Today’s Wall Street Journal Opinion section features two really indispensable pieces. One is on Afghanistan, with Dan Senor and Pete Wehner offering a counter to George F. Will’s advocacy of withdrawal. 

The war in Afghanistan is a crucial part of America’s broader struggle against militant Islam. If we were to fail in Afghanistan, it would have calamitous consequences for both Pakistan and American credibility. It would consign the people of Afghanistan to misery and hopelessness. And Afghanistan would once again become home to a lethal mix of terrorists and insurgents and a launching point for attacks against Western and U.S. interests. Neighboring governments—especially Pakistan’s with its nuclear weapons—could quickly be destabilized and collapse.

Progress and eventual success in Afghanistan—which is difficult but doable—would, when combined with a similar outcome in Iraq, constitute a devastating blow against jihadists and help stabilize a vital and volatile region.

Here’s the problem, as I see it: I agree with Senor and Wehner on the essentials, namely that we have very good reasons to be in Afghanistan for a long time and in large numbers. Peter Feaver, one of the sharpest foreign policy thinkers, has made the case very persuasively in blog posts for Shadow Government. But Feaver has also raised another thorny problem.

There are few things more toxic for effective civil-military relations in wartime than the military believing that their political commanders are not serious about seeing the conflict through to a successful conclusion. No army can remain more resolved than the Commander-in-Chief is — not for very long, anyway. And once doubts about that resolve seep into the interagency and theater decision-making process, they are very hard to eradicate. Indeed, once entrenched, efforts to rebut them with bold statements of resolve suffer from the “thou doth protest too much” problem and may even reinforce those doubts.

We’re in a spiral. I linked a short while ago to Stephen Biddle’s excellent, judicious essay on the case for staying and fighting in Afghanistan. Part of his point is that the war in Afghanistan is “only barely” worth fighting, a sentiment I imagine Senor and Wehner would reject. Note that Senor and Wehner highlight the danger that Afghanistan might become a launching pad for attacks against the West and U.S. interests. U.S. interests are present throughout the globe, so that provides an essentially limitless case for intervention. As for attacks against the West, Biddle offered some interesting thoughts on the subject.

The United States has two primary national interests in this conflict: that Afghanistan never again become a haven for terrorism against the United States, and that chaos in Afghanistan not destabilize its neighbors, especially Pakistan. Neither interest can be dismissed, but both have limits as casus belli.

The first interest is the most discussed—and the weakest argument for waging the kind of war we are now waging. The United States invaded Afghanistan in the first place to destroy the al-Qaeda safe haven there—actions clearly justified by the 9/11 attacks. But al-Qaeda is no longer based in Afghanistan, nor has it been since early 2002. By all accounts, bin Laden and his core operation are now based across the border in Pakistan’s Federally Administered Tribal Areas (FATA). The Taliban movement in Afghanistan is clearly linked with al-Qaeda and sympathetic to it, but there is little evidence of al-Qaeda infrastructure within Afghanistan today that could directly threaten the U.S. homeland. If the current Afghan government collapsed and were replaced with a neo-Taliban regime, or if the Taliban were able to secure political control over some major contiguous fraction of Afghan territory, then perhaps al-Qaeda could re-establish a real haven there.

But the risk that al-Qaeda might succeed in doing this isn’t much different than the same happening in a wide range of weak states throughout the world, from Yemen to Somalia to Djibouti to Eritrea to Sudan to the Philippines to Uzbekistan, or even parts of Latin America or southern Africa. 

It’s understandable that preventing Afghanistan from becoming a safe heaven is at the heart of the political case for the war in Afghanistan, but the strategic case rests on:

The more important U.S. interest is indirect: to prevent chaos in Afghanistan from destabilizing Pakistan. With a population of 173 million (five times Afghanistan’s), a GDP of more than $160 billion (more than ten times Afghanistan’s) and a functional nuclear arsenal of perhaps twenty to fifty warheads, Pakistan is a much more dangerous prospective state sanctuary for al-Qaeda.

This is a true nightmare scenario. Biddle goes on to establish, rather depressingly, that we have very limited means of influencing the Pakistanis, and so the real case for committing troops to Afghanistan is as follows:

If we cannot reliably influence Pakistan for the better, we should at least heed the Hippocratic Oath: Do no harm. With so little actual leverage, we cannot afford to make the problem any worse than it already is. And failure in Afghanistan would make the problem in Pakistan much harder. … This is the single greatest U.S. interest in Afghanistan: to prevent it from aggravating Pakistan’s internal problems and magnifying the danger of an al-Qaeda nuclear-armed sanctuary there.

And yet the stakes “do not merit an infinitely high price tag,” in Biddle’s words.

The tragedy for me is that I think we can succeed in Afghanistan at a reasonable cost. If we commit enough troops now, we can make a difference. But if we pursue a politically-influenced half-way option, in which we commit a somewhat smaller number of troops than we need so as not to alarm the public, we will actually have more casualties and a far higher likelihood of failure than we would with a more robust approach.

Keep in mind that managing Pakistan’s perceptions is vitally important. The Pakistanis don’t trust us and never will; because the Pakistani security establishment convinced that we will eventually “bug out,” they have a strong interest in keeping a Plan B of accommodating the Taliban in Afghanistan in the hopes of having an ally that will not challenge their rule in Pakistan. To be sure, more and more Pakistanis recognize that the Taliban is a transnational movement that poses a serious threat to the integrity of the Pakistani state itself. But many in Pakistan believe that they can still cut a favorable deal. The only way to solve this problem is to convince the Pakistanis that the United States is fully committed to the war effort. And like it or not, the Pakistani elite reads the same newspapers that we do. In a sense, the expectations management game has already been lost. So where does that leave us?

Part of me thinks that we should either commit fully to the war effort or we should recognize that our effort in Afghanistan might be a lost cause. I find this prospect extremely depressing and I’d like to be convinced otherwise. Rest assured, George F. Will is not alone among conservatives, and anti-war sentiment will only grow in the conservative grassroots if people get the sense that soldiers live are being put in danger not in pursuit of an achievable strategic goal but rather to avoid a backlash from hawks.

