Truth With An Error Range.

A recent article by Megan McArdle cause a mini storm in the health blogging circles. Moved by the assertion made by Ezra Klein back in the fall that Joe Lieberman was willing to cause the deaths of hundred of thousands of people by threatening to block reform, McArdles goes on to examine the link between mortality and health insurance and after finding various reasons to ignore or disqualify various studies on the issue, she concludes that while there might be some effect, it's hard to tell how big it is and because it's hard to measure exactly how big it is, it's probably too small to matter.

Needless to say, McArdle has been attacked from all sides (actually, mostly from the left) for this article and it's easy to see why. While her article doesn't insist that health insurance is irrelevant and she does say "even if we did agree that insurance rarely confers significant health benefits, that would not necessarily undermine the case for a national health-care program" by launching a pedantic attack on a statistic, she helped to undermine what many would consider a "logical" case for expanding health coverage to everyone.

There are two reasons why I find this whole debate incredibly annoying and offensive.

First of all, by making a reasonable case that the effect of health insurance on mortality are hard to determine precisely she then goes on to argue that we can't say how large it is. If one study says 50, another study says 200, it could probably as well be 0, seems to be the argument. The truly annoying thing about this argument is that from everything McArdle says, she doesn't seem to actually believe that there is no relationship, but she is suggesting that it might be small and either way no one can claim with any certainty what exactly it is.

I guess McArdle deserves credit for correctly identifying a problem with the studies of this sort - they aren't perfect and they aren't precise. However, does it mean they are thus entirely irrelevant? That's what she seems to be suggesting in her concluding paragraph: "we should have had a better handle on the case for expanded coverage—and, more important, the evidence behind it—before we embarked on a year-long debate that divided our house against itself." Translation: why didn't you pro-reform morons get your facts straight before wasting everyone's time with this non sense for a whole year?

Therein lies the insane contradiction of what McArdle is saying: on the one hand, she discredits the assertion that expanding health insurance saves lives by showing how evidence is hard to attain; on the other hand, she says we need better evidence to show exactly how many lives were saved by health insurance. Unless we have an exact measurement, it's useless; if it pretends to be exact and precise it's probably wrong.

McArdle's sophistry is equivalent to asking a man on a boat in the middle of an ocean how deep the water underneath is. The man clearly sees that the water is very deep but he has no good way to measure it until he realizes that he can tie a heavy rock to one end of a thread, drop it in the ocean and measure the length of the thread until the rock hits the bottom. Of course the bottom of the ocean is uneven, so multiple measurements will result in different results. Faced with this imperfect technique and variation in results, McArdle would probably say that we can't conclude that the ocean is very deep. Even though it is intuitive and obvious to all the rest of us that the ocean is very deep, because one can't measure exactly how deep, she would suggest there's some likelihood it's shallow, and maybe we're all just imagining the ocean in the first place. In the case of health care, McArdle's logic would suggest that because we can't exactly measure the link between insurance and health outcomes, we shouldn't be so obsessed with providing insurance to everyone. In the case of our man on a boat, McArdle would probably send the man without an oxygen tank to find something on the bottom of the ocean because he can't prove exactly how deep it is. Despite the preponderance of logic, common sense, intuition and countless anecdotes of people who lose their lives because they can't get the care they need, McArdle is totally unmoved and declares the deep ocean of the problems that uninsured have a mere mirage.

The other reason why this debate is incredibly annoying is because it's entirely besides the point. Yes, it would be great if we could say with total certainty how many people die each year because of lack of insurance and it would be awesome if we could therefore accuse someone blocking reform of killing hundreds of thousands of people. But even in the absence of that, the case for reform is no weaker. In fact, disproving (or undermining) any one "estimate" does not change the fact that the system is incredibly broken and unfair. And while it might be fun to play around with statistics to make a case one way or the other, the truth has an error range and no estimate or projection can be relied upon with absolute certainty. Ultimately, this debate is about values and trade-offs and I wish those hiding behind pseudo-statistical analysis would debate it as such.

What Now?

New article for Zahraničná politika. Other articles here.

What Now?

On January 19th, 2010, the good people of Massachusetts were voting to elect a US Senator to replace the deceased Ted Kennedy, a Democrat who held the seat since 1962. Ever since the Republican candidate Scott Brown was announced the winner of that election, the Democrats have been in a crisis that is threatening to completely dismantle the young Obama administration.

First some background is due. Prior to this election, the Democrats (in combination with the independent Joe Lieberman) held 60 seats in the Senate, and the Republicans held 40. Because a Republican won the seat, the Democrats lost their 60-vote majority. Now, in most legislative bodies, a 59% majority is still a perfectly good majority to pass a bill. Not so in the US Senate, where the rules require that in order to take a vote on a bill, the debate has to be formally brought to conclusion by 60 or more votes. Therefore, losing the 60th seat amounted to losing the ability to pass anything in the Senate. While Democrats technically still have a majority of seats in the Senate, what matters more is the other 41 seats occupied by Senators that represent 37% of the US population, who can bring the Senate to a halt any time they wish. If you thought that the US was a representative democracy, you might want to rethink that.

There is no area that illustrates better the effects this has had on American politics than healthcare. Prior to the special election, before the Democrats lost their 60th seat in the Senate, both the House of Representatives and the Senate passed their version of reform. Like they would with any other bill, after passing their respective versions, the representatives of the two bodies started negotiating a compromise bill that could be put to vote and passed in both chambers of Congress, thus finally enacting health reform, after nearly a year of hearings, negotiations and compromises - and a century of failed attempts. Indeed, when the President set the date for his first State of the Union speech for January 27th, 2010, it was commonly expected that he will list health reform as one of his first year accomplishments.

