Life expectancy at birth and health care spending per capita

From OECD's Health at a Glance 2013 report.  See if you can find the outlier.



Thanks to the Incidental Economist for calling attention to this chart.

I knew the individual health insurance market was broken, but I didn't realize it was this broken

Jonathan Cohn's Six Things the Media Doesn't Understand About Obamacare is an excellent read. I've been mulling the implications of this quote he includes, from Karen Pollitz:

In the traditional market, virtually all states require that renewal rate increases must be uniform for all policyholders in a block.  But insurers can close a block, starving it of influx of newly underwritten policyholders, so rates will spiral.  Healthy people in the block will tend to bail because they can still pass underwriting and so move to other, more favorably rated policies.  Sick people stranded in the block will all face the same rate increase at renewal, but it will spiral even more rapidly as risk profile of the block deteriorates.

For someone who is in the individual health insurance market, This. Is. Creepy.  People with employer-provided insurance or Medicare have no idea how broken things are.  Thankfully, on January 1st, 2014 Obamacare ends these games and allows the free market to function properly.

Six Things the Media Doesn't Understand About Obamacare

This article by Jonathan Cohn does an outstanding job of clearing things up.

Update: Jonathan Chait explains Why Letting Everyone Keep Their Health-Care Plan Is a Terrible Idea.

Update #2: Kevin Drum reminds people that Obamacare Will Be a Boon For Millions.

The governors of Connecticut, Kentucky and Washington on how they got Obamacare running so well in their states

http://www.salon.com/2013/11/18/dem_governors_explain_how_they_got_obamacare_working/

A Health Provider Strives to Keep Hospital Beds Empty

Nurses calling patients, asking them not to shovel snow?  It's called accountable care, a provision of the Affordable Care Act with great promise for bending the health care cost curve.

Obamacare's Winners and Losers, in One Chart

In this chart, 97% of the country is either (1) unaffected by Obamacare, or (2) a clear winner.  The remaining three percent of the country ends up getting higher quality insurance at a higher price.

Why Obamacare is good for business

James Surowiecki has a great article in the New Yorker about the effects (and non-effects) of Obamacare on businesses, particularly small ones.  In short, "the likely benefits of Obamacare for small businesses are enormous."  Moreover, Obamacare does away with "job lock," making it easier to start a business.

A great long read regarding Obamacare: Jonathan Chait in the New York magazine.

The Plot to Kill Obamacare: Why it continues to drive many Republicans to madness. By Jonathan Chait.

The post-policy GOP

"Post policy" - I chuckled when I read that in the Washington Post (here and here), in reference to the GOP.  Policy?  We don't need no stinking policy!  The GOP is playing whack-a-colleague with its latest nihilistic "Repeal Obamacare or we'll shut down the government!" tantrum.  The conservative Heritage Foundation, on whose writings Obamacare's mandate is based, is launching a $550K campaign to drum up support for letting insurance companies deny coverage to those with pre-existing conditions and making it more difficult for insurance policy-holders to shop around, among other perverse ideas.

Meanwhile enrollment for 2014 coverage starts in less than six weeks; in the spirit of good old American free enterprise, up to $1 billion in advertising will be spent by insurance companies alone to attract millions of new customers enabled by health reform.  That's nearly two thousand times the size of Heritage's campaign.

In fairness, the GOP does have some ideas worthy of consideration, if they would just stop with the "Repeal!" histrionics long enough to let them be heard.  They've argued for expanding the use of high deductible plans (I have one), allowing insurance companies to sell across state lines (they can today, to a limited extent; Obamacare allows states to expand it), and equalizing the tax treatment of employer-provided insurance versus individual insurance.  In my opinion, each of these has merit, although each has drawbacks.  I'd even entertain privatizing Medicaid and Medicare, as Paul Ryan has proposed; indeed Arkansas is experimenting with the former; and Medicare Advantage constitutes the latter.

Any of these ideas would fit nicely within the broad contours of Obamacare.  The GOP's problem is this: to use a golf analogy, they keep teeing off with a putter. Without Obamacare, none of their ideas address the three essential elements of health reform.

The first is eliminating consideration of pre-existing conditions.  Coverage is guaranteed.  When you enroll, all you need to provide is your name, address, birth date and social security number.  Maybe you have to disclose whether you smoke.  But that's it.  This isn't just about common decency, making sure those who really need coverage can get it; it's about making enrollment simple for everyone.  If enrollment involves nine hours reciting medical history, as it did with me, there is no way that Adam Smith's invisible hand can work its free market magic.  As for the premium, everyone pays the same amount, factoring in age, location, and perhaps whether you smoke.  In the insurance industry, this is called community rating.

The second element is that everyone, or at least almost everyone, has health insurance.   Insurance is all about sharing the risk of medical bills. The wider the community, or "risk pool,"  the better.  If coverage is not strongly - very strongly - encouraged, you can't make it available regardless of pre-existing conditions. New York tried that, requiring insurance companies in the individual market to cover everyone who applied, but doing nothing to discourage staying uninsured ("going commando," as I refer to it) like Massachusetts did.  This put New York in an "adverse selection" feedback loop, where the people who apply tend to be the people on which insurance companies will lose money.  As a result, New Yorkers in the individual insurance market pay among the highest premiums.  With Obamacare, the risk pool becomes much wider, and rates in New York's insurance marketplace will fall as much as 50%.

