Work requirements working as intended

Arkansas has instituted Medicaid work requirements.  A subset of Medicaid beneficiaries have to report monthly online their work or work-search or community engagement activities.

September 5th was the end of the third reporting period.

They are working as their advocates have intended.

 

The work requirements are paper work and administrative hassle requirements.  They are roadblocks to coverage which is leading to a 50% attrition rate in a good, high employment economy.

 



Pre-Dawn Open Thread: Another Bannon Comeback Failure

Up with the rocket and down with the stick, as my Irish granny used to say… but the cycles are getting shorter. This particular publicity attempt was over before most people even knew to complain about it…


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Screwing the People From Every Angle- Electricity Edition

This is great, and by great, fucking horrible:

As coal mining has collapsed across Appalachia, residents in eastern Kentucky and West Virginia have been socked with a double whammy—crippling electric bills to go along with a declining economy.

The pain in a region once known for cheap power has been felt in homes, businesses, schools and even at volunteer fire departments.

The problem of rising power bills has many causes.

– Mines and other businesses have shut down and people have moved away—mining jobs are off 70 percent since 2010—so utilities are selling less power and spreading their fixed costs across fewer customers.

– Electricity customers are shouldering the costs of shuttering old coal-burning power plants and cleaning up the toxic messes they leave behind.

– And experts say it hasn’t helped that utilities in eastern Kentucky and West Virginia have continued to invest in burning coal.

“They’re doubling down on coal at a time when coal is not competitive,” said James M. Van Nostrand, a professor at the West Virginia University College of Law with decades of experience in the energy field. “It’s really tragic.”

And the only people making out like this are wealthy out of state interests just squeezing every last penny they can out of a dead industry and a region they are killing. Then you have this:

For a little while earlier this year, it seemed as though 87-year-old Rosie Thomas and her neighbors in the small town of Gainesville, Va., had beaten Amazon. Virginia’s largest utility, Dominion Energy Inc., had planned to run an aboveground power line straight through a Civil War battlefield—and Thomas’s property—to reach a nearby data center run by an Amazon.com Inc. subsidiary. After three years of petitions and protests in front of the gated data center, skirmishes punctuated by barking dogs and shooing police, Dominion agreed to bury that part of the line along a nearby highway, at an estimated cost of $172 million.

Within a month, however, the utility and state legislators had passed on the cost to Thomas and her fellow Virginians. The state’s House of Delegates approved Dominion’s proposal to raise the money needed for the Amazon line with an as-yet-unannounced monthly fee. “Lord, have mercy,” Thomas said when a neighbor gave her the news this spring in the gravel driveway of her one-story clapboard home, where she was watching the metal disk spin inside the electricity meter on the side of the house. She was already struggling to pay her monthly $170. Leaning forgotten against Thomas’s mailbox was an old protest sign that read “UNPLUG Amazon Extension Cord.” It no longer felt like a trophy.

This sort of thing is becoming a pattern. Amazon Web Services, the company’s cloud computing business, is its fastest-growing and most profitable division, but it comes with a lot of upfront infrastructure costs and ongoing expenses, the biggest of which is electricity. Over the past two years, Amazon has almost doubled the size of its physical footprint worldwide, to 254 million square feet, including dozens of new data centers with vast fields of servers running 24/7. In at least two states, it’s also negotiated with utilities and politicians to stick other people with the bills, piling untold millions of dollars on top of the estimated $1.2 billion in state and municipal tax incentives the company has received over the past decade.

Amazon’s owner, Jeff Bezos, is the richest man in the world.

We’re also easing out of the summer months into winter, and we can expect the annual Republican assault on heating assistance to take over.

I find myself thinking about this story a lot, lately:

I have some ideas.



Tulips. Tulips I Tell You

Prediction is hard, especially about the future.  But a quick glance at the Wall St. Journal’s Market Data page made my eyes pop.

I wanted to see if my general sense of unease around the financial markets had any quantitative basis, so I was looking up the price to earnings ratio of the major market indices.  The first number I noticed was the current p/e number for the S & P 500: 24.13.  That’s only a smidge up from a year ago, but is still historically pretty high.

It is, it should be noted, nowhere near the stratsopheric numbers achieved in the 2009, when earnings crashed so far and so fast that market prices couldn’t crash fast enough to keep up, but it is not far off those in the summer of 2008, just before the Great Recession became brutally obvious.

