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Is it time to drop your health insurance?

On Wednesday, a team of researchers released a new study on Oregon's Medicaid expansion, showing that people who gained access to treatment had no statistically significant improvement on physical health measures like blood pressure or cholesterol.  I wrote:  "Given this result, what is the likelihood that Obamacare will have a positive impact on the average health of Americans? Every one of us, for or against, should be revising that probability downwards. I'm not saying that you have to revise it to zero; I certainly haven't. But however high it was yesterday, it should be somewhat lower today."

But how should we update our beliefs?  Does this mean there's a chance that health care doesn't work?    

That's one possible interpretation. Let's look at the strongest case.  Assume for a moment that if we could somehow study the entire population of the United States, we'd find that gaining access to health insurance doesn't improve blood pressure, blood sugar, or cholesterol control.  What would that tell us?  That health care doesn't work?

That's not actually as crazy as it sounds.  Lots of treatments are bad for you, and gaining access to the health system may just give you opportunities to get sicker.  Say you're an 88 year old with bad hips.  Now, maybe sitting still and not exercising is making you sick.  But going to get a hip replacement gives you all sorts of ways to die: blood clot, hospital acquired infection, adverse reaction to anaesthesia.  If it's not covered by insurance, maybe you'll stay home, take aspirin, and live longer.  

The jobs report isn't bad. But it's not great, either.

This morning's job report was in some ways a relief, and in some ways a disappointment.   The retail sector is weak right now, and retail can be a leading indicator of economic weakness (and also, a source of employment).  So I now have this sort of reflexive flinch when the jobs report comes out, as I half-expect a big blow to fall.  

That didn't happen this month, thankfully.  The jobs report was fine.  Payroll employment increased by 165,000--more than enough to soak up population growth.  Long term unemployment dropped by a quarter of a million people.  Retail employment was actually up.  

But if it wasn't too worrying, it also wasn't particularly cheering.  This is a middling jobs report for the middle of the business cycle.  But five years after the financial crisis, we still haven't had a month of really good job growth--the kind that America needs to put some of those long-term unemployed folks back to work.  The employment-to-population seems stuck at 58.6%.  That's the lowest it's been since the early eighties, when fewer women worked.  

Take a look at the employment-to-population ratio since 1990.

One of the most important health insurance studies ever done shows surprisingly little effect

Bombshell news out of Oregon today: a large-scale randomized controlled trial (RCT) of what happens to people when they gain Medicaid eligibility shows no impact on objective measures of health.  Utilization went up, out-of-pocket expenditure went down, and the freqency of depression diagnoses was lower.  But on the three important health measures they checked that we can measure objectively--glycated hemoglobin, a measure of blood sugar levels; blood pressure; and cholesterol levels--there was no significant improvement.  

I know: sounds boring. Glycated hemoglobin!  I might as well be one of the adults on Charlie Brown going wawawawawawa . . . and you fell asleep, didn't you?  

But this is huge news if you care about health care policy--and given the huge national experiment we're about to embark on, you'd better.  Bear with me.

Some of the news reports I've seen so far are somewhat underselling just how major these results are.  

Neat stories are too good to be true. True stories are too boring to sell.

Almost two years ago, the field of social psychology was rocked by some astounding news: Diederik Stapel, one of its stars, had been faking his research.  I don't mean that he'd been subtly altering figures to give better results, or maybe running through a series of increasingly implausible modeling assumptions until they delivered the results he'd expected.  I mean he'd apparently given up doing experiments entirely.  Instead he imagined experiments, imagined which results would look good, and then sat down at a computer and entered those numbers into a spreadsheet.  

The New York Times Magazine has an incredible article this week describing what Stapel did, and how he did it.  What's less clear is why he did it, or how he was able to get away with faking results for seven long years.  To his credit, Stapel, unlike most such fraudsters, does seem to grasp that what he did was wrong, and that he alone was responsible for his misbehavior.  It was a refreshing change from the complaints about witch hunts, bad childhoods, or the weakness of one's "standard operating procedures" that have accompanied most such revelations.  When Stapel's parents try to excuse him by criticizing the system, he corrects them:

The unspooling of Stapel’s career has given him what he managed to avoid for much of his life: the experience of failure. On our visit to Stapel’s parents, I watched his discomfort as Rob and Dirkje tried to defend him. “I blame the system,” his father said, steadfast. His argument was that Stapel’s university managers and journal editors should have been watching him more closely.

Stapel shook his head. “Accept that this happened,” he said. He seemed to be talking as much to himself as to his parents. “You cannot say it is because of the system. It is what it is, and you need to accept it.” When Rob and Dirkje kept up their defense, he gave them a weak smile. “You are trying to make the pain go away by saying this is not part of me,” he said. “But what we need to learn is that this happened. I did it. There were many circumstantial things, but I did it.”;

Questions linger in the wake of the Bangladeshi disaster

Matt Yglesias took a lot of flak last week for responding to an Erik Loomis post about the tragic collapse of a Bangladeshi garment factory by saying:

It's very plausible that one reason American workplaces have gotten safer over the decades is that we now tend to outsource a lot of factory-explosion-risk to places like Bangladesh where 87 people just died in a building collapse.* This kind of consideration leads Erik Loomis to the conclusion that we need a unified global standard for safety, by which he does not mean that Bangladeshi levels of workplace safety should be implemented in the United States.

