Imagine you were a manufacturer of powerful opioid painkillers and your sales representatives discover suspicious activities at the offices of some physicians who prescribed your product. These activities include patients lining up to pay cash for prescription opioids, drug deals going down in the parking lot, people falling asleep from opioid intoxication in the waiting room and physicians being visibly intoxicated themselves. In response would you:
(A) Report these doctors to the authorities?
(B) Insulate yourself by not sending your representatives to these doctors anymore, but continue to pocket the huge profits they generate from writing countless prescriptions for your products?
(C) Keep a secret list of these doctors but publicly promote the idea that painkiller abuse is not driven by wayward doctors but by other sources, such as pharmaceutical robberies?
(D) Reveal the list of doctors to authorities years later only because at that point it could stop a competitor from introducing a new generic medication that might cut into your own sales?
(E) A combination of B, C and D, but certainly not A.
I don’t recall ever seeing this one; it doesn’t surprise me, but, you know, this is just crazy talk:
Over the next twelve months, do you expect that the cost of living – that is, what you pay for everyday goods and services ─ will increase, decrease, or stay about the same?
Decrease……………………………………. 1
Stay the same …………………………….. 22
Total increase……………………………….77
Increase 1% to 3% ………………….. 23
Increase 4% to 5% ………………….. 18
Increase 6% to 10%…………………. 15
Increase 11% or more………………. 15
Increase not sure how much………… 6
So more than one in seven believe that inflation will be over 11% next year, and three in ten, total, have it at 6% or more. In real life, it’s unlikely that inflation will hit 2% next year.
In recent years, the term “American exceptionalism” has sometimes been an empty applause line, a fancy way of shouting “USA! USA!” Vladimir Putin recently went so far as to proclaim that “It is extremely dangerous to encourage people to see themselves as exceptional,” without bothering to investigate what American exceptionalism might entail.
As it happens, the term has become familiar only in the last three decades, with explosive growth since 1985. But we can find a version of the concept as early as 1787, and in a prominent place: the very first paragraph of “The Federalist,” in which Alexander Hamilton, James Madison and John Jay tried to persuade the nation to ratify the new Constitution.
At the outset of “The Federalist” No. 1, Hamilton wrote, “It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force.”
The stark opposition between “reflection and choice” on the one hand and “accident and force” on the other has defined the American character from its inception. The opposition suggests the U.S.’s distinctive optimism, captured in the repudiation of any kind of fatalism in political life.
Information is starting to emerge about what the House is going to try to do in the next few weeks. Nothing is certain, especially the details, but the broad outline is fairly clear now.
What’s John Boehner up to? Remember, my view is that he’s trying to avoid a shutdown or debt limit breach (because the situation for him gets worse post-deadline than pre-deadline) while at the same time keeping his conference from blaming him for anything. At least privately; one of the costs I assume he’s willing to accept is for many of them to blame him publicly for things they actually want him to do. But that has to be done sparingly. If he consistently “sells out” mainstream conservatives, even if they want him to, at some point they won’t be able to sustain it and will have to get rid of him for the pretense to work.
This is not an easy position for him.
So in response, he’s preparing a series of votes that is intended, apparently, to keep all those balls in the air at the same time. He has to win each of these votes, but not always with the same voting coalition. And remember, he’s already won the initial vote on the defunding-included Continuing Resolution (CR), which keeps the government operating for the meantime. Remaining:
Yes, the 2016 nomination battles are on, and reporting on them is a great idea.
That said: let’s not get ahead of ourselves. It’s too early to game out Iowa, much less the events after that. It’s too early to declare a candidate (say, Marco Rubio) has already lost his chance. It’s not too early to say how policy positions are affecting the contest right now — but it’s still too early, for most issue areas, to have a real sense of how things play out in 2015 among party actors, and certainly too early in most cases to know how they play out among voters in 2016.
On the other hand, it’s worth knowing which candidates are sparking intense interest among party actors, as well as which candidates are running into hostility from party actors (and yes, that might be the same candidate from different groups of party actors).