The situation changed dramatically on January 19th when a Republican won the Massachusetts senate seat. The implications of this loss quickly reverberated throughout DC. On a practical level, the loss of the 60 vote supermajority meant that the standard route that everyone envisioned prior to the election - passing a compromise bill in both chambers - was no longer a viable option, since the Democrats were now one vote short of the necessary supermajority in the Senate. As a result, the only option to still pass reform was for the House to simply adopt the bill already passed by the Senate prior to the special election. (Remember, as long as both chambers of US Congress pass the same legislation, it becomes law.) With a Democratic majority in the House and a simple majority required to pass a measure, one might think that concluding this saga would be a breeze.

However, what happened in Massachusetts had a much more profound impact than simply losing a seat in the Senate. With a solidly Democratic state like Massachusetts suddenly voting Republican, the narrative that quickly developed in the media was that the election in Massachusetts was basically a litmus test for Obama, his administration and the Democrats at large. The failure of a Democrat to secure the seat despite hugely favorable position in the polls just a few weeks prior to the election was being interpreted by many as a sign of meaningful dissatisfaction in the electorate. Even more specifically to healthcare, many commentators insisted that popular opposition to the current reform effort occurring in the Congress was behind the downfall of the Democratic candidate. Whether or not these theories have any truth to them, it is understandable that all Democrats in the Congress must have asked themselves what this means for them and their prospects during the midterm elections in November. After the loss in Massachusetts, which no one saw coming, are they risking their reelection by voting for the health bill? Something along these lines must have been happening, because by January 21st, the speaker of the House Nancy Pelosi declared that she doesn't have the votes to pass the Senate bill.

This chain of events clearly had an effect on Obama's State of the Union speech. Instead of taking a victory lap for passing health reform, Obama felt it necessary to urge the legislators: "Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people." Certainly, these are not words of someone confident in the imminent passage of the bill; on the other hand, some optimists in the pro-reform crowd might have rejoiced: he still cares about reform, despite what happened in Massachusetts! Clearly, Obama did not drop the issue entirely; however, the fact that he spent barely 5 minutes in the second half of his 69 minute speech on something that he and the Congress spent a whole year deliberating would suggest that he would rather not risk being remembered as the president who went down in flames in his first term due to his aggressive insistence on health reform. Instead, Obama used the speech to outline new priorities - the economy, financial sector reform, and the deficit.

At this point, many have written off health reform as dead. The irony of the situation is that not many envisioned the process getting this close - and its path certainly was not easy. After the August recess and a wave of attacks from all sides this column all but predicted its failure. Which is why after passing through both chambers of the Congress, it seemed all but inevitable and very few could see what would stop its momentum - until that fatal election in Massachusetts.
So what does this all mean for Obama, the administration and Democrats generally? On the one hand, it is hard to make a bulletproof argument that the Democrats should keep on marching fearlessly without a second thought about public preferences - an arrogance that was the staple of the last two administrations. On the other hand, it is not exactly obvious that letting health reform fail will save them from the anger that is brewing in the American public and that was at least part of the reason for the Democratic loss in Massachusetts. Yes, health reform has become less popular - a quick look at the polls can prove that (http://www.pollster.com/polls/us/healthplan.php). Still, will simply reversing course on health care be the saving grace for the Democrats? Unlikely. A recent survey by Public Policy Polling shows that the Democrats' chances at the midterms are not necessary better if reform fails - in fact, fewer people are likely to vote Democrat if reform fails. It seems that whatever damage health care is doing to the Democrats has already been done and retreating from it now can only do more damage. As Jonathan Cohn at the New Republic pointed out, letting reform die would have a threefold effect: first, it will discredit the party in the eyes of those who supported the effort - their base; second, it won't prevent the Republicans from campaigning against them as supporters of reform (they voted for it once before!) - and flip-floppers (they keep changing their minds!), and third, it will rob them of the chance to point to one big accomplishment. The last piece is the most critical one, not only in a symbolic sense (passing bills means "getting things done") but also in a practical sense, that is, there were enough concrete positive measures that would become effective immediately and be perceive positively. And so, even if the public is now riled up against reform, once they started experiencing its early benefits, they would quite possibly appreciate it.

Thinking about the current situation more broadly, if the result of the special election is the failure of health care, I deeply worry about the next 3 years and the ability of this administration to do anything at a time when crucial reforms are desperately needed in America. For if this one road block has the power to create such paralysis among the Democrats that they are not able to take the roads that are still widely open to them to deliver on a key domestic priority, what are their chances to tackle their next agenda items that are just as important yet controversial, like the economy, financial sector reform, climate change? And more importantly, if they fail on this one occasion, why should they deserve to even have the chance to try? After all, how can the country and indeed the whole world face the challenges of the post-Great Recession era with an impotent US government? My message is simple: wake up, Democrats, or die.

30 million reasons.

In today's column, Brooks lists the reasons to support and oppose the healthcare bill currently under consideration in the Senate.

His reasons to oppose the bill anger me, each in its own unique weakly reasoned and misleading way. But the thing that bothers me the most is the opening sentence:

"The first reason to support the Senate health care bill is that it would provide insurance to 30 million more Americans."

