Who Will Listen?

A controversial recent offering from columnist Kathleen Parker, "Getting Bubba," brings out what may be the driving force of Election '08. It once could be called "class resentment," but it's broader than that today.

What is it? The takeoff point to understanding it is embodied in the negativity some voters bear toward Senator Barack Obama, in that he does not impress them as a "full-blooded American."

This seems to be about more than his mixed race. Senator Obama's mother was herself a "full-blooded" (in her case, white) American. She was of no particular religion but had great respect for all religions, meaning that she herself was a freethinker, already out of step with mainstream American religious values. Most American religions tend to be more close-minded, truth be told. Obama's father was a Kenyan, a black African, whose religious background was Muslim.

This also seems to be about more than economic strata, since Obama does not come from wealth.

And it is not much about gender, since Democrats who are fleeing the uncertainty they feel about Obama are running to the supposed safe haven of ... Sen. Hillary Rodham Clinton.

What is it about? Parker puts it this way:

Politics may no longer be so much about race and gender as about heritage, core values, and made-in-America. Just as we once and still have a cultural divide in this country, we now have a patriot divide.

True enough, but it's a culture divide, too. Obama got into trouble for talking about disaffected working Americans who assuage their bitterness by "clinging" to their religion and their guns. At root, the dispute was over cultural differences, not just differences about patriotism.

Obama was likewise in trouble several months ago with African Americans who worried that he's "not black enough." That criticism seems to have died down for now. Yet it pointed to the same kind of anxiety as felt today by working class whites: will this man listen to us?

Or is he too much of an elitist?

It seems to me, the oldstyleliberal who writes this blog, that I myself have been too much of an elitist of late, too inclined to think in terms of wonky positions on issues like health insurance or the war in Iraq, to recognize that my fellow Americans are crying out from their respective communities and armed camps for some unifying national leader to take them seriously and pay them heed.

Meanwhile, the elites are urging upon us an enlightened, multicultural, manifestly relativistic agenda for sweeping change: bold strides along the "information superhighway" into an uncharted future. In that bright future as the educated elites see it, we will all be able to just get along because we will have put aside the benighted, old-fashioned, insular, absolutist beliefs to which we used to cling so desperately.

There are two kinds of American today. One American clings to the old absolutes (never mind that they may be different absolutes, depending on what group he owes his allegiance to). The other American sees all truth as relative, slippery, changeable.

For the old American, the prime value is just that: constancy of allegiance. For the new American, allegiance is itself negotiable.

The American whose constant allegiance is to the old ways is Bubba. Bubba thinks no one up there is listening to him ... and he's right about that. For the bright elites, listening to Bubba would just derail the glorious future they want to hasten into existence. The bright elites must pretend to listen to Bubba, of course, since they need Bubba's vote. But once in office, they'll have their own elitist agendas to see to.

That's why Bubba is so wary of Barack.

Boomers planting a debt bomb -- baltimoresun.com

Baltimore Sun financial columnist Jay Hancock writes in today's "Boomers planting a debt bomb" of the impending disaster that today's spendthrift ways will become for post-boomers:

The biggest U.S. financial crisis isn't the housing crunch. It's the government debt bomb being planted by baby boomers to explode in the faces of their children and grandchildren ...

The country already owes $9 trillion, a record, and almost half of it to foreigners, also a record. [The U.S. government] pays more in interest [on the national debt] than the annual cost of the Iraq war.

By the middle of this century, 20 percent of the national income — not just a fifth of the budget but a fifth of the whole economy! — will have to be diverted to pay interest on the debt ... . Another 20 percent will be needed to finance health care and pensions for boomer geezers.

That'll leave virtually nothing for education, roads, basic research and other investments that make the country great.

Oh, wonderful! Not only do we have to worry about the threat of global warming and the need to wean ourselves off foreign oil, we have to stop spending so much money into the bargain. Or everything will go bust.

Only problem is, not only do liberals like to spend money, so do today's conservatives à la George W. Bush.

oldstyleliberal sees little evidence that either Barack Obama or Hillary Clinton can fix this. They are, after all, liberals.

Nor does one, such as oldstyleliberal, who hopes to seem wise, tend to feel that John McCain — he who is willing to keep troops in Iraq for the next 99 years, and hang the cost — has a handle on the impending meltdown of the federal budget.

All of the presidential hopefuls will, like oldstyleliberal, be long gone by mid-century. (Well, maybe the youngish Obama will be still here, in his geezer-hood.) In fact, the next president, should he or she serve two terms, will be leaving office in 2017, just about the time that, the experts say, we will have begun to spend over 20 cents of every dollar of U.S. gross domestic product on health care alone.

That figure is due to go up to 25 cents on the GDP dollar by 2030. When the Hancock column talks about "20 percent ... to finance health care and pensions for boomer geezers" by mid-century, he means 20 percent of the federal budget, and it doesn't include private expenditures on health care/health insurance.


All of this, of course, pales in insignificance compared to whether Sen. Obama ought to wear a flag lapel pin or Sen. Clinton is fighting too dirty a campaign.

We hear more about how Sen. McCain is supposedly too soft on illegal immigrants than about how, with Sen. Lieberman, he has co-sponsored a bill that would put a down payment on quashing global warming.

McCain-Lieberman would set up a cap-and-trade system for reining in companies that spew too much carbon into the sky and rewarding companies whose carbon footprint is moderate and shrinking. But that's not a topic that commands our attention as voters; lapel pins are.

If the next president doesn't get a grip on our looming problems, we will know who to blame.

As Pogo used to say, "We have met the enemy, and he is us."

The Tao of Conservative Government, Part 1

"Governing a large state is like boiling a small fish," reads the Lao Tzu, one of the foundational texts of Chinese Taoism. Also known as the Tao Te Ching, it holds (according to D.C. Lau, one of its esteemed translators) that ...

... the state or the empire is a delicate thing that can be ruined by the least handling, or a sacred vessel which must not be tampered with. The empire is as much a part of the natural order as [it is a part of] the world of inanimate objects and, being part of the natural order, will run smoothly so long as everyone follows his own nature. To think that once can improve on nature by one's petty cleverness is profanity. The natural order is delicately balanced. The least interference on the part of the ruler will upset this balance and lead to disorder.

This wisdom from the 4th century B.C., out of a cultural tradition not America's own, resonates with some of us moderns today as we consider what to do about, among other things, our health care financing system that threatens to go bust in coming decades, or Social Security's looming fiscal crisis, or our planet's inability to keep sidestepping the climate change coming from all the carbon we are spewing into the air.

This ancient wisdom, applied to today's political controversies, admittedly seems an apostasy to a political liberal such as oldstyleliberal. We liberals are folks who say show me a problem, and I'll show you a way to have the government fix it.

Health care getting too expensive, with a sixth of the populace uninsured? Fix it by legislation mandating that everybody buy health insurance privately, if they can't get it from their employers. Then set up the government as insurer of last resort and give tax breaks to citizens who can't afford the premiums.

Social Security heading for a fiscal crackup as the burgeoning number of retirees drawing from the kitty overburdens the dwindling number of workers feeding the kitty? Fix the system. How, exactly? That remains unclear, but what seems ultra-clear to most liberals is that privatizing Social Security and subjecting it to the ungoverned vicissitudes of financial markets is out of the question.

Global warming threatening to swamp not only the planet's coastlines but also its sustainable agriculture and its potential for economic growth? Again, bring government power to bear on whatever or whoever is responsible for creating the climate change in the first place. Only problem is, we have met the enemy and he is us. We all have a huge carbon footprint. Even on paper, what could the government fix be for that?

It is beginning to become apparent to oldstyleliberal that, well ... that the old-style, liberal approaches to solving the world's problems have gone bankrupt.


Take, for example, the woes of our health care system today. Primary care physician Kevin Pho writes in an op-ed column in a recent USA Today that a real problem is the acute shortage of doctors who aren't specialists, but rather general practitioners, family doctors, and the like. Medicare and the rest of the health care financing/insuring system pay them much less handsomely when they use "30 minutes to discuss a patient's hypertension, diabetes or heart disease" than if they use the same 30 minutes to perform a procedure or render a tangible service. The incentives are all stacked in favor of primary care docs doing more and discussing less.

Meanwhile, there are the "annual government threats to indiscriminately cut reimbursements despite rising office and malpractice costs, [such that] physicians are faced with no choice but to increase quantity to maintain financial viability." Hence, "primary care physicians who refuse to compromise quality are either driven out of business or to cash-only concierge practices, further contributing to primary care's decline."

