Friday, May 26, 2017

The Rough Beast is a Piss-Ant

Above all else, Donald Trump  will be remembered for his smallness.  Not the hands nonsense, but the petty, petulant, puerility of his time on the world stage. Send not to know for whom the baby monitor tolls.  We have elected a puling nonentity and sent him out to represent us at the big-boy table.  Shame on us.  Shame on the Republican Party for having so little to offer.  But mostly, shame on us as a nation.

Vladimir Putin is popular in Russia.  People say it's because he suppresses information about his flaws, but I don't believe that's so.  I think he is popular because a classy leader is a luxury that the Russians have not been able to afford, ever.  Gorbachev might have been such a leader, but the fact that he has been supplanted by a fascist thug says something about the kleptocratic soil in which Russia grows its leaders.

Trump is living proof that the US can no longer afford the luxury of a quality President.  The GOP gerrymandered the Congress into a feckless mess with an approval rating of 19%, every missing 81 points of which are the other guys' fault.  They aren't to be pitied - they thought they were putting party over country - but there is a delicious irony to their having hoist themselves on their own petard.  When swing voters don't matter, cooler heads have no reason to prevail.  Instead, morons get elected, Congress becomes a swamp, sixteen Tweedle-dees run for the Presidency, and an abomination slouches toward Washington to be born.

Read some Gibbon.  Read Shakespeare's "Julius Caesar."  And then read Yeats:

Turning and turning in the widening gyre
The party cannot hear the ward leader;
Things fall apart; the centre cannot hold;
The Tea Party is loosed upon the world,
The heartless tide is loosed, and everywhere
The ceremony of compromise is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Or something like that.  I'm quoting from memory.

Watching President Trump lecture the NATO chiefs on their obligations to the US was really, really painful.  The US has every right to pressure its allies into paying their "fair share" toward the defense of their own soil, but the idea of hectoring them in public should make any American's skin crawl.  With so much going on in the world, so many points to make in a public speech, our guy kvetches about who ordered the lobster.  And yet, an astounding and sobering number of self-styled "Americans" actually think this bozo is a better leader than Hillary Clinton.  Or John Kasich or JEB Bush.

Like Willie Loman, when this many voters talk, attention must be paid.  We must take another look at Germany in the late 1920's and see why Hitler's, er, quirks, were overlooked.  If stupid people are empowered to vote, they don't suddenly become smart.  Rather, they just vote for stupid things - solutions that sound good fast, because no one else is offering any solutions at all.  So, no, Mr. Eliot, the way the world ends is not with a bang or a whimper.  It's with a snivel.

Tuesday, May 16, 2017

Or, in the alternative, I had every right to...

To paraphrase Voltaire, if the high-five did not exist, the Russians would have to invent it.

The famous (among lawyers) example of arguing "in the alternative" goes like this:
My dog doesn't bite. Or, in the alternative, my dog was tied up that night. Or, in the alternative, you were not bitten. Or, in the alternative, my dog was provoked.  Or, in the alternative, I don't have a dog. 

That's pretty much how the Trump administration addresses the Orange Peril's blunders.  Why was Comey fired? Because he was unfair to Hillary. Or, in the alternative, because this thing about Trump and Russia is a Hillary-sponsored hoax.  Did Trump leak classified information to the Russians last night?  Well, the formerly respected H.R. McMaster says he was in the room where it happened, and it didn't happen.  Or, tweets the leader of the free world, in the alternative, I had every right to do it.

The Russians have won the Powerball, and they've taken their winnings as an annuity payable over the political life of Donald Trump.  One can only pray that it is short, and that it ends non-violently.  I'll stop typing now, as this is probably already old news...

Sunday, May 7, 2017

It's Only Money (Healthcare Edition)

Is there anything seriously wrong with either Obamacare or the GOP House bill that money couldn't cure?  What are the gripes about Obamacare?  It forces you to buy insurance you don't want.  Would a sufficient subsidy not cure that?  Insurance companies can't make money, so they withdraw from state exchanges.  Would a sufficient subsidy not cure that?

