Friday, January 28, 2011

Our tax code:

Thursday, January 27, 2011

America's declining manufacturing base:

Generally, one wants to avoid absolute measures, but if I recall correctly, this actually represents an increase when measured as a percent of GDP.

Wednesday, January 26, 2011

The Ryan-Rivlin plan for reforming Medicare and Medicaid:

Friday, January 21, 2011

Obamacare will not decrease the deficit:
How, then, does the ACA magically convert $1 trillion in new spending into painless deficit reduction?

For starters, that $1 trillion price is a low-ball estimate, covering only six – not ten – years of subsidies that don't begin until 2014. The uninsured were clearly less of a priority than the deception of making the law look less expensive than it really is over its first decade. Over ten years of full implementation, it's more like $2.3 trillion.

Next up is the CLASS Act (for the Community Living Assistance Services and Supports Act) providing a new long-term care insurance entitlement. CLASS hitched a ride on the ACA for one reason only: premiums are collected in the first ten years, but no benefits are provided. Voila, it creates the perception of $70 billion in deficit reduction. In fact, CLASS is a bailout waiting to happen, as it will attract mainly sick enrollees...

In addition, a central CBO assumption could be disastrously off the mark. Today there are about 111 million Americans who could qualify for help to buy insurance through the exchanges, if they weren't eligible for an employer plan. CBO assumes that only 19 million of them would be getting new premium assistance in 2019 even though the new subsidies are so generous that low- and moderate-income workers come out way ahead if they get paid in cash, not benefits, and move to the new entitlement.

With such a large financial incentive, eventually those who would be better off in the exchanges will end up there, and costs will soar. If only the 35 million lowest wage-workers leave their job-based plans, federal spending will rise by another $1 trillion in just the first decade.

And this does not even count the costs that Congress has left off the books by shifting them to the states, well in excess of $150 Billion.

Wednesday, January 19, 2011

Today, Al Franken is commenting on how Comcast wants to wack Netflix. This is a surprisingly shallow comment from somebody that I would assume is familiar with the entertainment industry.

For most of the past decade, Netflix has survived, and thrived, on the long tail of entertainment. They provide content that is already produced, and for the most part, has had its production dollars costs paid for. Thus, content owners have been willing to sell this content through Netflix for pennies on the dollar because some revenue is better than no revenue. As they try and scale, many are making the naive assumption that Netflix's costs scale. Or, rather, that Netflix's pricing model can accommodate the cost of content creation. They don't. In recent years, more and more content has shifted to cable because bundled fees and a la carte channels provide better revenue streams in the face of declining theater attendance and decreasing tolerance of advertisements.

While the cost of content distribution has plummeted, the cost of content creation has not. Digital cameras and editing have reduced content creation costs somewhat, but the labor costs of actors, stagehands and production have not dropped.

Too many Web 2.0 evangelists, to include Mr. Franken, don't fully appreciate the effect that the likes of Netflix has had on the industry. Recently, my cable TV on-demand has been bombarding me with advertisements about movies coming "two months before Netflix", and "same day as DVD". Content producers would rather have the share of a $5 on demand payment than the fraction of Netflix's $9 per month. This puts the Netflixes and Hulus in somewhat of a bind, as they will probably be forced into either increasing their prices, or else offering tiered bundles that look (are are priced) an awful lot like cable is today. Hulu is already long on this path. We forget that much of the internet last mile infrastructure, not to mention the very TV shows that we're watching, are subsidized by our relatively high cable TV subscriptions. As we move forward, much of these costs will shift, but they will not disappear, and no network neutrality legislation will get around this fact.
Average Nashville Metro Police Response time:

Nashville Police Response Time (minutes)
Year Code 1 (Routine)Code 2 (Urgent)Code 3 (Emergency)Average

Nashville is actually better than similar sized cities:
In Atlanta last year it took, on average, 11 minutes and 12 seconds from the time a high-priority 911 call was received until an Atlanta police officer showed up at the scene. The response times reported by the El Paso (Texas) Police Department were only one second quicker than Atlanta’s, with an average of 11 minutes and 11 seconds. The Denver Police Department posted a response time of 11 minutes flat. According to the Journal Constitution story, police in Tucson, Ariz., responded, on average, in 10 minutes and 11 seconds. Police in Kansas City, Mo., and Oklahoma City posted average response times of less than 10 minutes.

