Monday, May 17, 2010

Does Better Health Care Coverage Reduce Abortion?

In his most recent column, T.R. Reid posits a connection between the absence of national health coverage in the United States and the unusually high number of abortions. Comparing the U.S. to other industrialized nations, Reid points out that the U.S. has a substantially higher rate of abortion than countries that have adopted national health care systems. The author uses this as evidence to suggest that opponents of abortion should be more willing to accept national health care as a way to advance their cause.

However, Reid’s argument ignores at least two other important points.

First, Reid fails to acknowledge the wide range of abortion rates among countries that have adopted national health care systems. The variation among states with universal health care is far greater than the variation between the United States and the United Kingdom. In Germany, for example, the number of abortions for women ages 15 to 44 is 7.8 per 1000 women, compared to 17 per 1000 women in the United Kingdom. (The rate in the United States is 20.8 per 1000 women.) This suggests that, when it comes to abortion rates, the health care system may not be as important as more subtle forces like culture.

Second, Reid does not take into account national teen pregnancy rates, which are far higher in the United States than in other industrialized countries. Because higher rates of teen pregnancy are likely connected to higher abortion rates, it seems plausible that there is a third variable – perhaps some measure of social responsibility – contributing to both the absence of a national health care system in the United States and the higher rates of teen pregnancy and abortion. Isn't it possible that American couples are less responsible about pregnancy because they have less of a sense of responsibility to society? Wouldn't this lack of social responsibility also make Americans less concerned about the uninsured?

Unfortunately, Reid chooses not to even consider this possibility. He simply asserts that there are “various reasons” why universal health care reduces the rate of abortion, acting as though correlation automatically implies causation.

As a supporter of national health care and abortion rights, I wish Reid’s contention were true. But wishing does not make it so. In his eagerness to connect national health care with lower rates of abortion, Reid overlooks essential details and relies far too extensively on testimonial evidence.

Tuesday, May 11, 2010

Is Kagan a Closed Book?

I don't know much about Elena Kagan yet, but I intend to read as much as I can in the coming weeks. So far, the general consensus seems to be that she's suspiciously uncontroversial.

In his column today, David Brooks argues that Kagan has never taken any real 'intellectual risks' in the course of her legal career. She has cautiously -- strategically -- hidden her feelings from the public. (Andrew Sullivan follows up and makes similar comments here.)

While it's certainly fair to wonder about Kagan's stance on important issues and to speculate about these kinds of things, it strikes me as a little cynical to assume that she's been deliberately concealing her views all this time.

Isn't it possible that Kagan is just one of those rare individuals who is able to see many sides of an issue? Because, if that's the case, she's exactly the kind of person that I would want on the Supreme Court.

Friday, May 7, 2010

Trim the Beard, Andrew!

Poor Andrew Sullivan. His readers have finally rebelled against his awful, unkempt beard.

My favorite dissent:

Was that a beard, or did a beaver die on your face? What am I saying? You'd never let a beaver anywhere near your face.
Don't get me wrong, I'm a big fan of beards. But come on, Andrew. This is just out of control . . .

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Monday, May 3, 2010

The Arizona Law: Why Rachel Maddow's Approach is Wrong

Discussing the new Arizona immigration law in his NYT column today, Ross Douthat writes:

Critics of Arizona’s new immigration law have not been shy about impugning the motives of its supporters. The measure, which requires police to check the immigration status of people they question or detain, has been denounced as a “Nazi” or “near-fascist” law, a “police state” intervention, an imitation of “apartheid,” a “Juan Crow” regime that only a bigot could possibly support.

Faced with this kind of hyperbole, the supposed bigots have understandably returned the favor, dismissing opponents of the Arizona measure as limousine liberals who don’t understand the grim realities of life along an often-lawless border. And so the debate has become a storm of insults rather than an argument.
I think this is absolutely correct. Instead of an honest discussion over whether this legislation could lead to unequal treatment, we've seen a barrage of ad hominem attacks against those who supported it.

