Health Care Exchange: Eligibility vs. Enrollment

(cross-posted at Angry Bear)

In the near four months since it passed out of Committee there has been little discussion of the Senate HELP Bill and the reason is clear, Max Baucus made it clear that Senate Finance would write a bill from the ground up. What this has meant is that the basis for comparing and contrasting alternate bills has been HR3200, the House Tri-Committee Bill. There are three main bills that have been presented in opposition to HR3200 with the Senate Finance Committee coming at it from the center-right while Wyden's Free Choice Act and HR676, Single Payer, coming from the left.

The major critiques of HR3200 have focused around the Public Option, with SFC debating whether it should even be part of the bill, while the Free Choice Act and HR676 arguing that it is too weak. This latter set of arguments seems to me largely driven by a profound misreading of the bill that may in its turn be driven by ideology from the Single Payer Now folk that have combined into a toxic stew that has led both the original HR3200 and his successor to be labeled in the harshest possible ways.

In the eyes of many progressives the problem with the PO is that it is just too cramped and limited to a "small sliver" of the American people, that "200 million people" will find it unavailable, that only people who are currently uninsured can get it, and so on. Well none of that is right, but seeing why will take some lengthy quotation and parsing, which for those interested can be found under the fold.

During the campaign Obama promised people that if they liked their current insurance they could keep it, and the bill does that, but what too many people took away is the idea that if they had current insurance, particularly through their employer that they HAD to keep it, that only those people who didn't have coverage at all, mostly the young, the self-employed, and workers in small businesses, would be served by the Exchange and the PO. Well lets go to the text, in this case the new House Bill.

SEC. 302. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.
(a) ACCESS TO COVERAGE.—In accordance with this section, all individuals are eligible to obtain coverage through enrollment in an Exchange-participating health benefits plan offered through the Health Insurance Exchange unless such individuals are enrolled in another qualified health benefits plan or other acceptable coverage. (p.156)

The key word here is "enrolled". Under the bill if your employer offers you insurance it has to be in the form of a Qualified Health Benefits Plan or QHBP, meaning that it has to meet all the accessibility, affordability and coverage provisions applicable to an Exchange plan which should mean in practice there would be little advantage to getting a QHBP Plan inside or outside the Exchange. So the bill writers and subsequently the CBO built in the assumption that most people who accept employer coverage, to the degree that they added a provision for employers to auto-enroll employees in the lowest cost plan offered by the employer. This process led many people to believe they were then simply locked into the company plan. Well not so fast, NOTHING permently locks you in, instead you have a number of different opt-out options.

Now one not acceptble option is simply not to have insurance at all, there are some religious exceptions but under the Individual Responsibility section there is a requirement for individuals to prove they have 'Acceptable Coverage'. And what is that?

(2) ACCEPTABLE COVERAGE.—For purposes of
this division, the term ‘‘acceptable coverage’’ means
any of the following:
(A) QUALIFIED HEALTH BENEFITS PLAN COVERAGE.—Coverage under a qualified health benefits plan.
(B) GRANDFATHERED HEALTH INSURANCE COVERAGE; COVERAGE UNDER CURRENT GROUP HEALTH PLAN.—Coverage under a grand- fathered health insurance coverage (as defined in subsection (a) of section 202) or under a current group health plan (described in sub- section (b) of such section).
(C) MEDICARE.—Coverage under part A of title XVIII of the Social Security Act.
(D) MEDICAID.—Coverage for medical assistance under title XIX of the Social Security Act, excluding such coverage that is only available because of the application of subsection (u), (z), or (aa) of section 1902 of such Act.
(E) MEMBERS OF THE ARMED FORCES AND DEPENDENTS (INCLUDING TRICARE).—
Coverage under chapter 55 of title 10, United States Code, including similar coverage furnished under section 1781 of title 38 of such Code.
(F) VA.—Coverage under the veteran’s health care program under chapter 17 of title 10 United States Code.
(G) OTHER COVERAGE.—Such other health benefits coverage, such as a State health benefits risk pool, as the Commissioner, in coordination with the Secretary of the Treasury, recognizes for purposes of this paragraph.

Well that is clear enough, an individual meets his responsibility requirement by showing he is covered under his employer plan, his spouse's employer plan, perhaps a parent's family plan or by a range of other public insurance plans. And in any of those latter situations the employee can opt-out of new employer coverage offers. But one of these opt-out possibilities is somewhat hidden here, that is the one that allows any employee to opt-out of employer coverage altogether and get an individual or group plan through the Exchange, including the PO, because in doing so he would meet the requirement of (A), the Public Option is explicitly defined as a QHBP. So where did the idea that the PO was only for the uninsured and was so limited to a fraction of the population arise?

Well a couple of places. First as noted the expectation is that most new employees without health insurance would simply enroll in whatever employer supplied plan level that met their needs, and that those who failed to do so would simply be auto-enrolled by the employer as provided in Sec 412 (c)

(c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPONSORED HEALTH BENEFITS.—
(1) IN GENERAL.—The requirement of this subsection with respect to an employer and an employee is that the employer automatically enroll such employee into the employment-based health benefits plan for individual coverage under the plan option with the lowest applicable employee premium.
(2) OPT-OUT.—In no case may an employer automatically enroll an employee in a plan under paragraph (1) if such employee makes an affirmative election to opt out of such plan or to elect coverage under an employment-based health benefits plan offered by such employer. An employer shall provide an employee with a 30-day period to make such an affirmative election before the employer may automatically enroll the employee in such a plan. (p. 273-4)

If the employee does opt-out during that 30 days he is not "enrolled" and so falls under the definition of "exchange eligible individual" as defined in Sec 302. At which point the provisions of Sec 411 (3) kick in:

(3) CONTRIBUTION IN LIEU OF COVERAGE.—
Beginning with Y2, if an employee declines such offer but otherwise obtains coverage in an Exchange- participating health benefits plan (other than by reason of being covered by family coverage as a spouse or dependent of the primary insured), the employer shall make a timely contribution to the Health Insurance Exchange with respect to each such employee in accordance with section 413.

In short you are 'exchange eligible' unless you ACCEPT enrollment or ALLOW yourself to be auto-enrolled. On my reading there is no such thing as a lockout for any given individual, if you want the PO you can get it, though not without taking some positive action.

But what about employers? Why are they locked out of the Exchange and the PO? Well the answer is that they aren't, at least not permanently, that is simply the result of misunderstanding the language governing 'transition'. Subject for another post.

HR3962: the new House Bill and its Scoring

by Bruce Webb




Well I have been venturing around the blogosphere and it is grievously clear that most people did not take my advice and Read the Bill!. Well it is not too late: http://docs.house.gov/rules/health/111_ahcaa.pdf (3.3 MB) Moreover CBO followed up with their preliminary analysis:
http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf

The above image is Table 2 and it shows the before (current law) and after numbers. There is a substantial amount of confusion on this with some people adding where instead they should be subtracting and I'll have to admit while I got the arithmetic operation I mislabeled the results elsewhere. So lets sort it out.

Under current, pre-reform law CBO projected that by 2019 there would be 54 million uninsured American residents, which figure includes undocumented workers. Since under current political conditions it is impossible to extend real reform to include "illegals" any solution will be by nature incomplete. In the case at hand CBO projects that the House bill would extend coverage to 36 million residents leaving 18 million without insurance. Of that 18 million a third or 6 million will be "illegals" leaving 12 million legal non-elderly residents without coverage (some people have tried to add 18 + 12 to get to 30, going the wrong way down One Way Math Street). This 12 million number will include both the so-called 'invincibles' who would rather pay the fine than get coverage as well as people who are Medicaid eligible but for whatever reasons can't manage the paperwork labyrinth. But generally if you are a legal resident of the U.S. who wants insurance you will be able to get it. (Affordability is another question, I think the bill contains adequate provisions for that, others will have differing opinions, we can fight that out in comments or on subsequent posts).

In percentages that adds up to 94% of the total non-elderly population up from 81% today, while it is 96% of the legal non-elderly population, up from 83% today. Not exactly the Universal Single Coverage that people like me would like, but still closing roughly 75% of the gap. Not bad considering the somewhat artificial restraints of both keeping the bill's cost under $900 billion AND making it deficit neutral over the ten year window.

