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Posted at 6:39 AM ET, 01/ 7/2011

Wonkbook: So. Much. News.

By Ezra Klein

Anyone getting a sense of deja vu? Gene Sperling, Clinton's NEC director, will be returned to that position later today. William Daley, Clinton's Commerce Secretary, was named chief of staff. Head over to OMB, and Jack Lew, who did the job for Clinton, is doing the job for Obama. At least when it comes to management and economic policy, the president's recent personnel decisions have, consciously or not, called back much of the team Clinton had in place once he found his rhythm in dealing with the Republican Congress. Engaging with Republican lawmakers who want to undo most of the White House's accomplishments isn't something Obama himself has much experience with, but it is something, at this point, that his administration has a lot of experience with.

And they'll need it. The fight over health-care reform has already begun, with the Congressional Budget Office scoring the GOP's repeal bill as increasing the deficit by $320 billion and the GOP dismissing the score and lifting their own rules so the repeal legislation doesn't need to be paid for. Secretary Timothy Geithner and Speaker John Boehner traded letters yesterday over the debt ceiling, with Geithner emphasizing the need to raise it and Boehner emphasizing the need for sharp budget cuts before Republicans will give the Treasury the authority to raise it. These fights may not be new, but their outcomes are incredibly consequential. It's somewhat comforting that at least a couple of participants will know what they're doing.

Top Stories

Obama has selected former Commerce Secretary William Daley as his new Chief of Staff, report Anne Kornblut and Peter Whoriskey: "William M. Daley has the deep political experience one would expect in a top White House hire: scion of a Chicago political dynasty, adviser to numerous presidential candidates, former Cabinet secretary who also relishes exerting influence behind the scenes. But in turning to Daley as his new chief of staff on Thursday, President Obama was looking as much at the other pages of his resume. With extensive experience as a businessman and Wall Street executive, Daley comes to the administration positioned to help the president rebuild his frayed relationship with the corporate world."

Carol Felsenthal profiled Daley in 2005: "Daley, 56, has played politics at such a high level that his career virtually tracks the roller-coaster history of the Democratic Party through the past quarter of a century. He started small—working in the Jimmy Carter campaign for President, advising Walter Mondale in 1984, then Joseph Biden in his aborted Presidential run in 1988. He became such a favorite of Bill Clinton’s that he sometimes had to decline when the President asked him to play golf or to watch a movie at the White House. Commerce Secretary Bill Daley, appointed by Clinton in 1996, had too much work to do. And he was at the center of the great Democratic disappointment of 2000, serving as the chairman of Al Gore’s race for the Presidency. Today, Daley’s friends say, he can pick up the telephone and call almost anyone, from Arizona Republican senator John McCain to the Citigroup chairman, Sandy Weill. At the peak of the election-night chaos in 2000, Daley called his friend Tom Brokaw, the NBC anchor, to trade the latest news on the Florida returns. Many of his best friends are tough-guy players in the mold of Dan Rostenkowski, once considered the most powerful man in Congress. Danny and Billy, as they call each other, share a love of golf and results; they are what Daley calls results rather than process Democrats—people who want to “get something done,” not people who go to Washington “and it’s all about the purity of the process.”"

James Downie bemoans Daley's career as a lobbyist: http://bit.ly/fMQzaA

I wonder at Daley's many backers: "How is it that a centrist banker who opposed the Obama administration's signature initiatives has such a large constituency among liberal political types both inside and outside the White House?..Howard Dean wanted more a vastly more progressive administration, but he likes the guy who wanted a vastly less progressive administration. The administration likes its own record but appears interested in hiring someone who doesn't. There's a widespread perception that the White House is too close to Wall Street, but the leading candidate for chief of staff is a top executive at J.P. Morgan...The particular theory of politics he espouses seems woefully detached from the realities of the modern partisan environment -- as Jon Chait says, it effectively means 'allowing extreme positions to redefine the parameters of the debate.' But you can certainly read this post as evidence that Daley is a singular political talent, and the Obama administration would be well served by hiring someone able to sustain these sorts of contradictions."