As they say, when seconds count, the police are only minutes away.

Monday, January 17, 2011

Mental Health Institutionalization and Prison Incarceration rate over time:

via the Volokh Conspiracy. A note over at NRO's corner explains:
“the politics of deinstitutionalization was generally facilitated by the fact that fiscally `conservative Republicans sought a way to save money… [and] the liberal Democrats sought a way to expand civil rights. The promise of doing good by saving money was irresistible’ (Isaac and Armat, 1990:15). (as quoted in Powers, Rothman, Smith College. Center for the Study of Social and Political Change, “The Least Dangerous Branch? Consequences of Judicial Activism,” 2002)
In 2004, the U.S. National Academy of Sciences released its evaluation from a review of 253 journal articles, 99 books, 43 government publications, and some original empirical research. It failed to identify any gun control that had reduced violent crime, suicide, or gun accidents...

Thus both sides of the gun prohibition debate are likely wrong in viewing the availability of guns as a major factor in the incidence of murder in any particular society. Though many people may still cling to that belief, the historical, geographic, and demographic evidence explored in this Article provides a clear admonishment. Whether gun availability is viewed as a cause or as a mere coincidence, the long term macrocosmic evidence is that gun ownership spread widely throughout societies consistently correlates with stable or declining murder rates. Whether causative or not, the consistent international pattern is that more guns equal less murder and other violent crime. Even if one is inclined to think that gun availability is an important factor, the available international data cannot be squared with the mantra that more guns equal more death and fewer guns equal less death. Rather, if firearms availability does matter, the data consistently show that the way it matters is that more guns equal less violent crime. (emphasis in original).

Kates and Mauser, 2006. The authors have similar findings for the relationship between suicide and firearms ownership:
The mantra more guns equal more death and fewer guns equal less death is also used to argue that "limiting access to firearms could prevent many suicides." Once again, this assertion is directly contradicted by the studies of 36 and 21 nations (respectively) which find no statistical relationship. Overall suicide rates were no worse in nations with many firearms than in those where firearms were far less widespread.

Sunday, January 16, 2011

Myth Diagnosis:
The possibility that no one risks death by going without health insurance may be startling, but some research supports it. Richard Kronick of the University of California at San Diego’s Department of Family and Preventive Medicine, an adviser to the Clinton administration, recently published the results of what may be the largest and most comprehensive analysis yet done of the effect of insurance on mortality. He used a sample of more than 600,000, and controlled not only for the standard factors, but for how long the subjects went without insurance, whether their disease was particularly amenable to early intervention, and even whether they lived in a mobile home. In test after test, he found no significantly elevated risk of death among the uninsured.

The only truly experimental study on health insurance, a randomized study of almost 4,000 subjects done by Rand and concluded in 1982, found that increasing the generosity of people’s health insurance caused them to use more health care, but made almost no difference in their health status.

In a recent review of the literature, Helen Levy of the University of Michigan and David Meltzer of the University of Chicago noted that the latest studies of this question “paint a surprisingly consistent picture: Medicare increases consumption of medical care and may modestly improve self-reported health but has no effect on mortality, at least in the short run.”

Megan McArdle elaborates:

So allow me, maybe, to be the first. I'm afraid I'm not confident about any number. All of these studies suffer from unobserved variable bias, which is to say, the uninsured are not like the rest of us. (The long term uninsured, I mean; the short term uninsured are not a large problem for society). There are all sorts of reasons that people end up uninsured, but most of them are correlated with much poorer health outcomes, and only some of them end up recorded in our surveys.

To give you an example of what I mean, one of the two studies that went into the most commonly cited number--the roughly 20,000 a year figure from the Institute of Medicine and the Urban Institute--found that the highest mortality was not associated with being uninsured, but being on a government health care program. (the other excluded those patients). This was true even after they'd run all their controls. Given that the bulk of the coverage expansion in both the Senate and the House plans comes from Medicaid expansion, this is a little disturbing.

