August 21, 2012

Posted by orrinj at 4:13 PM


Guide for the Perplexed (DAVID BROOKS, August 20, 2012, NY Times)

A study by Jessica Perez and others at the group Third Way lays out the basic facts. In 1962, 14 cents of every federal dollar not going to interest payments were spent on entitlement programs. Today, 47 percent of every dollar is spent on entitlements. By 2030, 61 cents of every noninterest dollar will be spent on entitlements.

Entitlement spending is crowding out spending on investments in our children and on infrastructure. This spending is threatening national bankruptcy. It's increasing so quickly that there is no tax increase imaginable that could conceivably cover it. And, these days, the real entitlement problem is Medicare.

So when you think about the election this way, the crucial question is: Which candidate can slow the explosion of entitlement spending so we can devote more resources toward our future?

Looking at the candidates through this prism, you see that President Obama deserves some credit for taking on entitlement spending. He had the courage to chop roughly $700 billion out of Medicare reimbursements. He had the courage to put some Medicare eligibility reforms on the table in his negotiations with Republicans. He created that (highly circumscribed) board of technocrats who might wring some efficiencies out of the system.

Still, you wouldn't call Obama a passionate reformer. He's trimmed on the edges of entitlements. He's not done anything that might fundamentally alter their ruinous course.

When you look at Mitt Romney through this prism, you see surprising passion. 

Posted by orrinj at 4:02 PM


Bailout Programs Return $1.5 Billion (Daniel Gross, 8/21/12, Daily Beast)

Four years after the Lehman Brothers crisis, housing finance remains a mess. But the Trouble Asset Relief Program (TARP), the crisis-era measures aimed at saving the banks, stabilizing credit markets, and preventing the auto companies and the insurer AIG from plunging into liquidation, have largely succeeded. And at a very low cost to the taxpayer. By and large, the recipients of cheap government capital have returned the cash they took - and with interest.  The central component of TARP was the Capital Purchase Program, in which Treasury bought interest-yielding preferred shares in banks and received warrants in return. Here is the latest daily TAPR update. Between the CPP and extra aid given to Citigroup and Bank of America, Treasury put $245.1 billion into banks. So far, those recipients have returned $231.11 billion of that capital. Add in dividends ($15.2 billion), proceeds from the sale of warrants ($9.19 billion), and cash raised from selling Citigroup and Bank of America stock ($9.36 billion), and the taxpayers have received  a total of $264.86 billion back. That's a profit of nearly $20 billion.

Posted by orrinj at 4:00 PM


Romney slightly ahead in Wisconsin (PPP, 8/21/12)

PPP's first Wisconsin poll since Mitt Romney announced Paul Ryan as his running mate finds him taking a small lead over Barack Obama in the state, 48-47. That represents a 7 point shift from PPP's last look at the state in early July, which found Obama ahead 50-44.

The biggest change Ryan's selection seems to have brought about is the unification of the GOP. Romney's gone from a 78 point lead with Republicans on our last poll (87-9) to now an 88 point lead with them (93-5). There's also been a tightening with independents. Obama still has a 4 point lead with them at 47-43, but that's down from a 14 point advantage at 53-39 six weeks ago. Democrats are unchanged from the previous poll.

Posted by orrinj at 5:43 AM


O Brave New Abundance! : Review of Peter Diamandis and Steven Kotler's Abundance: The Future is Better than You Think (Jonathan Witt, Religion & Liberty)

What's refreshing here is the authors' emphasis on for-profit, market- driven innovators for supplying affordable alternative energy in the future.

As little as four months ago, I was inclined to view solar energy as a permanently niche market held up, at least in the United States and Europe, almost purely by petroleum haters and government subsidies. After visiting an indigenous solar energy company in Haiti in January, I came to realize what now seems obvious: In sunny regions that lack an established power grid, solar power is already quite competitive. After reading Abundance and learning about the impressive efficiency gains in solar energy technology over the past several years, I am even more optimistic about its future.

I now suspect that these developing regions are where solar power will go to mature into an energy source that will successfully go head-to-head in the developed world with oil, coal, and nuclear power, not replacing them but expanding into a much larger segment of the global energy market--provided solar entrepreneurs are able to compete unhindered from either suffocating regulation or infantilizing government funding.

At the heart of Abundance is a faith in for-profit entrepreneurs to go boldly where no government program has gone before so cheaply, cleverly, or effectively. For Diamandis, this isn't just a pretty theory. As he describes in an engrossing chapter on DIY innovation, he lived it through his now famous Ansari X Prize contest, which succeeded in fast-forwarding Western civilization to the threshold of private-enterprise space flight.

