The Syrian Refugee Crisis.

A civil war between the Sunni majority and the Shi’ite minority has been ravaging the Middle East. Since the outbreak of the Syrian civil war in 2011, more than four million refugees have fled the country.[1] While many went first to all the surrounding countries (Lebanon, Jordan, and Iraq), most went to Turkey. By late 2011, the number of refugees in Turkey reached 7,600. By the end of 2012 the number of refugees in Turkey topped 135,000; the number in Egypt passed 150,000. In summer 2014 the appearance of ISIS in eastern Syria and western Iraq sent the number of refugees soaring. By August 2014 the number of refugees in Turkey reached an estimate 850,000. Then the CrISIS just exploded in the second half of 2014. Western aid workers were decapitated, a Jordanian pilot was burned to death, and Yazidis were enslaved. Huge numbers of Syrians “loaded up the truck and moved to Turkey-ey.” By early 2015, Turkey had 2.1 million Syrian refugees within its borders. Camps expanded and proliferated.

Then, in late summer 2015, hundreds of thousands of Syrian refugees suddenly sought to scale the walls of the European Union (EU). More than 300,000 refugees from Syria entered the EU between January and July 2015. It accelerated from there, with 100,000 refugees entering the EU during July 2015. Now hundreds of thousands are pressing their noses against the glass in Hungary, Croatia, and Slovenia. Media attention has focused on the appalling human suffering in the West.

How did hundreds of thousands of refugees get from camps in southern Turkey to either the Greco-Turkish frontier near Edirne or to the Turkish coast opposite the nearby Greek island of Lesbos? Most of the refugee camps are in Hatay Province in the far south. There is a railroad station in Iskenderun in Hatay province. The line from Iskerderun runs through Adana, Konya, Afyon, and Izmir (Smyrna) to the port of Dikili, on the Aegean. Dikili faces the island of Lesbos, the nearest Greek land. Lesbos has been swamped in refugees crossing from Turkey. How has the Turkish government failed to perceive or resist this huge movement of people? Are the Turks actually trying to organize the movement of refugees from the camps to the coast?

The 100,000 refugees to be taken in by the United States in the next several years seem ridiculous compared to the need. However, the Gulf states have taken in no Syrian refugees. None, nada, zip. They have pitched in a bunch of money to support the refugees. Those sums are piddly compared to what the United States has contributed. The refugee-aid sums provided by Kuwait, Saudi Arabia, the United Arab Emirates, and Qatar amount to 60 percent of what the US alone has contributed. In short, the Sunni Arab states aren’t concerned.

The Syrian refugee migration is best understood as part of the larger civil war in the Muslim world between Sunnis and Shi’ites. The Sunni Turks and the Sunni Saudis want the Alawite (a sect of Shi’ism) government of Bashar al-Assad gone. Shi’ite Iran wants the Assad regime to remain in place. How to get the western powers to intervene more effectively against the Assad regime? How about you cause them a bunch of problems? Hence, the refugee crisis.

Western states are deluged in migrants. These refugees are unwelcome in the West. It would be best if they went home. How to get them to go home? We’ll, no one is going home if the Assad government or ISIS is in a position to do them harm. So, get rid of Assad and ISIS. The Sunni states (Turkey, Saudi Arabia) are muscling the West by indirect means to overthrow the Assad regime. The Syrian refugee crisis is an act of aggression against the West by its nominal allies.


Character Test.

Eduardo Porter has argued that Americans have been guided by a shared disdain for collective solutions and a belief individual responsibility. The conservative argument offered by Charles Murray and others is that the welfare state has undermined the character of its beneficiaries. The liberal argument offered by Eduardo Porter and others is that America has relied on continuing prosperity instead of a real welfare state. When long-term economic troubles hit, many Americans plunged through the cob-web of a “safety net.”[1]

On the right, in line with the moral corruption argument made by Murray, Republicans propose to repeal the Affordable Care Act and cut a bevy of other programs for the poor. This will end the culture of dependency that many conservatives blame for creeping social pathologies that came to light after the recent Baltimore riots that followed the arresting-to-death of Freddy Grey. The Republican budget plans seem like a dead-end. For one thing, they target relatively low-cost programs aimed at the poorest Americans. In reality, defense, Medicare/Medicaid, and Social Security are the big drivers of government spending. As Willy Sutton explained when asked why he robbed banks, “That’s where the money is.”

