Memoirs of the Addams Administration 25.

There have been four special Congressional elections since the general election of November 2016 put Donald Trump into the White House.  Democrats have fought hard to win these newly-opened seats, casting the votes as a referendum on the reality show of a Trump presidency.  To the alarm of Democrats, Republicans have won all four.[1]  In Georgia’s Sixth District the Democrats appeared to have a reasonable shot.[2]  Although the district had long given the Republican candidate 20-plus percent majorities, Trump had beaten Hillary Clinton there by only 1.5 percent and the Democratic candidate, Jon Ossoff, had almost reached the 50 percent mark in an April 2017 election amidst a crowded Democratic field.  In the run-off election between Ossoff and Republican Karen Handel, the Democrat claimed to be a centrist, while Handel portrayed herself as a mainstream Republican (rather than as a Trumpite).  Immense amounts of money ($55 million) from both sides passed through the campaigns and into the hands of local television stations and Washington consultants.  In the end, Handel triumphed by 52 to 48 percent of the vote.  That is, she did better than had Donald Trump.  Conservatives have commented that Ossoff’s “centrism” was bogus: he supports all the standard Democratic orthodoxies that have sent Southern Democrats streaming into the Republican party for decades: gun control, secular sharia, abortion-on-demand, and extensive regulation of the economy.[3]

According to Democrats, Donald Trump is in deep trouble with the law.  They point to the retention of private lawyers by Mike Pence, Jeff Sessions, and Jared Kushner as proof that the allegations of collusion made by Democrats “could be a big deal.”  However, Trump “believes that he’s the victim of a Democratic conspiracy to oust him from the White House.[4]  OK, now it’s out in the open.  Thing is, he’s probably correct.  When Green Party candidate Jill Stein challenged the vote count in a number of critical states, alleging un-specified “irregularities” and “Russian interference” with the vote count, money from aggrieved Clinton supporters poured in.  Trump foolishly[5] challenged the reports of the intelligence services on Russian hacking.  They responded with sun-burned “amour propre” by leaking secret information to embarrass the president.[6]  So far, there exists no actual evidence of collusion between the Trump campaign and the Russians.  Not even “circumstantial evidence.”  If there was no collusion, then it will be a stretch for prosecutors to prove that Trump “obstructed justice” rather than just tried to get James Comey to act the way a decent human being outside the Beltway might do.  Most of the quoted criticism comes from the New York Times, the New Yorker, and New York Magazine.  Partly, this reflects the collapse of print journalism in the rest of the United States.  Fewer points of view are represented.  Partly, it reflects the bifurcation of the United States into bi-coastal Democratic islands and “heartland” Republicans.  All the same, for a long time lots of Republicans believed that President Richard Nixon could not have broken the law.[7]  We live in an ugly political season.

[1] This includes a Montana race where the Republican won despite (because of?) body-slamming a reporter.

[2] “GOP holds seat in high-stakes Georgia election,” The Week, 30 June 2017, p. 5.

[3] As many scholars have demonstrated, race wasn’t the issue that caused Democratic decline in the South.

[4] “Trump goes on attack against special counsel,” The Week, 30 June 2017, p. 4.

[5] Being a fool is no legal bar to running in or winning a presidential election.  Look at Ted Kennedy or Jimmy Carter or George W. Bush or Mitt Romney.

[6] Good luck with that.  Embarrassing the president I mean.  Still, it is difficult to understand the American intelligence community’s leaks of information about the Manchester, Britain, bombing while President Trump was en route to meet with Prime Minister Theresa May as anything other than a jab at the president.

[7] That is, I may yet have to eat this line of reasoning.

Medicaid 2.

The Republicans are willing to try to address the “entitlement tidal wave” headed toward the economy.[1]  Naturally, their first effort targets the low-hanging fruit of the poorest Americans.  Who don’t usually vote Republican.

Their first target is Medicaid.  Medicaid works as a partnership between the federal government and state governments.  Medicaid pays whatever bills are presented by care-providers.  The Republican American Health Care Act (AHCA), the intended successor to the Affordable Care Act (ACA) intends to cut the federal contribution to Medicaid.  Non-partisan experts agree that the intent of the plan is to cut federal spending on Medicaid over the long term.  States would not, in all likelihood, make up most of the cuts to federal spending by increasing state spending and—to pay for it—state taxation.