The third element is a combination of subsidies, tax credits or other measures to make make sure people can afford insurance.  That's pretty obvious, although there are many different ways to implement subsidies.

Policy wonks have likened these elements to the legs of a stool; unless you have all three, the stool doesn't work. The three main U.S. insurance systems - employer-provided, Medicare, and Medicaid - work because the three elements in various forms are present in each. Each of these systems have problems.  Employer-provided health insurance isn't portable.  Medicare has been a fee-for service model that pays for quantity, not quality.  Many doctors won't accept Medicaid.  While a bitch session could go on for days, each gets the three elements more or less right, which explains why they've lasted so long and have been able to cover 78% of the country.

Health reform is all about making those three elements happen for the 22% who don't have access to employer-provided insurance, are too young for Medicare, and make too much money for Medicaid. To get back to my golf analogy, until the GOP has addressed all three of those elements, they are not on the green, and their putter flailings amount to nothing more than slapstick comedy.

Ironically, parts of the GOP understand all this, or at least did so at one time.  The 2012 Republican presidential candidate implemented all three elements in Massachusetts, which now leads the nation in rates of coverage by a country mile (96%).  At the time he made that miracle happen, Romney, I'm convinced, viewed Romneycare as his ticket to the White House.  If Obamacare had not passed, I believe Romney would be President today, and the whole GOP crew would be extolling the virtues of a plan indistinguishable from Obamacare.

Obamacare accomplishments to date

1. 71 Million Kids & Adults With Private Insurance Have Received No-Cost Preventive Care.*
2. Discrimination By Insurance Companies For Children With Pre-Existing Conditions Was Banned.*
3. Consumers Received $1.1 Billion in Rebates From Their Insurance Companies.**
4. 3.1 Million More Young Adults Have Health Insurance Through Their Parent’s Plan.**
5. Seniors Have Saved More Than $6.1 Billion on Their Prescription Drugs Since 2010.**
6. 34 million seniors have received a free preventive service***
7. 105 million have had lifetime limits on insurance removed***

* “Health Reform-The Affordable Care Act Three Years Post-Enactment,” Kaiser Family Foundation, March 2013.
** "Health Reform in Action," WhiteHouse.gov, accessed 6/5/13.
*** HHS webinar, August 7th, 2013

Health re-form: Why I love Obamacare

Self-employed; too young for Medicare.  If that doesn't describe you, you have no idea how byzantine health insurance can become.  You'll never find anything like it in the writings of Franz Kafka, because it is too terrifying. When I applied for individual insurance, it took 6 hours to fill out the form.  After three hours of follow-up phone conversations, the insurance company refused to cover the female half of my family (who, thank God, are healthy) at any price.  My family finally got covered, praise the Lord, although I should point out that there is something wrong if divine intervention is needed in this neck of the woods.

Given what it took to get coverage, a competitor couldn't pay me enough to go to the trouble of switching companies, something that my insurance companies (one for the males, and one for the females) surely take into account when they relentlessly raise their prices.  

When printed, the form I had to fill out was 20 pages.  As if that weren't Kafkaesque enough, the insurance company required payment of a full month's coverage in advance, even though they reserved the right to decline coverage, a right that, in about two weeks time, they exercised.  Moreover, if I made a mistake in reciting our medical history, they reserved the right to cancel the coverage in the future.  Naturally, when I applied to a different insurance company for coverage of the female half of my family, I had to start over with a different form of roughly the same length.

Thanks to Obamacare, that form is about to get a lot shorter.  The draft form for 2014 coverage is only 4 pages. Looking through it, there are precisely the right number of questions about medical history, which is to say, none. As far as I can tell, I need to fill out page 2 for myself, fill out page 3 for my family, and then sign and date page 4.  And the single form will work for any of four insurance companies offering coverage in my region.

It's just a draft.  And it doesn't include obvious things like credit card and expiration date, or for that matter income, so as to determine if I qualify for tax credits (I don't), or which insurance company I want to go with, or which plan.  But wall, handwriting is on.  Thanks to Obamacare, in 2014 the individual health insurance market will be able to function properly.

What should Trayvon Martin have done?

Amy Davidson poses an excellent question in her New Yorker article.

In a later article, she quotes Obama:

And for those who resist that idea, that we should think about something like these Stand Your Ground laws, I’d just ask people to consider, if Trayvon Martin was of age and armed, could he have stood his ground on that sidewalk? And do we actually think that he would have been justified in shooting Mr. Zimmerman, who had followed him in a car, because he felt threatened? And if the answer to that question is at least ambiguous, then it seems to me that we might want to examine those kinds of laws.

We can be our best only if we bear at least some of the costs of the choices we make.

What Accountable Health Care Means

Did you know that starting in January 2014…

From Get Covered America:

(1) All health insurance plans will have to cover doctor visits, hospitalizations, maternity care, emergency room care, prescriptions, and more.