Patients naturally respond to the demise of the old-fashioned way of interacting with the family doctor by going directly to specialists who are eager to perform procedures that result in themselves, the specialists, being reimbursed generously. In the old days, the family doc would act as an intermediary and clearinghouse for possible specialist interventions, discouraging those that aren't really going to do the patient much good. Today, though, "studies show that increasing fragmentation of care results in a corresponding rise in cost and medical errors."


How did we get things so messed up?

In the estimation of oldstyleliberal, the culprit may have been the litany of attempts over the past half-century or more to "improve" or "fix" the health care system. They have all had in common that they make the consumers of health care services insensitive to the real relationship of benefits to costs, since "someone else" is paying the costs.

So consumers demand health care services more indiscriminately than they otherwise would ... and the primary care physician whose counsel might help avoid that is out of the loop. Because of the laws of supply and demand, prices go up, and the "someone else" bearing the costs — whether an employer, a private insurer, or the government — tries to impose artificial rules to keep things in check.

But the rules typically rebound. For instance, there was a time not too long ago when experts said "managed care" facilities (HMOs and the like) were the fix we needed. The HMOs, originally benign, soon began imposing all kinds of rules on who may see what doctor when and for what, simply to hold down costs. Massive customer dissatisfaction ensued, followed by an exodus from HMOs.

Again, oldstyleliberal believes the underlying problem with HMOs and the various other "solutions" that have been tried is that they have all been attempts to overrule or undermine the health care marketplace. As columnist George F. Will mentioned in this recent piece about Cuba, a market is "an information-generating mechanism, communism cannot know what things should cost."

Neither can the participants in an American health care financing system that suppresses the ability of consumers to find out, or even care about, what things actually cost.

Now, according to Dr. Pho, "if the Democrats' universal health care proposals come to fruition, the primary care system will be inundated with at least 45 million newly insured patients. As Massachusetts is finding out in its pioneering attempt to provide universal coverage, our system is not ready for this burden."

Dr. Pho's prescription

... starts with reforming the physician reimbursement system. Remove the pressure for primary care physicians to squeeze in more patients per hour, and reward them for spending time with patients, optimally managing their diseases and practicing evidence-based medicine. Make primary care more attractive to medical students by forgiving student loans for those who choose primary care as a career and reconciling the marked disparity between specialist and primary care physician salaries.

oldstyleliberal is not convinced, though, that these solutions wouldn't rebound in some unexpected way, should they be enacted, because they don't solve the underlying problem: the health care market has been jiggered and re-jiggered so that the "information" it provides suppliers and consumers with is ever more bogus. It doesn't give anyone any real idea of what things should cost. The reason it doesn't is that the level of demand for health services is divorced from what might be termed "cost-benefits reality" whenever "someone else" pays. Then the "someone else" typically tries to impose artificial cost-cutting measures, which always end up cheating somebody even more than purely market-driven forces might do.

In short, government soultions too often end up boiling the proverbial "small fish" into fish paste. There has to be a better way. oldstyleliberal increasingly looks to the so-called conservative initiatives — what this recent editorial in the Baltimore Sun recently lambasted as John McCain's "raft of small-bore policy ideas centered around giving individuals more control over [health care] spending" — that might allow the bottom-up forces of the marketplace to do what the top-down imperatives of government controls have conspicuously failed to do.

2008 Election - SUSA Polling Suggests New Battleground States

Remember 2000? The Democratic candidate, Al Gore, got more of the popular vote than the Republican George W. Bush did, but lost the election in the Electoral College (with the help of the Supreme Court). This year, it looks like another ultra-close general election may be on tap, and it's not unimaginable that it will be the Democrat this time who'll need an electoral-vote edge, after possibly getting fewer popular votes than John McCain. We Democrats need to be prepared for that.

Trouble is, we Democrats are unlikely to know who exactly our 2008 presidential nominee will be until the 796 superdelegates make their individual choices at the Democratic National Convention, August 25-28 in Denver.

The superdelegates are Democratic members of Congress, governors, mayors, and state and national party leaders. Each superdelegate can vote for Barack Obama or Hillary Clinton, as they prefer. Some have already pledged for one, some for the other, and some have not tipped their hand. Once "committed" by announcing their own personal choice, they can still switch candidates at will if they feel the need. There is no rule or law that forces them to cast their vote a certain way.

As of Sunday, March 9, Clinton has a slight edge in committed superdelegates, 242-210, while more than 300 remain uncommitted.

Interesting fact: the identities of only 719 of the 796 superdelegates are presently known. A group of 77 "add-on" superdelegates will be named later by state party leaders. The Obama-Clinton race may wind up in the laps of those 77.

Another interesting fact: if the delegations from Florida and Michigan wind up not being seated at the convention — they've been barred because their states violated party rules and scheduled too-early primaries — neither will Florida and Michigan superdelegates. But if some kind of deal is struck by which those two delegations get seated after all, then an as-yet-undetermined number of superdelegates from those states would be added to the current total of 796 — and their votes could end up picking the nominee.

Unless either Clinton or Obama takes all the remaining primaries/caucuses by large margins, then even in the wake of Clinton's victories in Ohio and Texas on March 4 it looks as if neither candidate can amass enough elected, pledged delegates to sideline the superdelegates at the convention.


How should the superdelegates decide how to vote?

2008 Election - SUSA Polling Suggests New Battleground States gets at what oldstyleliberal thinks the superdelegates ought to be thinking about when they decide. Specifically, they ought collectively to try to vote for the candidate most likely to lick John McCain in the Electoral College in the crucial battleground states.

Says the SUSA (SurveyUSA) pollster, "McCain leads [Obama] in the blue states of Pennsylvania and New Jersey while Obama leads [McCain] in the red states of Virginia, Ohio, North Dakota, Nevada, and Colorado." Meanwhile, "McCain leads [Clinton] in the blue states Washington, Oregon, and Michigan while Clinton leads [McCain] in the red states Florida, Ohio, West Virginia, and Arkansas. McCain leads [Clinton in] two of the three purple states, but trails Clinton in the neighboring purple state of New Mexico."

The "purple states" are the three states that changed parties in 2004's Bush vs. Kerry election, vis-à-vis how they voted in the 2000 Bush-Gore election: New Mexico (which went for Gore in 2000), Iowa (for Gore in 2000), and New Hampshire (Bush in 2000).

If these precise SUSA polling results hold up over time — and no one really sees that as coming about — Obama looks to be the better choice for Democrats concerned about winning Virginia, North Dakota, Nevada, and Colorado in November. Clinton looks to be the better choice if Florida, West Virginia, Arkansas, and New Mexico are held in focus. Both Democrats look like McCain-beaters in 2008 in Ohio. And so on.


Obviously, it's too soon to know for sure how Obama or Clinton would actually do against their Republican foe in all the various states in November. This particular early poll was of too few voters and had too wide a margin of error to be determinative. The point oldstyleliberal would like to make is that, come August, each superdelegate first of all needs to figure whether his or her state will be one of the close-fought ones in November.

If so, then that superdelegate ought to consider how Clinton and Obama will poll against McCain in his or her home state, and vote for the Democrat that can be expected to be most likely to take that state's electoral votes.

That is, each superdelegate from a battleground state should vote for whichever candidate they think has the best likelihood of keeping their own state's electoral votes from going to McCain.

Notice that this is not necessarily the same thing as knowing which candidate, Obama or Clinton, is the more favored by Democrats in the superdelegate's home state. It may be that Democrats in (say) Ohio prefer Clinton, yet Obama might be the better choice as McCain's opponent in Ohio because he could pull more independents, crossovers, and marginal voters into his column in the general election.

Unfortunately for Clinton, there seem to be few if any states where she would be expected to run stronger than Obama with independents, crossovers, and marginal voters such as young adults who typically don't vote, and who might or might not turn out. It is hard to find a state whose primary/caucus voters favored Obama but whose superdelegates ought to back Clinton as the more likely McCain killer.

So unless it somehow becomes clear that the electoral vote in November will turn on one or two swing states where Clinton does in fact stand a better chance than Obama against McCain — if such states exist — then superdelegates in general ought to lean toward Obama.

Accordingly, each superdelegate from a non-battleground state might wish to choose to make an estimate of each candidate's viability in the key battleground states specifically. The Democrat who polls best against McCain in those swing states will likely get more electoral votes in the November election than the other Democratic possibility would receive. Hence, the non-swing-states superdelegates might want to try to throw the nomination to that candidate — who, per the above analysis, is more likely to be Obama than Clinton.


Clearly, it will be pretty hard for any given superdelegate to presume to know how Clinton or Obama will do against McCain in the whole of the Electoral College, once all the people have voted in a close election on November 4. Given the cloudiness of everyone's crystal ball, oldstyleliberal thinks that if a superdelegate is from what will clearly be a battleground state, he or she still ought simply to vote for the Democrat who will be most likely to beat McCain in that state.

