Politics and Professional Advancement Among College Faculty

A new study released this week claims to have found evidence of political discrimination in hiring . I have to read the study more closely before I provide any coherent commentary but I was sorry to see Roger Bowen of the AAUP complain that the survey was no good because the sample size was too small. They surveyed almost 1,700 professors at 183 schools. Seems sizable to me. The more important questions go to how the sample was drawn. And whether the variables included in their regression, as well as the model itself, control for endogeneity. The model controls for how accomplished a faculty member is (potential measurement error there) and finds that the second strongest factor explaining the prestige of a faculty member's institutional affiliation is whether he or she is a conservative or not. What is not clear is whether the authors were able to control for the possibility that conservative faculty select conservative institutions. If they are religious, they may want to teach at a less prestigious religiously affiliated school. Or if they are conservative, they may prefer to work at a George Mason rather than a Harvard.

There is a good deal of anecdotal evidence that political orientation is an important factor shaping life on a college campus. A friend who had conservative Harvey Mansfield as the chair of his dissertation committee felt he was having a hard time getting a job because of his advisor's politics. But then this friend got job offers at Williams and UCLA in the field of political philosophy -- not an area with booming job opportunities these days. The National Association of Scholars complaint that academe is coming to resemble a religious creed certainly finds support in the reactions to the Summers affair. But I am not sure it has yet been demonstrated that conservative students are discriminated against in the classroom or that bias accounts for hiring patterns and the distribution of political affiliations. I would be surprised to walk onto the trading floor at Goldman Sachs and find more than 25% of the people there were Democrats, but I wouldn't come rushing out screaming discrimination in hiring. There is a fair amount of self selection into academe. Then again, a lot of that has to do with the fact that academia requires some rigor in thought and much of the conservative movement hasn't demonstrated much of THAT these days.

This week the Heritage Foundation is hosting a speaker who is an advocate of creative design or whatever it is that they call it. I suppose one way to look at this is to say, "my, look how broad-minded they are that they can entertain such a diverse viewpoint." But I wonder if we would say the same thing if they also had a speaker arguing that the world was flat? Ezra Klein reminds us that Bush thinks the jury is still out on evolution and Dr Frist in the Senate fears that AIDS can be transmitted through tears (not to mention that as a heart surgeon, he can also practice neurology through 4 minutes of edited video).

Personally, I like Brad DeLong's take on it:

"It's acceptable in academia to be a Democrat. It's acceptable to be a libertarian. It's simply embarrassing to be a Republican."

Lion's Eat Their Young. Republicans Eat Everybody, Even Their Elder Statesmen

The Club for Growth issued a press release yesterday attacking Republican Lindsey Graham for daring to suggest that a possible fix for Social Security might include an increase in the amount of income subject to the payroll tax. US Newire: "New Ad Campaign to Target TaxHiking Republican..." Of course what they don't mention is that this would be a tax increase only on those individuals who make more than $90,000 a year. That's probably about 160,000 households in the state, or a whopping 10-12% of South Carolina families. This will help Bush's relationship with Lindsey how exactly?

What's Going to Happen To Political Coverage in This Country?

Recently, the Supreme Court refused to shield newspapers that report false charges by others. At issue, a Pennsylvania paper which reported that a politician accused rivals of being child molesters.

Instead, the justices let stand a Pennsylvania Supreme Court ruling that a newspaper can be forced to pay damages for having reported that a city councilman called the mayor and the council president "liars," "queers" and "child molesters."

The case turned on whether the 1st Amendment's protection of the freedom of the press includes a "neutral reporting privilege." Most judges around the nation have said the press does not enjoy this privilege.

Lawyers for more than two dozen of the nation's largest press organizations, including Tribune Co., which publishes the Los Angeles Times, had urged the court to take up the Pennsylvania case and to rule that truthful news reports on public figures deserved to be shielded.

They said politicians have been hurling false and damaging charges at their rivals throughout American history. The press cannot do its duty to inform the public if it is not free to report what public figures say, they argued.

But the Pennsylvania Supreme Court said the press has never "enjoyed a blanket immunity" from being sued over stories that print falsehoods that damage a person's reputation. The law "has placed a burden (albeit a minimal one) on the media to refrain from publishing reports that they know to be false," the Pennsylvania court said.

What is going to happen in the future when the Swift Boat veterans and the National Guard veterans trot out their charges? What about hose votes to raise taxes, to cut spending, to do this or that? What will become of politics if we ask the press to try and report the truth. Shock! Horror!

So That's Why They Call It the BIG TEN!

All season long, one of two complaints I heard most often were 1) how weak a basketball conference the Big Ten had become, and 2) how Illinois was over-rated because they played in a weak conference. Analysts liked to point out how good both the ACC and the Big East were. So let's look at the NCAA Tournament results shall we? Three of the teams in the Elite Eight, playing for the regional finals, were from the Big 10. No other conference had more than 1. Two of the Final Four teams are from the Big 10.

So maybe Illinois is that good after all?

The New York Times: Report Says Medicare Is in Poor Fiscal Shape

What am I missing? The Trustees of the Social Security Administration released a report yesterday which showed that Medicare runs into solvency issues much faster than Social Security -- something we already knew.

"the trustees emphasized, as they did last year, that Medicare's financial outlook was "much worse than Social Security's" and predicted that the monthly Medicare premiums paid by almost all Americans 65 and older would rise by 12 percent next year after a 17 percent increase this year."

"The trustees said they saw a small improvement in the condition of Medicare's hospital insurance trust fund. They forecast that it would be depleted in 2020, one year later than was predicted last year."

"The trustees predicted that "Medicare's cost will first exceed Social Security's in 2024" and will then grow rapidly as a share of the nation's economy."

