Obamacare and the Invincibles

Our potentially most exciting podcast episode is up, discussing the basic theories and effects of Obamacare. CHECK IT OUT.

 

Conspiracy Theories are Popular

The Monkey Cage reports that “57% of the French public and 70% of French Socialists believe that Dominique Strauss-Kahn (DSK) was the victim of a set-up”:The post goes on to make the excellent point that “it seems a bit rich for Socialists to overwhelmingly take the side of the wealthy powerful politician with a history of sexual abuse allegations against what appear to be quite credible allegations of a poor Guinean refugee.”

But I’m bringing this up because I think it lends some useful perspective to recent conspiracy theories in the United States. As crazy as the myth about Obama not being born in the US was, contrary to what a lot of pundits claimed, I don’t think it indicated a level of paranoia or craziness in the conservative movement that was much greater than the level of paranoia or craziness among people in general. We have various biases that cloud our understanding of the here and now and make it easy to forget that, unfortunately, this sort of insanity is actually pretty normal.

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Obama is Not a Muslim

There are a lot of rational, good people out there that believe in some pretty crazy things: Birthers, 9/11 truthers, flat-earthers, and those who believe Ozzie Guillen isn’t a good baseball manager. One of the weird things the press seems to be emphasizing lately is that 18% of Americans believe President Obama is a Muslim. For the record, President Obama was born to a Muslim father but is undoubtedly a practicing Christian right now.

Marc Thiessen over at the Washington Post makes some good points regarding all this hub-ub over the widespread misinformation. Finding an issue where nearly a fifth of people are convinced of something concretely untrue isn’t that hard to come by. Another poll done by Pew showed some weird things:

It turns out that 36 percent of Democrats claim to have communed with the dead, and that 19 percent believe in casting a curse on someone using the “evil eye.” Think about that: According Pew, more Democrats believe in the “evil eye” than Americans believe Obama is a Muslim.

The incorrect belief of Obama’s Islamic-ness is wrong, of course. But people believe in all sorts of kooky things, so let’s try to put it into perspective. I mean, look at how many people don’t love free markets!

 

Already Thinking About Obama’s Second Term…?

A new poll says that a slight majority of Americans do not believe Barack Obama deserves a second term as President. What this tells us:

• Obama’s fairy tale story of his rise to the top to save the world from global warming, wars, poverty, and general conflict has ended.
• Whatever the true effects of the stimulus and other government-speared recovery efforts are, people are not seeing results and are not satisfied.
• Republicans have a much better opportunity to seize the Presidency than anyone would have thought two years ago. [If Sarah Palin and populist tea-partiers are their answer, I might rather have Obama.]

What this does not mean:

• Obama is conclusively a failure. We should judge Presidents by their approval ratings in the middle of their time in office and not wait to have hindsight to judge their performance.
• Obama will lose the next election.
• Obama has done nothing right.
• Americans are beginning to dislike Obama for reasons they understand and can justify.
• Nothing on the Democratic agenda – fighting global warming, healthcare reform, repealing the Patriot Act, etc – will get done now because of relatively low approval ratings.

A lot of GOP’ers are making ambitious claims that some of those last few points are true. A lot of people on the left are denying the possibility that the other list of bullet points can be true. In reality, I’d say that Obama has merely been brought back down to Earth. He won’t be able to rely on his sexy star-power or his massive popularity in Europe to pass legislation. He might, dare I say it, have to actually negotiate, compromise, and be a – gasp – politician in order to get things done.

 

Bush Should Have Gotten the Noble Peace Prize

No, not really.

But in light of Obama’s recent troop increase, it doesn’t sound that implausible. Obama is sending 30,000 more troops to fight the war in Afghanistan. Forget what one thinks about the legitimacy of said war, just think instead what would have happened if Bush had done this. Everybody left of center would be up in arms (they were). Bush is hated by all of the world, Obama wins the Peace Prize. Such a fact proves, I think, how most people judge politicians not on their actual policy actions but merely on their personality and party platform.

Don’t believe me? Take this fact: Bush gave more aid in terms of money to Africa than any other President in American history. Throughout his two terms, did Republicans criticize him for all of this superfluous spending that was essentially international welfare? No. Did Democrats praise him for his efforts? No. Why? The only reason I can think of is that both sides already had made up their minds about Bush, no matter what he did. Republicans decided they’d trumpet him as a fiscal conservative – which he wasn’t – and Democrats would paint him as an unsympathetic prick.

I always find myself in an awkward position when I am defending Bush in any context. I really dislike(d) the guy’s policies. But the inconsistency of most of the population regarding his actions is laughable. Bush was more liberal than a lot of Democrats in terms of immigration, he increased federal spending on education an absurd amount, spent more on the arts than any other President, and except for tax cuts, wasn’t really a fiscal conservative. But most progressives, when asked for a synopsis of the man’s Presidency, will probably give a formulaic regurgitation showing a southern oil man who cares about nobody but the rich. Then you tell them about how he’s relatively liberal on immigration. Or how that social security privatization idea that sounds good them was pushed by, uh, him.