As a practical matter the other superdelegates, the ones from states that will probably not be close, might still want to vote for the Democrat who will poll better against McCain in their own states. For instance, the Democratic governor of oldstyleliberal's home state of Maryland, Martin O'Malley, will be a superdelegate. He might opt to vote for whichever candidate, Obama or Clinton, would more certainly prevail in Maryland against McCain, in the unlikely event that huge numbers of Republican voters come out of the woodwork and make the race close in the Old Line State.

That way, O'Malley and the other Maryland superdelegates could avoid having to psych out the likely Electoral College results in the other 49 states, a Herculean task.

So there are several possible alternative strategies open to superdelegates who aim to angle their convention votes in August toward an Electoral College victory in November. oldstyleliberal admits he does not know exactly which micro-strategy for choosing between Clinton and Obama is most likely to pay off in November, given all the clouds in the crystal ball. Still, being ever-mindful of the electoral vote in the general election seems to oldstyleliberal the best way for the superdelegates to carry out their unprecedented duty to actually choose the Democratic nominee.

"BGE rate to climb higher in June" | baltimoresun.com

According to an article in the Baltimore Sun today, January 23, 2008 — click on the image above to see the whole article — residential electricity customers who are served by Maryland's Baltimore Gas & Electric, a subsidiary of the Constellation Energy Group,

... will pay an estimated 5.5 percent more for electricity starting in June, largely as a result of federal rules that are driving wholesale energy prices higher. ... The increase will add about $100 to the average customer's annual utility bill ... When combined with increases imposed since rate caps expired in 2006, BGE customers will be paying 85 percent more for electricity than they were before the General Assembly approved deregulation in 1999.

In 1999, the Maryland General Assembly deregulated the state's providers of electrical power in an effort to introduce competition into the electricity market and thereby hold down prices. An unintended consequence of that, combined with recent regulatory (not deregulatory) initiatives at the federal level, has been:

... more than a year into that effort [by the Federal Energy Regulatory Commission to impose new rules on the wholesale energy market], the latest increase shows just how difficult it is for state regulators to influence the federally regulated ... market. Many policy decisions affecting prices in Maryland are made in Washington with only limited input from state regulators.

"Because utilities no longer own generation plants that the state can regulate ... [utility customers are] at the mercy of what comes out of those wholesale energy markets," said Bill Fields, an attorney for the state Office of the People's Counsel, which represents utility customers.

This is just one more reason why oldstyleliberal has come to wonder whether strong government involvements in economic markets doesn't do more harm than good.

Even though Maryland has "deregulated" its electrical power marketplace, no real competition among BGE and various potential alternatives has materialized. Customers like me who live in locations where BGE once had a state-protected monopoly still don't have viable alternative providers of electrical power to buy from, eight years later. Moral: even when governments deregulate, they bungle the job.

This is something oldstyleliberal hates to admit. He is, after all, a liberal, and liberals believe that government programs help, no? Yet, time and again, government "solutions" just make bigger problems.

"Majority favors legalized unions" | Baltimore Sun

In a poll of Maryland voters, responders were asked about their views on same-sex unions. The Baltimore Sun reports that in the poll, a "majority favors legalized unions." 39% supported civil unions, but opposed gay marriage. Another 19% supported gay marriage outright. A solid majority, 58%, thus supported some sort of legalized same-sex union. That surprised oldstyleliberal.

Meanwhile, 31% opposed legalizing same-sex unions in any form.

Maryland's governor and legistlature are expected to take up the issue this year. Gov. O'Malley has said he favors civil unions, while being against gay marriage. The President of the State Senate, Thomas V. Mike Miller, a Democrat, opposes both civil unions and same-sex marriage, while supporting "increasing rights for same-sex couples," such as those concerning property ownership and medical decision-making. Another leading Democrat, House of Delegates Speaker Michael E. Busch, endorses civil unions but apparently not same-sex marriage.

Per the Sun, "Maryland law defines marriage as a union between a man and a woman. A lawsuit seeking to overturn that statute failed last year, effectively moving debate over the issue to the State House."

Republicans in the State House may introduce a measure to amend the state constitution to ban same-sex unions:

Foes of gay marriage also plan to push their cause this year. Del. Donald H. Dwyer Jr., an Anne Arundel County Republican and one of the General Assembly's most outspoken critics of gay rights, said it is time for the legislature to vote on all of the proposals so that constituents know where their representatives stand. He plans to sponsor a constitutional ban on gay marriage and civil unions.

The Sun article says that "only half of [the 31% of poll responders who opposed same-sex unions] said a constitutional amendment is needed to ban them."

Gay rights advocates "are pushing for a marriage bill with an exception to make it clear that no religious institutions or clergy would be compelled to perform or recognize those marriages."

In other words, opinions are all over the map on this issue in Maryland.

oldstyleliberal thinks gay marriages — secular, not religious — ought to be made legal. If that is impossible politically, then civil unions ought to be legalized, as they are marriages in all but name, conferring all of the legal rights that heterosexual marriages do. But outright recognition of gay marriage would be better, as it forecloses on the legal hair-splitting that is sure to arise if civil unions become law.

***

"Maryland bishops speak up for marriage: Statement supports marriage as union of man, woman," says a headline in a recent issue of the Catholic Review. The article began:

Archbishops Edwin F. O’Brien of Baltimore and Donald W. Wuerl of Washing­ton, D.C., and Bishop Michael A. Saltarelli of Wilmington, Del., released a statement Jan. 5 supporting the traditional definition of marriage.

The statement, “Marriage in Maryland: Securing the Foun­dation of Family and Society,” was distributed to all parishes for inclusion in January bulle­tins by the Maryland Catholic Conference (MCC), the legis­lative lobbying arm of Mary­land’s Catholic bishops.

Though oldstyleliberal is a Catholic — and not gay — he disagrees with the Church's position on marriage as a matter of civil law, as opposed to a religious sacrament, which it is in the Catholic Church. As a sacrament, whether marriage can be extended to include same-sex couples is a theological question which oldstyleliberal is frankly unable to resolve. As a civil matter, however, marriage ought to be open to all comers, gay or not.

oldstyleliberal thinks this is a good Christian way of looking at things, in fact.

We Christians believe, or ought to, that making love (in all senses of the word) trumps the ability of a married couple to make babies. The Catholic Church insists that a married couple be open to conception and childbirth at all times — supposedly impossible (depending on what "open to" means) for a same-sex couple. Being open to procreation is, however, not contradicted when a heterosexual couple is infertile, or when the husband and wife use the "rhythm method" to avoid pregnancy (since the woman is biologically infertile at certain times of the month). Why doesn't the exception for biological infertility apply to same-sex couples?

According to the CR article, a priest who is pastor of a local Catholic church said:

“Mar­riage is a sacred institution.” If the definition of marriage were altered, [the priest] said, “It would undermine a pillar of our society and would be a terrible fall down the moral ladder.”

oldstyleliberal doesn't buy that. oldstyleliberal thinks allowing gays and lesbians to marry would, if anything, improve the moral tone of society. For one thing, it would cut down on promiscuity among gays if gays could have settled marital relationships. Promiscuity is bad; gay sex is (for gay people) not.

For another thing, having a married gay couple next door might teach the rest of us to be more accepting and tolerant.

"O'Malley to offer energy package" | Baltimore Sun

This morning's Baltimore Sun has a front page article about how Maryland's recently elected governor, Martin O'Malley, is responding to looming energy and electrical power shortages in the state. The headline is "O'Malley to offer energy package." The article says that among the measures the governor's energy administration contemplates submitting to the legislature is a bill to have the state's power companies contribute money to a "strategic energy investment fund." The fund in turn would "invest in energy-efficient technologies and promote nonpolluting power alternatives."

oldstyleliberal lives in a suburb of Baltimore, Maryland, and buys his electrical power from Baltimore Gas & Electric, a part of the Constellation Energy Group. BGE and companies competing with it to sell electrical power in Maryland in 2006 ruffled consumers' feathers mightily by announcing steep price hikes. The rate increases were softened somewhat when politicos in the state legislature objected and threatened to take severe action — see New Electricity Rates on Tap for Maryland.

Since then, now-Governor O'Malley, a Democrat who was Baltimore's mayor at the time, ran against and defeated a Republican incumbent, Governor Robert L. Ehrlich. O'Malley, says today's article, "campaigned on the unfulfilled promise of undoing a 72 percent electricity rate increase for 1.2 million Baltimore Gas & Electric customers." This set of new proposals floated by the O'Malley administration instead "appears likely to ... further increase consumer costs in the short term."


