Dan Drezner has written a persuasive post on why Jon Stewart was wrong to condemn Crossfire, the late and mostly unlamented TV debate series.

As inane as the crosstalk shows might have been, one of their strengths was that they had people with different ideological and political perspectives talking to (and sometimes past) each other.  You could argue that the level of discourse was pretty simplistic and crude — but at least it was an attempt at cross-ideological debate.  People from different ideological stripes watched the same show and heard the same arguments.  Nowadays, if you’re looking for that kind of exchange, you either have to fast all week until the Sunday morning talk shows, or go visit bloggingheads. 

Instead of Crossfire-style shows on cable news, you now have content like Hannity, Glenn Beck, Countdown with Keith Olbermann, etc.  These programs have no cross-ideological debate.  Instead, you have hosts on both the left and the right outbidding each other to see who can be the most batsh**t insane ideologically pure.  These shows attract audiences sympathetic to the host’s political beliefs, and the content of these shows help viewers to fortify their own ideological bunkers to the point where no amount of truth is going to penetrate their worldviews.

At the time, I was mainly bothered by Jon Stewart’s self-righteousness. While the writers and producers of The Daily Show are clearly tremendously talented, it has long been clear that Stewart’s gift mainly lies in connecting with the prejudices of his audience. (Stephen Colbert, in contrast, strikes me as a brilliant performer, as evidenced by the manic intensity of The Colbert Report and his supporting role in Strangers with Candy, not a series I’d describe as family-friendly.) To that end, he veers between lecturing the public and, when it suits, retreating into the role of a jokester who is immune to criticism. The irony of his “hurting America” remarks is that, as Drezner suggests, Stewart helped accelerate the death of cross-ideological debate and the rise of contempt-driven mono-ideological programming.

That said, I have faith in the marketplace.

At the Weekly Standard, Jeffrey Anderson calls for a “small-bill” alternative to Baucuscare.

But Republicans cannot lead merely by stating abstract principles. They must advance specific proposals–ones that are easily understandable and can be expressed in plain language to the American people. The Republican bill should be as short and simple as possible. It should be targeted to address Americans’ specific and pressing concerns. And it should make health insurance more accessible, affordable, and portable–without breaking the bank, threatening the quality of care, or jeopardizing the preexisting insurance of millions. It should look something like this.

I don’t think Anderson’s proposal goes far enough, but it includes a number of smart ideas.

Who said bipartisanship is dead? Catherine Rampell reports that Republicans and Democrats are getting behind a solid — not perfect, but solid — proposal for fighting unemployment.

The idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and Washington officials grappling with the highest unemployment in a generation.

There are, of course, a variety of ways to structure the credit, some better than others.

An American Economic Review study has suggested that the 1970s policy was responsible for adding about 700,000 of the 2.1 million jobs that were awarded the credit. This may sound modest, but if accurate, economists say it would make this proposal a successful and relatively cheap way of creating jobs.

Advocates argue that such incentives would be more effective this time around not only because of design, but also because of timing. In 1977, hiring was already on the upswing, whereas economists expect today’s job market to decline a bit more and then stagnate for months.

“Now is a better time than ’77 was because we’re closer to the bottom of a recession,” said Daniel S. Hamermesh, an economics professor at the University of Texas, Austin, who helped create the 1970s plan. “This could help an uptick proceed more rapidly.”

There is legitimate concern that employers might game the system, and this approach won’t be cheap. But it seems vastly superior to the way the White House has approached the question of economic stimulus so far. 

P.S. Greg Mankiw has written a more critical take on the idea, and he endorses a more straightforward proposal.

I would institute an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax. I would make the two tax changes equal in present value, so while the package results in a short-run budget deficit, there is no long-term budget impact. Call it the create-jobs, save-the-environment, reduce-traffic-congestion, budget-neutral tax shift.

I recognize that some state governments are now struggling in light of the macroeconomic crisis. For the next two years, I would let each state governor have the authority to divert a portion of the payroll tax cut in his or her state and take the funds instead as state aid. This provision would essentially be giving governors the temporary authority to impose a payroll tax on his or her citizens, collected via the federal tax system. Those governors who think they have valuable infrastructure projects ready to go would take the money. When designing a fiscal stimulus, there is no compelling reason for one size fits all. Let each governor make a choice and answer to his or her state voters. It is called federalism.

This is an extremely appealing idea. My guess, however, is that the job creation tax credit might be the best we can get. 

One of the great pleasures of writing this blog has been receiving emails from readers, many of which offer trenchant criticisms of my sense of where conservative policymakers should be going on a wide variety of issues. In a recent Slate dialogue with Sam Tanenhaus, I laid out my broad view.

The historical reality I have in mind is that we’re living in straitened economic circumstances, that we face an unemployment crisis that might last a decade or more, and that American workers don’t have the skills they need to flourish. Over the past decade, spending by state governments has increased at a rate of 6 percent a year, far outstripping economic growth. This is not sustainable. What I want most from the political right is a commitment to truth-telling: In the next few years, we will have to cut spending and raise taxes across all levels of government. In normal times, this isn’t a winning political formula, but it might be in a crisis. And a crisis is exactly where the retreat from responsibility, which I see as a phenomenon of the right but also of the left and center, is leading us.

