A Letter to Andrew Sullivan, Ctd.

Andrew Sullivan posted my second letter questioning the results of this survey. (I previously posted about this here.)

. . . And this is why I love him.

Health Insurance and Entrepreneurship in America

Ezra Klein makes a good point regarding private, non-portable health insurance:

We may just have a culture in which people who care about health-care coverage don't think about becoming entrepreneurs, as they know perfectly well that they can't sacrifice the safety provided by a large employer. You've heard of learned helplessness? This is learned corporatism. A culture in which people didn't worry about health-care costs might also be a culture in which they were more willing to consider occupational risks.

So will health-care reform fix this? It will help. The various health-care plans under consideration all make life better for a would-be entrepreneur who wants to buy health insurance. The subsidies will help him afford coverage. The regulations will make sure insurers can't deny his family outright our jack up their rates. The exchanges will give him purchasing power and choice.

The question is really whether this renewed entrepreneurial spirit could make up for the deadweight loss from government-mandated coverage. Certainly, there are some people who choose not to buy health insurance. Taxing them would mean a loss of efficiency and, potentially, a loss of entrepreneurship. (Though the president denies that an insurance mandate would be equivalent to a tax increase, many economists aren't buying it.)

Ezra seems to be considering only the upside of mandated coverage. But, you may say, opponents of the plan tend to consider only the pitfalls, so can you really blame him?

Well, yes. I try to hold Ezra to a higher standard . . . .

A Letter to Andrew Sullivan

9/23/09

Andrew,

I'm not sure you should take the results of this survey at face value (as you seemed to here). The sample size for the poll is 621, and the margin of error is +/- 3.9%. But only 35% of the respondents are Republican. That means that the margin of error for this subgroup is closer to +/- 6.65%. The pollster also notes that "other factors, such as refusal to be interviewed and weighting, may introduce additional error that is more difficult to quantify."

If you look at some of the other cross-tabulations, they're very difficult to believe. For example, according the poll, 22% those between the ages of 18 and 29 believe President Obama is the Anti-Christ. This compared to only 5% of those age 30 to 45; 9% of those age 46 to 65; and 7% of those over the age of 65.

Since when are younger people more predisposed to believe President Obama is the Anti-Christ? This contradicts every polling trend we've seen.

Anyway, I just think it's worth mentioning that conspiratorial thinking may not be as prevalent among Republicans as this poll leads us to believe.

Best,

Jeremy Biggs

Faulty Health Care Comparisons

I made this point a while back (here and here), but it's worth reiterating.

Different health care outcomes in various countries cannot necessarily be attributed to differences in health care delivery systems.

O'Reilly and the Pubic Option

The title of this post is a little deceptive, since it's not clear whether Bill O'Reilly is actually endorsing a federally-run "public plan" or simply coming out in favor of the insurance exchanges, which his guest seems to consider the same thing.

Either way, this is why I don't think O'Reilly should be lumped into the same category as Sean Hannity, Rush Limbaugh, and other far-right extremists. O'Reilly is rude and obnoxious, and his show is often unwatchable. He's also way too socially conservative for my tastes.

But he's far less ideological than some of his right-wing cohorts. And it's encouraging to see that he has intellectual dexterity to rethink his position on such an important issue.

Moore's Failure

I will not be seeing Michael Moore's latest film, "Capitalism: A love Story." Having suffered though "Roger & Me," I think I have a pretty good idea of how Moore feels about free markets and corporate power. I can almost write the script.

In fact, it seems like CNNMoney beat me to it:

By now, a Michael Moore film is its own genre: a vigorous vaudeville of working-class sob stories, snippets of right-wing power players saying ugly things, longer interviews with experts on the Left, funny old film clips and, at the climax, Moore engaging in some form of populist grandstanding.

The reviews that I've read are largely mixed -- praising Moore as a skilled documentarian, while acknowledging his inability to offer coherent solutions to the "problem" that he identifies ("Capitalism is evil"). I think this has always been Michael Moore's greatest failure as a political pundit.

Erroneous facts and willful contradictions aside, Moore's films are always entertaining and often heart-wrenching. Even when you disagree with the guy, you have to admit that his stunts are pretty funny and he sure knows how to tug at the emotional heartstrings. Sometimes, he even makes a good point.