In the healthcare debate, the Obama White House crafted their proposals in anticipation of conservative objections and to counter the inevitable attacks. They knew that Americans like employer-provided coverage, and so they savaged McCain for undermining that system. This put them in a bind when it came to crafting a workable policy. Similarly, the anti-war left was careful to attack the “bad war” in Iraq and call for a more strenuous effort to fight the “good war” in Afghanistan. This was an effective means of channeling the sentiments of conservative independents who were committed to the fight against Al Qaeda, yet who were skeptical on the importance of the Iraqi front. But did it represent a real commitment? Now that those same conservative independents are abandoning the president, and now that the wars in Iraq and Afghanistan have less political salience, it seems very likely that the White House will distance itself. 

Unlike yours truly, Matt Yglesias is not an Afghanistan hawk. He does, however, offer some useful insight into what Team Obama is thinking.

Bob Corker strikes me as a pretty interesting figure. During his run for the Republican Senate nomination in 2006, he was a moderate candidate who made a strong effort to establish his conservative credentials. As mayor of Chattanooga, he was lauded across the political spectrum for his very hands-on, pro-development management style. And as a senator, he’s staked out a distinctive profile. On a number of issues, he’s taken the tack of offering market-driven alternatives to government-driven policies. He took the lead in opposing the auto industry bailout, instead favoring an aggressive restructuring plan that would invole far less public money. He’s also called for jettisoning cap-and-trade in favor of a modified form of cap-and-dividend, not unlike a proposal offered by Reps. Jeff Flake and Bob Inglis.

According to Shailagh Murray in the Washington Post, Corker is now applying a similar logic to health reform.

As he sees it, insurers would no longer be allowed to deny coverage for preexisting conditions, Corker told the crowd, and would offer an array of plans via a new insurance exchange, unrestricted by the current boundaries of state insurance laws. To help the uninsured gain coverage, the government would provide vouchers or tax credits, and would tax the most generous employer-offered plans to pay the cost.

But a public insurance option is a non-starter, Corker warned, and unless Obama pushes the idea off the table next week, meaningful GOP support will not materialize. A serious and gradual bid to control costs and expand coverage, however, could prove difficult for certain Republicans to resist, he said.

Suffice it to say, the details matter. What constitutes a serious bid to control costs? At the end of the piece, Murray cites one Corker idea that is very worthy of consideration.

One proposal that appears to be gaining traction among some Democrats and Republicans, including Corker, would limit the insurance people are required to buy to only a catastrophic coverage plan. Another idea, proposed by McCain on the 2008 campaign trail and now getting a second look from certain Democrats, would create special risk pools for people with serious illnesses. Some individuals familiar with health-care negotiations said that if Obama chooses to take a staggered approach, gradually expanding coverage over time, either of these ideas could prove promising starting points.

The great appeal of the catastrophic coverage approach is that it achieves one of the central goals that Democrats and Republicans are ostensibly working towards, namely protecting families against income shocks, while also creating a more “consumer-driven” healthcare marketplace, in which routine medical expenses are the responsibility of individuals rather than third parties. The hope is that this will encourage more responsible consumption of medical services. The danger, of course, is that we’ll see more adverse selection and that the less affluent won’t seek out much-needed preventive care. But there are ways of addressing these concerns.

As for the idea of special risk pools, there is another possibility for an interim reform, one that cut the number of uninsured roughly in half, namely federal reinsurance for the small-group and individual marketplace. More on that to come. 

After many weeks of pessimism regarding the prospects of health reform, I’m suddenly feeling strangely optimistic. My pessimism rested on a few fronts:

(1) The president is right to suggest that we need a healthcare overhaul, yet he’s been, in my view, very misleading regarding the likely consequences of his proposed health insurance reforms. 

(2) Republicans have been right to oppose many of the president’s proposals, yet their opposition has rested on a spirited defense of the status quo, including a defense of Medicare FFS, possibly the most counterproductive aspect of healthcare as we know it. 

So if the president “won,” we’d have an enormous new entitlement likely to grow more expensive over time. And if the Republicans “won,” future conservative policymakers would be sharply constrained in their ability to impose spending restraint. 

Now, however, I’m suddenly convinced that there might be room for a constructive reform proposal, one that could be embraced by congressional conservatives and moderates. 

Basically, the public option is a solution to a problem we’re set to create — that problem is that, as a number of liberal analysts have pointed out, a combination of an insurance mandate, reforms designed to eliminate or minimize adverse selection, and low-income subsidies is heaven for private insurers: there is nothing there to prevent them from charging ever-higher premiums. Because we’re not reforming the delivery system, the real driver of cost growth, we might actually see accelerating cost growth as a result of these reforms, which will eat into wage growth that has already been battered by the economic downturn.

The public option is, as we’ve discussed, designed to “discipline” private insurers. Yet this is a mirage as long as we don’t reform the delivery system: the public option will be “strongest” if it is allowed to impose Medicare reimbursement rates or close, which means that we’ll see cost-shifting as we did during the late 1990s. To oversimplify, the period from 1989 to 1996 saw a slowing rate of growth in health insurance premiums. Part of this derived from a shift towards managed care plans on the part of employers and private insurers. But part of it derived from the fact that Medicare was relatively generous during this period. After the Balanced Budget Act of 1997, however, Medicare slowed the rate of growth in its reimbursements to hospitals. And so hospitals demanded more from private insurers. I have no religious opposition to the fact that Medicare reimburses hospitals at low rates — that is one of the benefits of scale. I do, however, have a problem with the fact that they reimburse hospitals at low rates without leveraging their market power to make the system more efficient; instead, Medicare effectively makes our health system less efficient. 

A number of centrists, including some of my colleagues at the New America Foundation, want a weaker version of the public option, one that will serve as a non-profit benchmark. Whatever the virtues of this proposal, I don’t think it’s going to generate the necessary system-wide reforms.

Among liberals, the consensus view is that we should have coverage expansion now and reform of the delivery system later, when our hand is forced by spiraling costs. This strikes me as a fairly cynical view, and one that might backfire. We’re already facing mammoth deficits for a decade or more: if not now, when?

The good news is that a handful of congressional conservatives, like Senator Bob Corker, seem willing to force changes that will get us out of this impasse. 

