Moneybox
A blog about business and economics.

March 24 2017 8:21 PM

Let Us Now Appreciate Paul Ryan’s Utter Failure as a Political Leader

As he gave his brief press conference Friday afternoon confirming that Republicans had pulled their bill to repeal and replace the Affordable Care Act, House Speaker Paul Ryan both looked and sounded like a hangdog high school football coach spilling out a few defeated platitudes after watching his team get ground into the turf.

“Moving from an opposition party to a governing party comes with growing pains,” he said, “and, well, we’re feeling those growing pains today.”

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“We came really close today, but we came up short.”

“I will not sugarcoat this. This is a disappointing day for us. Doing big things is hard.”

In a sense, Ryan was being too easy on himself. Yes, “doing big things” is difficult in Washington. The Capitol dome is practically designed to bottle up and suffocate dramatic change. But whatever growing pains they may have experienced, fractious Democrats still managed to execute an ambitious agenda in the early Obama years without a major legislative collapse the likes of which we all witnessed this week. The rollout of the American Health Care Act, by contrast, was a mystifying debacle. And as much as anything, its demise is an indictment of Paul Ryan that should shatter what’s left of his myth as competent policy thinker or political leader.

Aside from the occasional PowerPoint, it’s really not clear what the man is good for.

Journalists often describe Ryan as a “wonk”—or if you’re CNN, a “legendary wonk“—mostly because he has sold himself as one. It’s Ryan’s #brand, which he’s nurtured with a stream of lofty white papers and interviews with credulous reporters. But in truth, he’s always been far better at playing a policy nerd on TV than at doing the hard work of crafting legislation that could ever conceivably pass Congress or be implemented without causing mass havoc to the poor. First and foremost, the man is an ideologue who can competently dress up his Randian fantasies with some numbers, and an occasional magic asterisk where key details should be.

That became painfully obvious with the AHCA, a nonsensical piece of legislation that despite his lame attempt to sell it with a slide deck presentation, somehow achieved the distinction of being panned by policy experts from the left, right, and center, without actually attracting the support that a normal, if unsatisfying, political compromise might. Ryan initially took Obamacare’s basic structure, then defunded the things that made it work in order to pay for massive tax cuts. The bill only became more preposterous and unworkable as Ryan and the White House bargained away necessary regulations for support from hardliners. Now, it’s possible this is not truly a reflection on Ryan’s aptitude as a policy thinker; the inherent contradictions of the Republican Party may have made it impossible for anybody in leadership to craft a coherent health reform bill. But then, after making last minute changes that would have fundamentally reshaped the entire individual insurance market, the speaker attempted to bring it to a floor vote Friday without any kind of score from Congressional Budget Office. The man pushed legislation with little to no clue as to what it would actually do to the country. Generally speaking, wonks care about that sort of thing.

So Paul Ryan’s reputation as a policy mastermind has finally been shown to be a myth. What about his leadership skills? They appear to be nonexistent. From the start, his entire strategy of pursuing health care as an early, quick win for Republicans never made much sense. Ryan argued that it was necessary in order to prep the runway for tax reform easier later on, since nixing the various taxes that fund Obamacare now would allow the GOP to cut rates deeper in a second tax bill while keeping it revenue neutral, and thus allowing it to pass as a permanent bill rather than one that expires after 10 years. But that was entirely predicated on the idea that health reform was actually doable. Back on planet earth, where the American Health Care Act was a disaster in waiting, doing taxes first, and maybe settling for a slightly higher capital gains rate, would have made far more sense. A man who had any sense of his own caucus’s limitations might have actually accepted that reality.

It’s also crystal clear that Ryan no longer has sway as an intellectual leader among conservatives. This was his chief qualification for becoming speaker, mind you: He was a star of the mainstream GOP who had the ideological credibility to bring along recalcitrant hardliners in the House Freedom Caucus. That was always a little bit of a dubious theory—off the bat, Ryan had to retract some of his demands he’d floated before taking the job after meeting resistance from the Freedom Caucus. And now it’s been totally debunked. In Ryan’s first truly serious legislative test, the Freedom Caucus has killed his bill.

Back in 2012, anti-tax lobbyist Grover Norquist summed up the prevailing sentiment among professional conservatives, when he said that it didn’t really matter who Republicans picked for president, so long as the party had Paul Ryan’s vision. “We don’t need a president to tell us in what direction to go. We know what direction to go. We want the Ryan budget,” he said. “We just need a president to sign this stuff. We don’t need someone to think it up or design it. The leadership now for the modern conservative movement for the next 20 years will be coming out of the House and the Senate.” Well, we know Donald Trump can sign stuff. It’s apparently Paul Ryan who can’t deliver on his end of the deal.