That’s got me generally a little concerned, as it doesn’t take much to spook “smart” money, and a high p/e is always a good excuse to sell.

But what made my eyes pop was the estimate of forward p/e: 17.65.  That is, in essence, a prediction that company earnings are going to improve significantly over the next year — enough either to ease the market into a soft landing, a return to more historically normal valuation, or (if you’re an ebullient sort) to keep the market powering upward for a while yet.

That’s all well and good, and as I’m a lot closer to retirement than my first day at work, I’ve got no objection to such an outcome.

But what has me antsy is that I don’t know the assumptions that went into that estimate, and known or not, I don’t trust ’em.  I’m writing now about the South Sea Bubble of 1720, and I’m continuously struck by how easy it was for very smart people — Isaac Newton, forsooth! — to persuade themselves the party would continue, even very late in the game.

All of which is to say that three hundred years of securities market adventures tell us that it’s always when, not if for unpleasant surprises.  I don’t know if one is imminent, but I do know two things: given current events, a big crash could produce true social and political ugliness in a hurry; and there are at least a few reasons to watch out for market hubris.

Any jackals got a similar feeling? Any actually knowledgeable types out there want to weigh in?

Necessary disclaimer:  I’m not a financial expert. I do not watch the markets closely.  Most of my retirement funds are in the most boring possible index funds I can find.  I have enough time — a decade-ish — so that I can ignore near term gyrations (ask me again around 2025 how I feel). And I’m certainly not an expert on company valuation, or the connection of or utility of macro- and political economics to something as fine-grained and context-dependent as a market investment.  I’m not a financial advisor, nor do I play one on TV.  I’m just a guy getting a little queasy.

Also too — a guy who thought we could use some more thread.

Over to you.

Image: A Stock Market Cleaner, cover of Puck, v. 15, no. 376,  May 21, 1884



Banana Republicans Open Thread: The War Between the Snakes

I’ve been reading about this Oligarch Feud for the past few days, wondering just where the levers were…

Most of the media coverage of the “ugly public feud,” as the New York Times called it, between President Trump and the Koch brothers has taken the Kochs at their word that they may have to give up on the Republican Party of Trump and start backing Democrats, so disgusted are they with the President’s protectionist trade policies. But history suggests that the Kochs’ threat is about as believable as that of a parent threatening to “just plain leave” if a balky toddler doesn’t behave.

Despite the brothers’ record as among the country’s largest and most consistently partisan financial sponsors, the Kochs’ pique at their own party is nothing new. For decades they have complained bitterly about Republican politicians whose fealty to their libertarian agenda has rarely, in their view, been absolute enough. This dissatisfaction with the Grand Old Party was evident as far back as 1980…

… In fact, it was the Kochs’ disappointment with George W. Bush’s expansion of prescription-drug benefits, among other issues, that inspired them, in 2003, to form their political-fund-raising network with like-minded conservatives. Since then, the group has grown into a private political machine that arguably rivals, and by some estimates overpowers, the Republican Party itself. Earlier this year, the network announced that it planned to spend four hundred million dollars in the coming midterm-election cycle, to help preserve the Republican majority in both houses of Congress. But last weekend, somewhat unexpectedly, at a meeting in Colorado Springs, of some five hundred members of this group, all of whom have pledged to contribute at least a hundred thousand dollars annually to the cause, Koch officials attacked Trump, in all but name, as “divisive,” and threatened to start backing Democrats in some midterm races….

On the surface, the cause of the rift is their opposition to Trump’s protectionist trade and immigration policies, which clash with their free-market preferences—and Koch Industries’ bottom line. The policy fight runs deep, reflecting a larger rift in the Republican Party on these issues. Exacerbating tensions, Trump and Charles Koch are both headstrong billionaires who are accustomed to buying, and then getting, their ways. Both were sent to military schools by their parents, after having disciplinary problems at home, and both have high regard for themselves as self-made men, despite both inheriting vast fortunes from their fathers.