In Talking Points Memo, Brian Beutler suggests that the reconciliation process lends itself to a more Medicare-like version of the public option.

According to Martin Paone, a legislative expert who’s helping Democrats map out legislative strategy, a more robust public option–one that sets low prices, and provides cheap, subsidized insurance to low- and middle-class consumers–would have an easier time surviving the procedural demands of the so-called reconciliation process. However, he cautions that the cost of subsidies “will have to be offset and if [the health care plan] loses money beyond 2014…it will have to be sunsetted.”

Paone’s view parallels the Commonwealth Foundation’s findings, which we discussed last week.

Though I’m not a fan of the public option, it is useful to think of it as a means of disciplining heavily subsidized private insurers, an idea that I discussed in a column published yesterday. Harold Luft offers a better, more market-friendly means of accomplishing the same goal in his book Total Cure.

Graeme Wood has written a post on crime in Mexico City and Cairo that raises broader questions.

The signature act of thievery is the “express kidnapping,” which elevates the streetside stick-up to the level of grand theft. The victim is taken from cash machine to cash machine and forced to empty his accounts. Since his bank likely places a daily limit on his withdrawals, the kidnappers often keep him past midnight to get a second day of cash. They may even activate networks of accomplices in the banks, to reset the daily limit for a third or fourth harvest of withdrawals. When the account is depleted, the victim’s credit cards fund high-end buys at Walmart or elsewhere, till finally the victim is left free and bankrupt. This sort of criminal spree (sometimes called a “millionaire’s tour”) happens on the order of half a dozen times daily in Mexico City.

I suppose what shocks me is that this sort of crime — high-reward and not more than medium-risk — does not happen more in America, and at all in most other great cities. I have never heard of ATM theft at all in Cairo, and though it happens in New York, I have never heard it described as such a developed industry anywhere else.

I’ve often wondered the same thing. This is one of many reasons why I think we’d do well to replace a mass incarceration approach to crime control with one focused on more effective crime prevention strategies, including sharply increasing the number of police. Thus far, we haven’t seen a spike in crime in major American cities despite the economic downturn. But the costs of crime remain staggeringly high and very unevenly distributed. Apart from the direct costs, there are indirect costs ranging from the relative decline of cities versus suburbs to stress levels in high-crime neighborhoods that contribute to various maladies.

In the post, Wood also offers some insight into his scrupulous journalistic methods.

The most garrulous character in the park was Andreas Montecristo, a tenor and auto mechanic who told me his thoughts on crime in exchange for a half a packet of fried plantains. 

Citing a McClatchy report on Obama’s commitment to Afghanistan, Peter Feaver writes:

There are few things more toxic for effective civil-military relations in wartime than the military believing that their political commanders are not serious about seeing the conflict through to a successful conclusion. No army can remain more resolved than the Commander-in-Chief is — not for very long, anyway. And once doubts about that resolve seep into the interagency and theater decision-making process, they are very hard to eradicate. Indeed, once entrenched, efforts to rebut them with bold statements of resolve suffer from the “thou doth protest too much” problem and may even reinforce those doubts.

Only one thing could scare me more: If these doubts are based on first-person encounters with President Obama and his top-most national security team. In my experience, even “senior Pentagon officials” can have only vague and dodgy understandings of what the president actually believes. During the Bush years, I sometimes encountered people matching that anonymous source’s description who based their assessments primarily on what they had read in the newspapers, not on any real knowledge of White House discussions. For the time being, then, I am hoping this story is based on a misapprehension of President Obama’s resolve. But I will be watching closely to see if it is based in fact. If so, the Afghanistan mission is in real trouble.

Note that the report comes shortly after President Obama characterized Afghanistan as a “war of necessity.”

Feaver also makes note of George F. Will’s case for withdrawal from Afghanistan, a view that I suspect will gain popularity on the right in the months to come. And if the right turns against the war in Afghanistan, anti-war Democrats, who have been gritting their teeth in deference to the White House, will bolt.  

One of the central problems we face in Afghanistan and Pakistan is that the Pakistanis are convinced that we aren’t committed to securing Afghanistan, and so they feel obligated to hedge their bets. We’re proving their point. 

A number of liberals, including Hanna Rosin, are very exercised by positions that Bob McDonnell took in a 1989 master’s thesis. Rosin is a writer and thinker I admire very much, and I found her thoughts stimulating as always.

One of the political phenomena I enjoy the most is when Virginia Republicans from the evangelical wing try to repackage themselves for higher office. Robert McDonnell, candidate for governor, was doing a passable job until this week, when his 1989 master’s thesis was discovered. The paper is a classic of earnest Christian right activism of the late ’80s. It’s too bad this PDF is not searchable, or one could have great fun: Find “fornicator,” “feminist,” homosexual,” “abortion,” “prayer in schools,” “working women.” Pick any culture war issue and young McDonnell has, in this paper, taken the most extreme side of it.

She goes on to argue that McDonnell’s career has been in keeping with the thesis.

McDonnell’s response was that he should be judged by his 14 years in the General Assembly, not some paper he wrote as a kid. But, of course, as a legislator he has acted pretty much in keeping with what the blogosphere has taken to calling “Bob’s Manifesto,” calling for abortion restrictions, tax policies to favor the traditional family, opposing ending wage discrimination, and supporting the arcane notion of covenant marriage. It’s just that young Bob grew up, so he stopped talking like that.

It is clearly true that McDonnell favors abortion restrictions and tax policies designed to support traditional families. McDonnell has argued that he has limited control over abortion policy given Supreme Court precedent and that he intends to focus on economic issues while in office. But it’s clear that his Democratic opponent Creigh Deeds intends to highlight McDonnell’s anti-abortion stance in an effort to garner support among social liberals in northern Virginia. This is fair game. 

I do wonder, however, if it is fair to say that McDonnell opposes ending wage discrimination. While he may have opposed legislation that intended to end wage discrimination, this isn’t exactly the same thing as favoring wage discrimination. Some legislative measures designed to achieve a particular purpose have unintended consequences. Many have argued that the Americans with Disabilities Act, for example, has raised unemployment for the disabled, whereas programs in Japan and western Europe that subsidize the employment of disabled persons have proven more effective. To be sure, I can’t speak to the efficacy of the legislation in question, but my sense is that McDonnell is not an enthusiastic supporter of arbitrary wage discrimination.

