"Money In Politics," Hillary, And The McDonnell Prosecution

Among the phony prosecutions pursued by the feds recent years, one of the flimsiest has to be the prosecution of former Virginia governor Bob McDonnell.  Of course, he was convicted; and his conviction was affirmed by the Fourth Circuit.  His appeal reached the Supreme Court last week.  The smart money is betting on reversal.

Out on the campaign trail, we have Bernie and Hillary telling the world that if elected they will appoint Supreme Court justices to get the Citizens United case reversed, and then advocate for legislation to criminalize most if not all private "money in politics."  But meanwhile in the McDonnell prosecution we have a great illustration of how this strategy would not only not solve the alleged problem, but would make things far worse.  Granted, the facts of the McDonnell case are not pretty.  On the other hand, the more you get into those facts, the harder it is to figure out how, as long as we have privately funded political campaigns, every single politician in the country will not be equally subject to conviction under the same theory.  So from Bernie and Hillary we get the only remaining answer -- that only money from the government itself can remain in politics.  But wait a minute:  money coming from the government is far and away the most corrupt money of all, always and everywhere used to advocate for the growth in size and power of government and to oppose all attempts to rein the government in.  The disease may be bad, but the cure is far worse.

For the most favorable view of the facts of the McDonnell case from the government’s side, check out its brief here.  While he was governor of Virginia, McDonnell and his wife “solicited and secretly accepted more than $175,000 in money and luxury goods” from a businessman who wanted the state-controlled University of Virginia to conduct clinical tests on his company’s product.  In return, McDonnell allegedly talked up the product to various university officials, invited the businessman to a reception where university officials would be present, arranged meetings between some officials and the businessman, and followed up as to why nothing was happening with the businessman’s proposals.  But in the end the university declined to conduct the trials.

 McDonnell was convicted under 18 U.S.C. Section 201.  That section makes it a federal crime for a “public official” to “corruptly demand[ ], seek[ ], receive[ ], accept[ ], or agree[ ] to receive or accept anything of value . . . in return for . . .  being influenced in the performance of any official act.”  McDonnell’s lawyers rightly point out on appeal that the government cannot name the “official act” that McDonnell agreed to or did perform in return for the gifts.  Is setting up a meeting or talking up a product an “official act” that a politician cannot legally perform on behalf of anyone who has made a contribution to his campaigns? 

At scotusblog, Lyle Denniston has a report on the Supreme Court argument last Wednesday.  If the drift of the justices' questions proves a good predictor of the outcome, as it almost always does these days, McDonnell is very likely to get a reversal.  Justices from both sides of the political divide (Roberts, Breyer, Kennedy, Kagan) actively picked the conviction apart during the questioning.  Much of the questioning centered around what is the “limiting principle” that would make it such that not every elected official who arranges a meeting on behalf of a campaign contributor is guilty of a federal felony.  Seems that the Deputy Solicitor General who argued on behalf of the government didn't have a good answer to that one.

If you think that McDonnell's conduct really must be illegal somehow, consider this about President Obama from one of the amicus briefs filed on behalf of McDonnell (by the American Center for Law and Justice):

During President Obama’s reelection campaign, in 2012, Hoffman [founder of LinkedIn] and Pincus [founder of Zynga] each gave a million dollars to Priorities USA, the Democratic Super PAC. Since then, they have had the opportunity to spend time with Obama. In a private forty-five-minute meeting in the Oval Office in 2012, Pincus gave the President a presentation on what he calls “the product-management approach to government.” Obama telephones him now and then, sometimes at home, and Pincus and his wife have been Obama’s dinner guests.  In June, Hoffman helped organize the guest list for a dinner party for Obama in San Francisco, and he has had conversations with Obama at several meetings and dinners at the White House. 

Legal or illegal?  As a clue, it is not a sufficient answer to say "Obama controls the prosecutors, and therefore he will never be prosecuted for this."

Meanwhile back in New York, official corruption is all over the news.  U.S. Attorney Preet Bharara, fresh off convictions of the two most powerful legislators in our state (Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos), has active investigations going of campaign fundraising practices of both Governor Andrew Cuomo and Mayor Bill de Blasio.  Bharara, of course, has been paying no attention whatsoever to the statutory requirement of some "official act" in return for the alleged pay-off.  The Skelos conviction, in particular, is on very weak ground.  The most important piece of Skelos's alleged crime was leaning on his friends in the government of Nassau County to approve a contract with a company that agreed to employ his son.  But Skelos himself had no official position with Nassau County, and no say in the approval of the contract.

