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Health insurance disproportionately benefits sick people

the economistMar, 12/02/2013 - 17:58

OF ALL the Slate-worthy pitches on all the websites in the world, Ben Smith's had to walk into my RSS feed:

Obama Prepares To Screw His Base

Young people reelected the president. Now they get to pay disproportionately for ObamaCare.

Can you see what's wrong with this story yet? We're just in the sub-head here, but I bet you can. Can't you? Yes, that's right: young people will, most likely, pay disproportionately for Obamacare, since young people tend to be healthier. In general, healthy people pay disproportionately for health insurance, since sick people are the ones who receive all the benefits. Also, young people pay disproportionately for Social Security; people whose houses don't burn down pay disproportionately for fire insurance; people whose flights aren't canceled pay disproportionately for travel insurance; and so on.

Ezra Klein has a more thorough debunking of Mr Smith's story, which shows that it's not only tautological if true, but possibly just plain not true. In fact, since Obamacare redistributes money from the (older) already-insured to the (younger) not-currently-insured, and via tax subsidies from the (older) rich to the (younger) poor, and since it's paid for partly by cutting Medicare cost growth, it's not at all clear that it involves a net redistribution from the young to the old. Sarah Kliff interviews the director of the Young Invincibles, a group that advocates specifically for young people's interests in health reform, who says she expects "the Affordable Care Act is going to have a lot of positive outcomes for young people." Notably, because young people earn comparatively little, 90% of them are likely to qualify for Obamacare's insurance subsidies, meaning they may pay less for insurance than they do now.

Mr Smith acknowledges that some young-to-old redistribution is inevitable in any universal health-insurance system. For some reason he plugs away with his thesis anyway. But beyond the misguidedness of the particular argument, his article seems to me to involve a failure, rather common in arguments over Obamacare, to understand what kind of product health insurance actually is. Mr Smith writes that Obamacare will "[limit] what the elderly pay in part by forcing young people to carry a larger share of the total cost of national health care." But health insurance is not health care, and buying health insurance is not the same as buying health care. Health insurance, like all insurance, is a hedge against risk. When young people pay their premiums and enter a system of guaranteed-issue universal health insurance, the good they receive is freedom from the risk of being unable to pay for health care when they are older or sicker. They may pay more in premiums than they get in health care, but still get a good deal, just as they may insure themselves against theft, never be robbed, and still get a good deal.

Whether young people are getting "screwed" involves a judgment about whether the new good they are getting, a lifelong guarantee of subsidised guaranteed-issue insurance that allows no discrimination on rates between the sick and the healthy, and only limited discrimination between the young and the old, is worth the cost they'll have to pay. Is it? Let's compare two kinds of health insurance. With the first kind, you may lose it if you lose your job, or if you get divorced, or if you actually get sick in combination with one of those other factors; the insurer can raise your rates unexpectedly and as steeply as they want as you get older, and if you fail to pay your premiums for a while and lose the insurance, you may never be able to get back in. (Is this, in fact, really "insurance" at all?) With the other kind, the insurer has to give it to you at the same price as anyone else regardless of whether you're sick, rates can rise only to a limited extent as you get older, and the government will subsidise it for you based on how much you earn to make sure it doesn't become unaffordable. Which of these is worth more? Which does more to reduce your exposure to risk?

Programming note

the economistMar, 12/02/2013 - 16:40

BARACK OBAMA will give his first state-of-the-union speech since re-election tonight. If the inaugural address sets the melody for a second term, then the state of the union writes the lyrics, says Kenneth Baer, a former White House aide.

The president gave some hints as to what those lyrics will be at a Democratic policy retreat in Virginia last week. His agenda, he said, “starts with an economy that works for everybody... That is a growth agenda—not just an equity agenda, not just a fairness agenda.” The president's progressive tone is likely to imbue calls for immigration reform, gun control and deficit reduction as well.

As Jackie Calmes writes, many will also be watching the speech for signs of the state of Barack Obama. The president has appeared more confident, even cocky, since November. He has been more assertive in his dealings with Republicans. A more self-assured president may breed a more stubborn opposition, to the detriment of his agenda. But Mr Obama may feel like he is pushing Republicans into untenable positions that will harm their party. Or perhaps it's just hubris.

The speech begins at 9pm ET. Our live-blog will begin shortly before then and take you through the Republican response.

Do American Catholics care?

the economistMar, 12/02/2013 - 00:16

THE resignation of the pope feels like it should be a profound event, and for some in America it certainly is. Those who see Benedict XVI as a blessed successor of Saint Peter, as well as those directly affected by the church's sexual-abuse scandal, are likely to find deep relevance in the pope's decision. But for most Americans, even most Catholics, the pope's resignation is more likely to be viewed like a modern-day royal abdication—an act of symbolic importance, with little actual impact.

A disparate group of people call themselves Catholic in America, but it appears that many of them long ago shed their fealty to the Vatican and its domestic representatives. The issue of birth control presents the most obvious example of this banal heresy. If it was not clear before, America's bishops have left no doubt about the church's opposition to most forms of birth control. Yet surveys show that a large majority of Catholic women use some form of contraception frowned upon by the church, and over 80% of Catholics find birth control "morally acceptable", according to Gallup.

The gap between the church's hierarchy and its flock in America runs much wider. According to an earlier Gallup poll, majorities of Catholics found divorce, pre-marital sex, stem-cell research, out-of-wedlock births, the death penalty and homosexual relations morally acceptable. Church doctrine, of course, says otherwise. Even those who said they went to church regularly were more liberal in their views on these issues than non-Catholic church attendees. In a more explicit criticism of the church's leaders in America, most Catholics say they would prefer their bishops talk about social justice than things like abortion.