Is covenant marriage an arcane idea? Rosin, a student of the evangelical right, knows far more about the subject than I do, yet I understand that it is an idea that has been discussed and debated for decades. It’s certainly true that McDonnell, like many social conservatives and social moderates, believes that couples should be allowed to choose a covenant marriage, as in Arkansas, Louisiana, and Arizona. Covenant marriage has never been a popular choice, and it’s not clear how it poses a danger to those couples who don’t choose it. 

McDonnell argues that his thesis was an abstract academic exercise, and far removed from the work he’s done as a public servant. Given that a fair bit of time has passed, I get the impression that his views on a variety of questions have moderated, as one might expect. He has distanced himself from his views on a wide range of issues, including women’s economic roles and gay rights. Virginia has grown more diverse and socially liberal over the intervening years. It is to be expected that an ambitious politician would thus move to the center on some issues. It is also entirely natural for a politician to have a genuine change of heart on some issues after encountering thorny problems and new voices. McDonnell issued a statement on the subject, which I first found via the Washington Post:

 ”Like everybody, my views on many issues have changed as I have gotten older.” He said that his views on family policy were best represented by his 1995 welfare reform legislation and that he “worked to include child day care in the bill so women would have greater freedom to work.” What he wrote in the thesis on women in the workplace, he said, “was simply an academic exercise and clearly does not reflect my views.”

McDonnell also said that government should not discriminate based on sexual orientation or ban contraceptives and that “I am not advocating vouchers as there are legal questions regarding their constitutionality in Virginia.”

And in today’s paper, the Post’s Amy Gardner, Rosalind S. Helderman and Anita Kumar write:

Democrats have long attempted to characterize McDonnell as an ultra-conservative who is playing down his views on such issues as abortion, school prayer and gay rights so as not to alienate moderate voters, particularly in Northern Virginia, who increasingly decide statewide elections.

But McDonnell’s public record and his reputation among colleagues paint a more complex portrait. He appears as a man with deeply conservative views that spring from a strong Catholic faith but also as reasonable, open-minded and increasingly focused on such issues as jobs and transportation.

It is certainly possible that McDonnell is an ideologue who intends to promote his 1989 agenda if elected to office. But opportunism cuts both ways. Given that McDonnell has gone out of his way to repudiate many of the most controversial views he expressed twenty years ago, one gets the impression that he intends to govern in line with his 2009 views. And surely that counts for something. 

I’ll also add that the views McDonnell expressed in 1989 are, as Rosin writes, common among religiously devout conservatives.

He didn’t write anything different than you could have read in 100 books—and no doubt college theses—during what was the birth of the Christian pro-family movement.

She also suggests, in a tart final sentence, that Sotomayor didn’t get the benefit of the doubt from conservatives under similar circumstances. This is a fair point.

A number of writers and thinkers have raised questions about the changing composition of the American family and its impact on children. Elizabeth Warren and Amelia Warren Tyagi wrote a brilliant and indispensable book, The Two-Income Trap, on the social impacts of two-earner households; while the authors would take strong exception to McDonnell’s views, they’ve described how middle-class life has become more volatile and insecure in a climate of rising inequality, fraying social protections, and rising labor force participation among parents of young children. Conservatives like Mary Eberstadt have cited the same social conditions as evidence that we need less rather than more labor force participation among parents, particularly mothers — this is the central reason why Eberstadt opposed the 1996 welfare reform. I disagree with Eberstadt’s conclusions, but I agree that the work-life balance issues are vitally important, and not just for women. Sociologists like Neil Gilbert and Catherine Hakim have noted how work-life preferences vary across and within social classes, and both have argued that the policy mix in market democracies tend to privilege some preferences above others. This strikes me as a subject worthy of serious discussion. 

Unsurprisingly, I don’t agree with McDonnell’s take on these issues in his 1989 thesis. I do, however, think it’s a very good thing that there is a gubernatorial candidate who has actually thought deeply about these issues. I’m also disappointed that McDonnell’s efforts to focus the campaign on economic issues keeps getting derailed. For liberals who embrace Thomas Frank’s What’s the Matter with Kansas? thesis, there is no small irony in this fracas.

At Baseline Scenario, James Kwak flagged an insightful comment by StatsGuy that might be of interest. The entire comment is worth reading. To summarize, StatsGuy is convinced that healthcare reform in its current configuration will swell costs while massively increasing profits for private insurance firms, an anxiety expressed by many advocates of the public option in recent weeks as well as opponents like Keith Hennessey.

Hennessey has argued in a similar vein that health reform might accelerate cost growth and thus have a negative impact on wages. This won’t necessarily trouble employers. David Leonhardt has noted that employers are not the ideal consumers of health insurance plans:

The cost of insurance comes mostly out of employees’ paychecks. If insurance costs more, employees are generally paid less. If insurance costs less, employees are paid more. The cost of insurance does not have a big effect on employers’ overall compensation costs.

Now back to StatsGuy, who highlights other consequences of fragmented responsibility:

Will the federal subsidies for health care only apply to basic care or care that has high return-on-investment (but not hideously expensive end-of-life care, or expensive diagnostic services or treatments that are not clinically proven to offer benefits)?

Will we NOT cover cancer treatment for smokers, or diabetes people who are clinically obese (due to primarily non-genetic causes)?

Will we NOT cover the cost of orthopedic surgery for high-risk athletes like climbers or football players (just like most states force hikers to pay the cost of helicopter evacuations)?

Will we pass rules that govt. funded or subsidized care plans (including Medicare and Medicaid) will NOT cover expensive procedures when there is a lower cost procedure that is almost as good?

Note that the measures StatsGuy is implicitly embracing are all restrictions that current Medicare beneficiaries and, interestingly, many Republican lawmakers bitterly oppose.

I don’t think that there are any good answers at this point. My basic view continues to be that the government role in healthcare should be limiting to an income protection or social insurance role: medical emergencies shouldn’t lead to bankruptcy or poverty. But achieving that goal in a revenue-neutral or close to revenue-neutral fashion will, unfortunately, require a serious reorganization of the healthcare marketplace. And almost no one wants to do that. Which is depressing. (Sorry about the sentence fragments, guys.)