In the New York Post yesterday, Nicole Gelinas asks if we are "tired of New York's pay-to-play politics," and laments that the Supreme Court may be "about to make it harder to secure corruption convictions."   Are New York's politics really more corrupt than those of any other state?  Sure they are, but in my view it's not because our politicians are any more corrupt, or really any different from the politicians anywhere else.  Nor is it because corruption convictions are too hard to obtain.  The difference in New York is that we have adopted full-blown progressivism; and therefore our government is bigger and more intrusive than that of any other state, and engages in massive state capital allocation, all in the effort supposedly to create perfect justice and fairness between and among all people, and to remove all downside risk from human life.  We merciless persecute our most successful businesses (banks, oil and gas) and periodically subject them to prosecutorial shakedowns, while doling out special permits and billion dollar handouts to loser businesses that only exist at the sufferance of politicians (casinos, solar, taxi medallions).  As a result, literally everyone in New York who has enough money to contribute noticeably to a political campaign has some "business before the state," and some interest in some state decision of some kind.  Cuomo takes money from people who want to ban fracking, or want approval of casinos, or want subsidies for solar panel factories; de Blasio takes money from the teachers' unions on the eve of a multi-billion-dollar contract settlement, or from people who want to ban horse-drawn carriages from Central Park, or from taxi medallion owners.  Are any of these "bribes"?  How do you tell?

So what's the answer?  We can have the Hillary/Bernie answer, where we do away with the First Amendment, nobody is allowed to push back against the growth of the government, and the only "money in politics" is government money.  Then the only voice we will be allowed to hear is the voice of government agencies seeking to expand their own budgets and power: the billion dollar government advertising campaigns to expand Obamacare; the EPA taxpayer-funded social media astroturf campaigns to generate hundreds of thousands of fake letters supposedly supporting EPA regulatory initiatives; the massive government promotion of expansion of food stamp dependency; the government fake "food insecurity" surveys fraudulently designed to sell the American people on the idea that millions are hungry; the government "anti-poverty" programs specifically structured to keep poverty high so that the public can be sold on yet more "anti-poverty" spending; the phony GDP accounting that fraudulently pretends that the most wasteful government spending is a 100% addition to GDP rather than a subtraction; etc., etc., etc. 

Or we can reduce (although not eliminate) "pay-to-play culture" and corruption in politics by shrinking the footprint of government.   

What's The Best Way To Reduce Poverty?

What is the best way to reduce poverty in America?  Anyone who follows the subject at all will immediately know the answer: the best way to reduce poverty in America is to reduce government "anti-poverty" programs.  If that seems counter-intuitive to you, it can only be because you do not follow the subject at all.  Those who follow the subject know that government "anti-poverty" programs are universally designed and structured to keep the beneficiaries in poverty, because the benefits encourage dependency and discourage work, and also do not count as "income."  Keeping the poverty rate high is the first priority of the "anti-poverty" bureaucracies, who need large numbers of poor people to justify their staffs and their budgets.  Call them the "Welfare Blob."

The public got introduced to this subject by the mid-90s welfare reform enacted by the then-new Republican Congress and President Clinton.  When Congress in 1996 instituted work requirements and time limits for basic welfare, many on the left predicted soaring poverty and disaster for the poor; but instead measured poverty (particularly among the key population of black children) immediately and rapidly declined.  Here is a chart from the Heritage Foundation showing that decline in the late 90s:

View fullsize

But the Welfare Blob was not so easily vanquished, and immediately went to work to re-establish itself.  Fortunately for them, they had 80 or more government dependency programs to work to expand silently and mostly out of sight from the public.  Here we are 20 or so years after the big welfare reform, and many of those other programs have exploded.  

As Exhibit A for today's lesson, we have what was once known as "Food Stamps," now "SNAP."  In 2000 it had 17 million beneficiaries and a budget of about $17 billion; by 2015 it was 46 million beneficiaries and a budget of over $74 billion.  That's some serious growth!  A big part of the growth came from changes after Obama's election, particularly loosening eligibility requirements and making it so that able-bodied single adults could get on food stamps and stay on them indefinitely without any work requirements.  The Obama administration also made a big push to promote food stamps and get as many people on them as possible.  (I reported on that here.)

Well, now food stamps are in the news, and for a very good reason.  A couple of states -- Kansas and Maine -- decided that they had had enough of indefinite work-free eligibility for able-bodied single adults, and so have reinstituted work requirements and time limits for people in that category.  And the result?  Of course, it is an immediate and dramatic decline not only of the number of program participants, but also in the poverty rate in the affected population.  Kansas started its program reductions in 2013, and now has three years of experience under its belt.  Here are some data from a Report from something called the Foundation for Accountability in Government:

The number of able-bodied adults who are in poverty has dropped significantly as more and more able-bodied adults have found work. Before Kansas’ welfare reforms, just 7 percent of the adults who left food stamps in December 2013 were above the poverty line.  They were not just in marginal poverty, either: nearly 84 percent were in severe poverty, earning less than half of the poverty line.  And even among those who were working, more than 80 percent were in poverty. . . .  Within a year of leaving food stamps, the number of able-bodied adults living in poverty dropped significantly and roughly half of those working climbed out of poverty entirely.  The average income among these working, able-bodied adults was just $6,730 per year prior to Kansas’ reforms.  But within a year of leaving food stamps, average income among workers grew to $13,304 per year.  This means that the average income among those working is now above the poverty line.     