Some might argue that the people responding to these surveys aren't true Catholics. But such an argument implies that the number of Americans leaving the Catholic church is larger than previously thought. In 2007 Pew found that about a third of Americans who were raised Catholic had left the faith (though Catholic immigrants are making up for the losses). "This means that roughly 10% of all Americans are former Catholics," concluded Pew. Whether you believe the organisation is undercounting or America's Catholics lack obedience, it's bad news for the Vatican.

The odd thing is, American Catholics have a positive view of this rather dogmatic pope. In fact, 74% say they are satisfied with his leadership. This suggests that the Vatican's primary problem in America is not so much disobedience as it is irrelevance. Like the Queen of England, the idea of a pope is quaint, even popular. But the pronouncements of these elderly white men from Europe, surrounded by similarly frail and pale figures, have carried increasingly less weight with the eclectic mix of Americans who call themselves Catholic and are slowly redefining the faith.

(Photo credit: AFP)

Debating Israel

the economistJue, 07/02/2013 - 19:29

DEBATES about Israel tend to stir up unusual levels of ire and vitriol, driving otherwise smart people to make poor arguments and stoop to childish taunts. This phenomenon has been on conspicuous display this week in New York City, where ten members of the city council sent a letter to the president of Brooklyn College criticising its political science department for co-sponsoring a visit by leaders of the BDS movement, an organisation calling for boycott, divestment and sanctions “against Israel until it complies with international law and Palestinian rights”. The council members were not subtle:

A significant portion of the funding for CUNY schools comes directly from the tax dollars of the people of the State and City of New York. Every year, we legislators are asked for additional funding to support programs and initiatives at these schools and we fight hard to secure those funds. Every one of those dollars given to CUNY, and Brooklyn College, means one less dollar going to some other worthy purpose. We do not believe this program is what the taxpayers of our City—many of who would feel targeted and demonized by this program—want their tax money to be spent on.

We believe in the principle of academic freedom. However, we also believe in the principle of not supporting schools whose programs we, and our constituents, find to be odious and wrong. So, should this event occur, we must strongly oppose it and ask you to reconsider any official support or sponsorship.

The unveiled threat to withdraw funding from the college sparked an outcry from progressives and strong statements defending the council’s move from the Anti-Defamation League and Alan Dershowitz, the outspoken Harvard law professor. The rhetoric was quasi-apocalyptic from both sides: supporters of the department’s right to co-sponsor the panel complained that the city council was engaging in “smear tactics and [a] campaign of intimidation”, while Alan Maisel, a state assemblyman, warned of a “second Holocaust” if the discussion takes place under the endorsement of the college. In a testy email exchange on the issue, Mr Dershowitz and blogger Glenn Greenwald resorted to ad hominem attacks on each other, questioning one another’s rationality, intelligence and integrity. (Mr Dershowitz started the name calling, but Mr Greenwald happily joined in.)

Pressure on Brooklyn College has begun to subside, with Michael Bloomberg, New York's mayor, joining the editorial board of the New York Times and the progressive caucus of the city council in speaking out in support of academic freedom. On Wednesday, Mr Bloomberg used a little hyperbole of his own, comparing the complaining city councilmembers to North Korean censors. His remarks hit exactly the right note:

Well look, I couldn’t disagree more violently with BDS as they call it, Boycott, Divestment and Sanctions. As you know I’m a big supporter of Israel, as big a one as you can find in the city, but I could also not agree more strongly with an academic department’s right to sponsor a forum on any topic that they choose. I mean, if you want to go to a university where the government decides what kind of subjects are fit for discussion, I suggest you apply to a school in North Korea.

The last thing that we need is for members of our City Council or State Legislature to be micromanaging the kinds of programs that our public universities run, and base funding decisions on the political views of professors. I can’t think of anything that would be more destructive to a university and its students.

The mayor is correct on both scores: the city’s heavy-handed interference with academic matters at Brooklyn College is just as misguided as the mission of BDS. The group rejects the idea of Israel as the homeland for the Jewish people and insists on a one-state solution in which Israel as we know it effectively ceases to exist. There is a lot to argue with in these proposals, and there may be better ways to structure a debate about them, but there is no good reason to suppress the department’s right to co-sponsor this discussion. When the event at Brooklyn College convenes this evening, protests and mayhem are sure to accompany Judith Butler and Omar Barghouti, the BDS representatives. As the panelists and audience debate settlements, human rights and whether Israel is an apartheid state (it isn’t, by the way), a conceptual tangle will lurk in the background: what is academic freedom, exactly?

Mr Dershowitz rejects the claim that the city council’s letter threatens academic freedom: it is the members of the political science department, not city pols, who constitute the real threat. How so? Here is how he makes the case:

I know that if I were a student at Brooklyn College today, I would not major in political science for fear that my support for Israel and my opposition to BDS might prejudice me in the eyes of professors whose department has endorsed BDS, thus discriminating against my point of view in the marketplace of ideas. How could I be sure they wouldn't discriminate against my point of view in grading or recommending students? This is the real issue in the hullabaloo over the decision by the Brooklyn College political science department to cosponsor and endorse the BDS campaign at Brooklyn College.

One might ask how rescinding the sponsorship at this point—the move Mr Dershowitz proposes—would make any difference. The department has already voted to sponsor the event (but not to endorse it, a conflation Mr Dershowitz makes consistently) and has, by his reasoning, created an atmosphere of ideological purity on the question of Israel/Palestine where pro-Israel dissenters are unwelcome. The (supposed) damage is done. But let’s assume that a shift at this late date would lift that ideological cloud. Mr Dershowitz cites a few examples of students whose academic freedom would be rescued:

One political science student at Brooklyn College said she was afraid to criticize her department because "that's going to put a target on my back." Other students talked about a "chilling effect" that the department's decision would have on them. And yet another student said that she had "an uncomfortable feeling" about raising her hand and arguing "with a professor who voted for it" and who tried to justify his vote in the classroom.

