Ten Things We Now Know About American Politics

Ahem. We seem to have been graced by the Chinese proverb, “May you live in interesting times.” The surprising upset by Donald Trump over Hillary Clinton has left many people flabbergasted. Since I live in Los Angeles, it seems a lot of those people live around me.

But there were many hints of this possible outcome going back months if not almost a year. The results seem to have confirmed some new “realities” to replace former “speculations.”

  1. The polling surveys proved to be less than accurate-to say the least-but this had been going on since the early primaries. Remember, Trump was never supposed to get past the first couple of primaries. The Hollywood adage that “Nobody knows anything,” held true to the end.
  2. The Republican party has been split between its party regulars or leaders and their voters. The voters won handily, now the party will need to respond with some supplication. Trump is a symptom, not a cause. Despite being counted out, the Republicans managed to retain the Senate and the House, awarding President-elect Trump a golden opportunity to enact his agenda, whatever that is.
  3. The Democratic party establishment apparently sold their voters a pig in a poke. It was not hard to see a year ago that Hillary Clinton was probably the weakest candidate the party could have selected given the political climate. She represented the status quo, promising Obama’s third-term, after two midterm elections that repudiated his policy agenda. Moreover, she came in carrying a 25 year load of baggage that caused voters to question her authenticity and candor, to put it politely. Her tenure as Senator and SOS did little to promote her candidacy. It seems that the fact that she was the wife of Bill was her most valuable asset, but even that was tarnished as voters were reminded of Bill’s former scandals and tawdry reputation. The voters had little choice and Sanders appeal should have been the first clue that things were going very wrong, again, for Clinton. The flip of the Rust Belt is another warning signal that the party has gone astray.
  4. The mainstream media pundits once again have egg on their faces. The politicization of coverage backfired and the more they pushed, the worse it got for their favored biases. They failed miserably at their efforts to shape political opinion instead of informing objectively. Now some of the more prominent talking heads should probably seek a new profession since the public has turned them off. But no, stupid will likely double down, until they discover nobody who matters is really listening.
  5. The Bush-Clinton-Bush-Obama/Clinton era is over, as each administration’s overreaching came back to bite them with a vengeance. Obama and his policy legacy is a casualty of this collapse of a 28 year party era. As painful as it might seem to some, Obama’s presidency helped to bring about the collapse of his party and the rise of an outsider like Trump. He now owns it, just like Bush wears the Iraq albatross.
  6. We have divided ourselves into a 50-50 nation, polarized by population density: urban vs. rural and suburban.* This means the popular vote will be less of an indication of true, broad support and may often diverge from the Electoral College vote. Thus, the EC is crucial to securing a clear electoral and governing mandate. It appears Clinton eked out a popular vote victory, but more importantly, Trump won the decisive margin in the EC. The swing state problem is that we don’t have enough swing voters at the center of our divide.
  7. We should probably be thankful that media and political transparency is being forced on us by technology. It is too ironic that we are getting our political insights from hackers and Wikileaks.
  8. “Politics as usual” was a big loser. The people took control of this election, for better or worse, so elites had better pay attention while the rest of us figure out how to move people power toward the broader good, rather than the narrow. When failure occurs, we need to see it clearly and own it. I’m wondering how many can do that after this election. Too many will probably respond angrily, but that’s self-defeating.
  9. The wise among us will try to figure out why our popular narrative for understanding American politics has been so wrong and what needs to change. The demonization of voters seems to be highly counterproductive in an open media environment.
  10. Lastly, political correctness and identity politics have suffered a severe backlash. Perhaps it’s time to put aside these punitive speech codes and divisive political strategies. We can only hope.

BTW, I voted for Gary Johnson, just for the 2%. He outperformed and got 3%!

*This urban-rural split is a historical divide that has defined much of our nation’s politics for the past 200 years.  We’ve managed it thus far and we can continue to do so if we can see it clearly. It’s NOT about biological identity – it’s about class interests, lifestyle choices, and political priorities. We can find compromise on all these issues.

Common Sense and Healthcare Reform

There is no other economic model out there that delivers a desired good, priced efficiently, and in abundance, other than an open, competitive market. We need to move in this direction if we want enough 1st rate healthcare to go around. No matter what political ideology we subscribe to. Aside from the economy, this is more important than all the other partisan B.S.

From the WSJ:

The Wrong Remedy for Health Care

The Affordable Care Act will exacerbate the problems with our current health-care system. Fortunately, market reforms are still possible.