Medicare premiums have risen 33% since 2003 with another double digit increase forcast for 2006. They have risen from about $60 in 2003 to about $90 in 2006. And that won't include the additional premium for prescription drugs that kicks in soon, expected to be about $35.

So why are we to believe that the major policy crisis facing this country now is Social Security and not Medicare, the health care system, or something like Global Warming? By 2024 spending on Medicare will actually exceed spending on Social Security and by 2041, the forecast date at which the Trust Fund is depleted, it will comprise a significantly greater share of GDP than Social Security. What am I missing?

Oh, that's right. The opportunity to finally dismantle Social Security. I keep forgetting.

(This last link takes you to the White House Strategy Memo on Social Security which was leaked)

"For the first time in six decades, the Social Security battle is one we can win -- and in doing so, we can help transform the political and philosophical landscape of the country. We have it within our grasp to move away from dependency on government and toward giving greater power and responsibility to individuals."

Maybe They Should Call It the Middle Ass

OK, it’s time for me to offend my readers, particularly those middle class women struggling with parenting and life. But one of my pet peeves is when social elites portray their personal problems as endemic of broader social problems in society. What am I talking about?

Terry Gross, whose show I usually admire, occupied me last night while I was doing the dinner dishes. Her guest was Judith Warner, the author of the new book Perfect Madness: Motherhood in the Age of Anxiety. Fresh Air features this quote on its website plugging the interview -- ‘In it she writes about the "choking cocktail of guilt and anxiety and resentment and regret" that is poisoning motherhood for American women.’ Warner decries the cultural expectations she felt -- that mothers were expected to lose themselves in their children. During the interview, Gross asked her about the anxiety she experienced and she replied as follows:

"Most of us apply the same drive and competitive spirit that we have put into our work and all of our lives and put it into parenting. Many of us, having been socialized a certain way all our lives, don’t know how to do anything else. We don’t know how to stop achieving or how to slow down or how to relax because we never have done those things. When we are mothers we take the mode of being that we have had throughout our lives and continue our lives and generalize it into the act of work or motherhood."

Most of us? We? Are we expected to think she speaks for all American women collectively?

I am sorry but I find it hard to accept that this is a pressing social problem that needed to be addressed by Nightline, Time Magazine and Fresh Air and I find it a sad commentary on the narcissistic self absorption of the middle class that this book has risen to the top of the best seller list. Warner comments that after several years as a stay at home Mom in the suburbs of DC, she found herself obsessing about planning birthday parties or whether her oldest daughter should have a fuller collection of pre kindergarten skill books.

I see this as a sad example of anecdote masquerading as social study. If you look at the statistics on TV watching by American families, the numbers on obesity among American children, the performance of students on state assessment exams, and the woeful lack of preparation of entire student bodies on college campuses across the land, you quickly realize that over-parenting is not one of the pressing social problems of our time. Nor is obsession about child rearing a broadly shared social or psychological disorder. If our society suffers from anything it is a lack of involvement and attention by the broader numbers of American families in the lives and education of their children. We live in a world of finite resources and we cannot maximize simultaneously on all dimensions, so if we must pick our battles, why must they be the struggles and pre-occupations of the most elite in society? Those who went to the best schools, who wanted the best jobs, who wanted the most impressive spouses, who wanted to be successful and famous and wealthy, have enough already. Must their problems also occupy our policy makers? Probably, he answered himself, since our policy makers draw from the same crowd.

I don’t mean to be overly critical of Warner. She has some good points. Having lived and worked in France while stationed there for Newsweek, she experienced the blessings of the French welfare state in a way few parochial Americans could appreciate. She saw firsthand how the 35 hour work week left both her and her husband more time with their children (ironic that she should observe this the same day that the French do away with the 35 hour work week). She appreciated how significant government subsidies and tax breaks made it affordable for her and most others to afford trustworthy day care so they could continue at their jobs or add some further dimensionality to their lives if they were stay at home Moms. A lot of what she says about the inappropriate uses of guilt in parenting and how it can warp a parent’s best intentions are right on. She comments sagely on the need to set boundaries between children and parents for the sake of the parent’s sanity and the child’s well-being and sense of self and independence. And then, of course, she can’t be all bad if she co-authored with Howard Dean the book You Have the Power.

But Warner’s work is endemic of a broader social phenomenon that should be troubling but is unlikely to draw notice except from the most self conscious of our social elites. William Bowen at the Mellon Foundation typifies this. He has sponsored a whole cottage industry in this vein. When he writes about the problems in American higher education, he is really speaking about issues at the top 15-20 universities and liberal arts colleges in the country. He wrote a book about affirmative action and interviewed only students who attended these schools. He took on college athletics, but which schools did he study and what was his angle? How admissions spaces reserved for athletes were denying opportunities for able students at the best schools such as Amherst, Williams, Princeton, Yale and others. At my current institution, the entire football program is on trial. At most Division 1A schools, millions of dollars are generated from the labors of mostly minority athletes who are generally discarded after a few years without having received much of an education. When Bowen sponsors research by others, his grantees go off and study the same schools. One recent study done by some Harvard economists looked at that pressing social issue of early admissions policies among the most elite colleges and universities.

Mellon’s grants typify an entire stratum of our society who mistakenly think of themselves as part of the challenged middle class but who actually comprise the most gifted and fortunate among us. These are the same folks who worry that one of the most pressing educational issues is the increasing competition to get into the best college or prep school or preschool. The folks who are preoccupied with anxiety, not that they are falling out of the middle class, but that their lives might actually become middle class. Meanwhile, most Americans attend public colleges and universities. 80% of all institutions of higher education have no admissions standards whatsoever. The average age of a college student is the middle to late twenties. Higher education is swamped with increasing numbers of non-traditional students who very much need more education to maintain their social level in our shifting labor force.