March 24 2017 3:03 PM

Steve Mnuchin Doesn’t Think A.I. Is an Immediate Threat to Jobs. That’s Insane.

Treasury Secretary Steven Mnuchin is a sharp guy. He’s a (legacy) alumnus of Yale and Goldman Sachs, did well on Wall Street, and was a successful movie producer and bank investor. He’s good at, and willing to, put other people’s money at risk alongside some of his own. While he isn’t the least qualified person to hold the post of treasury secretary in 2017, he’s far from the best qualified. For in his 54 years on this planet, he hasn’t expressed or displayed much interest in economic policy, or in grappling with the big picture macroeconomic issues that are affecting our world. It’s not that he is intellectually incapable of grasping them; they just haven’t been in his orbit.

Which accounts for the inanity he uttered at an Axios breakfast Friday morning about the impact of artificial intelligence on jobs.

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"it's not even on our radar screen.... 50-100 more years" away, he said. "I'm not worried at all" about robots displacing humans in the near future, he said, adding: "In fact I'm optimistic."

Now, there is a lot of apocalyptic thinking about robots taking all our jobs in the near future. (See Derek Thompson’s Atlantic piece on a world without work, or Martin Ford’s Rise of the Robots or The Second Machine Age, by Erik Brynjolfsson and Andrew McAfee.)

I’m not in that camp—yet. If anything, in the United States we have a shortage of people able to fill jobs that require human labor; there were 5.5 million job openings in the U.S. at the end of January. However, the notion that A.I. substituting for human labor is something that is 50 to 100 years away is, simply, nuts.

A.I. is already affecting the way people work, and the work they do. (In fact, I’ve long suspected that Mike Allen, Mnuchin’s Axios interlocutor, is powered by A.I.) I doubt Mnuchin has spent much time in factories, for example. But if he did, he’d see that machines and software are increasingly doing the work that people used to do. They’re not just moving goods through an assembly line, they’re soldering, coating, packaging, and checking for quality. Whether you’re visiting a GE turbine plant in South Carolina, or a cable-modem factory in Shanghai, the thing you’ll notice is just how few people there actually are. It’s why, in the U.S., manufacturing output rises every year while manufacturing employment is essentially stagnant. It’s why it is becoming conventional wisdom that automation is destroying more manufacturing jobs than trade. And now we are seeing the prospect of dark factories, which can run without lights because there are no people in them, are starting to become a reality. The integration of A.I. into factories is one of the reasons Trump’s promise to bring back manufacturing employment is absurd. You’d think his treasury secretary would know something about that.

It goes far beyond manufacturing, of course. Programmatic advertising buying, Spotify’s recommendation engines, chatbots on customer service websites, Uber’s dispatching system—all of these are examples of A.I. doing the work that people used to do. One of the biggest occupations for males without college educations is driving a truck. Last fall, Otto, Uber’s self-driving truck, made its first delivery. Companies are working on pilotless planes as we speak.

And, hello, even in the world that Mnuchin knows something about, software-empowered computers are doing the jobs of highly paid people. Many hedge funds trade stocks based not on the tips and edge their Wharton-schooled analysts can garner at lunch but based on the ideas that algorithms come up with. The big trend in money management, of course, are robo-advisers—essentially, programs that generate and suggest asset allocation plans for investors.

It’s not a question of when artificial intelligence is being used—or will be used—in your workplace. It’s how. If Mnuchin is serious about helping the economic sufferers in Trump’s America, he needs to learn that.

March 23 2017 7:38 PM

The Crazy House Conservatives Might Actually Be Right About Obamacare Repeal

So, here we are. It's Thursday evening, and House Republicans have had to cancel their vote to repeal and replace Obamacare because their bill still doesn't have enough support from hard-line conservatives to pass. House Freedom Caucus Chairman Mark Meadows, the face of the holdouts, says leadership needs to turn another “30 to 40” votes to reach the finish line. Trumpcare appears to be on life support.

What do the noes want? Meadows isn't getting into specifics, except to say that he doesn't think the current bill would lower premiums enough for his constituents. But the answer seems to be that conservatives are determined to kill off many of the insurance market regulations that make up the very heart of Obamacare. House leaders seem to be hesitant to do so, because many of those rules are quite popular, and nixing them would tee up some easy 30 second ads against Republicans in swing districts.