(Minor note. People are still referring to 'HR3200' but as you can see the bill number has changed to 'HR3962'

(Cross-posted at Angry Bear)

Early English Land Law, Freedom and Property Rights: in 800 Words or Less

Well I am kidding about the 800 words, but in truth you could fill many bookshelves with authoritative works on these topics individually and in combination, and most of those books remain unread by me or were read decades ago. Making this an impressionistic piece that will sound a lot more definitive than it is. If you wan't to fix it simply do a mental pause and insert a 'probably', 'apparently', or 'this blogger believes' about every two sentences and you will possibly approach the appropriate balance.
_________________________

When the Germans first appear in European historical sources in the first centuries B.C. it is not clear that they had any settled idea of property rights in land. Certainly they had inherited from their Indo-European speaking ancestors the concept of the 'ham', the 'home' or better 'homestead', but also town or village as in Notting-ham or hamlet. What makes a 'homestead'? Well I would go along with Fustel de Coulanges, author of the classic the Ancient City, that it is marked by an enclosure (that may or may not double as a barrier for men or beasts) and a central hearth, and indeed that idea has come down to us today in the form of 'hearth and home'. But this home was not to be permanently associated with a particular piece of ground among the Continental Germans, not for many centuries, instead the German home could be relocated and re-established. Which was a good thing because in the fifteen hundred years roughly bounded by 700BC and 800AD the Germans were on the march in Europe as this old-fashioned but attractive map shows us: http://www.emersonkent.com/map_archive/germanic_migrations.htm.

This mass movement was not uncontested nor did it totally displace the previous inhabitants, Spain remained Iberian (Both "Spain' and 'Iberia' are pre-German conquest words) and France remained largely Celtic, though it did take on the national name of its Germanic conquerors the Franks and the German rulers of North Africa and Spain were ultimately pushed back by the Arabs, Meanwhile what the Romans called Germania was in turn under pressure from new people from the East including the Huns and Magyars. http://z.about.com/d/ancienthistory/1/0/7/N/2/shepherd-c-038-039.jpg

I am not concerned, or honestly well enough informed, to discuss the political, economic, and social organization of the German invasions/conquests in Southern France, Spain, North Africa or Italy, except to say they seem to have generally adopted Mediterranean customs themselves oriented on the City and so the City State, something that is by nature centered and permanent and corporate. Instead I want to look at Northern Europe and particularly Britain as the Germans transitioned from a condition of mass movement of peoples to final settlement.

Ancient Germany, from which the Angles, Saxons, and Jutes emerged to conquer what became known as Angle-Land or England was not a land of cities. It had cities, particularly in the West, and its kings and nobles had fortified places for defense where they might reside on a semi-permanent basis, but primarily it was a land of villages. Nor were these villages always co-terminous, between the cleared area of the village and fields there would be stretches of forest to which the villagers would claim various levels of customary use. This doesn't mean that Germans were simply atomized into individual villages, instead they had the concept of the 'land' and the 'land lord', too they had the 'kingdom', the 'people' and the 'king' and their was an acknoweldged identiy between nation and territory even as the bounds of that territory moved as the nation or tribe did, but my contention is that they had no equivalent of the modern conception of property ownership, that every square inch of land belongs to someone or something. I'll go further and surmise that even the 'allod', property that is held free and clear of all encumbrances is foreign to original German conceptions and that while the dictionaries tell us that any relation between 'allod' and 'allot' is fanciful false etymology there is some evidence that when Germans moved into new territory that they did divide the use of the land up by share, and that like many ancient peoples let this allocation up to the Gods by reinterpreting what may seem to us like random events (birds flying this way or that, reading entrails, or indeed rolling dice). So fanciful coincidence or not I am going to suggestion reading the German allod as alloted share of the cleared area plus and equivalent allocation of rights to the common areas of the tribe or village.

(My knowledge of Roman Civil Law is skin deep, so feel free to jump in in comments on this next part)
Roman Law has various terms that together cover what we think of property rights today. We have 'usus'/use, 'possessio'/possession, and 'ius'/lawful right. And each may lie in different hands at any given time. moreover there may well be any numbers of layers, or example both German king and peasant alike may have degrees of possession, use and right over the same piece of dirt and there might well be some sort of land lord in between. In this schema tax, rent, and produce are simply different names for what is in origin a more or less equitable claim by each on the use.

In the next installment I will try to localize this to Anglo-Saxon England and then draw in the concept of freedom and then equality.

What the Bruce Web (and Bruce himself) isn't

Okay a disclaimer. I left academia 16 years ago and have not had access to a major research library since whereas for many of the twenty years before that I worked as a part-time student or full-time career employee in the Library of the University of California at Berkeley, which at the time was and probably still is the biggest research library west of the Mississippi. Moreover for most of that time my job was as a bibliographer in the Department that among other things handled inter-library lending and borrowing meaning I had potential access to just about any academic monograph or journal article in the world and the training to search it out. These days I have a public library and Google and an increasingly dated amount of wetware knowledge sloshing around between my ears. I try to be rigorous in my approach and source where I can but in the end these are daily blog posts and not researched seminar presentations and certainly not based on being current with the literature.

So I welcome criticism, even within limits ridicule, and even more so criticism and ridicule that comes with accessible links to relevant material, just understand that these posts are designed to start conversations and not settle them definitively.

F.W. Maitland: Great English Historian? or Greatest?

Maitland: an Index
Well I am biased but for anyone interested it his the history of property law as it developed from pre-Norman Conquest times Maitland is indispensable. And since he died in 1906 most of his work is available in the public domain, the link is to PDFs of his published works including most noteably Domesday Book and Beyond, which uses the great land survey of 1086 as a jumping off point for exploring the centuries which came before and (with Pollack) the History of English Law Down to the Time of Edward I (i.e. 1282)

I am going to be doing some backfilling on the Kennedy-Webb discussion using ideas largely derived from various works of Maitland though informed by other authors as well and so wanted to offer an opportunity for others to kind of check my work by consulting some of the sources. Just don't blame Maitland for what may seem terrible over-simplifications, properly speaking any of these historical topics deserves and largely has gotten book-length and multi volume treatment, if I get even a couple of people introduced to Maitland it is worth it.

By the way Maitland was an excellent writer, it is practically a miracle how he can address deep issues of legal history, constitutional history, and God help us "Forms of Action in Common Law" and not only keep the reader awake but fully engaged with the argument at hand.

Magna Carta: What it is and what it isn't

I would think most educated people in the Anglo-American tradition and in those countries who either had English Common Law imposed or adopted as the basis of their own national law have heard of the Magna Carta and understand that it is in some sense the fountainhead of that law. But to a large degree this is a misconception of its nature and purpose, it is not a grant of privileges from the King to his subjects, instead it is if anything a confession by King John in 1215 that he has overstepped what later became known as the Ancient Constitution. Britain did not and still does not have a written Constitution, instead its fundamental laws and institutions were considered at least through the nineteenth century to have been transmitted literally from time immemorial, that is in time prior to memory. And this is to my knowledge typical of all ancient European law and perhaps all Indo-European law (people with knowledge of Vedic Indo-Iranian law please jump in) and maybe all law, rather than looking back at some indefinite point where people entered into a Social Contract there seems to be a sense that Law precedes society altogether. A concept that may be echoed (or not, you tell me) in John 1:1 "In the beginning was the Word, and the Word was with God, and the Word was God."

Now certainly there were attempts at compiling and codifying the law, notably associated with the names of King Alfred the Great and Edward the Confessor, but the common view before Maitland was that the law itself was pre-existent. (A recent book that I confess I have yet to read but by the very thorough historian Patrick Wormald is Making of English Law: King Alfred to the 12th century). This was not the exclusive view, some maintained that the Common Law came over from Normandy with the Conquest in 1066, but generally the idea that King Alfred and then Edward the Confessor were law compilers and not law makers won out. (Though Alfred seems to have a more expansive view of his powers in this regard.)

What does any of this have to do with the Magna Carta? And what is so important about the Magna Carta to start with? I mean this is an economics blog! Well I am not sure, I am kind of making it up as I go along, those who want to follow and correct this line of thought can follow along.

A translation of the Magna Carta can be found at Constitution.org http://www.constitution.org/eng/magnacar.htm where it is after the Athenian Constitution held as the second oldest foundational documents for our own Constitution. Yet in reading the Magna Carta it is with a few partial exceptions not foundational at all, instead it is a restoration of the Ancient Law to the time before innovations by King John, his brother Richard the Lion-Hearted and their father Henry II. Now there are two provisions which are foundational if not actually considered original to the Magna Carta.