Pundits liked to mock John Edwards’ talk of two Americas. But it is more and more clear that our society is dividing into the Haves and the Have-nots and their experiences bear no relationship to each other. The problems of the Haves bear no significance to the vast majority of Americans who are struggling to get by in the face of downsizing, technically imposed redundancy, and foreign outsourcing. But their problems occupy the attentions and resources of our policy makers to an inordinate degree because our policy makers are so deeply rooted in and surrounded by the world of the Haves, they only experience the Have-nots as characters in a ER episode. Sometimes it seems our ship of state is sinking and all anyone can talk about is how expensive deck paint has gotten.

George Bush's Culture of Life Snuffs Another One

OK. So Georg Bush flies off to Washington to sign the Schiavo bill (when the bill could have been flown to him) as a gesture of his embrace of the culture of life. Meanwhile, as Mark Kleiman noted, a little boy's life was ended against the wishes of his parents by hospital staff and administrators who decided nothing more could be done, (pregnant pause) for free. HoustonChronicle.com - Baby born with fatal defect dies after removal from life support.

Polls indicate that most Americans see Republican grandstanding on this issue for what it is. My question, is why won't evangelicals and other conservatives accept that George Bush signed a law which expressly allows hospitals to withdraw all care (including feeding tubes) against the wishes of the family? Maybe that's because this has gotten so little attention in the press. Any maybe it's because the White House lies to the press about the law and they buy it hook line and sinker. Think Progress has the details on Scott McClellans baldface lie to the press corps about the Texas law. "The legislation was there to help ensure that actions were being taken that were in accordance with the wishes of the patient or the patient’s family."

From the legislation: "If the patient or the person responsible for the health care decisions of the patient is requesting life-sustaining treatment that the attending physician has decided and the review process has affirmed is inappropriate treatment....The physician and the health care facility are not obligated to provide life-sustaining treatment after the 10th day after the written decision required under Subsection (b) is provided to the patient or the person responsible for the health care decisions of the patient …"

The medical ethics of these cases are clearly complicated, as reading the story of the boy in Houston shows. But let's at least demand a little consistency from our demagogues.

One More Example Why Brad DeLong's Semi-Daily Journal is the Best Read In Blogging

This piece dissects Joe Lieberman's recent recapitulation of the Bush argument that every year we do nothing to fix Social Security increases the costs by $600 billion This about as phony figure as phony gets. It completely misunderstands the concepts of present value and discounting and swallows whole the Bush use of the infinite time horizon. This follow up by Krugman with DeLong's commentary is priceless.

Brad DeLong's Blog Points Us to Daniel Gross at the NY Times

Brad DeLong's Semi-Daily Journal comments on an article by Daniel Gross at the NY Times on Social Security and Income Insecurity.

Only minorly depressed by the fact that Hacker once interviewed me as an expert on health care reform and Raj Chetty was a resident in a dorm I supervised at Harvard.

America’s Socialized Health Care System

If nothing else, the most interesting thing about the Terri Schiavo case is that it reveals that Americans already have a socialized system of health care and have a deep commitment to the concept of socialized medicine. What is puzzling is the degree to which they are in denial about this. Particularly those on the far Right who seem most deeply committed to the concept.

Last night the Congress voted on and President Bush signed legislation allowing a Federal judge to hear the arguments of Terri Schiavo’s parents who want to reinsert the feeding tube that was removed last week. Unstated in all of this discussion is "who is paying for all this health care?" In a sense, it doesn’t matter, for implicit in the Republican argument is the notion that every individual should be kept alive at all costs -- at all costs. I find this stance pretty rich since a study released last year estimated that 18,000 Americans died last year for wont of health insurance or resource to pay the costs of their health care. The Miami Herald last week reported that her medications are paid for by Medicaid and that the Hospice where she stays now provides free care. But while all this has been going on, the US House of Representatives cut $20 billion from Medicaid for next year.

The Terri Schiavo case speaks volumes about the health care debate, or lack of it in this country. In 1993 Michael Schiavo received a $700,000 medical malpractice settlement. That money is almost entirely gone now (due to legal fees and medical costs - the Lawyers have not been paid in 2 years and a judge approves all costs), which begs some interesting questions of Republican attempts to cap malpractice claims at a lower level than this.

We already have socialized health care in this country if by this we mean that society has a commitment to keeping everyone alive at all costs and seeing to it that no effort is spared on account of resources. Businessweek reports that 17,000-35,000 people in America are currently alive in what is diagnosed as a persistent vegetative state and this costs the system between $1 billion and $7 billion a year. It seems clear that across the board, American’s share this commitment to extensive care regardless of a person's ability to pay. How many Americans would stand by and think nothing if told on the evening news that a man had been run down in the street and left to die because he had no insurance and little money, no ambulance would transport him and no hospital would take him? The fact is that few would. Given this, it seems reasonable to accept that Americans believe in socialized medicine, believe in a socialized system of paying for health care, but simply cannot agree on a rational way of organizing the payment of this care and the organization of the delivery system.

I don’t know enough of the facts to comment on the Schiavo case itself. But I would like to know how a member of Congress comments on his or her vote last night to bring Schiavo’s case to a Federal judge in an effort to keep her alive, on the implication that taxpayers and the health systems built-in cost shifting should continue to pay for her care, and on the refusal to fund Medicaid adequately or to tackle the issue of national health care reform. A poll just released indicates most American’s take a dim view of Congress’ efforts. Nevertheless, Democrats are keeping a low profile (witness the 52 votes registered opposing last nights legislation in the House) other than muttering about the political motivations on the Right. This is a shame since it is an opportunity to engage in a national discussion about health care and health insurance that should be at the heart of the Democratic message.

UPDATE: Matthew Yglesias points to Mark Kleiman who has a different but more compelling take on the Schiavo affair.