President Obama will name Gene Sperling as NEC Director later today: "This won't be Sperling's first tour of duty in that spot: He held that position from 1996 to 2000, making him the longest-serving NEC director in history...Obama's personnel decisions have shown a strong preference for prior government experience. William Daley, who was named chief of staff earlier today, is a former Secretary of Commerce. Jack Lew, who replaced Peter Orszag as head of the Office of Management and Budget, held the same position under President Clinton. Robert Gates, who leads the Defense Department, was a holdover from George W. Bush. Larry Summers, who Sperling is replacing, was Treasury Secretary under Clinton."

Sperling's return wasn't really predictable, reports John Maggs: "In June 2008, few Democrats in Washington seemed more out of luck than Gene Sperling, the new director of President Barack Obama’s National Economic Council. Back then, Hillary Clinton had just conceded the party’s presidential nomination to Obama and loyalists on her team wondered if the train back to the White House had passed them by... The first step in his White House return happened in 2009, when Obama tapped him to advise Geithner on his oversight of the financial rescue, the auto industry bailout and the $787 billion American Recovery and Reinvestment Act. Sperling became a versatile utility player -- participating in meetings at all levels, acting as Geithner’s deputy on nonfinancial matters and slowly amassing many responsibilities, including helping with Treasury’s effort to aid small businesses."

Gene Sperling isn't Wall Street's friend, writes David Corn: http://bit.ly/gckv7q

Repealing health care reform will increase the deficit by $230 billion, reports Amy Goldstein: "Rescinding the federal law to overhaul the health-care system, the first objective of House Republicans who ascended to power this week, would ratchet up the federal deficit by about $230 billion over the next decade and leave 32 million more Americans uninsured, according to congressional budget analysts. The rough estimate by the Congressional Budget Office also predicts that most Americans would pay more for private health insurance if the law were repealed. The 10-page forecast was delivered to House Speaker John A. Boehner (R-Ohio), installed a day earlier to shepherd the new GOP majority. He immediately dismissed it."

Treasury Secretary Tim Geithner has sent a letter to Congress urging it to raise the debt limit early: "Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs. Even a very short-term or limited default would have catastrophic economic consequences that would last for decades. Failure to increase the limit would be deeply irresponsible. For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent."

House Speaker John Boehner responds that the limit will be raised only if the administration agrees to budget cuts: "I’ve been notified that the Obama Administration intends to formally request an increase in the debt limit. The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington. While America cannot default on its debt, we also cannot continue to borrow recklessly, dig ourselves deeper into this hole, and mortgage the future of our children and grandchildren. Spending cuts - and reforming a broken budget process - are top priorities for the American people and for the new majority in the House this year, and it is essential that the President and Democrats in Congress work with us in that effort."

Got tips, additions, or comments? E-mail me.

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Music video interlude: Avi Buffalo's "What's In It For Me?"

Still to come: Paul Volcker is leaving; Mexican trucks are coming; Harry Reid will go ahead with filibuster reform with or without Republican backing; House Republicans are already trying to block EPA climate regulations; and Michael Caine does an impression of Michael Caine.


Economy

Paul Volcker is leaving his post as a White House advisor: http://wapo.st/g0qwMY

Obama is pushing to allow Mexican trucks into the US, reports Sewell Chan: "The Obama administration offered a proposal on Thursday to allow long-haul Mexican trucks to move cargo in the United States. The proposal, which the Mexican government greeted as a positive step, was the latest sign of a new willingness by the Obama administration to support free-trade measures backed by Republicans and by businesses despite objections from labor unions and other liberal constituencies. The United States has effectively barred Mexican trucks from operating on American roads since March 2009... Under the plan, Mexican long-haul trucking operators could seek permits to operate in the United States so long as they agree to safety, insurance and other monitoring requirements."