To put it nicely, this is hokum. A “target on my back”? Please. Academics are not in the business of punishing students who disagree with their political viewpoints. Professors court a diversity of views in the classroom and take an implicit oath to welcome everyone on an equal basis. There are different philosophies as to whether professors should reveal or conceal their political positions when facilitating class discussions, but no one makes the claim that faculty members must remain shills for neutrality outside the classroom.

This is, however, the absurd conclusion we draw from Mr Dershowitz’s argument: professors should resist the urge to profess on (or even sponsor a panel discussion about) a controversial matter lest one of their students with a differing point of view feels alienated as a result. Weighing in on the contraceptive mandate in the health-care bill might offend a Catholic student. Sponsoring a panel discussion on drone strikes might rub a pacifist the wrong way. Arguing in favour of Marx’s critique of capitalism might make a budding libertarian a little sheepish. And yes, a Brooklyn College student who favours a two-state solution to the Israeli-Palestinian conflict may be peeved by the presence of BDS on her campus. But none of these cases count as an assault on students’ academic freedom. Academics write books, give talks, and publish blog posts for The Economist. They also sponsor panel discussions, sometimes by speakers they roundly disagree with. If students are frightened off from a debate so easily—an exchange the department explicitly invites in this case—they would be advised to get a little spine. They’re going to college in Brooklyn, for God's sake.

Amazon coins v trillion-dollar coins

the economistJue, 07/02/2013 - 16:57

AMAZON has decided to create some currency out of thin air, which, as we all know from reading sober financial commentators the world over (especially in mid-continental cities like Chicago and Frankfurt) is a very bad idea. Money doesn't grow on trees! But it does grow on Kindles, or does whenever Jeff Bezos orders it to. The company will be "giving out tens of millions of dollars worth" of Amazon Coins, a "virtual currency" that can be used to buy apps, games and in-app items. As Matthew Yglesias writes:

In macroeconomic terms, you can think of this as a program of aggressive monetary expansion to stimulate the Kindle Fire economy. By delivering a helicopter drop of Amazon Coins to Kindle owners, Amazon is hoping to boost consumption of Kindle Fire content. Not for the sake of increasing consumption as such, but because higher expected demand for Kindle Fire content should stimulate investment by third-party firms in the development of Kindle content.

The border between doing this within the universe of the Kindle Fire economy by creating Amazon Coins, and doing it in the "real" economy by creating dollars, is porous. The reasons why you would want to do it in the Kindle Fire economy are some of the same reasons why you might want to run expansionary monetary policy in the real economy. The goods you'll buy with your Amazon Coins are goods that can also be purchased with dollars, and in principle it would make sense to let people buy Amazon Coins for dollars at a discount, just as people can sell other kinds of virtual currency they acquire in multiplayer online games. And yet people treat the creation of Amazon Coins as a routine marketing device, whereas many reacted last month to the prospect of the government minting a trillion-dollar coin to defuse the debt-limit crisis with a sense of bottomless dread. Why?

In part, because of misguided fears of inflation. But in part, I think this is an instance of what Stephen Greenblatt, in his book "Marvellous Possessions", terms "mimetic blockage".

The book is about the crisis of values and ideologies that accompanied the European encounter with the New World. The Spaniards who conquered Mexico, Mr Greenblatt writes, came bearing "a religious ideology centered on the endlessly proliferated representation of a tortured and murdered god of love," with a key ritual "in which the god's flesh and blood were symbolically eaten." Which is different from Mayan and Aztec religious belief, but in many ways cognate. The Spanish encounter with Mayan and Aztec civilisation generated constant opportunities for mutual recognition, in the stone-paved avenues and soaring temples of Aztec cities, the unmarried, often homosexual castes of Mayan priests, the human sacrifice and cannibalism of Aztec rituals, and so forth. But the Spaniards found the possibility of such recognition appalling. For them, the Aztec-Mayan funhouse mirror was sickening, insulting, scary. So their interactions with the Mayans and Aztecs often seem to have been kind of crazy. They would insist that the locals immediately throw out their idols, and replace them with crucifixes. The locals would say, hey, we get it, you've got your gods, we have ours, let's talk about something else. The Spaniards would grab the idols, axe them to pieces and burn them. Staggering bloodshed would ensue. Beneath the drive for conquest lay horror at the prospect of self-recognition, of being forced to acknowledge the arbitrary and mutable character of one's own deep values and totems.

Money is just such an arbitrary and mutable totem. As far as anyone can tell, it got started with Babylonian temples creating fungible units to record how much people had brought in for their sacrifices. David Graeber has a memorable gloss on the transition to state-backed coinage (in "Debt: The First 5000 Years") which he acknowledges is too simple, but useful: to provision his army efficiently, the sovereign hands out coins to soldiers, demands that citizens pay taxes in those coins only, and waits for entrepreneurs to start providing goods and services to the soldiers in order to get the coins. A few thousand years later, you've got a cash economy. And by now, those coins have come to signify the essence of value to us. They are what we spend our working lives in search of. They are, these days, the only non-controversial arbiter of what is or is not a worthy public pursuit. At some level we still know they're made of pure nothing, but we prefer not to think about that.

And yet more and more, we're confronted with the nothing. The tokens themselves are now almost entirely irrelevant, displaced by figures residing on servers; the merely physical bills and coins already have a bit of the same silly aura many feared in the trillion-dollar coin. Fewer and fewer of us make things that anchor our sense of money-value in object-value. By far the greatest weight of global assets consists of bets on future relationships of money and assets. We are increasingly used to seeing the value of massive global corporations disappear in a matter of days. The old standby for safe value, real estate, is as risky as anything else.