ANWR Framing

Once again, Dan Carol steps forward with an excellent posting for environmentalists on how to make headway in the ANWR debate. The new numbers in the Senate signal a possible change in direction on ANWR drilling -- change in the sense that Bush's direction is more likely to succeed now. I have to confess not being 100% green on the ANWR thing. I hardly think that this is the most important environmental fight facing the Green movement right now -- not when clean air, global warming and arsenic in drinking water all have much more direct relevance to people's lives. But Dan makes some great points. In a nutshell:

1) ANWR is not going to suddenly make us oil independent of the MidEast and other places. At best, it would reduce our oil imports by 2%.

2) ANWR is unlikely to reduce the price of gas at the pump since in the global market this is a few more drops.

3) We can help Alaskans now by purchasing the oil in the ground now -- making advance royalty payments.

4) There is nothing to stop oil companies from selling ANWR oil overseas instead of at home.

4) And, the best argument he makes by far -- as a matter of national security, ANWR can be thought of as an extension of the National Petroleum Reserve. By keeping it in the ground now, we increase the insurance coverage we have in case we need to have a secure source of domestic energy at some point in the future. Say Iran triggers a nuclear bomb in the MidEast and takes half their oil production capacity off line. Say currenlty friendly regimes fall into unfriendly hands. I think you see the point.

A Vote of No Confidence in Harvard's Faculty of Arts and Sciences

Well, Harvard's Faculty of Arts and Science has voted no confidence in current university president, Larry Summers. I have resisted saying anything about this issue but I guess at this point, as an alum, I can't remain silent any longer.

My first point would be, as a student who also attended the Kennedy School as well as Arts and Sciences, I would remind the faculty and the world that the Faculty of Arts and Sciences, however much they like to think otherwise, do not speak for the faculty of Harvard University. There are actually 11 schools at Harvard and one research institute and they all have faculty with academic governance rights in the university. They are not just leasing their space from Arts and Sciences. Af-Am Professsor J. Lorand Matory has been quoted as saying, "There is no noble alternative to resignation." Well, I can think of several honorable alternatives at this point so I have a suggestion for Dr. Matory. How about asking the rest of the faculty their opinion?

Of course, another alternative is to ignore the faculty and I think that is pretty honorable as well. I just came from serving on a panel on Academic Freedom here on campus and one of the things we were asked was about ideas that are considered outside the pale and whether academic freedom did a poor job of protecting scholars who wanted to but were prevented from looking at these ideas. I suppose that academic freedom does fail those scholars in some respects. There have been a few articles recently in the Chronicle of Higher Education which suggest that scholars who specialize in genetics have been discouraged or afraid to use the mapping of the human genome to investigate the possible genetic bases of differences among races and gender. It certainly seems, judging from the Summers' controversy, that members of the academy are supposed to embrace as an article of faith the idea that there are no innate differences (other than anatomical and cosmetic) whatsoever among genders.

I haven't been comfortable talking about the content of what Larry Summers said in the forum on women in the sciences but let's review. He suggested that there were three possible explanations for the difference in representation of women among the science faculty at the most elite research institutions (and that is an important distinction since he was not discussing women's representation in general). One hypothesis was that most women prefer not to work intense hours in such an intensely demanding profession. Another was that there is still a fair amount of discrimination in the structure by which tenure and promotion are awarded. And the third possible explanation was that there may be innate differences in the aptitudes for high level science work between men and women. The phrasing is important. Let's focus on what he did not say. He did not say men are better than women in science or that men are smarter than women. Either proposition would require that men are on average better in this area and I am not sure the data indicate that. What he did say was, "Whatever the difference in means, there is a difference in standard deviation." This means that the means (or averages) could be the same or that the average woman could be more able than the average man, but that in the upper ends of the distribution, there are likely to be more men than women. In other words, the variance in scientific aptitude, if it is greater among men, would suggest that men outnumber women at the bottom of the distribution (more men are dumb at science than women) and at the top.

It's also important to note the caveats that Summers interspersed throughout his presentation. Summers made clear, at the start of his remarks, "I am speaking unofficially." He further added this caveat before he began. "I am going to, until most of the way through, attempt to adopt an entirely positive, rather than normative approach, and just try to think about and offer some hypotheses as to why we observe what we observe without seeing this through the kind of judgmental tendency that inevitably is connected with all our common goals of equality" (my italics added). Finally, he said, "I would like nothing better than to be proved wrong, because I would like nothing better than for these problems to be addressable simply by everybody understanding what they are, and working very hard to address them." In other words, he would prefer that the differences we observe and worry about are just due to discrimination and family unfriendly labor policies.

Where Summers went wrong was he drew a preliminary conclusion regarding his hypotheses which suggested to people that he really didn't have an open mind with regard to the explanations and had already prejudged the question. He stated, "So my best guess, to provoke you, of what's behind all of this is...that in the special case of science and engineering, there are issues of intrinsic aptitude, and particularly of the variability of aptitude, and that those considerations are reinforced by what are in fact lesser factors involving socialization and continuing discrimination." So he said that aptitude was the most important explanation without really providing a way of evaluating the three possible hypotheses in combination. If Summers said anything for which he should apologize, than this is it. A further problem for Summers hypothesis work is that women are also underrepresented in sciences and math across the board in academe, not just in the elite universities, which suggests that the variance hypothesis as the central explanation has some weaknesses.

But I have to say I was sorry to see that he went beyond this in his public statement of apology. And I was even more sorry to see the President's of three major universities publicly criticize Summers for his comments as being entirely wrong, especially when I noted that two of them were prominent scientists.

