I have to thank NPR for proving my point about physicians being a protected profession. You see, doctors are poor little boys and girls — must be shielded from the free market, unlike auto workers, dishwashers, and domestic care workers. How else can we explain a Morning Edition segment on the possibility of a doctor shortage that never once discussed their wages?
For the record, the average pay of doctors in the United States is roughly twice as high as the average for other wealthy countries. (Yes, they have high student loan debt. Their average debt load would be equivalent to roughly $20,000 for a typical worker.) This might be taken as prima facie evidence of doctor shortage. If there were more doctors it would presumably drive down their wages, making health care more affordable for the rest of us. (Why does everyone know that higher pay for workers in fast food restaurants means higher hamburger prices, but somehow the idea that higher pay for doctors raises health care costs seems bizarre?)
The piece in effect implies that the market relations don’t apply to physicians. In discussing the idea of training more doctors as a precaution, it tells listeners:
“But letting more people train to be doctors ‘just in case’ strikes Wilensky [Gail Wilensky, a health economist] and many other health economists as wasteful.
‘Are you really serious?’ Wilensky asks. ‘You’re talking about somebody who is potentially 12 to 15 years post high school — to invest in a skill set that we’re not sure we’re going to need?'”
Of course if we had more doctors their training would be used, they would just get paid less to use it. So what, no one forced them to become doctors? (If the market doesn’t apply to doctors, then why don’t we just cut their pay in half tomorrow and save everyone $90 billion a year? That is equal to more than half of a percentage point of GDP or 45 times the amount of improper disability payments over the last seven years that AP chose to highlight in a piece last weekend.)
Incredibly, the issue of immigration never once got mentioned in this piece. Given that immigration is front and center in the news right now and it is obviously cheaper to train doctors in other countries than in the United States, it would have been reasonable to expect that the issue would be raised. But apparently doctors are not yet ready to be exposed to the harsh winds of globalization.
Can we get another piece from David Leonhardt and the Washington Post on the mystery of stagnating middle class wages? (Yes doctors are at the high end, many are in the one percent and virtually all are in the top two percent of the income distribution.)
I have to thank NPR for proving my point about physicians being a protected profession. You see, doctors are poor little boys and girls — must be shielded from the free market, unlike auto workers, dishwashers, and domestic care workers. How else can we explain a Morning Edition segment on the possibility of a doctor shortage that never once discussed their wages?
For the record, the average pay of doctors in the United States is roughly twice as high as the average for other wealthy countries. (Yes, they have high student loan debt. Their average debt load would be equivalent to roughly $20,000 for a typical worker.) This might be taken as prima facie evidence of doctor shortage. If there were more doctors it would presumably drive down their wages, making health care more affordable for the rest of us. (Why does everyone know that higher pay for workers in fast food restaurants means higher hamburger prices, but somehow the idea that higher pay for doctors raises health care costs seems bizarre?)
The piece in effect implies that the market relations don’t apply to physicians. In discussing the idea of training more doctors as a precaution, it tells listeners:
“But letting more people train to be doctors ‘just in case’ strikes Wilensky [Gail Wilensky, a health economist] and many other health economists as wasteful.
‘Are you really serious?’ Wilensky asks. ‘You’re talking about somebody who is potentially 12 to 15 years post high school — to invest in a skill set that we’re not sure we’re going to need?'”
Of course if we had more doctors their training would be used, they would just get paid less to use it. So what, no one forced them to become doctors? (If the market doesn’t apply to doctors, then why don’t we just cut their pay in half tomorrow and save everyone $90 billion a year? That is equal to more than half of a percentage point of GDP or 45 times the amount of improper disability payments over the last seven years that AP chose to highlight in a piece last weekend.)
Incredibly, the issue of immigration never once got mentioned in this piece. Given that immigration is front and center in the news right now and it is obviously cheaper to train doctors in other countries than in the United States, it would have been reasonable to expect that the issue would be raised. But apparently doctors are not yet ready to be exposed to the harsh winds of globalization.