14. And for obtaining the common counsel of the kingdom anent the assessing of an aid (except in the three cases aforesaid) or of a scutage, we will cause to be summoned the archbishops, bishops, abbots, earls, and greater barons, severally by our letters; and we will moveover cause to be summoned generally, through our sheriffs and bailiffs, and others who hold of us in chief, for a fixed date, namely, after the expiry of at least forty days, and at a fixed place; and in all letters of such summons we will specify the reason of the summons. And when the summons has thus been made, the business shall proceed on the day appointed, according to the counsel of such as are present, although not all who were summoned have come. & 63. Wherefore we will and firmly order that the English Church be free, and that the men in our kingdom have and hold all the aforesaid liberties, rights, and concessions, well and peaceably, freely and quietly, fully and wholly, for themselves and their heirs, of us and our heirs, in all respects and in all places forever, as is aforesaid. An oath, moreover, has been taken, as well on our part as on the art of the barons, that all these conditions aforesaid shall be kept in good faith and without evil intent.

Thus Ch. 14 lays down the principle of 'no taxation without representation' while Ch. 63 affirms the pre-existing rights of all Englishmen. But note that these two do not precisely map, you will look in vain for the concept of 'democracy' tout court in the Magna Carta, there is no hint that the Parliament promised in ch. 14 includes FULL representation of the people.

Instead if you read through the Great Charter, the Magna Carta, you will see that it is primarily a reassertion of the King's Tenants in Chief's (those who held their land directly from the King) property rights against the King rights with only some secondary protections for sub-tenants and freemen.

But words and concepts you will not find in the Magna Carta: Equality and Democracy. Instead it is a fairly straightforward defense of the principle that Liberty=Freedom from coercion from above over property, where property includes ones own person. This is not to concede that the concepts of equality and democracy are not inherent in English and hence American society all along, just to recognize that it would be a long time before those were recognized in law.

Revolution 3200

Chris Bowers at Open Left has a complaint: Burris Not Committed To Voting Against Cloture

Following up on Monday's article "President Burris," yesterday I talked over the phone with Jim O'Connor, a spokesperson for Senator Roland Burris. In regards to Burris's statement that he would vote against any health care reform bill that does not include a public option, I had two questions:
1. Will Senator Burris deny unanimous consent on a motion to proceed with a health care bill that does not have a public option?
(Such a motion is required for a bill to be sent to the floor for debate and amendment. If a unanimous consent motion fails--and it only takes one Senator to object for it to fail--then a cloture vote is required for a bill to be sent to the floor for debate and amendment.)

2. Will Senator Burris vote against cloture on a health care bill that does not have a public option?
(This is the logical follow-up to question #1. Given that Maine Senators Susan Collins and Olympia Snowe are the only two Republicans who would even theoretically vote for cloture on any health care bill, if three Democratic Senators say they will vote against cloture on any health care reform bill that lacks a public option, then it will be impossible for such a bill to reach the floor of the Senate.)
O'Connor's response to both questions was that Senator Burris stood by his statement to vote against any health care bill without a public option, bit that the Senator was still working on his floor strategy when it came to procedural votes. O'Connor stated that Burris did not seek to be an obstructionist, but to build consensus around the public option, which is good legislation and which polls show to be popular.
So, Burris is committed to voting against final passage of any health care bill that does not include a public option, but he has so far not committed himself to using procedural motions to block any such bill. As such, it is entirely possible he would still give unanimous consent, or vote for cloture, on a bill that does not contain a public option. Then again, he hasn't ruled that out, either.
Overall, this means that there is not even one Democratic Senator who has committed to blocking a health care reform bill without a public option. It would only take three, but right now the number is still zero.

I responded in comments:

"Overall, this means that there is not even one Democratic Senator who has committed to blocking a health care reform bill without a public option"
Christ! Stop the Presses!!! Not a single Democrat has come out against the principle of democratic majority rule!!!!!!!!!!

If Democrats can't find 50 votes against a bill without a public option, considering that most Republicans are going to vote No on any kind of reform, then that is just the breaks of a little game we call democracy. Trying to maintain the principle "The ends justify the means" is the reason the Far Left (and I don't mean that the way Faux News means it) and the Far Right have ended up settling their political struggles with deadly street battles between Black Shirts and Red Shirts. Come on, listen to your Uncle John

"You say you want a revolution
Well, you know
We all want to change the world
You tell me that it's evolution
Well, you know
We all want to change the world
But when you talk about destruction
Don't you know that you can count me out
Don't you know it's gonna be all right
all right, all right

You say you got a real solution
Well, you know
We'd all love to see the plan
You ask me for a contribution
Well, you know
We're doing what we can
But when you want money
for people with minds that hate
All I can tell is brother you have to wait
Don't you know it's gonna be all right
all right, all right"

Voting against cloture simply to save the PO is not a solution, it is instead destruction of democratic principles. Don't throw out the democratic baby with your seemingly progressive bathwater. Even if the end result of the immediate process is not exactly "all right".

Wrist taking a week off

Some excess blogging and mousing caused some tendons to become veddy painful. So along with mousing with my other hand my blog entries might be kind of brief for the next week or so.

Marx, Smith & the Ages of Man: Capitalism & Progress

In a comment to the post on Gavin Kennedy's blog Adam Smith's Lost Legacy (reposted here Gavin Kennedy responds I made the open admission that while I at one point possessed copies of Smith's 'Wealth of Nations" and Marx's "Capital" I read neither in full, nor am I in a position to see how much Marx drew directly on Smith but clearly they share a certain worldview in common.

In particular both share a belief in a kind of progress where civilization develops through a series of stages largely marked by their mode of production. In this view man starts out as a hunter-gatherer, progresses to nomadism as men follow than domesticate the herds, then to settled agriculture, which leads to the village and then the 'civis', the city, which is the literal basis of civilization. Per Mr. Kennedy Smith identified 'shepherding' and 'agriculture' as the 2nd and 3rd Ages of Man. These ideas cannot be separated from the idea of Progress and Civilization in the moral sense, a civil society being less violent and more devoted to the principle of Liberty which Kennedy following Smith seems to find inseparable from the notion of Private Property.

Certainly this overall framework has become almost dominant in Anglo-American thought, it is what lead Friedman to identify Capitalism and Freedom and Greenspan to conclude that Capitalism and hence capitalists were inherently moral and that cheating and gaming were outliers to the capitalist norm.

Well unfortunately I reject this whole historical framework, it seems to me just another version of the strain of thought which brought us the White Man's Burden and Manifest Destiny so common in 19th century thought but which by rights should have been blown away with the Guns of August 1914. In light of the events of 1914-1918 this from Mr. Kennedy is deeply ironic.

The group and individual violence common in many such primitive regimes of ‘tribal’ property is well documented in anthropological studies. Marxists idealise the ‘forest’ mode of subsistence as “primitive communism”, but it certainly had a bloody record among populations over hundreds of millennia, with women mainly suffering as victims and ‘war’ booty, and men suffering early and violent deaths (proportionally greater than well-known, so-called “murder capitals” in modern times).

Because whether we look forward from 1914 to WWII or backwards to the American Civil War and the Peninsular and Continental Wars that accompanied the development of 'civilized capitalist' society the idea these decades had a less "bloody record" than those of the hundreds of millennia before seems pretty unfounded by evidence.

Equally unfounded is the notion that modern 'opulence' is a product of private property and the associated idea that this opulance spread with civilization from North to South

Societies with individual property forms developed fairly high forms of civic society, at least for short periods, and while the annual distribution of “the necessaries, conveniences, and amusements of life” remained skewed, the long accumulations of stone-civilisations spread across Europe and the north Asian landmass, while not much changed elsewhere.

Well this would come as somewhat of a surprise to the builders of Timbuktu, Anghor Wat, Chichen Itza, Babylon, and Memphis (Egypt). And perhaps Kublai Khan might have wondered why his fabled Pleasure Dome in Xanadu didn't make the cut.

World History is studded with instances where there were major centers of concumption that could fairly be describe as 'opulent' that were not directly linked to the concept of private property. In fact I would think that in most cases that opulence was more often a matter of having control of three major sources of direct income: taxation, tribute, and trade tariffs. The English monarchy is not quite unique in its ability to draw large portions of its historic income in land rent but largely so, on the Continent the wealth of Princes and Kings was more often drawn from controlling trade, hence the series of very rich states on either side of the Rhine and the relative wealth of the cities around the Baltic and North Seas.