I hope that the Faculty of Arts and Sciences at Harvard based their voted of no confidence on Summers' overall leadership and the likelihood that he would not be able to continue to lead the institution because his brash style alienated people or the controversy might irreparably harm Harvard's ability to recruit top faculty, top students, or wealthy donors. Absent this, voting no confidence entirely on his public comments amounts to the worst kind of violation of academic freedom. Central in this concept is that competent peers would judge a person's statements and scholarship according to standards of the field, and (other than a somewhat presumptive conclusion) Summers' well-qualified (no pun intended) speculations certainly met the standards of social science scholarship. It almost makes one wonder how much statistical training do some of the critics of Summers, including those from the sciences, actually have, since his comments were an entirely reasonable speculation about the shape of a statistical distribution. I know from talking to some of the faculty at the Kennedy School that there is open speculation that Summer's critics, and not just those from the arts and humanities, do lack a good training in statistical analysis. Which is a shame. Worse still, the vote of no confidence is sure to be used and interpreted by those on the Right as another example of the degree to which the academy is captured by a narrow dogmatic Left. And there is not a lot of evidence in the current controversy that they would be wrong.

Happy St Paddy's

What Exactly is a Doctor of Education?

Arthur Levine, President of Columbia University's Teachers College has issued a report critical of School of Education Ed.D programs and calling for their elimination. An article in today's Chronicle of Higher Education notes:
"[P]rograms in educational leadership suffered from low admissions standards, weak faculties, and inappropriate degrees.

"'There is absolutely no reason why a school leader needs a doctorate,' Mr. Levine said.

"In its place, he called for the creation of a new degree, the master's in educational administration, with a curriculum in both management and education. It would be the terminal degree needed to rise through the ranks of education administration.

"The doctorate in school leadership, Mr. Levine said, should be reserved for a small number of people who want to become researchers. The degree is currently awarded to both scholars and administrators and as such, he said, is ambiguously defined."

Hear, Hear. Or is it here here?

Five Easy Things to Do on Health Care

To provide my readers and myself a break from the monotony of my discussions of Social Security I want to address another issue dear to my heart - health care reform. My old boss Harris Wofford once worked for Kennedy as his chief aide for Civil Rights. He would remind me that Kennedy used to ask him what were some simple things we could do on Civil Rights right away. And Wofford would ask me the same thing about health care. He would say -- "what are the 5 or 10 things we could do right now." Both Kennedy and Wofford knew that when some policy issues are so huge that political process seems incapable of handling them, some incremental steps are sometimes necessary to build momentum. So I have been thinking about this and here is what I would tell him today.

1) Have employers report the amount of health benefits paid by employee and by employer on the W-2.

Health benefits paid for by your employer are currently tax deductible. The deduction is worth billions. One estimate put the cost at $188.5 billion in 2004. Republicans would like nothing better than to remove the tax deduction and there are several arguments for doing so that make sense. But this would begin to destroy the current employer based health insurance system and absent a better system, I am not sure anyone (other than Bush and some right wing free marketeers) wants to risk that right now. But having employers report this as tax deductible income on the W-2 would do much to show people exactly how much their health benefits cost and how much is being spent. This would add a lot of clarity to public discussions about health care reform and it’s not that expensive either. My employer pays about $300 and I pay about $500 a month for family coverage. How much does yours cost?

2) Get real about consumer information

It’s often observed that health care is a market plagued with information asymmetries. These create lots of market inefficiencies and potential failures. Alleviating that requires that government get serious about providing consumers with information about procedures, doctors, hospitals, and insurance companies. The Institutes of Medicine have been working on outcome measures and performance data for a while, but bringing the databases to the public hasn’t happened yet. For one thing, most health professionals don’t trust the public since the data can be often unreliable and can also provide incentives for doctors to skew treatments and the acceptance of patients. One way to keep a hospital’s success in bypass operations up is to turn away the riskiest cases. But there is no reason to think that we can’t start bringing this to the public and getting some grant money targeted towards getting better information and metrics developed. If we want the market to work better, the first thing we need to do is improve the quality, transparency and availability of information.

3) Fix the ERISA regulations and preemption of state regulations of HMOs

One of the main provisions of the Patient’s Bill of Rights that Republicans have stalled for the last 8 years allows patients to sue their HMOs if they wrongfully deny them medical treatments. A provision in the law that regulates pension benefits (ERISA) has been interpreted to preempt all state regulation of employer provided benefits and this includes HMOs. So if your HMO says sorry, no transplant for you, then you cannot sue them to force coverage of your claim. You are, essentially, without coverage. What you can do is to sue in Federal Court to get coverage (without any damages) but all the insurance company has to do is drag out the process through appeals and delays until you and your problem pass away. If you die, your heirs have no standing in court. A few years ago the Supreme Court ruled that you could sue your HMO for malpractice but the ERISA preemption was upheld in another decision. So this is still an open problem. One way to fix this is to pass a law that simply says that Federal law does not pre-empt state laws that are more stringent in their regulation of any aspect of employee benefits. A better fix would be passing the Patient’s Bill of Right’s but that ain’t happening before 2008 for sure. It might seem hard to imagine that any bill allowing people rights to sue would not get passed in this environment, but this fix still needs to be implemented.

4) Create state insurance pools for small businesses

This idea has been around a while and high-risk pools by states have proven problematic. Bush often touts these kinds of plans. So let’s go head and set up mechanisms to allow small businesses to pool employers and risk so that they can get reduced cost health insurance. The Federal Health Benefits plan is a large risk pool of Federal employees that offers several kinds of plans. Kerry had a plan to allow people to join that pool and simply pay the same rate that the Federal government paid to cover its employees. But the Chamber of Commerce could set something up as well. Federal law needs to be set up to facilitate and support this kind of activity. Of course most employers still won’t provide health insurance, but these pools could form the basis for the kinds of Health Insurance Purchasing Cooperatives (or HIPCs) that were the centerpiece of the Clinton health care plan.