Can we get another piece from David Leonhardt and the Washington Post on the mystery of stagnating middle class wages? (Yes doctors are at the high end, many are in the one percent and virtually all are in the top two percent of the income distribution.)
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A front page Washington Post article touted the health of the U.S. economy, noting its 3.0 percent annual growth rate. While there are reasons for questioning whether even this growth rate will be sustained (October retail sales were weak, as was manufacturing output in both September and October), 3.0 percent growth is not especially strong given how far the economy is below its potential.
According to the Congressional Budget Office, the economy is still nearly 4.0 percent below potential GDP. With potential GDP growing at roughly a 2.2 percent annual rate, it would take us until 2019 to return to potential GDP if the growth rate remains at 3.0 percent. This would make it nearly 12 years since the beginning of the downturn, a longer period of under-utilization than even during the Great Depression.
It is also worth noting that Japan has not been quite the economic basket case implied in this piece. Its employment to population (EPOP) ratio increased by 2.2 percentage points since 2012. By comparison, the EPOP in the United States increased by just 1.1 percentage point over the same period.
A front page Washington Post article touted the health of the U.S. economy, noting its 3.0 percent annual growth rate. While there are reasons for questioning whether even this growth rate will be sustained (October retail sales were weak, as was manufacturing output in both September and October), 3.0 percent growth is not especially strong given how far the economy is below its potential.
According to the Congressional Budget Office, the economy is still nearly 4.0 percent below potential GDP. With potential GDP growing at roughly a 2.2 percent annual rate, it would take us until 2019 to return to potential GDP if the growth rate remains at 3.0 percent. This would make it nearly 12 years since the beginning of the downturn, a longer period of under-utilization than even during the Great Depression.
It is also worth noting that Japan has not been quite the economic basket case implied in this piece. Its employment to population (EPOP) ratio increased by 2.2 percentage points since 2012. By comparison, the EPOP in the United States increased by just 1.1 percentage point over the same period.
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That is a serious question. I ask in reaction to the assertion that increased U.S. domestic oil production sparked “a battle among OPEC members and other big producers for market share, leading to a crash in world prices.” This was a prediction from Michael Levi, a fellow at the Council on Foreign Relations. It was cited in a Slate piece by Jordan Weissman which argues that folks like me were wrong to be dismissive about the impact of U.S. production on world oil prices.
I am not saying that Weissman is wrong in his assessment of Saudi Arabia’s motives in increasing production, just that he is not obviously right. If the argument is that lower prices today will permanently displace domestic production, that doesn’t seem to make any sense. If increased demand pushes prices back above $100 a barrel in a year or two, what would keep domestic producers in the U.S. from coming back on line? if the answer is nothing (that seems the case to me), then how is Saudi Arabia gaining anything by increasing production and pushing down prices today.
As an alternative hypothesis, if the United States wanted to punish Russia and Venezuela, two countries with whom the Obama administration has issues, it would be difficult to think of a better mechanism than driving down the price of oil. Could the United States persuade Saudi Arabia to increase production to advance its foreign policy agenda? My guess is yes, but I will leave it to others to decide between these competing hypothesis.
One point that is not arguable is that the drop in world demand has actually had more impact in creating the current oil glut than increases in domestic supply. Current demand is 5.8 million barrels a day less than what was projected in 2007. This is twice the increase in domestic production over this period. That means the recession combined with conservation efforts deserve more credit for the oil glut than increased domestic production.
That is a serious question. I ask in reaction to the assertion that increased U.S. domestic oil production sparked “a battle among OPEC members and other big producers for market share, leading to a crash in world prices.” This was a prediction from Michael Levi, a fellow at the Council on Foreign Relations. It was cited in a Slate piece by Jordan Weissman which argues that folks like me were wrong to be dismissive about the impact of U.S. production on world oil prices.
