Sunday, October 27, 2013

Meat Substitute Branding Thoughts (I Want To Eat Dragon)

If you invent a tasty new fake meat, but it isn't really like any particular real meat like beef or pork or chicken, I'd suggest giving it the name of a mythical creature. I'd like to eat unicorn or hydra or phoenix or dragon.

The image is from these folks.

Saturday, October 26, 2013

National Standardization Of Voting Laws

It was fairly obvious to everyone that Republican voter ID laws were attempts to stop Democrats from winning elections by preventing black people from voting. After the Buncombe County GOP chairman said it in so many words to a Daily Show reporter, it's out there in public. 

If Democrats somehow win back the House of Representatives in 2014, some sort of national standardization of voting laws should be on the agenda, to stop local authorities from erecting frivolous barriers to voting. As always has been the case, federal action is the way to defeat a racist majority in state government that is determined to prevent black people from voting. 

Tuesday, October 22, 2013

Assorted Thoughts on the Seattle/Tacoma UFCW non-strike

Unionized workers at several grocery store chains--Safeway, Albertson's, and the Kroger-owned Fred Meyer and QFC--will stay on the job after negotiators reached a tentative agreement last night. The main sticking point seems to have been health insurance coverage for part time workers. The current contract provides some level of insurance to part-time employees working 16 hours per weekweek. Management sought to limit insurance coverage to employees who 30 hours per week, those who meet the definition of "full-time" under the Affordable Care Act, commonly referred to as Obamacare.
  • Management's position here is similar to, though less generous than, Trader Joe's. TJ's decided to give its part-time employees $500/year to purchase insurance on the exchange while dropping their employer-sponsored insurance coverage. They claim that for part-time workers for whom the job at TJ's is their only job, this is a much better deal. It's quite possible they're correct.
  • Simply dropping employer-sponsored coverage in exchange for nothing is a raw deal. It's just a reduction in compensation. If management had been offering a raise, that would be different, but instead they were trying to cut entry-level wages and eliminate paid sick leave.
  • Economists like to say that benefits are "compensation", and that any cut in benefits should  result in higher cash wages for workers. While that may be true in the long term, it's not always going to be true in the short term.
  • If the we want some or all of surplus generated by insurance cuts to flow to workers, we need to think about how to boost employee bargaining power, which has drastically deteriorated in man job sectors over the last fifty years.
  • Unions whose employees are likely to qualify for subsidized insurance ought to think about fighting for higher cash wages, or defined-benefit pensions, rather than non-cash compensation.
  • Employers who can easily rely on part-time workers, such as retailers, can engage in all sorts of scheduling games to prevent employees from qualifying for benefits. Requiring employers to provide benefits for part-time workers prevents them from wasting managerial time and effort playing these games.
  • This whole episode could be avoided, or at least mitigated, by replacing the 30-hour cliff with some measurement of full-time equivalents and require a certain level of insurance per FTE.

Wednesday, October 16, 2013

The Medical Device Tax Is Good Political Economy

One of the odd pieces of shutdown/debt ceiling negotiations has been an obsession in Washington with a 2.3% tax on medical devices included as part of the Affordable Care Act. Ezra Klein says "there's no obvious justification for the medical device tax", which, in pure policy terms I suppose is "mostly true". There's some deadweight loss, there will be slightly fewer jobs and slightly less innovation in the field. Whether or not that's a good price to pay for the revenue gained by the tax is an empirical and phisophical question. Note that there is some concern among health care wonks that medical devices are overutilized, particularly the subcategory of durable medical equipment.

But at the level of political economy, the medical device tax is a good tax. Most health care industry trade groups—insurers, drug manufacturers, hospital associations, etc.—decided that they would rather be at least a reluctant partner in the ACA's passage and negotiate some sort of industry-wide fee, tax, or federal spending cut in exchange for a tremendous expansion of their customer base. This lead to some unseemly results such as the White House opposing Democratic efforts to bring down the cost of prescription drugs as the price of PhrMA's cooperation.  The trade group for medical device manufacturers—the Advance Medical Technology Association—refused to play ball. The tax is thus a combination of (1) a way to gain revenue, (2) an attempt to compensate for perceived overuse & mispricing of medical devices, and (3) a penalty for the trade group's intransigence. The trade group is now trying to wriggle out from their previous mistakes.

This is the big leagues. In 2009, the AMTA played the lobbying game and lost. Now in 2013, they're trying again and losing. If device manufacturers want the tax repealed while Barack Obama is in the White House, they should try tying to something Democrats might actually care about. Fix the "family glitch". Replace the 30-hour "full time employee" cliff with some sort of full-time equivalency measurement. But attaching repeal or delay to reopening the government at sequestration levels of spending? That's not a ransom note that the Obama Administration should sign.

Monday, October 14, 2013

How To Negotiate Your Party Into Extremism, In Three Easy Steps

1) Congressional Republicans threaten to do something extreme in negotiations with Democrats. For example, "We're not going to raise the debt ceiling unless you accept the repeal of Obamacare." It's just a negotiating ploy -- they really think the debt ceiling should be raised, but they're trying to extract concessions by making threats.

