Trump

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Health Care Addendum

As a short addendum to what I have been saying recently about health care and the Republican efforts to ‘reform’ it I want to add the following:

  1. One of the major obstacles the Republicans face is that Trump has virtually no interest in policy making. This is remarkable. He seems not to like, let alone relish, all the detailed work that has to go into creating public policy. His attitude is that if it covers more than a page or so he just blocks it out. This abstinence on the part of the White House deprives the Republicans of a crucial weapon in their crusade. It puts the entire burden for policy making on Congress where the fault lines within the Republican caucus are constantly exposed. It is shocking to note how little of substance has occurred so far: Trump has plastered the walls with executive orders, but has yet to introduce legislation of substance. It’s as if he totally disdains governing and that winning election was all that mattered. In this context we will soon all be used to dismissing his every utterance, since we know it will never be backed up with action.
  2. The hodgepodge nature of the Republican health care plan reflects their deep, and probably unbridgeable, divisions. They seem never to have discussed making health care policy at all. The plan released yesterday is easily seen through as a political fudge rather than as an act of policy making. It tries to offer each faction within the Republican party something to get behind, and in so doing offers everyone nothing. In particular, the plan appears to have no strategic goal. Is it supposed to offer maximum coverage? Does it offer less coverage but more choice? Is it an attempt to rein in cost? Or is it the basis for the exit of government from health care altogether? It matches none of these, and some of its features appear to doom it to failure within a few years. Do the Republicans really want to be associated with a health care crisis of their own doing?
  3. Already opposition outside Congress is fully mobilized: various professional organizations and associations have come out against the plan, key retiree groups are adamantly opposed, and many Republican governors in states that expanded Medicaid coverage under Obamacare are especially upset. This combination of opposition will almost certainly prevent the legislation from passing in its current form, and probably prevent a compromise from emerging because many of those interests are irreconcilable.
  4. The Republican leadership is, nonetheless forging ahead into the valley of death. Why? Because after seven years of whipping up their base of voters with scare stories and promises of repeal they have no choice but to plunge forward. I imagine they had hoped that failure to repeal Obamacare could be pinned on the Democrats in Congress and so be used in the next round of elections, but that now appears a non-existent option. Failure will be due entirely to the divisions in their own ranks. Perhaps they want this: if the plan goes down in flames they can blame their own extremists and, possibly, defang their right wingers for future policy making. I wish them luck in that endeavor.

At the very least the next few weeks will be interesting as the entire Republican establishment squirms in full view. The White House has already thrown its weight behind the plan — the White House has not produced its own plan — even though it fails to meet Trump’s publicly stated goals. Currently there are three alternatives on offer each from a different Republican faction. The politics look intractable. The games are now beginning as the leadership looks for a plan that can garner sufficient votes to pass. Right now that appears impossible. But who knows?

Meanwhile public approval of Obamacare is rising. The likelihood is that we will end up with a revamped or modified version of Obamacare because that has always been the best solution: fix the old law rather than tossing it out and introducing a new law that will, no doubt, need fixing. In which case all the huffing and puffing since Obamacare’s introduction would have been for naught.

Winston Churchill once said that we can rely on the Americans to do the right thing only after they have tried all the wrong things. So it appears with health care. We will end up with single payer eventually. But only after decades of pointless partisan bickering, and only after the self-evident failures of our current system have brought it to its knees.

America is not a good place to be poor and sick. There is no compassion or sense of community to rely on to reduce sickness in the poor. Health care is just another commodity to be bought and sold. And if you can’t afford it, well that’s just tough. This is America after all.

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RyanCare! Or is it TrumpCare?

Well, the wait is over. We now know what the Republican health care plan looks like. It’s early days and the inevitable compromises will have to be made, but the Republican seven year crusade is reaching its climax.

Or not.

The problem is this: as we have discussed many times, any credible health care plan needs a number of key features. Three stand out:

  1. You need to ensure the biggest insurance pool you can. In an ideal world this pool would be the entire population of the country. In the US it will be smaller because local ideologies militate against “social” solutions and thus we are prevented from seeking maximum efficiency. Obamacare sought to do this through the so-called “mandate” which penalized people who failed to get insurance coverage.
  2. You need to regulate the private insurers to prevent them from discriminating against high risk customers. Obamacare did this by forcing insurance companies to cover people with “pre-existing” conditions, and by limiting the premiums charged to such people.
  3. Then you need some form of subsidy so that low wage people can afford to buy insurance. Obamacare did this by providing subsidies and by imposing taxes to cover the cost. The subsidies were linked to income and to the cost of insurance to make them strongly effective.

The success of Obamacare was that it achieved its biggest goal: it vastly expanded coverage, with around 20 million people newly insured at a rough cost of 0.6% of GDP. That cost, in the context of the goal, is low.