Ezra Klein, one of the hardest working reporter-bloggers on the web, writes:

Looks like the effort to allow Deval Patrick to appoint an interim senator to Ted Kennedy’s seat is gaining steam in Massachusetts. The House speaker has apparently given his blessing to the effort, and a hearing has moved forward to Sept. 17. This seems like something of a no-brainer: The people who elected Ted Kennedy presumably wanted a senator able to cast an affirmative vote on health-care reform. That was, after all, Kennedy’s top priority, and he was hardly silent about it when running for office.

But of course this is far from a no-brainer, for reasons Frank Phillips outlined in the Boston Globe less than a week ago.

Under the 2004 law, if Kennedy were to die or step down, voters would select his successor in a special election to be held within five months of the vacancy. But the law makes no provisions for Massachusetts to be represented in the Senate in the interim. In the meantime, President Obama’s plan to overhaul the nation’s health care system, the fate of which may hinge on one or two votes, could come before Congress.

When Rudy Giuliani flirted with suspending term limits in 2001 in the wake of the 9/11 terror attacks, he was rightly castigated. It is easy to see why Massachusetts voters would want to replace Senator Kennedy very quickly; that was a sound reason to oppose the 2004 law.

I’ll add, briefly, that while Senator Kennedy has been lauded for his contributions to expanding the American welfare state, he deserves credit and praise from conservatives for spearheading consumer-friendly deregulation, as Nick Gillespie of Reason has observed.

There are many who believe that Kennedy was less an American hero than a reckless scoundrel who was directly responsible for the death of Mary Jo Kopechne. David Weigel of The Washington Independent points to anti-Kennedy sentiments being expressed on the right, and I’ve encountered a fair bit of this among my close friends. I’ll just note the following: In reading about the Chappaquiddick incident, one is truck by how much American politics has changed in the intervening years. Weigel writes:

Kennedy got better treatment because he was a Kennedy, and the country had watched him lose two brothers to assassins’ bullets in the six years before the accident. It’s so obvious that it’s hardly worth saying, but it seems to have escaped him.

This sounds right, yet it should also be said that a Kennedy or a Bush or a Clinton or an Obama would not be treated the same way today. And if liberals are right to believe that Senator Kennedy was a vital and indispensable figure, this raises questions about the rigorous scrutiny to which we subject the personal lives of elected officials who are guilty of far less egregious infractions. One recalls the reaction to George W. Bush’s decades-old DUI charge during the 2000 presidential campaign.

One can imagine a utilitarian calculus, in which a member of the anti-war left argues that while Kennedy engaged in wrongdoing, he also helped millions of Americans via the creation of various social programs; in contrast, this same anti-war liberal would condemn President Bush for his role in the deaths of Iraqi civilians since the U.S.-led invasion of 2003. When President Reagan died, some liberals chose to condemn him for, among other things, his failure to reckon with the threat posed by the AIDS epidemic. Very few also praised him for promoting human rights in the Soviet bloc and also in authoritarian anti-communist states like the Philippines. President Obama won considerable goodwill when he half-heartedly praised Reagan during an early presidential debate, and Paul Krugman still won’t forgive him for it.

All this is to say that I think these questions are thorny and not terribly productive.

Slate’s Moneybox columnist Daniel Gross offers an interesting take on insurance coverage, one that takes into account the role of public sector employment. 

The system of employer-provided health care coverage is crumbling before our eyes, and for more Americans—and for more American insurance companies—government-funded health care is all that separates them from financial disaster. A Gallup poll found that the percentage of Americans who say they get their health insurance from an employer has fallen from 58.9 percent in January 2008 to 56.5 percent in May 2009, while the percentage who get it from the government (Medicare, Medicaid, VA benefits) has jumped from 26.5 percent to 29 percent. (The rest purchase it on their own.) But this poll understates the case. About 17 percent of payroll jobs today are government jobs. Crunch the numbers, and it’s more like 39 percent getting insurance from government sources (public programs and public-sector jobs) and about 47 percent from private-sector jobs.

Simply by doing nothing, we’re slowly nationalizing health care.

This is part of the reason why I’m so sympathetic to root-and-branch reform. Some will object that Obamacare will simply accelerate the process Gross describes. But other reform approaches can take current public spending and redistribute it in such a way as to deliver better outcomes across the health system; this is the basic goal of the Luft approach, and also that embraced by Graetz and Mashaw in True Security. My sense is that the Luft plan would be more politically viable.  

Simon Johnson and James Kwak and Alex Tabarrok separately offer useful correctives on the public option. First, Johnson and Kwak have a column on the subject in the Washington Post.

Imagine health-care reform without a public option: Insurers have to charge the same price regardless of customers’ medical history; everyone has to buy insurance; and poor people get subsidies to help them afford it. From the insurers’ perspective, they get more than 40 million new customers, they subsidize the old and sick by overcharging the young and healthy (who have to overpay because of the mandate), and the government even pays people to buy their product. There are no new competitors (additional choices for customers), and there is no pressure to reduce costs. What could be better?

This type of reform, with no mechanism to reduce long-term costs, would still be a significant achievement, especially for the millions of uninsured. But it’s only a temporary solution because rising costs would force the government to go back to the drawing board (to pay both for Medicare/Medicaid and for those subsidies). This is why the public option seems to be on the Obama administration’s preferred-but-not-absolutely-critical list. The true alternative to a public option isn’t “no public option”; it has to be some other lever to force private insurers to reduce costs. Saying that people can get all the care they want and private insurers will simply pass on the costs as higher premiums is not a solution.

Tabarrok writes in a similar vein:

In short, insurance reform will mean that everyone will be required to buy a product that will be tightly regulated and more homogeneous.  Both of these factors will increase the market power of insurance firms.  Since escape via non-purchase will no longer be a potential response to higher prices, mandatory purchase will reduce the elasticity of demand giving firms an incentive to increase prices.  Moreover, in oligopolistic markets, a more homogeneous product can increase the ability of firms to collude.

I believe that health insurance reform will increase the market power of insurance firms and drive up prices.  In this scenario, the public option at least has a raison d’etre, although whether it actually fulfills its purpose is an open question.