And the GOP bill that lets states set up high-risk pools for people who are very sick.  The Dems' only objection is that such funds have historically been underfunded.  Would a sufficient subsidy not cure that?

Topology fans - yes, there are topology fans - there must be - are fond of pointing to the torus - a solid object with a hole in it.  Like a bagel, or a teacup.  To the topologist, these are the same thing.  (How different is a meatball pizza from a cheeseburger, really?)  Well, any healthcare system that covers the poor and covers sick people after they get sick - when else would they be covered? - is going to be like any other at heart.  The risk has already been socialized, and the only question is whether there will be enough money delivered to providers to get them to deliver enough care.  Everything else is a detail.

Socialized benefits are paid for by taxes, broadly understood as an economic hit imposed to cover the cost of mutual benefits bought by the collective.  Buying insurance you don't want is a tax (just ask Justice Roberts), and inflation is a tax.  Price controls act as a tax.  Export tariffs on drugs sold at a higher price here than abroad impose a tax.  And, of course, explicit taxation is a tax.  But it's all the same to us topologists.  Everyone is getting healthcare, and, as a consequence, we are taxing whomever should be taxed, and in whatever way, as our politics determines.

I have my preferences regarding tax policy, but that's for another day.  For now, it's sufficient to note that any politically acceptable U.S. healthcare system post-Obama will require a lot of public money to pay for people who cannot afford the care they need.  Any legislative scheme that does not come up with that money will fail.  The murderers in Congress killed Obamacare by underfunding it.  The House Bill grossly underfunds the state pools without creating large enough subsidies to entice private companies.  Governors are in a bind: their constituents won't be able to buy coverage from insurers who are not there or afford coverage from pools that are underfunded.

No, the House Bill is not law, nor will it be.  But no new law will work unless it adequately subsidizes the cost of care.  Of course, that gives the government a big stake in cost control - e.g., the aforementioned export tariff on drugs sold to public health systems abroad - but that is a detail to be worked out.  The important thing is that no system that is underfunded can work.  Unfortunately, our pols don't much care whether a plan works; they just care who will get credit if it does, or - what may be a more valuable prize - blame if it doesn't.


Saturday, April 8, 2017

Who Knew? (Sarin edition)

Not long ago, President Trump "discovered" to his amazement that healthcare is complicated.  "No one knew," he tells us, how complicated it was.  Because our President lives in an impenetrable shell of ignorance, we should not be surprised that he is shocked to learn that nerve gas is bad for babies.  But we should not mistake "his" response to Assad's recent gas attacks for something approaching sentience.  Rather, this attack was the smart move of the smart acorns that our blind pig in chief reluctantly put in charge of the NSC.

The Tomahawk attack had one goal: to cause Assad to stop using chemical weapons and, having no use for them, to stop producing them or storing them lest his stockpiles fall into his enemies' hands.  Our object is not to save Syrian babies.  We don't have a way to do that.  Conventional bombs are lethal, too, and we can't stop them.  We are not trying to change the outcome of the Syrian civil war.  We are not even trying to "punish" Assad the man.  We are instead trying only to make the production of nerve gas a bad idea.  If none is made, none can be sold to or stolen by people we cannot persuade not to use it.  That alone is reason to make the use of sarin unprofitable for Assad.

The strategic decision to make Assad regret using chemical weapons is worthy of a national discussion.  Instead, our foolish media obsess over the morality of its use, the legality of our intervention, slippery slopes, palace intrigues, and everything else that has nothing to do with this act.  The Pentagon has tried to make clear that this attack was intended to discourage the use of the weapons, not to change our policy on Syria per se.   Of course, that's not what the President himself said in his mawkish blather about babies, but who cares what he says?