Brooks spends exactly 21 words in his 800-word column on this fact as if to quickly get that out of the way so he can talk about the important stuff.

Well, here is my list:

1. It will expand health insurance to 30 million Americans.

2. It will be budget neutral .. and I don't care what Brooks says about the alleged political inconceivability of spending cuts. If you really believe that you can't support legislation because the Congress will never be able to stick to its targeted savings embedded in it, that's political nihilism and effectively invalidates any further debate. On the one hand he wants more cost control, on the other hand he doesn't believe that the cost cutting measures in place will be implemented. What exactly does that leave the Congress with then?

3. It will expand health insurance to 30 million Americans.

4. It will save tens if not hundreds of thousands of lives every year.

5. In case you missed it, it will expand health insurance to 30 million Americans.

6. It will launch a host of ideas to improve the system.

We're not talking about anything revolutionary or immediate here but I have absolutely no idea what else Brooks is looking for that would:

(a) improve quality and efficiency

(b) correct all the messed up incentives currently in place

(c) cut not just wasteful spending but also total spending (that seems to be what he is looking for in his reason to oppose # 2)

(d) and at the same time do all magic this BY MEANS OF A SINGLE BILL and AT THE SAME TIME not be achieved with some measure of government involvement in the current system (which he cites as reason #4 to oppose).

Brooks is opposing the bill because it fails to live up some vague ideal of "getting the fundamental incentives right" .. but he also expects us to believe that it's a tough call for him, and he "flip flops" every day, as if the bill kept changing dramatically overnight from one that fundamentally transforms the system to a bad one that only insures 30 million more people without bending the cost curve.

As if all this time it seemed like we might, in the end, suddenly, find the holy grail .. and - OMG, oops - we didn't, so - sorry 30 million uninsured Americans, better luck in 16 years!

And those 350,000 of you that die in the meantime because you have no coverage - you can rest in peace because .. we didn't slow innovation!

You Know You Made It When ..

.. a dorky historian uses you as an example of flamboyance.

"To be recommended humble discretion by President Sarkozy is like being counselled modesty in dress by Lady Gaga, or self-denial by a banker."

Thanks, TGA, for a hump day chuckle. And an otherwise good article on the Swiss minaret craziness.

Boeuf Bourguignon.

Because this blog does have "eat" in its title, some pictures from my effort to make Boeuf Bourguignon a la Julia Child.

You start with oil, butter and bacon, of course.

You pat the beef dry with paper towels and display it on a white cutting board to take a nice picture.

Then you do a million other steps, all of which you forget to take pictures of .. oh, except the onions ..

.. and mushrooms ..

.. all of which are sauteed in butter - naturally! While the beef is braising in the oven for 3 hours, you realize you're starving and you run out to buy some cheese - how French! - and consume tons of it with crackers and wine.

When the meat is done and your whole home smells like butter and beef, you take a nice picture of the beef ..

.. and conclude that you're entirely too full of cheese to eat much of it. Refrigerate and reheat it the next day, when the flavor developed into even more orgasmic dimensions.

Bon Appétit!

Warning: This recipe was developed by Julia Child to prevent weight loss by long distance runners despite training as much as 50 miles per week. Reading this post alone is equivalent to consuming a tablespoon of butter. Eat some bread.

Clueless.

I have to admit: I have no idea what the US should do in Afganistan and I don't have a strong view on Obama's decision about this on Tuesday. And judging from reading the million and a half comments about it in the last few day, nor does anyone else really. Given the insane mish-mash of entirely contradicting elements of the genesis of the war, the current situation and the variety of possible ultimate goals, it's impossible to have an answer that will be entirely satisfying to anyone - and so the critics abound.

Meanwhile, I like the analysis of the Tuesday speech put forth in this TNR article:

"the rhetoric does, I think, help to answer a question that a lot of pundits have been puzzling over for the past year: What, exactly, is Barack Obama's overarching worldview when it comes to foreign policy? For a long time, I've felt I didn't really know. After last night's speech, I suspect Obama doesn't really know either. A politician who is capable of sounding such dissonant notes in the same speech is a politician who is still figuring out his first principles of foreign policy. This might help explain some of the more confusing things about Obama's first year in office: how, for instance, a president who has found his way to a human-rights-friendly policy on Afghanistan could have seemed so cold to human rights in his approach to Iran and China; or how a candidate who once spoke forcefully about the need to address genocide in Sudan has proven to be such a disaster on the issue now that he is in office."

On a slightly different note, I really enjoy the proposal to institute a war tax to pay for this insanity. And not because I want to pay more taxes, but because it exposes the hypocrisy of proponents of escalating the war who at once want to send more troops, but don't want to pay for it with tax hikes, even thought they are allegedly fiscally conservative (yes, I'm talking about Republicans here). And, in a sense, it will put the question to the nation as a whole: is this war worth paying for and if it's not worth paying for, why is it worth fighting?

Dubai.

An interesting article about Dubai .. but this part is particularly insightful:

"In Saudi, it's hard to be straight when you're young. The women are shut away so everyone has gay sex. But they only want to have sex with boys – 15- to 21-year-olds. I'm 27, so I'm too old now."

Marie's Secret?

"In VR [velvet revolution], it is not just the Abbé Sieyès who survives. Louis XVI gets to keep a nice little palace in Versailles, and Marie Antoinette starts a successful line in upmarket lingerie."

