As you should know by now, you should be reading Jonathan Cohn every day. And yesterday was no exception. He wrote, Is Obamacare Making Insurance Cheaper in Your City? It is primarily concerned with the new Kaiser Family Foundation study that I wrote about yesterday morning, Good News About Obamacare Doesn’t Get Out. But Cohn went into a bit more depth about the issue, as he usually does.

I was very struck by the end of the article where he talks about how the lower premiums will be distributed. He provided the example of Los Angeles where the decrease in premium is due to lower prices offered by Anthem. So if people have Blue Shield right now and decide to just keep it next year, they may end up paying more. Cohn commented, “It’s confusing, I know. And you can safely assume that not all consumers are going to understand this. It’s going to cause real problems come open enrollment time, particularly since some people will choose to re-enroll in their current plans automatically.” Indeed it is confusing.

This is one of the many problems with neoliberal policy. There is this idea that people have nothing better to do with their time but to look at all the options for health insurance each year and decide which one is best. To conservatives, this is called, “Freedom!” But it doesn’t feel much like freedom to the average American who is already busy making ends meet. It reminds me of the lines at the grocery store. I think most people would prefer a single queue where they know they would be treated fairly rather than the current system where the most obnoxious people dash to the next check-stand that opens.

What’s more, the economics of neoliberal policies are never fully worked out. These policies normally have huge opportunity costs. But they are ignored because it is a cost that is far greater on the poor (with little political power) than it is on the rich (with much political power). I know that we consistently get saddled with neoliberal policies because we are told that they are the only ones that are politically viable. But the reason they are politically viable is because they benefit the rich, and the country is run by and for the rich.

I’m glad that Obamacare is working out well. There is no doubt that it is far superior to the system we had before. But it is still suboptimal. We continue to use “free” markets to provide services, even in cases where those exact markets were a total failure. Look at the way that those in the so called Education Reform movement are so eager to destroy the public school system because they claim it is broken. If only these people applied the same thinking toward the healthcare system. But of course, the two are exactly opposite. Destroying public schools is seen as in the interests of the rich, and protecting our byzantine private insurance system is seen as in the interests of the rich.

You can predict government policy with a simple procedure. Does it benefit the rich? If so, it is the mainstream policy. If not, it is out of the question — not even worth discussing — “commie talk.” Are you enjoying your oligarchy?

I’m sure you’ve read about The Economist review of Edward Baptist’s forthcoming book, The Half Has Never Been Told: Slavery and the Making of American Capitalism. The anonymous reviewer concluded, “This is not history; it is advocacy.” That was because Baptist just focused on how slave owners forced more productivity out of slaves. The reviewer just couldn’t understand why he didn’t spend any time on all the slave owners who got their slaves to be more productive by being nice to them. You can catch more flies with honey than with vinegar! Am I right?!

There has been a lot of comment on this review, but most people just think it is funny. It is so over-the-top offensive that it is hard to take it seriously. Or maybe we are all so used to it by now that we figure, “Of course a conservative magazine would write that.” Michael Hiltzik at the Los Angeles Times noted that the review was very similar to what The American Spectator wrote about the film 12 Years a Slave, “If ever in slavery’s 250-year history in North America there were a kind master or a contented slave, as in the nature of things there must have been, here and there, we may be sure that Mr McQueen does not want us to hear about it.” Yeah! Can’t we get a little Margaret Mitchell fiction to cut the bitter taste of Solomon Northup’s nonfiction? A little balance, that’s all we want! Am I right?!

The Economist has reacted the way you would expect from a British publication. They admitted their error and moved on. In place of the article is an apology, Our Withdrawn Review “Blood Cotton.” (For transparency, they rightly leave the article after the apology.) And they don’t try to justify or minimize:

So good for The Economist. But the question is naturally raised: why is it that conservatives — Libertarians most especially! — are so often trapped by a kind of slavery apologia? One would think that believers in freedom would be especially offended by slavery. Yet they are forever making arguments that slavery was on its last leg and this nonsense about how slave owners treated slaves well because the slaves were valuable “property.” What’s with that?