But how likely is it that Medicaid is killing people? Possible, I suppose, but not really all that likely. Medicaid and Medicare patients, too, are not like the broader population. The authors in fact recognized this fact in their paper, pointing out that these patients have higher rates of disability--but then failed to address the obvious question this raised about their data on the uninsured. This problem plagues almost all of the studies on mortality and the uninsured...

That doesn't mean I'm prepared to say that no one dies from lack of insurance. The data is messy, and the studies often contradict each other. Intuitively, I feel as if there should be some effect. But if the results are this messy, I would guess that the effect is not very big.

Saturday, January 15, 2011

When President Obama was running for office in 2008, he repeatedly pledged not to raise taxes on people making less than $250,000 a year. He initially broke this promise when he signed into law the expansion of SCHIP, and Obamacare adds even more. Today Americans for Tax Reform published a comprehensive list of tax hikes in Obamacare, most of which raise taxes on the middle class. Excluding the question of the mandate itself, here is a list.

Direct tax hikes on the middle class due to Obamacare:
  • Reduction of Health Savings Accounts
  • Flexible Spending Account purchases of over the counter medication
  • Increased penalties on early withdrawals from HSAs
  • Medical itemized deduction cap
  • The Cadillac Tax on union members and others with extensive policies
  • Taxes on indoor tanning
  • Codification of the "economic substance doctrine"
  • Taxes due to increased 1099 reporting

Indirect tax increases which will be paid by the middle class:
  • Tax on medical devices used by the middle class
  • Taxes on prescription medications
  • Taxes on health insurance
  • Taxes on Charitable hospitals
  • Blue Cross/Blue Shield tax hike
  • Increased taxes on employer provided drug benefits in conjunction with Medicare part D

Friday, January 14, 2011

Jonah Goldberg on fascism:
I never claimed Mein Kampf to be a “liberal” book, certainly not in the European sense and not in the American sense either. If in the American context we are to distinguish liberalism from, say, leftism or radicalism, then Mein Kampf cannot be considered a liberal book. But it is deeply radical, not reactionary nor conservative as so many glibly claim. If you even skimmed the book, you’d learn that Hitler does not seek to restore the monarchy (something a reactionary might want to do) and he reviles classical or Manchester liberalism as well as democracy. Oh, and he despises the bourgeoisie (who, by the way, according to Marxists are supposed to be the enablers of Fascism). He attacks big business and bankers frequently. He says he is a nationalist but not a patriot. His nationalism is decidedly anti-Bolshevik (because that is foreign and, more importantly, Russian and Jewish, in his mind), but he is not anti-Socialist (as folks keep saying). If he was, he probably would have led a party other than the National Socialists. It is also not, as you sometimes hear, a remotely Christian book. Hitler celebrates the “much freer” pre-Christian pagan world.

So, depending on your lexicon, you could say Mein Kampf is right-wing because it is very nationalistic, but certainly not conservative in either the European or American understanding of conservatism. Also, unless you are both a dedicated and very specific kind of Marxist, you’re going to have a very hard time defending the claim that nationalism is, of itself, “right-wing.” If it is then Castro, Mao, Pol Pot, Stalin, and Hugo Chavez, to name a few, are all right-wingers.

Thursday, January 13, 2011

So, we are told that Net Neutrality is a necessary regulatory step in order to prevent ISPs from offering prioritized service. The initial rules came down from the FCC last month, and it explicitly enshrines this exact behavior:
"Managed services" delivered over a last-mile broadband pipe will be allowed, as we expected, though the FCC does say it will monitor them for anti-competitive behavior.

Understandably, even Net Neutrality supporters are angry at the ruling. However, this is a classic example of "regulatory capture", the process where regulations meant to reign in an industry instead serve to entrench and benefit established players.

Regulatory capture is an issue that transcends the traditional left / right spectrum. It is an issue that the left needs to address if it expects any of the regulations that it proposes to actually improve the state of affairs. As importantly, it is part of the reason why much of the Republican establishment is seen in the pockets of big business, and frequently does not live up to its liberal market ideology.