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But, purely from a policy perspective, the hard-liners may be on stronger footing. Sure, the changes they're seeking might not go over well outside their own ruby-red districts. But their approach might be slightly less disastrous for the insurance market than the misbegotten, unloved compromise bill Paul Ryan and the White House are currently pushing.

Up until last night, the American Health Care Act was animated by a very specific legislative logic. Because Senate Republicans planned to pass their version of the bill using the budget reconciliation process in order to avoid a filibuster, the plan could only deal with spending issues, not regulations. So Congress could slash Obamacare's subsidies, eliminate its taxes, and cut Medicaid down to size, but it couldn't eighty-six rules barring insurers from discriminating against patients with pre-existing conditions. That was the theory, anyway. In reality, many parts of the bill looked a whole lot like regulatory tweaks, such as a change that would have allowed insurers to charge older Americans up to five times what young adults pay for coverage. Why was that fair game, but not Obamacare's hundreds of other pages of regulatory dictates? Nobody would really say. This angered conservatives, who really, really want to tear out Obamacare root and branch, without worrying about obscure Senate parliamentary rules.

On Wednesday, the pretense that the bill couldn't touch regulations finally fell apart for good when, in order win over skeptical Freedom Caucus members, the White House reportedly offered to repeal Obamacare's essential health benefit rules, which require insurers to cover a wide array of services such as maternity care and hospitalization. These are regulations, pure and simple. You can argue that they affect the budget, and therefore should be fair game for reconciliation, because they affect the cost of the insurance the government has to subsidize. But that logic applies to pretty much all of the other regulations in Obamacare, as well.

And now, like the mouse that got its Milano, the Freedom Caucus wants to repeal the rest of Obamcare's regs, too. According to the Washington Post, they're pushing to scrap pretty much everything important in Title I of the law. That includes rules that stop insurers from charging people more based on their health or sex, from canceling their customers' plans at the drop of a hat, or from imposing lifetime or annual limits on coverage. The two provisions they're apparently willing to leave in place are the rules letting children stay on their parents' insurance until age 26 (nobody opposes that one) and barring insurers from turning down customers because they have pre-existing conditions (of course, that extremely popular rule would be rendered mostly useless, since carriers would be allowed to charge those sick individuals more).

This sounds barbaric. It is barbaric. The Title I rules are generally popular for a reason. They were designed to make the Kafka-esque nightmare of America's individual health insurance market something predictable and fair. Nobody wants to go back to a world where insurers can rescind coverage because somebody forgot to mention their childhood allergies on some paperwork or where sick people have to pay exorbitantly for insurance or go without.

And yet, at this point, that would be a more coherent approach to health policy than what GOP leaders seem to have settled on. That's because, by eliminating the essential benefit rules, the GOP plan would already make it possible for insurers to discriminate against the sick and aged. They just have to do it indirectly. Without any minimum benefit requirements to get in the way, carriers will be free to offer bare-bones plans that don't cover the needs of your typical 50- or 64-year-old. Carriers wouldn't reject anybody outright—they would just make sure not to sell health plans that might accidentally appeal to an unprofitable customer. I'd expect to see carriers start offering a whole lot of "insurance" that covers one night in the hospital and some antibiotics with maybe a gym discount thrown in to lure millennials.

Those are extremely perverse incentives that would warp the insurance market in some very ugly ways. Not only would sick people not be able to find the health plan they need, but relatively healthy and well-off customers looking for more comprehensive care like you'd typically get from an employer might have nothing to choose from but junk coverage designed to scare off the ill, or very expensive plans designed to compensate for the cost of caring for them. If you're a successful self-employed contractor with a nice roofing business, neither of those options probably sounds too appealing.

Eliminating most of Obamacare's regulations, rather than just the essential health benefits, might make this bizarro world of insurance a little more rational. Rather than indirectly discriminating against the sick by only offering cheapo or crazily expensive coverage in a way that also punishes healthy people, companies would be allowed to just charge the ill more. Meanwhile, it could offer somewhat comprehensive coverage to healthier customers at something approaching a reasonable price. What would happen to people with pre-existing conditions? Their situation wouldn't be great. But Trumpcare does have a $100 billion fund that states could use to set up subsidized high risk insurance pools, which has long been the standard conservative policy approach for dealing with people with pre-existing conditions. That might not be enough to adequately fund them over a decade, but it's something.

Now, to be clear, the insurance market that Freedom Caucus types are aiming to set up would still be an absolute horror. As I wrote on Wednesday, without essential benefit rules in place, insurance companies will be able to offer trash coverage priced at exactly the value of Trumpcare's premium subsidies, market the plans as free to consumers, and skim money off the government the way for-profit colleges have gobbled up Pell Grant and student loan money while ripping off undergrads for years. Older, sicker patients would certainly suffer, too, especially if the high risk pools are badly underfunded.