I think there are two issues. The first, and less important, is that they define “freedom” in such a way that it is meaningless. For example, freedom is “paying no taxes.” It is not “the ability to find work.” Conservatives believe that the government has a role in enforcing property rights. But it has no role in seeing that people who were born poor after all the property was divvied up have an option to make a living. Thus, it isn’t surprising that such a skewed idea of freedom would cause them to get confused about an issue like slavery were the slave owner is, after all, extremely free. And eliminating slavery requires collective action, which they hate.

The second reason that conservatives tend to minimize slavery is much more important. Conservatives have created a kind of idolatry. In its most simplistic form, this is a religion where the founding fathers were demigods who produced the divinely inspired Constitution and so on. Slavery puts a real damper on this party. If God was really behind the founding of America, why didn’t he get rid of slavery instead of coming up with that three-fifths clause? Thus, conservatives need to minimize the horror that was slavery to make it at least seem acceptable enough that it could wait 77 years.

Of course, the knowledgeable and intelligent people at The Economist don’t fall for such a thing. They believe something more sophisticated: free market ideology. But this is no more defensible. If free markets work so well, why is there slavery? And note: during slavery, it was those in the South — the slave owners — who were in favor of free trade. In the north, the fledgling industries wanted economic protection. So, far from being anti-free-market, slavery fully embraced it. I’ve been in many arguments with libertarians about this, but the arguments are not good. They all come down to, “But protecting people from slavery is one of the things we do need a government for!” Of course, the kind of weakling government they want would never have the power to stop slavery. It’s all nonsense.

I think that intelligent conservatives need to take a close look at themselves. When The Economist can push an idea that is normally reserved for confederate apologists, it is clear that there is racism festering in the core of conservative ideology. It’s great that the editors of The Economist were quick to admit their error. But that error indicates something going very wrong at the magazine and the conservative movement generally. But maybe I’m being unfair. Maybe all political movements have racism bubbling under the surface. Am I right?!

Actually: no. I don’t think so.

“Benghazi!”

I heard that Fox News had a big scoop: an interview with the five commandos who have come together to write the soon to be released, 13 Hours: A Firsthand Account of What Really Happened in Benghazi. You know how it is: when the right wing start talking about Benghazi, you have to find out what it is even though you know that for the umpteenth time it will be nothing.

So I went to Google News and entered the search term “Benghazi.” And what comes up is, of course, Fox News stories. Not just them, though; there are also articles in The Blaze and World Net Daily. What’s more, there are articles on liberal sites wondering just what the hell Fox is on about now. The best of this is Olivia Marshall’s article at Media Matters, Fox’s Newest Benghazi Conspiracy Immediately Debunked By Fox Guest.

Yesterday, supposed straight news guy Bret Baier announced that it was a “dramatic new turn in what the Obama administration and its allies would like to dismiss as an old story.” But as Marshall shows, this idea was dismissed by Charles Lane during that broadcast:

What’s more, this is not news. We already knew this. The commandos are trying to make a bunch of money, which they can do both because Fox News and other conservative outlets have been pushing the supposed Benghazi scandal for the last two years, and because they are pushing it now. Normally, books promising to tell “what really happened” need to offer something more than publicly available information.

Igor Volsky at Think Progress wrote about what is really going on here, The Amazing Shrinking Benghazi Scandal. It really is quite amazing. It is as if after all the Watergate investigations, it had turned up the fact that the conspiracy stopped at G Gordon Liddy. Of course, in the case of Benghazi, it doesn’t seem as though they’ve even managed that. The whole conspiracy theory started with the likes of William Kristol writing, “It would have been a presidential decision.” And now it is, “The contractors say that the CIA station chief [acted] on his own authority and was not operating under orders from anyone in Washington DC.” So there is a difference of opinion about the response to the situation on the ground at the time. The worst you can say is that the station chief was wrong and even that doesn’t seem to be the case.

The right wing seems to have one thing and only one thing left in this scandal.

“Benghazi!”

