Donkey Behind the Times

The donkey is way behind the times...

2008-04-18T15:19:00.003-05:00

With the addition of Bill Kristol to the op-ed mix, Friedman out on book leave, and Krugman spending too much time on the Democratic campaign (this isn't saying it isn't justified in the larger sense, only that I'm damn tired of Hilbama columns); I have been unable to keep up with finding, reading and writing on op-ed's from the NYT. When I do consider op-ed stuff, it has been featured over at the DONKEY MOTHER SHIP. I do think it is best to move towards a sole source blog for the Donkeyman, so this behind the times thing can go to the back burner as a defunct and failed project.

It may return at some point, especially if Friedman comes back with something valuable to say. Until then, keep it real and don't give up all hope on the NYT's editorial pages, they may be relevant again someday.... just not until Kristol is canned.

Double Bubble Trouble - 3/5/08

2008-03-05T13:08:00.005-06:00

Morgan Stanley Asia chairman Stephen Roach penned an insightful op-ed in today's NYT. He discusses the current economic situation in America in comparison to Japan of the early 90's. I'm not sure when we are going to wake up and realize that we are over consuming, but at least there seems to be some in the business world that recognize the coming reckoning...

Like their counterparts in Japan in the 1990s, American authorities may be deluding themselves into believing they can forestall the endgame of post-bubble adjustments. Government aid is being aimed, mistakenly, at maintaining unsustainably high rates of personal consumption. Yet that’s precisely what got the United States into this mess in the first place — pushing down the savings rate, fostering a huge trade deficit and stretching consumers to take on an untenable amount of debt.

A more effective strategy would be to try to tilt the economy away from consumption and toward exports and long-needed investments in infrastructure.

The bastardization of Keynesian economics by contemporary politicians is at the core of this problem. For some reason contemporary fiscal and monetary policy has taken the "lower interest rates / tax rebates or breaks" method to be the only way out of troublesome waters... Neglecting the concept of government backed infrastructure enhancements, which in the classical Keynesian school is a requirement of sound response to a slowing economy. I don't purport to be a devout Keynesian, but the current approach really stinks of being corrupted by the anti-tax crowd...

The Recession... The Recession.... 1/23/08

2008-01-23T21:56:00.000-06:00

The recession is coming... The recession is coming... Or so they say, but of course economists have collectively predicted 9 of the last 5 recessions...

The NYT Editorial Board weighs in with an interesting little tidbit. Unfortunately, the Board falls victim to the crying wolf recession doomsday reporting, which seems mandatory in the mainstream media. I swear that I once heard that consumer and investor confidence were critical to a market based system... well just scare the shit out of everyone why don't you with drivel like this:
The economy has fallen into recession each of the four times the national index slipped into the red since 1979. Recessions have started in the month in which the state indexes were declining in half the 50 states and rising in the other half. In October, eight were down. In December there were 13.
If this trend continues, it suggests a recession could be on the way.
(Emphasis mine). Seriously, how many conditionals can fit into a single sentence that really doesn't say anything of value? I could point out that only one of the last five recessions started in an even numbered year, or that no recession after WWII has started in January or February... but this would be of similar integrity, and a little silly. I could also make a sly remark about the fact that each of the last 7 recessions has started with a Republican in the White House, but that may seem partisan. Well... it is the truth.

Another, much better, Op-ed piece appeared today. Authored by Nobel Prize winner Stiglitz, the theme is a quick infusion of cash could help significantly -- but we should consider other long-term options as well. He highlights the concept of truly redistributing wealth by pushing more cash into the unemployment insurance system (where it will get spent) and also mentions aide to State and Local governments... We should begin by strengthening the unemployment insurance system, because money received by the unemployed would be spent immediately.

The federal government should also provide some assistance to states and localities, which are already beginning to feel the pinch, as property values have fallen. Typically, they respond by cutting spending, and this acts as an automatic destabilizer. Federal assistance should come in the form of support for rebuilding crucial infrastructure.

The importance of keeping state and local governments afloat is important, as since the Reagan years these entities have had a significant increase in services provided without federal monetary assistance. Many of poorest and needy people rely on this state/local system for support. Additionally, this redistribution could help ease the pain in the truly hard hit areas of the country (e.g. Michigan) where the citizens wouldn't believe there is going to be a recession -- they think it's been here for two years.

Burman, from the Urban-Brookings Tax Center also has an op-ed today
discussing the recession (maybe?). I don't believe I've heard of him before, but this column definately intrigued me. He also argues for getting cash into the hands of those most likely to spend it, and additionally brings up the Bush tax cuts as a method of stimulating the economy... not by extending them, but by making them go away sooner.
It’s true that more tax cuts this year could help head off a recession in the short run. Washington could send taxpayers rebate checks or give businesses temporary breaks for new investments in equipment. President Bush is likely to propose both as part of his $150 billion package of emergency measures.

Similar efforts in 2001 and 2002 had mixed results at best, but so long as the tax breaks are temporary, they wouldn’t do much long-term economic harm either. That said, the president’s proposal would leave out 37 percent of households because they do not earn enough to pay income taxes. A credit against payroll taxes or, better still, increasing transfers to the low-income families most likely to spend the money — say, by temporarily increasing food stamps — would do more to energize the economy.