For another thing, these categories of spending are widely popular with the American middle class. Once again, as with opposition to gay marriage and to immigration reform, Republicans are picking the losing side of an argument. Takes Social Security as an example. As the Baby Boom retires, it places a mounting pressure on the system. When current revenue through withholding is inadequate to meet obligations, the System draws on the Social Security trust-fund (built up from revenue surpluses in the past). At the moment, the trust-fund is expected to be exhausted by 2033. After that happens, retiree benefits will be reduced to perhaps 75 percent of expected benefits.[2] Senators Elizabeth Warren and Bernie Sanders favor raising or removing the cap on Social Security withholding to greatly increase revenue for the supplemental retirement income system. However, they favor going beyond stabilizing the finances of the present system to create an expanded national pension system.[3]

This seems likely to emerge as a powerful issue in future elections. In 2005, 26 percent of still-working Americans expected “to rely on Social Security as a major source of income” in retirement. In 2015, 36 percent of still-working Americans “expect to rely on Social Security as a major source of income” in retirement. Among currently retired people, 73 percent are receiving reduced benefits because they retired early.

There are several possible explanations for the growing place of Social Security in the retirement income of Americans. One explanation could be that the Great Recession devastated both the savings and the income of ordinary Americans. Another explanation could be that a decade of aging forced many Baby Boomers to confront their own lack of thrift over the course of a lifetime. Similarly, the huge number of people who took early retirement could be explained by either the moral corruption argument or by the ravages of globalization over the last 25 years.

If conservatives want to sustain the moral corruption argument, they will have to openly apply it to middle class entitlements. Of course, cannibalizing the Affordable Care Act could provide some of the revenues to shore up middle class entitlements. However, this would require the middle class to turn its back on the poor. So, a test of character.

[1] Eduardo Porter, “Income Inequality Is Costing The Nation on Social Issues,” NYT, 29 April 2015.

[2] “Social Security worries mount,” The Week, 22 May 2015, p. 32.

[3] This strikes me as equivalent to the sort of defined-benefit system that American companies found to be unsustainable and abandoned in favor of the defined-contribution systems. Perhaps I’m wrong.

Still More American Public Opinion.

What do Americans think of the Affordable Care Act (ACA)? The polls have been blurry. In March 2014, 41 percent of people approved of the ACA, while 53 percent of people disapproved. There was a big partisan break-down: 72 percent of Democrats approved it, while only 8 percent of Republicans approved it. Those figures raise their own puzzles. Why are 28 percent of Democrats opposed to the law or unsure if they approve it? If 72 percent of Democrats and 8 percent of Republicans approve the law, where do Independents stand? In another poll in May 2014, 61 percent that they either wanted Congress to leave the ACA in place or—at most—tinker with any flaws. In contrast, 38 percent of people wanted the law repealed.[1] Approval of the ACA appears to have shot up from 41 percent to 61 percent, opposition to have fallen from 53 to 38 percent. Did this mark a sea-change in attitudes toward the ACA or a polling error?

What do Americans think about race relations? In 2009, after the election of Barack Obama to be President of the United States, 66 percent of people thought that race relations were good. Then came the shooting of Michael Brown in Ferguson, MO. In August 2014, 80 percent of African-Americans thought that the shooting “raises important questions about race that need to be discussed.” Only 37 percent of whites agreed. Almost half of whites—47 percent—thought that race was “getting more attention than it deserves.” In December 2014, 85 percent of African-Americans disapproved of the decision by the grand jury to not indict Darren Wilson, the police officer who shot Michael Brown. Overall, 45 percent of Americans disapproved of the decision, while 48 percent approved it. By January 2015, 40 percent of people believed that race relations were “fairly good” or “very good.”[2] There is a rough similarity between the figures for those who had believed that race was getting too much attention, for those who approved the decision not to indict, and for those who believe that race relations are good.

