes I guarantee the stock markets will drop tomorrow.

Me: So?

BR: David, doesn't a drop in the stock market after the passing of a monumental legislation like the healthcare bill indicate investors feel that the bill will be a detriment to the healthcare sector? Doesn't that seem significant to you?

RZ: It won't just be the healthcare stocks that will drop. It's an added cost/uncertainty for all businesses, and the considerable legal issues will start almost immediately.

AS: B/R,
The stock markets might drop, as health care is such a major factor in the GDP (I think it's 12-15%). But then, if health spending comes down, individual consumption might go up, so retailers and manufacturers would benefit. That benefit would only play out over a 12 month cycle.
Also, while this is more subjective, I think if it lowers the overall long-run, firms might ramp up hirings. One of the biggest issues in the past decade has been jobless recoveries and jobless growth.

RZ: That would be great if it lowered spending, but even the scam artists themselves admitted that the bill is not about cost containment.
My biggest question is, since the CBO scoring assumes taxes for 10 years, but 6 years of "benefits", what are we going to do in the second decade? Or, are we supposed to take a presidential term off once per decade and just be content with our health?

First, the tribulations of panicky investors don't matter much in the medium- or long-term. Some people will dump their insurance-company shares tomorrow, and others will dump their shares across the health sector, but it will be a blip. So what, let some share prices flop for the next few days, then cooler heads will start buying up the bargains.

What bargains? Well, I don't expect the future profits of health-insurance companies will be as high as in the past, but that's kind of the point. So those stocks will never have the value they had on Friday. To me, good riddance. Because instead of wasting 30% of U.S. health-care expenditures on administrative expenses, instead of dropping people who have the temerity to make claims against their policies, instead of denying coverage to people who once had a runny nose, insurers have to run leaner operations in which they actually pay health care claims. They're not going out of business; they'll just have to compete in a marketplace that requires them to spread risks. You know, like auto insurers, all of whom suffer terrible indignities like the steady profits of a guaranteed market.

No, for bargains look at health-care providers, like hospitals, technology companies, drug manufacturers. (OK, maybe not drug manufacturers.) If I had a ton of cash right now, I'd short Aetna and, a couple of days from now, go long on a portfolio of health-care service providers.

Think about it: 65 million people who don't have health insurance now will start buying it. And those people will start consuming health care services in ways they haven't before, for instance by getting preventative care and not using the E.R. as a first resort. This will mean, most likely, more health-care spending in general.

So, yes, the legislation isn't "about cost containment," as RZ complains, but it's an excellent value for the country. Two things will happen once the U.S. joins the rest of the world in providing health care to all its citizens. First, people will be healthier. Second, because they're healthier, they'll be more productive. When you spend money on something today so that you realize greater gains tomorrow, that's not "cost containment," it's "investment." And actually, according to the CBO, the effect on GDP will be a wash. In other words, we'll provide health care to everyone for about what we're spending now. Maybe it'll cost taxpayers another $20-25 per year, each.

This isn't really a debate about the costs, though. Of course we should consider the costs—and I think we have. No, ultimately, this is the end of a century-long debate about whether Americans should have a legal right to basic health care. There is no objectively correct answer to the question. There is, however, a political process to resolve it.

It may seem like an argument to the people to point out that a majority of Americans believe we should, but in this case it isn't fallacious. That's why we've spent years—decades, even—going through this process. In the U.S. we have strong protections for minority views, but sometimes, just sometimes, the majority prevails. If the bill passes tonight, the majority wins. If not, all the things about health insurance that people hate will get worse. And that will cost us more than we have to spend in the future.

Religion and prejudice

Via Dan Savage, a meta-analysis showing a correlation (not necessarily causation) between religious dogmatism and racism:

The February issue of Personality and Social Psychology Review has published a meta-analysis of 55 independent studies conducted in the United States which considers surveys of over 20,000 mostly Christian participants. Religious congregations generally express more prejudiced views towards other races. Furthermore, the more devout the community, the greater the racism.

This study finds that a denomination's demand for devout allegiance to its Christian creed overrides any humanistic message. By demanding such devotion to one specific and dogmatic Christianity, a denomination only encourages its members to view outsiders as less worthy.

Moreover, the study found that agnosticism correlates with tolerance, to which I think one should add "Q.E.D."

Again, the study doesn't show causation, only correlation. Religion doesn't itself make one racist. Possibly the conditions that lead someone to religious dogmatism also lead to racism; possibly the communities in which more-devoted religionists live are in areas with historically higher racism.

Wind turbines generate superstition, nuttiness

The Chicago Tribune has a story this morning about the controversy blowing through DeKalb County (about 150 km west of Chicago) because of wind turbines:

Ben Michels' friends say he may have the worst of it. Five turbines stand in a line behind his home, the nearest 435 m away; the county restricts turbines from being any closer than that.

Michels, who has raised goats for 20 years and averaged one death per year, said nine have died since December. Autopsies didn't reveal anything physically wrong with them. But he said veterinarians told him the goats may have suffered from stress. "Common sense tells me, it's got to have something to do with the turbines," Michels said. Other farmers say the turbines have spooked their horses and other animals.