If you're looking for a company that encapsulates the queasy ephemerality of this economy, you couldn't do better than Amazon. It's a company whose initial core business (still accounting for a third of its revenue) is selling media, ie intellectual property (IP), which, like money and corporations themselves, is nothing but a useful legal fiction. At first Amazon sold IP mainly by physically shipping the media such IP was once housed in (books, CDs), but it can increasingly dispense with the physical part entirely. The market considers Amazon incredibly valuable even though it earns virtually no profits. And Amazon now wants to provide the IP it sells partly in exchange for "virtual currency", which is the most discomfiting mimesis of all, either on Amazon or within any other game, market, platform, corporation...what's the difference again?

I think that "what's the difference again?" quality is partly responsible for the angst here. When I come home from work and find my kids on the Wii eagerly trying to score gold coins in Super Mario, what exactly is the difference between what I do and what they're doing? How confident am I that next week the gold coin they just won won't be worth more than the salary I earned, or that society will continue to find writing journalism more valuable than playing video games really well? I feel like a conquistador watching Mayan priests. When value starts to quake and melt like this, it's no wonder we cling to guns, to religion, to gold, to the fetishistic hardness of our currency. Apart from the great lords of IP like Jeff Bezos, none of us know with any confidence whether what we do or what we own is going to be worth anything by the time our kids grow up. Trillion-dollar coins and quantitative easing fill us with dread because their ease of creation, no more troublesome than an on-screen video-game token, reminds us of the void out of which our values are ripped, and which lately seems all too eager to swallow them up again.

(Photo credit: AFP)

Why we're doomed

the economistJue, 07/02/2013 - 02:50

THE United States Postal Service has made a perfectly sensible decision. In light of the move by most Americans to electronic mail and online bill pay, it will no longer deliver the post on Saturdays. The volume of mail has plummeted over the past five years, and the service is deep in the red. Taking Saturdays off will save it about $2 billion a year. It's a smart move. But the way it came about is a portent of doom.

The Postal Service has been asking to move to five-day delivery for some time. They've been supported in this effort by a large majority of Americans. One need only look at the examples of Canada, Sweden, Australia or Germany (where Saturday delivery is charged extra) to see the non-disastrous effects of such a policy. Few reforms to major institutions are so popular and obvious.

Unfortunately for the Postal Service, this is but a baby step in the right direction. The whole concept behind the service is broken. Over three-quarters of America's post offices do not turn a profit. The requirement to deliver anywhere and everywhere in America, at a set price, is a noose around its neck. Congress, meanwhile, is pulling on its feet, requiring the service to pre-pay health-care obligations for retirees well into the future. But this is not why we are doomed.

We are doomed because last year the House and Senate considered separate measures aimed at reforming the Postal Service. Neither of them made it out of Congress. The farther-reaching House bill never came to a vote. The Senate bill passed, but was not taken up by the House. And, really, it wasn't a reform bill at all. Rather, it delayed the reforms sought by the service, and put off a decision on Saturday delivery for two years. Even with the American people pushing at their backs, the senators could not take that baby step. The service had to use some dubious legal reasoning to finally pull off the move.

Consider that for a moment. Most people don't rate mail delivery as one of their top concerns. It isn't the third rail of American politics. Yet Congress could not even pass a reform supported by seven in ten Americans. Now consider America's attitude towards Social Security, Medicare and Medicaid. Those programmes, primarily the health-related ones, will bankrupt the country if they're not changed or taxes aren't raised. No workable solution has anywhere near the backing of 70% of Americans. And the debate over what to do about them is highly charged. Does anyone truly believe Congress is up to the challenge?

(Photo credit: AFP)

Moving the goalposts

the economistMié, 06/02/2013 - 17:02

IN NEARLY every political race in a democracy, the rules are simple: the candidate that gets the most votes wins. The American presidency is a notable exception: four times in the past 200 years the loser of the popular vote has taken the oath of office. For three of those four cases blame the Electoral College. This unloved and Byzantine body emerged during America’s founding as a compromise between those who wished for direct popular election of a president and those who preferred that the president be elected by Congress. Hundreds of constitutional amendments have been floated to end or amend the Electoral College; yet it remains.

While the constitution mandates the existence of the Electoral College, states are free to decide how to apportion their electoral votes. In every state but two, the winner of the statewide popular vote gets all of the state’s electoral votes. The two exceptions, Nebraska and Maine, each give two electoral votes to the popular-vote winner, and apportion the rest to the popular-vote winner in each congressional district. That can produce splits. In 2008, for instance, John McCain won four of Nebraska’s five electoral votes by winning the popular vote and two congressional districts, but Barack Obama’s strong performance in Omaha, the state’s biggest city, let him peel off one elector.

Those systems have survived numerous attempts to change them. Between 2006 and 2011, eight states and the District of Columbia enacted, and every state legislature in the country considered, bills that would pledge all their electors to the winner of the national popular vote, but only when states with a majority of the country’s 538 electoral votes have done the same (the electoral votes pledged currently total just 132). Once triggered, this provision, formally known as the National Popular Vote Interstate Compact, would guarantee that the popular-vote winner would always win the presidency.

In the year after the 2000 election, which Al Gore lost to George W. Bush despite receiving over 500,000 more votes, 29 states proposed vote-allocation changes, mostly from the winner-take-all system that 48 states and the District of Columbia use to the district system of Nebraska and Maine.

A similar fondness for the district system has emerged in the wake of the 2012 election. But while the 2000 proposals occurred in states with both Democratic and Republican governors and legislators, and seemed driven by the sense that the Electoral College had thwarted the popular will, the most recent wave of proposals begins and ends with Republicans.

In early January Bill Carrico, a Republican state senator from Virginia, introduced a bill to apportion his state’s electoral votes as Nebraska and Maine do, but with the two additional electors going to whichever candidate wins the most districts, a cunning scheme that would have seen Mitt Romney win eight of Virginia’s 13 electoral votes, instead of zero.

