Krugman backslides

Just when it looked like the worst of the punning was over, we get this (which is worth reading, despite the title).

(Still better than "Screw your core-age to the sticking place.")

Excuses, excuses, excuses

Just moved so I'm still threading my way around a maze of boxes and I'm getting my wi-fi from the Starbucks around the corner (which wouldn't be so bad if I didn't hate their coffee), so this won't be much of a post but the Matt Yglesias argument Joseph alludes to just doesn't hold up.

There is plenty of support for merit pay among center and right segments, people who are taking Yglesias's exact position here, so his statement is wrong when applied to the general population. Of course, Yglesias is taking about fighting among progressives so the anti-tax line makes even less sense.

Put bluntly (because my laptop's almost out of power), Yglesias is trying to explain why so many progressives are offended by his movement reformer stand without admitting that he might be the one contradicting progressive principles.

A return to education as a topic

This is an interesting perspective from Matt Yglesias about the tensions in the education reform movement:

The ambiguous policy upshot of this is precisely what makes intra-progressive fights over education policy so fraught. The exact same evidence which suggests that we should offer higher salaries to teachers also suggests that many of our current teachers are sub-par. It’s easy to assemble a “let’s spend less money on teachers” coalition, which is just conventional anti-tax politics. And it’s easy to assemble a “let’s give more money to the teachers we have” coalition, which is conventional service provider politics. What’s tricky is a “let’s spend more money precisely in order to get different people in this field” coalition.

I think that there is another angle to all of this discussion that is often forgotten. Current teachers include people who sacrificed earning potential for long-term job security (and did so in an environment where this was a part of their explicit employment contracts). The modern vogue for reneging on promises that are not inconvenient is not helpful to the debate. There may be cases where this is necessary, but it should be a painful last resort and not a routine talking point (see state pensions and the rhetoric about them).

EDIT: Also worth reading is Dana Goldstein's column

Are we entering the Post-coalition age of American politics?

Probably not, but...

Of the many bizarre turns of the past few weeks, the one that really shocked me was the Republicans agreeing to a deal that will very probably end up gutting the Pentagon's budget. Over less that a year, the GOP has alienated seniors by threatening Medicare, scared the hell out of the financial sector with a threatened shut down, and pissed off the military and related industries by disproportionately targeting defense for deficit reduction.

Perhaps this simply fear of Tea Party retaliation or perhaps the party's stated concern for the deficit was more sincere than most of us realized, but either way this pushes the current political situation even further out of the range of data.

Check out Jonathan Chait's sharp summary here.

Is health care choice important?

Aaron Carroll has a nice overview of the situation in Florida where people who campaigned on health care choice seem to be removing for state employees. He quotes this news story:

Florida is changing part of its state-employee health insurance program to offer only one HMO in each county. The state Department of Management Services, which oversees employee insurance, said changes in the program would save an estimated $400 million over two years. The changes also would require thousands of state employees to switch to different HMOs, a process that would begin in late September.

I wonder if these positions are more harmonious than they appear on first glance. If the goal is to make government service less appealing, reducing health care choice (and thus competition) makes these positions less desirable.

Math issues

Felix Salmon's last two posts are brilliant. I strongly recommend reading both of these posts. Seriously!

Heck, I am likely to come back and post on them later today if I have enough time. Paul Krugman and Mark Thoma might be representing the outrage of progressives, but Felix is documenting the damage coldly and dispassionately.

However, this is a statistics blog. So I wanted to visit a comment on one of Felix Salmon's posts:

The top 10% of Americans pays 45% of all taxes, a higher proportion by far than any other country, while the American top 10% earns only 33% of total income.

By comparison, the 10% of the UK earns 32% of total income and pays only 38% of all taxes. And the UK is one of the more progressively taxed countries. The taxes paid by the top 10% of other European countries are on average around 30% of total taxes.

As an epidemiologist (a field that is in love with proportions), I realize how misleading they can be. In the example above, the rich earn roughly the same amount of income. But they pay a higher proportion of taxes. However, is it the proportion of taxes that matters or the absolute tax burden?

Consider a simple example. In two countries there are 10 people. Of these people, nine make 10 units of income per year and one makes 50 unites of income. This is pretty close to the income distribution of the US and UK cited above.

In country A, the nine people pay 2 units of tax per year and the rich person pays 16 units of tax. Total tax revenues are 34 units (or 24% of GDP). The rich definitely pay more as a proportion of taxes but pay 47% of the taxes overall.

In country B, they pay something more like the OECD average (35%). So the nine people pay 3.5 units of tax (31.5) and the rich pay 17.5 units of tax. That is 49 units of tax collected (exactly 35%). The rich pay 36% of the tax burden.

Which country is a low tax country for rich people to live in? One where they pay an effective tax rate of 32% versus 35%? Or one where they pay a higher proportion of total taxes collected?

The trick here is that the US total tax burden is so light that the top 10% can both pay a higher proportion of taxes than in other countries and, at the same time, still pay less absolute tax. That can make proportional analysis potentially misleading.

Apologies to Mr. Raz

I've never been a big fan of NPR's Guy Raz but his handling of the coverage of the debt crisis was very good today, peaking with this interview with Felix Salmon.

Overly-trusting Straussians

There is a strong strain of Straussianism in the conservative movement. Of course, not all prominent conservative intellectuals believe that you have to lie and oversimplify to move the masses in the best direction for society, but pretty much all have accepted and, more importantly, internalized the fact that many of their colleagues do believe in the need for these noble lies.