But while Moore can identify the problems -- and maybe even make those problems appear more "relevant" -- he can never seem to generate any real answers. What does Moore do when international competition pushes American car companies to outsource more jobs? He browbeats the CEO of General Motors. What does he do when a global financial meltdown causes millions of layoffs? He proclaims that "capitalism is evil."

All of this is great for the far-left sycophants who devour every morsel that Moore throws their way, but for those of us actually interested in viable policy solutions to complicated problems, Moore's "Capitalism" isn't quite worth the price of admission. It's easy to point out problems; the challenge is proposing realistic alternatives.

More than anything, Americans need to acknowledge the inherent complexity of our human institutions. It's the only way we can begin the hard task of reform.

Unfortunately, Moore seems content peddling his standard oversimplifications . . . .

Right-Wing Extremism, Left-Wing Paranoia

A great piece from Reason's Jesse Walker on the paranoia of some center-left pundits (via Andrew Sullivan).

Walker writes:

When critics blamed pro-life partisans for the death of George Tiller, there at least was a coherent connection between the pundits' anti-abortion rhetoric and the assassin's target. Say what you will about Glenn Beck and Rush Limbaugh, but neither is known for railing against the Holocaust museum. If Beck, to borrow Rich's mixed metaphor, is cheering on a kettle, it isn't the kettle that produced James von Brunn.

We've heard ample warnings about extremist paranoia in the months since Barack Obama became president, and we're sure to hear many more throughout his term. But we've heard almost nothing about the paranoia of the political center. When mainstream commentators treat a small group of unconnected crimes as a grand, malevolent movement, they unwittingly echo the very conspiracy theories they denounce. Both brands of connect-the-dots fantasy reflect the tellers' anxieties much more than any order actually emerging in the world.

When such a story is directed at those who oppose the politicians in power, it has an additional effect. The list of dangerous forces that need to be marginalized inevitably expands to include peaceful, legitimate critics.

Polling New Jersey Republicans

I've been reading a lot about polling and survey design lately, so I thought I'd comment on this article from The Huffington Post, which seems a bit misleading.

The author, Rachel Weiner, cites the results of a recent poll of New Jersey residents, which suggest that one-third of New Jersey Republicans do not believe that President Obama was born in the United States. The results also indicate that 14 percent of New Jersey Republicans believe that President Obama is the Anti-Christ.

Let's break this down a bit.

The sample size for the poll was 500, which means that the margin of error is +/- 4.5%. The pollster also notes that "[o]ther factors, such as refusal to be interviewed and weighting, may introduce additional error that is more difficult to quantify." Thus, nonresponse bias may have contributed an even greater degree of uncertainty.

It's important to point out that this was a poll of "likely New Jersey voters." The sample contained only 165 Republicans, putting the margin of error closer to +/- 7.5% for this group. (For those of you who are interested, here is a good margin of error calculator.)

When we begin to break a small sample size down into different subgroups, the results are subject to a significantly higher degree of uncertainty -- in this case, with the additional caveat about nonresponse bias.

Interestingly, The Huffington Post failed to note that, according to this same poll, roughly one-third of New Jersey Democrats believe that President Bush had advance knowledge of the 9/11 terrorist attacks. And 6 percent of Democrats believe that we should eliminate public education as well as the entire federal government.

We need to be very careful how we interpret results like these from polls with such small sample sizes. You can't simply look at the cross-tabulations and assume that the margin of error remains constant. It doesn't.

Health Care Cost Savings and the Baucus Plan

Today, the CBO released its preliminary cost estimate [pdf] of the Senate Finance Committee's health care proposal.

The new bill -- which would mandate coverage, but drop the public option -- is expected to reduce the federal deficit by about $49 billion over the next 10 years. This seems like great news. However, CBO Director Doug Elmendorf notes:

These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments. The projected savings for the Chairman’s proposal reflect the cumulative impact of a number of specifications that would constrain payment rates for providers of Medicare services. The long-term budgetary impact could be quite different if those provisions were ultimately changed or not fully implemented. (If those changes arose from future legislation, CBO would estimate their costs when that legislation was being considered by the Congress.)