(2) To see a complete list of benefit categories that all insurance plans will cover, visit www.getcoveredamerica.org/new-healthcare-benefits

(3) You might be able to get financial help to pay for a health insurance plan.

(4) If you have a pre-existing condition, insurance plans can no longer deny you coverage.

(5) All insurance plans will have to show the costs and what is covered in simple language with no fine print.

Eloquence

Maureen Corrigan, a contributor to NPR's Fresh Air program, normally reviews full-length books that contain tens of thousands of words.  On Memorial Day, 2013, she turned her attention to words that weigh in at a mere 186, soaking wet (metaphorically speaking).  By comparison, Lincoln's Gettyburg Address, known for its brevity, was 271.

The story starts with her father getting honorably discharged from the U.S. Navy in the fall of 1945, expecting never to hear from that institution again.  The economy faced significant disruption as military activity wound down and millions of veterans searched for work amid the uncertainty. (After the war my own father, a chemical engineer, finally found work as an insurance actuary.)

Ms. Corrigan:

And how special he must have felt in late December of 1945, when a letter [http://www.npr.org/assets/img/2013/05/28/corrigan-letter_archive.jpg] from Washington, D.C., came for him at his sister's house in Llanerch Hills, Pa. My father was living with his sister and her family because, by then, both of his parents had died. The letter, signed in fountain pen, was from the Secretary of the Navy, James Forrestal. It began:

My dear Mr. Corrigan:

I have addressed this letter to reach you after all the formalities of your separation from active service are completed. I have done so because, without formality but as clearly as I know how to say it, I want the Navy's pride in you, which it is my privilege to express, to reach into your civil life and to remain with you always.

...

The beauty of the letter's opening paragraph literally took my breath away.

Those words took my breath away too, not because they are eloquent, although they are, but because someone - Forrestal, or perhaps the Second Assistant to the Undersecretary of Naval Whatever - thought to send such a letter.  If every veteran WWII U.S. sailor received one in that pre-computer, pre-xerox age, as apparently was the case, this was a massive endeavor; at its WWII peak the U.S. Navy had 3,405,525 active duty sailors.

Eloquence emanates from the idea behind the words, not the words themselves. In Gettysburg, the power of Lincoln's words derive from surprise. A whole bunch of people had assembled there to do something; Lincoln said that they couldn't do what they had set out to do, and that they should do something else instead.

Forrestal can't hold a candle to Lincoln, not least because the fate of the nation did not hang in the balance. Nevertheless his eloquence also comes from an idea: to paraphrase Marshall McLuhan, the timing is the message. The letter needed to be civilian-to-civilian, therefore the timing was critical, indeed so critical that timing becomes the very focus of the letter.

Best Charles Ramsey tweet

Here's the best tweet regarding Charles Ramsey, the man who kicked in the door in order to free Amanda Berry:

Patton Oswalt:  Dear Charles Ramsey: I am not a little pretty white girl, but I totally want to run into your black arms. #hero

Andy Borowitz: Courageous Senators stand up to American people

Courageous Senators stand up to American people

Also: Right not to get shot faces uphill battle in Senate

A gun violence prevention town hall meeting

Last Saturday, I, along with about 100 others, attended a "town hall" meeting on gun violence prevention led by Congresswoman Anna Eshoo and Congressman Mike Thompson.

I did not have high hopes; Congress' approval ratings are low, and my opinion of it is even lower. Other attendees likely had similar thoughts; like myself, they glanced occasionally out the windows to admire the beautiful weather we were missing. Yet these two Representatives impressed me.

Anna's no gun expert, but Mike is. In addition to being the chairman of the House Gun Violence Prevention Task Force, Mike is a Vietnam veteran and the father of a police officer. Mike's task force released it's recommendations a couple of months ago. He gave us a brief gun tutorial using police-provided samples, including an AR-15, similar to the gun he carried in Vietnam, and an AK-47, similar to the gun carried by his adversaries there. He borrowed a "magazine" from a police officer, explaining how it's incorrect to call them "clips" or "cartridges." The tutorial continued, covering the difference between semi-automatic and fully-automatic, and more.

Mike (and Anna) emphasized that no single law or set of laws will ever eliminate gun violence, but we can pass laws that reduce it, and we can do so while respecting the Second Amendment. Mike explained how the 2008 Supreme Court decision known as Heller put to rest two extreme positions. At one extreme, it said that the government could not ban all guns. At the other, it said that the right to bear arms is not unlimited, just like the right to freedom of speech is not unlimited (e.g. you can't yell "Fire!" in a crowded theater). What you find in the Bill of Rights are fundamental rights, not absolute ones, and they are subject to restriction where it makes sense to do so. In writing for the Heller 5-4 majority, Antonin Scalia - as conservative a Supreme Court justice as you can find - explicitly cited the government's authority to (1) ban certain weapons, (2) ban certain people from owning any guns, and (3) ban all guns from certain areas.