I imagine a lot of you disagree with this, and I’d love to discuss this and other issues at greater length. So please join me today at noon Eastern Standard Time at the Washington Post. Hostile and friendly questions are equally welcome.

This summer, I wrote a post on the case for federalizing Medicaid, one that drew on Ronald Reagan’s proposal for a swap between state and federal governments. Ezra Klein offers another argument for doing so:

Medicaid is a counter-cyclical program. When the economy gets bad, the program gets more expensive. That’s obvious enough: People lose their jobs and suddenly need help affording health-care coverage. Medicaid exists to help them. The problem is, that’s the exact moment when state revenues go down, because people who lose their jobs pay less in taxes. And 49 of 50 states are required to balance their budgets, so they can’t deficit spend.

The precise moment when Medicaid costs more and is most needed, in other words, is also the precise moment when states are least capable of increasing their contribution. The federal government, conversely, is able to deficit-spend during recessions, and often does. The federal spending pattern makes sense for Medicaid. The state spending pattern doesn’t. Give it to the feds.

Now, Reagan’s idea for a swap posited that income-maintenance programs would be shifted to the states, and these are counter-cyclical programs as well. I think we need to do a far broader rethinking of state and federal responsibilities. 

Last year, I had the great pleasure of reading Michael Heller’s excellent and very accessible The Gridlock Economy, and Tim Lee has a very useful post summarizing Heller’s recent Mercatus debate with Richard Epstein, a libertarian law professor I’m guessing many of you have read. I’m a fan of Heller and Epstein, so this was a particularly interesting exchange for me. 

Will 2010 be a false dawn for Republicans? Brownstein makes a strong case:

In midterm elections, the electorate tends to be whiter and older than in presidential elections. ABC polling director Gary Langer has calculated that since 1992 seniors have cast 19 percent of the vote in midterm elections, compared with just 15 percent in presidential years. That difference contributed to the 1994 landslide that swept the GOP into control of both the House and Senate. Seniors had cast just 13 percent of the vote in Bill Clinton’s 1992 victory, but that figure spiked to nearly 19 percent two years later, with voting by the young people who had bolstered Clinton falling off sharply.

If 2010 is the year of the “angry white senior,” as The Cook Political Report has argued, it’s easy to see a strong anti-Obama backlash leading to significant Republican gains in the House. But the composition of the electorate will change in 2012.

But that dynamic also means that Republicans could do very well in 2010 without solving their fundamental demographic challenges. In the 2012 presidential election, the young and minority voters central to Obama’s coalition are likely to return in large numbers. The risk to the GOP is that a strong 2010 showing based on a conservative appeal to apprehensive older whites will discourage it from reconsidering whether its message is too narrow to attract those rapidly growing groups. “It can’t be the same formula in 2012,” Ayres warns.

One wonders how many young voters will return. It’s possible that 2008 saw an unusually high level of youth turnout that won’t be replicated any time soon. If unemployment surpasses 10 percent and stays there for a prolonged period, youth unemployment will presumably be somewhat higher. These voters might not be inclined to actively and energetically support the party in power at that point. To be sure, it’s not clear that Republicans will be able to win them over. A jobs-focused agenda would help. John Harwood suggests that Republicans will emphasize jobs on the campaign trail.

Moreover, even Mr. Obama’s economic team now concedes that unemployment, which they once hoped to keep from exceeding 8 percent, will get worse through the end of the year. One outside economist, Mark Zandi, predicts the economy will shed 750,000 more jobs over the next six months, with unemployment peaking at 10.5 percent in June.

Republicans say the trends will only magnify voters’ doubts about the effectiveness of the administration’s anti-recession policies. “For a lot of people, the ‘whether it’s working or not’ is filtered through jobs,” said a Republican pollster, Bill McInturff.

But what exactly will the G.O.P. do to revitalize the economy? 

This is one of the best takes on health reform I’ve read come across.

Health reform is beginning to look like a run-of-the-mill “fix” of the sort Washington applies whenever a big-spending program spins out of control. When people get attached to benefits they haven’t paid for, the solution is seldom to cut the benefits. It is to rope in a set of dupes (in this case, young, healthy people) to pay for benefits they won’t receive. Far from breaking with the me-first ethos that brought us to the brink of economic ruin, the individual mandate fits squarely within the time-honored Capitol Hill tradition of identifying resources that can be dislodged from future generations, and transferring them to the generation in power.

As Charles Murray has eloquently observed, we’ve lost a number remarkable conservative thinkers over the last decade. Fortunately, we have Caldwell, as well as some of my distinguished colleagues at National Review, to at least start filling the vacuum. 

I’m a little late on this one, but I’d like to point you to Annie Lowrey’s report on London’s struggles with the 2012 Olympics as a sign that Chicago should be grateful for losing to Rio. 