I am not saying that Weissman is wrong in his assessment of Saudi Arabia’s motives in increasing production, just that he is not obviously right. If the argument is that lower prices today will permanently displace domestic production, that doesn’t seem to make any sense. If increased demand pushes prices back above $100 a barrel in a year or two, what would keep domestic producers in the U.S. from coming back on line? if the answer is nothing (that seems the case to me), then how is Saudi Arabia gaining anything by increasing production and pushing down prices today.
As an alternative hypothesis, if the United States wanted to punish Russia and Venezuela, two countries with whom the Obama administration has issues, it would be difficult to think of a better mechanism than driving down the price of oil. Could the United States persuade Saudi Arabia to increase production to advance its foreign policy agenda? My guess is yes, but I will leave it to others to decide between these competing hypothesis.
One point that is not arguable is that the drop in world demand has actually had more impact in creating the current oil glut than increases in domestic supply. Current demand is 5.8 million barrels a day less than what was projected in 2007. This is twice the increase in domestic production over this period. That means the recession combined with conservation efforts deserve more credit for the oil glut than increased domestic production.
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Robert Samuelson does the old “pox on both your houses” routine, complaining about Republicans who want tax cuts for rich people and Democrats who defend Social Security and Medicare. Naturally, there are many problems wrong with Samuelson’s formulation. (The “pox on both your houses” story will always sell in elite DC circles, it doesn’t matter what the facts of the situation are.)
First Samuelson asserts:
“Democrats’ rigid support of retirement spending is squeezing many valuable domestic programs that, like defense, are now underfunded.”
Really? Is there any evidence whatsoever that we would be spending more money on education, infrastructure, clean energy, etc. if we spent less on Social Security and Medicare? Samuelson certainly doesn’t present any. The reality is that we are under no real world budget constraints at the moment or in the near-term future. We face political constraints and there is no reason to believe that the Republicans would view an agreement to cut Medicare and Social Security as anything other than an opportunity to give more money to the rich.
The more fundamental problem is that Samuelson’s prescription of reducing benefits for the “affluent elderly” doesn’t make any sense. This is for two reasons. First, unless “affluent” means something different for Samuelson than the rest of us, there ain’t no money there. When we raised income taxes, the line for affluent was an income of $400,000 a year. Even if we cut that in half because we think seniors needs less money, we would find that there ain’t nothing there.
While people earning over $400,000 have very large incomes, which can provide substantial tax revenue, they don’t have very large Social Security checks. It would just be a rounding error in the budget if we took away all of their Social Security and Medicare. To really have a noticeable impact on the budget we would have to go after people who have non-Social Security income of around $40,000 a year. This is not most people’s definition of “affluent.” (It’s funny this double-talk appears in a piece lecturing the public on the need for honest discussion.)
The other problem with cutting benefits for the affluent elderly is that they paid for these benefits. We could with as much justification go after the interest payments on the government bonds held by the affluent elderly, but most people probably would not consider this very fair.
According to an analysis from the Urban Institute most seniors pay more in Social Security taxes than they will receive back in benefits. The value of Medicare benefits exceed the taxes paid in, but this is due to the fact that we pay twice as much per person for our health care as people in other wealthy countries with nothing to show for it in terms of outcomes. The problem here is not how much seniors are getting, but rather how much we are paying to doctors, drug companies, and other health care providers.
Unfortunately, health care providers are a protected class in elite Washington circles. (Drug companies are big advertisers in the WaPo.) So instead we get pox on both your houses pieces that don’t make any sense.
Robert Samuelson does the old “pox on both your houses” routine, complaining about Republicans who want tax cuts for rich people and Democrats who defend Social Security and Medicare. Naturally, there are many problems wrong with Samuelson’s formulation. (The “pox on both your houses” story will always sell in elite DC circles, it doesn’t matter what the facts of the situation are.)