Democrats allege Republican rule changes will add $1 trillion to the deficit: http://politi.co/fFyyqQ

Texas' budget woes reflect a failure of conservative governance, writes Paul Krugman: "Data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels. The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies...Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

Complaints of "job-killing" regulation are GOP canards, writes Steven Pearlstein: "What's particularly noteworthy about this fixation with 'job killing' is that it stands in such contrast to the complete lack of concern about policies that kill people rather than jobs. Repeal of health reform, for instance, will inevitably lead to thousands of unnecessary deaths each year because of an inability to get medical care. Although lack of effective regulation led directly to the death of 78 coal miners last year in West Virginia, Republicans continue to insist that any reform of mine safety laws is bad for miners' employment... There is an unmistakable redbaiting quality to the 'job-killing' rhetoric, a throwback to the McCarthy era. It reflects the sort of economic fundamentalism better suited to Afghan politics than American."

Meta-impersonation interlude: Michael Caine impersonates Michael Caine.

Health Care

GOP governors are planning Medicaid cuts: http://on.wsj.com/g2CwMo

Health care reform is hurting insurance brokers, reports Kate Nocera: "Pay for health insurance brokers will be slashed by more than 50 percent in some cases because of new health reform rules, according to documents obtained exclusively by POLITICO. New insurance commission schedules show that brokers who were used to making 15 or 20 percent on plans they sold will now typically make between 4 and 10 percent. Brokers are contractors who help individuals and small businesses buy health insurance in the large and difficult-to-navigate market. The medical loss ratio, a provision of last year’s health care reform law that went into effect Jan. 1, specifies that insurance companies must spend at least 80 percent of premiums on medical expenses. With brokers’ fees categorized as administrative costs, insurance agents stand to see their commissions gouged."

Millions of Americans will lose employer health care and move to health care reform's exchanges, writes David Brooks: http://nyti.ms/fCQUUB

Domestic Policy

Harry Reid will pursue filibuster reform even without Republican backing, reports Michael O'Brien: "The Senate's top Democrat vowed to push ahead with filibuster reform with or without Republican support. Senate Majority Leader Harry Reid (D-Nev.) said it's 'very clear' that members of his party want to change Senate rules to weaken the filibuster. 'They believe, as I believe, that the rules have been abused,' Reid said at the Capitol after a caucus meeting with Senate Democrats. 'We hope that Republicans see the light of day and would work with us,' Reid added. 'If not, we'll do it on our own.'...Reid's expected to make some sort of proposal later this month in preparation for the first formal day of the new session in the Senate."

The GOP is already breaking its new House rules, reports Jake Sherman: "Just hours after taking control of the House, Republicans passed a sweeping set of rules promising transparency and reform. But the new majority is already showing these promises aren’t exactly set in stone. After calling for bills to go through a regular committee process, the bill that would repeal the health care law will not go through a single committee. Despite promising a more open amendment process for bills, amendments for the health care repeal will be all but shut down. After calling for a strict committee attendance list to be posted online, Republicans backpedaled and ditched that from the rules."

The filibuster should be abolished, not reformed, writes Matt Miller: http://wapo.st/ggXENk

The stimulus kept 4.5 million people out of poverty, writes Arloc Sherman: "On Tuesday, the Census Bureau released several new poverty figures for 2009 that rely on alternative, broader poverty measures -- ones that include tax credits and non-cash benefits. Under almost all of these alternative measures, the safety net as a whole, including the Recovery Act expansions, prevented any rise in poverty in 2009, despite the deep recession and very high unemployment...We examined the Census data to see how much of that poverty-reducing impact came from the Recovery Act expansions. We found that they kept more than 4.5 million people out of poverty in 2009."

Stand up interlude: Maria Bamford performs on the Late Late Show with Craig Ferguson.

Energy

House Republicans are already moving to block anti-emissions action, reports Juliet Eilperin: "Three Republican House members -- Marsha Blackburn (Tenn.), Shelley Moore Capito (W. Va.) and Ted Poe (Tex.) have each introduced separate bills aimed at blocking EPA from regulating carbon dioxide and other greenhouse gases under the Clean Air Act. The three measures hamstring the agency's authority in different ways: Blackburn's would 'amend the Clean Air Act to provide that greenhouse gases are not subject to the Act,' even though the Supreme Court ruled in 2007 that they are; Capito's would delay EPA from regulating carbon dioxide and methane for two years; and Poe's would prohibit any agency funding 'to be used to implement or enforce a cap-and-trade program for greenhouse gases.'"