The other night on MSNBC, for example, Rachel Maddow spend an awful lot of time accusing members of the Federation for American Immigration Reform (FAIR) organization -- a group that lobbied in favor of the Arizona law -- of racism:

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I'm sure that Maddow is right on the specifics here. It certainly seems that Dan Stein, the president of FAIR, distorted the facts. And I have no doubt that some members of FAIR have made racist comments in the past.

But FAIR is a large organization, with members from many different backgrounds. Maddow's attempts to portray FAIR as some kind of hate group strike me quite a stretch. Though some left-wing groups have leveled similar charges against FAIR in the past, the organization has really been able to maintain its tax-exempt status because it's not all that radical, and it adheres to the strict legal guidelines that are imposed on all tax-exempt groups.

In 2005, it was FAIR that explicitly condemned a leading member of the Protect Arizona Now (PAN) committee for her unabashedly racist remarks. (That member, Virginia Abernethy, was ultimately expelled from PAN.)

FAIR has worked hard to reject the use of discriminatory language, but the sad truth is that FAIR is an anti-immigration organization, and it's not difficult to find some members in any anti-immigration organization who have racist views. There is clearly some ideological overlap between those who oppose immigration and those who support white nationalism.

But even if FAIR is a racist organization, what does this really tell us about the legitimacy of the Arizona law?

Today, you can find dozens of explicitly racist groups that support gun rights. In fact, the Southern Poverty Law Center -- which has identified FAIR as a "hate group" -- has often pointed to the strong political ties between pro-gun organizations and white supremacist groups.

Does this mean that any bill designed to protect gun rights that is strongly endorsed by white supremacist organizations should be dismissed as racist? Maybe. But lots of other people -- myself included -- strongly support gun rights for completely legitimate reasons. Proving that some supporters of a piece of legislation are racist does not prove that all supporters of the legislation are racist, or that the legislation itself is racist.

Instead of trying to show that the Arizona law is racist because some groups that supported it may have racist motives, why not just look at what the law does? These other debates quickly distract us from the point. It's not difficult to see why the Arizona law may lead to unequal treatment under the law. For those of us who oppose the legislation, that should really be our primary focus.

Calling people racists doesn't usually make them rethink their position. When you begin with these kinds of ad hominem attacks, the argument quickly becomes about the character of those who support or oppose the law, rather than the lives of those who are actually affected by it.

Thursday, April 29, 2010

Christie Cuts Breakfast

New Jersey Governor Chris Christie is planning to reduce funding for school meal programs:

Christie wants to eliminate the state's $3 million for subsidized school breakfasts, which also run on $41.4 million from the U.S. Department of Agriculture. For school lunches, which get $173.4 million in federal funding, Christie seeks to trim the state bill to $5.6 million from $8 million.
I'm no expert on this subject -- and I'm not even sure if this is possible -- but it seems to me that the state should cut funding to school meal programs to help close its budget gap. Schools can then increasing the price of meals for other students.

Right now, kids who pay for lunch are getting bargain-price meals for no apparent reason. But if higher-income students were made to pay more and the additional revenue were used to subsidize meals for low-income students, then the state might not need to contribute to these food programs.

The Center on Budget and Policy Priorities (CBPP) has already recommended that the federal government try to increase regular meal prices, since the current price of a meal in most schools does not even cover the cost of preparation. CBPP's research also suggests that demand for school lunch is relatively inelastic over a certain price range, which makes sense since the prices are often dramatically lower than other available substitutes.

I don't think that we should be cutting funding for students who need free and reduced price meals. But we should be shifting more of the cost onto other students who don't need free and reduced price meals.

There is no reason for us to be subsidizing kids whose parents can afford to pay more.

Wednesday, April 28, 2010

Tea Party: Partisan Frauds or Racists?