Critics of the current operation of Medicaid point out that a willingness to pay any bill that is submitted just entrenches an inefficient current system.

The much admired Congressional Budget Office (CBO) estimates that the Republican plan would cut Medicaid spending by $80 billion a year for a decade.

To return to a previous post, those with disabilities, poor mothers, and about two-thirds of those in nursing homes have their costs paid by Medicaid.  This was Medicaid before the ACA expansion of coverage.  That expansion of coverage added many poorer Americans beyond these core categories.

Reportedly, the Republican bill (AHCA) will cap payments to each person covered by Medicaid, with a controlled rise in payments over time.  However, there is no guarantee that states will make up the difference if health care costs rise faster than the Republican projection.

Critics point out that necessary medical spending varies over the years, rather than sticking to the Republican projection.  If Zika reaches the United States (never mind Ebola), then spending could spike well above the projections.

At the center of the dispute is the question of who will pay if Medicaid spending is capped or reduced.  Will spending caps force doctors to cut their rates?[2]  That is the Republican bet, just as they blame rising college costs on the growth of financial aid.  Or will spending caps lead doctors and hospitals and insurance companies to dump their least profitable patients?  One factor missed in this crude debate is that the first to be cut will be the able-bodied workers added to the Medicaid rolls by the ACA.   If that happens it may never come to cutting nursing home funding.

Again, the press provides too little information to evaluate the program on its merits.  It seems absurd that the United States is the only advanced industrial country that allows the greed of doctors to dictate medical costs.  That seems to me a “social wrong.”  It seems absurd that ne’er-do-wells should send in their medical bills to the tax-payers.  Again, a “social wrong.”  On the other hand, it seems absurd that the United States is the only advanced industrial country without universal health care.  Such access seems to me a “social right.”

To think about these issues is to confront a basic question.  What role should the state play in providing medical care to the poorest Americans?  What role should be assigned to self-reliance?

[1] Margot Sanger-Katz, “How G.O.P. Health Plan Is Really a Rollback of Medicaid,” NYT, 22 June 2017.

[2] Apparently, American doctors make 50 percent more than their comparably-skilled Western European or Japanese confreres.  Did I ever tell you about my son’s urologist whose computer screen background was a picture of a 40 foot sailboat with the text “Sail the boat”?

Medicaid.

In 1965, fresh off a Democratic thrashing of the Republicans in the 1964 elections, President Lyndon B. Johnson had the means to push through his effort to “complete” the New Deal.[1]  This included legislation to provide government-funded medical care to four groups of the “deserving poor”: children, pregnant mothers, the disabled, and geezers who needed long-term care.  So it went from 1965 to 2014, as the one-time “war on poverty” failed to end poverty in a growing population.  By 2014, 57 million Americans were covered.  Still, at that point, one in seven Americans (14.3 percent) had no health insurance.  Then the Affordable Care Act (ACA) of 2010 kicked in, “allowing” states to use Medicaid to pay for the expenses of all able-bodied adults who earned less than 138 percent of the government’s poverty level.  This added 17 million people (about 30 percent of the 2014 total) to the Medicaid rolls. By 2016 the share of Americans without medical insurance had fallen to one in twelve (8.6 percent).  However, the cost of those covered by Medicaid ran to $574 billion a year.[2]

As part of the “repeal and replace” ACA effort, House Republican proposed to reverse the ACA’s expansion of Medicaid by 2020.  That is, they sought to return Medicaid to its original mission.  This would involve dropping 14 million people—those able-bodied people added by the expanded Medicaid of the ACA.  There also is talk of imposing a work requirement on able-bodied recipients of Medicaid.

Another part of the plan is tax cuts.  The ACA imposed $875 billion in new taxes, mostly on high income earners.  The Republicans want to roll back those tax increases.