But those things would also be true if House leadership got its way. Obamacare's regulations, remember, really were designed to work as a cohesive whole. If you pull out a few of its key stones, you're likely to create as much wreckage, if not more, than if you demolished the whole thing. So maybe Trump and Paul Ryan ought to let the Freedom Caucus have its way. Then they can hopefully let whatever politically radioactive bill comes of it die mercifully in the Senate.

March 23 2017 5:08 PM

Head of D.C. Metro Says Escalators Too “Sensitive” for Passengers to Walk on Them

We should be kinder to escalators. The District of Columbia learned this Wednesday.

Talking to D.C.’s NBC affiliate station one day before the D.C. Metro board approved fare hikes and service cuts to begin in July, the head of Washington’s Metro system said that by walking on the left side of the escalator and standing on the right—a mainstay of subway decorum!—people are actually harming the moving stairway. “These are very sensitive pieces of equipment,” Metro General Manager Paul Wiedefeld said as a new escalator at the Bethesda station was unveiled.

Even as he said it, he knew the futility of his cause. “We prefer that they stand as they move up the escalator, but also we know that people will do what they want to do.” It’s true. And to well-behaved Washington commuters, the Metro chief’s comments amounted to heresy:

March 23 2017 12:21 AM

The GOP Might Make a Deal That Would Screw the Sick While Letting Insurers Scam Taxpayers

This is nuts. Straight. Up. Nuts.

Right now, Republicans are negotiating a last-minute deal to save their health care bill before Thursday's vote in the House that, were it to actually become law, could have massive repercussions for the entire U.S. health care system. It would simultaneously be an enormous blow to the sick and a boondoggle for taxpayers that would turn the whole individual insurance market into an opportunity for insurers to skim money from the government by selling junk coverage.

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I really, really wish I was exaggerating. But no.

According to multiple reports, the White House is trying to win over votes from the archconservative Freedom Caucus by adding an amendment to its health care bill that would kill off Obamacare's “essential health benefits” rules. Those regulations require insurers to cover 10 different areas of care—things such as hospital and outpatient services, prescription drugs, and mental health and maternity care. Liberals like the rules because, among other things, they ensure that when people pay for coverage, they get something of value. (Back in the pre-Obamacare days, people often bought cheap coverage, only to discover it was worthless once their hospital bills arrived.) Republicans dislike the essential benefits, however, because they make coverage more expensive. Which is true. When insurers actually have to cover stuff, it costs more.

Getting rid of the regulations has been at the top of the Freedom Caucus' wish list, because it would allow premiums to drop for people who don't need much in the way of actual benefits. Unfortunately, it would also turn the insurance market into a massive exercise in graft by allowing insurers to game the living hell out of the subsidy system that Republicans are presently setting up.

Remember, the GOP plan offers Americans who make less than $75,000 flat tax credits to help buy insurance, and these credits go up as you age. If you're under 30, you get $2,000 toward your premiums; if you're between 30 and 40, you get $2,500, and so on. If there are no rules about what insurers have to cover, companies will design extremely pared-down health plans that cost exactly as much (or maybe just below) what the tax credit is worth. Sure, they won't really provide much in the way of actual help if someone gets sick, but to insurance buyers they'll be free.

It doesn't take a lot of imagination to see how this leads to companies hawking lots of dubious insurance products at unsuspecting customers. Forgive the quoting of my own tweet:

Of course, those free, threadbare plans will appeal to young people who might otherwise go uninsured, thus gobbling up the most profitable part of the market. That will leave carriers hesitant to offer more comprehensive coverage that actual sick people might want to purchase. Older Americans who want assurance that someone will cover their hospital bills are going to end up paying through the nose for it.

And all this dysfunction will be fueled with billions in taxpayer dollars. Because, again, if the plans are free after the tax credit, there's no reason for people not to snap one up. Whatever the Republican tax plan was supposed to cost before, it's probably going to be whole hell of a lot more expensive now.

Of course we won't know for sure before the House vote—which, again, is this Thursday—because the Congressional Budget Office won't have time to score the plan. To be clear, we do not know for sure whether this bargain will make it into the final bill. It's also an open question whether it would be allowed into the legislation under the budget reconciliation rules the Senate will be using in its attempt to pass the legislation. But this whole exercise still feels like some nightmare version of a high school kid writing his term paper a 2 a.m. the morning before it's due. Except in this case, it's Donald Trump and a couple fringe right-wing ideologues rewriting the whole damn health insurance system. God save us all.