The budget for the games has quadrupledto a truly Olympic size: £9.3 billion ($15 billion), and rising. Jack Lemley, the ousted chair of the Olympic Delivery Authority, forecast the games might at the end of the day cost Britain as much as the 2008 Beijing games cost China, in the region of $40 billion — more than Britain’s stimulus package, a mayday measure designed to save the country from economic ruin last November.

That was a cost China — an expanding economy with very low labor costs and the need for infrastructure anyway — could bear. It’s less clear that Britain can. For one, London hardly needs the facilities it’s building, and they are of questionable legacy value. More importantly, such exorbitant costs are coming at the same time that the British economy is struggling beneath the weight of the credit crunch and recession.

The sad truth is that the hosting the Olympics should be the province of developing countries with something to prove. Conservatives have been accused of gloating over Chicago’s loss, and that may or may not be true. This accusation does strike me as an effective way to deflect legitimate criticism of the president for going to Copenhagen when he evidently didn’t have enough time to regularly consult with and reassure an increasingly erratic Hamid Karzai before Afghanistan’s rigged national elections. The job of any president is almost impossibly hard, and it’s important to recognize that. But if President Bush had fought hard for Dallas or Houston to win the games, I promise that there’d be howling from the opposition.

On a lighter note, Brad Flora wrote the definitive take on the cultural politics surrounding Chicago’s bid for the Olympics for Slate.

Why the grumbling? The bid’s most visible opponents have spent years howling that the Olympics will breed graft and political corruption and bleed an already cash-strapped city dry. Chicago 2016’s supporters, by contrast, have argued that the Olympics will improve the city’s standing, create jobs, and boost local morale. The debate here wasn’t best understood as an honest disagreement over what’s best for Chicago. Rather, the rhetoric was indicative of a more fundamental clash: the eternal battle of jocks vs. nerds.

In Flora’s view, Obama was well-placed to bridge the jock vs. nerd divide.

Who in America has the power and the bona fides to end this perpetual jock-nerd standoff? If anyone can do it, it’s President Obama. With his professed fondness for comic books and his prowess on the basketball court, he speaks both nerd and jock. And having agreed at the last minute to fly to Copenhagen to stump for the Games, he put himself at the center of the dysfunctional local shouting match. 

Alas, it didn’t quite work out. The jock vs. nerd concept might even shed light on infighting among conservatives these days, but that’s a whole other story.

The Conservative Party is having its annual conference in Manchester this year, a departure from past years when party conferences would take place in England’s various seaside resorts. Fraser Nelson, the new editor of The Spectator, explains the shift:

Why a Monday start? And why Manchester? The seaside resorts were chosen when party conferences were rallies of the grassroot members, and venues were chosen for their supply of cheap (usually B&B) accommodation. Now, most people who attend are the new breed of political professionals who are not paying their own hotel bills. Lobbyists, quangocrats, NGO advisers, journalists, the whole lot. … There are fewer and fewer grassroot activists who do it for love. The reason for starting conference in a weekend was to let those activists get back to work. For the political pros now stuffing the conferences, this is work – don’t blame the Tories for starting on a Monday in Manchester – but it is a sign of the steady professionalisation of politics. And I don’t mean that in a good way. 

Many NR readers find David Cameron’s transformation of the Conservatives dispiriting. His efforts to “modernize” the party are often interpreted as a leftward lurch. I take a somewhat more favorable view. My sense is that Cameron has been far too accommodating on Britain’s National Health Service. Indeed, his stance on the NHS is arguably to the left of Labour, which is a scandal. Yet it is a fairly predictable political decision given the landscape, one that resembles the recent tendency of Republican lawmakers to defend Medicare in the same apocalyptic tones once used by Democrats. And it’s also true that Cameron hasn’t been as forthright as he should be regarding the spending cuts that Britain will have to endure over the coming years. He acknowledges that cuts have to be made and that Britain faces a fiscal emergency (see this report on the country’s public finances from The Economist), which is more than can be said of some politicians, but I wish he’d hammer the point more aggressively. The danger, again, is that he’ll be demagogued by Labour.

Labour’s attack on the Conservatives has been contradictory: he’s a dangerous right-wing ideologue and he’s an opportunist with no convictions. But now the consensus is that the Labour party has settled on the dangerous right-wing ideologue narrative, and to that end they maintain that Conservatives are gleeful about slashing public spending. Having emphasized their “compassionate” credentials, this kind of attack has lost its force. The Conservatives have instead focused on introducing choice, competition, and accountability into public programs. This had been part of Blair’s agenda, yet it was undermined by intense resistance within the Labour Party. Michael Gove, one of the bright lights of Cameron’s shadow cabinet, has done a brilliant job of selling the party’s ambitious plan to embrace Swedish-style school choice, which allows parents and charities and for-profit firms to establish schools that would then compete with state schools. And they’re also pushing an ambitious welfare reform agenda spearheaded by David Freud, who recently defected from Labour, and the slightly disappointing Theresa May.