Timothy Garton Ash in a recent article in the NY Review of Books, explaining one of the differences between old-style revolutions and velvet revolutions.

Tough First Years.

Regarding Obama's first year, Joe Klein makes a good point:

"Stepping back a bit, I do see a metapattern that extends over the 40 years since Richard Nixon's Southern strategy began the drift toward more ideological political parties: Democrats have tough first years in the presidency. Of the past seven Presidents, the two Bushes rank at the top in popularity after one year, while Obama and Bill Clinton rank at the bottom, with Jimmy Carter close by. There is a reason for that. Democrats come to office eager to govern the heck out of the country. They take on impossible issues, like budget-balancing and health care reform. They run into roadblocks — from their own unruly ranks as well as from Republicans. They get lost in the details. A tax cut is much easier to explain than a tax increase. A foreign policy based in bluster — railing against an "axis of evil" — is easier to sell than a foreign policy based in nuance."

Human Inventions.

"All national institutions of churches, whether Jewish, Christian, or Turkish, appear to me no other than human inventions set up to terrify and enslave mankind, and monopolize power and profit."

Thomas Paine, The Age of Reason.

While listening to NPR I came upon a segment with Thomas Frank who has an article in Playboy (slightly unfortunate venue) about Glenn Beck. During the segment he points out the conservatives' reverence for the founding fathers generally and Beck's obsession with Thomas Paine in particular.

False Choice.

According to Brooks, "we face a brutal choice. Reform would make us a more decent society, but also a less vibrant one. It would ease the anxiety of millions at the cost of future growth. It would heal a wound in the social fabric while piling another expensive and untouchable promise on top of the many such promises we’ve already made. America would be a less youthful, ragged and unforgiving nation, and a more middle-aged, civilized and sedate one. We all have to decide what we want at this moment in history, vitality or security."

It is strange to conclude that reforming health care is a simple trade off between vitality or security from the fact that the current bills do not bend the cost curve (and never could, by Brooks' logic), when the principal reason why this is so is because Republicans, the great conservative minds, did everything in their power to strip serious cost containment out of every version of the bill (eg, independent Medicare payment commission, "death panels", strong public option etc.).

Yes, Brooks is right to point out that the current bills would do little do contain costs, but that doesn't necessarily mean that we should ask ourselves if we want to give up growth for security. The question we should be asking ourselves is if we are willing to give up what he calls "a more decent society" only because the current system is phenomenally resistant to change without even asking ourselves why that is so and what can be done about it.

Suprise!

Americans don't give a flying monkey about bipartisanship, when it comes to getting the public option.

"Which of these would you prefer – (a plan that includes some form of government-sponsored health insurance for people who can’t get affordable private insurance, but is approved without support from Republicans in Congress); or (a plan that is approved with support from Republicans in Congress, but does not include any form of government-sponsored health insurance for people who can’t get affordable private insurance)?"

Fifty one percent said they preferred the public option; 37 percent said they preferred a bill with some support from Republicans in Congress. Six percent said neither and seven percent expressed no opinion."

Good to know that Americans care more about the substance of the bill than they care about holding hands with their evil twins on the other side of the political spectrum. Because, really, bipartisanship doesn't pay your health care premiums when you get fired and the insurance companies denies you coverage because you're pregnant or diabetic.

And as Tapper points out, this might embolden the Democrats to go ahead with the public plan with no Republican support and, maybe, this means we can end the obsession with Olympia Snowe. Unfortunately, I don't think it's that simple: the reason why they might need at least one Republican vote - and Snowe's seems the most likely to come on board - is because there are some Democrats and Independents who might vote to filibuster a bill with a public option in it.

Ridiculous Conclusions.

And since I'm all about blogging again, why not post my upcoming article in Zahraničná politika? I'm back on Obama, with gloves off.

Ridiculous Conclusions

Sometimes the tactical decisions that Obama makes make one wonder what the man really believes in. And, increasingly, they don't even seem to produce their purported goals.

When the President received criticism for being the first president since 1991 not to receive the Dalai Lama during his most recent visit to Washington in October, the press was promptly educated by his senior adviser Valerie Jerrett that "it is not a signal of any lack of commitment to human rights .. that's a ridiculous conclusion to draw." At the same time, Jerrett admitted it is "a fair point to make" that the decision to postpone the meeting was made out of respect to Chinese sensitivities to Tibet. In other words, it was a tactical move, not a principled move; the appearance of bending over backwards to please the Chinese should not be disconcerting - the President knows what he's doing - trust him.

To be sure, America's dependence on China is hardly a secret. With some $2 trillion in US government bonds, China is the largest holder of the US debt and thus the largest funder of its massive deficits. Amicable relations with China are therefore a clear priority for US foreign policy. And yet, this sort of diplomatic calculus could hardly justify not meeting with the Dalai Lama. For one thing, even George W. Bush received him during his visit in 2007 (and awarded him the Congressional Gold Medal) and other Congressional leaders, including Nancy Pelosi, met with him during his most recent visit in October. Of course, this was enough to make the Chinese dissatisfied: shortly thereafter, China accused the US of interfering with their internal affairs. In the end, Obama's tactical move not only enraged those who think the US should take a principled stand on human rights in China, but it also failed to deliver the goal of pleasing the Chinese government, instead encouraging them to make even more ambitious demands.

