The American Jewish Establishment

This article in the New York Review of Books about the divergence of Israel and American Jewish sentiment is a fantastic read. I'm not too well-versed on these issues, but the thrust of the article is that criticizing Israel is becoming more common from American Jews as Israel's policies diverge from liberal secular American Jewish mentality.

Bailout Funds

The financial regulation we're going to pass looks like it may have a bailout fund, filled by taxes on the big banks, which will be used to pay expenses incurred in winding down any bank that goes belly-up. Another similar concept is Superfund, where a tax was levied to create a pool that could pay for hazardous waste cleanup. It may be instructive to realize that currently Superfund money no longer comes from these taxes; the Federal Government pays out of pocket.

I'm very curious, though, why we think that establishing these funds is a good thing. In my opinion, every bank executive will now be searching for ways to get a hold of the bailout fund money. Furthermore, by establishing a bailout fund, aren't we creating an incentive for banks to continue with high risk investments? The only way to rein in the risk is to explicitly declare that there is NO safety net for these banks or for their creditors.

Al Queda vs. The Pirates!

This story of an al-queda linked group fighting against Somali pirates is fascinating. Al-Shabab apparently controls significant portions of southern Somalia; the pirates apparently operate out of the north. But this story is interesting because it illustrates that so-called "terrorist" groups are not all allies who fight the US. This story got a small blurb in the Washington Post, but is exactly the type of reporting I wish we had more of: something that makes us question our worldview and determine that things are not quite as simplistic as some would have us believe.

Why We Waited on Financial Regulation

This just clicked. We bailed out the banks, but then did nothing to regulate them, even though populist rage was at its peak and we could pass anything under the sun. I never understood why until now. I think that the real reason the Administration didn't want to do financial reform and "Too Big To Fail" regulation right away was three-fold. First, many wanted to do Healthcare as soon as possible (this is a poor reason). Second, we wanted to give the economy time to stabilize before enacting sweeping changes on the system (considering that this still hasn't happened, I'm uncertain it was a central facet of the decision). And finally and most cynically, the Administration wanted to recoup its bailout investment by letting the banks continue the status quo of unjustified profits, and only thereafter enact any sort of regulation.

This final point, I think, was biggest in the calculation. By recouping the bailout investment prior to regulations that would stymie big bank profits, Obama can regain some amount of political capital by saying that the bailout didn't cost taxpayers in the end. This was probably a politically smart calculation (despite the fact that it subsizided a year of excessive profits for the big banks), because regulation now looks imminent.

Of course, the real issue today is that we have set a precedent for bailouts. Because we are recouping most of the investment, future bailouts probably don't even look that bad from an Administration standpoint. As such, there is every reason to expect another bailout if it becomes the only way to prevent significant harm to the US economy. This means that Too Big To Fail is probably an even bigger issue today than it was a year ago.

Too Big To Fail...

By now we're very familiar with the idea of the Too Big To Fail banks. This article about Pfizer shows us, however, that the problem is not limited to financial institutions.

My knee-jerk response is that if we want to truly protect the public, our entire regulatory structure has to completely shift focus to ensure that no companies ever get too big to fail. This could also have the nice side-effect of limiting the deleterious consequences of the Citizens United decision and eliminating many anti-trust concerns.

The two significant downsides I can see arethe creation of a more hostile environment for corporations and increased costs coming from the minimization of economies of scale.

But what other solutions are there?

Gender Rating in Healthcare

Ok, so this is maybe a controversial topic, and I don't have strongly settled beliefs here, but for the sake of solidifying my position, here's where I stand now.

First, the status quo has what many consider to be a very discriminatory provision. According to this article, "[u]ntil now, it has been perfectly legal in most states for companies selling individual health policies...to engage in 'gender rating,' that is, charging a women more than men for the same coverage, even for policies that do not include maternity care. The rationale was that women used the health care system more than men."

My first question is this: do women actually use the health care system more than men? My intuition assumes so, and in a quick google search I found articles with "experts" stating this as fact, but I couldn't find any credible numbers to back it up. So, while I still consider this is an open question, for the sake of argument I will assume that women do, in fact, use the health care system more than men.

This brings my second question, which is whether, as a matter of policy, it is important to subsidize healthcare insurance so that men and women pay similar rates. Given the way the insurance system works, what will happen is that men's rates will rise to counteract women's rate's falling (In other words, the money's not coming from the treasury; for one group to get a subsidized rate, another group will be the subsidizer. No insurance company will be taking a haircut.). From a utilitarian perspective, the answer should be yes if subsidizing women's coverage this way will reduce the cost of healthcare as a whole. While lowering women's rates surely will result in more women covered and a lighter burden to all women covered, the resulting rise in men's rates will result in fewer men with coverage and a heavier burden for those covered. The former will reduce costs, but the latter will increase costs. Intuitively we may assume that the net impact will be reduced costs on average, but I haven't yet seen studies showing this.

However, even assuming that a net economic benefit results from this practice, there are still two issues that seem to be glossed over here. First, that considering only the economic implications of removing gender rating to society marginalizes the issue of the fairness to the individuals involved. And second, given the fix to this issue, that subsidizing women's healthcare should be the burden of men, rather than the burden of society as a whole.

Regarding this first issue, it is important that people respect the law. Government is a societal contract and when people do not respect the use of power by government, they try to remove themselves from the social contract. For example, we get things such as the Hutaree Christian Militia acting out. More likely with the elimination of gender rate, we stoke the flames of Men's Rights Organizations, which often allude to violent retribution for "unfair" laws. While I don't agree with these positions, it is reckless to ignore that any sort of redistributive policy will face resistance on grounds of fairness to the individual. So, even if there is a net economic benefit to society, there also must be a consideration of other, less tactile, results of the elimination of gender rating.

Regarding the second issue, I can't really see a reason to eliminate gender rating unless we decide that this is a societal problem. Given that discrimination certainly has psychic impact on the discriminated-against party, there truly does seem to be a societal rationale for eliminating it when possible. From that perspective, though, it really only makes sense that we should consider societal responses. Removing gender rating in the way it appears it's going to happen seems to me like the consultants in Office Space "fixing the glitch" to eliminate Milton's salary; an appropriate solution should instead deal directly with the issue of higher costs due to the inherent gender differences. In addition, just because there may be an economic benefit resulting from the elimination of gender rating, isn't it important to consider other alternatives that may eliminate this cost issue in more appropriate ways? I personally think it's important that we see healthcare as a societal burden, not an individual one. The elimination of the extra cost of insuring women should be something that we, as a society, think is important. In that vein, it should not be paid for by the other participants in the system, but rather by the federal government.

Finally, I cringe at calling this an issue of gender discrimination in the pejoritive sense. What I see from the effort to elimination gender rating frankly is not a moral argument for or against gender discrimination. While the public statements have always focussed on highlighting that it is discriminatory to gender rate in healthcare insurance, if we are taking a moral stance, how can we simultaneously ignore the same practice in car insurance, where the corrollaries are quite striking. So, no; this is not actually an ideological argument. This is really a cause to benefit society, which should not, by default, require resolution by men, but rather should be resolved by society as a whole.

Change the OLC?

Gerard Magliocca has a very interesting idea: what if we make the OLC career employees rather than political appointees?

http://www.concurringopinions.com/archives/2010/03/reforming-the-olc.html

As I think about this, I can't see any problem with this idea at all.