So far, the Conservatives have been cautious about offering tax cuts. They’ve proposed tweaks here and there, but they’ve also accepted some of Labour’s more egregious tax hikes in response to the looming debt crisis. At the same time, the party seems increasingly receptive to tax cuts designed to spur job creation. My hope is that they will, like the Canadian Liberals, create a very transparent, open process for sharply reducing government spending once in office, and that they will then pursue an agenda of tax-cutting and tax-simplification. After spending time with a lot of sharp Conservative thinkers, I sense that this is their intention: to gain credibility on spending before they make promises they can’t keep. 

For a sense of Cameron’s rhetoric, check out his recent comment in The Daily Telegraph. 

Via FuturePundit I found a really fascinating short article in Science by University of Calgary climate scientist David W. Keith, in which he argues that we should sharply increase investment in air capture, “an industrial process that captures CO₂ from ambient air, producing a pure CO₂ stream for use or disposal.”

Technologies for decarbonizing the energy system, from solar power to the capture of CO₂ from the flue gases of coal-fired power plants, can cut emissions but they cannot reduce the climate risk posed by the carbon we have already added to the air. It may be possible to increase the Earth’s reflectivity, engineering a cooling that counteracts the CO₂-driven warming. Although climate engineering may be important for managing climate risk, it cannot eliminate long-term climate and geochemical risks posed by elevated CO₂. It is therefore in our interest to have a means to reduce CO₂ concentrations in order to manage the long-run risks of climate change.

Like most climate scientists, Keith believes that we should focus on reducing emissions, and to that end he favors the creation of a carbon market. While I think reducing emissions is a worthy goal, I’ve been convinced by Jim Manzi that most of the proposals for decarbonizing the energy system, which focus on some combination of a carbon market and large transfers to incumbent energy firms, are too costly relative to the likely benefits, which is why I prefer large-scale public investment, financed out of general revenue, in technologies like air capture: whether you believe, as I do, that the IPCC is most likely underestimating the dangers from climate change or that it is overestimating them, this is a smart hedging strategy. 

So why not back a carbon market? I’d be more inclined to support one if we could somehow create a global carbon market. Brad Plumer recently cited a report from Climate Group on what a multinational carbon market might look like.

More specifically, the Climate Group estimated that, by 2020, carbon prices in Europe would hover around $65/ton if the E.U. was still going it alone. But, if both the E.U. and the United States had interlinked cap-and-trade programs, the price would go down to $28/ton. And if all developed countries and China somehow hooked up under one big cap-and-trade system, the price of carbon could be as low as $4/ton. In other words, the cost of reducing carbon would be nearly negligible.

Basically, the Chinese use a number of obscenely inefficient coal plants. There is a lot of low-hanging fruit in the developing world. Reducing emissions in the United States and Europe, in contrast, is more expensive, as our economies are already less carbon intensive. 

What if air capture became so efficient that we could unilaterally scrub the atmosphere? I’m sure that David Keith considers this a far-fetched scenario. But this research agenda certainly seems worth more than the $3 million of public and private research money we’re spending at the moment. The benefits of a breakthrough would be massive. 

Steve Coll, my boss at New America, has written two excellent posts on what we can learn from the Soviet experience in Afghanistan. In “Ink Spots,” he describes the state of Afghanistan between 1986 and 1992 and how it might prefigure a successful U.S.-led counterinsurgency strategy: realistically, the best we can achieve short of occupying Afghanistan with a 500,000 man army is an archipelago of secure cities linked by air or by heavily-defended roads cutting through Taliban-controlled territory. He ends on a sobering note.

The uncertainties point, like so many other factors in this conflict, to the central importance of politics in Kabul and Islamabad. The Soviets failed in Afghanistan for many reasons, beginning with the brutality of their military campaigns and the implausibility of their political strategy. Nonetheless, by the end of the 1980s, they had constructed a durable ink spot strategy, albeit one based on a more defensive and internally ruthless political-military strategy from the one McChrystal is proposing. The Soviets were unable, however, to convert that partial territorial achievement into a broader and more durable strategic success. Partly they just ran out of time, as often happens in expeditionary wars. Their other problems included their inability to control the insurgents’ sanctuary in Pakistan; their inability to stop infiltration across the Pakistan-Afghan border; their inability to build Afghan political unity, even at the local level; their inability to develop a successful reconciliation strategy to divide the Islamist insurgents they faced; and their inability to create successful international diplomacy to reinforce a stable Afghanistan and region. Does that list of headaches sound familiar?

In “Gorbachev Was Right,” Coll suggests that the United States should have cooperated with the Soviets in the late 1980s, after the U.S-backed insurgency had successfully sapped the strength of the Soviet-backed Afghan state. Rather than just prop up President Najibullah, Gorbachev sought a UN-sponsored process that would isolate Islamist extremists, who were both anti-Soviet and anti-American, and create a broad-based government. Note that Ahmad Shah Massoud, who went on to become the greatest thorn in the Taliban’s side, was on the verge of casting his lot with the Soviets before Afghanistan’s complete collapse.    