5) Create a standard basic health benefits package

Call it Plan A. But the Federal government could do much to get a discussion about what health care benefits could be in a national health insurance program by passing legislation stipulating what basic benefits need to be in a health insurance package at minimum. This wouldn’t stipulate any circumstances on the financial side. Plans could still be structured like they would under Republican preferences with high deductibles and low premiums or high premiums and lower deductibles, as they tend to be under Democratic preferences. It wouldn’t have to cover abortion or cosmetic surgery or other controversial treatments and issues. But it could have some minimum standards of what is covered. A certain number of preventive care visits. Rules about outpatient and inpatient stays. A list of covered procedures and treatments. One of the benefits of the Oregon health plan was that it initiated a discussion about what would comprise a basic set of benefits. Heck the government doesn’t even need to make this law. A large foundation could commission this and them publicize the results so that shoppers could compare their plan to Plan A. A standard set of benefits starts a conversation about basic benefits and it educates people about what to expect from an insurance company. It also can do much to protect against those phony insurance companies that are selling low cost coverage to folks and then skipping out on paying anything when a claims comes in.

Oh, and don’t forget to allow the importation of prescription drugs from Canada. And let’s let Federal health plans and state Medicaid plans negotiate for lower prices from drug companies too. Both of these were (intentionally) left out of the prescription drug bill.

UPDATE: Matthew Yglesias links to commentary about the latest health care proposal from the Center for the American Progress, which, at first glance looks like Kerry-lite.

Social Security Stance Risky, Democrats Told (via Yahoo News)

James Carville and Stanley Greenberg write, in the latest political analysis from Democracy Corps, that the Democrats' stance on Social Security is risky.

"Why has the public not taken out their anger on the congressional Republicans and the president?" they added. "We think the answer lies with voters' deeper feelings about the Democrats who appear to lack direction, conviction, values, advocacy or a larger public purpose."

Their argument is that Democrats need to stand for something. By only opposing change in Social Security they actually play to the perception that they are a reactive Party that defends entrenched special interests and the status quo. As a result, while the debate over policy swings the Democrats' way, the struggle between the Parties and their national image swings further the way of the Republicans -- they are doing something; the Democats are standing still.

"In the latest Democracy Corps poll, the public's esteem for Republicans, including the Republican Congress, moved even further above the Democrats, despite the crash of Bush's signature policy initiative and grave doubts about the wisdom of Iraq and Bush's economic policies. While gaining confidence from the assault on Bush's Social Security plan, Democrats should pause to think about why Republicans are not crashing and how that impacts the Social Security debate in the months ahead."

Dan Balz of the WaPost cites others who feel this way, including Harold Ickes:

"'Democrats are winning the fight over private accounts,' Ickes said. 'But if the Democratic position is we can't have private accounts but also can't have an increase in the cap [on earnings subject to the payroll tax] or the retirement age, that may be a difficult position to sustain.' He added: 'I couldn't predict what form it [a compromise] might take, but I think the administration has a lot at stake on the Social Security issue. . . . They are a wily group and I think they are going to come up with something to claim victory.'"

All this goes to my larger point that the Democrats are failing to connect with voters that they have a coherent vision of what they want to do and are willing to pay a political price to step forward and lay that vision on the table. People don't trust them to lead because they don't appear willing to take the risks of leadership. But I think in thinking about this problem Democrats need to step outside of the box and resist allowing others to define the situation and the problem for them. Balz writes:

"In their analysis, Greenberg and Carville said Democrats have resisted saying there is a problem with Social Security, even though 63 percent of Americans in a recent National Public Radio poll said there was. 'To say there is no problem simply puts Democrats out of the conversation for the great majority of the country that want political leaders to secure this very important government retirement program,' they wrote. 'Voters are looking for reform, change and new ideas but Democrats seem stuck in concrete.'"

I am willing to grant that perception but I think in part it is because Democrats have resisted trying to redefine the problem. The larger issue is that Repoublicans and pundits have defined this situation, defined this crisis. There are 3 or 4 other policy crises that are far more urgent but the punditocracy has decided that this is the cause du jour. How possible is it to strike out against this current? I don't know frankly. But one idea would be that rather than phrasing the situation as -- 'there is no crisis,' Democrats try a new tact and argue that this is a question of priorities. What about Medicare? Who is going to secure that? What about the deficit? Who going to secure that? There are serious problems facing the country but Social Security, while it may be one of them, is hardly the most pressing domestic issue. I maintain that focusing on the general funds crisis, on the problems in health care allows Democrats to tack against the wind and strike a new course.

The problem inherent in the analysis that urges Democrats get prepared to have a policy is that it a) accepts the Republican and punditocracy definition of the problem -- sure 65% of the country buys it but why accept that figure? And b) it requires that Democrats get prepared to strike a deal with the Administration and Republicans in Congress. There is nothing in recent past to suggest that this deal will go as Democrats want, that they won't get stabbed in the back, or that they will get any credit for dealing on the issue. Look at prescription drugs, no child left behind and homeland security. How much credit have Democrats gotten for those initiatives? Why can't Democrats say that we won't bargain under the current circumstances over Social Security. Why can't Democrats hold out for a time (hopefully in the near future) when the numbers are more in their favor? If the Democrats really want to look like they are willing to take political risks to tackle major issues they could talk about the Bush tax cuts and how rolling them back would simply restore us to tax levels we experienced under Clinton, when the economy was roaring, it will go a long ways towards fixing the general funds crisis which is real and significant, it will help stabilize the dollar, and it will ease back on the pressures facing Social Security. They could also spend more time reminding people of all the rotten domestic policy eggs that have been laid by this administration and how serious is the looming budget crisis. Greenspan (that Party hack - thank you Harry Reid) himself opened the door when he said that the budget problems are serious and urgent. Let's take him at his word.

A little perspective on the Social Security 'crisis'

Here are some important facts about Social Security that Jeffrey Leibman asks us to keep in mind in this months Harvard magazine.