Plus there is a more fundamental misunderstanding built into the whole concept of the Ages of Men. Back in my own college days, and ironically from a Professor named Smith, I took a course that focused on the Nomads of Central Asia from the Huns on down to the modern day Basseri of Northern Iran. Contrary to the opinion shared by Smith and Marx nomadism is not an intermediate mode of production between hunter-gathering and agriculture, the romantic idea of shepherds following their sheep wherever they wandered is a historical, economic, and ecological fantasy. A nomadic existence is only possible if the nomads know to a near certainty that where they end up for the night has sufficient grazing and water for the herds, and just as importantly that you won't have to fight to gain access. A stable nomadic society relies on its own variety of private property that establishes its rights to the resources at each stage of its migration path at the time the group reaches it. In many cases multiple groups will have rights to the same path, only time shifted so as to maintain the carrying capacity of the soil which in general is exactly the kind of soil that won't support settled agriculture to start with.

In fact nomadic society is largely dependent on an existing system of settled agriculture. The nomads stock in trade is wool, cheese, meat and skins which are traded for necessities and luxuries with village and townspeople in the form of grain, vegetables, tea, tobacco, rugs, and jewelry, none of which are readily produceable under mobile conditions. In Central Asia generally nomadic groups are functionally separated from townsfolk though they might share the same tribal identity while in the Mediterranean nomadism is more often directly attached to the village with the boys and young men taking the flocks to the hills in the summer, but either way there is an indispensable interaction between shepherd and farmer.

Similarly the notion that hunter-gathering societies are inherently less opulent than 'civilized' city dwelling ones is to ignore some other historical realities. The Tribes of the Pacific Northwest led fairly comfortable lives prior to the arrival first of the fur hunters and then the farmers, loggers and most destructively white fishermen. Previously the salmon and the steeltrout and the smelt and the herring literally ran like clockwork, with each month and season having its own run of fish up the rivers. This coupled with the unlimited mollusk production of the tidelands allowed for a very comfortable and cultured and peaceful lifestyle punctured only occassionally by a raid by the more warlike Makahs or tribes from what is now Canada.

So depending on the eco-system (a concept foreign to Smith and Marx) either hunter-gathering or nomadism might represent the highest and best use of the property and settled agriculture as measured either by leisure or life-style often a step downwards. In fact if we take a quick overview of world civilization we can see that the development of agriculture often was marked by explicit exploitation of agricultural workers by their 'civilized' masters. Certainly in Western Europe the development of large scale agriculture from Roman latifundia or villa to Medieval Estates to British Enclosures were always marked by higher levels of labor exploitation where the previous pattern of a free Greek or Roman farmer was replaced by one marked by slavery and further north a mix of servile and free peasants (the former an inheritance from Rome) were over time reduced to pure tenants at will who could and were ultimately ejected from their lands.

Kennedy assures us that: "The distant past is, well, distant." Well that is the problem, it is distant enough that modern controllers of property have been able to define Liberty as the Right to Defend Private Property while distancing themselves from the actual history of how that property was acquired. Is it fair to tax you extra because your great-grandfather was a Robber Baron? Well maybe. Is it fair to tax you extra because your many, many great-grandfather was an actual robber baron in 1215?

1215 was the year that the Great Charter, the Magna Carta was first issued, which Kennedy cites as the point to which the development of political liberty can be traced. And there is a sense in which the liberty of free Englishmen was affirmed in the Charter. In practice though this liberty was restricted to the land lords who were protected from arbitrary demands of the King but by that same token freed to use the new legal innovations imported by the Plantagenet Kings to impose what was in origin Roman land law on an English system built on entirely different roots. Kennedy explains Smith's views as follows:

In Smith’s Lectures on Jurisprudence (1762-63) he gives a very clear account of the very ‘slow and gradual’ political evolution of liberty: Magna Carta, trial by jury, independent judiciary, rule of law, Habeas Corpus, through the absolute monarchies of the ‘allodial’ and ‘feudal’ disorders of Europe from the fall of Rome in the 5th century to the Constitutional Monarchies after the English civil war, 1740-60 {bcw-typo for '1640-60}, and the ‘Glorious Revolution’, 1688.

From the standpoint of the once free peasant and the semi-free serf, that period of 'Liberty' is EXACTLY the same period in which his own property rights were extirpated. Something that apparently didn't bother Adam Smith or his lawyer contemporary William Blackstone a bit. In fact something that they couldn't even see.

Gavin Kennedy responds to "Adam Smith and Glibertarianism"

A recent post of mine Adam Smith and Glibertarianism: History Vanished into the Memory Hole was sparked by a comment thread at Angry Bear attached to the post Adam Smith in a wider context which in turn ultimately linked back to a post by Gavin Kennedy at his blog Adam Smith's Lost Legacy (ASLL). Mr. Kennedy left a comment HERE pointing back to a new post THERE and kindly offered to allow me to cut this Gordian Knot and start afresh from his take by reposting his piece in toto here.

I have yet to read through it in full and still less to formulate a response but I put it up in hopes that others will weigh in here. My response when it comes will be in comments. Mr. Kennedy:

[Please follow the link {above} as our debate is "parallel" rather than direct (I am not sure exactly what Bruce is debating with me, so I have offered an alternative perspective of history, which I think I share with Adam Smith.]

"Hi Bruce

I shall offer some comments on your article: “Adam Smith and Glibertarianism: history vanished into the memory hole”, first stating I am not sure to whom you address your remarks and,adding, I do not share your narrower view of history than Adam Smith’s, nor (on a lesser scale of philosophical symmetry) mine.

Applying class analysis to history, especially where it is informed by back-projecting 19-21st century consciousness, is limiting. If the mass of people in the distant past were deprived of the category, “democracy” as an idea, they were unaware of it. Athenian “democracy” disenfranchised women and slaves; in its modern context, glimmers of democracy appeared in Cromwell’s England (Levellers) and in late 18th century British colonies, and in Britain and France. Until then, the issue of “Liberty” was more important and, in my view, liberty still is more important than democracy – the former cannot be other than self-evident, the latter often is a sham (as recent and current examples show).

In Smith’s Lectures on Jurisprudence (1762-63) he gives a very clear account of the very ‘slow and gradual’ political evolution of liberty: Magna Carta, trial by jury, independent judiciary, rule of law, Habeas Corpus, through the absolute monarchies of the ‘allodial’ and ‘feudal’ disorders of Europe from the fall of Rome in the 5th century to the Constitutional Monarchies after the English civil war, 1740-60, and the ‘Glorious Revolution’, 1688.

A lack of democratic consciousness runs right back to and throughout pre-history and, incidentally, so does a lack of consciousness about property. The discovery of “property” was a revolutionary idea enabling a minority of the world’s tribes to move to rising population levels from the population-limiting mode of subsistence of the forest and rivers in which, well past the 18th century, the absence of private property among the majority of the world’s tribes in the vast land-mass of Africa, south Asia, Australia, the Pacific and the Americas, held their human populations in check. Tribal populations before property, and many of them afterwards, unaware of the phenomenon of property lived on in their subsistence modes. Both property and non-property societies were oblivious of each other’s existence until relatively recently.

Whilst their concepts of property were primitive and were confined to tribal properties, they were firmly resistant to other tribes intruding on “their” particular territories, but without their having clear concepts of property they could not evolve into early civic societies, based on laws, that were practiced over millennia. The group and individual violence common in many such primitive regimes of ‘tribal’ property is well documented in anthropological studies. Marxists idealise the ‘forest’ mode of subsistence as “primitive communism”, but it certainly had a bloody record among populations over hundreds of millennia, with women mainly suffering as victims and ‘war’ booty, and men suffering early and violent deaths (proportionally greater than well-known, so-called “murder capitals” in modern times).

Shepherding and agriculture (Smith’s 2nd and 3rd ages of man) gradually brought more sophisticated forms of property, first from tribal towards extended familial property forms and then towards individual families, and finally to inheritable personal properties. With such local property forms the need for resolving disputes emerged, many of them violent. Societies with individual property forms developed fairly high forms of civic society, at least for short periods, and while the annual distribution of “the necessaries, conveniences, and amusements of life” remained skewed, the long accumulations of stone-civilisations spread across Europe and the north Asian landmass, while not much changed elsewhere.
Into this world of cycles of civilisation and barbarism, with accumulating knowledge amidst “pusillanimous superstition”, and slow growth in total “GDP” (for want of a better term), though fairly constant per capita GDP (the surplus creamed off and directed to stone monuments, the detritus of such is scattered across the Euro-Asian landmass), Bruce introduces a conceptual apparatus to judge past epochs as if such concepts are applicable or remotely relevant to the past generations involved, or to modern generations, about what is called “history” (none of which we can change, experience, or even remedy now).