So now we have RyanCare.

How does it differ?

Well, it keeps those three main features, so it is not a repeal of Obamacare, it is a new version. The problem is that it waters down all three features and so is almost certainly doomed to failure.

  • RyanCare keeps the mandate. This was castigated as the most “unAmerican” part of Obamacare, but it stays in the GOP plan. The issue is that the way the Republicans keep it is that it imposes a penalty on people who have gaps in coverage. In other words if you don’t get coverage there is no penalty. It is only when you get coverage later, after a gap of having no coverage, that a penalty kicks in. This opens the door to a huge increase in adverse selection — this is the fancy name given by insurers to the problem of people only buying insurance because they know they need it. In other words the insurance pool will get a whole lot weaker — basically full of sick folk — and thus premiums will skyrocket.
  • RyanCare keeps a form of subsidy, but significantly weakens it. It switches to the provision of flat tax credits that phase out at higher incomes, but which are much lower than Obamacare’s subsidies at the low end. So low wage people will get a lot less help. This will, undoubtedly, end up with many poorer people being forced out of the market.
  • RyanCare keeps provisions preventing discrimination against people with pre-existing conditions.

So the basic structure of Obamacare continues. There is no real “repeal and replace”. There is just a lot of heavy handed meddling.

At the end of the day the big issue that confronts the Republicans is that they ave no over-arching strategy for health care. It is not a typical issue they worry about, so there isn’t a deep pool of prior existing thought. This may shock you given the seven years of discontent since the advent of Obamacare, but it seems as if no one in the upper echelons of the GOP ever gave serious thought to what a true Republican plan would look like. So they have been reduced to this botched and cobbled together effort, that pretends to eliminate Obamacare, but which is, in truth, a pale and poor imitation.

An imitation, moreover, doomed to fail.

It makes no mention, yet, of Republican favorites such as allowing the sale of insurance across state lines. It does include typical Republican goodies for the wealthy: they will benefit especially from the elimination of the Obamacare taxes, and form the widening of scope for the so-called Health Savings Accounts [HSA’s] that allow people to accumulate cash tax free in order to cover health care costs. The Republicans present HSA’s as a way for poor people to save to offset the inevitably higher premiums their plan will create. This is absurd because most poor people will not have sufficient cash to save, and most don’t have high enough incomes to take advantage of the tax break: they don’t pay tax to begin with! So HSA’s are yet another giveaway to the wealthy.

Nor is there any word on the impact of the elimination of the Obamacare taxes on the budget. One of the successes of Obamacare was that it brought in a large net inflow of tax revenue. Getting rid of that tax knocks a big whole in the Federal budget. It is surprising that the GOP, long a source of stern opposition to deficit spending during the Obama years [but not, lest we forget, during the Reagan years, or during the Bush’s tax cuts], is suddenly so blasé about the budget.

And then there’s the conservatives. Already, within hours of the plan’s release, the Republican right wing is lining up in opposition to it because it maintains too  much of a government presence in health care. It is highly unlikely that the plan, as it now exists, will get sufficient votes to pass. Then, if it does and it arrives in the Senate, there is growing opposition from GOP moderates to its Medicaid features. The plan eliminates the Obamacare expansion of Medicaid by 2020. This will place a huge burden on the states that accepted the Obamacare expansion [not all did], and since many of those states have Republican governors who would then be faced with slashing health care for their own voters, it is understandably an unpopular move.

So: not all is well with RyanCare. And, apparently the Republican leadership realizes this because they are crunching through a voice on the plan without any further consultation and without the usual “scoring” of it by the Congressional Budget Office. It is pretty clear why the leadership wants to avoid seeing the scoring: it will show that the plan throws a lot of people off health care, and that premiums will rise rapidly because of that adverse selection problem.

Ugly all round.

Let’s see what happens from here.

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Healthcare continued …

Nothing could possibly give us more insight into the ineptitude and unpreparedness of Trump for high office than his comment yesterday:

“It’s an unbelievably complex subject. Nobody knew health care could be so complicated.”

Really?

Everyone knew. Everyone.

Except for Trump who has blithely been assuming that his bully-boy attitude could translate easily from his real estate business into the White House. He, like a lot of others in recent years, reacted to the gridlock in Washington by arguing we needed a bold business like period of “action” to solve our national issues. We did not need anymore “talk”. All talk and no action is a criticism Trump levels glibly at anyone who appears to want to reflect before doing or saying anything.

So it is with health care.