March 22 2017 4:06 PM

Surprise! Even With an Extra $85 Billion, Trumpcare Is Still Terrible for the Old.

Despite a last-minute attempt to make the legislation more generous to people over the age of 50, it looks like the Republican health care plan would still be an unmitigated disaster for many Americans nearing retirement age. Or so suggests a new analysis from the progressive Center on Budget and Policy Priorities.

After the Congressional Budget Office reported that some older insurance customers would see their premiums rise by as much as 750 percent under the GOP's plan, party leaders went back and added a roughly $85 billion dollar placeholder into their bill supposedly designed to beef up its insurance subsidies for the 50-to-64 demographic. While nobody knows precisely how the money would be used—it's been called a magic asterisk”—the move was meant to assuage the fears of moderates in the House and Senate who are feeling queasy about the idea of pricing near-seniors out of the insurance market.

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Unfortunately, it appears that the asterisk doesn't actually perform that much magic.

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Even with the additional $85 billion kicked in, the CBPP estimates that the average 60-year-old earning $22,000 would still see his premiums after tax credits rise by more than $6,000, to $7,470. That's slightly less vertiginous than the $9,349 they'd have owed under Trumpcare 1.0, but it's still way outside the realm of affordability.

In some states, the price hikes will be far more dramatic, CBPP finds. In Alaska, premiums for 60-year-olds could reach near $27,000, while in Wyoming, West Virgina, Oklahoma, North Carolina, Nebraska, and Arizona they'd top $10,000.

Here's why the $85 billion, which amounts to a roughly 24 percent increase in the bill's total funding for tax credits, doesn't do much good for the people it's supposed to help. Under the Affordable Care Act, the government currently gives lower-income Americans tax credits to buy insurance that cap their premiums as a percentage of their income. So if you're a 62-year-old earning a bit above the poverty line in Arizona, the ACA keeps your monthly insurance payments low no matter what. Trumpcare nixes that system and replaces it with a series of largely flat tax credits based on age (they start phasing out for those who make more than $75,000). As written, those work to $3,500 for 50- to 59-year-olds and $4,000 for those 60 and up—not nearly enough to cover the full cost of premiums, which could easily reach five figures for an individual in their 60s, since Trumpcare would allow insurers to charge them up to five times what they charge twentysomethings (under Obamacare, the ratio is 3 to 1). The extra $85 billion, CBPP estimates, would only get those credits up to $5,100 and $5,900, not enough to make a significant difference for someone with a lower-middle-class income.

The CBPP's analysis suggests there's no real way for Republicans to paper over this problem in the legislation without spending far more money than they'd be willing. As long as insurers can charge near-seniors through the nose and the tax credits aren't targeted based on income but instead spread thinly across large demographic brackets, poorer, older Americans are going to face a massive affordability gap. All the way down to its foundations, this bill is engineered to screw poorish 64-year-olds.

March 22 2017 11:44 AM

After Bashing Obamacare for High Deductibles, the GOP Has Crafted a Health Care Plan That Raises Deductibles

Republicans like Donald Trump and Mitch McConnell have often pointed to the high insurance deductibles that Americans face under Obamacare as evidence of the health reform law's failure. This has always been an awkward and transparently cynical line of attack, since basically every replacement plan Republicans have floated over the years has been designed to allow insurers to sell cut-rate coverage with even higher deductibles. This is no less true of the proposal now making its way through the House of Representatives, which is designed to let carriers sell plans that cover less of their customers' health costs.

And so, in the brave new world of Trumpcare, average deductibles are almost certainly going to go up. In a column at Axios, Kaiser Family Foundation President Drew Altman estimates that the deductible in a “typical plan” will rise about $1,550, from $2,150 to to $4,100. He bases this calculation on the Congressional Budget Office's projection that the average “actuarial value” of insurance plans on the individual market—how much of customers' expenses they cover, on average—will fall from 72 percent to 65 percent.

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Now some Republicans might look at this and say something like, “Great. Under Obamacare, Americans are required to buy high deductible plans. Under Trumpcare, they'll be able to choose cheap coverage that fits their needs!” If you encounter this argument in the wild, please respond with a withering stare. One of the major reasons Americans will have to choose cheap coverage under Trumpcare is that Republicans are cutting funding for premium tax credits and eliminating the “cost-sharing reduction” subsidies that lower deductibles for low-income households. Furthermore, because Trumpcare will allow insurers to sell skimpy plans without also offering more robust options—Obamacare forces them to sell both in order to participate on the markets—a lot of Americans will have few choices to pick from. If this bill passes, expect that a whole lot of people won't have any option but to pay more for worse coverage—if they can afford any coverage at all.