OK, there is some naivete there, particularly failing to give any recognition to the possibility that many of the people may have worked in the illegal and/or underground economy while they were on food stamps.  Still, the results are dramatic.

In Maine, the time limit and work requirement changes came later, December 2014.  So there is only a year of experience, and I have not been able yet to find data on poverty reduction.  However, the number of able-bodied adults without dependents on food stamps experienced an immediate and drastic reduction, from 13,332 in December 2014 to 1,886 in September 2015, according to a Heritage Foundation report here.   A reasonable expectation would be that half or more of the people who lost the food stamp benefits will leave poverty within a year.

Needless to say, the Welfare Blob cannot abide the existential threat to its existence posed by these kinds of changes that reveal that the "anti-poverty" programs actually increase poverty.  In this post back in 2013 I compared the desperate campaigns of the Blob to maintain every last dollar of "anti-poverty" spending to the Brezhnev Doctrine, named after 60s-to-80s-era Soviet superthug Leonid Brezhnev.  The Brezhnev Doctrine held that any nation or territory that once fell within the communist orbit must never exit, the logic being that if anyone could escape then the whole house of cards would be in imminent danger of collapse. 

As the data from Kansas and Maine have started to come out, the Blob has sprung into action.  On April 1 the New York Times ran a big scare article with the title "Thousands Could Lose Food Stamps as States Restore Pre-Recession Requirements."  (Yes, it was April Fools' Day, but I think they were serious.)  The article contains quotes from advocates working for places with names like the Center on Budget and Policy Priorities and the Food Research and Action Center, and using words like "hard hit" and "cruel."  Of course the article does not mention the intentional cruelty of the Welfare Blob of trapping people in poverty in order to maintain jobs and perks for bureaucrats.  

And then we have the op-ed in yesterday's Wall Street Journal from former Treasury Secretary Robert Rubin and Diane Schanzenbach of something called the Hamilton Project, titled "In Defense of Federal Food Aid."  Rubin and Schanzenbach again fail to mention the effect of food stamps of trapping people for years in poverty.  Instead, they turn to perhaps the most fraudulent of all the fraudulent government statistics, the so-called "food insecurity" data, to justify maintaining the bloated current levels of food stamps:

The rate of food insecurity in the U.S. spiked during the Great Recession and it continues to remain unconscionably high in the world’s wealthiest nation. In 2014, according to the Agriculture Department, nearly one in five U.S. households with children—a total of 15.3 million children—were food insecure, which means at some point during the year they lacked adequate food.

Do you think that if Bob Rubin signs his name to something you can trust it?  In fact, this statement is blatantly false.  The government "food insecurity" statistic comes from the answer in a survey to this question:

“We worried whether our food would run out before we got money to buy more.” Was that often, sometimes, or never true for you in the last 12 months?   

"We worried whether our food would run out before we got money to buy more" is obviously not at all the same thing as "we lacked adequate food."  Indeed, the "food insecurity" question has been specifically designed to elicit a positive answer from most or all food stamp recipients (who are likely to "worry" that they might "run out" of food, since the design of the program requires that they manage a budgeted monthly amount) and thus to remain at a high and stable level no matter how much food aid is dispensed and how much money the taxpayers spend on the project.  The Wall Street Journal should be embarrassed that they ran this op-ed.

Meanwhile, the reductions in poverty from the reductions in the food stamp program are a very small piece of the puzzle.  Poverty could be hugely reduced through massive reduction in "anti-poverty" programs across the board, but that is not currently in the works.

Somebody Needs To Stand Up For Wall Street

Bashing Wall Street is a perennial pastime of the progressive politician.  Certainly, it's Bernie Sanders' favorite occupation.  His speeches are filled with accusations that it was "greedy bankers" that "drove the economy to its knees," and with calls to break up the big banks and to make "Wall Street billionaires" pay their "fair share" in taxes.  But he's far from alone.  Massachusetts Senator Elizabeth Warren has risen to the status of left-wing icon through endless bashing of "Wall Street."  Hillary Clinton, while perhaps stopping short of the rhetorical extremes of Sanders and Warren, has joined enthusiastically in calls for more and yet more regulation of the financial sector.  (Wasn't the 2000+ page 2010 Dodd-Frank law supposed to include every possible idea for financial regulation that any progressive politician could even think of?)  