Another part of the Republican plan would reduce the future growth in Medicaid spending by $834 billion over ten years.  The federal government would provide states with fixed amounts of money, rather than just paying whatever bills come in.  This proposal tries to address an important demographic and financial problem.  Medicaid pays for home health aides and for nursing home care for those who have exhausted their own savings.  A recent report by the World Economic Forum pointed out that the United States has the biggest gap between actual retirement savings and projected needed savings.[3]  U.S. government projections suggest that 70 percent of people will need long-term care.  The vast majority of these will need a home health-care aide, while 18 percent will need nursing home care.  Given the retirement savings gap, a huge financial cost will fall on the Medicaid system.  The Republican plan tries to address that issue.  It may not do that well, but one is surprised to see it done at all.

It is possible to see two distinct moral perspectives in the struggle over Medicaid.  Medicaid is but one front in a fight that involves Medicare, Social Security, defense, education, and taxes.  Broadly, they all touch on different conceptions of social reform and the best society.

Democrats would argue that the national government has a moral duty to its citizens.  It must break down the barriers to individual success.  Where those barriers can’t or can’t yet be destroyed, then the winners from current systems need to compensate the losers.

Republican would argue that such government action corrodes individual responsibility and creates dependency.  It harms the very people it seeks to help.  Government has a moral duty to create the conditions for individual success by fostering a dynamic economy.

It’s wishy-washy to say so, but both could be true.

[1] Julian Zelizer, The Fierce Urgency of Now: Lyndon Johnson, Congress, and the Battle for the Great Society (2015).  Really good book.

[2] “The battle over Medicaid,” The Week, 23 June 2017, p. 11.

[3] See: https://waroftheworldblog.com/2017/06/20/memoirs-of-the-addams-administration-24/

Memoirs of the Addams Administration 24.

Republicans struggled forward with the effort to make the Obama administration go away.  In 2010, the Democrats passed the so-called Dodd-Frank Act.  That legislation led to the imposition of about 28,000 new regulations on banks and credit unions, greatly increasing compliance costs.  As a result, many small institutions have been absorbed into larger institutions with deeper pockets.  The Dodd-Frank Bill created an Orderly Liquidation Authority for banks that do fail.  It created a Consumer Financial Protection Bureau.[1]  All of these were wildly unpopular with Republicans.  House Republicans passed the Financial Choice Act.   It exempts banks from many of the Dodd-Frank restriction in return for a requirement that they maintain large cash reserves.  The bill now goes to the Senate.  There it is likely to be subjected to a substantial re-write.[2]  Meanwhile, Republican senators have been trying to create a less-horrible version of the American Health Care Act (ACHA) previously passed by Republican representatives.[3]  The Senate plan postpones cuts to Medicaid for seven years[4] and maintains—at a lower level—the subsidies to low-income earners.[5]

Elsewhere, the World Economic Forum[6] (the folks who bring you Davos) reported that many Western countries—but the United States most of all—are suffering from a huge gap between the savings needed for retirement and actual savings for retirement.[7]  The American gap amounted to $28 trillion in 2015 and is projected to reach $137 trillion in 2050.  Cat food-salad sandwiches and living in an ElderCommune being unlikely to appeal as the “golden years,” one might anticipate a fight among Baby Boomers as the lower 80 percent seek to draw on the savings of the upper 20 percent.[8]

All of these were important developments for good or ill.  However, Americans seem to have focused more tightly on the controversies surrounding President Donald Trump.  To begin with, former FBI director James Comey told the Senate Intelligence Committee (which has been investigating possible collusion between the Russians and the Trump campaign) that the president made him uncomfortable in several private conversations, that he had made detailed notes of these conversations, and that he had arranged for these notes to be leaked to the press after his dismissal in hopes to triggering the appointment of a special prosecutor to investigate the man who had fired him.  Next came Attorney General Jeff Sessions and his porous memory.  Sessions told generally hostile former colleagues that he fired Comey for reasons unrelated to the FBI’s investigation of the “collusion” investigation.[9]   To round-out the week in suitable fashion, New York City’s “Shakespeare in the Park” series ran a version of “Julius Caesar” with a Trump look-alike in the title role.  Back in 2013 a square-state theater company used “Caesar” to imagine Barack Obama slain by right-wingers.  Now a right-winger is portrayed as meeting his death at the hands of women and minorities.[10]

[1] Just for fun, let’s imagine a Consumer Information Protection Bureau with its own “fiduciary  rule” requiring newspapers and other print media and television networks to “act in the best interests of their clients.”