March 21 2017 5:34 PM

Emirates Airlines Responded to Trump’s Laptop Ban by Updating an Ad Featuring Jennifer Aniston

On Tuesday the Trump administration announced a ban on laptops, tablets, Kindles, and other electronic devices larger than cellphones on flights from 10 Middle Eastern and North African airports on eight non-U.S. airlines. Misguided though the ban might be, most of the affected airlines have so far been fairly quiet about the ban.

So far the only exception is Emirates, the largest carrier in the Middle East. On Tuesday morning, the Dubai-based airline tweeted out an 18-second advertisement featuring Jennifer Aniston with the caption, “Let us entertain you” and a rather topical opening line: “Who needs tablets and laptops anyway?”

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Aniston is then shown holding a console attached to the seat in front of her and sitting with two children. “This thing has so many games and so many movies, it’s crazy,” she says. Aniston may not be the willing face of this friendly jab at Trump administration policy, but her time-tested likability makes her an effective one. Who wouldn't want to be on Jen's side?

On Twitter, users were impressed with the speed with which Emirates put out the ad, but the video actually came from a minute-and-a-half-long October advertisement in which Aniston befriends a boy who ventures into her private suite on the flight. The opening text was evidently slapped onto the clip to capitalize on a newsworthy event—a policy that may have been motivated by the Trump administration’s protectionist instinct and that may have serious business consequences for Emirates and its peers, which thanks to state funding often offer cheaper fares than their American counterparts.

Emirates appears to be the only airline to have seized the moment. On Tuesday afternoon Royal Jordanian Airlines tweeted out basic information to let its customers know it will begin adhering to the ban on March 24. Saudi Arabian Airlines also stuck to the facts.

Otherwise, the other affected airlines—Egypt Air, Etihad Airways, Kuwait Airways, Qatar Airways, Royal Air Maroc, and Turkish Airlines—seemed to focus their social media attention elsewhere. Presumably they spent the day wishing they lived on one of the 99 out of 100 Earths in which Donald Trump is not president.

March 21 2017 1:23 PM

Trump’s Laptop Ban Isn’t Just Misguided and Xenophobic. It’s a Giant Middle Finger to Business Travelers.

The Trump administration announced on Tuesday its latest effort to make life more difficult for anyone—citizen or noncitizen—who wishes to travel to and from the United States. As of right now, passengers on directs flights leaving 10 airports in the Middle East and North Africa on eight non-U.S. airlines are prohibited from bringing electronics larger than a cellphone on board.

The justification given was security grounds, although that sounds dubious. If laptops are dangerous in the cabin, why aren’t they dangerous in the cargo hold? Meanwhile, the list excludes airports in places like Venezuela, a country about which the U.S. government has issued a travel warning. In the Washington Post, Henry Farrell and Abraham Newman smartly unpack some of the trade politics that may be behind the laptop ban. Several of the airlines in questions are either state carriers or enjoy significant government support that puts U.S. carriers at a disadvantage. In other words, this move could be an extension of Trump’s twice-foiled travel ban, but it could also be an outgrowth of his protectionist trade policy.

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But on top of all that, the device ban is also the latest in the Trump administration’s efforts at a certain kind of class warfare—business class warfare. In addition to being a jab at foreign companies and another act of policy shaped by rank xenophobia, the announcement is a giant middle finger to one group of people you’d think our mogul in chief would like to keep happy: business travelers.

The use of laptops (and tablets) on long flights isn’t simply a convenience or a cure for boredom. It’s a requirement for any knowledge worker who works internationally. The planes plying the routes between Abu Dhabi and New York, between Riyadh and Washington, are filled with professionals of all types hunched over their MacBooks and ThinkPads.

The ability to work on long flights has evolved quickly over the years. Until recently, one of the virtues of having your laptop on the plane was that the cabin of an airplane winging across the Atlantic was the one place you could work without the constant interruptions of co-workers, social media, and emails. I looked forward to them as opportunities to write book proposals or finish chapters.