And actually, it gets even worse.  Here in New York, the financial business is our main home-town industry, the activity that far more than anything else makes us one of the richest cities in the world, if not the richest.  And yet somehow bashing Wall Street is an even surer route to political success here than elsewhere in the country.  Eliot Spitzer, when he was New York's AG, showed how a prosecutor could easily shake down any financial institution of his choosing for a few hundred mil, and quickly rode that horse to the governorship.  His current successor as AG, Schneiderman, continues in Spitzer's ignoble footsteps.  Same for the politician-wannabe U.S. Attorney (Bharara), who also follows the Spitzer playbook except that he has upped the customary hit of protection money per settlement by an order of magnitude, from a few hundred mil to a few bil.  Bashing Wall Street is also a sine qua non of most every successful campaign for the City Council.  Even in my own precinct of Greenwich Village -- home to loads of people in the financial business and where all local businesses, from real estate to retail to restaurants to theater to museums, depend on the success of the financial business for their livelihoods -- you are hard-pressed to find anyone with a good word to say about Wall Street.  They know that their own company consists of hard-working and ethical people, but somehow at the same time they buy into the narrative that everyone else in the financial sector is some kind of a crook.

Well, somebody needs to stand up for Wall Street.  And what's the point of being the Contrarian if you're not willing to do it?

First of all, what is "Wall Street"?  It once referred to a neighborhood near the Southern tip of Manhattan where the financial business was heavily concentrated.  The stock exchanges actually used to have a rule requiring stock brokers to keep their offices in the neighborhood in order to facilitate the physical transfer of share certificates from one firm to another when stocks were bought and sold.  Obviously, that rule became obsolete with the disappearance of paper share certificates.  Today I have my office in the Financial District area, a couple of blocks from Wall Street itself, and I can say from observation that the financial business is a much reduced presence in this area.  In the time since I previously worked around here in the 70s, close to half the buildings have been converted to residential.  In the 70s the residential population of the Financial District area was only a few hundred hardy souls; today estimates put the population around 50,000.  The biggest remaining office space users seem to be City and State government agencies.  Big new private office space users include the likes of Revlon, A.C. Nielsen, Conde Nast and Time, Inc.  Of the big banks, Citi and Chase have some operations here, but their headquarters and main operations are elsewhere; only Goldman Sachs maintains a headquarters in this area.  There are many small to mid-size stockbrokers and investment firms, but far and away most of that business is in midtown, if not Westchester or Greenwich, Connecticut (or Florida).

So "Wall Street" today is much more an abstraction than a place.  Indeed, Wall Street is an abstraction about the business of dealing in abstractions.  People rarely give a definition of what they are talking about when they use the term "Wall Street," but a good working definition is that part of the economy that deals in buying and selling abstractions.  In the traditional economy, you bought and sold physical things that could be touched and seen.  Even the other big wealth-generating sector of today's new economy, tech, has output that can mostly be touched, or at least seen.  Think computers, smart phones, or, in the case of programming, the output that you can see on your screen.  But what does the financial services sector produce and sell?  Things like rights to future repayment with interest, or rights to pieces of the future revenue stream of a business, or rights to future payment depending on the fluctuation of prices of something like gold or pork bellies or interest rates.  

It all seems so ephemeral.  Why should people get rich dealing in things you can't even touch?  Which is what gives the opening to the likes of a Sanders to say that Wall Street "produces nothing."  Well, that's because he's not smart enough or observant enough to perceive the benefits that buying and selling abstractions can bring to human existence.  Here are just a few examples:

• Availability of credit to the masses.  When I was a kid, credit cards were a new thing, and the large majority of people did not have them.  Most purchases required you to earn the cash first.
• Venture capital.  It's not just Microsoft and Apple and Google and Facebook.  Hundreds of companies in new and untried fields have gotten started in the U.S. through speculative venture capital investments, and a few of them have become the backbone of the economy in a remarkably short period of time.  Other countries don't have those companies because they don't have our venture capital investors.  Yes, some of the venture capitalists have become billionaires.
• Private equity.  Closely related to venture capital, but private equity often deals with existing businesses that could benefit from a good shake-up, or new businesses in more traditional fields.  In the old days to execute your business idea you needed wealthy friends or family to back you.  Today, there are Wall Street players who specialize in separating the promising ideas from the lemons.  If they actually have a good eye for the ideas that will work, they will make a lot of money.  And the economy will have many new and successful businesses to provide jobs and income to the masses. 
• Liquidity of investments.  Today you can buy or sell thousands of different stocks or bonds or funds in seconds, with minimal losses to commissions and bid/ask spreads (which today are a fraction of what they were when I was younger).  Much of the added liquidity comes from the increased presence of speculators in the markets, one species of which, the "high speed trader," is a favorite villain of Wall Street bashers.
• Risk shifting.  Before derivatives markets, farmers got wiped out when the value of their crop dropped between planting and harvest.  Miners got wiped out when the value of the output dropped while the mine was being developed.  Companies selling internationally got wiped out when currency prices fluctuated.  Today farmers and miners and international traders lock in their prices before they produce the output.  Who takes the risk?  Speculators.
• Efficiency of business.  Back in the 70s and 80s, a constant lament of business writers was that American business had gone soft, with entrenched management leading the easy life without accountability.  That meant less innovation and higher priced products for the consumer.  Today another aspect of "Wall Street" consists of activist investors and a market for whole companies ("corporate takeovers"), with aggressive investors constantly on the lookout for lazy management to challenge or oust.  Lazy entrenched management has been largely eliminated, except for that handful of companies with two-tiered stock structures that allow a family or other inside group to keep control (New York Times, anyone?).
• Someplace to earn at least something on your retirement savings even as the government runs a decade-and-counting-long war against savers and retirees by keeping interest rates at or near zero. 

And really, I'm just getting started.  To say that "Wall Street" produces nothing of value is to show that you do not know what you are talking about.  

As is obvious from the above list, despite the rhetoric of Sanders, Warren, Clinton, et al., the so-called "big banks" are only a small part of the businesses referred to as "Wall Street."  The biggest banks (the likes of Chase, Citi, BofA, Wells Fargo and Goldman Sachs) may have big shares of certain aspects of "Wall Street," like bank "assets," bank accounts, credit cards, and home mortgages; but they are far from dominant in the overall financial services sector of the economy.  Wikipedia here, citing a Citibank source, puts Citi's share of the overall financial services market at about 3%.  That would put the market share of the five biggest banks in the range of 10 - 15%, which seems about right to me.  And you won't find many of the "Wall Street billionaires" working for the big banks.  Outside of their investment banking operations, the big banks employ thousands of people who administer things like bank accounts and home mortgages, and do not make outsize salaries.  Some investment bankers do make outsize salaries, but they also have about the highest pressure jobs in the world, often concluding enormously complex transactions on breathtakingly short time schedules.  Meanwhile, the large majority of the "Wall Street billionaires" will be found not in the big banks, but rather in the venture capital funds, the private equity funds and the so-called hedge funds. 

And finally, what exactly is wrong with buying and selling abstractions?  With all the upsides identified above (and plenty more that I have not had space to mention), what is the downside?  Sanders says that Wall Street "brought the economy to its knees."  How?  Sure, every market fluctuates, and prices of anything can (and, from time to time, will) crash.  Is that a reason to prohibit the existence of the market?  It's just complete ignorance, but with literally nobody pushing back.       

Unifying Themes Behind Pseudoscience

Most of the coverage of pseudoscience at this site has been of two things, the climate scare and the high-fat diet hoax.  But in a column in yesterday's Times of London, Matt Ridley reminds us that there are plenty of more examples of big-time pseudoscience out there.  His column covers two more that are also the subject of recent news:  (1) glyphosate ("Roundup") weed killer, and (2) DDT.  That makes four.  Do all of them seem to have some unifying themes?

Why is glyphosate in the news?  If you are in the U.S. you may not have seen much news about it lately.  But Ridley notes that just last week the European Parliament voted to ban it for "non-professionals" -- that is, gardeners -- while also "allowing" its use for another counting-down seven years for farmers while the matter is "studied."  So what's the problem with glyphosate?  It certainly has some big positives.  Besides having a large role in increasing crop yields and reducing famine around the world, it is much less toxic than prior-generation weed killers:

Dose for dose, glyphosate is half as toxic as vinegar, and one tenth as carcinogenic as caffeine. Not that coffee’s dangerous — but the chemicals in it, like those in virtually any vegetable, are dangerous in lab tests at absurdly high concentrations. . . .  Roundup is probably the safest herbicide ever, with no persistence in the environment.   

But Ridley gives several reasons why glyphosate has come to be hated by what he calls the Green Blob:

[T]he Green Blob hates it for three reasons. It’s off-patent and therefore cheap. It was invented by Monsanto, a company that had the temerity to make a contribution to reducing famine and lowering food prices through innovation in agriculture. And some genetically modified crops have been made resistant to it, so that they can be weeded after planting by spraying, rather than tilling the ground: this no-till farming is demonstrably better for the environment, by the way.   