The energy fund portion of the proposed legislative package — which also eyes laws "reducing overall electricity consumption by 15 percent by 2015" and "requiring utility companies to buy 20 percent of their power from wind, solar or other renewable sources by 2022" — would "not rely on tax revenue. Instead, the governor is banking on proceeds from the auction of "pollution credits" under an initiative of 10 states to voluntarily reduce carbon dioxide emissions." CO₂ emissions are a major part of the "greenhouse gases" that are said to promote global warming.

The O'Malley brain trust is banking on a regional "cap-and-trade" system, just getting under way, to generate something like $100 million in windfall revenues that would wind up in Maryland's energy fund. The Sun article is not totally clear on how this would work; it says, "Maryland expects to receive about $100 million a year from the sale of its pollution credits." This has to do with the Regional Greenhouse Gas Initiative, under which power plants in ten voluntarily participating Northeastern and Mid-Atlantic states, including Maryland, "must keep emissions below a downward-sliding limit, or buy credits from cleaner power plants."

The assumption here may be — it's not perfectly clear to oldstyleliberal — that power plants in other RGGI states, because they emit more greenhouse gases into the atmosphere than Maryland plants do, would have to buy up some of the permits issued to the (relatively clean) Maryland plants. The money the Maryland power utilities would receive would, under the O'Malley plan, wind up in the energy fund. That way, Maryland utilities would supposedly not have to pass along the costs of filling the fund to their customers in the form of higher electric bills.

At least, there is that hope. O'Malley's political opponents are, however, skeptical:

Del. Warren E. Miller, a Howard County Republican on the [Maryland House of Delegates] Economic Matters Committee, said he doubted that the "cap and trade" system would create even a $100 million windfall, and that added costs borne by power plants would probably show up on consumers' electrical bills.

The dollar size of the permits windfall is in doubt in part because "the yield won't be known until the first [RGGI] auction this summer." But Maryland Public Service Commission Chairman Steven B. Larsen, an O'Malley appointee, said (according to the article) that he expects "the amount could be twice as high."

There is also this consideration: " ... recent tax increases and economic uncertainty might spur a fight in the legislature this session if lawmakers prefer to give all or some of the $100 million back to consumers."

It sounds to oldstyleliberal as if the O'Malley people want to make sure one of two things happens:

1. If Maryland's power producers do reap an RGGI windfall, it (because the money goes right into the new fund) won't wind up reducing consumers' electric bills. Lowering electric rates would give consumers no incentive to conserve energy. That would wind up exacerbating global warming.
   
2. If by chance there is no such windfall, utilities would still have to pay the required money into the new fund, which would cause electric rates to go up as the utilities pass some or all of these costs on to consumers. Higher rates would encourage even more conservation.
   

Either way, the recently boosted Maryland electricity rates would tend not to go down, as O'Malley suggested on the campaign trail that he wanted, and might well go up. No matter where the money to be injected into the new energy fund comes from — from an RGGI windfall or from Maryland power companies' general revenues — it will ultimately come from energy consumers in Maryland, and/or those in other states participating in RGGI.

So the proposed fund would encourage energy conservation and ameliorate global warming in two ways. It would invest in sustainable, environment-friendly energy technologies. And it would encourage energy conservation by in effect adding a hidden surcharge on electric power consumption in Maryland, or elsewhere, to pay for the fund.

Megan McCardle: "No Country for Young Men" | The Atlantic

In "No Country for Young Men," in the January/February 2008 issue of The Atlantic, associate editor Megan McCardle paints a bleak picture of what we're headed for as we Baby Boomers (yours truly is 60) start spending more time in doctor's offices and the old folks' home than we do working and earning our keep.

We geezers-to-be are already starting to retire, but many officially "retired" Boomers are starting some sort of second career as they exit career #1. They'd like to find "work-as-personal-fulfillment" and all that sort of thing, yet many find themselves limited to a less-than-wonderful job at Wal-Mart or Home Depot, Staples or Walgreens.

Still that's not the big problem. The big problem comes when they get too old to contribute labor to the workforce in any way, shape, or form. Then they'll be living off the productivity of their juniors, at a time of life when their, the seniors', medical expenses can be expected to grow and grow and grow.

McArdle:

And indeed there’s no getting around these facts: in 1945, the year before the Baby Boomers began entering the world, each retiree in America was supported by 42 workers. Now each retiree is supported by three. When the Boomers are fully retired, each of them will be supported by just two.

What happens when currently optimistic Boomers finally face the hard realities of their savings accounts? Will they ask for more from the government? At a bare minimum, seniors already struggling with their finances are not apt to look kindly on benefit cuts. Yet the cost of the benefits we’ve already promised them will weigh heavily on the workers expected to support a half-Boomer apiece.

Social Security is the comparatively easy problem to solve. It will go from consuming 4.3 percent of GDP in 2007 to absorbing about 6.2 percent in 2030. That’s a big jump—if the cost were spread evenly, it would be equivalent to about a 5 percent increase in payroll taxes for each worker—but by and large, the economy will be able to cope.

Medicare is a different story. Health-care costs now consume about 16 percent of GDP, but projections by the Department of Health and Human Services suggest that by 2016, that will have risen to almost 20 percent. [David Wise, head of the National Bureau of Economic Research’s aging program,] speculates that closing the Medicare budgetary gap would require a tax increase of something on the order of 8 to 12 percent of total payroll. That is a massive tax increase—$4,000 to $6,000 a year on a $50,000 income (again assuming the tax were spread evenly). Many economists and budget analysts have drawn up plans intended to fix Social Security, through some combination of benefit cuts, higher retirement ages, and tax increases. But almost no one claims to have any good ideas about Medicare.

As oldstyleliberal mentioned in Samuelson: Rx for Health Care, by 2030 health-care costs will most likely eat up 25 percent of GDP! A quarter of every dollar's worth of products made by Americans will be earmarked for medical bills alone. A hefty portion of that will go to pay the medical bills of Medicare recipients.

In other words, we're presently tied to a railroad track with a locomotive bearing down on us at breakneck speed. And "no one claims to have any good ideas about" how to loosen the rope.

The presidential candidates have said very little about Medicare. The Republicans want to chip away at the various reasons why health care costs in America are rising so fast, and that's good. Also good is the Democrats' insistence that all Americans who want to be insured can be (or, in some of their proposals, must be). But no one is talking about how something else — something really big, and something fairly painful, politically — is going to have to be done, and soon, to keep Medicare from killing the goose that lays America's golden eggs.

David Brooks: "Middle-Class Capitalists" | New York Times

David Brooks' op-ed column in the New York Times of Jan. 11, "Middle-Class Capitalists," contains some interesting information about the Republican presidential candidates' positions on health care reform:

While Democrats emphasize [insuring] the uninsured, Republicans emphasize cost control. They [unlike an earlier generation of Republican conservatives] understand that it’s not a question of protecting health markets from government takeover. Government already controls and distorts health care. It’s a question of straightening out the system so that it is clear who is paying and for what.

Mitt Romney supports private insurance enforced by a universal mandate. [John] McCain talks about paying for outcomes rather than tests to cut down on unnecessary procedures. Mike Huckabee promotes an activist agenda to reduce obesity and prevent chronic illness.

When Brooks says "government already controls and distorts health care," that sounds like a bit of hyperbole to oldstyleliberal. But it's basically true. It's verbal shorthand for the idea that, mostly by virtue of running market-distorting programs like Medicare, Medicaid, and the State Children's Health Insurance Program (S-CHIP), Uncle Sam (along with state and local governments) influences the supply and demand relationships that pertain to medical-care goods and services.

That affects in a major way what health care items patients (or their insurers) can buy, and how much it will cost them to buy it. Accordingly, certain health care categories may cost more than they otherwise would, because (government-subsidized) demand for them is higher than it would otherwise be.

Because of said marketplace distortions, certain things may wind up being in too-short supply, even at higher prices; there may be too few doctors in a certain area of the country, because bureaucrats there have decreed that local health care providers don't get paid as much as they do elsewhere. So it may take a while to get a doctor's appointment in East Podunk. Meanwhile, there may be too many doctors and health care facilities in other areas, so eager patients may wind up having too many health care services bestowed on them, with no measurable improvement to their health, life expectancy, or any other objective indicator of the quality of their health care.

But, Brooks implies, GOP reform proposals (and those of Democrats) will not eliminate these market distortions. They simply hope to "straighten out the system" by at least making it more "clear who is paying and for what."