The U.N. attempted, with ambivalent U.S. involvement, to pursue this vision of regional diplomacy and stabilization, through negotiations between 1988 and 1992 that included Najibullah and other Afghan leaders. It failed, however, in part because the United States, until the end of 1991, continued to fund and support a “military solution” for the mujaheddin favored by Pakistan’s army and intelligence service. The C.I.A. argued in favor of the military solution. It then concluded, as one assault after another on Najibullah-defended cities failed, that the U.S. had no further interests in the country and should pack up its financing and diplomacy and go home. A few years later, the Taliban took Kabul. One of the American policymakers responsible for this sequence of policy decisions—who was deeply skeptical of Gorbachev during the late nineteen-eighties and who was present at the decision to abandon the difficult work of regional diplomacy in 1991-1992 that Gorbachev favored—was Robert Gates, who is now Secretary of Defense.

One hopes that Gates is not on the verge of making a similarly serious mistake by short-changing the counter-insurgency effort in Afghanistan.

Many have argued that congressional Republicans have played a uniquely counterproductive role in debates over the fiscal stimulus and health reform. Some writers and thinkers have gone so far as to describe House Republicans as “nihilistic.” In a lead editorial, The New Republic doesn’t go quite that far, but the editors do suggest that Republicans are operating outside the bounds of reasonable disagreement:

The Republican reception of Baucus’s bill doesn’t so much represent a crisis for health care reform as it does a crisis for our system. The GOP is no longer representing interest groups; rather, it has become an interest group itself–and an implacable one. So that a compromise piece of legislation that achieves a rough consensus among the various factions in the debate fails to get even one vote from one of the two major parties.

Where to go from here? Having failed to win over Republicans, Baucus should now labor to win over Democrats. If that means having Massachusetts appoint an interim replacement for Ted Kennedy’s seat–or even passing some of the reform through reconciliation–then so be it. If Max Baucus’s months of work achieved nothing else, he has unmasked the true nature of the contemporary GOP and, in the process, revealed just how broken our political system has become.

I’ve recently been thinking a lot about how structural aspects of our political system have made partisan competition sharper, a subject I intend to write about at greater length. But for now I’ll point you to an excellent essay by Michael Barone in The American, which I just came across today, on the respective congressional bases of the Democratic and Republican parties.

Heavily Republican districts are concentrated in the rural and suburban South. But a significant number of these rural South districts elected Democrats—not as many as did before the 1994 election, but more than during the period of House Republican majorities from 1994 to 2006. As a result, they do not produce as large a share of Republican leaders as the gentry liberal and black districts do for the Democrats. Neither do the suburban South districts—many newly created after the 1990 and 2000 censuses because of rapid population growth—whose members tend not to have great seniority. But such districts did produce earlier Republican leaders, including Speaker Newt Gingrich (first elected in 1978 when GA-6 was a rural South district) and Majority Leaders Dick Armey (TX-24) and Tom DeLay (TX-22). The current Republican leadership thus has reason to focus less on the political realities of heavily anti-Obama districts and more on districts that in the 2008 presidential election were more marginal. That tendency is probably increased by awareness of the party’s current minority status, which gives them an incentive to appeal to voters in districts not currently represented by Republicans.

These constituency realities may help to explain why the House Democratic leadership has supported a solidly liberal agenda and has concentrated on whipping enough members from marginal districts to produce majorities on the floor—the large majority on the stimulus package in February or the narrow majority on cap-and-trade in June. It may also help to explain why the Republican minority has not coalesced around any coherent opposition program, and has avoided taking stands that appeal primarily to the party’s current base.

Many have noted the hypocrisy of conservative Republicans defending Medicare. Given that the composition of the midterm electorate is heavily weighted towards over-65 voters and that President Obama’s health reform rhetoric initially centered on generating significant cost savings in the Medicare program to finance expanded coverage, this seems like a rational response to a political opportunity. Another way of looking at this is to say that Democrats, who have effectively used the notion that Republicans intend to “slash” Medicare to great political effect, most spectacularly in the late 1990s after the Gingrich Republicans attempted to slow the rate of growth in Medicare spending, in a sense unilaterally disarmed. Republicans, meanwhile, expanded the Medicare program during the Bush years, sensing in part that Medicare represented a serious vulnerability for them. Republicans could have chosen to ignore this unilateral disarmament n the part of the Democrats, just as McDonald’s could decide to refuse to sell french fries to the parents of young children. Past experience suggests, however, that if McDonald’s were to take such a stance on principle, Burger King would step in. 

So does this mean that democracy is in danger? Or are Republicans engaging in fairly familiar scorched-earth politics that reflects their minority status? The New Republic believes that the rejection of Baucuscare is particularly egregious, as it combines various ideas that had once been embraced by liberal and moderate Republicans.