Responding to a man who felt it was too difficult to get a permit to carry a concealed weapon, Mike pointed out that his concern pertained to state law, not federal. A chorus of boos erupted when another man, citing the NRA's current go-to line ("The only thing that stops a bad guy with a gun, is a good guy with a gun"), advocated arming teachers. Anna, asking teachers in attendance to raise their hands, responded that they have neither the background nor the time to go through the extensive training needed. Moreover, as Blink author Malcolm Gladwell noted, even with extensive training, good guys with guns can make tragic mistakes.

At one point a man's voice broke as he described how he lost his son to a gun suicide. The most poignant for me, however, was someone who sat through the entire meeting without saying a single word, but who I knew had lost a brother in the 1993 massacre at 101 California Street in San Francisco.

When the conversation came around to last Wednesday's Senate vote on gun violence, neither Mike nor Anna minced words. Although 90% of the country is in favor of background checks, the Senate voted them down (54 voted for it compared to 46 against, but they needed 60 to overcome the filibuster). Mike said the task force had videos showing prospective gun show buyers asking if they could buy a gun even though they could not pass a background check; of course they could, some sellers said cheerfully. Legally speaking, those sellers who didn't have a federal license were right. An estimated 40% of all gun purchases do not currently require a background check.

The vote on background checks was shameful, but Mike pointed out it was by no means the most shameful vote. The Senate also voted down amendments to criminalize straw purchases - buying a gun for someone else who can't pass a background check - and gun trafficking. Who, Mike asked rhetorically, is in favor of gun trafficking?

Although I kept my mouth shut, I know who profits from gun trafficking: gun manufacturers. One way or another, manufacturers profit off every gun, including those sold to - or stolen by - criminals and others who can't legally obtain them. But every gun that lands in the hands of bad guys is extra profitable, because it scares law-abiding citizens, who are far more numerous, into buying more guns.

Background checks; criminalizing trafficking; criminalizing straw purchases. All I have to say is: duh. Unfortunately I didn't hear anything about another meritable idea: mandatory gun insurance. Guns are dangerous; it's projected that by 2015 more people in the U.S. will die by gunfire than by car crashes (this is already the case in ten states). If gun insurance were mandatory, free markets would encourage a whole host of practical ideas - trigger locks, gun safes, guns that won't work if stolen, etc. We now have cars that automatically call for help when an airbag deploys. What about a gun that can be configured to automatically call for help when cocked? What about a "LoJack" service for guns? People still die because someone doesn't realize a gun is loaded. Why can't we solve that design problem? If you think these are dumb ideas (I might agree with you, upon further reflection), suggest your own.

Or another idea: require gun thefts to be reported. Exercising the right to bear arms goes hand-in-hand with bearing arms responsibly.

While I'll have to wait before seeing mandatory gun insurance, Mike is optimistic that the U.S. House of Representatives will vote on background checks. I admire him for trying, and I'll give the House (including Speaker Boehner) one gold star if they do. They are staying in the dog house if they don't.

 Update: The New York Times has a very interesting article on how the percentage of gun owners has declined.

Drop a cannonball from the Tower of Pisa. Where will it land?

An apocryphal story has Galileo dropping two cannonballs, one large and one small, from the top of the Tower of Pisa in 1589, to show people that small objects fall as fast as large ones.  Whether Galileo in fact performed the experiment, it's been done by many others.  Where did the cannonballs land?  Ignoring the effects of wind, the answer seems obvious; they fell straight down, and landed directly below, just as surely as two plus two equals four.  Indeed that’s a very accurate approximation.  Believe it or not, it’s only an approximation.

I find this weirdly comforting, like when you discovered that you could create many more colors than the six provided at the kindergarten fingerpaint easel. It's an affirmation that the world is full of endless, fascinating details, in every direction and at every scale.  No matter which direction you point your mental lens, no matter what magnification you set it to, the more you look the more patterns, intricate and beautiful, you will see.  Okay, so I like physics.  Sue me.

For the sake of discussion, let's keep it to one cannonball.  Assume there’s no wind resistance, the earth is spherical and of uniform density, the cannonball is as well, and there are no other gravitational forces.  Even in this simplified, imaginary world, calculating the exact landing spot, as opposed to a very accurate approximation, is hard.  (The fact that the Tower of Pisa has a noticeable lean has no bearing on the problem.)

The first complication is that the earth is rotating on its axis, and the tower is rotating along with it.  That means the top of the tower (i.e. the place where you drop the cannonball) is moving laterally faster than the plaza below.  Atop a 100 meter tower standing on the equator, you will travel roughly 628 meters farther every 24 hours (23 hours, 56 minutes, 4.0916 seconds, but who's counting).  This difference in lateral speed means the trajectory of a dropped cannonball will follow a slight curve.

The Tower of Pisa is north of the equator, which means its speed differential relative to the plaza below is smaller.  But it also leads to the second complication: the cannonball's trajectory will curve slightly south, due to Coriolis, an effect which is also responsible for the counter-clockwise rotation of hurricanes in the northern hemisphere.  So the cannonball will land slightly to the east and south of the spot below where it was dropped.

