Greta Garbo Wants to Be Alone

Greta GarboA couple of important scientists were born on this day. The first is Adrien-Marie Legendre, who was born in 1752. He was actually a mathematician, but that’s close enough. He did a lot of great work. For example, his work on polynomials led to Galois theory. And he proved Fermat’s last theorem for n = 5. But most of all, he is known for the Legendre transformation. It allows you to transform a function from one set of variables to another. There are two classic examples of this. One is to transform the Lagrangian formulation of classical mechanics into the Hamiltonian formalism. The other is the transformation of thermodynamic internal energy—which we can’t measure—into enthalpy and other variables that we can measure. Unfortunately, the mathematics is not easy—it requires about a year of calculus and even then, it isn’t exactly trivial.

The second scientist is Leon Foucault who was born in 1819. If you’ve ever been to a big science museum, you have doubtless seen the Foucault pendulum. Basically, the idea is that the pendulum—because of its inertia and slow rate of rotation of earth—continues oscillating in the same direction. So as the earth rotates, it looks like the pendulum precesses. This was the first very simple and readily understandable experimental demonstration that we are, in fact living on a big ball that is spinning around. Of course, Foucault did much else in his short lifetime. He did a lot of work with electromagnetism and performed one of the earlier measurements of the speed of light.

Other birthdays: Dutch realist painter Anton Mauve (1838); novelist William March (1893); actor Jack Warden (1920); the best of The Ramones, Dee Dee Ramone (1951); actor James Gandolfini (1961); singer Frankie Avalon (74); comedian Fred Willard (74); journalist Chris Hedges (57); and cyclist Lance Armstrong (42).

The day, however, belongs to the great actor Greta Garbo, who was born on this day in 1905. At this point, she is probably better known for disappearing from public life for the last 50 years of her life. But she really was a great actor. She had an extremely naturalistic style when such things were rare. Here she is in Grand Hotel saying the line she is most remembered for, “I want to be alone!”

Happy birthday Greta Garbo!

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Dems Look for Reasons to Move Right

Kick Me!Ezra Klein wrote an article this morning, The White House Doesn’t Think it Can Prevent a Government Shutdown. It is all about how the White House is ringing alarm bells for business interests that the Republicans really are crazy enough to close the government and throw in a nice default sweetener. The idea is that hopefully, the the big Republican fundraisers will apply some pressure and stop the madness.

As far as all of this goes, I believe that the administration should always have taken this approach. The Republicans only respond to power and giving them power by allowing them to use the Debt Ceiling as leverage was a bad idea. But Klein mentioned something that greatly concerns me:

The White House believed, in its gut, that Republicans had been given a mandate in the 2010 elections to extract exactly the kind of concessions they were demanding.

This is a big part of the problem with Democratic politicians. I spent months after last year’s election ranting about how the Republicans were not going to moderate just because Obama won a solid victory. What’s more, I argued that they shouldn’t moderate for that reason. National elections are national elections. Just because Obama won didn’t mean that any given congressional district voted for him. Clearly, the Republicans (Rightly!) didn’t listen to the idiot pundits. But when the situation was reversed, I guess the Democrats did. Of course, that’s also what they did when Reagan became president. We would have a much better country today if they had continued to represent their constituencies rather than yielding to Reagan’s supposed mandate.

But the situation was even worse when Obama and his people were thinking that the 2010 elections were a mandate to cut social spending. In fact, the situation was exactly the opposite. The Republicans did well during that election because they got the people to think that Obama had cut Medicare coverage. So these people weren’t voting for the Republicans because they wanted more cuts—they were voting for the Republicans because they wanted less cuts—especially on entitlement programs! And remember, that was Obama’s “grand bargain”: cut entitlement programs in exchange for higher taxes. There is no way that the people voted for that!

Democratic politicians are always looking for opportunities to turn right—to move their policies closer to the Republicans’ extreme and unpopular positions. In this sense, liberalism is dead in the United States. When the people rise up and vote for what they think are liberal politicians, all they end up with are moderate policies. Ted Kennedy was still alive and the Democrats had 60 votes in the Senate when the White House offered up a pathetically underfunded stimulus that was one-third tax cuts that aren’t very effective anyway. And in the early discussion of healthcare reform, there was no serious discussion of a single payer system or even much support for a public option. From the very beginning it was the Republican healthcare plan. That’s what we get from our modern Democratic Party when it controls all the branches of government by a wide margin: Republican policies that get no Republican votes.

After everything that has happened and some quite terrible stuff that probably will happen, I won’t be shocked if the people vote the Republicans back into office. As a practical matter, they cause the government to grind along in the worst way possible. At least they are hypocritical enough to do a better job when they are in power. If Mitt Romney were in office, we would probably have had some kind of jobs program by now. Sure, it would have been inefficient and larded up with deficit expanding tax cuts that the Democrats would feel compelled to fix through more spending cuts once they were back in office. But it would have done a lot of good nonetheless. So if the people think that’s a better thing than paralysis and at best moderate to conservative policy from Democrats, I wouldn’t fault them for it.

Republicans New Healthcare Distraction

Marketplace Magic: And Then a Miracle OccursI’ve been waiting a while for Steve Scalise’s press conference, but I don’t think I need to wait any longer. This afternoon, he is gong to present the Republican Study Committee’s “alternative” to Obamacare. The reason I don’t have to wait is that I’ve always known what their alternative is: the same conservative wish list that they always want. Bruce Alpert at nola.com provides us with a preview, Rep. Scalise’s Conservative Caucus Presents Alternative to ObamaCare.