What do Americans think about opportunity in America? In November 2014, 24 percent of people believed that the economy is “fair to most Americans,” while 71 percent think that it “generally favors the rich.” A majority—57 percent–of those who earn more than $100,000 a year agree. However, 43 percent of those who did not vote in November 2014 were African-American or Hispanic-Americans, and 46 percent earned less than $30,000 a year.[3]

What do people think about getting anything accomplished in government? In January 2015, 60 percent of Americans believed that the Congress elected in November 2014 will not accomplish any more than the previous bums. Even more, 72 percent, doubted that the Republican majority in the Senate would accomplish anything more than did the Democratic majority. Some people seem frustrated with this situation, while others are satisfied. Thus, 46 percent of people believed that President Obama should wait on action by Congress to solve the immigration issue. According to the first poll, however, most people expect that such action will not come. In contrast, 42 percent of people favored the president issuing an executive order to deal with immigration. Finally, 59 percent of people favored building the Keystone XL pipeline. This included not only 83 percent of Republicans, but also 43 percent of Democrats.[4] The president vetoed that bill.

[1] “Poll Watch,” The Week, 4 April 2015, p. 15; “Poll Watch,” The Week, 23 May 2014, p. 15.

[2] “Poll Watch,” The Week, 29 August 2014, p. 17; “Poll Watch,” The Week, 12 December 2014, p. 19; “Poll Watch,” The Week, 16 January 2015, p. 17.

[3] “Poll Watch,” The Week, 14 November 2014, p. 19.

[4] “Poll Watch,” The Week, 23 January 2015, p. 17; “Poll Watch,” The Week, 28 November 2014, p. 15.

American Public Opinion.

So, regardless of what the politicians say, what do Americans think about some issues?

Back in September 2014, in the wake of the Islamic State’s over-running of much of Iraq, 53 percent of Americans approved of President Obama’s strategy for dealing with ISIS.[1] However, 64 percent of Republicans and 60 percent of Democrats approved. How did those higher numbers end up with an average of 53 percent? This suggests that there is a big group of Independents who don’t like the President’s policy.

In the November 2012 elections, 68 percent of Hispanic voters supported Democrats and 33 percent supported Republicans. In the November 2014 elections, 62 percent of Hispanic voters supported Democrats and 36 percent supported Republicans.

What do Hispanic voters care about? Not immigration reform. Only 16 percent of those polled in November 2014 ranked that as their primary concern. Health care came first for 24 percent. The economy in general came first for 49 percent.[2]

Two thirds of Americans are satisfied with the current US health-care system. [That’s a blurry response. Are they satisfied with the medical care they receive or are they satisfied with how the Affordable Care Act operates or both?] A whopping 74 percent of Democrats are satisfied, but even 60 percent of Republicans are satisfied.

The “war on guns” appears to be headed in the same direction as the “war on drugs.”[3] In 2000 only 29 percent of Americans favored preserving gun-rights over gun-control. By 2013, 45 percent favored gun-rights over gun-control; in 2015, 52 percent favored gun-rights over gun-control. This included 54 percent of African-Americans, up from 29 percent in 2012.

In the immediate aftermath of the “Charlie Hebdo” massacre in Paris, 63 percent of Americans believed that it was more important to preserve free speech than to not offend religious people. Only 19 percent thought it important to avoid offending other people.[4]

In early 2015, 49 percent of Americans identified as “pro-choice,” while 47 percent identified as “pro-life.” However, 84 percent favor liming abortion to the first three months of a pregnancy. This includes 69 percent of those who identify as “pro-choice.”[5]

This is a puzzler. Does it mean that a lot of pro-life people wouldn’t have an abortion themselves, but don’t really want to proscribe abortions for other women who find themselves in a jam? Does it mean that lots of pro-choice people think that abortion is a necessary evil, rather than a categorical right to be exercised at any time?