The cannonball's exact trajectory will depend on the forces it is subjected to.  The third complication is the centrifugal force produced by the earth's rotation, which counteracts to some degree the earth's gravity.  When weighing yourself, you will get a smaller number at the equator than at either of the poles (if the earth spun about 16 times faster, those at the equator would be weightless).  When you drop the cannonball, centrifugal force counteracts, somewhat, the downward acceleration due to gravity.

The fourth complication also lowers the downward acceleration at the moment the cannonball is dropped.  Over four centuries ago, in one of the most famous scientific advances, Isaac Newton showed that the force of gravity varies in inverse proportion to the square of the distance from the earth's center.  The top of the tower is farther from the center of the earth, which means the gravitational force is lower.  As the cannonball gets closer to the earth, the gravitational force increases.

The fifth complication has to do with the gravitational force caused by the cannonball itself.  All mass, no matter how small or how distant, exerts a gravitational force. While the cannonball is falling toward the earth, the earth is falling toward the cannonball.

The earth moves!  Two masses - the earth and the cannonball, in this case - accelerate toward each other.  Since the cannonball has less mass, it moves more than the earth does.  But the earth still moves. This universal law of gravitation was discovered by Isaac Newton.

Drop a cannonball from a 100 meter tower, and it will land after traveling slightly less than 100 meters, because the earth has been pulled ever so slightly toward the cannonball.

Einstein's theory of relativity introduces yet more complications, which I'll skip because I don't know enough about them.  And there may be more complications I haven't thought of.

These five complications have small effects, even when aggregated.  In almost any physics class, you can safely ignore them all, and pretend a dropped cannonball will fall straight down.  But rest assured that no matter where you look, if you choose to look further, there is more to find.

The Antidote

"For what?", you ask.  It's an excellent question, and, to be honest, after reading "The Antidote," a Grisham-esquely titled book by Oliver Burkeman, I still can't answer it.  To the best of my knowledge, the word "antidote" appears nowhere else in the book.  Nitpicking aside, I found the book, based on columns the author published in the Guardian.Weekend magazine, well written and well researched.  Like a Michael Lewis story, but with weirder characters - as if Michael Lewis had written a non-fiction version of Harry Potter.  (That analogy occurred to me after the first couple of chapters.  Later, by coincidence, J.K. Rowling makes a brief appearance.)

Here's how the book starts:

The man who claims that he is about to tell me the secret of human happiness is eighty-three years old, with an alarming orange tan that does nothing to enhance his credibility.  It is just after eight o'clock on a December morning, in a darkened basketball stadium on the outskirts of San Antonio in Texas, and - according to the orange man - I am about to learn 'the one thing that will change your life forever.'  I'm skeptical, but not as much as I might normally be, because I am only one of more than fifteen thousand people at Get Motivated!, America's 'most popular business motivational seminar,'  and the enthusiasm of my fellow members is starting to become infectious. ...  'Here's the thing that will change your life forever.'  [Dr Schuller, author of more than 35 books on positive thinking] then barks a single syllable - 'Cut!' - and leaves a dramatic pause before completing the sentence '... the word 'impossible' out of your life!  Cut it out!  Cut it out forever!'  The audience combusts. ...

The book's subtitle is much more specific: "Happiness for people who can't stand positive thinking."   Although I can't remember how the book caught my eye, I imagine this is it. People rarely accuse me of being excessively positive, a characteristic that, according to Burkeman, I share with journalists like himself.

This early passage contains hints of what comes later:

The logic of Schuller's philosophy, which is the doctrine of positive thinking at its most distilled, isn't exactly complex: decide to think happy and successful thoughts - banish the spectres of sadness and failure - and happiness and success will follow.  It could be argued that not every speaker listed in the glossy brochure for today's seminar provides uncontroversial evidence in support of this outlook: the keynote speech is to be delivered, in a few hours' time, by George W. Bush, a president far from universally viewed as successful.  But if you voiced this objection to Dr. Schuller, he would probably dismiss it as 'negativity thinking.'  To criticize the power of positivity is to demonstrate that you haven't really grasped it at all.  If you had, you would stop grumbling about such things, and indeed about anything else.

A brilliant business model: the less effective the philosophy is, the more profitable it becomes, since it can't be falsified, and all 15,000 attendees become prospective customers for Schuller's next visit to San Antonio.  But Burkeman's takedown of Schuller's philosophy turns out to be more perspicacious than merely suggesting that not all positive thinkers are successful and happy (although, I hasten to add, Bush 43 is nearly universally viewed as happy, inexplicably so); he points out that the power of positivity may not even lead to positive thoughts.  This is the realm of ironic process theory, which evolved out of research conducted by Daniel Wegner, a Professor of Psychology at Harvard.  At its core, it suggests that certain things are harder - nee impossible - to do when you try to do them, such as "not thinking about a white bear."  Being happy is one such thing, Burkeman argues.  Paraphrasing Burkeman, we can glimpse it out of the corner of our eye, but can't see it when we look directly at it; "For a civilization so fixated on happiness, we seem remarkably incompetent at the task. ... 'Ask yourself whether you are happy,' observed the philosopher John Stuart Mill, 'and you cease to be so.'"  During a chapter on Buddhism, the astute reader will contemplate that the secret to happiness might be, paradoxically, to not care whether or not we are happy.