In the health care financing system as it is currently set up, it is not at all clear who pays for what. Even if you don't personally get any benefits from Medicare, Medicaid, or S-CHIP, and even if you do not have employer- or individually provided health insurance — you buy your medical care on a pay-as-you-go basis — you are probably already shelling out for the health care of other people.

If you, as a "young invincible" who normally "never gets sick," happen to undergo an emergency appendectomy at a local hospital, the bill which you are going to pay entirely out of your meager savings account probably has been inflated to help the hospital defray the costs of patients whose government-provided insurance programs — because of price controls or coverage limitations — don't fully defray the expense of treating them. That's what policy wonks call "cost sharing," and it also applies to the costs of treating charity cases: patients who have no insurance at all, government-provided or otherwise.

Cost sharing already distorts health care markets. Even if the government completely got out of the health care financing business — which is politically impossible, owing to the popularity of Medicare — and even if private insurers and HMOs acted in a totally greedy way to inflate their bottom lines at the expense of providing everyone with the health care we all so desperately need, the very fact that each of us can expect to use more health care than we can pay for, at some point in our lives, means cost shifting is inevitable. If all of the other market-distorting aspects of health care financing — government insurance programs, tax incentives to employers to provide health insurance for their workers, state regulations, etc. — disappeared overnight, cost sharing for charity cases would remain. And a great many of us, lacking huge financial reserves, would at some point become its beneficiaries.

So it is not a question of ever having a strictly market-based health care financing system, with zero distortions to "pure" supply-and-demand relationships. The "market footprint" of the government is, and will remain, huge. And unless we went to a full-bore "single payer" system of government-financed health care — an idea that has completely failed to gain political traction in America — there would continue to be private insurers, employers, doctors, hospitals, and managed care organizations who quite naturally fear their health care costs are getting way out of proportion to their levels of recompense. In a pinch, these entities, as recent history shows, tend to want to cut back their outlays — at the expense, too often, of making it too hard or even impossible for the sickest among us to get the care they need.

The Republicans all want to re-jigger the current system in various ways short of a single-payer system or a mandate that those who lack health coverage must buy it from the government. Romney would mandate the purchase of private insurance and would presumably arrange (somehow) for it to become available and affordable to all (good luck there!).

McCain would control health care costs by "paying for outcomes rather than tests." By that, oldstyleliberal assumes, McCain means health care providers would not be able to charge public or private insurers for procedures that don't measurably improve patients' health — though how that would be adjudicated is admittedly a bit of a mystery to oldstyleliberal at this stage.

And Huckabee emphasizes promoting "an activist agenda" to keep us from incurring serious (and expensive) illnesses in the first place: a noble goal, but again, good luck!

On the other hand, most of the GOP hopefuls' health care platforms contain, somewhere in the fine print, a plank that would permit the health savings accounts (HSAs) that became available to Americans under a 2003 law to become larger and less restricted. oldstyleliberal thinks this is a good idea. Accounts which are stocked with tax-free money, year by year, and which can be drawn upon at any age to buy health insurance and/or health services, while remaining tax-free, are a fine thing.

Right now, if you establish such an account, you are forced to buy so-called high-deductible health insurance along with it. The enlarged HSAs proposed by various Republican presidential hopefuls would eliminate that restriction and other drawbacks which keep HSAs from being as popular as they might be. oldstyleliberal thinks "large HSAs" would be the perfect complement to a universal-access health care plan such as Democrat Barack Obama proposes, which would make government-provided health insurance available to all adults and children but would mandate coverage only for children.

Samuelson: Rx for Health Care

Newsweek economics columnist Robert Samuelson recently prescribed this Rx for Health Care in the December 10, 2007, issue of the magazine. oldstyleliberal feels the article should be required reading, not because he necessarily agrees with all of Samuelson's solutions, but because it captures some of the essential dimensions of the problem which confronts all of us in this election year and beyond.

Dimension 1: "Health spending already totals more than $2 trillion annually, about 16 percent of national income (gross domestic product). By 2030, it could easily exceed 25 percent — one dollar out of four — projects the Congressional Budget Office. Higher health spending is the main force expanding the federal budget."

Those figures presumably include both private and government expenditures on health care, whether they come out of patients' pockets to cover their medical expenses, copayments, and insurance premiums; out of insurance companies' payments to health care providers; out of employers' payments to insurance companies to provide health coverage to the employers' workers; out of government health care payments through programs like Medicaid and Medicare; or what have you. Total it all up, and we Americans now carve 16 cents out of every dollar of our income "pie" to spend on health care, on the average, and within the lifetimes of many of us, that number will go up to a shiny quarter of a dollar or more.

Dimension 2: "There's a massive transfer of income from young to old. Americans 65 and older now represent about an eighth of the population and about a third of all health spending. By 2030, their population share will be about a fifth, and they could account for nearly half of health spending, finds a study by the Centers for Medicare & Medicaid Services. Under present law, the 19- to 64-year-old population would pay most of those costs."

Put those two dimensions together, and by 2030 working adults between the ages of 19 and 64 will be covering the lion's share of the nearly half of total health spending that seniors will by that time represent. That's roughly a dime out of every dollar of each youngster's income. Under present law, every able-bodied member of the pre-retirement workforce would have to fork that dime over in one form or another to underwrite the health care of doddering Americans. Hence the description, "massive transfer of income."

Dimension 3: "Neither the government nor the private sector has succeeded in controlling health spending. From 1970 to 2005, average spending per Medicare beneficiary rose 8.9 percent a year; spending for Americans with private health insurance rose 9.8 percent annually over the same period (the figures cover similar health services). The small difference may reflect cost shifting. When Medicare imposes price controls, doctors and hospitals increase prices for privately insured patients."

Think about that a while. Recent history has shown that health care prices are not held in check either by market-based activities of private insurers and health care providers looking to improve their bottom lines or by government agencies trying — and failing — to rein in costs through price controls.


Samuelson says we Americans don't see how the money flows through the complicated plumbing of today's health care system. It comes out of the pockets of us all, but in hidden, indirect ways. For instance, the health insurance coverage an employer buys for a worker is paid for — in part, since the worker also pays in premiums — by money the employer gives the insurance company. That money could alternatively have come directly to the worker as higher wages. But the worker never sees that.

When governments, federal and/or state, provide insurance coverage, as in Medicare, or subsidize patients' health care costs directly, as in Medicaid, some of the expenditures come out of general tax revenues, largely derived from income taxes or sales taxes. Again, the taxpayer doesn't see his or her tax dollars flow through the system and come out in the bank account of a doctor, nurse, technician, hospital, or pharmaceutical manufacturer.

Meanwhile, the patient himself or herself racks up expenses that are — apparently — paid for by other people. Other members of the same insurance plan. Other taxpayers. Other patients at the same hospital, through the accounting practice called cost shifting. Whoever the "other people" are is hidden from the patient's view, and the patient has no incentive to comparison shop for the lowest prices consistent with getting the best quality of health care services.


Often, the patient not only has no incentive to shop for health care bargains, he or she simply cannot do so. Perhaps the prices for drugs and other commodities are fixed at a certain level by the health insurer's agreements with providers in its network, so shopping around is pointless. Or perhaps there is only one available source of whatever it is the patient needs, because the health care system limits competition as an unintended consequence of how it is currently set up.

Patients today are therefore not really "consumers" in the usual sense of the word: people who desperately prefer to keep prices as low as possible when they shop for goods and services, and who avoid paying too much by bargain hunting.

And that, oldstyleliberal thinks, is both a good thing and a bad thing.

It's a good thing because, if you need a heart bypass, a liver transplant, or a mastectomy, the last thing you want to do is shop around ad infinitum for the best quality-to-price ratio. That takes time and effort when what you really want to do is get the scary thing over with as quickly as possible. You want to put yourself in the hands of the best surgeon you can find, and not necessarily the one who charges the least. You're unexpectedly sick — or maybe you've finally found a solution for a debilitating condition that's been sapping your strength for a long time — you're frightened, and you just don't want to die. So careful comparison shopping is not going to be uppermost in your mind.


But the fact that the current health care system pretty much obviates the need for comparison shopping and bargain hunting is also a bad thing because, as Samuelson points out, it is driving the explosion in health care expenditures. As a 60-year-old, oldstyleliberal can easily remember when there was not all that many surgical remedies available for heart patients, there were no liver or bone marrow transplants, there were no CT scans or MRIs, no screenings for breast cancer.

Medical care was pretty cheap in the days when penicillin was still the latest wonder drug. There was nothing that could be done to prevent you from getting tuberculosis or polio in 1947, oldstyleliberal was born, and if you did get one of these dread diseases you could easily die from it without ever racking up a lot of the life-prolonging medical expenses associated with ongoing patient care today.