To anyone who has been watching Obama's presidency with a little bit of a critical eye, this scenario looks eerily familiar. In fact, we witnessed a similar tactical blunder even before the Obamas moved into the White House, when then president-elect asked Pastor Rick Warren to deliver the invocation at his inauguration ceremony. For the sake of context, this choice was controversial due to Warren's widely publicized support for Proposition 8, an anti-gay marriage ballot measure in California during the November election. The choice of an extremely conservative pastor was widely seen as Obama's attempt to reach out to the conservative base and passionately criticized by his largely progressive supporters. In the end, it did very little to improve national cohesion (as evidenced by the largest partisan gap in Obama's job approval ratings, according to PEW) and at the same time offended his socially progressive supporters.

Fast forwarding to last summer, we saw the same pattern emerge during the health care reform debate. As the debate quickly focused in on the question of the public plan - a government run insurance option - the legislators increasingly looked to the White House for guidance. At this critical juncture, in an apparent attempt to bring some Republican support on board, the President and his advisors, through interviews and press conferences communicated the message that while the President supports the public plan, it is "not the entirety of health-care reform" and "not the essential element". Ironically, this telegraphed flexibility did not make Republicans any more constructive in the reform efforts. In fact, despite the president's soft-pedaling on one of the key components of reform, it seems likely that if reform passes, it will happen with no Republican votes.

Obama's willingness to make sacrifices to achieve greater goals - Dalai Lama vs the Chinese, progressive issues vs national cohesion, public option vs bipartisan support - is theoretically understandable as shrewd political calculus. However, it is then imperative to judge his effectiveness in making these trade-offs and, so far, it seems to be very limited. In fact, it seems that every time the President decides to give something up, he receives very little in return. The impression it creates is one of an almost pathological desire to please his opponents even if this disregards the sensitivities of those that might be hurt in the process.

It is certainly understandable how his predilection for compromise and trade-offs would make Obama appealing to a certain committee in Norway. At home, however, he is testing the patience of his liberal base. It is ironic that one of the common criticisms of George W Bush was his inflexibility. These days, Democrats sometimes wish that Obama would exhibit some of that stubbornness, at least when it comes to defending their interests – the promises he made a year ago.

20 Years.

Yes, it's been almost 20 years since the revolutions in Central and Eastern Europe that effectively ended the Cold War and that being one of my personal favorite topics, I was delighted to find a pretty good article on it in the New York Review of Books. Hiding in the analysis of the article are a couple of really fun anecdotes that are worth quoting:

So what happened in 1989 can only be understood on the basis of a scrupulous, detailed chronological reconstruction of intended and unintended effects, in multiple directions on multiple stages, day by day, and sometimes—as on the evening of November 9 in Berlin—minute by minute. The reporting or misreporting of events, especially by television, is itself a vital part of the causal chain. When a trusted, avuncular presenter on the 10:30 PM West German television news declared that "the gates in the Wall are wide open" they were not yet wide open; but this report helped to make them so, since it increased the flood of East Berliners (who watched and were more inclined to believe West German television) hoping to get through the frontier crossings to the West, and the crowds of West Berliners coming to greet them on the other side.An erroneous report on Radio Free Europe that a student called Martin Šmid had been killed, in the suppression of the November 17, 1989, student demonstration in Prague, helped to swell the protesting crowds in the first days of the Velvet Revolution in Czechoslovakia. (In what seems to me the best, and certainly the most amusing, of the retrospective chronicles, György Dalos tells how the student came home the next evening to be told by a somewhat agitated father that he was reportedly dead.)

With regards to the apparent US apathy towards or understatement of what was going on in CEE:

Nor did Bush set much store by bearded dissidents who looked like something out of Berkeley in the 1960s. Victor Sebestyen, in a book full of sharp snapshots and crisp narrative, has a well-sourced account of the President meeting with the leading Hungarian dissident János Kis in Budapest in July 1989, and subsequently telling aides, "These really aren't the right guys to be running the place." Much better to stick with a preppy reform communist.

The bottom line of the article seems to be that 20 years later, given the significance of the events of that year, someone needs to write a comprehensive history of 1989 from all angles. However, looking at these anecdotes, I think this would make for brilliant material for a 4-hour epic movie 1989 (fine, I'll settle for a 10-part series on PBS). I mean, seriously - a blunder on TV, a screw up on the radio and you have a revolution - that is classic.

Gosh, WTF.

I realized that I totally stopped posting anything on the blog and that's not fun. I guess the temptation to just spit out random crap on Facebook is easier than blogging and I keep telling myself that I will just reserve the blog for longer more thought out stuff .. except that doesn't happen anymore, because all longer more thought out entries never start as longer more thought out entries, instead they almost always happen as a quick reaction to something and then take a life of their own .. except all the quick reactions to crap are now channeled to FB, hence the death of blogging. But that has to end. Now!

Health Reform in America – Why It Should, Could and Probably Won't Happen

A super belated installment of my article in Zahranicna Politika. It was meant to be a "US Health Reform 101" for readers outside the US who may not be familiar with the problem. Of course a few things have changed since the time it was written but the conclusion still rings true, especially when one looks at the Senate Finance Committee bill.

Health Reform in America – Why It Should, Could and Probably Won't Happen

The story of US health reform is a complicated one and a thorough analysis of the topic is beyond the scope and scale of this column. However, it has become increasingly difficult to ignore given the prominence it has risen to in the last few months. Not only has it become the number one domestic issue that the president, lawmakers, lobbyists, news reporters and policy analysts are occupied with, but it is also quickly becoming the gauge for the Obama administration's success and potentially one of the determinants of the mid-term Congressional elections (in November 2010) and the next presidential election (in November 2012). Even more broadly, it has been a fascinating study in the functioning (some would say, malfunctioning) of the US political system and its many quirks. In short, for anyone interested in US politics, there are many reasons to care about health reform.