Breathtakingly negative topics - Stoicism; a guy who sat on a park bench for two years; failure; insecurity; Mexico's fascination with death; the world's largest pubic louse - succumb to Burkeman's cheerful, engaging prose.  At times I think the book is repetitive, but it doesn't feel repetitive; when he finds several interesting ways to say the same thing, I'll happily read them all.  Analogous to Clinton's "third way" in politics, Burkeman's opus is a third angle on happiness, between "the futile effort to pursue solutions that never seem to work, on the one hand, and just giving up, on the other."  Sounds plausible to me, paradoxes and all.

Time Magazine: Why Medical Bills Are Killing Us

Here is a terrific long read: Time Magazine's fascinating, detailed look at why medical bills are killing us, by Steven Brill.

Update:

Some more links for those interested:

Matt Yglesias comments on the Time Magazine series.

David Goldhill: How American Health Care Killed My Father.

Jonathan Cohn: The Robot Will See You Now.

Atul Gawande: The Cost Conundrum and The Cost Conundrum (*).

Drone 101 - Chapters 1 and 2

I couldn't write a complete overview of drones even if I wanted to.  But the first two chapters often get shortchanged in the current media feeding frenzy over a leaked drone memo.

Chapter 1.  Finding and exploiting an opponent's weakness. On the surface, Chapter 1 has little to do with drones, but everything to do with the broader context in which they get deployed.  The "war on terror," as Bush 43 put it, better framed by Obama as the mission to "disrupt, dismantle and defeat al Qaeda," relies on two sets of rules: the rules of law enforcement and the rules of warfare.  Critics question whether the drone program properly follows those sets of rules.  That's a fair question, and it's good that the press have gone beyond blandly reporting drone strikes as if they were a common weather pattern.  We are great at law enforcement, and we are great at warfare; it stands to reason we should set high standards for both.  But while our gumshoes and GIs have no peer, neither set of rules is well-suited to disrupting, dismantling and defeating al Qaeda, a mission whose merit no one questions.

The rules of law enforcement assume that all countries have the means and the will to enforce laws, and that the focus should be on building cases, not preventing crime.

The rules of warfare assume uniformed soldiers sponsored by countries.  Deadly force gets employed based on split-second decisions by all, even the lowliest private.

Al Qaeda's asymmetric tactics fit neither set of rules.  That is not a coincidence.

A common military strategy is to attack along the seam between two opposing forces, since coordination difficulties will ensure that that is the weakest point along a war front.  In seeking to disrupt, dismantle and defeat al Qaeda, we employ two strategies, a military one and a law enforcement one.  The weakest point is the seam between the two.

Indeed that seam is the weakness al Qaeda seeks to exploit.  They don't wear a uniform, and they're not sponsored by any state.  That would suggest they are common criminals, where the rules of law enforcement apply.  But they gravitate toward countries where the rule of law is tenuous, at best.  In that seam between the two sets of rules, we inherit the disadvantages of both and the advantages of neither.

Chapter 2 - Drone capabilities. Into this foggy milieu enter drones, unmanned planes carrying cameras and missiles, controlled by U.S. pilots in Nevada or another remote location.  Before gnashing teeth over who is a legitimate target, when, under what conditions, and most of all, who gets to decide, one needs to read Chapter 2, which covers the four game-changing capabilities drones bring to the mission.  These capabilities have profound implications for developing new rules that address the threats that have emerged out of the subtle weaknesses of the current two-pronged (law enforcement and warfare) regime.

Section 2.1: Drones are unmanned.  Well, duh.  But this has huge implications for rules of engagement.  The critical problem with deploying troops to trouble spots is that they have to be given the right to defend themselves.  If fired upon, fire back!  Self-defense, however, means that people can get hurt, and it's not always the bad guys.  Innocent civilians and your own troops can get killed.  With drones, self-defense is irrelevant.

Section 2.2: Surveillance.  Lost in the debate about deadly force delivered via drone is the fact that the most powerful "weapon" carried by a drone is a camera.  In fact, most drones, which range in size from hand-held to a take-off weight exceeding a half dozen cars, are unarmed.  The most famous drone strike, which targeted and killed Anwar al-Awlaki, was likely preceded by hundreds if not thousands of hours of drone surveillance.  Regardless of the preferences of hawks as well as doves, we can expect the typical drone strike approval to require more intelligence.

Section 2.3: Time for deliberation.  By providing staggering amounts of data over prolonged time periods, continuous drone monitoring imposes an obligation, moral if not legal, for extended analysis and deliberation.  In World War II General Eisenhower would have rightly objected to having every shoot/don't shoot decision approved by an "informed, high-level official."  No such excuse exists for drones, where the decision to strike can play out over hours if not days and involve gigabytes of data.  Ultimately, if the right decision-making process involves approval from a dozen officials, digital drone technology supports it.