I am a big fan of Miller's law, a bit of communication theory that tells us to interpret statements in whatever reasonable way will make them true.  That won't turn "Obama tapped my phones" into "my associate's conversations were picked up by legal surveillance of foreigners," but it does facilitate an understanding of what people acting in good faith are trying to communicate.  The spirit behind Miller's law extends to analyses of public policy.  We should interpret each action in whatever reasonable way will make it the right thing to do, completely ignoring as irrelevant any defenses of the action that don't hold water.  Just because an actor offers a bad reason for doing something does not mean that the thing was the wrong thing to do.

In the case of the attack on Syria, discouraging proliferation of sarin is the good reason for doing it.
Viewing the attack in that light, I come out in favor of the raid and give the Administration credit for conducting it.  That the White House chooses instead to go off on a moralizing tangent is beside the point.  According to news accounts, the Pentagon (not the White House) has put forward a reasonable defense and strategic context for the action.  That's where our attention should be focused, and if our President's brain weren't such a muddle, we could in fact focus it there.

Update, 4/14/17.  Sean Spicer got in trouble for saying that not even Hitler used gas on his own people.  On the same day, Sec. Mattis was saying that not even Hitler used gas on the battlefield.  The people on the left who get outraged for a living went nuts over Spicer's version, but no one made a peep about Mattis's statement.  Spicer, of course, is an inarticulate spokesman, a quintessential first hire for Trump.  Loyalty, first, then, when that doesn't work, settle for competence.  But finding a good spokesperson will be hard for Trump, because a press secretary can't speak any more clearly than his principal thinks.  Better to have a liar like Conway, who doesn't care whether she's making sense, or a dimwit like Spicer, who doesn't know whether he's making sense.

But I digress.  The real difference between Spicer's gaffe and Mattis's statement is not that the Defenese Secretary speaks more clearly than the Press Secretary.  The difference is captured in this article.  Mattis attacked the weapon, whereas Spicer, like his boss, attacked the user.  Mattis compared Syrian war-fighting and German war-fighting.  Spicer compared Assad's war crimes and Hitler's war crimes.  On his Sunday show "Reliable Sources," Brian Stelter made the interesting point that Trump's talk about the pictures out of Syria reflects the fact that we don't see the pictures of the damage done by conventional weapons.  As Stelter put it, Trump only saw the gas victims because their bodies were intact.  The pictures of conventional bombing victims are so horrific that news media won't show them.  Those attacks didn't move Trump, but the gas bombs did.  As our wordsmith in chief might say, sad.

Anyway, Spicer got in trouble for making a moral argument about someone not being worse than Hitler.  That's a no-no, because the survival of the Jewish people may hinge on no one ever being publicly judged worse than Hitler, even though any number of tyrants and psychopaths in power could give the guy a run for his money.  But it all starts with the idea that Trump was moved by the immorality of the gas-bombing and not by our national interest in having gas-based weapons go away.  Mattis didn't say anything about the relative evil of people, just about the threat to humanity posed by the unique power of the weapon itself as a force multiplier.

Spicer is a constant reminder of Trump's inadequacy as a President.  If the President had anything to say worth hearing, he'd be forced to find someone capable of saying it.  So far, however, nothing useful has been lost in translation.  If the guy steps in it from time to time, the Left's outrage machine can huff and puff if it likes, but there's really no substance there, and we ought not to be distracted by it.



Tuesday, March 14, 2017

There Can Be Only One (Healthcare edition)

The nation appears to have reached a consensus that healthcare should be affordable and portable.  Our pols are now left with the impossible task of putting this square peg into the circular hole called "insurance."

Insurance is not a label; it's a concept.  Insurance covers risks that have not matured.  But we want to provide coverage for risks of illnesses that have already been contracted when the insurance policy is issued.  Unfortunately, the existence of the condition removes the risk that it will arise later, leaving only the risk that treatment will cost an unknown amount.  That risk can be insured, but the risk that the illness will occur cannot, because that insurable event has already happened.

Yet, we have decided we want to cover the costs of illnesses that have already been contracted when the insurance is taken out.  How do we do that?