Bush should not get the Noble Peace Prize. Ever. But sometimes it’s important to judge Obama with the same critical lens that we viewed Bush through for 8 years.

 

Peace Prize Winner Update

From the Washington Post:

President Obama announced in March that he would be sending 21,000 additional troops to Afghanistan. But in an unannounced move, the White House has also authorized — and the Pentagon is deploying — at least 13,000 troops beyond that number, according to defense officials.

…The deployment of the support troops to Afghanistan brings the total increase approved by Obama to 34,000. The buildup has raised the number of U.S. troops deployed to the war zones of Iraq and Afghanistan above the peak during the Iraq “surge” that President George W. Bush ordered, officials said.

Oh, also: Guantanamo Bay is still open.

 

Obama Wins Nobel Peace Prize?!

They just announced it: President Barack Obama has won the Nobel Peace Prize for “his extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” We’re in two wars, one of which Obama wants to raise troop levels. One can argue that by improving America’s standing in the world, he will foster peaceful acts.

But those are all still to be seen in the future. Obama has been President for less than 9 months. What has he done so far? The Committee cited his outreach to the Muslim world and his attempts to limit nuclear proliferation. Since when do “outreach” and attempts necessitate the Nobel Peace Prize. Perhaps Obama’s efforts will do great things for the world. But it’s way to early to reward efforts.

The Chicago Tribune reports:

“Only very rarely has a person to the same extent as Obama captured the world’s attention and given its people hope for a better future,” the committee said. “His diplomacy is founded in the concept that those who are to lead the world must do so on the basis of values and attitudes that are shared by the majority of the world’s population.”

“Hope for a better future”?!?!?!? Did they reward him for a successful Presidential campaign?

 

Stimulus Not Stimulating

The rationale behind an economic “stimulus” is that recessions or depressions are caused by a lack of aggregate demand. Because of this, governments step in to speed up the recovery by using deficit spending to make up for the decreased aggregate demand. An economic term called the “Keynesian multiplier” predicts that for every dollar spent by the government, output will rise higher than a dollar because people continue to spend the money they get in exchange for their goods and services (and save the other portion). But how successful has the last stimulus really been?

In a recent op-ed in the Wall Street Journal, Robert J. Barro and Charles Redlick, using observations from a paper that will be published soon, write:

The bottom line is this: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller.

If this multiplier is less than one, the government is spending more than it is helping. This deficit spending is more than just inefficient, it actually crowds out investment by raising interest rates, and creates the obvious problem of long-term interest payments.

The vast majority of economists say that this economic crisis has reached its bottom in terms of output (though unemployment will continue to grow). At the same time, only 10% of Obama’s stimulus package has been spent. 10%! If we’re already on the upswing, I propose we just forget about spending the other 90%.

Barro and Redlick did briefly mention another way to stimulate the economy:

…there is empirical support for the proposition that tax rate reductions will increase real GDP.

Hmm…

 

Bootleggers and Baptists: Flavored Cigarettes

In 1983, Bruce Yandle first published the idea that, in regulation, there were often two parties lobbying for regulation to take effect: bootleggers and baptists. Baptists are calling for the regulation on the grounds of morality or protecting people. The bootleggers are passively supporting the regulation because they plan on profiting from it. The terms are a clear reference to the American prohibition of alcohol.

A few months ago, President Obama signed a law that would allow the FDA to ban flavored cigarettes. Today, that law goes into effect. The move was justified on the grounds that flavored cigarettes were disproportionately targeted to children (the baptists’ argument). But what was lost between the headlines was the fact that Phillip Morris, the largest tobacco manufacturer in the country, doesn’t produce any products that are covered by the ban. In fact, menthol cigarettes, produced almost exclusively by Phillip Morris, were mysteriously exempted from the bill. The third biggest distributor, Lorillard Inc., also does not make any covered by the ban.

This is a prime example of how regulation perpetuates market domination by special interests and is not as “moral” as it’s cracked up to be. I think the power of special interests and lobbyists is obvious:

Menthol, the most popular flavored cigarette and the one preferred by blacks, was allowed to stay on the market over objections from seven former U.S. secretaries of Health and Human Services.

SEVEN former U.S. secretaries of Health and Human Services!

 

Post Office Bailout

The Post Office, in trouble financially, might get a bailout from Congress:

Democrats moved Thursday to give special relief to the financially strapped Postal Service, which would be allowed to defer $4 billion in payments due at the end of this month to cover retirement benefits for its employees.

This scares me because it makes me think that Obama’s Public Option for healthcare will eventually be in the same situation. The post office and the proposed public option for healthcare are both government-run entities set to compete with private firms. In theory, the post office or public option are not meant to get subsidies in order to get an unfair edge over the likes of UPS, FedEx, Blue Cross Blue Shield, etc. If the public option ran a deficit, I have to think the government would step in to help them out. As such, I am inclined to believe that the public option will, in time, just become a huge liability that will only increase the deficit.