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Sunday, November 10, 2013

There is nothing new under the sun



     The cable news talking heads report that we are a deeply polarized electorate, at the same time the cable news network’s report poll data about “The New American Center”. This latest poll justifies reporting from the middle. Both claims are reported as new, the polarization is new and caused by violent computer games (there is a well crafted argument outlining this claim), and at the opposite, the “New American Center” is recent. Reading the essays, the polls and the reporting from both sides of these two claims I am struck by the self justification on display. I will consider this in a longer time frame and a larger context.
     News organization must operate at a profit, or they cease to exist. Yellow journalism is an established business model for news organizations. From Wikipedia, “a type of journalism that presents little or no legitimate well-researched news and instead uses eye-catching headlines to sell more newspapers.” As the consumers of news we want the latest scandal, complete with shocking revelations, we want news that conforms to our views, and we demanded stories that justify our beliefs. The owners and editors of news organizations have known this for centuries. The cable news denizens have to give us something “new”, hence the “new” polarization stories and the “new” American center poll. There is nothing “new” here; instead this is a creative attempt at a controversial story. The truth is more interesting but requires nuance.
     Americans are ideologically conservative and functionally liberal. Most of us are in favor of a smaller government, more freedom and lower taxes. That is an ideology 70% of Americans agree with, at the same time most of us agree (the same 70% actually) that soldiers have earned their VA benefits, that someone who has worked hard for 50 years deserve their Social Security and Medicare. Most agree that VA benefits, Social Security and Medicare should receive more funding and be strengthened. I have just described myself, and I am ideologically conservative while being functionally liberal.
     Polarization is based on misinformation and is highly profitable. Talking with coworkers, friends and relatives I find the most vocal are also the most misinformed. Those that point out the Low Information Voters are themselves Low (valid) Information Voters. Hearing their antidotes I could get angry myself, I don’t wish to give free stuff to lazy people; I don’t want my food stamp tax dollars buying steak for drug using illegal immigrants. The facts don’t support the antidotal stories. Most food stamp recipients are Wal-Mart employees or work at McDonalds. Most food stamp recipients work long hard hours at the best job they could get; the hourly wage just isn’t enough to feed a family. Inflammatory misinformation is high profitable for the purveyors of the material, the cable news network will have a higher viewership, and the author of an expositive book can earn millions of dollars.
     Looking through all this for something “new” can become discouraging. As the bible noted millennia ago, there is nothing new under the sun. The speed that we can be misinformed has certainly increased but the speed that we can be correctly informed has also increased. While people have not changed our tools have, the internet holds as much promise as peril.

ObamaCare (ACA) talking points



     ObamaCare health insurance will only work if healthy young people join.
     If that is true then why does Medicare work, all the participants are older, at least 65 years of age, still Medicare is working very well, Medicare premiums are lower, benefits are better and every retired person is covered. The answer is in the math, for Obamacare to work a large number of people need to sign up. As long as there are a large number of members it will work, all the members can be sick or well or any mixture of the two. Insurance is risk sharing by a large pool of members; actuarial science is often counter intuitive, as is true of most scientifically sound statistics.

     ObamaCare will change the American health care system.
     ObamaCare will certainly change the health insurance industry. The previous business model for the insurance corporation was simple, collect premiums, and then deny claims. The industry had developed a collection of highly profitable practices. Preexisting conditions, rescission (a legal method of undoing a contract), cherry picking by forced selling to employed citizens (did you really have any choice as an employee?), annual and life-time maximums, these are just some of the highly profitable health insurance business practices. The ACA law forbids or seriously restricts all these practices. The insurance industry will have to go back to the old fashion practice of actuarial science. The health insurance industry will remain profitable; the proof of this projection is visible everyday on the public stock market. I’ve profited by owning the Medicines Company (symbol MDCO) and Covidien PLC (symbol COV), and I still own shares of MDCO. For anyone claiming that the health care industry will be destroyed I will point to the world’s stock market exchanges, and then ask for proof of their claim judged against the open market’s evaluation. The stock markets are reacting to a free market health care system with government mandated rules. This is the same as car insurance or mortgage insurance. America will be the only example of this system; the other advanced nations have chosen true government run health care systems, with private insurance available on the margin.

     There will be shortages of Doctors and facilities.
     I guess all the Doctors are going to quite medicine and become welders, maybe hospitals will be converted to shopping malls, or maybe since we all have insurance, we will start grapping snakes with bare hands, or diving freeways in reverse. I can’t predict for certain but I think not. Any shortage of Doctors (or Engineers, or Car Mechanics) is due to an artificial shortage of educational opportunities.
I could easily go on and on about the politically motivated claims of the right wing, however the consistent theme is massive misinformation. This is a surprising paradox, the Tea Party types I know spend a lot of time informing themselves. They read a lot, they meet and discuss issues, and they profess commitment to logic and facts, so why are they so misinformed? This is a clear case of a self reinforcing believe system, they start with the answer then find “facts” to support their beliefs. This still leaves a paradox, the Tea Party types are generally intelligent, well educated and willing to study. I guess that with over 300 million Americans you can find a few hundred thousand of anything.