The distant past is, well, distant. The terrible crimes of oppression, genocide, sexual dominance, shaman-led atrocities, wholesale slavery, conquest, and ignorance, cannot find a remedy, a balm or an anti-septic comfort, nor can they be “revenged” (by whom on whom?). We are not just the descendants of noble savages, ignoble tyrants, and human saints. There are now six billion (and counting) where two millennia ago there were 100 million, and a couple of hundred millennia ago there may have been 50,000 or fewer.

Back-projecting modern indignation onto that past is an awesome vision. Who knows which “crimes” and degrees of “culpability” were shared by which individuals in the ancestors of each of us? Who knows who, among the past populations aided and abetted any of the “crimes” of their fellows, whether chasing and killing interlopers from other tribes on “sacred land”, or stole their women, or swung the lash or the sword at the defenceless “spoils of war” and unspeakable domination, right up the modern genocides of Nazism or Stalinism?

A Smithian perspective is somewhat less ambitious, and more to the point. It is to study the past to learn how the present came about; to neither condemn nor praise it, but to understand it, and to offer advice in areas where changes may be made to improve the lot of those unable to prosper humanely under the current regimes of the current plenty.

Property made some societies in the mainly Northern latitudes incomparably more opulent that the majority of the rest of the world’s population; attacking, perhaps destroying, the basis of that opulence is to act as if property never happened, or that it should have happened differently. That it didn’t happen differently is sufficient warning that what didn’t happen couldn’t happen. No examples of societies without property, "fairly" or “unfairly” distributed, managed to create the technologies and knowledge levels of those with property. Searching for evidence of seething masses of revolutionary inspired “soldiers” held down by perfidious state functionaries is as futile as it is fictional.

I think understanding such awesome facts is a proper prelude to understanding how and why we might move, slowly and gradually, towards societies more in line with the sentiments, oft expressed by Adam Smith, where those who sustain and co-operate in the progress towards opulence share in the resultant growth in “the annual output of the necessaries, conveniences, and amusements of life”.

[My 2008 book, Adam Smith: a moral philosopher and his political economy, (Palgrave Macmillan) gives a more detailed account than I managed to squeeze in here.]

Talking Point vs Reality: Health Care Reform's Effect on Medicare

cross posted at Angry Bear

The latest Republican talking point, promoted among others by Chuck Grassley this morning, is that proposed cuts to Medicare make its financial situation more precarious. Why cut $500 billion if Medicare is already in trouble? This is totally backwards and shows a total unawareness of how Medicare is financed. So lets review:

Medicare has four 'Parts' A (Hospital), B (Physicians), C (Medicare Advantage) and D (Drugs).

Part A is financed primarily by a tax on payroll supplemented by co-pays for extended stays. Tax receipts not needed for immediate payout are deposited in the HI (Hospital Insurance) Trust Fund which like its counterparts in Social Security functions as a reserve fund, serving to buffer out fluctuations in tax income.

Parts B & D are financed by a combination of premiums and direct transfers from the General Fund, while Part C being a combination of A, B, and D draws from all three sources and is run by insurance companies.

The Health Care bills under consideration leave current revenues into Medicare alone and so CAN'T worsen the overall financial health of the system. Instead they propose to change the payment mix going out and slash the extra premium going to Part C and so make the overall financial position BETTER. These changes actually move the date the HI Trust Fund is projected to go to depletion OUT IN TIME.

Now it is fair to argue that cuts in Medicare potentially deprive people on Medicare benefits they have come accustomed to, but the argument that they financially weaken Medicare is to get it 180 degrees reversed. Republicans have been bleating about an 'entitlements crisis' whose costs are out of control. Well the answer to that is to cut costs. The only difference is that Democrats propose to use the savings to extend coverage to the uninsured while Republicans were hoping to use them to preserve tax cuts.

So don't buy the "We are trying to save Medicare" argument from the Republicans, they don't like it, never have, and don't care in principle about cutting money going to gramma. Instead all of this, all of it is about wanting Obama and the Democrats to fail so that Republicans can make gains in the 2010 mid-terms. Pay no attention to the crocodile tears.

Game Changing Vote On Health Care

cross posted at Angry Bear

Key Senate committee passes health care plan

The Senate Finance Committee passed a long-awaited $829 billion health care bill Tuesday by a 14-9 vote. Sen. Olympia Snowe, R-Maine, was the lone committee member to cross party lines, breaking with other Republicans to vote for the measure. All the committee's Democrats supported the bill.

The MSM will lead with Snowe, but the real story to follow is that last sentence. Neither Conrad nor Lincoln left the fold. Meaning that at first glance there is no chance they would vote to keep the merged bill from at least coming to the floor for debate (which was a possibility if they had defected on the SFC bill itself) and I would think little chance they would back a filibuster on final passage.

TPM liveblogged the vote here: LIVEBLOG: Senate Finance Committee Votes On Health Care Reform Bill

I'll be following this story all day and night and will be able to respond to comments here (but not to those at AB). So consider this an open Health Care thread. I would throw one question out for discussion: Did AHIP overplay its hand by releasing the PWC Report? Because I certainly would not have predicted the Conservadems falling into line the way they did, something got them off the fence.

Adam Smith and Glibertarianism: History Vanished into the Memory Hole

Over at Angry Bear there has begun an ongoing discussion of Adam Smith led by the newest Bear, Gavin Kennedy of the blog Research Agenda. Today's post is Adam Smith in a Broader Context

In the course of the comments to the post I confronted a regular Glibertarian commenter who as always is arguing the standard Glibertarian line that Unfettered Capitalism Produces Optimal Outcomes because Adam Smith explained the Invisible Hand. My response got so lengthy, and ate into my time that I figured I would put it up here rather than going a weekend without a post. I think it stands pretty well on its own, but it is a response to a particular person and a particular argument whose details would require some to visit the linked post and thread. Anyway:
_________________________________________________________
In practice individual workers have always had explicit external bounds placed on their ability to maximize their own self-interest. For most of history and still today property owners, first mostly defined in terms of lands and moveables, later in such things as factories and intellectual property, have been able to count on State Power protecting those rights against the majority. often pejoratively described as the 'Mob'.

For example In Medieval and Early Modern centuries education was firmly in the hands of the Church, including higher education in the form of the great Universities. In turn the Church was firmly and legally in the hands of the property owners, who had the legal power to appoint parish priests, just as Kings had the right to appoint Bishops. Which meant in practice the vast majority of the Tithes extracted from the rural and urban working classes went not to the local parish, but instead to whatever member of the land owning class had been appointed to the benefice. In turn that person did not actually have to serve his parish, he could instead take the money derived from the tithe, use a small piece to hire someone to leave in his place 'vicus', hence the familiar English Vicar seen in literature, and go off to Court or University for advancement. In turn those Universities, funded as they were largely by past donations of various religious benefices naturally restricted entry to University to members of their own class which included medium to major landowners, certain merchants and much later manufacturers.

This self-closed system where only a minority had access to the means of advancement was firmly in place in England at the publication of Wealth of Nations, and while a little less closed in Scotland, was certainly understood by Smith. In reading Smith, or at least those parts of Smith that are commonly read today by economists in the classical tradition, there seems to be no understanding that all of these equilibrium mechanisms only applied to that subset of the population interior to the property owning system that had access to education and capital.

British society and economy was quite explicitly and open anti-Democratic right up to and beyond the revolutionary moment marked by the year 1848 with Chartists demanding universal suffrage in Britain and various European countries and capitals marked by open revolution. Remember that this was the year of the Communist Manifesto and the Second French Revolution http://en.wikipedia.org/wiki/Revolutions_of_1848 And these Revolutions failed in their aims, the forces of Reaction were largely triumphant and Democracy would remain a dirty word for several decades to come. In Britain it wasn't until the Representation of the People Act of 1884 that you had anything resembling democracy.In light of that it is hard to see why people looking at these matters from a fundamentally Majoritarian position would take these late nineteenth century analyses as applying to the twenty-first century. This simple extension of ideas from Smith's very different economic and social society, where the general mindset that the majority was a potentially revolutionary mass to be suppressed where necessary by the use of State force, and where wage suppression and systematic denial of education to the masses were integral tools in those continual efforts, injects an 'up by your bootstraps' mentality that was utterly foreign to the time these ideas were formulated.

Smith's equilibria, to the extent they ever worked at all, were confined to those classes that were on the inside of the bubble of people represented in government and for whom the government in practice worked in return. Which is to say property owners and controllers of other forms of capital. The notion that this process delivered fair returns to the masses is absurd. Which in turn makes the whole Glibertarian effort to cherry pick Smith and Walras equally absurd, they are working from a discipline that grew out of explicitly anti-majoritarian principles and trying to apply that to a political and economic system ostensibly based on universal representation and equality of opportunity that would have been totally alien to the society in which the discipline of economics originally developed.