Ezra Klein wrote an article this morning with some extremely positive news, The Obamacare Train Keeps Not Wrecking. It is primarily about some new information from the Kaiser Family Foundation that shows that where we have data, insurance premiums on average are going to go down next year. That in itself is a big deal because healthcare premiums pretty much never go down. But this is especially notable because the most recent claims from conservatives have been that there will be “rate shock” next year and that premiums will go up by double digits.

The worst case that Kaiser found was in Nashville where the premiums look to go up 8.7%. But this is more than offset by declines in places like Seattle (-9.8%), Providence (-11.4%), and Colorado (-15.6%). Of course, you aren’t likely to hear much about this in the news. Ten months ago, Intelligence² held a debate with the title, Is The Affordable Care Act Beyond Repair? In that debate, 16% started in favor of the motion; 32% ended in favor. That’s the nature of public coverage. Since then, there has been nothing but good news about Obamacare, yet that news has gotten shockingly little coverage.

Part of that is simply that “good news” is no news. The problems with the website were clear and potentially disastrous. But all the news since then has been of the nature, “Obamacare working as intended — but better.” Even if suddenly everyone in the United States had health insurance because of Obamacare, it would get at most a passing reference on the nightly news.

But there are some places that are determined not to report even the best of news:

It would be getting blanket coverage, of course. But what coverage is the good news getting? Not a drop.

This gets to an important point about Fox News and other outlets that I try to explain to people who consume “news” in this form: the greatest propaganda aspect of this kind of reporting is not in the reporting itself; it is in what is and is not reported. Look at Solyndra — the solar panel company that went out of business. It was a small story. But the right wing media beat on it for years. The story was that it had gotten a large government loan. This was seen as some kind of scandal, even though the vast majority of money in that loan program was paid back. But the full context was never reported by them. After other mainstream outlets pushed the full context of the loan program, the right wing simply dropped it. And this is why you will still find conservatives ranting about it: after blanket coverage, the right wing media just dropped it and their consumers were never the wiser.

The problem with this is not just that conservative voters get their news from biased sources that simply ignore any ideologically inconvenient information; the conservative elites do the same thing. And this is how the entire Republican Party has managed to go on tilt. Notice that despite the internet allowing people to get far better and more thorough news about the world, conservatives have allowed themselves to be cocooned in a hermetically seal media system that is even more limited than the news people got from the television in the 1950s.

What is most problematic about this is that the right wing echo chamber is only sealed regarding information getting in. The people who watch Fox News all day and every day think they are well informed. Most people don’t pay much attention to politics, so they are not able to go to family gatherings and rant about global warming being a conspiracy and Benghazi being a conspiracy and Fast and Furious being a conspiracy and so on. But the dedicated Fox News viewer can — and will. So all the looniness of the right wing gets spewed out. And it has an impact. One of those is the continued ignorance about Obamacare that is turning out to be a far greater success than I ever dreamed possible.

Update (6 September 2014 5:03 pm)

Paul Krugman posted something about the mechanism I discussed here, A Note on the Dynamics of Misinformation:

If you look at economic data even as casually as I do, you cannot have missed noticing that the United States’ economy does better under Democratic presidents than it does under Republican presidents — a lot better. Looking at all the presidents after World War II, the economy grows at about twice the rate under Democrats as it does Republicans. I’ve never thought that much about it. I’ve always figured that it was due to a lot of luck.

Well, I was just over at Mark Thoma’s blog (absolutely essential daily reading if you are at all interested in economics) and he posted a paper by Alan Blinder and Mark Watson, The US Economy Performs Better Under Democratic Presidents. Why? These two Princeton economists look seriously at this question and conclude… Well, they are academics and so it is all very nuanced and complicated. But let me see if I can lay it out for you.

First they looked at both fiscal and monetary policy to see if that explained anything. There was no correlation with fiscal policy (stimulus), and the monetary policy actually favored the Republicans. So the two colossal economic drivers have nothing to do with the fact that Democratic presidents are far better for the economy than Republicans. That’s important to remember.