Burman also discusses the concept and value of moving the sunset for the Bush Tax cuts up from 2011 to 2009. This is rarely argued for, especially during an impending recession (maybe?). I hope this argument gets some traction and we can begin having a serious debate, not just about how to help stave off a recession now, but how to fix our government's fiscal condition going forward.
Best of all, this is one stimulus proposal that would reduce the deficit — the single largest threat to the economy’s long-term health. And that long-term benefit wouldn’t depend on our getting the timing and amount of stimulus right, something policymakers are notoriously inept at.

"A Center Called McCain" - Cohen 1/17/08

2008-01-17T08:45:00.000-06:00

An interesting, if a little bubbly, column on McCain from NYT columnist Roger Cohen. The column goes a little overboard on the McCain will give the GOP a fighting chance because of his allure to the middle. It would be impossible to disagree that he may appeal to more independents than say Mitt, but I'm not convinced he will be able to mobilize the core votes of the party. His attempts at winning over the evangelical movement has also tarnished this very independent streak that used to win over some middle of the road and/or good governance folks. I should know about this feeling of loss of a stand up governance kine of guy, as I would have probably supported and voted for McCain in 2000 if he had faced Gore (but not Bradley, he was my man).

The core of the column, however, isn't really focused on McCain's independent allure - but on his unwavering and single-mindedness on the Iraq war. Saddam’s nightmare ended in a misbegotten, mishandled, bloody and costly war. Does Bush’s fraudulent, blunder-ridden rush to war matter more than the prizing of 26 million human beings from a sadistic tyrant who modeled himself on Hitler and Stalin?

That core question has seldom, if ever, been dignified by honest debate through all the verbal Iraq wars fought on U.S. soil. I still believe Iraq’s freedom outweighs its terrible price. So does McCain. In the looming battle between the Baptist minister, the corporate whiz and the war hero — and perhaps Mr. 9/11 — to unite the frayed strands of Republicanism, McCain now has a fighting chance.

I think it is fairly obvious to the honest observer that Hussein was an atrocious leader, who unflinchingly resorted to fascist tactics when he felt the need. I'll be the first to say that Hussein was not a net positive for Iraq and getting rid of him could very possibly yield a better Iraq.

My concern with the war has always been the lack of thought put into planning (did the administration understand the Kurd-Sunni-Shia issue?), the failure to adequately explain the case to the international community, the rationale for going after a "bad leader" when there is no shortage of these options worldwide, and mostly the complete ineptitude of the current administration in executing the war and reconstruction effort.

"The Comeback Continent" - Krugman 1/11/08

2008-01-16T14:55:00.000-06:00

I truly am behind the times in getting to this excellent column by Krugman last week.
An all to common belief in America is that Europe's economy cannot compete due to high taxation, social safety net, and too much regulation. As Krugman points out, this may have been true thirty, or even twelve, years ago - but those days are passing away. Today's European Union is a vibrant economic actor on the global stage. The Euro zone's economy is already competing closely in size and scope with America's. So what has happened in Europe over the past ten years?
What European countries definitely haven’t done is dismantle their strong social safety nets. Universal health care is a given. So are a variety of programs that support families in trouble, helping protect Europeans from the extreme poverty all too common in this country. All of this costs money — even though European countries spend far less on health care than we do — and European taxes are very high by U.S. standards...

According to the anti-government ideology that dominates much U.S. political discussion, low taxes and a weak social safety net are essential to prosperity. Try to make the lives of Americans even slightly more secure, we’re told, and the economy will shrivel up — the same way it supposedly has in Europe.
If the EU where to bring the UK into the Euro zone (very unlikely), establish a more integrated (deeper) union via a strong constitution or supplant the dollar as the preeminent global currency a lot of things could change very quickly. I would argue that Europe's economy is in prime position to make a strong surge to the top of the global economy. With a strong social safety net in place, there is a lower risk of severe disruption of a large swath of the population's lives due to globalization when compared to America. Re-training programs, retirement benefits and health insurance are all issues that the majority of governments on the continent deal with in some manner.

Our American blend of exceptionalism has gotten us a long way, but our resistance to accepting the positives of the European model may just be our most exceptional mistake.

"From Hype to Fear" - Krugman 1/7/08

2008-01-10T10:29:00.000-06:00

On Monday, Krugman discussed the GOP fear mongers and their take on the economy.

He hits the nail on the head when he discusses the flip flops this group does when the economic climate changes.

When the economy is doing reasonably well, the debate is dominated by hype — by the claim that America’s prosperity is truly wondrous, and that conservative economic policies deserve all the credit.

But when things turn down, there is a seamless transition from “It’s morning in America! Hurray for tax cuts!” to “The economy is slumping! Raising taxes would be a disaster!”

My economic thinking has always been informed by a progressive ideal, by which the affluent support the economic system from which they are the primary beneficiary. Therefore, if there is a concern about the current level of economic security for the middle and/or lower socioeconomic classes, the first place to look is the affluent. As Krugman points out, however, there are a number of folks out there who will do anything to keep this issue from being framed in this manner.