• In 2050 the system will have "enough revenues to pay 73% of scheduled benefits."
• The amount of these benefits will be "larger in inflation adjusted terms than the benefits received by today’s retirees."
• The projected shortfall is only 1.7% of GDP.
• This amount is significantly smaller than the projected shortfall in Medicare -- heard Bush talk about the health care ‘crisis’ lately?
• The shortfall is about a 1/3 of the current shortfall in the Federal budget.
• "Returning the tax code to what it was President Clinton left office (i.e. before the Bush tax cuts) would produce more than enough extra revenue to cover the gap in Social Security."

Robbing Peter to Pay Paul

This just in from the National Journal's Earlybird edition of Thursday March 3rd.

"The House Appropriations Committee is preparing to boost military spending by $1.8 billion in President Bush's $81.9 billion FY05 war supplemental while cutting about $1.5 billion in foreign aid provisions," CongressDailyAM reports. "Foreign aid requests the committee plans to pare back range from $400 million in funds for unspecified allies in the war on terrorism to $45 million in debt relief for tsunami-ravaged Indian Ocean countries." (Subscription Required)

Playing Hot Potato with Social Security

It's a new game by the Republican Leadership. "I don't want you take it." "No you!" I keep having these images of Wiley Coyote and Yosemite Sam playing hot potato with the Bush Social Security plan.

On Wednesday, House Speaker Dennis Hastert, R-Ill., "pressed the Senate to pass a Social Security reform bill before the House takes it up," The Hill reports. "Hastert thus threw the hot potato of reform back to the upper chamber just a day after" Senate Majority Leader Bill Frist, R-Tenn., "suggested he might not bring it to the Senate floor for 12 months," but the speaker's remarks came before Snow "indicated that the White House could accept a Social Security overhaul that excludes the diversion of payroll taxes to personal savings accounts." (From the National Journal Earlybird)

So is the sky falling or rising?

A recent report from the Minnesota Fed by Hilary Croke, Steven B. Kamin and Sylvain Leduc suggests that a collapse of the dollar is unlikely to have the dire economic consequences forecast by those I have cited recently including Thomas Friedman, Brad DeLong, Nouriel Roubini, Brad Setser, and others. This is from their abstract:

"We found little evidence among past adjustment episodes of the features highlighted by the disorderly correction hypothesis. Although some episodes in our sample experienced significant shortfalls in GDP growth after the onset of adjustment, these shortfalls were not associated with significant and sustained depreciations of real exchange rates, increases in real interest rates, or declines in real stock prices. By contrast, it was among the episodes where GDP growth picked up during adjustment that the most substantial depreciations of real exchange rates occurred. These findings do not preclude the possibility that future current account adjustments could be disruptive, but they weaken the historical basis for predicting such an outcome."

They're not the only ones. Brad DeLong reports on the work of Olivier Blanchard, Francesco Giavazzi, and Filipa Sa. I can't comment on that research but Brad DeLong does a good job. I haven't read the Fed report in great depth but I can raise a numnber of questions. Their data draw from 23 or so instances in the last two decades of 'current account adjustments' among industrialized countries. This raises some concern on my part siunce they include 1987 and the stock market crash in the US. Bet you didn't know that was a current account adjustment did you? I think this is an instance of social science struggling to make square data fit a round hole. I am not sure that all of the instances they cite give us much insight into what is likely to happen if there is a run on the US dollar. For one thing, the experiences of Austria, Belgium, Greece, and Portugal are unlikely to be similar to that of the US. For another, none of the nations in the list found themselves in a situation where over 40% of their reserves were held by foreigners and where two nations held almost 40% of their dollars. What the authors are talking about are runs on a currency. What DeLong, Roubini, and others are concerned about are a stampede on the dollar. Very different things.

The authors suggest as much at the end of their paper when they also acknowledge:

"Finally, the U.S. current account deficit, at present, is already larger than it was for the average of the episodes in our sample....However, the size of the deficit likely increases the extent of external adjustment that might be required in the future."

Hmmmmm

Are these folks petty or what?

The Toronto Globe and Mail reports today that Condoleeza Rice has called off her Ottawa trip after the supposed missile defence snub. The Canadians' faux pas? Their decision to not participate in the missile defense shield proposed by Bush and his Administration.

"The move by Ms. Rice is the most public note of disapproval to come from the Bush administration since Prime Minister Paul Martin made his decision known late last week. To make sure that the slight was understood, a White House official told an Associated Press reporter that the cancelled trip was the direct result of Mr. Martin's decision."

How to Win Friends and Influence People, 2nd Edition, by Geroge Bush

Lester Thurow: Oracle of Delphi or Cassandra?

I was doing some research for a paper the other day and came across this Boston Globe Op-Ed of November 28, 2000, written by Lester Thurow during the debate over the first round of Bush tax cuts. I don’t usually agree with Thurow on many things but his prescience is striking here.

"…the most likely cause of the next president's first economic crisis is easy to pinpoint. It is a foreign exchange crisis. If American consumption, investment, and government spending is aggregated, it exceeds American production by $450 billion - about 4.5 percent of gross domestic product. This is only viable as long as the rest of the world is willing to invest $450 billion more in the United States than Americans wish to invest in the rest of the world.

"Put simply, foreign money is needed to pay for the $450 billion excess of imports over exports - the imported goods and services that allow us to spend more than we produce. In his election campaign George W. Bush promised to give away most of the surplus in the federal budget in the form of a big tax cut. With fewer taxes to be paid, take-home income rises and Americans will want to consume and invest more than they are now consuming and investing. Since American spending already exceeds American production, this can only happen if foreigners are simultaneously willing to significantly increase the funds they are investing in America. The balance between payments deficit has to get bigger to give us the extra investment and consumption goods and services that lower taxes allow us to buy….The American economy is slowing, and, if anything, it will look like less of a good place to invest in the next eight years than it has in the past eight years. Also, economic growth is speeding up in much of the rest of the world. Foreigners will probably want to invest a smaller, not larger, portion of their funds in America over the next few years. In simple supply and demand terms, if Americans want to spend more and foreigners want to invest less, the value of the dollar has to fall. This makes foreign goods more expensive so that we buy less.