2) So that they don't look like hostage-takers, they want to seem like they're making principled demands rather extreme threats. So they argue that the threatened scenarios really fit their principles. For example, "Not raising the debt ceiling is necessary to keep us from going broke."

3) The Republican base believes them. After all, the opposing views are coming from Democrats and the mainstream media, whom they don't trust. So many Republicans think not raising the debt ceiling is necessary to keep America from going broke -- even though it triggers debt default, which actually constitutes going broke!

Do this over and over again, and people in your party start to have views on major issues that weren't even believed by the people who initially expressed them. I don't know whether Ted Yoho is a cruder example of the politicians in (2) or one of the base voters in (3) who managed to win a primary. Probably he's an amalgam of both. 

Sunday, October 6, 2013

Republican Extremism Is Bottom-Up

As Dave Weigel points out, it's not really a few dozen crazy Republicans provoking the government shutdown. It's Republican primary voters all across America. They hate Obamacare and they're willing to defeat anybody who doesn't take a sufficiently hard line against it, just like they've been defeating a long line of electable Republicans in Senate primaries.

Ted Cruz may be the star of the movement, but his role was to bring a particular extreme political option within the scope of Tea Party hopes and dreams so that the Republican base would pressure their legislators to pursue it, not to build a coalition of legislators by himself on Capitol Hill. That's what I'm liking about him -- he strengthened the force that's tearing the Republican Party apart, and it should help Democrats win more legislative races next year, as it did in the last two cycles. One hopes that these forces don't tear apart the country, but assuming that we can pass budgets and debt ceiling increases, the majoritarian structures of democracy provide protection against that.

Friday, October 4, 2013

Friday Obama Caption Contest & Kitsch Cover

Photography is probably non-essential, so here's the last photo on the Whitehouse Flickr feed. Original caption: "President Barack Obama and Vice President Joe Biden listen as they are updated on the federal government shutdown and the approaching debt ceiling deadline, in the Oval Office, Oct. 1, 2013. From left, Kathryn Ruemmler, Counsel to the President, Treasury Secretary Jack Lew, Sylvia Mathews Burwell, Director of OMB, and Alyssa Mastromonaco, Deputy Chief of Staff"

Today's Kitsch Cover is the Watson Twins performing The Cure's "Just Like Heaven":

Thursday, October 3, 2013

More on the Troglodytes running Southern States, Wisconsin, and parts of the Interior West

21 year-old Chad Henderson is getting lots of calls from reporters. I wanted to highlight this snippet from WaPo's Sarah Kliff:
Henderson is a part-time worker at a day-care center. He did not qualify for tax credits to purchase health coverage because his income is below the poverty line. Since Georgia is not expanding the Medicaid program, that meant Henderson was essentially responsible for his entire premium.
Henderson purchased a health insurance plan with a $175 monthly premium. While that price does fit in his budget, he was also hoping for a better deal.
100% of FPL is $957 a month. Chad Henderson earns less than that, and he's going to spend $175 of it on health insurance.

This is the flesh-and-blood consequence of state-level Republican lawmakers—and let us not mince words here, Republicans control at least one of the branches of government in the only states that have not expanded Medicaid— choosing not to expand Medicaid to cover the poorest of the poor. For merely the cost of administering the expansion, states had the opportunity to cover all their citizens earning less than 133% of the Federal Poverty Line. Instead people like Chad Henderson will fork over a hefty chunk of their paycheck every month in insurance premiums.

And Henderson's situation isn't even that bad. A 62-year old retiree—someone who might have lived a life full of physically taxing low-wage jobs—might have retirement benefits that are still below the poverty line. But their premiums would run in the $550-650 range. Remember, for one in five retirees, Social Security is their only form of income. If someone fitting this description lives in the Deep South, Wisconsin, Missouri, Kansas, etc., they will have to send half their paycheck to their health insurance company to get coverage. All because their Governor or State House Speaker or State Senate President didn't want to participate in a nationwide Medicaid expansion.

I don't understand how anyone can call this behavior anything other than immoral.

Tuesday, October 1, 2013

For Obamacare Purposes, Your Income May Be Lower Than Your Salary

As people are beginning to navigate the five-question Obamacare flowchart, it's important to remember that the Affordable Care Act defines "income" as "Modified Adjusted Gross Income". Many line items on form 1040 that people commonly refer to as "deductions" are technically "adjustments to income", meaning that they will not count as income for purposes of determining Medicaid or subsidy eligibility. Most importantly, tax-favored retirement contributions (401k, deductible IRA, SEP, SIMPLE), student loan interest for low-income & middle-class households, and alimony do not count as income for Medicaid/subsidy eligibility. Other pre-tax employer deductions, such as commuter expenses, daycare FSAs, and the like, also don't count as income.

Another important note is that Social Security income, which is non-taxable for many people, does count as income under the ACA.

The Berkley Labor Center put together list of what counts as income under Obamacare, which you might find handy.