Now, however, another reality has taken hold. Access to in-flight internet via GoGo or other services is something close to standard. It kicks in at 10,000 feet. Virtually every plane is equipped with power plugs that can keep laptops juiced for the entire journey. On a recent flight back from Europe, eight grinding hours during a work day, I was able to be online—and hence in my office—pretty much the whole time. The internet access is slow, doesn’t let you stream video, and can fade in and out over the ocean. But it lets people do pretty much everything else: get into secure systems or dashboards, chat with colleagues, trade stocks, move money, sign and forward contracts, monitor sales on your e-commerce site, fine-tune the proposal you’re going to make upon landing.

As a result, the expectations and norms surrounding business travel have changed. There is a large class of highly compensated people for whom time is money—they bill by the hour or by the day. Investment bankers, management consultants, lawyers, accountants, project managers, engineers, architects. For them, long international flights used to be an economic black hole—you couldn’t really charge clients for the time, and you couldn’t get much work done. But now, for a lawyer who charges $1,000 an hour, paying $5,000 for a one-way business class seat from Dubai to the U.S. makes sense, even if she can comfortably do only seven hours of work. The same calculus holds for the accountant in coach. At the same time, we work in a business climate in which people expect you to be connected at all times. The idea that you’re on a plane for 10 hours is no longer an excuse for not responding to a colleague or client.

There is something particularly pernicious about the way this laptop ban works. It doesn’t apply to flights leaving the U.S. for the Middle East—which is to say west-east travel. But on those flights, a lack of connectivity or access to a laptop isn’t as much of an issue. These flights often go overnight, when it is permissible to be unplugged and passengers may spend most of the time sleeping. Those flights also tend to be shorter. But east-west travel is another story. The flights take longer and are often timed to coincide with work hours at home.

Take the laptop—and internet access—out of people’s hands, and it destroys their capacity to work. It turns several productive hours into unproductive ones. And there is huge amount of business to be done in the countries affected by the laptop ban. Saudi Arabia has a GDP of about $650 billion and Saudi Aramco is about to stage what could be the world’s largest initial public offering. Morocco is building some of the world’s largest solar plants. Istanbul’s airport is an important regional hub, and the gateway to a market of 75 million people. Major U.S. multinationals all have outposts, operations, and significant holdings in the countries serviced by these airports. In a way, the laptop ban doesn’t simply alienate individual business travelers; it alienates entire economies. Erecting policies that inhibit or discourage the free flow of people and commerce is just as protectionist as building a wall or slapping tariffs on imported goods.

Now, globe-trotting knowledge workers face a choice when returning from a business trip. They can stick to the nonstop flight and write off the east-west flight as wasted time, and read newspapers and books or watch in-flight movies. Or they could seek a less direct route home, which would allow them to be connected for some portion of the travel. One way to avoid the ban would be to fly from Saudi Arabia to Frankfurt, London, or Paris and then catch a flight on Delta or American back home. But doing so violates one of the cardinal rules of business travel. If you’re flying for work, you always fly direct if you can to eliminate downtime and reduce the risk of delays and cancellations. It’s good business. And our president is supposed to be all about good business, right?

March 20 2017 4:54 PM

Paul Ryan’s Favorite Talking Point About Medicaid Is Utter Bunk

Republicans have a handful of go-to criticisms of Medicaid. One is that they believe it costs too much—which is why the House GOP has targeted $880 billion in cuts at the government-run health insurance program for low-income and disabled Americans as part of its Obamacare replacement plan. Of course, simply slashing coverage for the vulnerable seems a bit cold-hearted, so conservatives also like to claim that Medicaid does a poor job serving its beneficiaries, because doctors won't accept it. That makes it easier to say with a straight face that they're interested in “reforming” the program, rather than just bleeding it dry.

You can find variations of this point dating back years. But it's been coming up a whole lot more lately, as Republicans have been trying to sell their austere version of health care reform to a deeply skeptical public. “More and more doctors just don’t take Medicaid,” Paul Ryan told reporters during a PowerPoint presentation a couple weeks back, repeating a claim he'd made in January. “I mean, what good is your coverage if you can’t get a doctor? And that is a huge, growing problem with Medicaid.” When confronted at a CNN town hall by a cancer survivor who'd obtained life-saving medical coverage thanks to Obamacare's Medicaid expansion, Secretary of Health and Human Services Tom Price resorted to a similar argument.

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“We have one-third of the physicians in this nation, Brian, who are not seeing Medicaid patients,”  Price said (the cancer survivor’s was Brian). “And so if we want to be honest with ourselves as a society, it's important we step back and say, ‘Why is that?’ Why are those doctors not seeing Medicaid patients? Let me just suggest it's because the Medicaid program itself has real problems in it.” Price added that the Trump administration wants to move some patients from Medicaid to private insurance that “might be much more responsive to them.”