In the past month officials in Michigan, Pennsylvania and Wisconsin—all states that Mr Obama won that happen to have Republican governors—have flirted with similar proposals. Reince Preibus, who heads the Republican National Committee, said that electoral-vote reapportionment was something that “states that have been consistently blue that are fully controlled red ought to be looking at.” In 2012, if all 50 states had apportioned their electoral votes as Nebraska and Maine did, Mr Romney would have beaten Mr Obama 276-262 despite having lost the popular vote by nearly four full points.

As it turns out, Mr Carrico’s bill died in committee, and officials in other states now seem to be slowly backing away. The problem with the Republican proposal is not the gamesmanship; both sides play electoral games: consider, for instance, the relative number of visits from candidates received by swinging little New Hampshire and big blue California. The problem for the party is that it continues a defensive, backward-looking and ultimately losing strategy of the last election, in which Republicans tried to keep non-white voters from voting rather than engaging with them. Instead of trying to thwart the popular vote, Republicans might be a lot better off trying to win it.

(Photo credit: AFP)

How am I doin’?

the economistSáb, 02/02/2013 - 22:59

DESPITE losing his bid for re-election in 1989, Ed Koch never really stopped being mayor of New York City. By the time he died on February 1st, he had become as much of a New York icon as the Empire State Building or the city skyline. He was decidedly more beloved in 2013 than 1989, and he knew it. During a lunch at The Economist’s New York bureau, a colleague speculated that if he ran for mayor today he would win handily. Koch agreed.

Koch was not expected to win his first bid for mayor in 1977. He faced better known, better connected opponents, like Mario Cuomo, who would later become governor. But his law-and-order message fit the times. New York was on its knees then. A serial killer was terrorising the city, the Bronx was burning, crime was rampant, and the city was going broke. Upon taking office, Koch went to work on the city's finances, but his main job was to act as the city’s cheerleader. As Michael Bloomberg, New York’s current mayor said, “When we were down, Ed Koch picked us up. When we were worried, he gave us confidence."

He did so well that his second election was more of a coronation. He ran on both the Democratic and Republican ticket and won 75% of the vote. A year later, in 1982, he set his sights higher, running for governor of the state of New York. But his heart remained in the city. In a damaging interview he disparaged other parts of the state. Suburban living was "wasting your life", and living in Albany, the state capital, was a "fate worse than death." He lost to Mr Cuomo in the Democratic primary and returned home to work on what is perhaps his most lasting legacy, a $5 billion affordable-housing programme.

He never let down his ebullient facade, but Koch struggled as his popularity faded during his third and final term. Rudy Giuliani, then a tenacious federal prosecutor, investigated the mayor's close friends and political allies for corruption. Though not suspected of wrongdoing himself, Koch suffered a stroke in 1987. He remained in office but his troubles continued. Black New Yorkers became increasingly disenchanted with the mayor, as racial tensions in the city mounted. An unpopular decision to close a public hospital in Harlem was followed by a weak response to racially motivated violence. Koch may have hurt himself most when stating that Jews would be "crazy" to vote for Jesse Jackson in New York's presidential primary. In 1989, black voters favoured David Dinkins, who would defeat Koch and become New York's next mayor.

Even after leaving office, Koch remained relevant, his endorsement a prized commodity. He favoured a mix of candidates, including George W. Bush in 2004 and Bob Turner in 2010. Koch said he supported Mr Turner, a Republican who won Anthony Weiner's old House seat, in order to send a message to Barack Obama for throwing Israel under the bus. But he didn't give up on the Democrats. He returned to Mr Obama's camp in 2012, and he even buried a long-standing grudge with Mr Cuomo to endorse his son Andrew for governor.

The bad blood between Mr Cuomo and Koch had been the result of yard signs in the 1977 campaign that read: "Vote for Cuomo, not the homo." A lifelong bachelor, Koch's sexual orientation was the source of much speculation. Despite ushering in groundbreaking gay-rights bills, some in the gay community claimed the fear of being outed kept the mayor from responding more forcefully to the growing AIDS epidemic. When asked about his sexuality during the filming of the new documentary “Koch”, he responded, “It is none of your fucking business.”

He did not appear to have a partner in life, but maybe that was just as well. His great love was New York City. Even in death, he could not imagine leaving it, so a few years ago he bought a plot in the only Manhattan cemetery still in use. On Friday Ray Kelly, New York's police commissioner, mused that the mayor had "finally left New York for someplace better—although he’d probably argue that’s not possible."

(Photo credit: AFP)

Immigration reform is not enough

the economistVie, 01/02/2013 - 16:15

IF NOVEMBER'S presidential election, in which some exit polls had Mitt Romney winning just 27% of the Latino vote, was a wake-up call to Republicans, the sleep must have been deep indeed. For months it had been clear to anyone with half an eye on the polls that the Republicans were tanking among Latinos. In August, Mr Romney emerged 39 percentage points behind Barack Obama in the first of 11 weekly tracking polls carried out by Latino Decisions. (Those, of course, turned out to be the good days.) Whether or not Mr Romney's fondness for "self-deportation" was to blame, the Republican pre-election spin that a focus on jobs and growth would be enough to win around Latino voters is not only risible in retrospect, it was obviously wrong at the time.

OK, election campaigns do funny things to people's brains. At least the Republicans are on board now. After all, as Reagan is once supposed to have said, Latinos are natural Republicans. They just don't know it yet. Ditch the crazy rhetoric, silence the wingnuts and take at least partial ownership of immigration reform, and the shared values of Republicans and Latinos—aspiration, pro-enterprise, social conservatism—should emerge clearly enough to help satisfy Reagan's formula. (If it's good enough for Susana Martinez...)