Andrew offers a pretty good description of how I've come to see the Tea Party Movement:

[O]n the fiscal front, they're total frauds. They have yet to propose any serious cuts in entitlements and want far more money poured into the military-imperial complex. In rallies, the largely white members in their fifties and older seem determined to get every penny of social security and Medicare. They are a kind of boomer revolt - but on the other side of that civil conflict, and no longer a silent majority. In fact, they're now the minority that won't shut up.

More and more, this feels to me like an essentially cultural revolt against what America is becoming: a multi-racial, multi-faith, gay-inclusive, women-friendly, majority-minority country. The "tea-party" analogy is not about restricting government as much as it is a form of almost pathological nostalgia. That's why there's much more lashing out than constructive proposals. And yes, a bi-racial president completes the picture.

He also offers this caveat, which I think is important:

And no, that doesn't mean they're all racists. Discomfort with social and cultural change is not racism. But it can express itself that way. [My emphasis.]

Is Twitter Making Reporters Lazy?

As far as I can tell, the primary source for this CNN story is . . . a bunch of tweets from random Twitter users:

UK Prime Minister Gordon Brown apologized "profusely" on Wednesday after he was caught on microphone describing a woman who spoke to him on the election campaign trail as "bigoted."

. . .

One Twitter user, Thermalsocks, said: "Gordon Brown has created a total survailance society. Glad to see he got caught out, now he knows how we all feel."

Another user, urbantaoist85, said: "Anyone else up for making all politicians wear a microphone at all times?" Ririnyan added: "I wonder if that was the final nail in the coffin for Labour this time." Andy_Francis said: "I think GB has just kissed goodbye to any chances Labour had left."

However CupCate wrote: "I'd be more concerned if Brown had said, "What that brilliant woman said about all those damn immigrants, too right!"

. . .

But one Twitter user, SusanCalman, spoke for many when she said: "I feel sorry for Gordon Brown. If people I've met knew half the things I'd said about them when I left I would be stabbed and left for dead."
How has this become an acceptable method of reporting on overseas elections?

Update: Here is Andrew Sullivan's (non-Twitter) analysis:

Gillian Duffy is a life-long Labour voter. She doesn't like being called a racist because she worries about immigrants; she's fed up with the welfare state rewarding, as she sees it, the unworthy; she's working class; she's not alone. This is Brown's base. He has essentially attacked his own base in the most condescending two-faced manner possible, on a live microphone, on every broadcast. Imagine if Obama's gaffe about "clinging to guns and religion" had been uttered by John McCain, about his own base. With a week to go.

Friday, April 23, 2010

Two Must-Read Articles

First, a newsletter(pdf) from the Federal Reserve Bank of St. Louis, rethinking the static way that we typically talk about the income distribution in the United States:

The Census Bureau essentially ranks all households by household income and then divides this distribution of households into quintiles. The highest-ranked household in each quintile provides the upper income limit for each quintile. Comparing changes in these upper income limits over time for different quintiles reveals that the income of wealthier households has been growing faster than the income of poorer households, thus giving the impression of an increasing “income gap” or “shrinking middle class.”One big problem with inferring income inequality from the census income statistics is that the census statistics provide only a snapshot of income distribution in the U.S., at a single point in time. The statistics do not reflect the reality that income for many households changes over time—i.e., incomes are mobile. For most people, income increases over time as they move from their first, low-paying job in high school to a better-paying job later in their lives. Also, some people lose income over time because of business-cycle contractions, demotions, career changes, retirement, etc. The implication of changing individual incomes is that individual households do not remain in the same income quintiles over time.

. . .