First Samuelson asserts:
“Democrats’ rigid support of retirement spending is squeezing many valuable domestic programs that, like defense, are now underfunded.”
Really? Is there any evidence whatsoever that we would be spending more money on education, infrastructure, clean energy, etc. if we spent less on Social Security and Medicare? Samuelson certainly doesn’t present any. The reality is that we are under no real world budget constraints at the moment or in the near-term future. We face political constraints and there is no reason to believe that the Republicans would view an agreement to cut Medicare and Social Security as anything other than an opportunity to give more money to the rich.
The more fundamental problem is that Samuelson’s prescription of reducing benefits for the “affluent elderly” doesn’t make any sense. This is for two reasons. First, unless “affluent” means something different for Samuelson than the rest of us, there ain’t no money there. When we raised income taxes, the line for affluent was an income of $400,000 a year. Even if we cut that in half because we think seniors needs less money, we would find that there ain’t nothing there.
While people earning over $400,000 have very large incomes, which can provide substantial tax revenue, they don’t have very large Social Security checks. It would just be a rounding error in the budget if we took away all of their Social Security and Medicare. To really have a noticeable impact on the budget we would have to go after people who have non-Social Security income of around $40,000 a year. This is not most people’s definition of “affluent.” (It’s funny this double-talk appears in a piece lecturing the public on the need for honest discussion.)
The other problem with cutting benefits for the affluent elderly is that they paid for these benefits. We could with as much justification go after the interest payments on the government bonds held by the affluent elderly, but most people probably would not consider this very fair.
According to an analysis from the Urban Institute most seniors pay more in Social Security taxes than they will receive back in benefits. The value of Medicare benefits exceed the taxes paid in, but this is due to the fact that we pay twice as much per person for our health care as people in other wealthy countries with nothing to show for it in terms of outcomes. The problem here is not how much seniors are getting, but rather how much we are paying to doctors, drug companies, and other health care providers.
Unfortunately, health care providers are a protected class in elite Washington circles. (Drug companies are big advertisers in the WaPo.) So instead we get pox on both your houses pieces that don’t make any sense.
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Steve Rattner gets many things right in his NYT column on income inequality. (Okay, I’m going soft because he used a chart from CEPR on mandated vacation.) But there is one point worth correcting.
His charts showing income inequality before taxes and transfers across countries is misleading. The OECD counts government run pension programs like Social Security as a transfer. Most other countries have much more generous public pension programs than the United States. As a result, many retired workers in these countries have no income except their government pension. They also pay more in “taxes” for their benefits.
This makes before-tax income seem much more unequal than would be the case if we treated the pensions as being privately run. That implied redistribution is then very large, even if the pension program is only modestly redistributive (i.e. workers’ benefits reflect what they paid into the program).
Btw, inequality really is not hard. If we free trade for the services of doctors and other highly paid professionals, a more efficient mechanism than patent monopolies for developing prescription drugs, and taxed the financial sector like other sectors, we could undo most of the increase in inequality over the last three decades.
Steve Rattner gets many things right in his NYT column on income inequality. (Okay, I’m going soft because he used a chart from CEPR on mandated vacation.) But there is one point worth correcting.
His charts showing income inequality before taxes and transfers across countries is misleading. The OECD counts government run pension programs like Social Security as a transfer. Most other countries have much more generous public pension programs than the United States. As a result, many retired workers in these countries have no income except their government pension. They also pay more in “taxes” for their benefits.
This makes before-tax income seem much more unequal than would be the case if we treated the pensions as being privately run. That implied redistribution is then very large, even if the pension program is only modestly redistributive (i.e. workers’ benefits reflect what they paid into the program).
Btw, inequality really is not hard. If we free trade for the services of doctors and other highly paid professionals, a more efficient mechanism than patent monopolies for developing prescription drugs, and taxed the financial sector like other sectors, we could undo most of the increase in inequality over the last three decades.