With a success like that, it isn't surprising that Diamandis is similarly upbeat about the prospects of solving a variety of developing- world resource problems through the wealth-generating power of private enterprise. Perhaps the book's infectious optimism and non-partisan tone can penetrate and cure the virus of fixed-pie economic thinking that has crippled the thinking of so many on the left.

Posted by orrinj at 5:05 AM


'Do You Trust Politicians?' (THOMAS B. EDSALL, 8/20/12, NY Times)

Here in New Hampshire - once a securely Republican state -- the presidential contest pits Democrats struggling to revive their victorious 2008 coalition against Republicans attempting to reignite the conservative insurgency that swept the state in 2010.

In 2006 and 2008, New Hampshire Democrats were exceptionally enthusiastic about voting for Democrats, according to poll data analyzed by Andrew Smith, a political scientist at the University of New Hampshire.

By the 2010 midterm elections, Democrats had sunk into relative apathy while Republicans couldn't wait to vote. More than three quarters of Republicans, 77 percent, said they were "excited" about the 2010 election, and just 10 percent said they were "depressed." Only 36 percent of Democrats were "excited" while 43 percent were "depressed."

The depression lingers. The biggest hurdle facing President Obama in New Hampshire (and elsewhere) is an enervated liberal electorate that must be galvanized. [...]

A remarkable study of population changes in the state by the Carsey Institute at the University of New Hampshire revealed that in 2008, one-third of voters had not cast ballots in New Hampshire in 2000. Of the new voters, just over 200,000 were migrants from out of state and more than 100,000 were New Hampshire residents who turned 18 between 2000 and 2008.

We need more Latinos and fewer Mass refugees.
Posted by orrinj at 4:41 AM


Myanmar Eliminates Most Forms Of Media Censorship (PALASH R. GHOSH, August 20, 2012, IB Times)

The government of Myanmar (also known as Burma) has abolished censorship of the press, in yet another reform measure taken by President Thein Sein's nominally civilian government.

"Any publication inside the country will not have to get prior permission from us before they are published," Tint Swe, the chief of the government's Press Scrutiny and Registration Department, or PSRD, told the Agence France Presse agency. "From now on, our department will just carry out registering publications for keeping them at the national archives and issuing a license to printers and publishers."

Posted by orrinj at 4:38 AM


What Paul Ryan, and His Critics, Can Learn From Canada (Evan Soltas, Aug 19, 2012, Bloomberg)

Under its block-grant system, the federal government of Canada provides provincial and territorial governments with a single large sum every year to fund Medicare, and they administer the program according to a set of baseline requirements. Once they meet the federal baseline, however, they are free to innovate and get the most for their residents' money.

By fixing the maximum federal contribution, block grants offer Canada's provincial and territorial governments far better incentives to reduce the cost and improve the quality of the medical services they purchase. When costs rise, the provinces that run the programs are forced to pay 100 percent of the added costs at the margin, unlike in the U.S., where state governments pay an average of 43 cents at the margin for every dollar of added Medicaid expense.

Decentralized administration gives provinces the flexibility and the accountability to design their programs according to their needs and particular local challenges, rather than federal "one-size-fits-none" imposition. It also creates opportunities for innovation. By sharing notes, provinces and territories learn from one another and improve their Medicare programs.

Canada has been using block grants for 35 years. After several years of ruinously high growth in Medicare expenses during the 1970s, their federal government abandoned a 50-50 cost-sharing plan in 1977. Through the Canada Health Transfer program, which gives states some money directly and some through tax-shifting agreements, Canadian provinces and territories receive equal per capita aid, regardless of actual health care expenditure.

Growth in aid has varied over time, but starting in 2017 it will match the three-year moving average growth rate of nominal gross domestic product -- which, on rough average, runs at 5 percent annually -- with an unconditional floor of 3 percent annual growth.

By comparison, Medicaid expenditure in the U.S. has grown rather consistently at 10 percent annually for decades, and nominal per-enrollee Medicaid expenditure has risen at roughly 8 percent annually.

The result in Canada has been successful cost control -- indeed, even at the aggressive scale Ryan anticipates for Medicaid. Canada spends far less on health care than its southerly neighbor: 10.9 percent of Canada's gross domestic product, or $4,196 per capita, versus 16.2 percent of GDP, or $7,410 per capita, in the U.S. The rate of health-care cost inflation is less problematic: a net 65 percent rise from 1993 to 2005 in Canada versus a 90 percent increase in the U.S over the same period.