As of early 2015, 60 percent of Americans thought that middle-class people pay too much in taxes; 68 percent believe that the rich pay too little in taxes.[6]

A huge majority of Republicans—69 percent–agree with Rudy Giuliani that President Obama doesn’t love America. A huge majority of Democrats—85 percent—believe that does too love America.

One of several bizarre things here (aside from so many Republicans agreeing with that idiot Giuliani) is that apparently 15 percent of Democrats either believe that the President doesn’t love America or they’re not sure.

[1] “Poll Watch,” The Week,” 26 September 2014, p. 17.

[2] “Poll Watch,” The Week, 21 November 2014, p. 19.

[3] Timothy Williams, “Poll Finds That More Americans Back Gun Rights Than Stronger Controls,” NYT, 12 December 2014.

[4] “Poll Watch,” The Week 26 January 2015, p. 17.

[5] “Poll Watch,” The Week, 6 February 2015, p. 17.

[6] “Poll Watch,” The Week, 6 March 2015, p. 17.

Getting a fat lady into a girdle.

It is way too early to tell how the Affordable Care Act (ACA) is going to shake-out. Neither Republican doom-saying nor Democrat triumphalism seems warranted at this moment. There are signs of gains that need to be consolidated and issues that may need to be addressed.

During the first year of the ACA the uninsured rate fell by thirty percent/10 million people.[1] That means that seventy percent/20 million people of the previously un-insured are still un-insured. Between 2002 and 2012 a rising number of Americans told Commonwealth Fund pollsters that medical bills caused them financial troubles.[2] Medical debt became one of the leading causes of people filing for bankruptcy. Many people (43 percent in 2012) decided against seeking some sort of medical care because of the cost. The Affordable Care Act intended to address this problem as one part of its effort to make health care more broadly available. The number of Americans reporting trouble with medical debt peaked at 41 percent in 2012. Then the number began to fall, hitting 35 percent in 2014. The number of those who did not seek medical care because of cost also fell to 36 percent. So, is the glass full, half-full, or empty?

The big problem is health-care costs and, thus, health-insurance costs.

Between 2003 and 2013, insurance premiums rose faster than did median incomes.[3] Between 2003 and 2010 insurance premiums rose by an average of 5.1 percent per year. In thirty-seven states the total employer + employees contributions equaled at least 20 percent of median income. Thus employers’ labor costs also rose. From 2011 to 2013, the pace of increases slowed, but continued to rise at a rate of 4.1 percent. By 2013 the average insurance premium had reached a national average of $16,000. Employers started looking for a way to limit the rise in their labor costs.

What they have hit on, in many cases, is shifting the cost to employees. In 2003, 52 percent of workers had employment-provided insurance with a deductible. By 2013 the number had risen to 81 percent. Furthermore, the deductibles have also risen by an average of 146 percent. They now average $1,000 per person in most states. According to a Commonwealth Fund study, the out-of-pocket costs for employees (insurance premiums + deductibles) rose from 5.3 percent of median household income in 2003 to 9.6 percent in 2013.

On the one hand, according to one report, 58 percent of Americans polled want ObamaCare repealed.[4] Why? Job-creation and wage increases have both been lagging for several years. This has left people feeling like the Great Recession never ended. Perhaps the shifting of medical costs to their consumers makes people feel like ObamaCare never happened.[5]

On the other hand, although health-care costs have risen more slowly since passage of the ACA, most economists—as opposed to political spokesmen—attribute this to the recession. They are likely to start back upward as the economy recovers. This will increase the pressure on employees for out-of-pocket expenses and premiums.