But what's the state of the science?  Is glyphosate dangerous?  On that subject we have the U.S. Agricultural Health Study, which has been tracking 89,000 farmers and their spouses for 23 years.  The results:

The study found “no association between glyphosate exposure and all cancer incidence or most of the specific cancer subtypes we evaluated, including NHL [non-Hodgkins lymphoma]. . .”   

Numerous other studies reach the same results.  So why isn't that the end of the matter?  Because something called the International Agency for Research on Cancer, part of the UN's WHO, hired an EDF activist and long-time anti-glyphosate campaigner named Christopher Portier to advise on glyphosate.  Portier proceeded last year to put together a big dossier on glyphosate for IARC, claiming to find that glyphosate is "probably carcinogenic"; and he's been going around from government to government pushing for a ban ever since.  And thus the European Parliament's vote last week.  Ridley characterizes the Portier dossier as "surely pseudoscience" and based "on a tiny number of cherry-picked studies."

For more on the IARC anti-glyphosate campaign, see this from blogger David Zaruk: "IARCgate For Dummies:  Three Reasons This WHO Agency's Glyphosate Campaign Is A Scandal."  

So what themes do we find here?  Activist campaigners claiming to be advocating for environmental or health issues (often for both) seek to exploit minor potential risks of concern to wealthy constituencies to gain vast additional amounts of additional control over people's lives.  Oh, and in the process throwing under the bus poor and third-world constituencies.  In the case of glyphosate, it's the poor who would benefit greatly from increased crop yields and decreased famines.

Do you notice any similarities to the situation with DDT?  People forget that malaria was very much a major health problem in the United States until as late as World War II.  Although progress had been made against it through laborious efforts with larvicides and draining of stagnant water, it was the widespread use of DDT after the war that literally wiped malaria out in the U.S.  Then came Silent Spring. DDT got banned, and today millions annually continue to die in Africa.

What I don't understand is how people can convince themselves that they are on the moral high ground when they would ban glyphosate for the poor while they themselves eat like kings; ban DDT for the poor while they themselves live where malaria has been wiped out by DDT; ban fossil fuels for the poor while they themselves jet around the world; and on and on.     

How Not To Measure Whether Obamacare Is Succeeding

After some months of little news on the Obamacare front, it's suddenly back in the headlines in the past week or so.  Major health insurers have announced withdrawals from the "exchanges"; others have announced big losses; and some are predicting a combination of further withdrawals and/or big premium increases when the next round of annual renewals comes up.  Is the whole thing starting to unravel?

Obviously, the New York Times needs to weigh in.  They did so with a big front page article on Monday titled "One Year Later, Many Are Finding Relief in Health Care Law."  (Online the title is "Immigrants, the Poor and Minorities Gain Sharply Under Affordable Care Act."  )  Is Obamacare succeeding?  Of course it is!  At least, Obamacare is succeeding if you use the criteria of success that the New York Times uses.  The problem is that they use criteria of success that seem to make sense to the progressive mind, but don't make any sense to me.

Now, if you asked me to assess whether Obamacare is succeeding, the criteria I would come up with would have to do with whether it is accomplishing important goals in a cost-effective manner.  In other words: (1) Have health outcomes improved for some categories of the supposed beneficiaries of the law? and (2) At what cost?  You won't be surprised to learn that this very long New York Times article does not devote one word either to the question of whether anyone's health outcomes have improved, nor to the question of cost. 

Well, of course they don't devote a word to the question of whether health outcomes for anyone have improved.  That's because by now everybody (or at least everybody who follows the literature) knows that expanding the number of people covered by health insurance does not measurably improve health outcomes.  (You mean you don't know that?  You've been reading the New York Times!)  Megan McArdle here in a 2013 article summarizes the results of the major studies on whether increased "coverage" by health insurance improves health outcomes:

• There was the big Oregon randomized study that ran for two years from 2008-10.  Oregon got some money to expand Medicaid, but only for about half the number of people they wanted; so they held a lottery to determine who got in.  And then they ran a randomized study on 6400 people who got in and 5800 who did not.  Results:  Not only was there no detectable difference in mortality, but "the study failed to find statistically significant improvement on the three targets associated with the most common chronic diseases.  This, mind you, is the stuff that we're very good at treating, and which we're pretty sure has a direct and beneficial effect on health." 
• Then there was the big observational study, conducted by Richard Kronick of UC San Diego, based on data from 672,000 insured and uninsured people as reported on the National Health Interview Survey from 1986 to 2000.  Results: "no mortality benefit from insurance."  
• Or, going back a ways, there was the big Rand randomized study of close to 8000 people, divided into five groups ranging from very to much less comprehensive health insurance, that ran from 1971 to 1982.  Results:  "[T]hey looked to see what differences emerged in health outcomes.  Shocker: none did."