Energy companies dominate the list of corporations asking Rep. Darrel Issa for help with regulations: http://bit.ly/ii2TSz

Sen. Barbara Boxer is pledging to block legislation stripping the EPA's power to regulate greenhouse gas emissions: http://bit.ly/hv18MC

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.

By Ezra Klein  | January 7, 2011; 6:39 AM ET
Categories:  Wonkbook  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Unreconciled
Next: 103,000 new jobs in December; unemployment down to 9.4 percent

Comments

Wonkbook is a great resource. Very valuable.

Love the blog. Great work Ezra.

But...can you be sure to include some "real talk" with every outside link you provide?

I find outside links without your accompanying perspective to be totally useless.

For example, I'd like your take on Brook's article from this wonkbook.

Posted by: lauren2010 | January 7, 2011 7:28 AM | Report abuse

All these Obama staff changes will be useless unless Obama starts getting tough with the GOP and corporate media message machine and starts fighting back and starts trying to sell its accomplishments and ideas.

I vote for a candidate for two reasons: 1) to get work done, and 2) to get himself and OTHER like minded public servants re-elected.

He does me no good to fail at either one.

Posted by: lauren2010 | January 7, 2011 7:33 AM | Report abuse

Insurance brokers are somewhat overpaid, but they're not paid 15-20%. Every state is different but here in the Northeast its more like 4 to 5% and coming down as the article suggests. And brokers don't just help people buy insurance in the market, they help them naviagate through after the purchase dealing with the insurance companies and doctor's offices mess to advocate for the patient. Many insurance brokers become the defacto HR department for small businesses making sure they comply with HIPAA, COBRA and ARRA. That Politico article that I saw yesterday is full or inaccuracies. The best part of it though is the thought that buying health insurance could be like Travelocity. If you believe that as Mr. Jost does then you really don't have any idea of what it is to navigate the healthcare system. We hear all the time how the healthcare system is so fragmented (which it is) but yet jokers like him think you can just go buy it on a website and it'll work fine for them. I can't wait for the "I told you so day". And the system itself is becoming more complicated with the upcoming subsidies, tax credits that are currently available for some that qualify etc. Its like making the tax code even more complicated and telling accountants they can't do their job.

Posted by: visionbrkr | January 7, 2011 7:42 AM | Report abuse

Regarding the mexican truckers, I have a question....

What percentage of those trucks will be returning empty to Mexico?

If a large percentage of those return trucks will be empty, then I oppose this decision to allow these trucks into the uSA.

Also, will these trucks, perhaps on their return trips, be allowed to carry goods that originate and then unload within America? I.e. will they be allowed to compete with American truckers within our borders? If so, I again oppose this decision.

If these questions can not be answered then I oppose this decision.

My gut feeling is that a large proportion of those trucks will return empty to Mexico AND that eventually those Mexican trucks will seek to increase profit margins by carrying goods within the USA as they head back to Mexico.

Posted by: lauren2010 | January 7, 2011 8:03 AM | Report abuse

its funny but what I took from the Brooks' article was this:

The Congressional Budget Office projects that 19 million people will move to the exchanges at a cost of $450 billion between 2014 and 2019. But according to the economists Douglas Holtz-Eakin and James C. Capretta, costs could soar to $1.4 trillion if those who would be better off in the exchanges actually moved to them. The price of the health care law could double.


I guess if the price doubled it would kind of throw your post about "gimmicks" under a different light.

Posted by: visionbrkr | January 7, 2011 8:14 AM | Report abuse

E,
great blog again. any thoughts of looking at what assumptions in the CBO ACA repeal cost estimates are "partisan"?
R

Posted by: rusone | January 7, 2011 8:27 AM | Report abuse

If the price doubled, then the only solution at that time is a true public option.

If ACA can't serve as a first-step reform towards future costs saving efforts, then that means we gave the free markets two opportunities to solve the health care crisis and both times it failed.

And that's what is so idiotic about people who support the GOP attempts at repealing ACA--they are fighting against free market reforms that are obviously needed (because costs and access were dismal failures under the laissez faire system in place two years ago).