One solution - the one used in Obamacare - is to require everyone to buy "insurance," all paying the same price (perhaps age-adjusted), whether they are sick or healthy.  All we have to do is add up the total expected costs of treating all illnesses, divide by the number of people paying insurance premiums, and provide assistance to those who can't afford that amount.  Problem solved.

Except for one thing.  The logic behind this solution demands that all of the premiums collected be available to pay all the claims presented.  But that cannot happen with multiple insurers in the same market.  The better a company is at servicing claims, the more likely it is to attract those who need claims serviced. Meanwhile, a company with poor service would make more money, as its premium payers leave when they get sick.  The companies would, in effect, be competing for the right to go broke.  Companies don't do that, and, mirabile dictu, many Obamacare insurance markets are finding only one player in the game.  How else could it be?  Nothing else works.

Portability is basic stuff to insurance people. A carrier can take on a matured risk if (i) it is paid the estimated cost associated with that risk, or (ii) it is reimbursed for paying actual claims associated with that risk, or (iii) some combination of both.  In the property/casualty business, so-called "loss portfolio transfers" are a common practice.  Claims incurred under one carrier's policy are transferred to another carrier in exchange for a lump sum or other negotiated payment.

A more pertinent model involves reinsurance.  Many primary insurance carriers have reinsurance agreements in place that survive a loss portfolio transfer.  Thus, when the transfer occurs, the amount the original carrier will have to pay to the acquiring carrier may be fully known and fairly small, because the real cost of the loss is borne by the reinsurer.

An Obamacare fix could adopt this reinsurance model.  Each insurance company could take the risk that a healthy insured will get sick while under its coverage, collecting a premium for that eventuality. When an insured gets sick, the company would be required to buy "reinsurance" with respect to that illness by paying an actuarially determined amount into a common Already Sick Pool (ASP),  Then, if an insured changes insurance companies, the company acquiring the risk could tap the ASP for payment.

To assure adequate financing for the reinsurance pool, some combination of three things must occur: (i) healthy people must buy insurance, or (ii) healthy people must pay a tax in lieu of the portion of the premiums they would have paid in excess of the actuarial cost of insuring them, or (iii) coverage by insurance would be automatic and free, with a tax imposed to pay for it on some basis that people find fair.  (See "Medicare.")

Note, though, that a single ASP is central to any of these approaches.  It is not a "detail to be worked out in conference."  It is essential to portability, which is essential to covering pre-existing conditions.  Unless the insurer on the risk when the illness is contracted, or someone else, pays for the cost of that illness, there cannot be portability between competing insurers. Since that is not happening now, competing insurers are withdrawing from the market, and they won't come back no matter how easy it is to enter the market, because the market itself cannot support competition without a single-payer already-sick pool.

The ramifications of a single ASP are enormous.  Insurance companies are essentially investment banks that make their money lending out their insurance reserves. Underwriting activities are just a way of collecting money to lend.  Insurers can even compete on the extent to which their investment results reduce the premiums they need to collect. So, unless an insurance company gets some money to manage, it's not really doing what its shareholders set it up to do.  It becomes a buying service for insureds rather than an investment bank for its owners.  Those are different businesses.

Who, then would manage the ASP?  In what would it be invested?  One can imagine a mechanism whereby each carrier gets to manage a chunk of the pool based on its contributions to the pool.  That might be cumbersome.  The obvious alternative would be transferring the ASP money to the Medicare Trust fund, where it would fund the national debt.  That's not a terrible idea in economic terms, as it would lower interest rates for everyone, thereby benefiting savers and borrowers. But it would deprive the capital markets of the money they now get in the form of health insurance company reserves, so that's pretty much a wash.

And, if there's going to be one pool, it might make sense to put it in a place where administering medical claims is already being done.  That means putting everyone in Medicare.  In short, if we want to insure pre-existing conditions, the only viable solution is a single payer, and the best choice for single payer is Medicare.