Beyond this, both appear to think that the Republican Party in particular, and American politics in general, should be theirs to dominate. Yet, if you parse last weekend’s complaint from Charles Koch carefully, what you see is that his ire wasn’t so much directed at Trump, whom he didn’t name, as at the Republicans in Congress for having fallen in line with the President instead of with him….
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Distribution, net health expenditures and single payer

This week there were two very different groups that evaluated two different single payer proposals.

The Mercatus Center, a liberterian group, evaluated Senator Sanders (I-VT) Medicare for all proposal.

The Rand Corporation evaluated the New York Health Act.

Both proposals made some strong assumptions on provider pricing and implementation challenges but I think both groups made reasonable estimates of a good case scenario for advocates. And both groups came in with roughly the same type of conclusions:

  1. Total health expenditures would go down slightly (~2%) at the end of the implementation period
  2. Government health expenditures would go up a lot
  3. Everyone would get covered
  4. Significant distribution of costs and benefits are not uniform in the population.

This last point is key.  Single payer produces winners and losers.

The tweet above is the distribution of average winners and losers of moving to single payer in New York. This only looks at changes in taxes, premiums and cost sharing. On average, people who are in the bottom 90% of the income distribution are better off with single payer.  People in the top 10% of the distribution are worse off.  I think this graph understates the change as doctors are a disproprortionately likely to be members of the top 10% so they’ll get hit coming and going.

People who have something to lose will scream a whole lot more than people who are promised future yet to be delivered benefits/improvements.

Mechanically designing a single payer system is fairly straightforward in the American context.  Levers can be twisted, knobs turned, incentives tweaked, budgets adjusted.  Different people with different values will move those interacting variables in different manners, but a clear logic model to implement a version of single payer can emerge.

The challenge with single payer systems in the United States is the political problem. It is the problem of managing both change-aversion and juggling the trade-offs that produce happy but not motivated winners and extremely loud and angry losers who were well positioned in the status quo and are losing their advantages.

That is the challenge, not the mechanics per se.



True Crime: Rich Uncle Pennybags (Open Thread)

When I was a kid, we got a big kick out of the McDonald’s Monopoly game. You know, where little plastic tags are on the packaging, and when you peel them off, there’s Monopoly pieces or instant-win codes on them? Anyway. My older brother was convinced that it was a scam, that all of the big-ticket winners were fakes. McDonald’s put them there, the story went, to trick people into thinking that winning was possible.

As it turns out, from about 1995-2000, almost all of the big-ticket winners were fakes, but they weren’t put there by McDonald’s. The chief of security at the company that printed the tags was stealing them, and laundering them through dozens of associates. The Daily Beast has a crazy long-read up detailing the rise and fall of said security chief, the real Hamburglar, Jerry Jacobson.

Before each bi-annual game, Jacobson arrived at the drab Dittler Brothers’ office at 5 a.m to observe their Omega III supercomputer making the McDonald’s prize draw. He watched the printing presses that roared for 24 hours a day for three months, using 100 railroad cars of paper to print half a billion game pieces. . . Jacobson observed technicians applying the “INSTANT WINNER!” stamp to blank game pieces, and pioneered random watermarks that deterred counterfeiters. He locked the winning pieces in a vault behind coded keypads and dual-entry combination locks. It was Jacobson who personally scissored out the high-value game pieces and slipped them into envelopes, before sealing each corner with a tamper-proof metallic sticker. In a secret vest, of his invention, Jacobson transported the winning pieces to McDonald’s packaging factories across the country.

[…]

The 1980s was America’s “decade of greed,” and it was Jacobson’s job to create instant millionaires. Playing God was intoxicating, as was holding a stranger’s fate in the palm of his hands. . . It was a thrill to protect the Monopoly promotion, and only a natural part of his job to consider the system’s fallibilities. But soon the temptation to steal had become irresistible.

One day in 1989, at a family gathering in Miami, Jacobson slipped his step-brother, Marvin Braun, a game piece worth $25,000. “I don’t know if I just wanted to show him I could do something, or bragging,” Jacobson later admitted, but he just needed “to see if I could do it.”

[…]

The judge sent him to jail for 37 months. He did not pass go.

Apparently the reason this didn’t capture our imagination as the White Collar Trial of the Century is that the trial began on September 10, 2001.

It’s well worth a read, if you’re looking for something to pass the time in what’s left of your evening. Me, I have a Scalzi out from the library I need to tend to. Open thread!