So go ahead you nihilists and saboteurs: tear down ACA and see what happens. I'll tell you what happens: misery for all Americans as health costs spiral even more and everyone loses health care whether you are employed or not. And at that time, if we still have a country, we will then have the public option with strict controls on how much providers will be able to charge.

Providers need o decide whether they want to negotiate reasonable costs now (in the near future) or cause a public option to get created which dictate what they get paid. Sort of what happened to the unions.

Posted by: lauren2010 | January 7, 2011 8:38 AM | Report abuse

--*At least when it comes to management and economic policy, the president's recent personnel decisions have, consciously or not, called back much of the team Clinton had in place*--

Hope and Change continues to look a lot like business as usual.

Posted by: msoja | January 7, 2011 8:45 AM | Report abuse

"If a large percentage of those return trucks will be empty, then I oppose this decision to allow these trucks into the USA."

Why would you expect a poor country like Mexico to be able to buy as much from America as we buy from Mexico? Isn't it good that via trade, Mexico can do a little bit to make itself a richer country? Isn't it good that poor (and all) eAmericans will be able to buy those goods and services provided by Mexicans for cheaper prices?

"Also, will these trucks, perhaps on their return trips, be allowed to carry goods that originate and then unload within America? I.e. will they be allowed to compete with American truckers within our borders? If so, I again oppose this decision."

Why should we discriminate against a person who wants to make a living driving a truck because he happens to be Mexican? I mean our stupid drug war has practically destroyed Mexico, so having our government step in the way of honest Mexicans trying to make a living on top of that is simply cruel.

There is no right for Americans to drive trucks without competition.

Posted by: justin84 | January 7, 2011 9:41 AM | Report abuse

"If the price doubled, then the only solution at that time is a true public option."

It's not going to save you as much money as you think.

If the public option saves money by providing lower reimbursements than private insurance, fewer providers will accept it.

Since anyone under 400% of the federal poverty level receives massive subsidies, the price signals aren't going to reach them, and the vast majority will pick the private plans with better networks. In addition, a very high proportion of those earning more than 400% of the fpl will probably have private insurance from their employer, as health care reform will inflate premiums for those in the exchange without subsidies and high income workers will continue to demand it.

"because costs and access were dismal failures under the laissez faire system in place two years ago"

A laissez faire U.S. health care system? Do you even know what laissez faire means?

Posted by: justin84 | January 7, 2011 10:01 AM | Report abuse

@visionbrkr:
"I guess if the price doubled it would kind of throw your post about "gimmicks" under a different light."

Wouldn't really qualify as a democratic 'gimmick', that would be the CBO just blowing their projection.

Anyway, it's hard to come up with scenarios where this effect is particularly budget busting.

Let's say a company is providing 11,000 to an employee whose family (of four) makes 70K (subsidy eligible). They decide to sluff off the employee into the exchanges, so the employee can take advantage of the subsidy in the exchanges. The employee gets an extra 10K in salary to make this move more palatable.

Now the employee's family makes 80K. Their subsidy will be about $3,500. The company will pay a $2,000 penalty (for not covering the employee), and the employee will pay somewhere between $2,000 and $3,000 in taxes on the extra $10K in income.

At the end of the day, this 'trick' has managed to cost the company $1000, the employee perhaps breaks even, perhaps doesn't, and the federal government's budget situation is improved. OH NOES!

All those companies employing legions of minimum wage employees that cover their employee's cadillac healthcare plans will certainly be worrisome.

Posted by: eggnogfool | January 7, 2011 10:14 AM | Report abuse

its amazing how people don't correlate the provider community's concern over the doc fix and Medicare's inadequate reimbursements (in their eyes) and then talk of "let's get the public option back". Justin as usual has it right. For every additional member in a public option that pays much less than private insurance you'll see a relative decrease in the number of providers that accept that it. So you can think you give them insurance but if they have no access to providers willing to accept it then what good is it really?

