Foreign Aid, Perception and Reality

I like Dylan Matthews' argument that we should actually give a really huge chunk of money to foreign aid -- maybe the 28% of the budget that Americans think we're giving. It looks like you can save the life of someone in another country with health interventions against AIDS, insecticide-treated bednets to prevent malaria, or deworming pills for under $5000 a year.  Devoting a big chunk of the federal budget to causes like this would be of enormous benefit to humanity, and that's what utilitarians like me care about.

I was thinking about why Americans think 28% of the budget is going to foreign aid when it's only 1%. I wonder if most Americans are categorizing foreign aid in the same way that pundits talking about the budget usually do. A huge portion of the federal budget is directed overseas -- in particular, to military spending. And a lot of military spending has gone to endeavors that could be confused with some kind of foreign aid, on a broad definition of the term -- nation-building endeavors alongside military intervention in Iraq and Afghanistan, for instance. Maybe that's part of why so many Americans think such a huge percentage goes to foreign aid.

Obviously this isn't anything like the aid Dylan supports. It'd be a real misfortune if opposition to excessive "foreign aid" was to expensive nation-building projects that operated alongside military operations, and it frightened politicians away from doing genuinely beneficial humanitarian work. 

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.

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. 

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.

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.