This is certainly how John McCain is selling the proposals put forward by his "Gang of eight" senators. His home state of Arizona, where the Latino population grew by almost half between 2000 and 2010, is one that many Democratic strategists see as ripe for competition in 2016. (The state has backed the Republican candidate in every presidential election bar one since 1948.) Elsewhere in the mountain west Latino votes have already helped shift the 20 electoral-college votes of Nevada, Colorado and New Mexico, all of them once reliably red states, into the Democratic column in the last two elections. Mr McCain acknowledges the danger. But because of "small business, less regulation, big service in the military, pro-life, all these reasons," he argues, Republicans should be able to attract enough Latino support to keep the demographic tide at bay.

Mr McCain's commitment to sorting out America's broken immigration system is not in doubt. And the Republican tin-ear to immigration concerns certainly helps explain Mr Romney's dismal performance among Latinos. But it's worth unpacking Mr McCain's claim. Perhaps the most common element of the "natural Republican" argument for Latinos is the cultural-conservative one. It doesn't stack up well. Support for same-sex marriage is now stronger among Latinos than other ethnic groups. If support for second-amendment rights counts as a conservative value, there is scant consolation for Republicans: last year just 29% of Latino voters told a Pew poll that gun "rights" were more important than gun "control". Mr McCain is right about abortion, an issue on which Latinos are marginally more conservative than blacks or whites. But it's not a priority for many voters. And as with other Americans, younger Latinos are considerably more liberal on all these issues than their older counterparts.

What about Mr McCain's "less regulation"? Well, leaving aside the Dodd-Frank Act, which happens not to make an appearance among the top priorities of any voters, Latino or otherwise, one of the heftiest pieces of regulation produced in the first Obama term was the Affordable Care Act. And, as Mr Romney turned out to be aware, it's a hit with Latinos. OK, so what about all that business-stifling red tape the Democrats are so fond of? Well, there sure are a lot of Latino small-business owners. Some should be receptive to a Republican message that emphasises entrepreneurial vim and freedom. But we haven't heard much of that from the GOP lately. (Marco Rubio's convention speech in Tampa was an honourable exception.)

This is partly because the party's energies have been dedicated to keeping a lid on spending and shrinking the size of government. And while these may be worthy goals, they do not appear to fly with many Latinos. Immediately before November's election just 12% said spending cuts were the best way to reduce America's fiscal deficit. Neither is trimming the deficit is a priority. Indeed, many Latino voters appear to be moving in the opposite direction from today's Republicans: in 2011 Gary Segura of Latino Decisions reported that 82% of Latinos wanted a more active government, next to 59% of non-Hispanic whites.

Education may present an opportunity for Republicans. Latinos are among the worst victims of the terrible public schools in many parts of the United States, and the lock that teachers' unions often have over state Democratic parties leaves an opening for the GOP. The Republicans will also be helped by a saner message on immigration, voter-friendly Latino faces like Mr Rubio's and, if they can craft it, a 21st-century version of the American dream. But against these potential bright spots are the demographic trends: the Latino share of the electorate grew from 9.7% in 2008 to 12.5% last year and will continue to rise quickly. Most of these new voters will surely continue to back Democratic candidates, even if the Republicans can eat away at the gap.

(Photo credit: AFP)

Suffer the children

the economistMié, 30/01/2013 - 19:44

ON MARCH 29th 2012, Georgia’s Republican-controlled House of Representatives voted on a criminal-justice reform bill that read like a left-leaning criminologist’s fantasy. It revised sentencing laws to keep non-violent drug and property offenders out of prison, directing them instead toward alternatives—drug courts, day-reporting centres, mental-health courts—designed to treat and rehabilitate rather than punish. It invested millions of dollars in such programmes—not an easy sell in times of tight budgets. And it created graduated scales of punishment, allowing the law to distinguish between someone with a single joint and someone with a pound of marijuana. The House passed the bill unanimously. The Republican-controlled state Senate did the same, and Nathan Deal, Georgia’s Republican governor, signed it into law.

Now Georgia is looking to do something similar for juveniles. The impetus is the same: high costs and poor return on investment. Nearly two-thirds of Georgia’s juvenile-justice department’s annual $300m budget goes to running residential facilities, which cost $91,126 per bed per year for long-term facilities and $88,155 for short-term. By way of comparison, the annual fee for students at Riverside Military Academy, a private boarding school just north of Atlanta, is $29,750.

But while most graduates of Riverside head to college, graduates of Georgia’s juvenile-justice facilities tend to head back inside. Fully 65% of young offenders incarcerated in one of the state’s long-term facilities, and 53% of convicted juveniles not sent to a long-term state-run facility, commit another crime within the next three years. Since 2003 the latter rate has remained steady, while the rate among the former has risen by six percentage points.

And just as nonviolent offenders take up costly space in Georgia’s adult prisons, low-risk juveniles do the same: in 2011 a majority of juveniles in non-secure residential facilities (such as supervised group homes, as distinct from detention facilities) were convicted of misdemeanour or “status” offences (crimes, such as truancy, that would not be considered crimes if committed by adults). Of that share 56% were judged to be low-risk, meaning they are deemed to pose little danger to the general population, as were 39% of those held in long-term secure facilities.

In December, Georgia’s Special Council on Criminal Justice Reform released a series of recommendations designed to improve on these lacklustre results and to save money. The recommendations echo those it made in 2011, which formed the basis of the broad adult reform bill. The council also recommends boosting investments for community-based sentencing options: many rural and less-populous areas of Georgia have no programs available for juvenile convicts, increasing the chances that they will be sent to state-run residential facilities. A programme in Illinois that treats non-violent youth as close to home and non-restrictively as possible has cut the re-incarceration rate to 14.2%, compared with 57.4% among juvenile offenders who did not participate in the programme.