 By JOHN F. COGAN, R. GLENN HUBBARD AND DANIEL P. KESSLER

In upholding the Affordable Care Act, the Supreme Court has allowed the president and Congress to put the country’s health policy on a path that will restrict individual choices, stifle innovation and sharply increase health-care costs. Now the only recourse is to repeal the law through the legislative process and replace it with policies that rely on the power of the markets.

The American health-care system’s principal strength is its ability to produce ever more impressive innovations. The U.S. has no equal in developing new medical technologies, surgical procedures and pharmaceuticals. These extraordinary advances are not the product of government direction but rather the efforts of scientists, investors and entrepreneurs pursuing their individual goals and aspirations in a competitive market system. The Affordable Care Act puts these strengths at risk.

The law also exacerbates the central problem of our health-care system: high costs without corresponding value. The “individual mandate” will require that people purchase health insurance with generous benefits and limited cost-sharing. This flawed conception of health insurance has created the bad incentives that have led us to where we are today.

The principal factual claims made by the individual mandate’s supporters are that the failure to purchase conventional health insurance causes harm to the uninsured person (in the form of worsened health) and to others (in the form of a shifting of the burden of the costs of care).

The evidence supporting each of these claims is weak at best. Peer-reviewed studies from the National Health Insurance Experiment and other data dating back to the 1980s have concluded that there is little or no causal relationship between health insurance and a person’s health outcomes.

What about the claim that the costs of caring for the uninsured are significantly shifted onto doctor and hospital bills, thereby raising insurance premiums? George Mason University Prof. Jack Hadley and John Holahan, Teresa Coughlin and Dawn Miller of the Urban Institute published a comprehensive, peer-reviewed study on this in Health Affairs in 2008. It concluded that “Private insurance premiums are at most 1.7 percent higher because of the shifting of the costs of the uninsured to private insurance.”

The problems with the U.S. health-care system are mainly the result of a handful of government policies that have prevented market forces from reducing costs and making services more widely available. So what to do?

Fix the tax code. First and foremost is the federal tax code’s long-standing exclusion from taxation of employer-sponsored health insurance. The exclusion has created a tax advantage for purchasing health care through insurance rather than directly with out-of-pocket dollars. This, in turn, has caused consumers to overutilize health-care services as they and their physicians perceive that someone else is footing the bill. As a result, health-care costs have been driven upward.

Policy makers should make the tax treatment of health care neutral by allowing out-of-pocket expenses and individual insurance to be tax deductible. Alternately, neutrality could be achieved by eliminating the tax exclusion for employer-sponsored health insurance. The Affordable Care Act’s tax on high-cost health plans is a first step toward tax neutrality. Unfortunately, the act couples this policy with others that work at cross-purposes.

Redesign Medicare and Medicaid. The Affordable Care Act includes numerous reforms to the way that Medicare pays health providers, some of which are on the right track. But in Medicare, the main problem is the nearly complete neglect of patient incentives. The Medicare Part B average copayment rate has fallen nearly in half during the past 35 years. One near-term solution is to allow beneficiaries to choose health plans that have lower premiums but higher deductibles, more coinsurance, or more tightly managed networks of providers than those in traditional Medicare. The long-term solution is to provide beneficiaries with a defined level of support to allow them to purchase a private insurance plan. Such an approach is modeled on today’s Medicare prescription drug coverage and is similar to one proposed by Rep. Paul Ryan (R., Wis.) and Sen. Ron Wyden (D., Ore.).

In Medicaid, the emphasis on access to health insurance, rather than access to health care, has stifled innovation in delivering care to the uninsured. The Affordable Care Act does little to change this. Medicaid should be converted to a block grant in which states are given a fixed sum of money and allowed greater flexibility to experiment with new approaches, such as delivering care through organizations that tailor available services to patient needs at reduced costs.

Reform insurance markets. State price controls and the proliferation of state mandates that insurers cover particular medical services and providers have driven up the cost of insurance by as much as 15%, made it less portable, and increased the number of uninsured by as many as 10 million. Unfortunately, the Affordable Care Act enshrines many of these flawed policies in federal law.

The key objective of insurance regulation should be to increase the availability of low-cost, portable health insurance—insurance that delivers the benefits that people want, at a price they can afford. To this end, individuals should be allowed to purchase insurance across state lines or in a federal market that is free of insurance mandates.

The Affordable Care Act will expand the reach of government into our personal health-care choices, while exacerbating the problems with our current health-care system. Market forces, if allowed to work properly, are the best means for reducing the growth in health costs, encouraging continued innovation, and ensuring that consumers have access to quality health care.