Posted by: visionbrkr | January 7, 2011 10:18 AM | Report abuse

eggnofool,

you really think employers are going to be that generous to give employees $10k to make the move to the exchanges? Do they even need to? All they need to do is slant their contributions towards benefits and that should do the trick. Most employees won't even realize that its an option to go to the exchange or not. Again exchanges aren't built yet or just being built but the mechanism that allows people on or off of them is going to be very key and hasn't been talked about much at all.

I also don't see how liberals in general who have been crying over stagnant wages due to increased healthcare costs think that once its subsidized by the government that automatically employers are going to be ever so generous as to reinflate employees' wages. Because corporations are that benevolent???

kind of throws your premise off.

Oh and when healthcare costs increase at a higher rate than CBO projects then more and more will be eligible for the subsidies.

Posted by: visionbrkr | January 7, 2011 10:40 AM | Report abuse

justin

can you point to any country in the world with a more laissez faire health system than the one we had two years ago?

Didn't think so.

Posted by: lauren2010 | January 7, 2011 10:53 AM | Report abuse

"that automatically employers are going to be ever so generous as to reinflate employees' wages. Because corporations are that benevolent???"

Visionbrkr,

I would agree that the instant $10K raise isn't likely to be forthcoming. Certainly nothing that would put the employer down any amount.

That said, corporations do have a habit of poaching talent from other firms, and if taking the responsibility for health insurance provides extra money for the bidding wars, wages will be bumped up.

If an employer thinks an employee is worth $60,000 plus $15,000 in fringe benefits to keep, it would probably pay $75,000 in salary and no benefits as well. Let's say this employee was one of your best, and you put him on the exchange and increase his salary from $60,000 to $65,000. In a year, he receives an offer from a rival firm for $72,000 - wouldn't you be willing to counteroffer at least up to $75,000 to keep this person on?

In the current environment, I can see an employer of middle income employees take away health insurance, blame Obamacare for it and "generously" provide a few thousand more in salary to help the employee going into the exchanges - with unemployment at 9.4%, the risk from this strategy shouldn't be too high. It should be accretive to the corporate bottom line until the labor market tightens and wages are bid back up.

I wouldn't say this occurs because corporations are benevolent either, but rather that it is in their own self interest to do so.

Posted by: justin84 | January 7, 2011 10:54 AM | Report abuse

"fewer providers will accept it."

That's true under the current way we do things.

We cant afford that.

Later, after ACA is repealed and no once can afford health care anymore, we will be forced to enact a public option system which regulates all health care services.

At that time people who become doctors for the money will leave the system and people who do it for more virtuous reasons will become doctors. And their advanced educations will be paid for by the US gvmt as well.

So, either the free market and all you saboteurs start getting reasonable now or else everything will collapse and then we'll have to let the gvmt decide how to do everything.

Posted by: lauren2010 | January 7, 2011 10:58 AM | Report abuse

justin,

I absolutely can see occasional hand picked talent to get a raise to avoid being poached, just as it happens now, but your general worker is not going to see any increase as eggnofool's assumption implies.

Posted by: visionbrkr | January 7, 2011 11:03 AM | Report abuse

@visionbrkr:

My scenario made the assumption of a change that would would be somewhat neutral to the employee involved.

Obviously companies will be able to straight up screw their employees, and that would be harmful to employees and the deficit.

But...this isn't new. Employers around the country five year ago could all have declared that they were no longer providing medical benefits, and, heck, were cutting salaries across the board 10% too. They didn't do it. Total employee compensation levels are generally set by some supply/demand function that is fairly independent of policy changes such as this, and if anything the new penalties will tend toward dissuasion of benefit removal.

The deficit-dangerous scenario is the one where employees and employers have options whereby they can both improve their situations at a net cost to the government. These scenarios are not overly common, are a legitimate concern, but have been accounted for by the CBO. That's the point.

Posted by: eggnogfool | January 7, 2011 11:03 AM | Report abuse

@eggnofool,

agreed then. If employers act in their own best intrests as they have generally done since the beginning of time then I'm correct. If they suddenly have a wave of concern for increasing middle class wages without being forced to by market pressures or other influences then you're correct. I'd suspect the answer would fall somewhere inbetween.