Governor Deal has welcomed the report, and a bill based on its recommendations soon may find its way to the General Assembly. The council predicts that its recommendation will reduce the number of residential juvenile offenders by around one-third by 2018, saving the state more than $88m. On top of that are longer-term savings. Jeanette Moll, a juvenile-justice policy analyst at the Texas Public Policy Foundation, calls juveniles “an eminently rehabilitatable population...if we can fix them now we can avoid a lifetime of crime and costs.”

Excellent Street

Tom PetersMié, 30/01/2013 - 17:08
Tom's in New Zealand escaping the New England winter. Consider this his postcard to all his readers. Also, you... Cathy Mosca

Sudden agreement

the economistMar, 29/01/2013 - 23:39

AFTER years of fruitless argument, America now has not one but two serious proposals for comprehensive immigration reform. The first came on Monday, from a bipartisan group of eight senators. The second came today, from Barack Obama, who flew to Las Vegas to give a speech on the subject; not a formal proposal, per se, but an expansion of his blueprint from May 2011. On the issues that were apparently too delicate to discuss in public a year ago, there's now broad agreement: there should be a path to citizenship for immigrants who are already here illegally, the country should issue more green cards for highly-skilled immigrants, and employers who deliberately hire unauthorised immigrants should be penalised for it.

The president's proposal does differ from the Senate framework in several respects. The most notable is that the latter would only allow unauthorised immigrants to become legal permanent residents; citizenship would have to wait until various border-security reforms have been implemented. Mr Obama, by contrast, considers that a troubling form of legal limbo. Congress will presumably proceed to debate the Senate framework, rather than the president's proposal. But it is remarkable that politicians are now discussing how direct the path to citizenship should be, and not simply how high to build the fence.

Perhaps we shouldn't be surprised. As invidious as the rhetoric on immigration has been, and as unwieldy as the current system is, it easy to forget that in many respects America has a respectable record on the subject. The country has historically been, and remains, a destination for people around the world—an enviable position, but not an uncomplicated one. America is among the few rich countries that prioritises family reunification, while others prefer to save their visas for engineers and doctors. And while the country doesn't offer much in the way of social services for immigrants, it does have a dramatic record of enabling new Americans to make staggering vertical leaps. The American meritocracy is full of second-generation citizens, from the president on down.

An interesting question, in fact, is whether America's occasional ambivalence about immigration somehow facilitates the mobility of immigrants who manage to make it here. Glenda Joe, whose father moved from China to Houston after a massacre in his family's village, recently told Texas Monthly that this is why Houston gets so many immigrants: "There’s that wide-open 'Don’t ask us to help you, but we won’t stop you' feeling." Any proposal for comprehensive reform will be met with resistance in Congress, particularly in the Republican-controlled House. But if the effort succeeds, the curmudgeons should be sanguine: think of it as stocking the pond.

(Photo credit: AFP)

A Catholic block

the economistLun, 28/01/2013 - 21:00

THE most delicious moments in political discourse come when your opponents are tied up in fits of discord. Lefties love to see Ted Olson, the grumpy architect of George W. Bush’s legal victory in 2000, thumb his nose at conservatives and argue the case in favour of same-sex marriage. Righties are delighted when Democrats distance themselves from Barack Obama or call him out as “cocky”. So it is no surprise that Democrats are cheering this open letter from 64 Catholic theologians urging “fellow Catholics in Congress” to support gun-control legislation:

All Americans share responsibility for public safety. This requires reasonable measures to regulate the sale and use of lethal weapons. As faithful citizens—Catholic theologians, priests, sisters and social justice advocates—we join our bishops, the Catholic Health Association and Catholic Charities USA in calling for common-sense reforms to address the epidemic of gun violence in our nation. Pro-life citizens and elected officials have a responsibility to show greater moral leadership and political courage when it comes to confronting threats to the sanctity of life posed by easy access to military-style assault weapons and high capacity magazines. Members of Congress who take pride in their pro-life stance and appeal to family values have no excuse for inaction, and neither do any of us who share a firm commitment to these values.

The rhetoric is custom-made for partisan schadenfreude: Catholics berating Catholics for selective application of “the pro-life stance”, a central tenet of their faith. The letter does not mince words. Nor does it hesitate to name names:

We especially encourage our fellow Catholics in Congress, including prominent leaders such as House Speaker John Boehner, to stand up to the National Rifle Association and other gun lobbyists who choose to obstruct sensible reforms. Catholics who earn an “A” rating from the NRA—including Republicans like Speaker Boehner and Rep. Paul Ryan and Democratic lawmakers such as Sen. Joe Donnelly and Sen. Heidi Heitkamp—should not put powerful special interests before the common good. We urge you to reflect on the wisdom in our church’s call for a “consistent ethic of life” as you consider legislation in the coming months that can provide greater protection for our families and communities.

John Boehner and other Catholic legislators may appear to be hypocrites when they condemn the abortion of fetuses while opposing gun-control legislation aimed at preventing horrors like the massacre of schoolchildren and teachers in Newtown. If the sacredness of life does not expire when the baby is delivered, and if an aspiration to consistency and a willingness to entertain revisions to one’s positions is at the heart of what it means to be reasonable, it may seem callous to carry a banner for life while failing to take action to preserve people’s lives.

Despite first appearances, the critique is intellectually hollow. There are cogent arguments for gun-control measures like banning assault weapons and limiting the size of magazines, but Catholic doctrine just has no purchase here. Say what you will about the wisdom of their positions, but Mr Boehner and his brethren are not advocates of mass murder. Ramesh Ponnuru explains how this nullifies the central argument of the letter:

The view that the slaying of an unborn child in abortion should be legal is in no way parallel to the view that a class of weapons should be legal. It is parallel to the view that killing people with one of those weapons should be legal. And nobody is for that.