So what is all the fuss about? Why all the talk about reforming a system which is defined by spectacular innovation and some of the most advanced treatments and therapies? The standard answers to that question typically involve three aspects of the system: access, cost and outcomes. Quite simply, with all its high technology and innovation, the US health system leaves many people uninsured, and despite being the most expensive in the world, it produces worse outcomes. Specifically, while almost a fifth of non-elderly Americans don’t have any health insurance, the cost per capita is roughly twice that of most developed countries, and yet life expectancy is remarkably below average while infant mortality is astonishingly high. Underneath all these characteristics lies the fact that health care in America is an amalgam of disjointed systems of financing and delivery with little coordination of care, no incentives for prevention and wellness and plenty of room for duplication and errors.

(Source http://ucatlas.ucsc.edu/health/spend/cost_longlife75.gif)

If this brief description of the complexity of US health care and its flaws in and of itself doesn’t make it obvious how much of a fool’s errand trying to revamp the system is, consider the fact that during the last reform effort, led by Hillary Clinton, the backlash from all stakeholders was so strong that for the last 15 years most lawmakers treated health care like a bag of toxic waste they wouldn’t touch with a ten foot pole. And yet, given the ambitious nature of Obama’s agenda, it seemed almost natural that he would try to find the Holy Grail.

Interestingly, despite the obvious difficulty of the task and the discouraging historical precedent, as recently as in June, there was a widespread sense of confidence on Capitol Hill that this time around things are different and something will get done. For starters, in the 15 years since the last attempt, healthcare spending has ballooned 160%, while the ranks of the uninsured have swelled from 41 million to 47 million. In fact, according to the CNN exit polls from the presidential election, while the economy was the number one issue for the vast majority of voters, healthcare ranked as number one for as many as did the issues of terrorism and Iraq. Even more specifically, two thirds of voters said they were worried about health care costs (and 60% of them voted in favor of Obama). In addition to having an apparent mandate and greater urgency, the new Democratic administration was also equipped with an expanded Democratic majority in both chambers of Congress - the first time such power alignment occurred since 1993. Perhaps more importantly, unlike in 1993, there seemed to be an agreement among key stakeholders, including the for-profit healthcare industry, about the need for reform. This was a major difference from the Clinton era, when the lobbying and advertising efforts of the health insurers, pharmaceutical manufacturers and doctors killed reform in its infancy. The new administration, trying to prevent Clinton’s mistakes, kept the process as open and collaborative as possible so as not to ignite hostile opposition from any of the key groups, instead making deals with each of them. The premise was that if we can fix the system and expand coverage, all of the participants will benefit and should therefore contribute in their own ways towards making the overhaul affordable. In short, for a very long time it seemed like the stars were aligning for the impossible to occur.

In hindsight, it was only a question of time when the fairy tale would turn into a mean fight. Once the committees in Congress started drafting bills – there are 3 of them in the House of Representatives and 2 in the Senate with jurisdiction over health care – the details got in the way of noble goals. The reality is that while most agree on the need for reform, there are numerous starkly different ideas about both how it should be accomplished and paid for – and each of them has a different set of proponents and enemies. The obvious goal is to find a solution that upsets the smallest number of participants – which isn’t very consistent with the objective of revamping 16% of the US economy. To make matters more complicated, the differences of opinion do not necessarily fall along party lines, rendering the Democratic majorities in Congress largely useless. As an example, a major portion of the debate has been around the possible introduction of a government-run health insurance option that would compete with private health insurers. While progressive democrats perceive this as an essential part of the reform, the conservative block of the party is vehemently against it. Recognizing the complexity of these diverging interests, Obama has been smart in keeping his demands as vague as possible and instead putting out broad parameters for reform – it has to expand coverage, improve quality and save money. This strategic vagueness, however, didn’t prevent the opponents of reform from poking holes in the proposals and the proponents of different solutions from engaging in hostile debates.

And so here we are in August and the whole reform effort appears to be on life support. Why? If reform fails, history books will probably trace its death to the August congressional recess. The recess is a month-long break during which lawmakers typically go back home to meet with their constituents. Early on in the month it became clear that having a bunch of health care proposals sitting around for a month was like leaving a carton of milk on the table for a few days. The news became quickly dominated by reports of contentious town hall meetings in which lawmakers encountered anger and even violence, often fueled by outrage over the supposed attempt to nationalize healthcare and over particular provisions in the health care bills, some of which were completely made up. The famous example was the rumor that Obama’s reform would create government-run “death panels” that would determine which patients are worth living – which turned out to be a gross misrepresentation of actual proposals to include funding for voluntary end-of-life counseling. Another example of populist hysteria was the accusation that the reform will force preferential hiring of homosexual hospital administrators and includes funding for sex change operations, when in fact none of the proposals include any such language. Absurd or not, these protests have a good chance of making lawmakers uneasy about their support for reform especially if they are Democrats in conservative districts or states and thus vulnerable in the next election.