OK, so that’s fairly tricky. And what makes it harder is that we really don’t have a good roadmap. Yes, elite endorsements seem to matter, or at least they are good indicators of what’s going on…but we really don’t have any systematic way to predict whether it will be Cruz or Rubio or Kasich or whoever, or to explain why party actors go for one but not the other.
The upshot of that, in my view, should be caution. Gather and report as much information as we can, but be cautious about how to interpret it. Remember how few iterations of this process we’ve had, and even then it’s hard to generalize across them because both the system and the parties have changed over time.
Again: reporting on what the candidates and party actors are actually doing is great. Some speculation based on that is fine. But try to remember that there’s still a long time remaining, and the issue landscape changes all the time, and so do candidate apparent fortunes. Caution, everyone.
The theme of Ted Cruz’s filibuster this week was “Make D.C. Listen.” But Cruz himself doesn’t listen; he talks. And talks. And talks. It’s no wonder the Texas senator can’t hear what the public is actually saying.
A recent CNBC poll asked whether the Patient Protection and Affordable Care Act should be defunded. By 44 percent to 38 percent, Americans said no. Then the pollsters asked specifically about Cruz’s plan: forcing a shutdown to defund Obamacare. The public rejected that idea 59 percent to 19 percent. But Cruz isn’t listening.
Public opinion on Obamacare is complicated but generally consistent. The law is unpopular. But a solid majority wants the Republican sabotage to end.
A poll this month from the Pew Research Center for the People & the Press found that 69 percent of Americans, including many who disapprove of the law, want Congress to “make the law work as well as possible.” Only 23 percent of Americans say Congress should try to “make the law fail.”
The Republican Party, however, has focused like a laser on making the law fail. Congressional Republicans have withheld crucial implementation funds and sent letters to everyone from the National Football League to local health groups warning them against helping with the rollout. Republican governors have, for the most part, refused to set up health-care exchanges or participate in the Medicaid expansion authorized by the law.
And now Republicans in Congress are considering shutting down the entire government or defaulting on the national debt in order to prevent Obamacare’s implementation. They’ve gone from trying to make Obamacare fail to threatening to make the country fail.
A new set of projections released last week by Medicare’s actuaries has drawn much attention, in part because it suggests the deceleration in the growth of health costs we’ve seen over the past few years is ephemeral. The actuaries attribute the slowdown to the “lingering effects of the economic downturn and sluggish recovery” and to increases in cost sharing.
Both of these explanations have serious shortcomings — and that, in turn, suggests something larger is in fact at work.
The assertion that economic sluggishness is playing a dominant role is based on an econometric analysis that links past slow growth in gross domestic product to current aggregate health spending. However, such a macroeconomic explanation is difficult to reconcile with the slowdown in Medicare, because there is no reason to expect Medicare — a subsidy that goes mainly to retired people — to be much affected by the economy.
What’s more, the econometric methodology itself, which I have long disliked, was debunked in another paper released last week. Amitabh Chandra and Jonathan Holmes of Harvard University and Jonathan Skinner of Dartmouth College found that when they made even modest changes in this type of model, the results changed drastically. They concluded, “We are reluctant to make much of the time-series evidence between GDP growth and healthcare spending.”
A simple rule of thumb is that econometric results are untrustworthy if small specification changes — such as shifting the time period by a couple of years — substantially alter the results. (The same critique applies to an earlier analysis of this ilk, also much cited in the news media, from the Kaiser Family Foundation. The report is unfortunately less scientific than it pretended to be.)
Cost Sharing
The second reason for the spending deceleration cited by the Medicare actuaries — increased cost sharing — has a bit more force to it. As I noted in a column a couple of years ago and as has played out in recent decisions by Walgreen Co. (WAG) and other companies, employers are shifting away from defined health-care benefits and toward defined contributions. But as the actuaries’ report shows, total out-of-pocket spending has fallen from 11.7 percent of aggregate health-care spending to an estimated 11.3 percent in 2013. So even though increased cost sharing may help explain the change in private spending on health care, it’s hard to see how this factor can explain the overall slowdown.