But there’s a powerful political faction in this country that understands very well that any real change will create losers as well as winners. In particular, any serious progressive reform of health care, let alone a broader attempt to reduce middle-class insecurity and inequality, will have to mean higher taxes on the affluent. And members of that faction will do whatever it takes to scare people into believing that change means disaster for the economy.

I have often been confounded by the success of this group (the have mores) of playing the middle and upper middle classes against the lower middle class. I would argue that the current highest rate is not sufficient and that the threshold is too low. Maybe a $1M top bracket at 40%? I'm not sure of the exact values, but the current system allows too many of the upper middle to fear being moved into the upper bracket(whether or not that fear is justified is debatable).

"The Great Divide" - Krugman 12/31/07

2008-01-03T09:13:00.000-06:00

The last day of 2007 saw Krugman continue his recent fixation on anti-Obama positions. The column focuses on the GOP candidates economic policies generally, and the transmogrification of McCain specifically. The overall tenor of the piece, however, is a rebuke of the "transcending partisanship" argument promoted by the Obama campaign. Krugman discusses how the GOP nomination process shows that every contending candidate (with the notable exception of Huckabee) for the nomination has fallen in line with Bushonomics. If [bipartisan solutions] were possible, Mr. McCain, Mr. Romney and Mr. Giuliani — a self-proclaimed maverick, the former governor of a liberal state and the former mayor of an equally liberal city — would seem like the kind of men Democrats could deal with. (O.K., maybe not Mr. Giuliani.) In fact, however, it’s not possible, not given the nature of today’s Republican Party, which has turned men like Mr. McCain and Mr. Romney into hard-line ideologues. On economics, and on much else, there is no common ground between the parties.
It is amusing that a scant four years ago, there was significant discussion about whether or not the Dems were going to create an unelectable partisan out of a brutal nomination process, and now it appears that the GOP is actually heading down that road. The economy is struggling -- though analysts say it could go either way -- and the average American is feeling the pinch of falling home prices and stagnant wages. Cozying up to the Bush administration's policies doens't seem to be the most intelligent general election move, but I tend to agree with Krugman's assertion that this is what is to be expected out of the current Republican Party and it's blind "free market" economics.

"Trouble With Trade" - Krugman 12/28/07

2007-12-28T08:25:00.001-06:00

I find it refreshing that Krugman does not shy away from the issue of international trade by falling back on an exclusively economics argument. It is mostly true from a "pure" (whatever that means) economic argument that trade is a net benefit at the highest aggregation of stakeholders. It is, however, also true that even if the trade maxim that "trade will occur when it is mutually beneficial for both sides," does not offer guidance with respect to the component parts of the two sides involved in a trade. If the USA trades with Vietnam, economic theory says that both will gain something (The US gains cheaper goods, Vietnam gains the wages) -- but what it doesn't do is consider the effects on the individual within both units of analysis. Consider to whom the biggest benefit accrues in the case of a lower cost computer component. The less educated, lower wage American who used to make this part is a net loser as he/she doesn't have a job -- and their only benefit is to get a computer cheaper (which probably isn't high on the unemployed person's list). The more educated, higher wage American keeps his or her job, even if they are in the industry, because this is where R&D are done -- and they get a lower cost computer. This lower cost computer may only cost them 1.7% of their gross annual income instead of the 2.0% it would have otherwise.

I want to be careful not to sound overly protectionist, because I think that possibility is effectively off the table and that it unneccesarily rejects the basic economic rights of the individuals in lower wage countries. I think Krugman sums it up well with the following:

So am I arguing for protectionism? No. Those who think that globalization is always and everywhere a bad thing are wrong. On the contrary, keeping world markets relatively open is crucial to the hopes of billions of people.

But I am arguing for an end to the finger-wagging, the accusation either of not understanding economics or of kowtowing to special interests that tends to be the editorial response to politicians who express skepticism about the benefits of free-trade agreements.

It is tiring to listen to the "you don't understand" economics folks chanting at the thrown of free markets, and though I do not espouse all of the solutions proposed by the competing interests - I find this pulk-pull to be critically important for the contemporary political arena to hash out. Let us make sausage!

Friedman is on book leave...

2007-12-26T12:34:00.000-06:00

Today's NYT proclaimed that one of the duo on which this blog is focused is on book leave. This means a refocusing of the DBT is needed. I would love to proclaim that this has been the reason for my laxity in posting recently, but alas that was fecklessness. Hope the holiday/seasonal period is going well for all.

"After the Money's Gone" - Krugman 12/14/07

2007-12-15T12:03:00.000-06:00

If the subprime/credit/liquidity crisis is of interest, I would recommend reading Krugman's column from this past Friday. There are a lot of angles to be considered in the current market shake-up and Krugman focuses his column on some of the long term impacts and why they can't be fixed by the Fed's rate cut presription.

Krugman describes two of the biggest problems with the current crisis in succinct manner:

First, we had an enormous housing bubble in the middle of this decade. To restore a historically normal ratio of housing prices to rents or incomes, average home prices would have to fall about 30 percent from their current levels.
Second, there was a tremendous amount of borrowing into the bubble, as new home buyers purchased houses with little or no money down, and as people who already owned houses refinanced their mortgages as a way of converting rising home prices into cash.