The rabbit is already in the hat. All that remains is for some political magician to extract it. Unfortunately, the rabbit looks like a poisonous snake. Maybe "ASP" isn't so good a name for it...

Sunday, February 12, 2017

About Judge Gorsuch

When it comes to Constitutional law, I'm an originalist.  That's with a small "o," like the small "r" in the republican that I also am.  I won't bore you with the difference between my kind of originalist and the kind the Right wants on the Court.  I'm just saying that I take the words in the document seriously.

So, when the Constitution says, in Article II, Section 2, that the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint ... Judges of the supreme Court...", I believe that an originalist must regard as a dereliction of Constitutional duty the failure of any Senator to perform with respect to any nominee for "judge of the supreme Court" the actions that the founders intended be performed with respect to such a nominee.  And it is, therefore, the obligation of any such originalist, should he be offered the chance, to decline to take a seat for which a prior President made a nomination that the Senate has refused, with clearly partisan political motives, to consider.

Judge Gorsuch said in his remarks on being nominated that any judge who likes every decision he has to make is not a good judge.  Well, here's his chance to put his money where his mouth is.  If he takes the Constitution as seriously as those supporting his nomination say, without irony, that they want him to take it, he should decline the nomination until the Senate has dealt with the nomination of Merrick Garland.

I wonder what would have happened if President Obama had sued the Senate, claiming that its stonewalling his nomination of Judge Garland violated the Constitution.  Ignoring the procedural hurdles, how would Justice Scalia would have voted on that one?  How would Justice Gorsuch? Happily, President Obama did not bring that case, and I don't hear any suggestion that such a case is in the offing.  As a result, Judge Gorsuch may legitimately be asked about his reading of the Senate's responsibilities under Article II, Section 2, without the questioner having to worry that the issue might arise before the Court.

I would urge the Democrats on the Judiciary Committee to press Judge Gorsuch for his views, as an originalist, on the Constitutionality of the Senate's treatment of Judge Garland's nomination.  And then, whatever he says, I would urge the Democrats on the Senate to vote "nay" on Judge Gorsuch on the grounds that his very standing for the office is inconsistent with his claimed devotion to the Constitution and with the oath to uphold it that he will take as he usurps Justice Garland's seat.

Saturday, December 31, 2016

Welcome to the Zero-Sum World, where Winning Trumps Sharing

I first came across game theory when I was in High School.  I liked math, and I liked games.  So when I found a book on game theory lying on a table in the school library, I picked it up and got hooked.  Not that I am anything of an expert.  We reductionists don't much go in for uncompensated expertise.  I just want the kernels, especially the idea of coordinated plus-sum games, i.e., games where everybody can win if the players cooperate.

Plus-sum games are distinguished from "zero-sum" games, in which the pay-offs to winners must be matched by the losses of losers.  The Prisoners' Dilemma is the quintessential coordinated plus-sum game.  It quantifies a simple notion that has been around for as long as there has been civilization, a notion captured by the golden rule, and explicated in grand style by Thomas Hobbes in Chapter XIII of Leviathan.
There Is Alwayes Warre Of Every One Against Every One Hereby it is manifest, that during the time men live without a common Power to keep them all in awe, they are in that condition which is called Warre; and such a warre, as is of every man, against every man. ...

Whatsoever therefore is consequent to a time of Warre, where every man is Enemy to every man; the same is consequent to the time, wherein men live without other security, than what their own strength, and their own invention shall furnish them withall. In such condition, there is no place for Industry; because the fruit thereof is uncertain; and consequently no Culture of the Earth; no Navigation, nor use of the commodities that may be imported by Sea; no commodious Building; no Instruments of moving, and removing such things as require much force; no Knowledge of the face of the Earth; no account of Time; no Arts; no Letters; no Society; and which is worst of all, continuall feare, and danger of violent death; And the life of man, solitary, poore, nasty, brutish, and short.
Hobbes reads as a Utopian monarchist.  He argues, in effect, that with "a common Power to keep them all in awe," people would prosper, enjoying those things denied them by the war of all against all.  He understood the prisoner's dilemma.  But there is another way to view the war of all against all.  Any given man can decide simply to win it.  It's a bad choice for most, and it is hard on those who don't win, but the choice is available.  Just ask Vladimir Putin.  Or Donald Trump.