How many times have you read scary stories in the press about addictive drugs of unprecedented purity? How often in movies has the villain been the one to cook up an incredibly pure drug? “Pure” in these cases is used as a shorthand for powerful and dangerous, but that isn’t what it means.
Purity is a measure of how much of some substance is “what it says on the tin”. Potency in contrast refers to the dose necessary for a substance to exert its effect on the body. Ivory Snow Soap, famously, is 99.4% pure. But its potency when ingested is far less than that of 1% pure heroin.
This ends up mattering more than one might think in drug policy debates. Policymakers and parents get scared when they hear that an addictive drug is pure. But a pure drug can be safer than an impure drug if the potency of the latter exceeds the potency of the former. Even within the confines of the same potent drug, purity can increase safety if the impurities are nasty things such as levamisole or strychnine.
One concrete area where this misunderstanding is influential and sometimes exploited for effect concerns methamphetamine. A prescription requirement for the pseudoephedrine-containing cold medicines that are used to make meth would virtually wipe out domestic meth labs. Opponents of this policy sometimes try to scare people by saying that the result would be an influx of “much purer” methamphetamine made without pseudoephedrine (PSE) in Mexican superlabs (PSE imports are banned in Mexico). Yes, that form of methamphetamine is purer, but it’s much less potent and hence less dangerous than methamphetamine made from PSE, even before you count up the burn injuries, explosions and fires that small-scale domestic meth labs cause.
Want a good measure of how far Republicans are from being a healthy party? Check out Judd Gregg’s “to-be-sure” paragraph in a recent piece he wrote for The Hill.
Gregg had a column yesterday slapping down Ted Cruz and other Republican Crazy Caucusers. It’s legitimately brutal, and written to get attention, beginning with: “Most Americans these days are simply ignoring Republicans. And they should.”
Well, yes. But then we get to the to-be-sure — placed not close to the end, as the classic structure dictates, but smack-dab in the middle, and continuing far beyond one paragraph. This is the part in which Gregg, essentially, performs a Ritual of Conservative Obedience to establish his credentials so that the column is taken as “sane, loyal Republican criticizes suicidal strategy” and not “RINO establishment turncoat criticizes real conservatives” (and, yes, I know that RINO establishment turncoat isn’t exactly the most rational formulation, but it’s a thing, nonetheless. Well, it isn’t, but…oh, you know). Where was I…oh, yeah, Gregg:
None of this is to deny that ObamaCare is a disaster, especially for small businesses, most states and many healthcare providers. It should be replaced with something that will actually improve the quality and reduce the costs of healthcare. There are many good ideas in this area but they will not be achieved via an inherently self-defeating strategy…
Beginning next year, there will be a real outcry regarding the arbitrariness of the sequester cuts. At that point, the fight should be joined in earnest over the issue of changing ObamaCare to initiatives that improve and expand healthcare coverage rather than march toward a dysfunctional, single-payer system.
So not only is this substantively nonsense — ACA may or may not be a good policy, but it certainly isn’t a “march toward a dysfunctional, single-payer system” — but it’s also tactical nonsense. After all, the message shifts here from a sensible one about the impossibility of the Cruzites getting their way by holding their breath until they turn blue into one about that being nuts this year…but perhaps appropriate once sequestration hits harder. Or something like that; it’s hard to tell exactly what he’s holding out as Plan B here.
At any rate, the point here isn’t whether Gregg makes sense; it’s what he feels he needs to do to get listened to by his target audience of non-crazy Republicans (how do we know that’s his target audience? Different audience gets different “to-be-sure” paragraph!). And, to tell the truth, it shows how hopeless the task is right now. Tea Party Republicans have spent four years now convincing themselves that the enemy within (the GOP) is in some ways an even bigger problem than the enemy in the Oval Office. And you know what? Advice they’re not apt to take from someone grovelling to their myths really isn’t going to push them in a better direction. Good for Gregg that he’s trying, and he’s of course correct about the defunding strategy right now, but my advice for anyone trying to push Tea Partiers back on the path to healthy governing is that they aren’t going to get there unless they give up their mythology, so you might as well be blunt.