This means that when (probably not if) house prices return to the historical norm then those who borrowed for a lot of the house cost (i.e. subprime borrowers) will be left with a house that is worth less than the mortgage on it. This is negative equity, which can lead to more foreclosures-- which are less likely to be able to recoup the costs to the lender-- which means more bank right offs of bad loans. (The financial blog Calculated Risk mentioned by Krugman is a helpful site to peruse to understand the size and scope of the coming negative equity crisis.) This is another example of a vicious cycle argument of economics and I believe shows how a free market will from time to time go to far. I'm not sure what the end of this crisis will look like, but if home values fall 10-30% there will be a lot of problems for homeowners, lenders, borrowers, and the economy in general. (A potential positive side effect may be to inform homeowners that home equity loans to support personal consumption aren't a good idea in the majority of cases.) In addition, this will hopefully teach some a lesson that these bad lending, borrowing, and consumption practices can't always be fixed in a reactionary method by the Fed... we either need to regulate up front or accept these severe consequences as a part of the free market in real estate transactions...

Markets won’t start functioning normally until investors are reasonably sure that they know where the bodies — I mean, the bad debts — are buried. And that probably won’t happen until house prices have finished falling and financial institutions have come clean about all their losses. All of this will probably take years.

Meanwhile, anyone who expects the Fed or anyone else to come up with a plan that makes this financial crisis just go away will be sorely disappointed.

On Vacation

2007-12-06T15:59:00.000-06:00

AM donkey is on vacation this week. Enjoy your early December. Remember the Neediest!

“Winter of Our Discontent” – Krugman 11/26/07

2007-11-29T15:30:00.000-06:00

On Monday, Krugman delivered an insightful piece concerning public opinion on the economy featuring information from a recent Gallup poll. I won’t delve into the public opinion stuff too much here, but a table that might interest you follows:

I think it is obvious there is a problem when two out of three self identified Republicans think the economy is getting worse. This isn’t nearly as partisan as the Bush administration would love to make it. The fact is that inequality is growing and wage gains are not keeping up with inflation. This combined with the current mortgage crisis, is yielding a significant portion of the population facing a significantly reduced purchasing power. Krugman alludes to this big issue of inequitable distribution of wealth generation - when he points out that the unemployment numbers are not that much different now than the late ‘90’s, yet the views of the average American are exceptionally different.

“Today by contrast, wage gains for most workers are being swallowed by inflation. In fact, the reality for lower- and middle-income workers may be worse than the official statistics say, because the prices of necessities like food, transportation, and medical care are rising considerably faster than the [CPI] as a whole.”

I can speak from personal experience in confirming that transportation and food are definitely rising faster than my CPI adjusted wage increase. I am fortunate enough to be less reliant on the box grocery stores (which I still use) and thus, the petroleum driven price increases in them. These increases have taken less of a hit on my wallet, but I am sure the increases are more than 3% over last year. Krugman goes on to directly state that just getting another Democrat as president will not solve all the problems. We still must address this continual income rift between the upper and lower class. We must also recognize the importance of some form of health care reform. Perhaps the golden nugget of the entire editorial, however, is a hint of one of the big potholes ahead for the Democrats in 2008.

“And there are good reasons to think that the negative effects of globalization on the wages of some Americans are larger than they were in the ‘90’s. That’s a hugely contentious issue within the progressive movement, with no easy resolution. I’ll write more about it in the months to come.”

I am sure this will be a contentious issue and will likely change the structure of the Democratic Party in the future. I look forward to seeing what Mr. Krugman has to say.

“The Real Rudy” – David Brooks 11/23/07

2007-11-29T14:49:00.000-06:00

I watched a brief portion of the Republican YouTube debate on CNN last night. The issue of immigration came up (I understand it continued to do so throughout) and I was reminded of this David Brooks editorial from last week. The editorial focuses on Rudy G., and his apparent flip-flop from vigilant pro-immigrant NYC mayor to xenophobic authoritarian candidate. This transition has really manifested itself mostly in the past year, and to any serious follower of politics appears to be rooted in pandering to the perceived GOP base. Brooks selects numerous quotes from Giuliani’s past to highlight this change.

I am normally not a big fan of “gotcha” politics or journalism, but I am enthralled by the amount of backpedaling going on from several GOP candidates on the issue of immigration. Romney and Giuliani are the leaders in this reversal in direction from their earlier executive actions to the new “get’em out” mentality.

“At the moment, Giuliani and fellow moderate Mitt Romney are attacking each other for being insufficiently Tancredo-esque. They are not renouncing the policies they championed as city and state officials, but the emphasis as they run for federal office is all in the other direction. In effect, they are competing to drive away Hispanic votes and make the party unelectable in New Mexico, Arizona, Colorado, Nevada, Florida and the nation at large.”

I do believe that this ideological stance on an issue so personal to so many citizens is not in the long-term best interest of the GOP or the nation as a whole. The growing Hispanic population is an important part of America and to treat them as the “unwanted other” is to give way to xenophobic fear mongering at its worst. I do not proclaim to know the answer to the immigration issues that are facing America today, but I am confident that the vitriol being put into the “political debate” by the GOP candidates does not have a place in true political discourse. I should point out that I thought Huckabee and McCain were much more political in their responses that I heard on this issue. I never thought I would say that Huckabee seems more desirable and moderate at this point than Romney or Giuliani...

