Repub Venality Open Thread: Mick Mulvaney Gets Caught Telling the Truth

They’d throw him off the GOP Titanic for this, but Mulvaney’s the Acting Head of Everything They’ve Still Got… and possibly the only one who’s figured out how to work the light switches in the Oval Office.

Industrial clusters and thick labor markets

I’m waiting for a huge piece of code to rerun and I should not be working on a cognitively intensive revise and resubmit on a Friday afternoon, so I want to go back to what I originally went to grad school for — urban economics and economic development — for a minute to respond to a seemingly populist and really dumb proposal to strip the federal government of expertise proposed by Andrew Yang.

Let’s think about Washington DC’s primary export industry as government and more specifically federal government leadership and top level analysis and management. The federal government is an industrial cluster in DC much like venture capital fueled technology firms are an industrial cluster in San Francisco-San Jose region, bio-tech is a cluster in Greater Boston and steel was a cluster in Pittsburgh. Clusters are interesting in that they are often positive feedback loops until they run into hard constraints or a massive external shock.

There is a huge literature on the positive feedback loops on economically successful clusters. One of the major drivers is that a cluster creates a rich and thick labor market. This means that at any given point, there are lots of good jobs available to anyone who is qualified to work in the cluster. People aren’t locked into a “good enough” job because that is the only job available that utilizes any specific human capital/education/tacit knowledge available to them, but that people can readily shift between positions to maximize their personal gain. In Washington DC, if someone is a research economist, there are a hundred opportunities within seven Metro stops of their current place of employment. If someone is a research economist in Sault Ste. Marie, there may be one or two within an hour of their current place of employment. The same applies for geneticists who work in Boston vs. geneticists who work in Boise.

Employment concentration creates specialization and optimization. It allows for work to be more productive as the cluster grows and the labor market becomes even thicker and deeper. This is all pretty standard.

There is another labor market point to make; large urban areas have lots of jobs that are not in the primary export industry. This could matter for me at some point in the future as I could easily see myself spending a couple of years working for either the federal government in the DC-Baltimore region or working for an entity that directly services the federal management and analysis industrial cluster. My wife has a skill set that could translate into this industrial sector but her current experience is in a general professional environment. If my options for moving to DC for federal work or Boone, North Carolina, my wife will far more readily find a good enough job in DC.

Dispersing the vast majority of the DC/Baltimore/NOVA government management and analysis cluster that has been built up over four generations is a great way to make the federal government less efficient and less attractive to top tier talent especially if the dispersion would be going to smaller urban clusters with far shallower and thinner labor markets.

Repub Venality Open Thread: Rand Paul Stays True to His Principle

He has but the one: What’s in it for Rand Paul?

Rand Paul *and* Mitch McConnell. WHY, Kentucky?

Why now?…

Shocking news — work requirements don’t work

Benjamin Sommers** and others published an important study with a completely expected result on Wednesday in the New England Journal of Medicine.  They surveyed Arkansas to evaluate what was happening with employment and insurance coverage as a result of the state’s decision to implement work requirements for Medicaid:

We conducted a telephone survey to compare changes in outcomes before and after implementation of the work requirements in Arkansas among persons 30 to 49 years of age, as compared with Arkansans 19 to 29 years of age and those 50 to 64 years of age (who were not subject to the requirement in 2018) and with adults in three comparison states — Kentucky, Louisiana, and Texas. ….

Our study had three primary outcomes: the percentage of respondents with Medicaid, the percentage of respondents who were uninsured, and the percentage of respondents reporting any employment. Secondary outcomes were the number of hours worked per week, the percentage of respondents satisfying any category of community engagement requirement (described below), the percentage of respondents with employer-sponsored insurance, and two measures of access to care — the percentages of respondents having a personal physician and reporting any cost-related delays in care….

estimate of changes in the percentage of respondents who were not insured was an increase of 7.1 percentage points (95% CI, 0.5 to 13.6; P=0.04).

Uninsurance rates increased more for the work requirement cohort than other cohorts.  This is not an unexpected result.  Almost every pre-waiver approval analysis projected significant enrollment drops due to increased paperwork friction.  The amount of friction would be a function of how user friendly the roll-out and implementation was; it was not a particularly user friendly process as the reporting system was online only with limited professional office hour availability that made reporting extremely difficult and unlikely for people who did not have reliable internet or worked jobs that did not neatly map to a 9-5 assumption.

Overall, more than 92% of the respondents in all four groups — and nearly 97% of the respondents 30 to 49 years of age in Arkansas — were already meeting the community engagement requirement or should have been exempt before the policy took effect.

Work requirements are targeted at an incredibly small cohort of people who might be able to work but don’t.  This is very wide spread pain to sort out the “deserving” vs “undeserving” working poor.

Employment declined from 42.4% to 38.9% among Arkansans 30 to 49 years of age, a change of −3.5 percentage points. The three comparison groups had similar decreases, ranging from −2.9 to −5.7 percentage points.

And work requirements did absolutely nothing for employment.

None of this is particularly surprising.  It is good that we have very firm evidence of the obvious as this type of evidence raises the bar in future litigation against arbitrary and capricious waiver approvals.  The current federal district court judge who is overseeing lawsuits against work requirements has held that work is not a fundamental purpose of Medicaid.  If the study had shown absolutely minimal to no net coverage loss as people shifted to exchange or employer sponsored insurance and significant income gains, then the administration’s argument that this was an evidence based experiment with plausible real gains could hold some water.  Instead, this study shows that work requirements are fundamentally paperwork requirements that culls enrollment without producing employment effects.




** DOI: 10.1056/NEJMsr1901772


Cold Grey Pre-Dawn Open Thread: Justin Amash, Libertarian

Like Dana Houle, I remember Justin Amash as a local (state) nuisance, carrying water for his deVos family patrons in order to help the proud Christianists of Western Michigan stay barefoot and ignorant. But unlike such ‘independent thinkers’ as Mike Lee or Little Prince Rand, he’s not a moron, and he doesn’t assume that everyone not Justin Amash is either lying or a moron or both. If he’s made the decision to cut line on the Squatter-in-Chief, well… He does have his Libertarian principles, but I’m halfway hoping he’s also the first defector before the flood.

For the supposedly well-disciplined and implacable Trump Brigades of the GOP, this is some very weak tea, per the Washington Post:

Trump privately has vented to associates about the Michigan lawmaker, who on Saturday became the first congressional Republican to raise the possibility of impeachment, citing the findings of special counsel Robert S. Mueller III, according to officials who spoke on the condition of anonymity to discuss private conversations…

But on Capitol Hill, few Republicans are eager to punish the libertarian, who had a long history of bucking GOP leaders even before Trump was elected. Top Republican lawmakers and aides said Monday that kicking Amash out of the GOP conference or off his committee would only draw more attention to his apostasy. Instead, they have focused on isolating Amash and portraying him as an outlier. The House Freedom Caucus, a conservative group of which Amash is a member, also took a position Monday night “strongly disagreeing” with Amash’s comments…
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