And as Tom Hamburger and Kim Geiger report in the Los Angeles Times, the insurance industry is setting itself up for a massive windfall.

“The insurers are going to do quite well,” said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. “They are going to have this very stable pool, they’re going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide — plus their administrative costs.”

I have the sinking feeling that we’re walking into a buzzsaw. I’m increasingly drawn to innovative reinsurance proposals, and also to the more radical structural approach Harold Luft outlined in his book Total Cure. I’m hoping to write more on Luft this weekend. For now, I recommend an op-ed he wrote back in April.

I had the great pleasure of talking to Mike Konczal of Rortybomb last week. If you are so inclined, you can watch it as well here.

I’m a great admirer of Jon Henke of The Next Right. Along with Patrick Ruffini, he’s one of the political strategists I most enjoy reading. He has a gift for clarifying political questions, as in this post:

What exactly is the message here? That Republicans think Medicare is peachy? Republicans are now the Party of the Entitlement Status Quo?

The Democrats tried to address Iraq like this in 2004.  Their proposals amounted to “The same, but….better! And less expensive! No hard choices for America! Please like us.”

The GOP is doing the same thing on health care.  This is not a policy vision; it is a campaign vision.  The message is: We want to pick off some senior citizen votes in 2010.

On the off chance that the Republican leadership is listening to anybody but their campaign operatives these days: The horse is supposed to go in front of the cart.  Policy should not be made by polling.  Campaign committees and operatives should be selling policy, not making it.

I do, however, disagree with him on this; Henke points to data that shows that household income has increased over the last thirty years as a way of suggesting that concerns about wage stagnation are overblown. But increases in household income can be attributed in no small part to an increase in the number of wage earners per household, i.e., more two-earner households. More two-earner households have tended to bid up the prices of housing in desirable school districts, and they’ve also removed an economic cushion for households experiencing temporary income loss. This doesn’t mean that the middle class is impoverished — that’s absurd. But it does mean that middle-class anxieties are rooted in reality. 

I wrote my column for Forbes.com on this subject. It’s a bit more pessimistic than I’d like to be, but with good reason. It’s based on some ideas I’ve discussed here at The Agenda. One thing many readers won’t like: like Greg Mankiw, I suggest that moderate inflation might be a good idea. 

Jamais Cascio, one of my favorite thinkers, has written a post on healthcare that offers a useful perspective.

Fact #1: I am self-employed American.

Fact #2: I have a severe, chronic medical problem.

These two facts don’t mix nicely.

As a self-employed worker, I don’t receive the benefits that usually accrue to salaried professionals doing similar work: employer-contribution 401K; paid vacations; and, in particular, employer-provided health insurance. I knew going in that this would be the case and decided that the other, non-material benefits of working for myself outweighed the material drawbacks. For the most part, I can provide the equivalent benefits to myself — a retirement savings account and money set aside for vacation time.

But not health insurance.

Because I have a “pre-existing condition,” I can’t get insured. I’ve tried. The coverage I have, through COBRA, will run out soon — and at that point, I could be in trouble.

I bring this up not to elicit suggestions or sympathy, but to identify myself as someone very interested in the current health insurance reform process underway in the United States — and someone who would clearly benefit from that reform’s success.

Cascio is definitely to my left, and I don’t think he appreciates the strength of some of the criticisms of Obamacare coming from the pro-market right. But he’s definitely not alone in his basic dilemma, and conservatives would be wise to pay to careful attention to the dysfunctions of the individual health insurance marketplace. John Cochrane’s proposal for health-status insurance would do a great deal to help people like Cascio, yet it’s not the kind of policy that would work retroactively. 

Chris Edwards at the Cato Institute highlights the wages of federal workers:

The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.

This gap in average compensation is even more pronounced when you factor in state and local workers. Edwards suggests a pay freeze:

Federal wages should be frozen for a period of years, at least until the private-sector economy has recovered and average workers start seeing some wage gains of their own. At the same time, gold-plated federal benefit packages should be scaled back as unaffordable given today’s massive budget deficits. There are many qualitative benefits of government work—such as extremely high job security—so taxpayers should not have to pay for such lavish government pay packages.

I tend tot hink that a freeze for all federal workers is too blunt an instrument. Some workers are overpaid while some might still be underpaid, e.g., effective procurement officers who can save the federal government vast sums of money. But his basic point is an important one. 

In his latest column, Paul Krugman makes the case against Reaganism. He also seems baffled by opposition to the public option.

The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.

Let me walk through — very slowly — an argument that I consider coherent and convincing. In June, the Commonwealth Fund published “Fork in the Road: Alternative Paths to a High performance U.S. Health System.” I should stress that the authors strongly endorse a public option. The paths include:

Public Plan with Medicare Payment Rates. This path includes a public health insurance plan that pays providers at Medicare rates and is offered alongside private plans within a national health insurance exchange.

Public Plan with Intermediate Payment Rates. This path includes a public insurance plan that pays providers at rates set midway between current Medicare and private plan rates and is offered alongside private plans in a national health insurance exchange—and subject to the same market rules as they are.

Private Plans. This path does not include a public plan option; it includes only private plans offered to employers and individuals through a national health insurance exchange.

The researchers argue that the closer a Public Plan sticks to Medicare rates, the more likely it is to generate system-wide savings.

Health system savings. All three paths would produce substantial health system savings over the 11-year period from 2010 through 2020, with cumulative savings of $3.0 trillion under the Public Plan with Medicare Payment Rates scenario, $2.0 trillion under the Public Plan with Intermediate Payment Rates scenario, and $1.2 trillion under the Private Plans scenario.

And if the Public Plan does indeed pay providers at Medicare rates or intermediate payment rates, we will inevitably see “cost-shifting,” i.e., squeezed providers will presumably demand that private insurers reimburse them at higher rates. Over time, this will make private insurance plans less attractive relative to the Public Plan. Indeed, this would be true from the start of a robust Public Plan.

Impact on premiums. Estimates indicate that premiums for the public plan choice in the Public Plan with Medicare Payment Rates path would initially be 25 percent below those currently available for a comparable benefit package in the private individual/small firm market and 16 percent lower under the Public Plan with Intermediate Payment Rates scenario (Exhibit ES-4). Private plan premiums would initially be 3 percent lower within the exchange as it facilitates the process of choosing plans and reduces administrative costs, especially for individuals and small businesses.