[2] “Issue of the week: Dodd-Frank under fire,” The Week, 23 June 2017, p. 34.

[3] “Trumpcare: The GOPs secret plan,” The Week, 23 June 2017, p. 17.

[4] Actually, this is pretty clever.  Seven years from 2017 would be 2024.  Given the way that the parties alternate in the White House, a Democrat would be walking in the front door just as the Medicaid cuts took effect.

[5] One federal court has held that those subsidies are illegal because the original Affordable Care Act (ACA) made no provision for appropriating the money to pay for the subsidies.  The Obama administration appealed this decision.  The case has not yet reached the Supreme Court.  When/if it does, that will be the end of all subsidies and the whole system of “mandated” insurance for poor people who don’t have employer-supplied medical insurance will collapse in a heart-beat.   Republicans hope to use this as leverage.  Democrats have been blaming the “uncertainty” caused by the Republican repeal-and-replace effort among insurers for the collapse of the health-care market-places.

[6] See: https://en.wikipedia.org/wiki/World_Economic_Forum

[7] “Retirement: Will Boomers work forever?” The Week, 23 June 2017, p. 32.

[8] See Richard Reeves “America’s hidden class system,” The Week, 23 June 2017, p. 12.

[9] “Comey: did he damage Trump?” The Week, 23 June 2017, p. 6; “Sessions denies collusion as Trump eyes Mueller,” The Week, 23 June 2017, p. 4.

[10] “Julius Caesar: Assassinating Trump on stage,” The Week, 23 June 2017, p. 17.

Memoirs of the Addams Administration 23.

In 2015, President Barack Obama negotiated American participation in an international agreement to reduce carbon emissions.  The agreement committed the United States to cut its greenhouse gas emissions by 26-28 percent of the 2005 level by 2025.[1]  This is known as the Paris climate agreement.[2]  Then President Donald Trump announced that the United States would withdraw from the agreement.  The president’s decision inspired much criticism from home and abroad.[3]  Critics appear to be out of step with ordinary Americans.  Few Americans—of either party apparently—think that the environment is a pressing issue.  Most assign a higher importance to health care, the economy, terrorism, immigration, education, and crime.[4]

Opinion varied on this decision.  On the one hand, if the Paris agreement had been sustained by President Trump, it seems unlikely to have achieved its stated goals.  That goal is to limit global temperature rise to 2 degrees above pre-industrial levels.  One percent of that rise has already occurred.  The Paris agreement would limit further increases by 0.2 degrees.  Worse still, by one report world temperatures will rise by 3.1 degrees above pre-industrial levels by 3.1 degrees by 2100.  On the other hand, the admittedly flawed agreement set the ball rolling toward greater commitments in the future.  One reality appears to be that developing nations pursuing industrialization as the road to prosperity (China and India for example) will need to burn carbon to reach their goals.  The only way to prevent this would be to develop non-carbon alternatives.

Many people saw the decision to withdraw as an American abdication of leadership.[5]  President Trump, the critics said, has tossed aside the American leadership built up over decades.  Now, however, other leaders—especially Germany or China–would step forward.[6]  Right.

Then the “Trump-loves-dictators” theme reappeared.  The logic here failed.  Saudi Arabia has been a loyal American ally for decades; Israel has ruled over a captive Palestinian population since 1967; a series of American presidents have struck agreements on nuclear arms with the Russkies, Communist and post-Communist, while the Obama administrations sought a “re-set” with Vladimir Putin, and negotiated with Iran; and China has been an American “partner” ever since the chain-smoking dwarf Deng Xiaoping took power.  No American president who negotiated with those countries got called a dictator-lover.  Nor should they have been.