The futility of this is illustrated in Caplan's 'Myth of the Rational Voter' which seems aimed at the equivalent of repealing the Representation of the People Act and the Fourteenth Amendment on the grounds that the majority simply doesn't understand the primacy of property over democracy. Well maybe because most of us aren't starting from the position of privilege still given to those with ready access to capital and the means of economic advancement.

Score the War

cross-posted at Angry Bear

Davis Obey asks some hard questions that should have been asked long ago. My eye was caught by question one which prompts the title of my post. Why insist that Health Care be budget neutral and come in below some arbitrary target? Why did we even allow these wars to be funded with Supplementals and never received a ten year score? Why not Score the War?

Chief House Appropriator Urges Obama to Change Course On Afghanistan

“There are some fundamental questions that I would ask of those who are suggesting that we follow a long term counterinsurgency strategy:

1. As an Appropriator I must ask, what will that policy cost and how will we pay for it? We are now in the middle of a fundamental debate over reforming our healthcare system. The President has indicated that it must cost less than $900 billion over ten years and be fully paid for. The Congressional Budget Office has had four committees twisting themselves into knots in order to fit healthcare reform into that limit. CBO is earnestly measuring the cost of each competing healthcare plan. Shouldn’t it be asked to do the same thing with respect to Afghanistan? If we add 40,000 troops and recognize the need for a sustained 10 year or longer commitment, as the architects of this plan tell us we do, the military costs alone would be over $800 billion. And unlike the demands that are being made of the healthcare alternatives that they be deficit neutral, we’ve heard no such demand with respect to Afghanistan. I would ask how much will this entire effort cost, when you add in civilian costs and costs in Pakistan? And how would that impact the budget?

2. Do we really believe that there is an international consensus for such a long-term endeavor, or will we in fact, with the exception of some tokenism, be going it alone? Are we really prepared to “go it alone”?

3. What policy is in fact achievable? We should be asking not what policy is theoretically the most intellectually coherent, but which policy is actually achievable given the only tools we have in the region; the Afghani and Pakistani governments. Is there sufficient leadership, popular support, and political will, not in the United States but in Afghanistan, necessary for effective governance to take hold?

4. What makes us think that a much more aggressive and expansive role for U.S. troops will not harden elements of the Taliban and make them a more potent force, forcing them to stand up to the “occupier”?

5. Does it all add up? The so-called COIN, or counterinsurgency strategy, calls for a certain number of troops and police based on a country’s population. In Afghanistan that equates to 600,000 people in uniform. But the Afghani government has never maintained more than 200,000 before. Can they really sustain a three-fold increase?

6. Do we really have the tools to overcome language, culture, history and a 90% illiteracy rate to sufficiently transform such a country?

There are many things we could do to "provide for the common defense" and more that we could do to "promote the general welfare", and maybe this one is so vital that we have to do it come what may. But if the Generals tell us this is going to be a ten year war why not be adults and have an open discussion of what that means in dollars?

CBO Scores Tort Reform

CBO Letter to Senator Hatch

What Hatch proposed:

Several times over the past decade, CBO has estimated the effects of legislative tort reform proposals. Typical proposals have included:

 A cap of $250,000 on awards for noneconomic damages;
 A cap on awards for punitive damages of $500,000 or two times the award for economic damages, whichever is greater;
 Modification of the “collateral source” rule to allow evidence of income from such sources as health and life insurance, workers’ compensation, and automobile insurance to be introduced at trials or to require that such income be subtracted from awards decided by juries;
 A statute of limitations—one year for adults and three years for children—from the date of discovery of an injury; and
 Replacement of joint-and-several liability with a fair-share rule, under which a defendant in a lawsuit would be liable only for the percentage of the final award that was equal to his or her share of responsibility for the injury.

What doctors would save in premiums and as a share of overall medical expenditures

The Effect of Tort Reform on Premiums for Medical Liability Insurance
National implementation of a package of proposals similar to the preceding list would reduce total national premiums for medical liability insurance by about 10 percent, CBO now estimates. That figure reflects the fact that many states have already enacted at least some of the proposed reforms. For example, about one-third of the states have implemented caps on noneconomic damages, and about two-thirds have reformed their rules regarding joint-and-several liability.

CBO estimates that the direct costs that providers will incur in 2009 for medical malpractice liability—which consist of malpractice insurance premiums together with settlements, awards, and administrative costs not covered by insurance—will total approximately $35 billion, or about 2 percent of total health care expenditures. Therefore, lowering premiums for medical liability insurance by 10 percent would reduce total national health care expenditures by about 0.2 percent.

Not quite the panacea that the Right has been promising here. How much would that effect the Federal deficit?

In the case of the federal budget, enactment of such a package of proposals would reduce mandatory spending for Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits program by roughly $41 billion over the next 10 years (see Table 1).

I particularly like the part that both caps your possible award and then subtracts from that any proceeds you might have gotten from insurance and workers comp. That is if by some chance you actually have catastrophic health insurance designed to meet your lifetime needs should something terrible happens you wouldn't have any recourse against malpractice at all.

Republicans need to stop dodging and ducking and get realistic about where the problems are. And it is not because meanie Democratic trial lawyers are driving doctors to perform defensive medicine. Americans deserve health coverage. We cannot continue to operate like we are a second world country where the wealthy get care and the working poor go without.

CBO Preliminary Score of Baucus's Chairman's Mark

by Bruce Webb (cross posted at Angry Bear)

CBO letter to Baucus

Estimated Budgetary Impact of the Amended Chairman’s Mark According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period (see Table 1). The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period.1 In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.

For some reason the Table came out smaller than usual, in any event click to enlarge.

I haven't read through this and will make only two preliminary notes. One the bill leaves $81 billion in wiggle room to allow changes and still not break Obama's (rather foolish in my mind) demand that it be deficit neutral. Two is that on the cost side it is way under Obama's $900 billion leaving plenty of room for additions as long as corresponding funding is found for any thing proposed in excess of the $81 billion. Now if the Senate Finance Committee can just get this thing voted on and approved we could get this show on the road.

Max Baucus and Reconciliation

Well time to confess a screw-up. I had it stuck in my head that October 15th was the deadline for passing health care reform by reconciliation and so was reading Baucus's current attempts to drag out the bill as trying to run out the clock. Oops. Instead it looks like October 15th is the trigger that ALLOWS reconciliation and so that Reid is letting Baucus slowly tighten his own noose.

All of which makes me feel better about the prospects for ultimate passage even as it makes me feel kind of foolish. Luckily I didn't spread this misconception too far or God forbid post it at AB or here. Anyway here is Ezra correcting me six months in advance.

PASS HEALTH REFORM BY OCTOBER 15TH, OR ELSE.

First, a bit of background: Awhile ago, we talked about the three types of reconciliation possible on health care. The first type was a simple reconciliation process. The second type was a timed process where reconciliation would begin if the Congress didn't pass a bill by "X" date. And the third type was a threat to pass another budget at a later date that would include reconciliation.

The timed process always seemed the most likely. And Jon Cohn reports today that a deal has been struck: The budget will include reconciliation instructions pegged to October 15th. That's the date by which Congress has to pass bipartisan health care reform. If they fail, then the relevant committees have to write reconciliation legislation that faces a simple up-or-down vote in the Senate. No filibuster allowed. And with 59 Democrats, no Republicans needed.

It's hard to overstate the importance of this decision. This could be the day that health care reform went from being unlikely to inevitable. Without reconciliation, the incentives for the minority are very simple: Kill the bill. Do as Gingrich did in 1994 and hand the majority a failure. With reconciliation, killing the bill just means you're locked out of the final legislation. It's a death sentence for your involvement in the process. It is not, however, the end of the process itself.

I just mistook a trigger for a deadline. Oh well.

A Response to Robert Reich, or God Save Us From Our Friends

Robert Reich in a post at TPMCafe proposed a four point proposal to create jobs: Specifically, What Should Be Done For Jobs?. In it he falls into the typical trap certain technocratic liberals do, mostly those younger than Reich, they get too cute by half and neglect the political history. Here was my response to bullet point (2).

Secretary Reich, and I call you that because that made you ex officio a Trustee of Social Security, with all respect this is one of the stupidest suggestions I ever heard.