So does this mean that health care reform is dead? Probably not entirely. Obama has made the issue so central to his domestic policy that a complete failure could harm the future prospects of both his party and his own. However, given the lack of legislative will and mounting opposition in the electorate, the most viable alternative is to settle for some smaller incremental changes such as expanding some public programs like Medicaid to cover more poor people and children and pay for it by cutting spending in a few targeted areas. This would be very far from a comprehensive reform of financing and delivery of care, and it will certainly anger the progressive Democratic base. However, faced with the prospect of getting nothing at all, the progressives will likely take whatever “reform” they can get. In the end, it seems quite possible that this will all have been yet another exercise in the realpolitik in the US legislative process and perhaps another lesson for those who believed in Change: it’s slow, painful, full of compromise and ultimately not very satisfying.

Dear Mr. Collier,

I read about you in the New York Times and I have to say I am truly perplexed.

Your situation as you describe it would seem to position you as one of the fiercest advocates of health reform. Your wife's experience with the system is nothing if not exemplary of everything that is flawed in it: your insurer denied payment for your wife's radiation treatment because they were deemed "experimental" (even thought they are pretty much the standard of care for breast cancer as far as I know), presumably to avoid paying for the $63,000 bill (which you ended up not having to pay only because of the kindness of Emory Healthcare). Your insurance premiums have been going up 15% per year - I would imagine much faster than your income - and your deductibles have quadrupled. More importantly, God forbid the cancer were to recur (and in the best case, there is about a 10% chance it will) and you happened to lose your job, your wife would be uninsurable, due to her pre-existing condition.

And yet, you oppose health reform which aims to control the growth in cost of care, prohibit insurers from discriminating among people based on pre-existing conditions, and would give you a safety net to fall back on in case you lose your job or your employer simply decides to no longer provide health coverage for employees, or their spouses (it's a recession, after all).

What I don't understand at all is your reasons for fearing health reform. You say about Obama "he wants to centralize everything. He wants to take over the car companies. He wants to take over the banks. Now he wants to take over health care." Leaving aside the fact that the government didn't simply decide to take over car companies and banks (they begged for and survived thanks to government intervention), I simply don't get what about any of the current proposals says anything about the government taking over health care. And even if it did, why is that necessarily a bad thing compared to what happened to you? You worry about the government rationing care and skimping on the elderly. Instead, you prefer to be in a system, where your insurance company can simply deny payment for a procedure which, according to medical research lowered recurrence risk of your wife's cancer by more than 50%, because it is considered "experimental", even though your doctors recommended that treatment. If that isn't rationing and intruding into medical care decisions made by your doctor than I don't know what is. But I guess having those life-threatening decisions made by a for-profit entity at least feels more American?

I suppose I can understand one reason why you want to keep the system as it is - that against all odds and thanks to a combination of luck and other people's charity, you got what you need out of it. Your wife is OK now and, however expensive it may be, you have health insurance. In other words, the system sort of works for you, so why mess with it?

All of which is to say, go read James Surowiecki's brilliant article in the New Yorker about why we tend to want to stick with things that suck.

Just Dance.

Eh, not particularly timely but here's another installment of my column in the Slovak journal Zahraničná politika. I have to say, using a night out at Vandam as inspiration and a Lady Gaga reference .. that's a first for me.

Just Dance.

Starting a column with a personal anecdote like “when I went out last Sunday it occurred to me” is probably not particularly professional. And yet, at the risk of diminishing the respectability of this piece, I can't help myself: When I went out last Sunday it occurred to me that for a city in the epicenter of the greatest economic decline since the Great Depression, everyone seems to be having an unusually good time. Granted, this was the night before Memorial Day, one of the few national holidays in the US, also considered an unofficial start of the summer. But it struck me as somewhat representative of the overall mood around me – not just in my social interactions, but also at my work in the financial markets – that could generally be summed up with three statements: the world is not coming to an end; it's going to be ok; just dance. And the skeptic in me has to wonder: is this for real or are people just fooling themselves, diluting their worries with a cocktail of green shoots, only to wake up with a massive hangover of reality the next morning?

The term green shoots in this context was coined by the Federal Reserve chairman Ben Bernanke during an interview in March to describe what he believed were some early signs of economic recovery. Since then, many analysts have been obsessed with identifying these encouraging data points. Suddenly, it mattered less that many data points were still bad or worsening; it became fashionable to point out that as bad as things may seem – or deteriorating even – they are getting worse at a slower rate, the implication being that we are close to hitting a bottom. The market responded accordingly: between early March and the end of May, the S&P500 index has climbed 35%. And this sense of optimism has clearly infected American households: the Conference Board consumer confidence index in May showed a stunning improvement since the previous month to the highest level since last September, when the crisis broke out. Even more telling is the fact that the increase was driven by a pop in future expectations – to the highest level since December 2007, the month when this recession started. In other words, while people's assessment of the current situation is still not particularly rosy, their view of the future is as good as it was before the recession started. Similarly, in the stock market, one earnings report after another, investors have been looking through mediocre near term trends, and propping up prices of stocks in the hopes of an economic recovery.

Now, let me spell out my main source of skepticism clearly: none of the fundamental negative trends that were at the core of the downturn that clearly broke out last fall has reversed. Here's a quick survey of some macroeconomic factors: the housing prices keep going down (15% in April, according to National Association of Realtors, while the inventory of homes climbed 8.8% and mortgage delinquencies hit a record high, said Mortgage Bankers Association), the true health of banks remains unclear, unemployment continues to go up, even if at a slower pace. In other words, there is plenty of negative data pouring out, if one only pays attention.