They next looked at five kinds of economic shocks that might indicate that it is just a matter of luck. The shocks are: oil price; productivity; foreign growth; consumer expectations; and defense spending. When they included all of these, half of the effect was explained. But that doesn’t mean that these things are all random. Oil and military shocks are both affected by government policy. What’s interesting is that consumer confidence goes up during Democratic presidencies. This is a big part of the correlation. The authors ask, “Did [the public] know something economists didn’t?” All I can say is that it wouldn’t be surprising; the economic profession is known for its cluelessness.

But that leaves half the effect of better economic performance under Democratic presidents unexplained. I have an idea: it’s the policies, stupid. Especially over the last four decades, Republicans seem far more interested in enriching their already rich friends than doing what is best for the economy. For example, I’m sure that the Iraq War was terrible for our economy. The economy did grow through the early years of it, but that was what it was already doing. I’m talking opportunity cost here. We could have built roads and bridges and factories; we could have educated more people and done more research; in other words: we could have built our nation’s infrastructure with the money we spent blowing up things in Iraq. I have been very hard on both Presidents Clinton and Obama for their foreign policies. But there is no doubt that as lethal as their policies are, they are not huge economic drags.

Similarly, when Republicans want to stimulate the economy, they generally do it in the most inefficient way possible: they give lots of money to people who already have more money than they can spend. Democrats are much more efficient with programs like the payroll tax holiday and extended unemployment benefits. While Blinder and Watson looked at total fiscal policy, they didn’t look at it’s effectiveness. I suspect if they did, they would find a big effect there as well.

So the bottom line is that Democratic presidents produce better economic growth because they offer better economic policy. The Republican prescription of convincing people to vote for them to “get the darkies” so they can give tax cuts to the rich and start bloody good wars does not lead to a good economy.

Mark Thoma wrote an interesting article over at CBS Money Watch, Sagging Job Growth: It’s Not Just a Skills Gap. The idea is that the reason the rich are getting richer than the poor is because they went to college and so their job prospects are better because their skills are more in demand. There’s just one problem: that doesn’t seem to be the case. In fact, readers of this blog should be well aware of the issue.

Thoma is a careful guy, so he won’t come right out and say it. But I will: the “skills gap” is little more than apologetics designed to minimize economic inequality. Paul Krugman is fond of pointing out that all the 80,000 odd public school teachers in New York have a combined salary equal to a single hedge fund manager, even though the education level of the jobs is about the same.

This isn’t to say that education and training have nothing to do with inequality. It is just that it isn’t a primary cause and that is what the research Thoma reported on demonstrates. The big issue is what David Harvey has been ranting about for many years: capital can move anywhere, so jobs go where they are cheapest. This causes what seems to be a problem in the system: businesses can only sell things as long as people have the money to buy them. An impoverished middle class today implies an impoverished upper class tomorrow.

Regardless, there is a fundamental problem with the idea that it is the skills gap that creates inequality. Dean Baker wrote about it on Tuesday, Actually, the Chinese Can Do the High-Skilled Jobs at Lower Cost Too. The idea that only Americans can do highly skilled work is, in addition to being arrogant, just wrong. As I am well aware: there no kind of high tech work that you can’t find someone in Romania who is just as qualified to do for half the cost. This is why American companies are so keen to get more H1-B Visas approved in the United States. It ain’t about getting skills that are unavailable here. It is about getting skills that are available all over the world for less money.

It isn’t limited to high tech either. As Baker talks about a lot, there are great doctors all over the world. The reason that they aren’t here is because the American Medical Association has managed to get the government to protect their jobs. So over the last three decades, we’ve see the government allow globalization as it is related to manufacturing workers. But doctors, lawyers, and college professors have been protected. So that’s the reason that there is any kind of basis for the skills gap: if you can get into one of the protected professions, you will do well. But that isn’t because of the skills gap. Rather, it is just government policy.

Whenever you hear someone talking about how the reason we have inequality in this country is that the poor are not getting college educations, remember this. Of course, I think in ten years no one will be able to make this argument. As it is, those with recent college educations are finding the job market really hard. The main thing they have to show for their college degrees is large amounts of debt. And that too is government policy.