Posted by: visionbrkr | January 7, 2011 11:15 AM | Report abuse

"can you point to any country in the world with a more laissez faire health system than the one we had two years ago?

Didn't think so."

Depends on what you are measuring.

Government spending on health care is higher in the United States than most other countries. The amount of regulations on the health care and insurance sector might well be higher than most other countries too.

In many other countries, they have price controls which reduce government payments. In America, government just pays higher prices. Neither is a free market laissez faire system.

America can't be called laissez faire just because the heavy hand of government might be a bit heavier in the UK.

A compeltely laissez faire system wouldn't have, for example:

- Medicare
- Medicaid
- VA Hospitals
- SCHIP
- Tax preferences
- FDA
- Patents
- State insurance regulators
- Licensing requirements

I'd imagine much of the care in such a system would be delivered via an extensive network of nonprofit hospitals, much of it for free (but who can really know, since no country is currently laissez faire).

Posted by: justin84 | January 7, 2011 11:27 AM | Report abuse

(1) Employee compensation levels are set by market forces. Under this assumption, my first post is the correct way to view effects of the PPACA (in which case employers will find that dumping employees isn't helpful).

(2) Employee compensation levels are not set by market forces, compensation is what it is due to inertia, and moving forward changes in compensation will be due to the extent to which employers have excuses (legitimate or not) for screwing their workforce. This appears to be the guiding economics of your line of thinking.

The latter sounds bad when I phrase it that way, but I could justify it economically along the lines "while in the long term compensation levels are guided by market forces, there is a significant degree of stickiness in compensation. Currently in many fields employees are overcompensated relative to what the market would otherwise bare, and as a result moving forward changes in compensation in these fields will be a function of employers finding ways to overcome stickiness. The political cover gained from 'Blame Obama' is one example."

Which is a longwinded way of saying that I agree with your last post, reality is probably somewhere between the two. On topic, in this scenario deficit problems are in fact a result of falling compensation levels nationally. I doubt they fall all that much nationally over the next X years; in fact I expect them to grow, albeit not that quickly.

Posted by: eggnogfool | January 7, 2011 11:44 AM | Report abuse

wish i could edit posts.

anyway, that's (previous post) a summary of the two different compensation assumptions that appear to be used in this discussion.

Posted by: eggnogfool | January 7, 2011 11:51 AM | Report abuse

justin

Just name one country with a "MORE" laissez faire health system than ours.

The USA has the MOST laissez faire health system in the world. Please convince me I am wrong.

And if you can't name such a country, what makes you think we should make the USA's health care system even more laissez faire than it was two years ago given its obvious failure? You do agree the system two years ago had failed or was heading to it, don't you?

Posted by: lauren2010 | January 7, 2011 12:57 PM | Report abuse

"Just name one country with a "MORE" laissez faire health system than ours.

The USA has the MOST laissez faire health system in the world. Please convince me I am wrong."

There are no laissez faire systems to point to. If you can't see that then there is nothing more I can do.

If you asked me which was more of a peaceful liberal democracy - Nazi Germany or Facsist Italy - I would tell you neither, and for the same reason. Fascist Italy wasn't "MORE" or a peaceful liberal democracy than Nazi Germany, it simply wasn't one.

"USA's health care system even more laissez faire than it was two years ago given its obvious failure? You do agree the system two years ago had failed or was heading to it, don't you?"

It's still heading to failure - that hasn't changed. More people will be on the train, and the pace is picking up.

Posted by: justin84 | January 7, 2011 1:24 PM | Report abuse

@Justin84:

It's popular among today's communists to argue that problems in the Soviet Union can't be held against Marxism because the USSR never had anything approaching a 'real' Marxist system in place.

The simple fact is that when it comes to national policy, you are going to have limited datasets, but that only makes the empirical evidence you do have available more valuable. When the best example you have available of something is a catastrophic failure, that has to be seen as a legitimate and signficant concern.

Posted by: eggnogfool | January 7, 2011 1:35 PM | Report abuse

justin

Let's just ignore your nazi/fascism comments, because I find them irrelevant and fatuous.

Here's the facts...