"(2) Propose a one-year payroll tax holiday on the first $20,000 of income. "

As you must be aware actual Social Security income from payroll tax and tax on benefits will barely cover outlays in OAS this year, while DI went cash flow negative in 2006. The two Trust Funds still show surpluses simply because of interest accrued on the Special Treasuries, but this interest has not come in the form of cash, but instead in the form of more Special Treasuries. Now these Special Treasuries are backed by Full Faith and Credit of the U.S. but can only be redeemed in cash by the Treasury doing borrowing in the public markets dollar for dollar.

What this means is that every 95%+ of every payroll tax dollar that comes in the door goes out immediately out in the form of benefits. Which means that every dollar not collected because of a tax holiday has to be replaced by a dollar of public borrowing and has the effect of flatlining the growth of the Trust Fund and so making a phony Social Security crisis into a real one.

Every time I hear of a 'temporary' payroll tax holiday I want to tear my hair out. The reason they are embraced by Blue Dogs and Republicans is because they make it easier to achieve their long term goal of rolling back the New Deal by 'proving' Social Security is a 'failure'.

Social Security is not a regressive tax, not when you consider the system as a whole. And Social Security was designed specifically NOT to be a welfare system lest it gets caught up in exactly the kind of proposals you are putting forth here.

Leave Social Security alone. It is worker insurance paid entirely by workers for workers. It demands nothing from capital and so owes nothing to capital. No one gets a free ride although there is a mild transfer from the middle class to the working class (because most people making $102,000 or less know they could easily have ended up closer to the bottom).

Under your proposal would workers still get credit for these dollars not withheld? Or would their future retirement simply be permanently reduced? These proposals always seem easy. Regressive carbon tax? Reduce payroll tax to compensate. Regressive flat tax? Reduce payroll tax to compensate. But each and every proposal has the effect, and often the intent, of defunding Social Security and transforming it from insurance to welfare.

Mr. Secretary do you have trouble sleeping at night? It is probably the ghost of Frances Perkins haunting you for even thinking about helping those who would kill her brainchild.

Either Social Security is in some sort of existential crisis or it is not. If it is the last thing you want to do is blow a big hole in its current income stream, and even if it isn't in crisis as a whole it is entering a period when it needs cash dollars. As noted above sometime soon income extracted in the form of payroll taxes and taxes on upper income benefits will no longer cover outlays. This will start as short term event in 2009 and 2010 but will return sometime after 2013 or so. This is not a problem it was exactly to counter the short term events that caused Congress to mandate that Social Security maintain a one year reserve right from the beginning. Right now those reserves are sitting right at 3 1/2 years, plenty to handle a cash shortfall that will be something less than 1% of outlays.

On the other hand even a short term payroll tax holiday blows a big hole in the Trust Fund. I don't know how much of SS tax income comes from the first $20,000 of income, but surely it is more than the $110 billion or so in interest on the existing Trust Fund, interest that will have to be paid by money borrowed on the public markets, there not being any free lunch here. Every $100 billion not collected in the present cuts $200 billion or more off the Trust Fund projected peak total. Good for Biggs' 'sustained solvency', not so good for the long term interests of workers.

Social Security is NOT welfare. Until you start exempting the first five, ten, or twenty thousand of income. For the love of FDR and Francis Perkins (the Labor Secretary who oversaw implementation of SS) resist the temptation to show how progressive you are by screwing around with FICA taxes. The wall between Social Security was carefully constructed for a particular purpose, it holds back those who would destroy Social Security in the name of 'fiscal responsibility' and 'intergenerational equity'.

Payroll tax holiday = defund Social Security. No matter how reasonable it sounds to offset some proposed regressive tax by a cut in payroll tax you always have to keep this equation in mind. You are not doing the poor any favors no matter how regressive you might think FICA is in theory. In practice it isn't. Just leave it alone.

Ground Rules at the Bruce Web: Don't be like Bob

Bob Boudelang is (we hope) a fictional character. But he represents a type that is unwelcome here. You don't get to just make shit up and by "make shit up" I mean repeating some talking point from Beck or Limbaugh. Just because you swallow the swill doesn't mean you can just present your beliefs about Clinton or Obama or whoever as being gospel truth. This came up because a long time commenter at Angry Bear asked if he was welcome here and I said "Sure, as long as you don't start spinning". Then he started bringing some urban folklore about Obama in. I don't want to hear it unless you can back it up with something better than Orly. Or Dori Monson. But back to Bob. Equal Time with Bob Boudelang copyright Democratic Underground

Ha! Ha! Ha! Dumborat Morans! You Are Doomded!, Mar 13, 2004
Well, now the election season has begun in dead ernest and at last our Great President has taken the boxing gloves off and started swinging.

And already people are talking about his great campaign commercial, which is unfair to those of us who wanted to have a discussion about September 11 without bringing up George W. sitting motionless at a school reading to children until he jumped up to run and hide. Which he did not want to panic those children, and anyway he was not running because he was afraid but only to be safe. And anyway, people have forgot about him lying about Air Force One being a target, which was not a lie but a miss statement, so do not bring that up again! Gee wiz!

You would think the victims and the firemen would be proud of Our Great President using such a divine moment in his ad instead of saying ugly things like "molesting the dead" or "grave robbing." But then some people are never satisfied and always want more. They should be satisfied with great leadership and not ask who knew what and when, or why someone was on vacation for a whole month, or why nothing was done about terrorism between the inaugeration and 9/11, or why Concertina Rice will not testify, or when subpeenas are going to be issued, or other trivial matters.

And yes, he did not use real firemen in the ad, but that was to create jobs. Now some actors have been paid to pretend to be firefighters who support Bush, just as if there were really ones. And Dennis Miller is also hiring people to sit in his audience and pretend to laugh at his hilarious conservative jokes. So who says there are no jobs under the Bush economic miracle, accept for the economists, and what do they know?

Speaking of hilarious, who did not get a chuckle when they heard John F. Karey had the nerve to call Republicans the most crooked lying group he has ever seen. Really! Imagine calling Our Great President a crook and a liar!

Yes, George W. has been arrested and convicted and yes, he made millions while his businesses went bankrupt and yes, he said there were weapons of mass distraction in Iraq and there do not seem to be any, but those are all blood under the sand, as far as I am concerned. And you cannot prove any sort of payoff from Halliburton so do not even try to look. Really. Do not even try.

I think John F. Karey owes an apology, not just to honest hard-working Republicans like me, but honest non-crooked people like Dick Cheney, who you cannot prove got the energy task force case fixed when he went duck hunting at the private lodge of an oil millionaire with Judge Scalia.

And he owes an apology to Ken Lay, who has not got indicted and that is as good as being honest. And he owes an apology to Tom Delay, who is sinnonimous with honesty and fair play, even if you cannot prove those rumors about his daughter, the lobbyists and the hot tub.

What shocking disrespect for the office of the president John F. Karey shows! Back when Dan Burton said Slick Willy was a scumbag and Trent Lott said Klintoon was a rapist and Jim Hansen said he should be assassinated and Jesse Helms said Clinton "better watch out," it was all said with respect.

Even Mrs. Brown Rosenfeld, who is such a LIEberal extremist that she supports public schools and wants health care for everyone, was outraged when she heard me explain what John F. Karey had said and how I wanted to respond, and she even donated a sheet so I could paint my sign. And she had her son get a tractor and drag my trailer up to the front of the lot so people driving by would see it.

So now everybody driving by the DaisyView trailer park can see my trailer with a big sign on it that says "George W. Bush: Crooked Liar! Who is Not Outraged!" The Democrats are doomded when Mrs. Brown Rosenfeld endorses messages like mine.

And from the number of people who honk their horns or give a big thumbs up as they drive by, it is clear Our Great President will continue to have smooth sailing like he has so far, if you do not count all the problems.

And who is not proud of the way the Republican party is moving like a oily machine? Just last week, they all switched their votes from yes to no at the drop of a hat when the Natural Rifle Association told them to. They were trying to protect freedom and liberty by keeping crime victims and frivolous parties like Chicago from suing the gun industry. But when it appeared a fanatic band of Moderates and Liberals were going to add background checks at gun shows and other wild-eyed schemes, they moved in unicycle, like wild geese in flight or precision machinery, and voted down their own bill.

Now fresh from that triumph, the Republicans are going to reclassify jobs at fast food restaurants as manufacturing jobs, which will not make more of them or make them pay better but will seem like good news and make everybody who does not know any better more upbeat. And the GOP has introduced a bill to keep people from suing fast food manufacturers like McDonnells. Now when Ronald McDonnell sends them an email telling them to vote the bill down, the entire country will be impressed again!