In short, we’re not yet done with health insurance reform. Maybe we’ll get it all the way right the next time.

[1] “Obamacare: Why, in Year Two, it’s still so unpopular,” The Week, 16 January 2015, p. 6.

[2] Margot Sanger-Katz, “Distress Appears to Ease Over Cost of Health Care,” NYT, 15 January 2015.

[3] Tara Siegel Bernard, “Health Premiums Rise More Slowly, but Workers Shoulder More of Cost,” NYT, 8 January 2015.

[4] “Obamacare: Why, in Year Two, it’s still so unpopular,” The Week, 16 January 2015, p. 6.

[5] However, it is possible that what they don’t like is Obama, rather than the Care. People often disapprove of a President in his lame-duck years.


The Affordable Courts Act (ACA).

The Affordable Care Act offered the states the opportunity to create health insurance exchanges, but then set up barriers to states actually creating such exchanges insurance. To create its’ own exchange, a state had to create a new state-paid staff to set up and operate the exchange: run a call center to explain the plans, regulate the plans offered by the private insurance companies, and set up the web-site through which people select their insurance. All this would cost money[1] and require some horse-trading in the legislature that could mess up other deals. Recognizing this, the federal government created a pool of money to subsidize the creation of state exchanges. The continuing costs would fall on the states. Moreover, many state legislatures were in the hands of Republicans who were opposed to the whole thing to begin with. It should surprise no one that thirty-four–about two thirds–of state legislatures opted to let the federal government carry the weight. Thus, most people buy their insurance through federal exchanges, rather than through state exchanges.[2]

Recently, the Supreme Court has agreed to hear a challenge to one provision of the ACA. The case of King v. Burwell turns on the meaning of the language in the ACA regarding subsidies for people who purchase insurance through the exchanges. Do subsidies go only to people who purchase insurance on state-created exchanges or do they go to all exchanges, state and federal alike?[3] The Supreme Court will issue an opinion on the case in June 2015.

In a subtle bit of propagandizing the court, Margot Sanger-Katz recently penned a story in the New York Times that explains the likely consequences of a Court decision restricting the subsidies to state-created exchanges.[4] First, subsidies would end in the thirty-four federal government-created exchanges. This would drive up the cost for many insurance consumers beyond what they could afford. The individual mandate to purchase health insurance, a corner-stone of the ACA, could not be maintained if insurance costs rose dramatically. Second, any effort to replace the federal exchanges with state exchanges would involve an immense amount of work in a restricted period of time.

The Court will probably issue its opinion in June 2015. October is the enrollment month, so states would have from June to October (about four months) to create exchanges. Only eight states will have legislatures in session in June. This may cut down the time for legislative action to the extent that is necessary. It took three years to create the original exchanges. They turned out to be plagued with what the Obama Administration is pleased to call “glitches.” Doubtless people have learned a lot from the first round of experiences. The trouble is that one of those lessons is that it isn’t possible to create an exchange over-night. States will have to hire teams of people to create and manage the exchanges. They will have to find the additional money (see fn. 1 below) somewhere in the middle of a fiscal year. They will have to find the people somewhere. (I foresee a big money harvest for Massachusetts health insurance professionals.) Then computer programs will have to be purchased and adapted to suit the needs of each new state exchange. There is a good chance that chaos will reign for a time if the Court overturns subsidies for federal exchanges.

This leads me to believe that Chief Justice John Roberts will side with the Democratic appointees on the Court and against the four Justices who have always opposed the ACA.

Or, already existing state exchanges could start enrolling residents of other states as well. You can go to another state’s public colleges and universities if you pay out-of-state tuition. Why can’t insurance customers pay out-of-state premiums? Not a lot higher. Just enough to create a positive revenue stream.

[1] One current estimate of the cost to establish a single state exchange is about $40 to $60 million. Then the annual operating cost would be added on that. Obviously not the end of the world, but a hard sell to state legislatures in the middle of a recession.