Or you could wind up crippled or in diminished health for the duration of a normal lifetime — yet the monetary costs associated with post-polio or post-tuberculosis status were not all that high. President Franklin Roosevelt, a polio victim, could do little but visit the spa at Warm Springs, Georgia, and wear braces on his legs.

Sick by Jonathan Cohn

The current health care financing system actually got its start in the days of FDR: the great depression, World War II. Sick: The Untold Story of America's Health Care Crisis — and the People Who Pay the Price, by Jonathan Cohn, is more must-reading for Americans today. It details (among other things) how employer-provided health insurance got its start during the Second World War, at a time when employers were trying to attract workers from a labor force diminished in size by all the boys in uniform overseas. Uncle Sam gave employers a big tax break for the health insurance coverage they were starting to offer as a fringe benefit to their employees, and private employer-based health insurance soon became an American institution.

At the time, as already noted, health care costs were moderate for even the sickest among us. The fact that being covered by insurance took away a patient's incentive to price-shop for health care had little negative impact. Things are a lot different now.


A little back-of-the-envelope figuring shows that when $2 trillion is spent each year to provide health care for 300 million Americans whose average life expectancy is 78 years, then every American will on average use $5.2 million worth of health care over the course of a lifetime. Think of it. Even in this age of homes that cost more than $1 million, that figure dwarfs what used to be considered the single most expensive thing a middle class person would most likely buy in his or her life: a house.

Of course, the prices of health care have gone way, way up, and way too fast, so oldstyleliberal figures the amount of money actually spent on his own health care needs during the first 60 of his allotted 78 years has been much less. Then again, if prices keep skyrocketing, he may still wind up costing the health care system $5.2 million by the time he is done.

A baby born today can expect to cost the health care system a lot more than $5.2 million, owing to the fact that health care costs continue to zoom upward. Something must be done, and soon.

As Samuelson points out in his article, "People need to see and feel health costs." Whatever else we do, we have to stop letting health care consumers proceed as if they're getting a free ride (even if the dollars they don't think they are spending on health care are actually feeding the present system in hidden, indirect ways).

Samuelson want to: "First, make Medicare beneficiaries pay more; many retirees can afford more. Second, create a dedicated federal health tax to cover all government health spending (Medicare, Medicaid, etc.). If health spending rose, the tax would rise. People would know why."

Third, he wants to "eliminate the income-tax exclusion for employer-paid insurance and replace it with a tax credit of lesser value. Workers would have more pretax income, but they'd have to spend more after-tax dollars for insurance."

Of the three proposals, oldstyleliberal likes the second one best. He thinks there ought to be a dedicated federal health tax as an income surtax. It ought to cover all of Uncle Sam's health care expenditures, such that Medicare, Medicaid, S-CHIP, and the various other programs would not draw from general revenues at all. It would be charged at a flat percentage of income; there's no sense in alienating economic conservatives by making it progressive, so as to take a proportionately greater bite out of the pocketbooks of the rich.

Starting it at a flat (say) 5 percent of income would make it easy for Americans to see how the rate was changing from year to year and ask embarrassing questions of politicians if the rate went up too much — and that's the whole point.

Meanwhile, oldstyleliberal favors substituting for Samuelson's first and third proposals — designed to re-jigger the monetary disincentives of the current health care system to patients to comparison shop and thus hold the line on prices — so-called "large HSAs": health savings accounts with fewer restrictions than today's HSAs currently have. Americans would use these accounts as "401(k)s on steroids" to replace or amplify the proceeds of regular health insurance coverage with their own tax-free dollars — dollars that it behooves them to spend wisely.

Cynthia Tucker: "Obama's Rise Signals Shift" | Baltimore Sun

Kudos to op-ed columnist Cynthia Tucker for pointing out in "Obama's rise signals shift," available at BaltimoreSun.com, that few of us are being really upfront about how we're dealing with Barack Obama's blackness. Says Tucker, who is black:

While this country has made great strides toward genuine racial equality over the last 50 years, we're still hampered by a race-consciousness that lurks just below the surface, in our reptilian brains, where stereotype, prejudice and unconscious judgments override rational considerations. That's true for all of us — black, white and brown.

oldstyleliberal is white, and although he intends to vote for Obama in the upcoming Maryland Democratic primary, he has to admit there were parts of Obama's victory speech in Iowa during which he had to tamp down a negative reaction to the vocal cadences Obama was employing, which he realized were right out of the African-American pulpit. Whoa, thought oldstyleliberal. Where did Obama, who wasn't raised in such a church, pick that up — from Al Sharpton?

Another part of oldstyleliberal's brain duly kicked in and said something like, "Shame on me for even feeling that." If Obama, whom some African-Americans have deemed "not black enough," can't appropriate the rhythmic, rhyming cadences and grunts of a Jesse Jackson or an Al Sharpton, how can he possibly bring American blacks along with him into a new ethos of political "change."

All of us, black, white, or brown, respond to what one might call "extra-rational" rhetorical cues that are intended to say, "You and I are the same." But if these cues are designed to pull some folks toward a candidate, other folks who might otherwise feel a bit alienated by them have to be smart enough to cut that candidate, who after all wants to lead us all toward some brighter day, a degree of slack. Right?

All of which brings up the question, just how do we decide, individually and corporately, what our opinions are about candidates and their programs? As Ms. Tucker says, there's a lot going on just below the surface, in our "reptilian" brains, which we can't very well admit to, but which might wind up making all the difference in the world.

Yet More on Health Care

This is the fifth post in oldstyleliberal's series on the current health care debate among the presidential contenders. This morning's Baltimore Sun has a front page article on the topic, available here. Reporter David Nitkin writes in the article, "Clinton, Obama clashing on health," about the fact that Sen. Hillary Rodham Clinton is calling for mandatory health insurance for all Americans, while Sen. Barack Obama would leave the choice to buy health insurance optional for adults and mandate it only for children. (Both would set up a new, government-run health insurance provider that would insure all comers who do not have or cannot get private health insurance through their workplace or on their own.)

The Nitkin article says, "Former Sen. John Edwards of North Carolina, New Mexico Gov. Bill Richardson and Sen. Christopher J. Dodd of Connecticut have included the requirement [to be covered by health insurance] in their health plans, making Obama the most notable outlier in the party's presidential field." It does not mention Rep. Dennis Kucinich by name as the main presidential proponent of a "single-payer" system of health care financing, called in the article "a Medicare-style government program that replaces private markets."

The article seems to suggest that none of the Republican candidates are offering universal-coverage plans for health insurance. Oddly enough, former Massachusetts Governor Mitt Romney, a GOP presidential hopeful, was responsible for shepherding through the legislative process in his state the only state-level program to date that mandates health coverage. The article says it is too early in the game to see whether that program, which assesses the uninsured with a financial penalty unless they buy insurance, will actually bring about universal coverage. Mrs. Clinton's proposal for the country as a whole is very much like the Massachusetts system.

Switzerland and the Netherlands are the only other countries with a health insurance mandate, but their plans are notably dissimilar to the Clinton proposal. So it's anybody's guess how many people would fail to buy "mandatory" health insurance under the Clinton system, either because they were legally granted exemptions or because they simply scoffed at the law.

Nonetheless, Clinton's side is accusing the Obama proposal of failing to cover everybody. The Obama folks say the "young invincibles" who today opt out of the private health insurance sector could be brought in without a mandate. These are the youthful, healthy souls whose finances are stretched thin enough, during the years in which they are getting started in independent life, that the extra burden of paying premiums for insurance they don't "need" appears an unjustifiable expense. Obama wants to change the law to allow them to continue to be covered under their parents' health insurance until age 25, regardless of whether they are still in school.

He also favors "reducing the costs of insurance, which would almost certainly require huge government subsidies for the poor. Obama says it makes most sense to focus there first" — rather than go immediately to a health insurance mandate, as Clinton wants to do.

The reason both Clinton and Obama want to bring the "young invincibles" and others without health insurance into the system is not just to make sure no one gets slammed with huge, unpayable bills if their health suddenly deteriorates. It is also to make sure those who continue to have good health do their part to spread the risk of illness and its associated cost over as broad a base as possible, providing their fair share of the money to finance the system as a whole.

Supporters of the Clinton mandate are, the article says, intent on changing the thinking of Americans. Robert Blendon, a health policy professor at Harvard University's Kennedy School of Government, is in the Clinton corner:

The details of a mandate are less critical than the change in thinking that such a requirement would instill, Blendon said.