“Coulda, Woulda, Shoulda” – Friedman 11/14/07

2007-11-14T10:48:00.000-06:00

Today’s column by Friedman on energy policy should be mandatory reading for all political candidates. The basic premise of the opinion is that America has failed to act in a coherent manner with regards to energy (i.e. oil) policy. Specifically, Friedman points out the drastic increase in oil prices from September 2001 through November 2007 (350%), which can largely be attributed to the increased global demand for oil. This increased global demand is significantly related to America’s failure to reduce its’ demand and developing nations (e.g. China and India) adopting the American developmental model with respect to energy policy (see 11/9 post). The real underlying issue Friedman has with the current policy is that America has blindly relied on market forces to guide energy policy, but in a situation as complicated as energy policy the market fails to consider all the costs and benefits of a transaction. In a completely free market there is no obvious incentive to the individual driver or company to reduce oil reliance because the benefits that accrue from such decreased reliance are to the nation-state and society at-large and not the discreet economic unit. The societal costs of additional pollution is not part of the transaction, nor are the implications on geopolitical stability and sustainability calculated (directly) into the spot price of West Texas sweet crude.

The question is how do we get these costs considered in each transaction? One method would be to get individual consumers to price in these costs on their individual consumption behavior. Though laudable, the aggregate effects of this change will likely be nominal due to the overwhelming costs of an educational drive and also due to the low participation rate in such a program. The low participation rate is economically understandable, because there is no rational economic disincentive to the behavior in question. This is where a second method of regulating the market comes in: taxes. Of course using taxes to modify behavior is never very politically palatable, but this is when a truth telling politician (don't laugh) is needed. Friedman argues we need a candidate (a Democrat in his mind, and probably the only hope at all) to speak to this issue in a clear and truthful manner.

“DEMOCRATIC CANDIDATE: “Yes, my opponent is right. I do favor a gasoline tax phased in over 12 months. But let’s get one thing straight: My opponent and I are both for a tax. I just prefer that my taxes go to the U.S. Treasury, and he’s ready to see his go to the Russian, Venezuelan, Saudi and Iranian treasuries. His tax finances people who hate us. Mine would offset some of our payroll taxes, pay down our deficit, strengthen our dollar, stimulate energy efficiency and shore up Social Security. It’s called win-win-win-win-win for America. My opponent’s strategy is sit back, let the market work and watch America lose-lose-lose-lose-lose.” If you can’t win that debate, you don’t belong in politics.”
The likelihood of any serious candidate making this kind of statement is slim, but just because the current political actors aren’t willing to say it does not mean it is without value (an argument could be made that precisely for this reason it has value) Americans need to realize that continued (over) consumption of oil has a number of negative externalities coming to bear on each additional barrel of oil imported from abroad. It is my opinion that the best method to address these concerns is through a fuel tax. I understand that this tax would be inherently regressive, but this could be addressed through a phase-in and/or a temporary (I know this is hard to do) fuel tax income tax credit. Taxes have their place, and though modifying individual behavior may be the most desirable, sometimes a little government intervention can get the ball rolling.

Take this as my personal call to arms for a Geopolitical Social Cost Benefit Analysis of US Energy Policy. There has already been an outcry for including a tax on oil that would incorporate the social costs of pollution, but I argue here that we must consider the geopolitical consequences of continue reliance on foreign oil from unstable regions. An extension of the current policy, leads to America in a showdown of increasing demand with China and/or India for a stagnating world oil supply.

“Health Care Excuses” – Krugman 11/9/07

2007-11-13T16:20:00.000-06:00

Last Friday (before taking a sick day Monday?), Mr. Krugman offered a quick rebuttal to four of the favorite talking points for apologists of the current American health care industry. Krugman does a good job of deconstructing these four arguments into recognizable one-liners that reverberate through contemporary American culture:

1. No Insurance, No Problem
2. It’s the Cheeseburgers
3. 2007 is better than 1950
4. Socialized Medicine! Socialized Medicine

Point #1 is a true statement, if by health care you mean emergency care at a hospital. It is not true, however, if you are attempting to seek preventive care from most clinics or if you are seeking mental health treatment. This isn’t to say you can’t get this care without insurance, but the vast majority of Americans without insurance (the working poor) cannot afford it. Krugman highlights some of the other flaws with this logic:

We’re told, for example, that there really aren’t that many uninsured American citizens, because some of the uninsured are illegal immigrants, while some of the rest are actually entitled to Medicaid. This misses the point that the 47 million people in this country without insurance are an ever-changing group, so that the experience of being without insurance extends to a much broader group — in fact, more than one in every three people in America under the age of 65 was uninsured at some point in 2006 or 2007.

The “they are all illegal immigrants” and the “they might be coverable by Medicaid” are both arguments used to prop up a failing national health care policy. Are some of the 47 million uninsured in this country illegal? Probably so. Are others eligible for Medicaid? Almost undoubtedly. Do these two groups sum to 47 million? Definitely not. I know I spent a portion of 2006 uninsured, as I’m sure many professionals in between jobs or returning to school can attest – there are a lot of uninsured Americans out there who have no viable method of securing health care coverage.