In almost Solomonic fashion, Baucus crafted a bill that gives something to–and takes something away from–each faction. Virtually every industry group–from hospitals to drugmakers to device manufacturers to insurers–that faces new fees or budget cuts in the Baucus bill is rewarded with additional revenue from the legislation. And, when it came to winning over Republicans, Baucus went more than halfway: eliminating the public option, strengthening protections against federal funding of abortions, and lowering the legislation’s price tag.

At the same time, the Baucus bill tightly regulates benefit packages, the interstate compact concept does not allow for the robust competition among state regulators that conservatives had hoped to cultivate, the individual and employer mandates mean that the legislation’s supposed price tag masks stealth taxes on firms and families. 

In 2005, President Bush proposed revamping Social Security. The Bush White House made it clear that it was open to a variety of approaches that had at one point been championed by the center-left thinkers, including progressive price indexing and voluntary individual accounts. You’ll recall that this didn’t take off among Democratic lawmakers. Unified Democratic opposition to President Bush’s Social Security effort proved highly effective. And somehow democracy survived. So at the risk of speaking too soon, I think we can rest easy.    

Regular readers will know that I support the goal of universal coverage, and I think that congressional Republicans, with a few rare exceptions, haven’t done a very impressive job on this and other domestic issues. I am, however, sensitive to overwrought language, and to the constraints imposed by a competitive political environment. This is one reason why I favor fairly dramatic election reforms, ranging from adding at-large House districts to the most populous states, campaign finance reforms designed to strengthen challengers against incumbents, open and jungle primaries, among other things.  

Paul Krugman argues that we tend to exaggerate the scale of the debt problem caused by fiscal stimulus in a liquidity trap. To summarize, fiscal expansion leads to smaller output losses than we’d see otherwise, and this in turn leads to a “crowding in” of private investment that will enhance the long-term growth potential of the economy. Higher GDP growth in the short and the long term mean that we’ll be better able to carry the debt burden.

Assuming this is true, and I think Krugman makes a reasonable case, the design of the fiscal stimulus remains relevant, i.e., how much bang for the buck are we getting in terms of smaller output losses? Desmond Lachman of AEI suggests that President Obama’s fiscal stimulus package didn’t move quickly enough. 

The degree to which unusually large gaps have been allowed to open up in the US labor market highlights how ill-designed was the Obama fiscal stimulus package. If the purpose of the US$780 billion stimulus was indeed to jump-start the economy, one has to ask why only around one third of that package was concentrated in 2009 when the economy most needed support. One also has to ask how much economic sense it made for the fiscal stimulus to rely so heavily on the sort of temporary tax cuts that were seen not to have worked in 2008 and why the package was allowed to be so laden with pork that was sure to result in very little bang being obtained for the buck.

A particularly unfortunate consequence of the Obama Administration’s botched 2009 fiscal stimulus package will be to complicate the prospect for any further fiscal stimulus in 2010. Sadly, the need for a second stimulus is all too likely in the event that the economy indeed experiences a double dip later in the year as consumer demand remains weak.

That is, the slow-working stimulus allowed unemployment to increase sharply. Once the unemployment rate takes off, it is very hard to lower it, not least if the main instrument at hand is fiscal stimulus. The president’s allies could argue that conservative Republicans are to blame, as the stimulus was loaded with temporary tax cuts in an effort to win Republican votes. This does not, however, account for the slow-moving spending initiatives that were included in the legislation.   

This Popular Mechanics interview with Dean Kamen is well worth your time.

T.R. Reid’s call for universal coverage in the United States has received considerable praise from Senator Kent Conrad. I wish Senator Conrad had read Shannon Brownlee’s review of Reid’s book in the Washington Monthly, a favorite magazine of liberal wonks. Having read the book this summer, I’m inclined to agree with Brownlee’s basic assessment.

A distinguished and highly accomplished foreign correspondent, Reid appears not to know what he doesn’t know about the scientific and economic complexity of health care. He also gets his medical facts wrong, stating there are “millions of deaths each year” in the developing world from smallpox (smallpox was eradicated from the planet more than thirty years ago), that polio is a “bone-twisting” disease (it destroys nerves and can lead to muscle wasting), and that the U.K.’s National Health Service won’t give him a prostate-specific antigen, or PSA, test, because it’s not cost-effective (the NHS, in fact, does pay for PSA testing, but doctors in the U.K. don’t encourage it, having figured out long before we did that the test hasn’t been shown to reduce mortality, while leading to unnecessary and potentially harmful surgery). Health care reform is going to take a lot more than cutting the insurance industry’s overhead and slashing the prices of medical services. It’s also going to require profound and sustained changes in the way care is delivered. But you wouldn’t know any of that from reading The Healing of America. 

The need for delivery system reform is a lesson that health reform proponents haven’t fully taken in — they seem convinced that Massachusetts will now “solve” the problem due to rising political pressure in the wake of coverage expansion and spiraling costs, which is a bit like assuming a can opener. 