The Demoncrats can not match that and will not even try. And that is why I think some people are going to be mighty surprised on election day, and not just because there will be trouble at the polls in Florida (and you will not be able to prove Jeb had anything to do with it, no matter how it looks). Amen!

Don't sound like Bob. And don't be bitching about Free Speech, it is your side that is fighting the Fairness Doctrine tooth and nail even though nobody it actually proposing bringing it back.

TBogg: He shoots, he scores! Best Palin descriptor ever.

Still reading the Ancient City. Plus there are some key football games today including my California Golden Bears playing against USC with a lot riding on the outcome. Not only will the loser be locked out of the Rose Bowl hunt, if it is Cal we will be lucky to get into a second tier Bowl. (Update: my Bears stunk the place out. You can't win the Pac 10 without a top quality quarterback, and so far this guy is showing me nothing here. And crap what is up with Stanford? They were not remotely projected to be this good.)

So as filler I give you TBogg, who is in his own description a 'Somewhat accomplished blogger' now based in the FireDogLake empire. His latest snark is on Palin's new auto-biography 'Going Rogue, an American Life' and in doing so coined an instant classic term. With no further ado:

That's not writing, thats someone else typing

Let's not kid ourselves. Anyone with the bare minimum requirement of one honest bone in their body knows that Snowbilly Virginia Woolfkiller did not spend the past four months holed up in an igloo of her own furiously typing up her memoirs. Sarah provided Christian scrivener Lynn Vincent with tapes and some face time while she was visiting here in San Diego, between taking the kids (Musk, Camaro, Velour, and Baby Brushetta) to Legoland and the outlet malls, and, poof! magic!, a book was born.

But just like those facebook postings and the speech in Hong Kong, Sarah really wants us to believe that she did it all by her own bad moose-slaying self, and so Lynn Vincent gets relegated to the liner notes so as not to clutter up the view/Rich Lowry toss-off target:No "..with Lynn Vincent" or "...as told to Lynn Vincent".

Just like the Bible: God wrote it.

So: Sarah Pain, accomplished author.

I don't expect her fans to get the reference but I think Virginia Woolfkiller captures the essense of Sarah the Writer perfectly.

The Ancient City: by Fustel de Coulanges

The Ancient City (PDF)
Today I am going to start a re-read of Fustel de Coulanges The Ancient City, a classic study of pre-classical Greece and Rome written in 1864. In examining his Wiki entry http://en.wikipedia.org/wiki/Numa_Denis_Fustel_de_Coulanges one sees the claim that "The work is now largely superceded" but does not explain in what way, perhaps commenters can fill in the gaps.

I found it a fascinating read the last time around, and will update this post as I work through it. From recollection Fustel de Coulanges sees the ancient city as a series of concentric circles each with a patriarchal head and its own god which continues down to the individual household with its Lares and Penates (of which more to come).

In doing some Googling I came across the following by M.I. Finley, himself a major historian of Ancient Greece. On my computer clicking the link triggered an immediate download and opening of the PDF. It is not a big file (708kb) but maybe not something you want to click on with a slow connection. The Ancient City: From Fustel de Coulanges to Max Weber and Beyond

From Finley we see where Fustel de Coulanges was perceived to go astray. In 20th century scholarship the city was more often seen as an economic unit and not so much as a social and familial one. Just off the bat I would say this is the product of too much abstraction, the model which explains the evolution of the medieval town to the modern city may not map well onto antiquity. So I am not ready to ditch the thesis of the Ancient City just yet.

And on finishing the Finley article I am going to give the edge to the Ancient City. The attempts by Weber and others to fit cities into an evolutionary model that culminates with capitalism is much too reductive as are attempts to draw too strict a line between urban and rural as separate economic interests. Instead we would do well to follow Fustel de Coulanges advice:

To understand the truth about the Greeks and Romans, it is wise to study them without thinking of ourselves, as if they were entirely foreign to us; with the same disinterestedness, and with the mind as free, as if we were studying ancient India or Arabia.

And here is the thesis statement:

A comparison of beliefs and laws shows that a primitive religion constituted the Greek and Roman family, established marriage and paternal authority, fixed the order of relationship, and consecrated the right of property, and the right of inheritance. This same religion, after having enlarged and extended the family, formed a still larger association, the city, and reigned in that as it had reigned in the family. From it came all the institutions, as well as all the private law, of the ancients. It was from this that the city received all its principles, its rules, its usages, and its magistracies. But, in the course of time, this ancient religion became modified or effaced, and
private law and political institutions were modified with it. Then came a series of revolutions, and social changes regularly followed the development of knowledge.

Making the city quite literally an extended family.

In Chapter 2 I find the first point of departure.

The dead were held to be sacred beings. To them the ancients
applied the most respectful epithets that could be thought of; they called them good, holy, happy. For them they had all the veneration that man can have for the divinity whom he loves or fears. In their thoughts the dead were gods.

In this chapter Fustel discusses funerary rituals that show that the ancients believed in an afterlife where soul and body lived on together, at least if the rites were strictly observed. Otherwise the soul wandered restlessly and perhaps haunting the living. But back in my days of studying Celtic Mythology it was clear that the Fairy People, those who lived in the mounds of ancient Ireland were treacherous and often malevolent. Yet in folklore these child stealers were called "The Good People". Why? Because as Professor O'Hehir explained "They might be listening". In Indo-European mythology and folklore the line between gods and devils was blurred to the point of non-existence, and the prudent approach was to adopt a posture of fear and awe. Here Fustel may have been drawn astray by the language, he might better of said "loves AND fears".

"Treacherous Pens and Tongues": The News Media Is Driving Me Crazy, by Jack S

The following is a story suggestion sent to Dan the siteowner of Angry Bear by commenter Jack S. Dan still has it under reveiw and he Jack and I agreed to put it up here to at least get the discussion going.
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Dan. You know how my personal take has been that the media, the news media in particular, is a primary agent in the obfuscation of all significant political and economic issues. "Treacherous pens and tongues," as the man once said. That man was describing the manner by which the populace is kept dumbed down on important issues and often led to a conclusion opposite to their own best interests. This morning the New York Times gives us yet more bold evidence of its own role in this process, and subtle they can be at the NY Times. Two articles on the front page of the print edition are striking, both for what is said and for what is left glaringly off the page. Maybe you can use this on AB.
First, (ed: from the NYT) Senators Reject Pair of Public Option Proposals

In print there is an accompanying photo of the panel (the on-line photo only shows a dejected(?) Sen. Schumer) with Sen Grassley front and center. The caption contains a part of the following quote, "But Senator Charles E. Grassley of Iowa, the senior Republican on the committee, said a government insurance plan would have inherent advantages over private insurers. “Government is not a fair competitor,” Mr. Grassley said. “It’s a predator.” He predicted that “a government plan will ultimately force private insurers out of business,” reducing choices for consumers." The caption repeats the government as predator remark. There is no further comment on Grassley's comment. It is just out there, front page caption and all with no discussion of the self contradiction of the remark. The predatory nature of government, as Sen Grassley sees it, is given front and center prominence. What is the government if not Grassley and company? How are the rules of government decided if not in the Congress? Yet Grassley is permitted to make a baseless claim which distorts the debate, and the news media gives him the soap box to stand tall on.

Second, and here we have an interesting distinction between the on-line and print editions, there is the presentation of the story concerning the cash flow problems at the FDIC. In print the headline reads, "BANKS TO RESCUE DEPLETED F.D.I.C.: Plane to Protect Deposits as Failures Increase." On-line, same story and author different lead in, "Banks To Prepay Assessments
To Rescue F.D.I.C." Not quite the same emphasis, but still the same "rescue" scenario. The banks are rescuing the FDIC? Is that not ass backwards? Has not the FDIC rescued the depositors of the banking industry? Who is the rescuer in this story, and why is the NY Times highlighting and implying the good will of the banking industry that created this mess of failures to begin with?

As noted, "treacherous pens and tongues" intent on obfuscation and deception. Here is the whole quote,
"The people must therefore be instructed"
The obstacles to their enlightenment?
"The paid journalists who mislead the people every day by shameless distortions."
"What conclusion follows?"
"That we ought to proscribe these writers as the most dangerous enemies of the country and to circulate an obundance of good literature."
He means journals written in support of the revolution.
He goes on to summarize:
"When will the people be educated?"
"When they have enough bread to eat, when the rich and the government stop bribing treacherous pens and tongues to deceive them and instead identify their own interests with those of the people."

Jack S