Creature Feature: Woody Takes a Long Shower

Enquiring minds want to know, is it warm or is it cold?

The Senate's Health Care Bill

Like all compromises necessary to garner support from fence sitters in Congress, the Senate health care bill is not as strong as progressives would like, but it does preserve a government health plan as part of the proposed health insurance exchanges. The public option is not as robust as it started out, primarily because the legislation requires reimbursement rates be negotiated with the private health insurance sector, and allows states to drop out of the program by passing their own legislation. All legal residents will be required to have health insurance by 2014 or face fines. Employers with more than 50 employees would have to pay $750 per full-time worker if any of them obtained subsidized coverage through the exchanges. By these mandates and changes to Medicare and Medicaid, the bill intends to cover 94% of Americans.

The Congressional Budget Office (CBO) expects that only one out of eight people purchasing coverage through the exchanges will enroll in the public plan. It also estimates, perhaps overly so, that seventeen states will opt out leaving only two-thirds of the population residing in states where the public plan is available. CBO expects premiums for the public plan to be slightly higher than private plans offered in the exchanges since the premiums must cover the cost of claims, administration, and a contingency reserve. The plan will have lower administration costs, but will attract "a less healthy pool of enrollees" due to "less management of utilization" by the Department of Health & Human Services. Progressives can only hope that California opts out and leads the way to a more efficient single payer system in the future. But Senator Henry Reid's version is at least half a loaf better than none. According to the rating by CBO, the plan does save the government money: $130 billion between 2010 to 2019. US Person predicts that a bill close to the Senate plan in content will come out of conference committee minus the unacceptable (and perhaps unconstitutional) limitation on private funding of abortion that House conservatives forced onto its bill as political ransom for passage.

Yes, We Did Torture

A positive development to report from the anti-torture front: Attorney General Holder has announced that the Office of Professional Responsibility report on the role of Department of Justice attorneys in justifying the use of torture in violation of international and federal law should be publicly released by the end of the November. This is only a first step toward holding US officials accountable for their implementation of torture as official US policy in the so-called "Global War on Terror":

The administration also did the right thing by deciding to try major terrorists in federal criminal court in Manhattan and not by military commission in a private chamber of the Guantanamo gulag. The public criminal trial is sine qua non for reestablishing the rule of law after eight years of an installed regime that shredded the Constitution in the name of national security. If Americans are to remain a free people, they cannot afford to be afraid, despite political opinions--no matter how asinine--to the contrary. The US criminal justice system has prosecuted 195 terrorists since the attacks of September 11, 2001 with a 91% conviction rate.

China, the Ugly

Want to know why our biggest trading partner and creditor can produce so many consumer products cheaply, flooding our market to the point of endangering the health of our own economy? Beside cheap labor, industrial production in China enjoys the freedom to dump and pollute where and when it likes. These graphic photos by a Chinese freelance photographer are examples of what economists hygienically refer to as "uncompensated externalities" which make extremely low costs of production possible. The Chinese waste their land because Americans buy their stuff in container ship loads. Think about Earth that the next time you head to Wal-Mart to do your Christmas shopping.

[credit: Lu Guang; an elder covers his nose against the smell of the polluted Yellow River]

Chart of the Week: Let Them Eat Prozac

source: www.calculatedrisk.com

Conventional economic wisdom is that full employment and inflation are correlated. Workers with money in their pockets bid up prices--a case of increased demand for limited supply (demand-pull in Keynesian terms). There are other sorts of inflation, notably relevant now as the Fed drastically expands the money supply, is monetary inflation. Here is a chart which shows the inverse relationship between the Federal Funds rate, a key tool used by the Fed to control inflation, and employment. As you can see the Federal Reserve usually does not increase the discount rate until after a peak has been reached in unemployment. You are at the top of the red line on the right. Think of it as a greater misery leading indicator.

Americans Want a Strong Public Option

Senator Dick Durbin (D-Il) conducted an on-line poll to find out what kind of public health insurance plan we want. The poll was not intended to be scientific, but US Person thinks its a good representation of what progressive voters want, so he shares the results here:

• Out of a possible 10 the average ranking for a fifty state fully funded public option was 8.56;
• 65% of respondents completely opposed any "trigger" mechanism because they know it will never be used;
• an "opt-out" public option as proposed by Senator Henry Reid scored 5 out of 10 while an opt-in provision supported by the insurance industry handmaiden Ben Nelson (?-NE) scored 2.3.

The poll counted 83,954 responses. The message is clear: American want real reform.

Elephant Walk

No, not the 1954 film melodrama* starring the irrepressible Elizabeth Taylor, but the actual migration corridors used by generations of intelligent and sensitive elephants. An Indian high court ruled in favor of elephants over land developers, prohibiting construction blocking their routes on the Segur Plateau and around Mudumalai tiger reserve. According to wildlife officials only four corridors will be secured by the interim ruling among the 88 passages listed as critical by the Wildlife Trust of India. Conservationists have been working to purchase private land across India to connect protected areas for the pachyderm residents of India.

*Even though the film concerns a tea plantation manse built athwart a traditional elephant path in Ceylon, the elephants in the poster appear to be African, but reality never stopped Hollywood.