At this point, you may ask yourself: why insist on highlighting the negative and ignoring the positive signs? Shouldn't we be celebrating the improving sentiment? These questions aren't entirely unfounded. The economic cycle is, after all, a self-feeding mechanism to some extent: if sentiment recovers, businesses will plan for higher output, increase investment, hire workers, and so on and so forth. And yet, while confidence is an essential element of recovery, it doesn't actually pay for much. So while consumers may be feeling more bullish, the real question is how much stuff will they be able to buy when all is said and done. And if you think about the fact that much of the spending in the last decade was driven by a massive expansion of credit – which is unlikely to make a comeback soon, I have to wonder what the true buying power of Americans – and people around the globe – will be when the dust settles. Put bluntly, without credit cards, how many millions of people will find it essential in the future to get the latest iPod every 6 months?

And so, while it would be nice if this jolly spring became the foundation for the next boom, I am finding it difficult to ignore all the signs that tell us otherwise. What's more, the precedents are not very encouraging: even during the Great Depression the economy did not fall apart immediately. After the initial drop, there was a brief period of recovery during which the market rallied 50%, only to start an extended decline during which stocks lost 80% of their value. And while I am nowhere near making that kind of prediction, when I look around today and see everyone dancing again, I fear how surprised everyone will be when the music stops.

Finally.

Some time ago I was walking with a friend and the topic of health care reform came up. The friend stated: "clearly something has to be done .. there are so many uninsured people."

I may know a lot about health care but being caught off guard on a hungover Saturday morning, my response probably wasn't as succinct or clearly stated as I would have liked it to be. And the response I think is the most appropriate is that the uninsured are not the problem with the system but rather a symptom of the problem.

Here's what I mean: with some notable exceptions (like illegal aliens and young healthy people) the reason why there are so many uninsured people in this country is because health insurance has become prohibitively expensive for many employers to offer and for many individuals to buy. The real issue in America is not access but rather cost. As health insurance premiums have grown at double digit rates every year over the last 2 decades (all the while incomes haven't changed much, if anything, they have gone down), people are increasingly faced with an ugly trade off between health coverage and other spending. This has transpired in a few ways: many businesses have either stopped offering health coverage or increased the employee portion of the cost. To the extent that employees are faced with larger portion of the premium, it has clearly provided a disincentive to buy coverage (so called "take up" rate). And while other employers haven't asked their employees to foot a greater portion of the bill, almost all have shifted their employees to plans with higher out-of-pocket expenses - effectively leaving many "underinsured". And so, even if you still technically have coverage, chances are that when you get to the hospital, you now have a large deductible and a co-pay. In other words, the precipitous growth in health care costs (which drive premiums) has left many people out in the cold.

The reason for making this distinction between access and cost (ie, the uninsured are not the problem, but rather a symptom of a problem, which is skyrocketing costs) is twofold:

1. By focusing on the number of people without health insurance the implication could be that you could solve the perceived problem of access by simply throwing trillions of dollars to those who don't have coverage and get them insured. This would, at least temporarily, make everyone happy. I say temporarily because without addressing the underlying problem of cost and "bending the cost curve" (a popular expression these days), the problem would reemerge as further increases in costs would make insurance increasingly expensive to employers and employees (ie, right where we started) or, in the case of government funding, would lead to ever increasing deficits.

2. The focus on the uninsured also makes health care reform less appealing or relevant to the average voter. While there are unacceptably many uninsured Americans, the majority is still insured and the majority likes their health insurance. By talking about reform through the perspective of access, it is hard to inspire much urgency or support when the majority of people don't have an access problem. Other than feelings of sympathy, the horror stories of those who lack health insurance are not particularly motivating to those who do. In reality, however, even those that have insurance today and are happy or OK with it, are not immune from the underlying problem of cost growth. At a minimum, their premiums and out of pocket costs are rising at incredible rates year after year. More importantly, however, unless those trends are muted, the pool of uninsured and underinsured is ever expanding - and it is this threat that should make the need for reform very personal even to those who are currently covered.

On a related note, by focusing on costs rather than access, the problem becomes not only personally relevant to everyone but also inherently less partisan. It is easy to see how a conservative would not be particularly moved by the idea of "universal coverage". And it is also easy to see why my friend, who I mentioned in the beginning of the article, would relate the notions of health reform and uninsured in his liberal train of thought. Indeed, the very need for health reform is often questioned by some in the Republican party, on the grounds that there is nothing inherent about the right to health care. However, by focusing on the real problem - costs - reform suddenly sounds like a fiscal imperative, something that is surely more appealing to conservatives. And certainly, for a problem as big and complex as health care, it is useful to think about problems in ways that people across the ideological spectrum find appealing.

So, to conclude this little diatribe, because cost is the true problem that we should be addressing, I found it heartening that recently the public discourse has finally shifted in that direction. Not only in Obama's press conference on Wednesday but also in a recent slew of articles and op-eds on the topic (here, here and here). I really hope that the message is resonating - not just with the public but also with the lawmakers who are in charge of the sausage that is the legislative process around health reform.

Health Reform Op-Ed Extravaganza.

You can tell that an issue is heating up when you get a slew of columns on it in one day.  Today we got one from Krugman, Douthat, and Will.  All make solid points, even though they see the problem from very different perspectives.  After following the issue up close for the last few years, I could probably write an novel about it, so one of these days I should at least squeeze out a longer piece here.  Stay tuned.