[2] President Obama’s unilateral abandonment of the “public option” looks worse and worse all the time—in retrospect. Lots of human decisions look worse in retrospect.

[3] To an ignorant—Republican—layman like myself, the answer is clear. Congress did not pass an enormous and complicated piece of legislation with the intent that it should fail. Congress did not intend that subsidies be restricted to the state-created exchanges when it was creating the federal exchanges as a back-up system. Congress intended both forms of exchanges to receive subsidies. End of story.

[4] Margot Sanger-Katz, “Many States Unprepared to Set Up Health Exchanges,” NYT, 11 December 2014.


Sore Winners and Sore Losers from Obamacare.

Medicare provides health insurance for 98 percent of Americans aged 65 and over.

Who lacked/lacks health insurance before/since the Affordable Care Act (ACA)?

Group                                                  Before ACA               Today              Difference.

All Americans under 65                      16.4 percent                11.3 percent    -31 percent.

Hispanic-Mexicans                              26.2 percent                16.5 percent    -37 percent

Blacks                                                             24.1 percent                16.1 percent    -33 percent.

Whites                                                14.1 percent                10.0 percent    -29 percent

Asians                                                             13.6 percent                 9.7 percent    -29 percent

Aged between 18 and 34,                   21.6 percent                14.2 percent    -34 percent[1]

Aged 35 to 44                                     16.4 percent                11.2 percent    -32 percent

Aged 45 to 54                                     15.0 percent                10.6 percent    -29 percent

Aged 55 to 64                                                 12.7 percent.               9.1 percent    -28 percent

Poorest 20 percent of neighborhoods 26.4 percent                17.5 percent    -36 percent

Next poorest 20 percent                      21.6 percent                14.3 percent    -34 percent

Middle 20 percent,                              17.6 percent                11.9 percent   -33 percent

Next highest 20 percent                      13.4 percent                 9.4 percent    -30 percent

Richest 20 percent                               6.5 percent                6.5 percent    ————–


Overall and within almost all groups, the ACA has reduced the uninsured by about one-third. Still, two-thirds of those who were uninsured before the ACA remain uninsured today.

Why hasn’t a plan intended to provide almost all Americans with health insurance come anywhere near to achieving that goal? In large measure, the failures of this part of the ACA go back to its design. The ACA originally sought to coerce the states into expanding Medicaid to cover many of those who are uninsured today. In 2012, the Supreme Court rejected that component of the plan. States were left free to expand or not expand Medicaid. So far, twenty-seven states have chosen to expand Medicaid, while twenty-three have rejected it.

Why did many states reject Medicaid expansion? One answer would be Republican wrecking tactics directed against the center-piece of President Obama’s agenda. However, not all Republican-led states rejected expansion and not all Democratic-led states accepted it.

It is possible that rational calculation played a role. The states that rejected expansion had an average uninsured rate of 18.2 percent before the ACA, while those that accepted expansion had an average uninsured rate of 14.9 percent. Federal subsidies for expanded Medicaid are scheduled to be reduced in a few years. States will have to increase their share of the expanded costs. Many of the states that rejected Medicaid expansion pursue a low-tax strategy to attract business. Other parts of the ACA were not completely thought through. Perhaps the failure to make the complete Federal subsidy permanent is another such “glitch.” It will take a Democratic House, Senate, and White House to fix it.

Even in states that expanded Medicare, 9.2 percent of people remain without insurance.   Why? Ignorance? A libertarian resistance to coercive good intentions? Most Republicans have an ideological opposition to an “entitlement” that was forced on them by Democrats. Unlike post-war Europe, there is no consensus on this issue.

Kevin Quealy and Margot Sanger-Katz, “Obama’s Health Law: Who Was Helped Most,” NYT, 29 October 2014.

[1] Understates the gain because it doesn’t include the three million people who are allowed to remain on parents’ insurance.