Elsewhere, the “Russia scandal” spun its wheels while awaiting the testimony of fired FBI Director James Comey[7] before the Senate Intelligence Committee.[8]  Then various brown dwarves of American popular culture (Kathy Griffin, Ted Nugent) attracted attention for their tasteless comments on public figures.[9]

Still, if you want to worry about something real, terrorists attacked the Iranian parliament and the tomb of Ayatollah Khomeini.  ISIS claimed responsibility; Iran blamed the Americans and the Saudis; and the terrorists were Kurds.  Big storm coming.

[1] The agreement took the form of an executive agreement because President Obama recognized that a treaty would not be ratified by the Senate.

[2] “Trump pulls U.S. out of Paris accord,” The Week, 16 June 2017, p. 4.

[3] One poll found that a mere 28 percent of Americans supported withdrawing from the Paris agreement, while 59 percent opposed it.

[4] “Poll Watch,” The Week, 16 June 2017, p. 17.  Only 4 percent rank climate in first place on the list of problems.

[5] “Paris: Does Trump’s America still lead the world?” The Week, 16 June 2017, p. 6.

[6] “How they see us: Defying the world on climate change,” The Week, 16 June 2017, p. 15.

[7] Like Michael Flynn, another “good guy” according to all media reports.

[8] “Russiagate: The plot thickens—again,” The Week, 16 June 2017, p. 16.

[9] “Griffin’s Trump stunt: Has the Left lost it?” The Week, 16 June 2017, p. 17.

Memoirs of the Addams Administration 22.

It will be difficult for future historians to make sense of the commentary on the second, European, leg of President Trump’s first foreign trip.  The “usual subjects” of Mainstream Media (MSM) decried his hectoring of North Atlantic Treaty Organization (NATO) members to pay more toward the common defense while refusing to make an explicit commitment to Article 5 of the NATO Treaty.[1]  Europeans themselves seemed aghast at his sharp tongue (and in the case of the prime minister of Montenegro, his sharp elbows).[2]  German Chancellor Angela Merkel affirmed that “we have to fight for ourselves.”  She called for European nations to “shoulder emotionally charged challenges such as a common defense and security policy.”

There is reason to doubt the value of all this talk.  On the one hand, a clear-eyed assessment of American vital interests would show that non-Russian Europe and “off-shore Asia” (Japan, South Korea, Taiwan, the Philippines) are vital trading partners and allies of the United States.  It doesn’t matter what President Trump says or fails to say.  If Push comes to Shove, the United States will have to defend those areas.  In contrast, neither Russia nor radical Islam poses an existential threat to the United States.[3]  On the other hand, the European Union (EU) lacks the means and probably the will[4] to provide for its own defense against foreign foes.

In May 2017, a second version of the Trump/RyanCare squeaked through the House of Representatives.  Since then Republican Senators have been trying to sort out a better version.  The Congressional Budget Office then issued an evaluation saying that under the House plan 23 million more Americans would be without health insurance and that premiums would rise for those who are old and sick.  The first part of this isn’t troubling: at least two-thirds of the “uninsured” would be people who never wanted the insurance (let alone the premiums) in the first place.  The second part reflects what the plan itself said: older and sicker people consume a lot more health care than do the young and healthy, so they should pay for it.  Republican senators are divided over the plan.  Public opinion leans against the House plan.[5]

The appointment of former FBI Director Robert Mueller to investigate the “Russia scandal” (including how his friend, protégé, and successor at the FBI James Comey came to be fired by President Trump) means that the investigation could run on for quite some time.  People will know nothing definitive until that investigation is completed.  However, it appears than anything illegal (like collusion between the Trump campaign and the Russian government hackers who revealed all sorts of inconvenient truths about Hillary Clinton) would have to have taken place before the election of President Trump in November 2016.  Wikileaks published the stolen e-mails on 22 July 2016.  The names of Kellyanne Conway (joined Trump campaign on 1 July 2016) and Steve Bannon (joined Trump campaign in August 2016) have not so far appeared among the list of FBI targets.  Jared Kushner and Michael Flynn—who had a history of legal contacts with the Russians–tried to open a back-channel contact with the Russian government in December 2016.  Maybe, just maybe, this dog won’t hunt.

[1] “Trump in Europe: A frayed alliance,” The Week, 9 June 2017, p. 6.