Trump and Putin see the world in zero-sum terms.  They are obsessed with winning, because they have doped out that they cannot do as well by sharing a growing pie as they can do by drinking everybody else's milkshakes.  But that's what the Prisoners' Dilemma is all about: it is always better to steal, if one will not be punished for it by a common Power, than not to steal.  It's not enough to argue that, if everybody steals, we are back in a Hobbesian war.  That argument only works if enough people believe it.  The good behavior must be "coordinated."  Otherwise, the honest man simply becomes the one stolen from.

Hobbes's "common Power" comes in many forms.  One is morality, the shared value system whereby self-esteem derives from not making war against those it would be best not to make war against.  If enough people in a community believe it is wrong to steal, then they won't steal.  Whether that belief is supported by the fear of God, the fear of legal sanction, the fear of ostracism, or the bootstraps we call virtue, the good behavior effectively enjoys a "common Power" sufficient to end the war of all against all.

Morality is the most important driver of good behavior, far more so than the external sanctions.  The sanctions are there to catch the moral weaklings: if you don't see the damage your behavior would do if everyone else mimicked it, we will provide a disincentive for our mutual benefit.  But morality is underlain by material conditions.  Unless cooperation - obedience to law, etc. - yields a better result than defection, people will lose the sense that cooperation is worth the restrictions it imposes.  To put this in game theoretical terms, unless the coordinated game is a plus-sum game, in which the pay-offs exceed the losses such that enough players are enticed to join in, people will revert to a zero-sum view of the world, in which the only way to win is to make somebody else lose.

That view changes everything, and I think it explains the gulf that exists between the Trump voters and their antagonists, not to mention successful states and their kleptocratic enemies.  Trump is about winning a zero-sum game; his opponents are about working together to create a bigger pie and sharing that pie in a politically acceptable way.  In a plus-sum society, a politically stable number of people must be getting more pie soon enough to keep them from thinking it's ok to take someone else's pie.  One can see how losing a war to an unforgiving victor (Germany at Versailles), or losing jobs to an emerging economy of low-wage workers, or seeing all of the gains from trade inure to the benefit of 1% of the population, might lead the common man to believe that morality ain't really all it's cracked up to be.  Maybe we need to be winning rather than sharing.

My internal reductionist sees the "plus-sumness" of one's worldview as a key determinant of behavior.  He also sees self-esteem as the prime motivator of behavior.  If I feel good about inflicting losses, because I see the world as a place where my success depends on those losses being inflicted, then I become or support a Trump.  If, on the other hand, I feel bad about inflicting losses, because they are counterproductive to my sharing in a bigger pie, I become or support a Bush or a Clinton.  Note, this is not a right-left thing; plus-summers can disagree wildly about how to grow or share the pie.  No, it's more of a zeitgeist thing: can the pie be grown and shared, or can't it?

Being a citizen of a "great" country is a  source of self-esteem, "big league."  We want to make America great.  If we believe from looking around us that greatness can come only from "winning," because we tried sharing, and it just isn't working out for enough of us, then we will elect a zero-sum leader.  It's a mistake, because there are plus-sum solutions to our problems, but we need to understand that those solutions are counter-intuitive and not likely to be tried until simpler things have been tried..  (For one thing, sharing the benefits of outsourcing labor require a denigration of work, itself a crucial source of self-esteem in a plus-sum or zero-sum world.)  With any luck, we will find that a non-violent war - a trade war, say - merely impoverishes both sides, i.e., that trade really is a plus-sum activity and that the problem in the US has been the not the paucity but the maldistribution of its benefits.  If that happens, we may move one step closer to solving our problems.  On the other hand, there may be blood.