Derek Thompson has a new piece up at the Atlantic claiming that the Affordable Care Act (Obamacare) and the American Recovery and Reinvestment Act (the Obama stimulus) are the “most divisive” pieces of legislation in modern American history. He draws from a JP Morgan analysis examining partisan divisions on major pieces of legislation over the past century. Here’s the graph he draws:
Okay, that’s interesting (and there’s a whole table at the link), but there’s a key point being missed here: Just because something isn’t partisan doesn’t mean it’s not divisive. The argument being made is that you can tell how divisive a bill is by subtracting the percentage of Republicans who support it from the percentage of Democrats who support it. So Obamacare gets an astounding 93.5% score — almost every Democrat supported it, and no Republicans did so. But it’s possible to be divisive without having such a partisan split.
States have adopted different approaches to reducing recidivism by intoxicated drivers. Some employ ignition interlocks that prevent an offender’s car from starting if the person in the driver’s seat fails an inbuilt breathalyzer test. Others have adopted 24/7 Sobriety, which requires offenders to appear in person twice a day and be breathalyzed.
Mark Kleiman and I have highlighted the evidence that 24/7 Sobriety both makes the roads safer as well as reduces other types of alcohol-related crime. Ignition interlocks have much weaker evidence of success. This could be in part because all one has to do to evade an interlock is drive someone else’s car, whereas an in-person test is pretty much impossible to fake given that the staff who administer the in person breath tests know the offenders personally. Ignition interlocks are also more constrained in their scope: 24/7 Sobriety can be employed for any alcohol-related crime whereas interlocks only make sense when the crime is driving under the influence.
Vladimir Putin’s proposal for mitigating the bloodshed in Syria has revived the allegation of declining American influence. Across the globe, but perhaps most intensely in the United States itself, news items and opinion pieces portray a bumbling giant, as liable to be rebuffed by allies as outmaneuvered by adversaries.
Whether one thinks that the U.S. is presently a bystander to international affairs, “America the bystander” has been a persistent theme over the past seven decades. One of the paradoxes of the postwar era, in fact, is that while the U.S. has managed to accumulate an inordinate amount of influence—reflected in its development of and centrality within a liberal international system—it has often appeared (and been characterized as) impotent at certain moments, and even during significant stretches.
Fears of Declining U.S. Influence
It is commonly observed that the U.S. enjoyed hegemony in the immediate postwar period. While its shares of military and economic power resources were indeed much higher then than they are now, disproportionate power did not yield commensurate influence:
You know what the “Gephardt rule” was? Majority House Democrats back in the 1970s automatically linked the debt limit to the deficit that Congress passed, so that there didn’t need to be a separate vote. Then when Republicans took control of the House in 1995, they scrapped it.
And then when Democrats regained control in 2007, and had unified government with (briefly) 60 Senators in 2009, they…well, they didn’t do anything at all. They didn’t even pass a debt limit increase that would have at least meant that it wasn’t an issue in 2011-2012 leading up to the presidential election.
Mainly, however, they failed to simply scrap the whole thing. I don’t know whether they failed to anticipate that it would be a problem if Republicans took the House in 2010, or if they didn’t have the votes to act because some Democratic Senators though it would be a tough vote, or if they just overlooked it entirely. Whichever: it was a clear mistake then, and they’ve paid for it ever since.
To be sure: one must be careful when second-guessing 2009. Remember that there were only 58 Democrats at the beginning of the historic 111th Congress, and one of those (Kennedy) wasn’t always available. Not only that: intense partisan pressure to pass things as fast as possible might have upset the process that brought Arlen Specter into the Democratic caucus, giving them 60 and the ACA (and more). Still…I do think that tossing a debt limit elimination onto some law passed over those two years probably could have been done, and wasn’t.