"The most important thing you want to achieve is a cultural change which sort of accepts the responsibility that people have coverage," the Harvard professor said. The country must create an attitude where everyone is expected to have health insurance, he said, so "when you go into a doctor's office, they are horrified if you don't have coverage."

Clearly, under the Obama proposal there would be less of an impetus toward such a cultural change of attitude. Even though Obama's voluntary-for-adults approach to health insurance might wind up covering just as many Americans as Clinton's mandatory-for-all approach, it would not stigmatize the uninsured. oldstyleliberal favors the Obama approach for this reason. He does not approve of stigmatizing individuals such that "when you go into a doctor's office, they are horrified if you don't have coverage."

***

Still, oldstyleliberal feels Barack Obama's approach to health care financing could be improved by including something most of the Republican candidates support: enlarged health savings accounts.

HSAs are only a few years old, and many Americans have yet to hear of them. In their current form, they allow Americans to set up accounts that are like "401(k)s on steroids." Account owners can contribute so many dollars a year to these accounts, and their employers can likewise make contributions up to a certain amount. Both types of contributions are exempt from income and payroll taxes.

If the owner of the account wants to pay for his or her medical expenses out of the HSA, or for the requisite high-deductible health insurance premiums, that too is tax-free — no matter what age the account owner is. After age 65, any withdrawals for all other types of expenses are also tax-exempt. Before age 65, non-medical withdrawals are taxed as income.

Currently, the rules for HSAs insist that the owner have high-deductible health insurance to supplement the accounts. HSA owners are responsible for paying their own way, in terms of their ongoing medical expenses, until the relatively high annual deductible is reached each year. Beyond that, owners continue to pay copayments for their health services, at a set rate, until a certain number of dollars of out-of-pocket expenses (above and beyond the deductible) has been accumulated. Until that point is reached, the requisite insurance covers only those covered medical expenses above and beyond the copays. From that point on, the health insurance takes over and pays all covered medical expenses.

The assumption here is that the deductible amounts and the copayments would come directly out of the HSAs, assuming they contain enough money to begin with, since using HSA funds for medical expenses is tax-free.

HSA advocates want to remove many of the restrictions and limitations of the current law as it pertains to health savings accounts, bringing in the era of so-called "large HSAs." They want to increase the contribution limits to allow employers to deposit the full value of workers' health benefits directly into their HSAs; eliminate the health insurance requirement for HSAs entirely; and allow tax-free HSA withdrawals for all voluntarily incurred health insurance premiums, not just those spent on the currently mandatory high-deductible health insurance.

In other words, owners of "large HSAs" and their employers would be able to choose not to obtain/provide health insurance coverage at all; to choose the currently mandatory high-deductible health insurance; or to choose an "ordinary" health insurance plan that does not feature high deductibles and/or high limits on out-of-pocket copayments. Those who wish to do so could combine a "large HSA" with their existing insurance coverage and then, if they want to later, optionally migrate either to high-deductible coverage or to no coverage at all as they become comfortable with making such choices on their own behalf.

Proponents of "large HSAs" believe they would put more decisions about health-care purchases in the hands of consumers themselves and bring all the benefits of informed marketplace participation to the health-services and health-insurance domains. Competition would flourish. There would be fewer incentives for those who now have comprehensive, low-copay, low-deductible coverage provided by their employer to continue to demand more health services than they would if they were paying the costs themselves. These individuals and their families would opt to save money in HSAs instead and economize on medical outlays, resulting in less health spending overall. Studies show that the "extra" services today demanded by the comprehensively insured don't really improve their health status or life expectancy, but they do inflate health-services prices. Health-services prices would accordingly come down if "large HSAs" were enacted into law.

Opponents of "large HSAs" object that the tax-free aspects of a growing plethora of them would drain the Treasury of needed revenues, in terms of foregone income taxes and payroll taxes. Supporters counter that "large HSAs" would offset the anticipated drain on the Treasury associated with Medicare, as baby boomers cross the age-65 threshold.

Opponents also object that there is no reason to be sure "large HSAs" would spread health risks and their associated costs equitably over the entire population, the way a Clinton-style universal-coverage program supposedly would. An Obama-style universal-access plan would presumably make it less likely that all of the medically needy among us would have insurance.

Still, it's not clear that mandated universal coverage would turn out to be truly universal. And it would stigmatize those who lacked it. That's why oldstyleliberal thinks we ought to try an Obama-style universal-access plan, augmented with "large HSAs," before proceeding — and then only if necessary — to a full-fledged Clinton-style mandate.

More on the Health Care Debate

In three earlier posts to this Health Care series oldstyleliberal addressed one of the primary issues looming in the 2008 election, that of health care and whether or not all Americans have a right of access to it at reasonable prices. That topic leads naturally into the question of health insurance, which some 47 million of us (16 percent of the population) do not have.

The Democrats running for president tend to follow the lead of the top two contenders, Hillary Clinton and Barack Obama, in proposing some form of universal access to health coverage through job-based, privately purchased, and/or public insurance plans. The public insurance plan, offered by the U.S. government, would be new. It would become mandatory for Americans without any other health insurance, under the Clinton proposal. Under the Obama proposal, only coverage for children would be obligatory.

The leading Republican contenders Rudy Giuliani, Mitt Romney, and John McCain eschew mandatory insurance plans, while seeking changes to the present system that would give health care consumers more power to look after their own needs. Among the proposed changes are an end to state regulations that block buying health insurance from providers in other states, such that there might be wider competition for customers and lower premiums. Also being called for by GOP contenders are enlarged health savings accounts that would make savings for future health needs and spending from these accounts to cover current medical expenses fully tax free. If HSAs were made flexible enough, the thinking goes, they could obviate the need for insurance benefits to cover any except the most catastrophic medical expenses.

oldstyleliberal finds it difficult to decide between the two general approaches. The Democrats' solutions would pretty much guarantee universal health insurance coverage at decent rates, with only a tiny percentage of Americans falling through the cracks — or, at least, in the case of the Obama proposal, universal health insurance access at fair premium rates. But it is not clear to oldstyleliberal how these relatively "liberal" approaches would hold down health care costs without relying on that dread word rationing, or else depending on taxes to cover costs.

From the point of view of an economist, prices depend on the relationship between supply and demand. In a totally free competitive market, when the quantity demanded of goods and services exactly matches the quantity offered by sellers, a price level is thereby determined, and the amount of sellers' commodities actually taken by buyers is also set. Should demand go up from there, sellers naturally raise prices to cover the extra costs of providing goods and services in greater quantities.

When people have health insurance with low copays and small up-front deductibles, they tend to require more doctor's appointments, more diagnostic tests, more medical procedures, and the like — more, that is, than they would seek if they were paying fees out of pocket or out of a health savings account, however tax-free the money is. Economically, that can't help but nudge the supply-and-demand balance point up to a higher overall price level.

To offset that, private or public insurance plans can ration care. One way to do that is simply not to cover certain types of care. Or, certain expenses can be only partly covered, such that the patient still owes money after the insurance plan pays its share. Consumers tend to require less of the types of care their insurance plans don't fully cover.

Another way to ration medical care is to limit the supply such that there develop long waiting lines. People who are confronted with long queues often forgo "unnecessary" care entirely. Or, there can be a form of triage involved, such that the neediest get advanced to the front of the line while those with supposedly less urgent needs wait and wait.

Would the Democrats' public health insurance plans accomplish the necessary rationing in a fair, politically feasible, economically realistic way? Depending on your point of view, one advantage of the current private system is that it's hard to call politicians and government bureaucracies on the carpet when health-care prices, insurance premiums, or quality and availability of care don't meet with our approval.

Another advantage to private health care financing is that there is no impetus to burden taxpayers with the costs of the medical benefits covered by a public insurance plan, as a way of sidestepping unpalatable rationing measures or for any other reason. Of course, federal taxpayers do pick up the tab for Medicare and Medicaid already, but would the Democratic candidates' health care plans cost the taxpayers yet more? oldstyleliberal is not entirely certain that either the Clinton or the Obama plan would pay for itself without taxpayer burdens and/or unacceptable rationing of health services.


Of course, there is a strong argument to be made in favor of doing just that: setting up a health care financing system that allows every American access to all of the medical care they need when sickness strikes, and hang the cost. The philosophy here is that we all stand at risk of catastrophic illness at some point in our lives, so we should all share the high costs of treating those who are sick now. The only question is, by what mechanism(s) ought the cost burden be shared?

When insurance payouts to beneficiaries and their health-services providers are entirely covered by premiums being paid in by policyholders, that's one way to share the cost burden. Another way is to cover some or all of the payouts using general revenues accrued from taxes paid in to the government. Yet another way is for, say, a hospital or clinic to fail to recover the costs of treating an uninsured patient and to pass those costs on to its paying customers in the form of higher bills.