Point #2 illustrates the argument that our health care costs are higher because we take on a heightened amount of risky behavior and lifestyle choices. We eat too much and don’t exercise; We drive to fast; and We saturate our lives with stress. This sounds like a great reason for an expensive health care system, but a McKinsey Global Institute report begs to differ. The report finds Americans are not significantly sicker than other countries studied.

As to #3, well to be as kind as I can be --- that is just stupid. Of course we have improved health care immensely over the last half a century, but we’ve have an even more amazing increase in knowledge and ability regarding computers and that has led to more access and lower costs.

Point #4 is the final corner of retreat for at least a quarter of all American politicians on any issue – “Program X is socialist, commie, pinko, over-regulated, inefficient, non-market based, abandons individual responsibility, and is bad for the economy.” These politicians will continue to spew this vitriol about these programs, until you bring up Medicare. Then they talk about how it’s such a wonderful program for our elderly population.

We have both supply and demand issues in America’s health care policy, but maybe it is time to start considering solutions instead of continuously giving heed to reactionary politicos and pundits who haven’t been without health care in at least twenty years (if ever). America already pays for premium health care, isn’t it time we give access to it to all Americans?

“No, No, No, Don’t Follow Us” - Friedman 11/4/07

2007-11-09T08:42:00.000-06:00

What happens if India’s population starts driving at a rate close to that of America? I’m not sure of all of the consequences, but I agree with Friedman in thinking that it just isn’t likely to be a net postive. The factor driving (pun intended) this issue is the release by Tata Motors of India of a new $2,500 car, which will make a personal automobile a reality for millions of Indian families. It is hard to be the judgmental American on this issue, but developing nations need to understand that this is one area where America’s development model is very seriously flawed. In many ways the USA and China are in better form to handle this new domestic oil demand than India, because both of the former have significant reserves and domestic production. India, however, imports more than 70% of its oil and has virtually no strategic reserve. This means that as oil prices continue to increase and Indians continue to buy more $2,500 cars and thus increasing demand, India will see a larger percentage of its’ wealth shipped to the oil rich countries of the world.

This issue is awash in environmental concerns, both for India and the world as a whole. Additional issues include, India’s economic health, trade surplus, and perhaps the biggest cost, which ties all of these concepts together – the opportunity cost of Indian innovation working on a major problem of the world. Friedman is a champion of Indian innovation, and it is difficult to argue against the following thought:

“If it applied itself to green mass transit solutions for countries with exploding middle classes, it would be a gift for itself and the world... To do that it must leapfrog. If India just innovates in cheap cars alone, its future will be gridlocked and polluted. But an India that makes itself the leader in both cheap cars and clean mass mobility is an India that will be healthier and wealthier. It will also be an India that gives us cheap answers to big problems – rather than cheap copies of our worst habits.”

It would be wonderful if the world started solving the developmental problems that the American model of development has perpetrated. I am mostly concerned with this logic in the fact that if the Indians solve the issue, I’m not convinced America will take to it. We love our cars -- $100 barrel oil, despotic regimes, and declining discretionary income be damned. Until Americans are ready to make some sacrifices in giving up their single occupancy vehicles, we aren’t going to solve our transportation issues – but I guess there is hope for the rest of the world.

“Wobbled by Wealth?” – Krugman 11/5/07

2007-11-07T12:09:00.000-06:00

Are the Democrats becoming corrupted by the influx of cash from wealthy supporters? This question is becoming more pertinent in the Democratic Party, as for the first time in recent history; the Democrats have raised more cash than the GOP from the business world. Are the Democratic officials selling out their progressive base by accepting the largesse of corporate America, or are they taking advantage of a political opportunity to broaden the power base?

The answer to this question will likely not come until sometime after 1/20/09, when a new president (likely Dem) will be able to develop an agenda for the nation. Will this agenda feature a more equitable tax structure with fewer loopholes and deductions for the rich? Will health insurance reform see the light of day? Will insurance reform to ensure that long-term policyholders aren’t dropped without cause become law? Or will hedge fund managers call on Mr. Schumer, drug companies on Hilary, and insurance on Mr. Dodd? Though this sounds a bit doomsdayish, the biggest concern I have is that progressives will fail to support the Democratic Party because they view it as the same as the GOP. Krugman hit the nail on the head on this point:

“O.K., some perspective. I sometimes hear people say that there’s no difference between Democrats and Republicans; that’s foolish. Look at the fight over children’s health insurance, and you can see how different the parties’ philosophies and priorities really are. All of the leading Democratic candidates are offering strongly progressive policy proposals; the Republicans are, if anything, running to the right of the Bush administration.

Perspective is key here, and I am not convinced that the Democratic presidential hopefuls are completely devoid of progressive principles. They have shown a willingness to at least espouse progressive ideals on the campaign trail. I am, like Krugman however, worried.