This is, of course, the same objection that Megan McArdle has made. Greg Mankiw tries to put it into layman's terms:

[T]he plan would reduce the deficit if it were carried out as written, but there is good reason based on historical experience to be skeptical that it would be.

Let me try to put CBO's point in a more familiar setting: Your friend Joe, who says he want to lose weight, asks you for an extra slice of pie after dinner. Naturally, you are doubtful about the wisdom of the request. "Ahem, Joe," you whisper, "Aren't there a lot of calories in that?"

"Yes," he says, "but the pie is part of a larger plan. I am committed not only to eating that slice of pie but also to going to the gym every day for the next week and spending at least half a hour on the treadmill. That exercise will more than work off those extra calories."

"But that's what you said last week, when you asked for piece of cake. And you didn't end up going to the gym."

"Yes, I know" he replies ruefully, "but this time I really mean it . . . . Can you please pass the pie?"

I think this is pretty on-target. Heart-wrenching stories like this not only prevent lawmakers from following through with proposed cost-cutting plans, but often force them to expand benefits and increase funding to health care entitlement programs.

Update: Time Magazine offers this primer on the Baucus health bill.

Cost-Cutting Ideology

Greg Mankiw is skeptical of the president's proposal to add a "provision" to the health care reform bill that "requires us to come forward with more spending cuts if the savings we promised don't materialize."

Meahwhile, Megan McArdle is dismayed by Andrew Sullivan's comment that "no one can argue that what looks like the current healthcare reform would cripple future finances as profoundly as [the Medicare prescription drug benefit]." Megan writes:

In short, it is not only not true that "no one" believes that this will cost more than Medicare Part D, it's not really very reasonable for anyone to disbelieve it. We are, after all, preparing to provide health care for millions of more people, who will not only be consuming prescription drugs, but also heart catheterization and asthma treatment and the leg amputations that doctors apparently prefer to providing routine diabetes care. Prescription drug costs are on the order of 10% of overall spending, even for Medicare.

So, why all the push-back from right-of-center economists?

The idea that the the Obama administration can ensure deficit neutrality by simply adding a cost-saving "provision" to the legislation is a bit too much to swallow. For example, Megan points out that the Medicare "sustainable growth rate" -- which is supposed to keep Medicare spending in line with inflation -- has consistently been adjusted upward by Congress in order to keep doctors from refusing Medicare patients. This has been a big problem, and it's why Medicare has come to occupy an increasingly larger percentage of the federal budget.

I think Megan is also correct about another thing -- there seems to be a growing tendency among some Obama partisans to uncritically accept the administration's talking points as some sort of substitute for reality. This goes beyond mere ideological loyalty.

For example, I was stunned when Ezra Klein -- a normally sensible left-wing political analysts -- actually criticized the CBO when its numbers conflicted with the administration's numbers. I've also seen friends and relatives question the accuracy of this article because they trust the president more than they trust a well-respected, independent fact-check site.

This kind of thing really has to stop. Progressives rightly criticize some of the more ideologically rigid conservative pundits for refusing to acknowledge reality, even when it smacks them in the fact.

They shouldn't be falling into the same trap. The president is not the arbiter of truth.

Update: Andrew responds to Megan, and Megan replies with a rather wonky, long-winded post explaining the complexities of budget scoring.

Update II: Andrew posts a reader response to Megan, and Megan retorts.

Again, I think Megan wins this one. It's true that Medicare Part D isn't quite the same as the health care legislation currently under consideration, but I think this is the salient point:

If any of the cuts or the taxes fails, the deficit starts bigger, and gets bigger faster. Meanwhile, Obama has moved forward one of the really expensive bits, covering people who are uninsurable because they have some expensive disease.

How are we paying for this? Dunno. It's all too vague. But to my ears, Obama has so far failed to rule out anything expensive, like generous subsidies, and also failed to outline who he's going to tax or cut benefits to if he's serious about deficit neutrality. So a mere stated wish to stay deficit neutral just won't do--every president states that sort of wish. The question is, what will they do to get there? Obama's coyness on this topic is reaching it's sell by date. It's time for the president to commit to an actual plan with actual numbers we can check.