During the presidential campaign Trump promised the earth. According to his many statements on the topic no one was going to lose coverage, prices would fall, people could keep their own doctors, and all this would delivered by a private rather than public mechanism. He said he was going to eliminate the dreaded mandate aspect of the Affordable Care Act [aka Obamacare]. This was the crucial part of the three legged stool approach in the ACA that lowered average insurance premium costs. Unfortunately it raised them for healthy people and lowered them for the sick, and it was the subsequent uprising amongst the healthy that so motivated the Republicans. This was, of course, over and above their ideological objection to anything smacking of governmental intrusion into the purity of the free market.

The Republicans have been calling for the destruction of the ACA ever since it was voted into being. They have been passing legislation calling for its repeal with regularity — all the time knowing that Obama would veto any such attempt.

But here we are: since they control all branches of government the Republicans can now carry through with their threat. Their leadership promised urgent and early repeal to their rabid base of supporters. It was, we were led to believe, their number one priority ranking even higher than their promise to reduce taxes for the rich.

That sound you hear is the silence surround their efforts.

It now transpires that Trump had no idea what he was talking about, and is only just getting an inkling of the difficulties surrounding a health insurance program based on private market delivery. Any such program is riven through with contradictions unless, and this is the pivotal point, legislators are prepared to cut millions of people adrift from health care coverage. If the Republicans were willing to roll back the triumph of the ACA and its extension of coverage to the well over 20 million people who previously had not been covered, they could easily forge ahead. It would be an act of enormous callousness but not wood be consistent with their anti-social pro-individual ideological stance. Under that stance anyone without health care coverage is to blame for their own inadequacy and it is not the proper role of the state to compensate for that inadequacy.

The Republican mantra is, in this sense, straight out of the Hayek and Friedman playbook: “everyone gets what they deserve”; and if you have failed to get health care coverage you must, by definition, deserve not to be covered.

The social democratic mantra is, in contrast: “everyone gets what they deserve” implying a socially cohesive policy stance allowing for the public provision of health care because all citizens deserve it. They are, after all, equally citizens.

The problem currently undermining the Republicans is that their ideology prevents them from caring about their fellow citizens and so providing coverage to everyone. The idea of full coverage is contradicted by the need to prevent state coercion. Since the latter is needed to ensure the former the whole idea of full coverage through a private market collapses. It cannot be done.

Apparently neither Trump nor his key advisors had thought this through. Hence his ridiculous claim that nobody realized how complex health care policy making is.

Everyone knew.

Except Trump: What an amateur.

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Amateur Hour

I can’t resist. I have tried, but I can’t.

Trump is a total amateur. A complete child in a land of grown ups.

His organizational capacity is weak. His personnel selection ability is mixed. His leadership ability questionable. And his strong man image a total illusion.

We were promised, throughout the election, that a Trump presidency would be, amongst many amazing things, one of iron will and foreign policy grit. Gone would be those days of Obama searching for a more modern role for the world’s mightiest army. Gone would be those apologies for bygone mistakes. Gone would be the days of equivocation. No. Not at all. We were going straight back to the heady days of Teddy Roosevelt and the strong arm, red-blooded, all-American, tough guy, rapid response.

ISIS was doomed. Give it a few days at best.

North Korea was doomed. Give it a few days at best.

Europe falling apart? So what?

NATO? Let them defend themselves.

China? Bring it on. That’s a sure fire war in the making.

Trump was going to bring the swagger back to American foreign policy. The bully boy was back in town.

Well.

Not so much.

Russia, so we learn, rigged the election and has files that incriminate Trump and a few of his main men. So the latest Ukrainian unrest? Not a whisper from our fearless leader. Carry on Russia! We aren’t looking.

That defiance over the South China Sea? That radical phone call to Taiwan? That tough guy talk about Chinese trade? Evaporated in the first phone call with the Chinese president. The Chinese press now calls Trump a “paper tiger”. Toothless, belligerent, but a pussy cat nonetheless.

That North Korean missile launch? The silence is almost deafening. Trump punted the problem to the Chinese — it’s their issue.

Then there’s the complete chaos in the Trump administration itself.

General Flynn turns out to have been paid by the Russians. He spoke to them about foreign policy whilst being an advisor during the election. He thus broke the law twice over.

Trump himself knew about all this which means he broke the law too.

And he didn’t have the fortitude to fire Flynn. In a strange and eye-opening contradiction of his TV persona Trump didn’t fire Flynn peremptorily, he waited timidly for the resignation. Weak-man Trump rather than strongman Trump.

So much equivocation was there in the White House about Flynn and the threat to national security that he represented, that the Department of Justice (and other concerned agencies) where responsible folks had warned Trump about the possibility of leaks and breaches etc, had to resort to leaking their concerns to the press in order to engender sufficient energy to get a result. Trump, apparently, was frozen in inaction.

Then there was the absurdity of the reaction to that North Korean missile launch.