OK, so the Times won't talk about any improvement in health outcomes.  What then are they referring to when they say that immigrants, the poor and minorities have "gained sharply" under the law?  Answer:  they've gained "coverage"!

[T]he Times’s analysis shows that by the end of that first full year, 2014, so many low-income people gained coverage that it halted the decades-long expansion of the gap between the haves and the have-nots in the American health insurance system, a striking change at a time when disparities between rich and poor are growing in many areas.  

Yes, it's "coverage," the holy grail of progressive healthcare policy.  But can somebody please explain to me why "coverage" is of any value to a poor person?  Remember that "coverage" will not improve your health outcomes.  Also remember that in this country, if you are sick or injured and show up at a healthcare facility such as a hospital, they have to treat you.  You might run up a big bill.  But it is a given that if you are poor and without assets, they won't be able to collect the bill.  That's why low income people with few assets who think about the subject for a few moments realize that their sensible strategy is to go without health insurance.  If you had few assets and an income around, say, $30,000 per year, and suddenly you had available another $10,000 or so per year in cash, is there really any chance that you would think your highest priority would be to spend all of that money on health insurance?  How about food for the kids, or a new TV?

Let's give the Times a chance to try to explain why "coverage" is valuable to poor people.

“From the vantage point of the poor and working poor, Obamacare has been profound,” said Jim Mangia, president of the St. John’s Well Child and Family Center, a federally funded health clinic in South Los Angeles that has enrolled 18,000 new patients under the law, nearly all of them Hispanic or black and the vast majority in Medicaid.

But what exactly is the "profound" effect of Obamacare for poor people if you can't demonstrate any change in health outcomes?  There is, of course, the fact that Jim now gets paid a lot more, since he gives away much less uncompensated care.  Good job, Jim, trying to spin that as a benefit to the poor.

Or try this one:

One new patient, Angela Cruz, 60, is a typical example of a winner under the law. A legal immigrant who is not a citizen, she came to this country from El Salvador in 1990. She had never had health insurance in her 25 years of working in the United States, most recently as a nanny. . . .  Then she got coverage under the health law’s expansion of Medicaid in California.  Now, she said, “I don’t have the stress of wondering — can I pay this — when sometimes I didn’t have anything to pay it with.”   

So what exactly did this big Obamacare "winner" win?  No demonstrably improved health outcomes, but she doesn't have the "stress" she used to have!

I say, give Angela the real test:  offer her the cost of her Obamacare "coverage" in cash and see whether she takes the cash or the "coverage."  Of course, she'll take the cash.  And so would nearly everyone else who the Times says is "gaining sharply" from Obamacare.  That's because, as I wrote in this post back in 2013, health insurance is about asset protection, not health.  If you don't have assets to protect, health insurance is of next to no value to you.  It won't improve your health.  OK, it may relieve some "stress."  If you had no meaningful assets and pretty good health, would you pay the cost of Obamacare "coverage" versus taking the cash?

Oh, and dare we address that other subject that is taboo over at the Times -- cost?  The CBO here puts the net cost of Obamacare subsidies for 2016 at $660 billion.  (And that's before you even get to the effect of Obamacare in driving up everyone's premiums.)  But don't worry, the resources of the federal government are infinite.  We'll never miss the money.

Careening Down The Road To Stupid

It's been a long time since a New York voter got to have some real say in a presidential election, so I suppose that I should celebrate that somebody may actually notice that I voted this morning.  Still, all the polls seem to be indicating that on the Republican side Donald Trump is way ahead in New York, and indeed may for the first time in any primary receive more than 50% of the Republican vote.  Meanwhile, on the Democrat side, although Hillary seems to have a reasonably comfortable lead in statewide polls, believe me, in our neighborhood you would barely know she is running.  All the energy is on the Sanders side.  Our local newspaper (The Villager) has endorsed Sanders.  If you went to a fancy college and got a fancy job in New York and moved into fancy and expensive Greenwich Village, it is now just a given that you believe that the government is an infinite source of free money that can and should be passed around by those in power to solve every human problem and create perfect fairness and justice.  Hey, we all know it!  Feel the Bern!  

Back to the Republican side.  Readers here will not be surprised to learn that I don't think much of Trump.  Yes, I don't naturally take well to people who are obnoxious and insulting to everyone else; but I could learn to live with that if I agreed with the person on major issues.  In Trump's case he's just completely at sea on the issues.  It's not so much that I disagree with him as that when he's not contradicting himself I often can't even figure out what he's talking about.  In this post last month I commented on Trump's endlessly-repeated line that running a trade deficit with another country means that we are "losing" some kind of trade war with that country, and that the situation can be fixed by having some really good negotiator as President to negotiate better government-to-government "trade deals."  Then we'll be "winning."  It just doesn't make any sense, and shows complete ignorance of the subject matter.  I could even live with ignorance on a complex subject like this, if the person was willing to be humble and show a willingness to learn.  Obviously, that's not Trump, who has made the subject of his greatest ignorance into his signature issue.