I have hope that opening the doors to business will generate immense electoral gains, arguably solidifying a governing coalition that can make a positive globalization effect for America into the future. I also have my concerns - Business is a bit of a serial monogamist, where nothing is forever. If the Democrats pursue this path of working closely with business, they may just cut some of the power out from under themselves were they to pursue a progressive agenda viewed as too extreme by the business community. Conversely, if they pursue an overly business friendly agenda, the possibility of losing unions, labor, and progressives is also real. I don’t believe in entrenched party lines, as they tend to make compromises more and more difficult as absolutes are embedded in party platforms. I do, however, find some cause for concern when the party that is stopping big boy hedge fund managers (all 150 of them) from being equitably taxed on their sizable income is the same party that for years has claimed to represent all the little guys out there.

"Did We Do That?" - Friedman 10/28/07

2007-10-28T21:01:00.000-05:00

Today, Friedman penned a column on global warming and climate change that focuses on the question as to if certain cataclysmic events that are occuring (e.g. Southern California fires) are directly the fault of mankind. The idea that a specific event is atrributable to global warming is a stretch, to say it is specifically attributable to human action is even more difficult. It is, however, important in my mind that these types of anecdotal connnections be made in the general imagination of the populace. The thing that I find resonates most for people is when they think about the things they or their loved ones have seemingly noticed changing over time -- Be it the later freeze or the earlier thaw of farmers or the ability to golf in November in the suburbs of Chicago. These discreet events are what powers our imagination, which can lead to a collective consciousness that realizes there is a cost to our actions.

There is no completely conclusive evidence that a catastrophic and tumultuous weather period lies in wait, but as Friedman and his interviewees point out -- Weather change is occuring and if these disastourous events do continue to come in higher than expected frequencies, we are severely lacking in our infrastructure to handle these issues:

"Getting society focused on meeting these new infrastructure needs is huge. Our creaky power grid or leaky water pipes really matter in prolonged, record-shattering droughts like the one Georgia is now experiencing. “Some scientists have suggested giving droughts names, like we do hurricanes,” Ms. Cullen noted. “If we did, this Southeast drought would be called Katrina, and it would be about to hit Atlanta."

The failure of the world (with the likely exception of the Dutch-- they've been ready for years) to address how we will handle a 3 inch rise in ocean levels and the inablility to recongize the critical importance of having a water distrubution system that can handle and accommodate a severe drought are two (there are many) examples of how we are not preparing for what may not be certain but is becoming more and more likely.... and you just don't build flood walls overnight (just ask the Dutch)!

2007-10-25T14:43:00.000-05:00

I know, I’m not keeping up on my promises of posting twice weekly... maybe I should run for office? In the meantime, I’ll offer an interesting NYT editorial that promotes a nifty little site that can keep you busy.

“The site features not just the expected arguments, like how government protects the rights of the disadvantaged, but discussions of why capitalism requires government, and a spirited defense of bureaucracy.” (emphasis mine)

I am consistently confused by the Reagenesque “government is the problem” mentality. Of course it is the problem, sometimes – while other times the problem is lack of adequate health care for an increasingly growing underclass – other times it is an issue of individual choice. There are lots of problems in the world, but eliminating an institutional arrangement that has overseen the greatest increase of inclusive self-deterministic growth is just plain silly. Return to feudalism, anyone?

“Death of the Machine” – Krugman – 10/19/07

2007-10-19T13:08:00.000-05:00

Friday's NYT has Krugman discussing corporate campaign financing via K Street.The ability of the Republican Party to raise significantly more funds, especially from the business community, has been considered a given over the last few election cycles. The methods of Rove and elected Republicans, such as Santorum, to garner a permanent majority were predicated on the ability to grossly outspend opponents in elections. The current election cycle is strongly challenging this given, as Democrats are receiving more funds from each of the top ten industries in America. The question at the core of this issue is why is corporate America abandoning the GOP at this rate? The easy answer is political calculus. This argument holds that businesses know how to read the signs of an impending bomb of an election for the GOP in 2008. With 22 of the 34 contested Senate seats held by Republicans, a wave of GOP retirements in the House, and a lackluster presidential field the corporate world is quite simply hedging on the likelihood of a unified Democratic government for the first time since 1993. This calculus, along with the business community getting tired of seemingly being held hostage by the Republican Party, are two of the likely reasons for the funding shift.

Another possible cause of the growing gulf between business and the GOP is the lack of competency by the current administration. Though it is hard to argue that Bush has been unfriendly to business, his actions and policies have not exactly been the most conducive to growth and stability in the national and world economy. Disruption, volatility, and incoherent policies are bad for business, and the current administration has had no shortage of any of the three.

I would add two additional reasons for this growing disaffection between GOP and business. The first is that as the GOP maintains its intimate relationship with social conservative organizations and groups, the business community is forced to recognize that the GOP isn’t always with them – but occasionally must pander to the vote base. A singular example of this issue is the public financing of research facilities for stem cells – here in Madison the business community is very receptive to the idea, while the religious organizations are vehemently opposed. The final reason, and most disturbing, that I can come up with regards to business money flowing to the Dems instead of the GOP, is that the Democratic National Committee and the presidential candidates are viewed as in the pocket of big business.

Krugman, I think, would disagree with this last point being intentional, but he recognizes it as a real possibility:

“Many progressives, myself included, hope that the next president will be another F.D.R. But we worry that he or she will turn out to be another Grover Cleveland instead – better-intentioned and much more competent than the current occupant of the White House, but too dependent on lobbyists’ money to seriously confront the excesses of our new Gilded Age.”