It is true that many doctors do not accept new Medicaid patients, in large part because the program pays physicians relatively little for their services. But new data suggests Ryan is dead wrong when he says this is a growing problem. If anything, it appears that more doctors have started to see Medicaid enrollees in the years since the program expanded under the Affordable Care Act. Meanwhile, a recent analysis shows that low-income Americans tend to have similar access to doctors whether they have Medicaid or a private plan, which belies Price's notion that many Medicaid patients would be significantly better off with coverage purchased on the individual market.

In other words, some of the GOP's favorite current talking points about Medicaid are bunk.

When the Washington Post tried to fact-check Ryan's Medicaid claims earlier this year, it had trouble finding any number at all to substantiate them. “I am not aware of any data source that would tell you one way or another whether the number of physicians who accept Medicaid or Medicare, or private insurance for that matter, is going up or down,” Julia Paradise, associate director of the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, told the paper. But a recent survey highlighted by Bruce Jepsen at Forbes suggests the figure has been pretty stable in major metro areas over the past decade. According to the doctor job placement company Merritt Hawkins, 53 percent of physicians in 15 large cities said they were accepting Medicaid patients in 2017. That's up from 45.7 percent in 2014, when the Medicaid expansion began, and down slightly from 2009, when it was 55 percent.

These data may not cover the entire country, but they are instructive. First, they come from a substantial survey. Merritt Hawkins interviewed about 1,400 doctors' offices in large cities like New York, Los Angeles, and Atlanta covering five different specialties: cardiology, dermatology, family medicine, OBGYN, and orthopedic surgery. The company also found that doctors working in midsize metros were slightly more likely to accept Medicaid than their peers in bigger cities, so there's no particular reason to think that Medicaid is facing a more severe crisis outside the country's larger population centers (the report only offered survey results for midsize metros covering 2017). A separate Merritt Hawkins survey of more than 17,000 physicians around the country found that 63.7 percent said they saw all Medicaid patients in 2016, up from 61.9 percent in 2014.*

A pessimist like Price might look at these data and note that, while the problem isn't getting any worse, about half of doctors still aren't taking Medicaid patients or are limiting the number they'll see. That sure makes the program sound dysfunctional. But if you're relatively poor, it turns out that private coverage might not be much better. In November, an analysis by the Medicaid and CHIP Payment Commission showed that Americans who earned less than 138 percent of the poverty line—the population covered under Obamacare's Medicaid expansion—had about the same difficulty getting access to medical care during 2014 whether they had Medicaid or private insurance (that was the first year Obamacare's major pieces were fully implemented). In fact, those with private plans were twice as likely to say they lacked a regular source of medical care, and about 9 percentage points more likely to say they worried about medical bills. Medicaid patients did face slightly longer wait times. But they had far, far better access to medicine than the uninsured. So to demonize Medicaid, as Price does, is to ignore the fact that private insurance faces the same problems, and in some respects more severely.

If you stop and think about it, it makes sense that Medicaid might be about as good, if not better, than cheap private insurance, which tends to be cheap because it's accompanied by high co-pays and deductibles, and keeps costs down by offering patients a narrow network of doctors to choose from. Medicaid, in contrast, “is designed for people who have no money,” University of Chicago professor and health policy expert Harold Pollack told me. “So there are a lot of aspects of Medicaid that are more comprehensive than for people with private coverage.”

The irony about all this is that, whatever Medicaid's deficiencies are now, the Republican plan would almost surely make them worse by cutting the program's budget. Many doctors refuse to take Medicaid patients because the system doesn't pay them enough for their services. As funding shrinks, states will almost surely either have to knock those reimbursement rates lower, cut the enrollment rolls, or perhaps both. It will be become more of a niche, underfunded program, and that will discourage doctors from accepting its patients.

That might not be disastrous for access to care if today's Medicaid enrollees had the prospect of getting better insurance on the individual market, like Price suggested at that CNN town hall. But they don't. Under the Republican health care plan, low-income Americans (and especially low-income, older Americans who are below the qualifying age of Medicare) will receive smaller tax credits to purchase insurance than under Obamacare. Insofar as those families will be able to afford coverage at all, they'll have to opt for something cheaper and less comprehensive than they can get now. It seems plausible those plans will give them even less access to affordable medical care than the Medicaid coverage they enjoy today.

For the Americans who rely on it, Medicaid may not be any less desirable than the private coverage they could theoretically afford in its place. Under the plan Republicans are pushing, both options will simply get worse.

This post has been updated to reflect an additional Merritt Hawkins survey on Medicaid acceptance.

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