The report’s authors suggest that this will spur innovation among private insurers, and they float a legislative change that really would transform the medical marketplace. I’ve marked it in bold below.  

Effective private-sector cost containment. Offering a public health insurance plan as an alternative choice should be a catalyst for private plans to innovate in the way they operate and pay for care. It would help them reduce their administrative costs and implement payment and system reforms that lead to more appropriate utilization, better care, and slower cost growth—and, in the process, contribute to reduced premiums. Community health plans partnering with integrated health care delivery systems in particular have considerable potential to achieve economies through redesign of care, control of chronic conditions, and prevention of avoidable hospitalizations. Private plans could also be given the authority to adopt public plan payment methods and rates. If private plans adopt effective cost-containment measures sufficient to slow a rise in their premiums relative to trends in public plan premiums, over a three-to-five-year period public plan premiums and private plan premiums within the exchange would be roughly comparable.

If private plans were given the authority to adopt public plan payment methods and rates, rest assured, private insurers would be fighting tooth and nail for a public option. Medical providers, in contrast, would be extremely upset.

Many progressives argue that there is no reason why a Public Plan should operate on a level playing field with private plans. Why not use its monopsony power to deliver better outcomes? This view makes sense when you consider the origins of the Public Plan concept as a more politically palatable alternative to single-payer — the idea is to achieve a single-payer option in stages.  

So it’s not terribly interesting to say that the Public Plan would be “better” than private insurance plans when it can force providers to accept lower rates of reimbursement.

I would get better prices at my local sandwich shop if its owners were legally obligated to sell me sandwiches for twelve cents. It’s by no means obvious that other customers would be better off. To be sure, I could then resell my sandwiches to other customers by setting up a stand outside of the original sandwich shop. Said customers would be delighted to patronize my new “business.” For a while, we might even generate “system-wide savings.” But surely the providers would object, particularly as customers who pay the standard rates start drying up. Believe it or not, a few sandwich shops might even go out of business. 

This is, of course, a gross oversimplification. As Shannon Brownless has argued, American medicine suffers from oversupply in some areas and undersupply in others. In my view, fee-for-service medicine is the problem, a case David Ignatius made in an excellent column published last week. Perhaps medical providers should be encouraged to work for less. I certainly think we can organize providers into more efficient networks. There are many good reasons to oppose single-payer. For example, systems with a bias towards catastrophic coverage tend to yield far greater savings, which is one reason why Michael Graetz and Jerry Mashaw favor such an approach in their book True Security. This is, admittedly, a somewhat subtle argument. But surely it’s coherent.  

Michael Grunwald has written a primer on alternative energy for the latest issue of Foreign Policy, and he makes a number of excellent points. His skepticism regarding biofuels is warranted, and his core argument that efficiency increases are of central importance is well taken. That said, I don’t think Grunwald gives nuclear power its due. (Seed Magazine published a symposium on the relative virtues of nuclear power and coal power last month that’s worth a look.) He rightly emphasizes the staggeringly high start-up costs involved in nuclear power and the excruciatingly slow process of getting nuclear plants up and running. 

Unlike biofuels, nukes don’t worsen warming. But a nuclear expansion — like the recent plan by U.S. Republicans who want 100 new plants by 2030 — would cost trillions of dollars for relatively modest gains in the relatively distant future.

Nuclear lobbyists do have one powerful argument: If coal is too dirty and nukes are too costly, how are we going to produce our juice? 

We’re banking on the emergence of new technologies that will sharply reduce these costs. In June, Keith Johnson of the Wall Street Journal surveyed the state of small nukes. 

In a nutshell: The smaller reactors can be built in U.S. factories, then shipped to where they’re needed. That gets around many of the roadblocks to building big nuclear reactors, such as a bottleneck on reactor core vessels made only in Japan.

Babcock & Wilcox say the new reactor, which uses existing technology, will also be as cheap or cheaper than existing plants—“less than $5,000 per megawatt.” That compares favorably to recent cost estimates for large-scale nuclear construction.

Part of the appeal of a would-be small nukes revolution to policymakers is that it could generate manufacturing employment, though that remains to be seen.

Then there are a number of more exotic possibilities, some of which Brad Plumer surveyed in his TNR essay on how the promise — perhaps the false promise — of technological breakthroughs shapes the climate debate.

Last December, the office [the DOE's Office of Basic Energy Sciences] released an “energy challenges” report that offered a lavish vision of what a new “control science” could accomplish. If, for instance, the steel used to make nuclear reactors was built by manipulating atoms at the nanoscale, rather than through traditional bulk processes, we could have materials that self-heal and better resist chemical corrosion and intense radiation, allowing the construction of nuclear reactors that operate at much higher temperatures and efficiencies–meaning more power and less waste. Or ultra-light materials could be used to build cars that require far less energy to propel. Or batteries built on chemistry yet unknown could allow electric vehicles to vastly surpass their currently limited range. Or solid- state lighting that used just a fraction of the power that incandescent light bulbs use, and without the glare of compact fluorescent lights, could drop the percentage of electricity the nation needs for lighting from 22 to 2 percent.

Grunwald also briefly references the idea of technological approaches to mitigating carbon emissions.

One hates to indulge in broad generalizations, but Bryan Caplan has written an interesting post on why Europe is a wonderful place to visit while America is a wonderful place to live. Tyler Cowen added the following observation: 

My alternative view is that Americans rate European life so highly (in part) because the buildings from previous eras are so striking and attractive.  If all of the U.S. looked like U.S. postwar construction, the country would still impress more or less as it does.  If all of Europe looked like its postwar construction, Americans would be less likely to admire European policies and political institutions.

During the heyday of laissez-faire, when the success of Victorian economic liberalism seemed undermine the case for dirigiste economics, you did get a lot of handsome architecture, but now we’re just belaboring the point.   

On an unrelated note, Tim Lee argues that Jim Henley’s pessimism about the American future is probably excessive.

But I think if we take a longer view, the problems we’re facing today just aren’t out of line with problems faced by previous generations.