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Nope, the tree huggers are not proposing to tax chocolate as a way to slow global warming, the global warming deniers are raising the price of chocolate because of their insistence that we do nothing to combat global warming. According to an article in the Washington Post, cocoa production in the Ivory Coast and Ghana, which account for 70 percent of world production, has declined in recent years as a result of dry weather and the spread of a fungus.
Is this due to global warming? Well, we can only have probabilities, but we have to act on probabilities all the time. For example, we invaded Iraq ostensibly because there was a high probability that Saddam Hussein was developing weapons of mass destruction. (Some of us did know the probability was near zero, but no reason to go there.)
Anyhow, when we get people crying tears over the harm that will be done to people if carbon taxes or other restrictions on greenhouse gas emissions raise their energy prices we have to ask where are their tears when people pay higher prices for chocolate or other foods due to the effects of global warming? Or when they have to pay more taxes to pay for the damage from storms like Sandy?
When costs rise the economy doesn’t care whether it was due to a government imposed tax or the impact of human caused global warming. The effects are the same. If the former is “job-killing” so is the latter.
Nope, the tree huggers are not proposing to tax chocolate as a way to slow global warming, the global warming deniers are raising the price of chocolate because of their insistence that we do nothing to combat global warming. According to an article in the Washington Post, cocoa production in the Ivory Coast and Ghana, which account for 70 percent of world production, has declined in recent years as a result of dry weather and the spread of a fungus.
Is this due to global warming? Well, we can only have probabilities, but we have to act on probabilities all the time. For example, we invaded Iraq ostensibly because there was a high probability that Saddam Hussein was developing weapons of mass destruction. (Some of us did know the probability was near zero, but no reason to go there.)
Anyhow, when we get people crying tears over the harm that will be done to people if carbon taxes or other restrictions on greenhouse gas emissions raise their energy prices we have to ask where are their tears when people pay higher prices for chocolate or other foods due to the effects of global warming? Or when they have to pay more taxes to pay for the damage from storms like Sandy?
When costs rise the economy doesn’t care whether it was due to a government imposed tax or the impact of human caused global warming. The effects are the same. If the former is “job-killing” so is the latter.
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A NYT editorial today rightly raised warning signals about weak economic growth in the United States and around the world. While the basic point is well-taken — tens of millions of people are being denied the opportunity to work or to get pay increases due to bad macroeconomic policy — the piece does get a few things wrong.
Most importantly it criticizes Japan’s Prime Minister Shintzo Abe for failing to carry though with his commitment to bring more women into the labor market. Actually, Japan has made enormous progress in this area according to the OECD. It reports that the employment to population (EPOP) ratio for prime age women (ages 25-54) went from 69.1 percent in 2012, when Abe took office, to 72.0 percent in the most recent quarter. By comparison, the EPOP for women in this age group in the United States is just 69.9 percent.
This is a very dramatic increase in a relatively short period of time. Undoubtedly Japan can and should go much farther. If barriers are removed, such an inadequate child care arrangements and work place discrimination, their EPOP would certainly go higher. (It’s in the high 70s for the Nordic countries.) Also, many women are still excluded from better paying jobs and full-time employment. It is nonetheless worth noting the impressive progress that has been made under Abe.
There are a couple of smaller points worth mentioning in this piece. It reports that the euro zone grew by just 0.2 percent in the third quarter. This is a quarterly rate of growth. While it is conventional in Europe to report growth at quarterly rates, the standard in the United States is to report growth in annual rates. The annual rate of growth in the third quarter in the euro zone was 0.6 percent. This doesn’t change the argument, but newspapers should be trying to convey information in ways that are understandable to readers. It is almost certainly the case that most readers thought the 0.2 percent figure referred to an annual rate.
Finally, the piece refers to the recovery from the “financial crisis.” While the financial crisis was lots of fun, the reason that the economy in the United States and elsewhere are still stumbling is that we had housing bubbles that collapsed. These bubbles had been driving growth. In the wake of their collapse there is no source of demand to replace the demand that had been generated by the bubble. This is really a very simple story.