Exactly. Catholics can call out members of their flock for supporting capital punishment, where the state actually puts people to death, without falling into fallacy. But the gun-control debate takes place largely on the level of expected outcomes, not principle, even if ridiculous warnings of weapons restrictions as a precursor to government-sponsored genocide fuel the cause of second-amendment fundamentalists, and even if Wayne LaPierre paints gun rights as "God-given freedoms" that "no government can ever take away". All this rhetoric to one side, no one in the NRA camp argues that the right to bear arms is so sweeping and so sacred that the cost of a few dozen or a few thousand lives is the unfortunate price of liberty. The guns debate is thus fundamentally different from disputes over the permissible range of freedom of speech, where ugly, offensive, ludicrous expression is seen as the cost we must bear to preserve a foundational freedom.

Catholic politicians who oppose the assault weapons ban put forward by Dianne Feinstein and similar measures do not believe their position will cost American lives. They contend, rightly or wrongly, that these regulations will have no effect on the level of gun violence and thus restrict autonomy unnecessarily. If they’re sincere in this belief—and not fooling themselves about the social cost of semi-automatic weapons—the anti-regulation position is in no sense a breach of Catholic teachings. On this question, at least, everybody is pro-life.

Never-ending arguments

the economistLun, 28/01/2013 - 18:20

THE decision in Roe v Wade wasn't the biggest news on January 22nd 1973. Top headlines went to the death of Lyndon Johnson. But 40 years later, Roe has inspired weeks’ worth of coverage, including a piece I wrote for the print edition. In researching that article, I was intrigued by two battles inspired by the case: the fight over whether abortion rights empower women; and the fight over contraception.

In 1973 feminists claimed Roe as a victory, but feminism did not much feature in Harry Blackmun’s ruling. Blackmun, a former lawyer for the Mayo Clinic, instead focused on the fate of doctors (who, after all, were the ones sent to jail for abortions). It wasn't until 1992, when Sandra Day O'Connor penned the decision in Planned Parenthood v Casey, that the court honed in on the relationship between abortion and female empowerment. “The ability of women to participate equally in the economic and social life of the Nation has been facilitated by their ability to control their reproductive lives," wrote Mrs O'Connor. "The Constitution serves human values, and while the effect of the reliance on Roe cannot be exactly measured, neither can the certain costs of overruling Roe for people who have ordered their thinking and living around that case be dismissed.” (It is worth noting that Casey was a mixed decision for those who favour broad abortion rights. It upheld Roe but also made it easier for states to limit access to abortion.)

By 2007 Mrs O'Connor had been replaced by Samuel Alito and the court expressed a very different sentiment. Gonzales v Carhart upheld a ban on a specific abortion procedure. Anthony Kennedy, writing for the majority, worried that women might not act in their best interest: “While we find no reliable data to measure the phenomenon, it seems unexceptional to conclude some women come to regret their choice to abort the infant life they once created and sustained.” This marked an interesting shift in the battle over abortion. Historically the fight has pitted the rights and life of the fetus against the rights and life of the woman. But Charmaine Yoest, of Americans United for Life, which helps states draft anti-abortion legislation, says Carhart undermined the notion that abortion is empowering for women. So has her work. States are now passing laws claiming to protect not just the fetus but the woman as well. South Dakota, for example, tells women that abortion raises the risk of suicide. Other states say that abortion raises the risk of breast cancer.

“The problem is that the evidence doesn’t meet their goal,” argues Susan Cohen of the Guttmacher Institute, a think-tank that supports abortion rights. “It’s a very patronising approach to women.” Ruth Bader Ginsburg would no doubt agree. Mrs Ginsburg thought Mr Kennedy’s reasoning absurd. “The Court deprives women of the right to make an autonomous choice, even at the expense of their safety,” she wrote in her dissent. “This way of thinking reflects notions about women’s place in the family and under the Constitution—ideas that have long since been discredited.”

The argument will undoubtedly continue, but both sides, presumably, would like to prevent the unintended pregnancies that precede abortions. To achieve this, it is helpful to look at the women who have abortions and the women who become unintentionally pregnant. Most women (58%) who obtained abortions in 2008 were in their 20s, according to the Guttmacher Institute (2008 is the most recent year for which data are available). Forty-two percent of women who had abortions in 2008 were poor, compared with 27% in 2000. Only 31% of those who received abortions had Medicaid, compared with 33% with no health insurance and 30% with private health insurance. Poor women were more likely to have unintended pregnancies: rates among 20-something women with incomes of less than 200% of the poverty level were more than three times as high than among richer women. More than half of all unintended pregnancies among unmarried women in their 20s ended in abortion.

There is a lot to chew on here, but there seem to be at least three conclusions. First, unintended pregnancies among young, poor women drive up abortion rates. Second, if you want to lower abortion rates, you should try to prevent unintended pregnancies among young, poor women. Third, if you want to prevent unintended pregnancies among young, poor women, contraception would help. This analysis is so hit-you-over-the-head obvious that it’s embarrassing to spell out (though I welcome any challenges in the comments). Unintended pregnancies, bad. Contraception, good.

Now we get to the harder question: how do you improve access to contraception? Barack Obama wants to require employers to cover contraception for their employees, at no charge. Dozens of lawsuits challenge the mandate as a violation of religious liberty. If the employers’ argument holds, wouldn’t any public funding of contraception violate religious liberty, as tax dollars go to family planning? And if so, is there any way to improve access to contraception? Nixon, that unwieldy leftist, advocated federal funding of family-planning services and created the Title X programme. In 2011 the House of Representatives voted to defund Title X (it failed in the Senate). That same year Texas slashed money for family planning, largely as an effort to target Planned Parenthood. This seems to have led to a jump in births. We don't yet know whether it also led to a jump in abortions, but when the data arrives it should be revealing.

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