However the cost burden gets shared, it does get shared, even today in the absence of universal access to a public health insurance plan. Few people who get catastrophically ill have a big enough nest egg to cover the huge costs on their own.

The costs that don't get shared are the ones that are never incurred. Chief among these are the costs of routine preventive care, prescription medications that head off (expensive) illnesses before they strike, and other items and services that the uninsured often go without. For example, diabetics need to self-monitor their blood sugar levels and get regular blood tests. If they shirk these necessities because they can't afford their high associated costs, they are liable to need even more expensive health services later on, when the diabetes takes its toll. Then, if they have a diabetes-related heart attack and wind up in the emergency room, those costs will likely be picked up indirectly by the hospital's paying customers.

But it would have been cheaper for society to pay for the preventive measures that would have avoided the heart attack in the first place, even if only by using tax monies to help defray the health-services outlays of a public insurance plan.

The current system, because it leaves so many Americans uninsured, tends to shift costs from (admittedly expensive) diagnostic services and preventive care to yet more expensive emergency services and procedures that might have been avoided with better medical care all along. So the burden of sharing these costs — whatever the mechanism of sharing — gets skewed away from preventive, prophylactic care. The result is that the total shared cost of health care in America is higher than it needs to be. It costs a lot more to amputate a diabetic's foot and rehabilitate the patient than it does to keep the patient's blood sugar levels in check right along.

Notice that there are at least two ways in which the current system inflates health care costs in America. One is to discourage the uninsured from getting routine screenings and preventive care, leading to exorbitant costs later on. Another is to encourage those who do have insurance to obtain a lot of less-than-crucial health services, to the extent these services are covered by insurance. As a result, while some people are lucky enough, because they have comprehensive health insurance, to get their tummy tucks and eye jobs galore for next to nothing, others have to do without the mammograms and colonoscopies that might save their lives.

If that seems unfair, then perhaps we need public, government-run health insurance plans, despite their possible burdens on taxpayers down the road, and despite the fact that they might force some form of rationing of health services on the American public.

The Candidates' Health Care Plans, Part 3

In The Candidates' Health Care Plans, Part 2 oldstyleliberal looked at the health care proposals of two of the leading Democratic candidates for president, Hillary Rodham Clinton and Barack Obama. Both plans involve augmenting current private insurance plans by setting up a public, government-run insurance program from which individuals and families would be required to obtain health insurance — if, that is, they didn't buy private insurance on their own or get coverage from their employer. This mandate would apply to all uninsured Americans, in the Clinton plan, or to all uninsured children, in the Obama plan; in the Obama proposal, uninsured adults could continue to opt out of private plans and the public plan.

As he said before, oldstyleliberal worries that a "mandatory" health insurance system, government-run, would encroach too much on citizens' freedom of choice to make their own decisions about their own health care and insurance needs. That's why oldstyleliberal, though he is a Democrat, went looking to see what the various Republican candidates have to say about the issue.

This page gives a side-by-side analysis of the proposals made by Rudy Giuliani, John McCain, and Mitt Romney, three of the current leaders in the GOP field.

These three candidates entirely avoid mandates requiring uninsured citizens to buy health insurance. They all want to change federal tax laws, particularly with respect to income taxes, to "incentivize" taxpayers to obtain health insurance privately. States would receive federal subsidies, block grants, or other encouragements to enroll the uninsured in voluntary public plans of their own, craft health reforms, etc. All these plans would expand private health savings accounts (HSAs), which in a more restrictive form have been available under federal law since January 2004, to make them more attractive to Americans as options to, or supplements for, privately purchased or employer-provided health insurance.

Healthy Competition by Cannon and Tanner

All of these moves are intended to shift market power toward patients, away from federal and state governments, away from employers, and away from insurance companies. They are in the spirit of the approach to health care of the Cato Institute, a libertarian think tank. The book Healthy Competition: What's Holding Back Health Care and How to Free It, by Cato's Michael F. Cannon and Michael D. Tanner argues that the woes of the health care system today would diminish, if not vanish, with greater competition among health services providers for the dollars of consumers — i.e., the patients themselves.

On page 14 Cannon and Tanner state, "By hindering the competitive process, government actually makes it more difficult for the medically needy to obtain care." By that they mean that the present federal policy — not taxing employers' outlays in providing health insurance to their workers — blunts the employees' own market power. It keeps the workers, as health services consumers, from going to doctors and hospitals that are not part of the coverage plans/networks their employers sign up for, for example. That limits competition in providing health services, causes prices to be higher than they would otherwise be, and encourages consumers to obtain more services than they really need, since they are insulated from paying most of the fees themselves. It also fails to provide a market-oriented mechanism to weed out health services providers whose quality of care is substandard.

If consumers could bypass the current system and (for instance) set up their own unrestricted, tax-free health savings accounts, they could actively shop for the health services and providers that give them, in their own estimation, the best care for the least money.

At least, that is the theory. It is a theory that makes a lot of sense to oldstyleliberal. But he worries that it is no slam dunk that a fully market-based solution would let the "medically needy" among us be able to afford all of the care they need.


Stripped to bare essentials, the current health care financing system, imperfect as it is, is intended to allow American health care costs to be paid for by someone else — someone other than the person receiving the health care.

A couple of years ago when oldstyleliberal had to have heart surgery, the total tab, before his insurer adjusted the amounts originally charged by the service providers, was over $70,000. After adjustments of around $24,000, the tab was reduced to approximately $44,000, of which yours truly paid only a little under $3,900 out of pocket. The insurance covered over $40,000.

Translation: premiums paid in by other people in the same Blue Cross-Blue Shield insurance pool kept oldstyleliberal from having to shell out more than $40,000 of his own money.

Looked at another way, oldstyleliberal recouped (very roughly) 25 years worth of his own earlier premiums that he had paid into the health insurance system over time. But if he had not put that much into the kitty over the years, his benefits would have remained the same. It's more accurate to think of his expenses as having been picked up by other current premium payers.

Each one of those payers, if they live long enough and have enough of their own medical woes, can expect to see the favor returned someday. Still, it's a crap shoot whether any one person or any one family will ever recoup their accumulated premiums. Some people will put more money into the system than they take out, while others will take out more than they put in. The latter will go to their grave having had some portion of their lifetime medical expenses paid for by someone other than themselves.

Depending on how far market-based health care reforms are taken, it is entirely possible that few Americans will continue to have health insurance that pools their financial risk with that of many, many other people, so as to allow the medical expenses of Peter to be paid for, sometimes, by Paul.

According to this Wikipedia article about health savings accounts, for instance, increased reliance on of HSAs could cause "people who live healthy lives [to] leave insurance plans while people who chose to live unhealthily [would] avoid HSAs." Then the medically needy might find that the insurance plan they have (if any) ceases to be affordable, as canny lower-risk individuals switch to so-called "large HSAs" and leave behind those whose medical bills are chronically high. With payouts per person, on average, going higher, the insurance companies would be forced to raise premiums. Those who couldn't afford the steeper premiums and who lack HSAs might find themselves frozen out of the system entirely.


So it looks as if there is a tough choice to be made by voters. Do they want a health care reform package that sets up mandates to join a new, government-run insurance plan, if only as a last resort, in lieu of private insurance? If so, then one of the Democratic plans should fill the bill. But such a program would probably further distort today's health-services markets by blunting the market power of the individuals being served, further decoupling their choices as consumers from their own pocketbook exigencies, and increasing even further the market power of impersonal bureaucracies to make choices on their behalf.

Or, do voters want a system that allows people to shop more directly for their own medical services on the basis of quality and cost? That would put the burden on all of us to be canny consumers of "products" that — when we are sick, fearful, and in need of them the most, we don't like to think of as being in the same bargain-hunting category as computers and cleaning services.

(Cannon and Tanner talk of Americans who, needing heart surgery, chose to have it done in India where success rates were just as high but costs were much lower. But how many of us would even consider that possibility? oldstyleliberal, when he had a heart operation, would never have considered such an option, even if it had occurred to him at the time to do so.)


It is certainly possible to mix and match initiatives from today's two main styles of health reform proposals. There could be, for instance, a mandatory public health insurance plan set up for the currently uninsured, as long as they didn't set up "large HSAs" instead. Whether such a hybrid approach would make things better or simply cancel out one another's strong points is something oldstyleliberal would not care to speculate on. That's surely a job for Congress, which will have to pass upon the proposals of whatever candidate, from whichever party, takes the oath of office as president in January 2009.