Up until two years ago, the USA had the most laissez faire system in the entire history of the world. And because of political and other social reasons, that same system is also highly unlikely to EVER get MORE laissez faire.

Ergo, the USA had the most laissez faire health care system POSSIBLE by any definition.

And by your own admission, that system was failing.

Now do the math.

Laissez faire failure = at a minimum some form of cooperation (private business + gvmt)

ACA embraces free market principles, so given the failure of laissez faire health care practices, and CBO "blessings" of ACA, and the obvious dearth of will from any GOP politician to offer any serious alternative prior to ACA, anyone who continues to object to trying to make ACA work or see it as a first step to better reforms is just a no-good crybaby who needs to be spanked and then ignored.

That's how I consider so many commenters here, even one's with stacks of so-called numbers and "analysis" in their writings.

Posted by: lauren2010 | January 7, 2011 1:56 PM | Report abuse

"The simple fact is that when it comes to national policy, you are going to have limited datasets, but that only makes the empirical evidence you do have available more valuable. When the best example you have available of something is a catastrophic failure, that has to be seen as a legitimate and signficant concern."

You're missing the point. There is no laissez faire system to look to here, only a different type of government system. It might be worse than government systems elsewhere, but the whole edifice is constructed, regulated and largely funded by government, directly or indirectly. The fact that people can't even imagine what laissez faire would look like anymore is a huge symptom of the problem.

You are comparing two lakes, each with a different type of pollutant in them. One type of pollutant has slightly higher concentration, but has only modest toxicity, and the other is a bit less concentrated but is highly toxic.

The lake with the pollutant that is more toxic but in low concentration makes a lot of people ill after drinking. The lake with the other pollutant, in higher concentration but less toxic, is making fewer people sick and tastes better.

Lauren is concluding, having never seen a clean lake, that water is what's causing the problem, given that the lake with lower concentration of pollutants is causing more harm than the lake with the higher concentration. Her solution is to add pollutants from the lake causing fewer health problems to her own lake.

When told the pollutants are the actual source of the problem, Lauren insists that her lake is much closer to being pure water, and yet she still gets sick more often than her friend who drinks from the other lake. She's already tried clean water, she believes, and will have none of it. Sure, I'll even give her that using the least damaging pollutant might make her situation better - but it's not better than simply not dumping pollutants in the lake at all.

Posted by: justin84 | January 7, 2011 5:44 PM | Report abuse

"Let's just ignore your nazi/fascism comments, because I find them irrelevant and fatuous."

Try the lake example I use above instead then, if the words nazi or fascist make your brain turn off - which they clearly did.

"Up until two years ago, the USA had the most laissez faire system in the entire history of the world."

Well that's certainly not true (even more than USA 1929?), but let's take that as given.

You could also argue that the U.S. has the most advanced interstellar space program in the entire world, given that it's space probes have gone the furthest from Earth and it actually managed to send a few guys to the moon decades ago. However, looking at NASA would be a very poor way to evaluate an interstellar space program, as the U.S. clearly doesn't have one.

Jamie Dimon might be closer to poverty than Bill Gates, but you don't use his situation as an example of poverty.

"Laissez faire failure = at a minimum some form of cooperation (private business + gvmt)"

No, government interaction with private business is not laissez faire. Nor does the fact that such interaction exist evidence that laissez faire fails, any more than the existence of slavery is evidence that people shouldn't be free. You don't know what laissez faire is.

"ACA embraces free market principles"

No, it doesn't. You don't know what a free market is.

"anyone who continues to object to trying to make ACA work or see it as a first step to better reforms is just a no-good crybaby who needs to be spanked and then ignored."

Yes, we get it that you're a tyrant, and you want everyone to go along with your favored designs whether they like or not. Unfortunately, sometimes other people get into power and have other plans - and you've lost all moral grounds for complaint.

Posted by: justin84 | January 7, 2011 6:05 PM | Report abuse

It is fantastic time to refinance home mortgage. As Clark Howard says it is very tough to find these low rates for long time. Search online for "123 Mortgage Refinance" they found me THE lowest possible rate.

Posted by: pamelakuo08 | January 8, 2011 5:11 AM | Report abuse

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