China’s rise as an export juggernaut has coincided with a big drop in labor’s share of U.S. national income. Photographer: Kiyoshi Ota/Bloomberg
When I was in business school, way back at the turn of the millennium, one of the things we learned was that labor always got about two-thirds of national income, with the other third going to capital. That percentage might fluctuate, as the economy waxed and waned, but it was basically steady.
Progressives have tended to look at the decline in unionization to explain this; conservatives have tended to look away. But another provocative paper from Brookings this week argues that the best explanation is what they call “import exposure,” which is to say, trade. Offshoring of the labor-intensive portion of the supply chain has deprived workers of bargaining power and driven them into lower-wage jobs — or into government programs like disability.
“Labor’s Declining Share of Income and Rising Inequality,” by Margaret Jacobson and Filippo Occhino. Federal Reserve Bank of Cleveland.
Meanwhile, capital is doing well. And yet, when you talk to manufacturers, they don’t feel that they have a choice about either outsourcing or squeezing their labor force for higher productivity and lower wages. In order to compete with China, they need to automate, or they need a much lower-wage workforce; try to keep to the old model and they’ll be out of business. Sure, there’s always special pleading by bosses, but I don’t think you can put the radical changes in the U.S. manufacturing base down to an outburst of employer greed. They were presumably just as greedy before; the difference is, they weren’t competing with low-wage countries brought closer by modern telecommunications and cheap shipping.
Much ink has been spilled in the past week concerning the long-term implications of the successful recall of two Democratic State Senators in Colorado, which centered on gun control measures passed by the State Legislature and signed by Governor John Hickenlooper. Indeed, with an election focused on a hot-button issue and little else nationally to distract big donors, money poured into the race from both campaigns and outside groups. A post-election analysis by the Atlas Project (here) determined that together the Democratic campaigns and outside groups had spent almost $2.3 million on both races, while their Republican counterparts merely spent a little over $500,000.
Some progressives would argue that this was an off year election and that special elections are notoriously bad for Democrats, when older and more conservative voters turn out. Additionally, mail ballots were not allowed, the election was at an odd time of year, etc. While all these facts are true, they should not have come as a surprise. So given the political leanings of these districts and the money advantage, how did Democrats lose two seats where nearly 60 percent of voters chose President Obama in 2012?
The short answer is: Democrats and their affiliated groups decided to spend the vast majority of their money on television and radio when the data show these methods are becoming more and more ineffective. As many as 4,055 commercials aired during the run-up to the recall election, 3,569 of which were from the Democratic side, over 88%. But to little avail.
It is no secret that it is becoming harder to reach voters through these traditional means. Long gone are the days of being able to put a 1,000 points on broadcast television with a guarantee of reaching your targeted audience. This is not just a phenomenon on the local level, in the 2012 Presidential election, more than $760 million was spent in total on advertising for Obama and Romney. In the end, this three-quarters of a billion dollars ended up having a net one percentage point change in the margin between the two candidates from the conventions to Election Day. That’s an astonishing $76 million for every tenth of a percentage point movement.
On the Presidential level, this behavior has turned into the campaign version of “Mutually Assured Destruction.” Given the results, it seems safe to say that the two presidential campaigns could have spent half the money they did on TV and ended up with the exact same result. As campaigns become flush with money, the arms race to meet the opponent’s levels of media spending quickly reaches the point of diminishing returns. After a few campaign commercials, results are no longer altered in a meaningful way.
This is not to say that the campaigns in Colorado should have given up TV advertising completely. However, in a low turnout election, in an off year, at an odd time, where mail ballots were not allowed, Democrats and their allies, decided to air 3,569 commercials instead of investing more resources in determining which voters they needed to turnout and which voters they needed to persuade to vote in these elections. If you have a 5:1 money advantage in a district that overwhelmingly votes for your party’s candidates, you should not be looking for excuses on why you lost. It is time for campaigns, Super PACs, 501c3s, and donors to start making more data based decisions on the growing realities of today’s world as opposed to what worked 20 years ago.
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