It came during a fancy outdoor dinner reception Trump was hosting in Florida. The subsequent scenes as Trump and his aides huddled in plain view of his guests in order to cobble together the American response was a textbook example of insecurity. Secret documents were strewn across the dinner table where guests could get good photos of them. Aides huddled within ear shot. It was all a great big show for the guests, many of whom immediately updated their social network pages with photos and updates oblivious to the national security risks, but drunk on the splendor of sharing the moment with their host. How fun it must have been for Buffy and Muffy to be there in the center of the action. It was almost like the movies. Now that’s worth another big donation to the Trump coffers. Real time immersion in the affairs of state. Good food too.

Trump is in way over his head. He cannot, yet, discern the difference between being a business honcho throwing a big bash for buddies, and being the President of the United States. He acts as if the nation is just an extension of his business. This is all just a great big money making opportunity. There are deals to be made. Just don’t stare at him or else he’ll quiver in fear.

The ship of state is riddled with security breaches, lapses, and weaknesses that make anyone with a sense of propriety cringe.

The man has no respect for his office.

He is an amateur.

This is amateur hour.

And the Republican leadership min Congress? Are they cranking up the ancient protections that the constitution provides? Are they wheeling out all their best outrage over our foreign policy missteps? Are they bravely stepping up to defend the rule of law? Are they taking on their assigned role as overseers of government? Do they give a damn?

Of course not.

Amateur hour indeed.

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Petty, Small, but Non-Trivial

Our dear leader is turning out to be precisely what we expected: he is petty, small, yet non-trivial. The damage he is doing to America is going to accumulate into an irreversible tide. We can only hope that enough of the voters who were duped into supporting him come to their senses and allow an opposition to rise in both 2018 and 2020.

Trump is clearly a very weak man. He seems easily led. He has no opinions of depth. He has no qualities of leadership other than outright bullying.

People are aghast at his demolition of decades of decorum and honest tradition. I simply respond by saying that he is a small time New York bully whose failure in real estate led him into reality television where he learned the art of manipulation, puffery, and self-aggrandizement. The current chaos in his administration is a true reflection of his style. Don’t forget that all those famous deals he crows about have destroyed value: he would have been better off today had he simply invested his very large inheritance in an index fund. In other words his vaunted business capacity would have cost his shareholders money and he would have fired decades ago had he any shareholders.

And this is a vital thought to keep in mind: Trump has never had to lead using the development of consensus. He has always had the privilege of being a dictator within the confines of  small family business. In this case by small I mean the governance structure not the sprawling array of deals scattered across the globe. He relies on a very small group of people. He acts through that small group. They filter all the information he receives and make sure it conforms with whatever they perceive his current ideas are. His own sources of information are extraordinarily narrow. He has no active desire to learn. He is an easy target of conspiracy theory. He believes what he says and gathers virtually no evidence upon which to make decisions. He is thus entirely representative of most Americans who are too busy conducting their lives to ponder great issues of state.

This is why his attitude so resonates with many. His own narrowness is a direct reflection of their own. The difference being, of course, that a president is supposed to open up to broad analysis and discussion before making a decision. Trump sees no need for such consideration. He is convinced he already knows the answers.

Within all this weakness the most damaging is Trump’s desperate need for flattery. His ego is so fragile that he has to be correct no matter what reality is. Thus we see his tantrums when reality conflicts with his preconceptions of his own greatness, and the pettiness of his character when reality contradicts him.

All this is uninteresting in the small time head of a family business. No one would care. But in a president these traits are likely to bring great disrepute and harm to the country.

He is neutering government departments right when we need them to interpret and implement his policies. Take, for instance the State Department where he has peremptorily fired the entire upper management. This was a petty and childish move under any circumstances — many of the people ousted were Bush appointees and thus loyal Republicans — but it was truly stupid when it came a day before the insanity of the refugee ban. The State Department is now incapable of reaching out to our allies and helping assuage concerns.

Perhaps this was deliberate. Trump’s inner circle is dominated by Bannon, a white racist nationalist, who views the State Department as a major impediment to the execution of his extremist plans. When we discover, as we have, that Trump asked Giuliani how he could enact a total Muslim ban without breaching the constitution, and was advised that a travel ban targeting terrorism rather than religion was the way to go, we understand the depth of depravity within this administration.

I hesitated to use the word “Fascist”  during the election because I would prefer to reserve it to describe regimes beyond the range of modern sensibility, but with Bannon holding sway and dominating Trump’s every move, I am beginning to falter in that regard. Let’s see how this unfolds before adopting that nomenclature entirely.

Nonetheless, Trump is clearly not concerned with the constitution or with the great traditions of American governance. He needs to be watched and resisted at every step.

He is a petty, small, and weak man, but his impact will be non-trivial. America will survive him, but its reputation will not. The only question is: how much damage can he do before we get rid of him?

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