[2] “How they see us: Europe loses faith in America,” The Week, 9 June 2017, p. 14.  See also: “Russia: Cheering Trump’s NATO policy,” The Week, 9 June 2017, p. 15.

[3] Russia possesses nuclear weapons, but is deterred from using them by American nuclear weapons.  Vladimir Putin has had to make do with “little green men” and cyber-attacks.   Radical Islam doesn’t seem able to conquer anywhere vital to the United States.  Saudi Arabia, Iran, and Turkey all have the means to resist radical Islamists.

[4] See: https://waroftheworldblog.com/2015/06/17/die-for-danzig-marcel-deat-mourir-pour-danzig-loeuvre-4-may-1939/

[5] “Republican health-care plan struggles in the Senate,” The Week, 9 June 2017, p. 5.

My Weekly Reader 3 June 2017.

It is characteristic of the long-running funk into which many Western societies have fallen that there have been many “decline of the West” books published in recent decades.  They offer varying analyses shaded by varying clouds of pessimism.  Some focus on economic issues, some on misguided international policies, and some on cultural factors (with rotten schools in the forefront).  Many are inspired by China’s challenge to societies that otherwise could remain complacent.  Some are compelling, many are not.  One recent example come from the former editor of the Economist, Bill Emmot.[1]

Thirty years ago Mancur Olson investigated the rapid revival of the devastated German and Japanese economies after the Second World War and the slower growth of the Western victors in that war.[2]  He found the answer in the role of intermediate groups–political as well as economic–in the different societies.  By intermediate groups he meant both labor unions and businessmen’s association, but also intrusive government regulators.  These groups entrenched established organizations at the expense of newcomers.  They entrenched established procedures at the expense of innovation.  Dictatorship, war, defeat, and foreign occupation had destroyed these intermediate groups in Germany and Japan.  This left individual entrepreneurs free to do what they wanted in a dynamic fashion.  (“And all that implies.”—“The Iron Giant.”)  Elsewhere, the intermediate groups survived the war and sometimes even tightened their grip.

It’s possible to find many examples of dysfunction in Western societies.  Take both the Republican and Democratic parties in the United States for example.  Or the low labor participation rate in the United States as men have fled to disability programs as an alternative to lost familiar work.  Or Japan’s descent from Olsonian prime example of success into a barnacle-encrusted sampan.  Or the domination of the American—and perhaps “Western”–political economies by the banks.  In Japan that has meant a “lack of entrepreneurship or corporate investment” needed for growth.  In the United States, it has meant exploiting a public safety-net to cover imprudent risk.  This has resulted in “rising inequality, distortion of public policy, and [the] generation of collective economic pain and anger.”  And now the dreaded “populism.”

Much later on, several different countries sought to scrape these “barnacles” off the hull. Sweden “reduc[ed] taxation and deregulat[ed] all manner of industries” in pursuit of “more freedom of choice and creativity.”  Switzerland adopted an openness to immigration and also deregulated its labor market to get the right mix of workers to the right industries.  Britain’s embrace of the “Thatcher Revolution,” joined with membership in the European Union allowed Britain to reap both a “brain gain” and a “brawn gain.”[3]

What does Emmott offer by way of possible solutions?  Refreshingly, he does not glom every unpleasant surprise into one whole.  Thus, Putin’s Russia and Islamist terrorism pose no existential threats to Western civilization.  They can be mastered with a coherent effort.  Similarly, “Brexit” is a bad idea but not a rejection of Western values or most Western institutions.  In contrast, he over-states the real danger posed by the Donald Trump administration.  Trump speaks neither for mainstream Republicans nor for Democrats, and his administration will not last beyond his first term.  Then it will be back to business as usual.

Emmott has less to say about solving the real danger: Olson’s intermediate groups.  Appeals for “openness” in discussion isn’t likely to suffice.  It may take a real crisis, alas.

[1] Bill Emmott, The Fate of the West: The Battle to Save the World’s Most Successful Political Idea (2017).

[2] See: https://waroftheworldblog.com/2016/06/18/the-rise-and-decline-of-nations/

[3] See: https://en.wikipedia.org/wiki/Polish_Plumber.