Ezra Klein writes:

Liberals don’t think that Congress will pass a bill outlawing private insurance. They don’t think the Supreme Court will render a decision naming WellPoint “cruel and unusual.” Rather, they think the market will, well, work: The public option will provide better service at better prices and people will choose it. Or, conversely, that the competition will better the private insurance industry and that people won’t need to choose it.

But that confidence rests on a very simple premise: The public sector does a better job providing health-care coverage than the private sector. If that proves untrue — and I would imagine most every conservative would confidently assume that that’s untrue — the plan will fail. The public option will not provide better coverage at better prices, and so it will not be chosen, and it will languish. Indeed, if it languishes, it will lack customers and thus lack bargaining power and economies of scale, and get worse even as the private insurers get better. In that scenario, the public option not only fails, but it discredits single-payer entirely.

Well, it depends on the relative advantages given to the public sector and the private sector, doesn’t it? If the public option is allowed to negotiate reimbursement rates that private insurers can’t also use and if private insurers are regulated in such a way that they can’t define the mix of benefits and providers they offer (to avoid adverse selection), providing better coverage at better prices is fairly straightforward. How is this an up-front wager? If, in contrast, the public option is not allowed to leverage its publicness, and it has to offer the same reimbursement rates as private insurers, the public option is toothless. 

The real goal, as I understand it, isn’t benchmarking for its own sake. Rather, it is to restrain private insurers in an environment in which private insurers will have the benefit of a captive marketplace — thanks to the individual and employer mandates – and no strong incentives to reduce costs and premiums.

A better approach would, as Harold Luft has argued, allow private and public insurers (i.e., Medicare Advantage plans, state Medicare plans, etc.)  to contract with a publicly-chartered Major Risk Pool that would gives healthcare providers a choice of either accepting Medicare rates with no balance-billing or episode-based payments to care delivery teams with balance-billing. This would encourage greater efficiency among providers without imposing new regulations. 

At the moment, it looks as though a gently modified form of Baucuscare will become a reality. Ezra Klein describes the remaining roadblocks (possible revenue-enhancers  include a soda tax and curbing itemized deductions) and Nicholas Beaudrot, a data-driven liberal blogger based in Seattle, has been writing a series of posts on how to make Baucus’s reform proposal more generous to the less affluent. The debate has focused on reducing the cost of Baucuscare to the federal government, but of course any individual or employer mandate will create costs for families and firms. Without subsidies, the mandate essentially becomes an unacknowledged tax on the middle class, as James Kwak has argued.  

Relative to the House bill, then, the Baucus bill costs the government $140 billion less; but it costs middle-income people exactly $140 billion more, since they have to buy health insurance. The difference is that in the House bill, the money comes from taxes on the very rich; in the Baucus bill, it comes out of the pockets of the middle-class people who are getting smaller subsidies. Put another way, the Baucus bill is the House bill, plus a $140 billion tax on people making around $40-80,000 per year. That’ s not only stupid policy; it’s stupid politics.

I get the impression that Kwak is less concerned than I am about the drag created by high levels of government spending, but he makes a compelling point. The advantage of Baucuscare’s “modest” price tag is purely psychological: $856 billion sounds less frightening to taxpayers than $1 trillion, yet those same taxpayers will be legally obligated to spend an additional $140 billion as Kwak explains — only it’s not a “tax.”

I’m increasingly convinced that Senator Ron Wyden’s so-called “free choice” proposal is preferable to the Baucus approach.

I believe there is a way to work with the present employer-based system to guarantee that all Americans have choices, and I am proposing it in an amendment to the latest Senate health care bill. My amendment, called Free Choice, would let everyone choose his health insurance plan.

It would impose only one requirement on employers — that they offer their employees a choice of at least two insurance plans, one of them a low-cost, high-value plan. Employers could meet this requirement by offering their own choices. Or they could let their employees choose either the company plan or a voucher that could be used to buy a plan on the exchange. They could also simply insure all of their employees though the exchange, at a discounted rate.

All payments that employers would make, whether in the form of premiums or vouchers, would remain tax-deductible as a business expense. Reinsurance and risk adjustment mechanisms already in the bill would balance the costs of employers who end up with disproportionately sick pools of workers, and this would avoid any disruption to existing employer coverage. Any employers that did not offer either their own choices or insurance through the exchange would be required to pay a “fair share” fee to help support the system.

By increasing competition among private insurers, this approach is somewhat more likely to yield cost savings over time. While I’d much rather we move to a universal catastrophic coverage system based on a well-designed reinsurance program, Wyden’s proposal might be the best of the realistic options.

Many Republicans are banking on winning back Congress and the 2012 presidential election in order to repeal the reform legislation that ultimately takes shape. This is much easier said than done.  

I tend to think that we don’t have enough members of the House of Representatives. We’ve had 435 members since 1911, yet the population has increased threefold in the decades since. Some, including Jonah Goldberg, have called for increasing the size of the lower chamber dramatically, doubling it or more. I tend to think 650 would be a good number, one that would bring us in line with democratic legislatures in Britain and Germany. The trouble is that it is difficult to create and maintain working relationships in a body much bigger than that, and the U.S. population will continue increasing for many years to come. 