Once you've internalized the idea that people in your circle are smart and sane but occasionally make ludicrous statements for the benefit of the crowds (call it the Elsinore strategy -- feigning madness), it becomes easy to ignore craziness in your own party, particularly when there's a penalty for suggesting the alternative (see Bartlett and Frum).

In other words, we have something like conservation of cynicism. The Straussian assumes the worst about the masses, but has an excuse to assume the best about allies, even when they give every indication of being crazy and/or stupid. The result is that it has taken smart, sane conservatives far too long to acknowledge what's going on with House Republicans.

The consequences of this lack of cynicism is spelled out in detail in excellent posts by Jon Chait and Paul Krugman.

A view into the queue

Still in the middle of a move but here are some of the posts I'm trying to find time for. Given the speed at which events are moving, I thought I should at least get something out in preview form.

-- The worst thing about the Tea Party from a Republican perspective is not the movement's extremism. If a (slightly modified) modified stag hunt is an appropriate analogy, players who decrease the chances of a successful hunt (by demanding you take unpopular positions) and who are disloyal (bolting to third party candidates when offended) are the worst possible allies.

-- When Straussianism makes people insufficiently cynical. Conservative thinkers may have underestimated the danger of a default crisis because they assumed the rhetoric coming out of the Republicans in the house was fodder for the masses rather than sincere statements.

-- Fox News and flawed control systems.

-- Political science models may tell us that spouses don't effect candidates' chances, but how far out of the range of data is Michelle Bachmann's husband?

How to improve health care for the poor

I really want to make sure that this post from Megan McArdle isn't overlooked in the discussion of the debt ceiling. There are not a lot of bloggers who have been in my situation in my 20's -- desperately poor and with a difficult medical condition (that was not my fault). But she has.

As a result, she has the correct instincts for services that would really assist the poor:

This is actually not inconsistent with other findings. For example, every time we get a health care expansion, people predict large falls in emergency room usage. Supposedly, we'll save huge sums by shifting people from expensive ER visits to cheap primary care sessions. Unfortunately, the savings have been elusive; in Massachusetts, the largest such experiment we have to date, ER visits actually rose.

Why? ER's are much more convenient. The working poor usually have much less flexibility in their schedules than the middle class. They work shifts, they may need a doctor's note to miss work, and if they don't work, they often don't get paid.

Note that this implies a totally different solution to the problem of "non-emergent ER visits": urgent care or "Minute Clinics" that work odd hours. Otherwise, you just cram even more people into the same ER space*. It is easy to come up with "Just So" stories in health care. The reforms always sound wonderful, and the benefits always unfold in a beautifully logical way. Unfortunately, people, and reality, are rarely as predictable as the models.

When you are short of money for food, leaving work to sit in an MDs office is a major sacrifice. If you are here in the Southeast and do not drive then the cost in time to make it via public transit can be huge. I have seen sick days used as a part of evaluations. I have worked in a small business where I was the only person in the store and leaving it would cause a crisis.

If you are dying of a myocardial infarct then leaving your job is clearly the right decision. But I would leg infections that started small . . . and sometimes did not progress. If I was able to get an antibiotics prescription then I'd avoid the ER.

I have tried going to "minute clinics" but they all refuse to treat because it was not on the symptom list. A last minute appointment at an MDs office was a huge issue.

I saw some good signs of improvement in Seattle where they put an urgent care clinic (open until something like 1 am) right next to the ER. I joined that HMO and it made a huge difference in my quality of life when a medical event happened.

These days I am a professor and these issues are lessened. But I think it is worth keeping in mind just how crucial these services can be for the poor, even if they are unpopular with people who work a 9 to 5 schedule.

"Looks like I picked the wrong week to quit sniffing glue"

A busy, busy end of July here on the West Coast, professionally, personally and socially. The movers come tomorrow. Perhaps I can get the OE posting queue moving shortly after that.

Words of Wisdom -- Weekend Edition

Felix Salmon is unimpressed with Alan Greenspan and suggests a different perspective:

In fact, the opposite is true — ask anybody who has experienced both wealth and poverty. When you’re wealthy — when you have a nice capital buffer to absorb mistakes — you don’t worry so much about running risks, and you’re significantly happier than when you’re poor and you have to be much more worried about where your money might end up. Insurance improves living standards, it doesn’t detract from them. Let’s have more of it.

Too busy to give this the write-up it deserves

But NPR's morning edition has been doing a great series on failing schools. Having taught in the Mississippi Delta, this piece on rural schools struck particularly close to home.

Restoring my faith in public radio

Just when I was losing faith in the medium on this story, American Public Media's Marketplace had segments today digging into the impact of the (manufactured) debt crisis, both in terms of immediate unemployment and long term effects.

Definitely worth your time.

A surprisingly blunt view of finance

I really need to blog on a health policy post by Megan McArdle. But in the meantime, here is a surprisingly sane point of view on the debt ceiling crisis:

My reading of what the ratings agencies have said is that if the GOP somehow manages to force the Democrats to do everything their way, this will not secure our AAA; it will guarantee that we lose it, because it will show that we are currently unable to make the ugly bipartisan compromises that long-term budget balance requires, and raises the risk that sometime in the not-very-distant future, the other party will retaliate by threatening default. That's what Wall Street cares about. Not saving social security. Not lower spending. They just care about getting enough consensus to keep the checks flowing.

I think it is easy to over-estimate ideology among members of wall street because a few of them have decided to spend their wealth on political activism. But, for most businesses (especially in banking), the goal seems to be getting paid and it is worth remembering that. Narrowly averting a disaster is only of limited value if structural incentives (and poor journalism) ensure that it happens again and again.