Focusing on the financial crisis is a distraction and makes the problem appear far more complex than is actually the case. It’s a problem of insufficient demand, end of story.
A NYT editorial today rightly raised warning signals about weak economic growth in the United States and around the world. While the basic point is well-taken — tens of millions of people are being denied the opportunity to work or to get pay increases due to bad macroeconomic policy — the piece does get a few things wrong.
Most importantly it criticizes Japan’s Prime Minister Shintzo Abe for failing to carry though with his commitment to bring more women into the labor market. Actually, Japan has made enormous progress in this area according to the OECD. It reports that the employment to population (EPOP) ratio for prime age women (ages 25-54) went from 69.1 percent in 2012, when Abe took office, to 72.0 percent in the most recent quarter. By comparison, the EPOP for women in this age group in the United States is just 69.9 percent.
This is a very dramatic increase in a relatively short period of time. Undoubtedly Japan can and should go much farther. If barriers are removed, such an inadequate child care arrangements and work place discrimination, their EPOP would certainly go higher. (It’s in the high 70s for the Nordic countries.) Also, many women are still excluded from better paying jobs and full-time employment. It is nonetheless worth noting the impressive progress that has been made under Abe.
There are a couple of smaller points worth mentioning in this piece. It reports that the euro zone grew by just 0.2 percent in the third quarter. This is a quarterly rate of growth. While it is conventional in Europe to report growth at quarterly rates, the standard in the United States is to report growth in annual rates. The annual rate of growth in the third quarter in the euro zone was 0.6 percent. This doesn’t change the argument, but newspapers should be trying to convey information in ways that are understandable to readers. It is almost certainly the case that most readers thought the 0.2 percent figure referred to an annual rate.
Finally, the piece refers to the recovery from the “financial crisis.” While the financial crisis was lots of fun, the reason that the economy in the United States and elsewhere are still stumbling is that we had housing bubbles that collapsed. These bubbles had been driving growth. In the wake of their collapse there is no source of demand to replace the demand that had been generated by the bubble. This is really a very simple story.
Focusing on the financial crisis is a distraction and makes the problem appear far more complex than is actually the case. It’s a problem of insufficient demand, end of story.
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When a Washington Post editorial frets over weak wage growth is is a bit like ISIS wondering why foreign reporters don’t seek their leaders out for interviews. Come on folks, are you serious?
We’ve had three and half decades in which we have maintained much higher unemployment rates than in the Golden Age (1947-1973) when workers shared in the gains of productivity growth. As Jared Bernstein and I show in our book, wage growth at the middle and the bottom of the wage ladder is directly related to the level of unemployment. Of course the Washington Post has endorsed most of the high unemployment policies in the form of the Fed’s anti-inflation policy, a high dollar policy that gave us large trade deficits, and reducing budget deficits and thereby depriving the economy of much needed demand.
But the Post’s attack on wages goes well beyond these macroeconomic policies. It has supported trade deals that are designed to put downward pressure on the wages of large segments of the labor force by placing them in direct competition with low-paid workers in the developing world. Yet, it will not even consider policies that would allow consumers to gain by subjecting doctors, lawyers, and other highly paid professionals to the same sort of competition.
The paper also has been an enthusiastic supporter of increased protectionism in the form of stronger patent and copyright protection. As a result of patent protection, we now spend close to $400 billion a year (@2.2 percent of GDP) on prescription drugs alone. We would probably spend about one-tenth this amount if drugs were sold in a free market.
And, the Post has been a consistent opponent of policies that would restore the balance of power between unions and management. The plunge in unionization rates has also been a big factor in reducing wages for most workers.
And,the Post has been a protector of the vast rents earned by rich people in the financial sector. It has opposed the I.M.F. and others who want to subject the financial sector to the same level of taxation of other sectors.