And then there I was last night watching a video clip of Trump at a campaign rally in Buffalo.  In the particular clip that somebody had chosen, Trump was saying that "nobody here can vote for Ted Cruz."  And the reason?  Because Ted Cruz had dissed New York by voting against the Hurricane Sandy relief bill at the end of 2012.

Now, as anyone who can do basic arithmetic will immediately recognize, the Hurricane Sandy relief bill was a terrible thing for New York.  Not for the then governor and mayor, who got big wads of free money to pad their budgets for a couple of years; but for the people of New York it was a terrible thing.  The Hurricane Sandy relief law passed out a wildly-inflated $60 billion, mostly to New York and New Jersey, to pay for everything that anybody could think of to put on a wish list at an emotional moment, without the slightest consideration of whether particular expenditures made sense or were justified.  This was a terrible thing because it established the precedent that the federal government after a natural disaster will pay whatever it takes to restore everything to perfection in any amount, reasonable or unreasonable, that anyone can think to claim.  This precedent was terrible for New York because, Hurricane Sandy notwithstanding, New York is not very subject to natural disasters.  Therefore, under a regime where the federal government provides complete no-limits relief and recovery aid for every natural disaster, over time New York will pay out in disaster relief to other parts of the country a large multiple of anything that it ever receives, likely ten or twenty or more times as much.  

New York rarely gets a serious tornado or earthquake.  And while it does get a hurricane occasionally, it gets far, far fewer of them than the South Atlantic states and the Gulf coast.  Just look at a map, and you will realize how difficult it is for a hurricane coming up the East coast to score a bulls-eye on New York.  For this post written at the time of the Hurricane Sandy relief bill, I did some research and discovered that in the 50-year period from 1961 to 2010, some 27 "major" hurricanes (categories 3, 4 and 5) made landfall in the United States.  Of those, 23 hit the Gulf coast or Florida, 3 hit the Carolinas, and just one (Gloria in 1985) hit the mid-Atlantic.  By demanding and taking the Hurricane Sandy money, we have put ourselves securely on the hook for the cost of recovery from the twenty or thirty or more serious hurricanes that are sure to strike the South for every one that we get over the coming decades.  Take a look some time at the dozens of miles of multi-million-dollar mansions and condos lining the oceanfront north and south of Miami in Florida.  A good cat-3+ hurricane strike in the middle of them would cause losses a multiple of those from Sandy.  The oceanfront mansions and condos wouldn't even be there except that the Floridians are secure in the knowledge that New York and the rest of the country are going to replace everything when the big hurricane comes through.

And then give some thought to tornadoes in Kansas, earthquakes in California, and floods along the Mississippi.

I don't know about you, but for me, the first thing I would expect from a negotiator negotiating on my behalf would be that he/she can do the basic arithmetic to figure out which position in the negotiation benefits me and which position costs me.  If you lack that basic skill, you will promptly get taken to the cleaners by your negotiating counterparties.  From the evidence I can see, Trump seems to lack that skill.  And supposedly, negotiating skill is his big selling point.  Lord help us.  

Cruz?  Whatever else you may think of him, he definitely had this one figured out.

Well, I take heart from realizing that as bad as Trump's basic arithmetic skills seem to be, he's not in the league of Bernie and Hillary and their supporters.  Disaster relief is a question of some tens or maybe hundreds of billions of dollars every now and then.  Not being able to figure out that Social Security and Medicare and Obamacare (and single payer healthcare for all, and free college, etc., etc.) are ponzi schemes is more like a $100 trillion issue.  I guess Bernie and Hillary have the excuse that they are old enough that they can dupe the suckers for now and they're likely to have died as heroes by the time everything comes apart.

UPDATE, April 20:  Who says that my Congressional District (NY-10) is good for nothing?  Our district covers the West Side of Manhattan and some pieces of Brooklyn, and is known for loopy left-wing thinking, Columbia and New York Universities, Greenwich Village, and the highest income inequality of any district in the country.  According to election results here, we gave enough votes to John Kasich yesterday to take a delegate away from Donald Trump.  But we were bested by our cross-town rivals NY-12, where Kasich actually took a plurality of the votes and 2 of the 3 available delegates.  Outside Manhattan, Trump swept all but a couple of delegates.  If you are looking for an explanation, I don't have it.