Section 2.4: Small, precise munitions.  Conventional wisdom holds that the U.S. military seeks to build weapons that make bigger and bigger explosions.  In reality, for the most part they are obsessed with building smaller weapons wielding less destructive power that limit collateral damage.  This won't comfort people who follow in the footsteps of Anwar al-Awlaki, who everyone agrees got what he deserved.  But it reduces collateral damage.  Small, precise munitions make it harder to justify collateral damage as a necessary side-effect of hitting a legitimate target.

Given the two discreet sets of rules we can bring to bear, disrupting, dismantling and defeating al Qaeda is a difficult challenge.  The unique capabilities of drones will help us meld the rules of law enforcement and the rules of warfare into a new hybrid set of rules that eliminates the seam al Qaeda is currently exploiting.

Update: Last year an article in the New York Times discussed some advantages of drones.

Update #2: Mark Bowden has a thoughtful article in the Atlantic.

How A/B web testing can unintentionally propagate stereotypes, including racism

Why does Google's ad network think people with names like Latanya and Rasheed have an arrest record?

Imagine the following scenario: An employer is Googling prospective job applicants. Some of those applicants have black-identified names. Due to his or her personal racism, the employer happens to be more likely to click on the InstantCheckmate ads that suggest “Arrested?” next to the black-identified names. And over time, Google’s AdSense algorithm learns that “ads suggestive of an arrest record” work better when associated with black-identified names. Voila.

Robonomics

If, later this century, we had robots so intelligent and so dexterous that they can perform any and every job a human can do, how would that affect the economy?

This thought experiment, which I'll name "WALL-E" in honor of the animated movie about a future civilization that comes close, was prompted by Ray Kurzweil’s book How to Create a Mind. (Coincidentally, the book includes many other interesting thought experiments.) For centuries the economy has engaged in "creative destruction," where technological advancement destroys jobs for humans - buggy whip and slide-rule assemblers, for example - while it creates others: auto mechanic, computer programmer, etc. Robots won't suddenly become the intellectual equals of humans, as the thought experiment implies. As we humans continually improve them, we will busily find valuable things to do that robots can't, at least yet. Maybe we will keep doing that forever. And even if robots were every bit as capable as humans, I can't imagine electing one to be president, or wanting one to be a hospice director. Perhaps our ultimate competitive advantage over robots is our mortality - although, when we figure out how neurons can directly communicate with computers, it may get difficult to tell human from robot.

Nevertheless, the WALL-E question stands. Where's the "creative" in creative destruction if each new job technological advancement spawns can be done better by a robot, at lower cost? Would we humans get jobs building robots? Remember the premise: any - any - job a human can do, a robot can do better. So robots, not humans, would build robots.

Accepting the premise at face value, it's an understatement to say the concept of human employment would be fundamentally transformed.

A lot would depend on who owns the robots. Let's say for argument that there were as many human-capable robots as humans, ten billion of each. Let's assume that due to technological advancement these incredible robots, robots so advanced they can do anything a human can do, only cost $5,000 per year to run.

At one extreme, all ten billion human-capable robots could be owned by me. I could "hire out" the robots at say $20,000 per year, making a annual profit of $150 trillion dollars. Meanwhile, Adam Smith's invisible hand would drive human salaries down to $20,000 per year. If there's demand for more than ten billion workers, remember I can have my robots build more robots. So while it's possible for humans to find employment, Adam Smith ensures they can't find jobs paying more than what I charge for my robots.

At the other extreme, each human in this scenario could own one robot. That would still create downward pressure on human wages, but the profit from robots would be spread far and wide. Current ownership of robots, limited though the robots are, is concentrated in large corporations, and we can expect that pattern to continue.

Capital and human labor are the inputs into all goods and services. In my WALL-E thought experiment, perhaps some people would find jobs paying $20,000 per year, but for all intents and purposes, human employment has been wiped out. Goods and services are produced entirely from capital, and income is composed entirely of investment income.

So, in WALL-E world income inequality very likely would be higher than today, as human wages fall and robot "wages" accrue to a concentrated few.

How then, could anyone (other than me, of course) afford to buy anything? It wouldn't even be in my self-interest to own the entire robot labor force, because no one could buy the stuff my robots produced. (As one example of this consideration, Henry Ford deliberately paid his workers above-market wages so they could afford the cars he sold, allowing him to sell more cars.) The public policy lesson is that concentrated robot ownership could lead to higher levels of income inequality, and at high enough levels, income inequality creates a drag on the economy, hurting everyone. Like I said, a lot would would depend on who owns the robots.

Another consideration is the relationship between productivity and wages. For much of the twentieth century, productivity increases, measured by Gross Domestic Product (GDP) per person, have lead to wage increases. When each worker can produce more, companies, in the aggregate, have sought more workers, not less. The expanding economy spawns a new, more productive job for every job destroyed; companies discover they must offer higher wages in order to fill those new jobs, even if the job is no more difficult and requires no more skill. Other companies then have to raise wages in order to retain their workers. In an effect identified by Baumol, an economist, this can even lead to wage increases for jobs (hair stylists, perhaps) where productivity has not increased.