Another problem with drawing inferences from the census statistics is that the statistics do not include the noncash resources received by lower-income households—resources transferred to the households—and the tax payments made by wealthier households to fund these transfers. Lower-income households annually receive tens of billions of dollars in subsidies for housing, food and medical care. None of these are considered income by the Census Bureau. Thus the resources available to lower income households are actually greater than is suggested by the income of those households as reported in the census data. At the same time, these noncash payments to lower-income households are funded with taxpayer dollars—mostly from wealthier households, since they pay a majority of overall taxes. One research report estimates that the share of total income earned by the lowest income quintile increases roughly 50 percent—whereas the share of total income earned by the highest income quintile drops roughly 7 percent—when transfer payments andtaxes are considered.
Second, a great piece from Henry Louis Gates -- yes, that Henry Louis Gates -- on the question of slave reparations in the United States:

Advocates of reparations for the descendants of those slaves generally ignore [the] untidy problem of the significant role that Africans played in the trade, choosing to believe the romanticized version that our ancestors were all kidnapped unawares by evil white men, like Kunta Kinte was in “Roots.” The truth, however, is much more complex: slavery was a business, highly organized and lucrative for European buyers and African sellers alike.

Tuesday, April 20, 2010

Is the SEC Reaching?

Goldman Sachs offers a pretty thorough defense of its business practices:

We want to emphasize the following four critical points which were missing from the SEC's complaint.

-- Goldman Sachs Lost Money On The Transaction. Goldman Sachs, itself, lost more than $90 million. Our fee was $15 million. We were subject to losses and we did not structure a portfolio that was designed to lose money.

-- Extensive Disclosure Was Provided. IKB, a large German Bank and sophisticated CDO market participant and ACA Capital Management, the two investors, were provided extensive information about the underlying mortgage securities. The risk associated with the securities was known to these investors, who were among the most sophisticated mortgage investors in the world. These investors also understood that a synthetic CDO transaction necessarily included both a long and short side.

-- ACA, the Largest Investor, Selected The Portfolio. The portfolio of mortgage backed securities in this investment was selected by an independent and experienced portfolio selection agent after a series of discussions, including with Paulson & Co., which were entirely typical of these types of transactions. ACA had the largest exposure to the transaction, investing $951 million. It had an obligation and every incentive to select appropriate securities.

-- Goldman Sachs Never Represented to ACA That Paulson Was Going To Be A Long Investor. The SEC's complaint accuses the firm of fraud because it didn't disclose to one party of the transaction who was on the other side of that transaction. As normal business practice, market makers do not disclose the identities of a buyer to a seller and vice versa. Goldman Sachs never represented to ACA that Paulson was going to be a long investor.
Obviously, this is all pretty self-serving. Ezra describes the charges against Goldman this way:

Another way of think about it comes from the Washington Independent's Annie Lowrey, who analogizes it to a housing sale. Imagine a broker shows you a home. It looks good to you. Looks like the other homes, in fact. But when you buy it, it turns out that the foundation is cracked and the roof leaks and the neighborhood is full of crackhouses.

How can this be? You got the home appraised! And your broker knows all about homes!

Well, it turns out that your broker was working for the seller, who did the appraisal himself. And the seller had bet a bookie that whoever he sold the home to would move out within a year, which and your broker knew that but never told you. In this analogy, as you've already guessed, the broker is Goldman, the seller is Paulson, and the buyer is the counterparties.

But that's not a very fair presentation of the facts either. Since Goldman Sachs was also taking a long position on the CDO in question, the "broker" in this analogy would have had a much greater incentive to see the house appraised well. Goldman was gambling way more of its own money on the assumption that this CDO would pay off. The fees it was receiving from Paulson & Co. were paltry in comparison.

To me, this seems like a rather salient point. If the SEC is trying to prove that Goldman was engaging in some kind of nefarious deception, why did it work out so badly for them?

Update: Here is Felix Salmon's take on the whole thing, and here is the SEC's formal complaint.

The big question seems to be whether Fabrice Tourre -- the Goldman employee who helped structure the deal and market it to investors -- mislead ACA into believing that Paulson was taking a long equity position on the ABACUS 2007-AC1 CDO, when in fact Goldman knew all along that Paulson had intended to short it.