The idea that a Democrat may be well intentioned, but unable to make some necessary politically bold moves seems more likely when the influx of corporate dollars is noted. The business community is often inherently conservative in nature – along with being enemies of volatility and incoherent policies; they also fight against change and any policy that is assumed to be harmful to the bottom line. I am, like Krugman, very concerned that we have established such a low baseline over the past seven years for leadership, that the progressives in America will rally behind a candidate that is primarily financed by some of the very industries (pharmaceuticals and insurance) that are most impeding necessary social changes.

“Sliming Graeme Frost” – Krugman – 10/12/07

2007-10-17T07:00:00.000-05:00

Last Friday, Paul Krugman took issue with the lambasting of Graeme Frost at the hands of the right-wing media machine. It is frustrating for me to watch our political discourse continually fall to this level. I loathe the carelessness in the media of presenting information and the corresponding laxity with which the populace consumes it. Though I am unwilling to exclusively condemn one side of the political spectrum, it does seem that this program of personal attacks by innuendo and lies is utilized entirely too often by the “mainstream” conservative pundits. Krugman points out that these are not “fringe elements” within the right wing media, but folks like Limbaugh and Malkin who are often cited and greatly respected (within their portion of the spectrum) sources of political information.

Believe it or not, I think America needs these folks on the right to stir the political pot with their perspective. The unfortunate reality is that this role of biased (not in a bad way) media outlets is being, along with many other aspects of our discourse, continually polarized where the other side cannot be given quarter at any time. This mentality is, in and of itself, not political – but a zero-sum war game where by one side always wins and the other loses. This is to me one of the biggest failures of a portion of the political spectrum that claims to be so pro-business. The failure to recognize a basic premise of economics - that win-win outcomes are where the most value is added – informs me that there is little interest in making America better in aggregate. The point is to make America better for a certain constituency.

“Politics aside, the Graeme Frost case demonstrates the true depth of the health care crisis: every other advanced country has universal health insurance, but in America, insurance is now out of reach for many hard-working families, even if they have incomes that some might call middle class... ultimately, this isn’t about the Frost parents. It’s about Graeme Frost and his sister. I don’t know about you, but I think American children who need medical care should get it, period. Even if you think adults have made bad choices – a baseless smear in the case of the Frosts, but put that on one side – only a truly vicious political movement would respond by punishing their injured children.”

Thank you Mr. Krugman. This is not as much of a political issue as it is an ethical one. I, along with many others, have lived through a childhood of no health insurance coverage. Children in these positions are exposed to countless health issues that if treated or addressed at an early age may not have a serious impact on their lives, but left untreated we put these kids at a health disadvantage as they enter adulthood. I guess our land of equal opportunity doesn’t apply to health, or education, or dynastic wealth....

“Generation Q” - T. Friedman – 10/10/07

2007-10-11T18:31:00.000-05:00

On Wednesday, Thomas Friedman penned an op-ed piece that is quite appropriate for the initial post here on Donkey Behind The Times. The column focuses on college age and other young (I’m assuming up to about 35 here) Americans and their methods of influencing the world. Generation Q, according to Friedman, means “the Quiet Americans, in the best sense of that term, quietly pursuing their idealism, at home and abroad.” The main thesis is that though our generation is idealistic and optimistic, we are failing to become as engaged (and enraged) as we should be on the political scene. I have to agree that our generation is seemingly abandoning the political arena for the opportunity to affect social change at a more micro level. We are guilty of promoting our ideas, thoughts and networks via the internet (irony point for me), in lieu of the old-timer method of grassroots organizing (As in, we can all stand together on the same grass and conduct an in your face protest – not join a defunct-on-creation Facebook group). We are also caught up in “grassroots” social behavioral change, by which I mean to lower CO2 emissions we change to fluorescent bulbs at home and buy a Prius. These methods are commendable and essential parts of improving the world, but unfortunately the most prolific changes need to be implemented from the top. This is not to say that the idea should (or is likely to) come from the top, but engaging and influencing politics can get our generational values injected into public policy. I am aware that the term “our generation” tacitly implies that we are all on the same page politically, which I am 100% sure is untrue. I do, however, believe that we are failing to address issues that will affect each and every twenty-something for the rest of our lives. Friedman points to three questions that “Generation Q” needs to be asking of political leaders:

“What is your plan for mitigating climate change? What is your plan for reforming Social Security? What is your plan for dealing with the deficit – so we all won’t be working for China in 20 years? America needs a jolt of the idealism, activism and outrage (it must be in there) of Generation Q. That’s what twentysomethings are for – to light a fire under the country.”

Word to your moms, Mr. Friedman! These three questions should be at or near the top of our “to fix” list. I also have to admit that I found the deprecating term, “Greediest Generation,” applied by Friedman to his own cohort to be an interesting choice of terminology – of which I concur to a great extent. They have left us with many debts to pay; the longer it takes for us to influence action the more interest is accumulating.

PS: If you happen to be in the “Greediest Generation,” please don’t take this as a personal affront, there are numerous reasons that these failed policies have been created and promulgated. Instead of feeling berated by the young, consider engaging us – we aren’t as stupid as you think we are.