But in WALL-E world, productivity increases push wages down, not up. If technological advances (developed by robots, of course) allow my robots to produce twice as much at the same cost, such that it takes two humans to replace one of my robots, then that will force human wages down to $10K per year.  And with robots in WALL-E world designing new, ever more capable robots, productivity growth would skyrocket.

I doubt we will ever be presented with a scenario as extreme as my WALL-E thought experiment, at least not in the twenty-first century. It's tempting to conclude that since the scenario won't occur, we won't have to contend with the issues WALL-E world raises. But these issues aren't binary. If a fraction of the scenario occurs, we will experience a fraction of the consequences. Hyperbolic extremes can illuminate subtle issues that exist in more realistic scenarios, but are hard to see. Although technology will fall short of the WALL-E thought experiment, it will continue to advance, and advance quickly. Thus, to some limited degree we will experience the effects discussed above.

In fact, income inequality has been increasing, a trend Tim Noah masterfully covered in a series of articles titled The Great Divergence. This could either be a passing fad, with income inequality dropping again soon, or the leading edge of a sustained climb, which if it occurs, would become the defining public policy issue of the twenty-first century.

And, in fact, we've also recently seen productivity growth coupled with stagnant wages:

The economy’s failure to ensure that typical workers benefit from growth is evident in the widening gap between productivity and median wages. In the first few decades after World War II, productivity and median wages grew in tandem.  But between 1979 and 2011, productivity—the ability to produce more goods  and services per hour worked—grew 69.2 percent, while median hourly compensation (wages and benefits) grew just 7.0 percent.

(I suspect average wages have done better than median wages, as wages for high income earners have probably grown.)

Perhaps we will soon invent whole new job categories in an expanded economy, and the stagnant median wages we've recently experienced will turn out to be a temporary phenomenon in the long arc of history. But the WALL-E thought experiment suggests that with sufficiently advanced technology, steadily increasing productivity will force wages down. Could wages be on a downward trajectory from now on? In The Lights in the Tunnel, author and Silicon Valley entrepreneur Martin Ford says yes:

A simple application of common sense should show us that there is some threshold beyond which the overall economy will become too capital intensive. Once this happens, lower prices resulting from improved technology will no longer result in increased employment. Beyond this threshold or tipping point, the industries that make up our economy will no longer be forced to hire enough new workers to make up for the job losses resulting from automation; they will instead be able to meet any increase in demand primarily by investing in more technology. ...

What might we expect to happen if the overall economy were approaching this tipping point, beyond which industries would no longer be labor intensive enough to absorb workers who lost their jobs to automation? We would probably expect to see gradually rising unemployment, stagnating wages and significant increases in productivity (output per hour of labor) as industries were able to produce more goods and services with fewer workers. That sounds uncomfortably close to what actually occurred in the years leading up to the current recession.

Even if technological advancement falls far short of WALL-E, it will greatly improve our future, just as it has improved our lives in the past. But our economy may already be experiencing side effects from accelerated productivity growth: greater income inequality and stagnant median wages. If economic growth doesn't keep pace with productivity growth, jobs and wages will decline, a serious problem at least until WALL-E world makes human labor obsolete. With the technological frontier moving as fast as it is, we need to either create new jobs at a much faster pace, or transition to an economy where human labor doesn't play the critical role it does today. (People might still work, but it would be more of a choice, influenced in part by factors other than income - labors of love.) Either way, we will need more than the bromide of education reform; we will need an entrepreneurial spirit our forefathers could never imagine.

Working poor have the highest marginal tax rates

Edward J. McCaffery, USC professor:

[The] highest marginal tax rates in America do not fall on the highest incomes, like [Phil Mickelson, a professional golfer], but on certain of the working poor, many of them single parents, who are being taxed at rates approaching 90% as they lose benefits attempting to better themselves.

General Martin Dempsey meets the new Army

General Martin Dempsey, later to become Chairman of the Joint Chiefs of Staff, meets the new U.S. Army:

Dempsey took command of the Army's 1st Armored Division in June 2003, when Iraqi insurgents were starting to target American troops with sniper fire, grenades and roadside bombs. As he prepared for a trip outside his headquarters, he took a moment to introduce himself to the crew of his Humvee. "I slapped the turret gunner on the leg and I said, 'Who are you?' And she leaned down and said, I'm Amanda.' And I said, 'Ah, OK,' " Dempsey told reporters at the Pentagon.

Whoever came up with the idea the earth is 6,000 years old, give him or her a break

Frankly I'm impressed that a writer living a couple of thousand-ish years ago, centuries before the scientific method, swagged the earth's age and was accurate to within six orders of magnitude.

The strength of weak ties

The above could pass for a Jackson Pollock painting, but it's actually a map of my current network, courtesy of LinkedIn Labs' InMap tool. (Update, January 9th, 2013: the tool appears to be down at the moment.)

Social network analysis took a huge leap forward with Mark Granovetter's 1973 paper, The Strength of Weak Ties.  The principles Granovetter described have both helped me and allowed me to help others.  The punchline: your "weak" connections might be the most valuable ones.