Here is the SEC's primary evidence:

On January 10, 2007, Tourre emailed ACA a “Transaction Summary” that included a description of Paulson as the “Transaction Sponsor” and referenced a “Contemplated Capital Structure” with a “[0]% - [9]%: pre-committed first loss” as part of the Paulson deal structure. The description of this [0]% - [9]% tranche at the bottom of the capital structure was consistent with the description of an equity tranche and ACA reasonably believed it to be a reference to the equity tranche. In fact, GS&Co never intended to market to anyone a “[0]% - [9]%” first loss equity tranche in this transaction.
As the key evidence against Tourre, this seems pretty weak. The SEC is essentially quoting one phrase from an email out of context. I suspect that the upshot of this case will depend largely on whether Tourre ever explicitly stated that Paulson would be investing in the CDO alongside ACA. The actual wording of this email matters immensely.

Monday, April 19, 2010

J.K. Rowling on Incentives and Single Mothers

In a recent op-ed in the London Times, author J.K. Rowling slamed Tory leader David Cameron for his apparent hostility toward single mothers.

Rowling writes:

Yesterday’s Conservative manifesto makes it clear that the Tories aim for less governmental support for the needy, and more input from the “third sector”: charity. It also reiterates the flagship policy so proudly defended by David Cameron last weekend, that of “sticking up for marriage”. To this end, they promise a half-a-billion pound tax break for lower-income married couples, working out at £150 per annum.

I accept that my friends and I might be atypical. Maybe you know people who would legally bind themselves to another human being, for life, for an extra £150 a year? Perhaps you were contemplating leaving a loveless or abusive marriage, but underwent a change of heart on hearing about a possible £150 tax break? Anything is possible; but somehow, I doubt it.

Rowling goes on to detail the trials of single-motherhood, and portray Cameron as out of touch with the lower-class and ignorant of nontraditional family dynamics.

But what is Cameron really saying that’s so controversial?

There are a number of things that bother me about Rowling’s piece. While it’s true that some children suffer because of acrimonious marriages, the overwhelming amount of research suggests that – all other things being equal – kids are substantially better off in stable two-parent households. Asserting that two-parent households are better for children in the aggregate isn’t the same as demonizing single parents. It's simply acknowledging what seems to be the empirical reality. Rowling is wrong to misconstrue Cameron's statements as some sort of crusade to smear single moms.

The central complaint of Cameron's “sticking up for marriage” campaign is that the British welfare system provides a fiscal motive for single-parenthood, while the tax system fails to encourage matrimony in any meaningful way. Since we know that kids from two-parent households perform better – even when controlling for a range of other demographic factors – this makes little sense. Conservatives argue that we need to provide parents with more of an incentive to stay together for their children.

The real question, then, is whether you believe that people actually respond to economic incentives – even if those incentives seem relatively meager. Rowling is very skeptical, primarily because she doesn’t believe couples will stay together for such a trivial amount of money. Afterall, why would any woman base her decision to get married on the how much she would receive in tax breaks?

Of course, this is a pretty silly oversimplification. And whether she knows it or not, Rowling is actually challenging decades of microeconomic research (with broad theoretical underpinnings) that shows people do respond to these kinds of incentives, at least on the margin. Certainly, no one is expecting – or hoping – that an abused wife will remain with her husband so that she can take advantage of a small tax break. But what about a young couple that recently had a child out of wedlock and is wavering on the marriage issue? Or a couple that has lived together for years and never thought it was “worth it” to get married?

What bothers me most about Rowling’s piece is her ignorance of microeconomic theory – an ignorance that I believe is widespread. Microeconomic analysis rests on two primary assumptions: people respond to incentives, and those responses can be measured on the margin. This is the central thesis of books like Freakonomics.

To argue that people won’t respond to a tax incentive because you can’t picture them responding to it strikes me as a pretty weak and ineffectual argument, particularly when you're railing against such a widely-held and widely-supported proposition.

But, then again, Rowling has never been very good at economics.