So, the WaPo is troubled by the fact wages aren’t growing. Hmmm, maybe if they followed the news more closely they would be better informed on the topic.
When a Washington Post editorial frets over weak wage growth is is a bit like ISIS wondering why foreign reporters don’t seek their leaders out for interviews. Come on folks, are you serious?
We’ve had three and half decades in which we have maintained much higher unemployment rates than in the Golden Age (1947-1973) when workers shared in the gains of productivity growth. As Jared Bernstein and I show in our book, wage growth at the middle and the bottom of the wage ladder is directly related to the level of unemployment. Of course the Washington Post has endorsed most of the high unemployment policies in the form of the Fed’s anti-inflation policy, a high dollar policy that gave us large trade deficits, and reducing budget deficits and thereby depriving the economy of much needed demand.
But the Post’s attack on wages goes well beyond these macroeconomic policies. It has supported trade deals that are designed to put downward pressure on the wages of large segments of the labor force by placing them in direct competition with low-paid workers in the developing world. Yet, it will not even consider policies that would allow consumers to gain by subjecting doctors, lawyers, and other highly paid professionals to the same sort of competition.
The paper also has been an enthusiastic supporter of increased protectionism in the form of stronger patent and copyright protection. As a result of patent protection, we now spend close to $400 billion a year (@2.2 percent of GDP) on prescription drugs alone. We would probably spend about one-tenth this amount if drugs were sold in a free market.
And, the Post has been a consistent opponent of policies that would restore the balance of power between unions and management. The plunge in unionization rates has also been a big factor in reducing wages for most workers.
And,the Post has been a protector of the vast rents earned by rich people in the financial sector. It has opposed the I.M.F. and others who want to subject the financial sector to the same level of taxation of other sectors.
So, the WaPo is troubled by the fact wages aren’t growing. Hmmm, maybe if they followed the news more closely they would be better informed on the topic.
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This one should be in the “you must be kidding category.” The New York Times has a front page story with the headline, “Cost of Coverage Under the Affordable Care Act (ACA) to Increase in 2015.” Hmm, that would mean that 2015 is just like 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007 … you get the idea. Costs of health care have always gone up, apparently the Affordable Care Act didn’t change this fact. NYT headlines ain’t what they used to be.
The substance of the article, insofar as there is any, is not much better. There are places in the country where some plans had large increases in prices. That is unfortunate, but if the NYT had a bit more experienced reporters, they would know that there were frequent incidents of large increases in insurance premiums before the ACA. Given that there are literally thousands of different plans, it would be surprising if some did not have large increases.
While the article focused exclusively on the plans and areas with large increases (which are mostly sparsely populated cities and counties), it could have also focused on the areas in its own chart with small premium increases or even decreases. For example, the chart shows that the average premium in Cook County, IL (which includes Chicago) raised its premium by 1.0 percent in 2015. The average premium in Cuyahoga County, OH (which includes Cleveland) fell by 1.6 percent. And, the average premium in Bergen County, just outside of New York City, fell by 0.9 percent.
Information on the overall pattern of premium increases is news. The New York Times really didn’t need to hire reporters to know that some insurers raised their rates on some plans by a large amount.
This one should be in the “you must be kidding category.” The New York Times has a front page story with the headline, “Cost of Coverage Under the Affordable Care Act (ACA) to Increase in 2015.” Hmm, that would mean that 2015 is just like 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007 … you get the idea. Costs of health care have always gone up, apparently the Affordable Care Act didn’t change this fact. NYT headlines ain’t what they used to be.
The substance of the article, insofar as there is any, is not much better. There are places in the country where some plans had large increases in prices. That is unfortunate, but if the NYT had a bit more experienced reporters, they would know that there were frequent incidents of large increases in insurance premiums before the ACA. Given that there are literally thousands of different plans, it would be surprising if some did not have large increases.