The main thing that the Republicans are offering is high risk pools to cover people with pre-existing conditions. This is the perfect conservative policy. You see, it seems to fix a problem without really doing it. The high risk pools are more or less the answer for the problems faced by rich people with pre-existing conditions. So people with pre-existing conditions can go to these high risk pools, but most won’t be able to afford them. Brilliant.

The next idea is to “increase competition” by allowing people to buy insurance across state lines. All this will do is cause all the insurance companies to relocate in the state that has the least regulation—just like now happens in the credit card industry. Aaron Carroll explains what the end result would be, “What we would have is a world where it would be likely cheaper for those who don’t need health care to get insurance. For everyone else, especially those who need care, insurance would be more expensive, and care harder to obtain.” That’s a typical reverse Robin Hood kind of policy: take from those in need and give to those not in need.

The plan also includes health savings accounts (HSAs). They allow people to buy high deductible insurance policies at reasonable prices while having tax deferred savings accounts to pay for everything up to the deductible. The problem is that for a plan with say a $2,000 deductible, you will still be paying over $100 per month—most likely much more. That’s not a great deal when you consider that more than half of the uninsured will be able to buy a normal insurance plan for about $100 with Obamacare. There is also the problem that people with HSAs are incentivized to avoid preventative care. What’s more, these are not really plans for the poor; those most able to use them are probably already getting insurance from their employers.

Basically, the Republican Study Committee’s answer to the healthcare crisis in this country is the same as it always is: the magic of the marketplace will fix everything. It is like the old cartoon of the two mathematicians at the chalkboard. There is math on the right and the left connected with “Then a miracle occurs.” We start with high healthcare costs that have existed despite all kinds of free markets working on the problem. And we end with low healthcare costs. How? Magic! Of course the Republicans don’t actually believe in the magic of the marketplace. They simply don’t want to do anything to help the poor and weak. This plan that Steve Scalise is presenting is not actual policy; it is simply political cover. But don’t be surprised if it gets a lot of good media attention.

Update (18 September 2013 1:05 pm)

I blew it! I forgot one of the Republican’s favorite policy ideas: tort reform! Yes, allowing people to not sue their doctors for malpractice is going to save our medical system! This too is a myth. Anyway, The Hill provides a preview of the official plan. I thought this part from the article was telling:

Roe said Scalise came to him a few months ago with a set of marching orders. “He said you can’t have any mandates in this bill. You can’t raise taxes. You’ve got to reform the tax code, but there can’t be any subsidies involved,” Roe recalled.

This is why Republicans always come up with bad policy. They start with everything that they can’t do. So they never approach any problem with, “What’s the best way to solve this?” And so they provide justifications for why all the things they always want to do will fix this problem. It’s just propaganda, not policy.

Companies Maximize Profits—Period

Matt YglesiasMatt Yglesias is a curious fellow. Yesterday he wrote, Post-Ballmer Microsoft Announces Plan To Become Much Lamer. By “lamer” he means that instead of doing something interesting with its cash flow, Microsoft is doing a stock buyback and paying more dividends. Instead, he thinks that Microsoft should find a way to “elbow into new markets.” He admits that this has not worked out all that well for the company over the past few years, but that it has been really good for the industry and for the world.

This is an argument that Yglesias has to make every couple of weeks. I think it’s like Tourette syndrome or something, because it doesn’t make sense. Capitalism doesn’t work by having companies do what is best for everyone. The idea instead is that everyone tries to do what is best for themselves and given time, it will end up that everyone does better. It is ridiculous to call for companies to do anything but look out for their own best interests. And Yglesias must know this.

I get into this argument a lot, especially with conservatives. Most liberals understand that companies are not going to, for example, pay higher wages out of the goodness of their hearts, even though it might be better for the economy as a whole. This goes right along with liberal thinking about the need for rules and regulations in the market. Conservatives, on the other hand, are generally more outraged when they see companies taking advantage of employees or exploiting loopholes. And strangely, this allows conservatives to maintain their belief in not regulating businesses. The idea is that businesses will do what’s right if government just “gets out of the way.” But that is not how capitalism works nor is it the way we should want it to work.

Now, Matt Yglesias is not a conservative. But he does have a distinctly pro-market bias. Of course, so do I! So I don’t really understand where he’s coming for. When he was earlier saying that Apple ought to reduce its huge profit margin on the iPhone, at least he had a business strategy. He claimed that Apple could destroy the smartphone competition. But in the case of Microsoft, he admits that doing what is best for the consumer market has not been good for Microsoft. So why should they do it? Microsoft is not in the business of making the lives of people better; it is in the business of making money.

Over thousands of years, we have seen that expecting businesses to do what is best for the society at large is a vain hope. And I think loose talk by people like Yglesias is quite harmful. It perpetuates the myth that businesses do something other than relentlessly pursue profits. And that gives people all kinds of strange ideas like “trickle down” economics. “Once the companies are profitable enough, they will raise wages!” No, not really. Have the incredible profit margins that Apple makes caused them to move production to the United States? Have they caused them to invest more money in R&D? Have they done anything other than allow the company to pile up more and more money? No. No. No.

We need to manage the economy so it works better for the society at large. Markets really are helpful in distributing the resources of an economy. But left to itself, the economy doesn’t function well even for the richest people. We must get past the notion that businesses are going to do what’s right by the people. They won’t and we should expect them to.