I don't think we've seen a better encapsulation of the public policy reasoning of many voters in a long time. First, a spike in something coinciding with something else. Then, an appeal to common sense. Finally, an anecdote about unnamed but similarly-situated people that reinforces the original opinion.

The Tribune doesn't make explicit a clear pattern that emerges from the people who they interviewed: the ones most opposed to the turbines don't own them. At least the article notes "each turbine, which takes up about 1.2 ha total, pays...about $9,000 per year.... That compares with the going rate of about $73 per hectare per year to lease farmland in DeKalb County, according to the U.S. Department of Agriculture."

Ah. Yes. Goats dying and migraine headaches caused by other people profiting from the goat-killing headache machines. (I commend to the reader the chapter in James Davidson and Mark Lytle's brilliant textbook After the Fact on the economic situation in Salem, Mass., in the 1680s.)

I especially enjoyed the top sour-grapes quote of the article:

Yet not everyone who could have profited from the turbines did so.

Ken and Lois Ehrhart originally agreed to allow NextEra to run a power line through their property in Shabbona but then changed their minds. Leasing part of their 320 acres would have provided money to pay off a large hospital bill.

"I says nothing doing," recalled Ken Ehrhart, who raises soybeans, wheat and corn. "We're not the highfliers for all the modern ideas."

In other words, "Get your damn turbines off my lawn, you young whippersnapper!"

Such is progress. Imagine the outcry if someone tried to put a nuclear plant in DeKalb County. Or a coal one.

Where was this guy six months ago?

Senate majority leader Harry Reid (D-NV) has run out of patience:

Many Republicans now are demanding that we simply ignore the progress we've made, the extensive debate and negotiations we’ve held, the amendments we've added (including more than 100 from Republicans) and the votes of a supermajority in favor of a bill whose contents the American people unambiguously support. We will not. We will finish the job.

As you know, the vast majority of bills developed through reconciliation were passed by Republican Congresses and signed into law by Republican Presidents – including President Bush’s massive, budget-busting tax breaks for multi-millionaires. Given this history, one might conclude that Republicans believe a majority vote is sufficient to increase the deficit and benefit the super-rich, but not to reduce the deficit and benefit the middle class. Alternatively, perhaps Republicans believe a majority vote is appropriate only when Republicans are in the majority. Either way, we disagree.

At the end of the process, the bill can pass only if it wins a democratic, up-or-down majority vote. If Republicans want to vote against a bill that reduces health care costs, fills the prescription drug 'donut hole' for seniors and reduces the deficit, you will have every right to do so.

All right. Can we get health-care reform already?

Angels and ministers of grace defend us

A North Carolina congressman wants to put Reagan on the fifty:

It's a Republican -- Rep. Patrick McHenry -- who has introduced the bill to replace the general who led the Union to victory in the (War Between the States) and led the nation as well with another more modern president, the late Californian and great communicator, Reagan.

Reagan transformed the nation's political and economic thinking, the way McHenry sees it. He maintains that "every generation needs its own heroes."

Grant may have had his problems, and he was, after all, a Republican. But let's wait a little bit before replacing him. Maybe we can put Reagan on a new 99c coin (which would be at least somewhat useful).

March of Civil Rights

Citizens of the District of Columbia are now free to marry:

The U.S. Supreme Court has refused to stop same-sex marriage in the District of Columbia, clearing the way for couples to register to wed beginning Wednesday. Equal-rights opponents in the capital had asked Chief Justice John Roberts to prevent the issuing of licenses until residents had voted on the issue. Lower courts had denied requests to place a moratorium on issuing of licenses.

"It has been the practice of the court to defer to the decisions of the courts of the District of Columbia on matters of exclusively local concern," wrote Roberts, who made the decision without bringing in the full court.

Roberts also cited the fact that although D.C. is autonomous, Congress could have passed a bill to disallow the city government from enacting the law, and it did not do so.

Marriages may be performed beginning March 9, as there is a waiting period of three business days after the issuance of licenses.

In response to the D.C. marriage equality law, Catholic Charities will no longer offer spousal benefits to any new or newly-married employees:

[On March 1st], Catholic Charities President and CEO Edward Orzechowski sent out a memo to staffers informing them of the change to the health care coverage, which will go into effect [March 2nd].

In short: If you and your spouse are already enrolled in Catholic Charities health coverage, your spouse will be grandfathered in. Starting tomorrow, however, new employees (or newly married employees, hint hint) will not be allowed to add spouses to the plan. So: Longtime employees will receive the spousal benefits they’ve always had; Catholic Charities will get to keep its pool of covered spouses gay-free; only fresh employees and gays will feel the sting on this one.

Orzechowski's memo to employees closes with, "Thank you for your understanding in this matter, and let me again express my appreciation for your support and patience over these past months as we have worked hard to arrive at a decision that allows us to continue to serve others in a manner that is consistent with our religious beliefs." Now, I'm not Christian, but I've read the instruction manual, and I'm not sure how exactly bigotry is consistent with it. But, you know, Orzechowski's a grown-up, he can make his own choices. Still, I'd pay real money to watch their financials over the next 24 months...