While the article focused exclusively on the plans and areas with large increases (which are mostly sparsely populated cities and counties), it could have also focused on the areas in its own chart with small premium increases or even decreases. For example, the chart shows that the average premium in Cook County, IL (which includes Chicago) raised its premium by 1.0 percent in 2015. The average premium in Cuyahoga County, OH (which includes Cleveland) fell by 1.6 percent. And, the average premium in Bergen County, just outside of New York City, fell by 0.9 percent.
Information on the overall pattern of premium increases is news. The New York Times really didn’t need to hire reporters to know that some insurers raised their rates on some plans by a large amount.
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If you doubt that AP would write a story to make this point, you guessed correctly. AP actually decided it was REALLY BIG NEWS that Social Security’s inspector general found evidence that 0.2 percent of payments were improper.
The news service devoted a major article to reporting that $2 billion in benefit payments over the last seven years appear to have been given to people who did not qualify for disability. The piece neglected to mention that the program paid out close to $900 billion in benefits over that period. This means that improper payments identified in the inspector general’s report were less than 0.3 percent of the total payments in the program.
Since the piece does not provide any context it is likely that many people will be led to believe that the disability program is rife with fraud when in fact the report is indicating the opposite. It would be great if improper payments were zero, but in a program that pays out $140 billion in benefits every year, this is not going to happen. It makes sense to try to reduce improper payments as much as possible, but it doesn’t make sense to spend $10 billion to eliminate $2 billion in improper payments.
It is also important to note that there are undoubtedly people who should be getting disability who have been wrongfully denied benefit. We could have workers dying of cancer or unable to work due a heart attack or stroke or other disability who an a judge somehow decided was not eligible. If we put more pressure on judges to turn down claims then there will be more people improperly denied benefits.
There is another important point to keep in mind when the media decided to highlight relatively small amounts of waste or improper payments in government programs. AP has this information because the government investigated its own payment practices and issued a public report. Walmart, GE, and other private companies don’t disclose instances of fraud and improper payments so we aren’t likely to read AP stories about the waste and abuse in the private sector. (They could do their own investigations, but that’s another story.)
Anyhow, if we start hearing political hysteria over $2 BILLION in improper disability payments over the coming months, remember to have sympathy for the folks who have problems with big numbers.
If you doubt that AP would write a story to make this point, you guessed correctly. AP actually decided it was REALLY BIG NEWS that Social Security’s inspector general found evidence that 0.2 percent of payments were improper.
The news service devoted a major article to reporting that $2 billion in benefit payments over the last seven years appear to have been given to people who did not qualify for disability. The piece neglected to mention that the program paid out close to $900 billion in benefits over that period. This means that improper payments identified in the inspector general’s report were less than 0.3 percent of the total payments in the program.
Since the piece does not provide any context it is likely that many people will be led to believe that the disability program is rife with fraud when in fact the report is indicating the opposite. It would be great if improper payments were zero, but in a program that pays out $140 billion in benefits every year, this is not going to happen. It makes sense to try to reduce improper payments as much as possible, but it doesn’t make sense to spend $10 billion to eliminate $2 billion in improper payments.
It is also important to note that there are undoubtedly people who should be getting disability who have been wrongfully denied benefit. We could have workers dying of cancer or unable to work due a heart attack or stroke or other disability who an a judge somehow decided was not eligible. If we put more pressure on judges to turn down claims then there will be more people improperly denied benefits.
There is another important point to keep in mind when the media decided to highlight relatively small amounts of waste or improper payments in government programs. AP has this information because the government investigated its own payment practices and issued a public report. Walmart, GE, and other private companies don’t disclose instances of fraud and improper payments so we aren’t likely to read AP stories about the waste and abuse in the private sector. (They could do their own investigations, but that’s another story.)
Anyhow, if we start hearing political hysteria over $2 BILLION in improper disability payments over the coming months, remember to have sympathy for the folks who have problems with big numbers.
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