"As the dollar falls, however, foreigners with dollar assets in the United States will see the value of their American assets (measured in their own currencies) falling. To avoid big losses in their investment portfolios, they are likely to want to get out of some of their dollar investments. As they move their money back home, the fall in the value of the dollar accelerates. As they move out, they sell their stocks, and stock prices are apt to fall. Shrewd American investors, seeing that big short-run gains are possible if one holds the foreign currencies that are going up in value and noticing that stock prices are going down, also are apt to move their investments from dollar-denominated investments to foreign currency-denominated investments.

"At this point a Mexican-style run on the dollar becomes possible or even likely. The only remedy is a big increase in interest rates. Foreigners and Americans must be bribed to keep their money in America. But a big increase in rates leads to a recession. The demand for imports goes down because American incomes go down, but the demand for American-made goods also goes down.….One cannot ignore the rest of the world when designing American economic policies. What determines our ability to cut taxes or raise government spending is not the surplus in the federal government budget, but the balance between national spending and production."

You can read this and conclude either of two things. One, people on the Left are Chicken Littles who have been crowing about a foreign exchange crisis for years with no appreciable evidence of it happening. Two, that Thurow foresaw what many have been writing about lately (witness John Aloysius Farrell of the Denver Post, David Broder of the Washington Post, & Thomas Friedman of the New York Times all in the last week). Sooner or later the sky does fall when you pull out the joists which prop it up. If you are inclined to the former view (i.e. option one) allow me to remind you that Alan Greenspan gave his irrational exuberance speech in 1996.

Where Do We Go From Here? Pt IIb

The Reagan subtext will end just as we can count of a major series of historical events to transpire altogether at some point in the future. The key to seeing your narrative arise triumphant in the national subtext is to be clear in your articulation of it before that moment arises. The Republicans had Goldwater in 1964 and Reagan in 1976 (Recall that then, the argument of the moderate Republicans was that Reagan was not electable because he was too extreme). The liberal wing of the Democratic Party had Roosevelt and Al Smith prior to the Depression.

There is a great reckoning coming. This national party is coming to a close. The dollar seems poised for imminent collapse. Tuesday’s announcement from the Bank of South Korea suggests just how close we may be to some kind of economic meltdown. Koreans hold less than 6% of Foreign US reserves. Together China and Japan have about 50%. Imagine what would happen if they announced that they were giving up on the dollar. We have deficits as far as the eye can see. No willingness on the part of the Republican Party or leadership to talk seriously about the deficit or about the trade deficit. No willingness to part with their adherence to more and ever greater tax cuts. We owe foreigners a lot of money and we are poised to owe them more. The Republicans are toying not just with our national welfare but with our very sovereignty. We have a major health care crisis. Not simply because 1 in 5 Americans has no health insurance. But because costs are rising ever faster, more and more of our GDP is consumed by health care, and it’s not as if people are making a conscious choice between consumption of health care over other goods. Our education system is failing and a bipartisan group of state officials just gave the Bush administration’s main contribution to this issue an F. The gap between the wealthy and the poor continues to grow. The middle class is increasingly squeezed. We are dependent on foreign producers of petroleum. And the earth is warming with no foreseeable intervention planned from the nation that contributes the lion’s share of the carbon emissions that are responsible for this warming. The issues are real and vast.

So where does the Democratic Party stand on this? What is its narrative? James Carville presciently notes that it hasn’t got a narrative but a litany. Polls show (as I repeatedly stress) that people do not trust the Democratic Party and do not know what it stands for anymore. America need a simple, compelling story that articulates the Democratic vision and which adheres to Democratic values. Democrats need to be willing to articulate it even when there are political risks involved. After the Yankees lost to the Red Sox in the baseball playoffs last year, after being several outs away from winning twice, Derek Jeter was asked if losing this way hurt more. He looked at the reporters and said losing stinks however you do it. It doesn’t matter if you lose four straight or lose 4-3, you still lose. Democrats could use a little of this medicine. At the rate we are going, it doesn’t much matter if we lose 51-48 or 62-38.

What does matter is that Democrats rally around their core beliefs. We need to do this and we need to do this now because the coming crisis engendered by Republican polices presents the best chance in half a century for Democrats to seize the national subtext. When the dollar falls and interest rates spike, the economy will stall. Millions will go bankrupt and Americans will witness one of the most drastic declines in their standard of living in the nation’s history. This will be the time for Democratic vision. This will be the time for a Democratic voice that shows the need for stewardship of the land, for policies of compassion in health and social protection, for initiatives that begin to protect us from the sway of foreign petroleum producers, for responsible budget policies and progressive tax structures, for investments in the future through real investments in education, and for policies that get America’s debt habit and poor savings under control. The time for this kind of leadership is coming and Democrats need to be ready by highlighting its imminent arrival and beginning to articulate the vision of what to do -- no matter how far fetched, how liberal, how dated, how politically risky.

One of my favorite stories in politics comes from Robert Penn Warren’s All the King’s Men. The candidate Willie Stark finds his political voice and campaigns against political corruption but loses to his opponent. Afterwards, a disaster at a school that results from corrupt dealings among officials convinces people that Stark was right and he sweeps to victory in the next election. There may not be immediate pay off to saying what you believe and campaigning on what you think is right. But there is always a payoff to standing for the truth as you see it. If Democrats can coalesce around their vision and begin to articulate it, they will reap large dividends soon. More importantly, Democrats need to stand up and point out what is wrong and what is coming. Their foresight will be rewarded because sooner or later, we all pay the piper.