The form of the recent Net Neutrality ruling should come as no surprise, and needs to be remembered whenever advocating for government policies.

Wednesday, January 12, 2011

What is Net Neutrality?
Imagine that you are Netflix boss Reed Hastings. You're busy trying to eat the cable companies' collective lunch by offering on-demand Internet streaming video; sure, you're not there yet, but it's clear this model has a bright future… except for one little worry.

The cable companies and telcos you rely on to deliver your bits also compete with you, offering profitable video services of their own that don't come through "the Internet" but are increasingly based on IP and use the exact same pipe. Should those companies be allowed to offer managed quality of service enhanced video streams over a segregated section of the last-mile Internet pipe to directly compete with your own best-effort Internet offering?...

"The fact that network operators control the delivery pipes and generate significant revenue from content that travels over those pipes provides both the means and motive for discriminating against new ventures that might threaten revenue sources of the network operators," Netflix warned. These developments "exacerbate the growing concern that [video providers] will use their control over programming networks to stifle competition, including the growing competition from online video providers like Netflix."

Therefore, according to Netflix, the FCC should apply its open Internet principles to "managed services," too, possibly by requiring that such services could never consume more than a set fraction of the Internet pipe, reserving the rest for the "open Internet."

So, basically, Netflix says that the mere possibility that their competitors might throttle throttle other people's service is unfair. So, their remedy is to: throttle other people's service. This is a classic example of overt regulatory corruption, one group lobbying government to restrict their competitor's ability to compete. The fact that the most efficient technological solution might not involve Netflix is sufficient to use government to intervene on their behalf.
Foreign Policy runs down the list of the countries with the top 10 gun ownership rates, and asks
America has by far the most robust gun culture on the planet and one of the world's highest rates of gun crime to go along with it. Looking at the next nine countries on that list, however, reveals a very mixed bag. How is it that the world's most gun-crazy countries include some of the most dangerous and the safest?

Could it be that there's no correlation between guns and instability? Could it be that political upheaval and violence have more to do with culture and legitimate governance than gun control?

For the record, the top gun owning countries are:
  1. The United States (just under 90 per 100 residents)
  2. Yemen (54.8)
  3. Switzerland (45.7)
  4. Finland (45.3)
  5. Serbia (37.8)
  6. Cyprus (36.4)
  7. Saudi Arabia (35)
  8. Iraq (34.2)
  9. Uruguay (31.8)
  10. Sweden (31.6)
  11. Norway

Tuesday, January 11, 2011

Tax rates by income, 2007.

Friday, January 7, 2011

Our tax code:
As the report says, "The most serious problem facing taxpayers--and the IRS--is the complexity of the Internal Revenue Code."

Olsen estimates that individuals and businesses spend 6.1 billion hours preparing their returns. That equal to a year's labor by three million full-time workers. Individual taxpayers are so befuddled by the Code that she reports 89 percent either pay a preparer or buy commercial software to help with the paperwork. The total cost of compliance in 2008, Olsen estimates, was $163 billion, or more than 11 percent of total income tax collections.

via Megan McArdle.

Thursday, January 6, 2011

The math on overpopulation.

Wednesday, January 5, 2011

An update on Erin Brockovich's War on Science:
From 1996 to 2008, 196 cancers were identified among residents of the census tract that includes Hinkley — a slightly lower number than the 224 cancers that would have been expected given its demographic characteristics, said epidemiologist John Morgan, who conducted the California Cancer Registry survey.

The survey did not attempt to explain why any individual in Hinkley contracted cancer, nor did it diminish the importance of Pacific Gas & Electric Co. cleaning up a plume of groundwater with elevated levels of chromium 6, Morgan said.

"In this preliminary assessment we only looked at cancer outcomes, not specific types of cancer," Morgan said. "However, we did look at a dozen cancer types in earlier surveys of the same census tract for the years between 1988 and 1998. Overall, the results of those surveys were almost identical to the new findings, and none of the cancers represented a statistical excess."
Copyright © Swing Right Rudie
A notebook to myself