The usual argument for expanding the size of the House stems from the enormous size of today’s congressional districts, which now contain an average of 640,000 people. But in 2006 Bruce Reed, CEO of the centrist Democratic Leadership Council, called for creating more at-large districts for the House.

A recent bipartisan proposal to give new House seats to both the District of Columbia and Utah averts a mid-decade redistricting battle by having the new Utah member run statewide. Why not go all the way and turn half of all House seats into at-large districts? If half of every congressional delegation had to run statewide, it would sharply reduce the potential for gerrymandering, and every member would have to compete in a bigger, less homogeneous district.

Such a system would probably have little or no predictable impact on the partisan breakdown of the House. In the seven small states with at-large members today, both parties have done proportionally better at breaking the red-blue barrier in the House than in the Senate. Two of the five at-large House members from red states are Democrats, compared with just 16 out of 62 senators from red states. One of the two at-large members from blue states is a Republican, compared with only nine out of 38 senators from blue states. 

This doesn’t strike me as the ideal reform, and Reed’s article includes a great deal of anti-DeLay sentiment that I find unconvincing. But I do think we’d be better off if there were more Republicans elected from Democratic states and more Democrats from Republican states, which is one possible outcome of the proposed reform. Free-market conservatives based in cities like New York and Chicago might have a decent chance of winning statewide and bringing their distinctive views to bear on national debates. (I have a bias here, obviously.) 

I have many friends on both sides of the net neutrality issue. Internet advocates like Tim Wu and Lawrence Lessig have long argued that the government needs to intervene to prevent Internet Service Providers from discriminating between different types of content so as to preserve the end-to-end principle. 

With Julius Genachowski at the helm, the Federal Communications Commission has proposed new net neutrality regulations. Fawn Johnson and Amy Schatz of The Wall Street Journal have written a very useful account of the announcement and the salient issues. One major concern is that overburdened ISPs will have to start charging customers higher rates:

If the FCC does force U.S. wireless carriers to open their networks to data-heavy applications like streaming video, it could push them beyond the limited capacity they have. Already, in areas like New York and San Francisco, a high concentration of iPhones has caused many AT&T customers to complain about degrading service.

In such a scenario, wireless carriers may have to rethink how much they charge for data plans or even cap how much bandwidth individuals get, said Julie Ask, a wireless analyst at Jupiter Research.

The FCC’s proposal will take into account the bandwidth limitations faced by wireless carriers, according to people familiar with the plan, and would ask how such rules should apply to current networks.

The rules could encourage big Internet companies to launch new data-intensive services by establishing that their traffic can’t be slowed or blocked. In the business market, companies that make Internet-phone services or video-conferencing software may invest more heavily in those services, some analysts say.

Engadget, one of the world’s most popular technology blogs, offered a more accessible take last week:

Based on what we’re hearing, a slate of soon-to-be-proposed FCC rules may stop the likes of Comcast fromdiscriminating against P2P applications on their networks, and AT&T sure will have a tougher time justifying why it won’t let the iPhone’s version of SlingPlayer run on 3G while giving WinMo and BlackBerry users all the bandwidth they can handle. Julius Genachowski, the new chairman of the entity, is slated to discuss the new rules on Monday, though he isn’t expected to dig too deep into the minutiae. Essentially, the guidelines will “prevent wireless companies from blocking internet applications and prevent them from discriminating (or acting as gatekeepers) [against] web content and services.” We know what you’re thinking: “Huzzah!” And in general, that’s probably the right reaction to have as a consumer, but one has to wonder how network quality for all will be affected if everyone is cut loose to, well, cut loose. Oh, and if this forces telecoms to deploy more cell sites to handle the influx in traffic, you can rest assured that the bill will be passed on to you. Ain’t nuthin’ free, kids.

Words to live by.  

P.S. Julian Sanchez has written an excellent post on the Genachowski announcement for Cato.

If you foreclose in advance the possibility of cross-subsidies between content and network providers, you probably never get to see the innovations you’ve prevented, while discriminatory routing can generally be detected, and if necessary addressed, if and when it occurs.  And the worst possible time to start throwing up barriers to a range of business models, it seems to me, is exactly when we’re finally seeing the roll-out of the next-generation wireless networks that might undermine the broadband duopoly that underpins the rationale for net neutrality in the first place. In a really competitive broadband market, after all, we can expect deviations from neutrality that benefit consumers to be adopted while those that don’t are punished by the market. I’d much rather see the FCC looking at ways to increase competition than adopt regulations that amount to resigning themselves to a broadband duopoly.

This strikes me as exactly right: the real problem is that consumers don’t have enough choices when it comes to broadband providers. In a more competitive environment, consumers would have a better check against broadband than the slow-moving blunt instrument that is the regulatory apparatus. Sanchez also links to a very insightful paper by Tim Lee, a libertarian Internet advocate who opposes onerous net neutrality regulations.