What follows is characteristically measured and smart.

I used to admire Tom Ridge. After reading Peter Baker in The New York Times, I have to say, I’ve lost a lot of respect for the man. 

By now you’ve probably heard about Ridge’s allegation that he faced political pressure to change the Homeland Security Department’s threat level in 2004. 

The most sensational assertion was the pre-election debate in 2004 about the threat level, first reported by U.S. News & World Report. Mr. Ridge writes that the bin Laden tape alone did not justify a change in the nation’s security posture but describes “a vigorous, some might say dramatic, discussion” on Oct. 30 to do so.

“There was absolutely no support for that position within our department. None,” he writes. “I wondered, ‘Is this about security or politics?’ Post-election analysis demonstrated a significant increase in the president’s approval rating in the days after the raising of the threat level.”

But Baker, to his great credit, then states the obvious:

Mr. Ridge provides no evidence that politics motivated the discussion. Until now, he has denied politics played a role in threat levels. Asked by Eric Lichtblau of The New York Times if politics ever influenced decisions on threat warnings, he volunteered to take a lie-detector test. “Wire me up,” Mr. Ridge said, according to Mr. Lichtblau’s book, “Bush’s Law.” “Not a chance. Politics played no part.”

Interestingly, a number of observers have taken Ridge’s remarks — which, lest we forget, have been made in the run-up to the publication of a book that in the absence of shocking revelations would likely sink like a stone — as confirmation of their long-held views. As Marc Ambinder correctly notes, the only new information we have is this: 

Reading the excerpts from Tom Ridge’s book, it is not clear to me that he is actually arguing against interest, or that he is correct. No doubt, Don Rumsfeld and John Ashcroft had very strong views about terrorism, but simply because Ridge — who disagreed with Rumsfeld and Ashcroft about many, many things — had a feeling that Rumsfeld was trying to tinker with an election’s outcome does not, by a mile, prove anything.

What it establishes is that Ridge had the same suspicions as many liberals and libertarians. And Ridge, having access to most of the intelligence, had sound reasons to object. 

Which is fair enough. But this doesn’t strike me as “confirmation” of anything.

The fundamental problem is that the idea of a “threat level” was itself completely specious. Consider the controversy over the CBO’s bizarre analysis of IMAC, the president’s proposal to shift authority over Medicare from Congress to an independent commission. Peter Orszag wrote an insightful blog post on the nature of the CBO’s cost estimate. Part of the problem with the CBO’s analysis, in Orszag’s view, was that:

The point of the proposal, however, was never to generate savings over the next decade.  (Indeed, under the Administration’s approach, the IMAC system would not even begin to make recommendations until 2015.)  Instead, the goal is to provide a mechanism for improving quality of care for beneficiaries and reducing costs over the long term.  In other words, in the terminology ofour belt-and-suspenders approach to a fiscally responsible health reform, the IMAC is a game changer not a scoreable offset.

How does one responsibly “score” something like a “threat level”? This is fundamentally a matter of political guesswork. And it’s also about something we call “CYA.” Ridge seems to believe that the Bush administration wanted the threat level raise to enhance the president’s re-election prospects. But after the Bin Laden tape, many people believed that the Al Qaeda threat was real and potent. While Ridge claims that there was “absolutely no support for that position within our department,” other administration officials clearly disagree. Moreover, the decision-makers were presumably mindful of the consequences of not raising the threat level and then facing a major terrorist attack. This is the reason why the threat level concept has always been utter nonsense.

Via Mike Konczal, I’ve come across some interesting numbers that offer a useful contrast to the aforementioned report by Leonhardt and Fabrikant. Tom Petruno of the Los Angeles Times flagged a Bank of America Merrill Lynch research brief on “The Myth of the Overlevered Consumer,” which essentially argues that an economic recovery will depend on renewed spending by the affluent. The top 10 percent of earners spend almost as much (42 percent of total consumption) as the next 50 percent of earners (46 percent), yet that next 50 percent — let’s call them the middle class — face a heavy debt burden.

In terms of their debt burdens, neither lower-income families nor the wealthy are constrained the way the middle class is constrained, the report asserts.

It estimates that middle-class families’ debt as a percentage of disposable income was 205% in 2007, a function of the level of trading-up during the housing boom and of the cash people pulled from their houses via home-equity loans.

By contrast, lower-income families’ debt-to-disposable-income ratio was a much less onerous 133%. And for the wealthy the percentage was lower still, at 116%.

Thus, the need to pare debt is most urgent now for middle-income earners.

Petruno highlights the uneven impact of the housing collapse.

What’s more, on the asset side, BofA Merrill says the middle-class has suffered more than the wealthy from the housing crash because middle-class families tended to rely more on their homes to build savings through rising equity. Also, the wealthy naturally had a much larger and more diverse portfolio of assets — stocks, bonds, etc. — which have mostly bounced back significantly this year.

The crippling effect of negative equity on middle-class families is one reason why a number of conservatives and liberals have been rallying behind Dean Baker’s right-to-rent proposal, which Konczal outlined for Baseline Scenario. 

 ”The Myth of the Overlevered Consumer” reminded me of Ajay Kapur’s 2005 report on “Plutonomy,” which Robert Frank of the Wall Street Journal summarized as follows:

In a series of research notes over the past year, Kapur and his team explained that Plutonomies have three basic characteristics.

1. They are all created by “disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time.”

2. There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.

One wonders if the top 10 or 20 percent can drive a sustainable recovery. More importantly, one wonders how middle-class families will respond politically to the painful process of paring down debt. Unfortunately, I think it’s easy to imagine a turn towards punitive soak-the-rich policies that end up undermining America’s long-term growth potential.

This is a good time to point, once again, to Zachary Karabell’s excellent essay in the Journal on why corporate earnings aren’t a good guide to the state of the real economy. As the BofA Merrill report notes, the fortunes of the wealthy are tied to corporate earnings that are buoyed by global growth. Yet as Karabell argues,

As these companies profit from global expansion and greater efficiency, they have little or no reason to rehire fired workers, or to expand their work force in a U.S. that is barely growing. If you are a global company, you want to hire and expand where the most dynamic growth is. Unfortunately for Americans, that’s not the U.S.