I think that's wrong. Bangladesh may or may not need tougher workplace safety rules, but it's entirely appropriate for Bangladesh to have different—and, indeed, lower—workplace safety standards than the United States.

The reason is that while having a safe job is good, money is also good. Jobs that are unusually dangerous—in the contemporary United States that's primarily fishing, logging, and trucking—pay a premium over other working-class occupations precisely because people are reluctant to risk death or maiming at work. And in a free society it's good that different people are able to make different choices on the risk–reward spectrum. There are also some good reasons to want to avoid a world of unlimited choice and see this as a sphere in which collective action is appropriate (I'll gesture at arguments offered in Robert Frank's The Darwin Economy and Tom Slee's No One Makes You Shop At Walmart if you're interested), but that still leaves us with the question of "which collective" should make the collective choice.


The Taxman Cometh

Art may be valuable. But it's not deductible unless it turns a profit.

Maria at Crooked Timber wonders why the Minnesota Department of Taxation is hassling artists: 

One of the days, I’ll get around to reading the copy of Sandel’s ‘What Money Can’t Buy; The Moral Limits of Markets’. It’s even made the exquisitely painful cut of being one of only two dozen books brought on our three-month sojourn on the south coast of England. When I do read Sandel, I hope to acquire a greater appreciation for exactly how market thinking has permeated and corrupted so many aspects of human life.

One surprising place a weirdly attenuated and manically zealous form of market thinking has popped up is in the Minnesota tax office. (via BoingBoing) They’re running a quite unhinged vendetta against Lynette Reini-Grandell and Venus DeMars, a married couple who make music, art, poetry and teach English. The taxman running their audit says Reini-Grandell and DeMars’ creative activities don’t make enough money, and haven’t for years, thus proving the artists are mere hobbyists who shouldn’t get a tax break. Either they should turn a consistent profit by now, or have given up already and gone back to being good little consumers.

Fascinated, I clicked through the link she provides, and I think I can tell her: the couple in question are not actually making any money.  

They'd have had to take it eventually

Political Scientist Chris Lawrence makes an astute point in the comments of a Doug Mataconis post:  the way things were heating up in Florida, the case would have ended up before the United States Supreme Court, one way or another.

One other thing to bear in mind: as of the date of the court’s decision, the Florida state legislature was in the process of moving a bill to award all of the state’s electors to Bush (which under the 12th Amendment was its right; Scalia is often mocked on the left for saying in Bush v. Gore there is no right for the people to elect the president, but it’s right there in the text of the Constitution). Inevitably that would have been challenged in court. And inevitably that case would have ended up on the U.S. Supreme Court’s docket, because I can’t imagine the equally-politicized Florida Supremes ruling for the legislature’s position. So denying cert here just would have delayed matters further.

The original sin, in my view, was Gore's attempt to recount just the votes in a few heavily Democratic counties.  I'm not saying that Bush would have done any different, had the positions been reversed.  But once that had happened--and Democrats on local election boards and the Florida Supreme Court had decided to go along--there was no longer even a pretense that this was about anything other than naked post-facto power grabs, using whatever political levers your party controlled.  "Count all the votes", which most progressives now remember as the rallying cry, actually came very late in the process, and only after the Supreme Court of the United States told the Florida Supreme Court that no, it couldn't just let Al Gore add in some new votes from Democratic Counties his team had personally selected.  

By the time Bush v. Gore petitioned for cert, both sides were more or less nakedly maneuvering to declare their candidate the winner.  The Florida Supreme Court's November 21st decision was outrageous and completely unjustifiable.  So was Katherine Harris's clear determination to stop any recount that might help Gore. And while the Florida legislature was arguably within its constitutional rights to intervene to declare Bush the winner, this contravened more than a century of custom . . . and the behavior of the state Republican Party in the weeks prior made this seem less like a bid for fairness and closure than a bid to make their guy president.  The Florida Supreme Court would undoubtedly have ruled against the legislature, but of course, their prior behavior made it impossible to claim that they were just trying to insure a fair and democratic process.

Sandra Day O'Connor says that maybe the Supremes should have sat that one out. What if they had?

Teeth are grinding in front of computers from Bangor to Baltimore, San Diego to San Jose.  In a quiet interview with the editorial board of the Chicago Tribune, Sandra Day O'Connor mused of Bush v. Gore, "Maybe the court should have said, 'We're not going to take it, goodbye.'"

How much would have changed if they had just said "Thanks, but no thanks?" 

I love me some counterfactuals, and there's nothing more fun than ripping open ten year old wounds, so I thought I'd take a look at the likely outcomes if the Supreme Court had just bowed out of the whole mess in Florida.  

It turns out that this is not a simple question.  Much depends on when they'd bowed out, and what decisions were made by various parties in Florida.  

Is education turning into a caste system?

There used to be a big educational gap between poor children and everyone else.  And not just because they were in failing schools; poor kids showed up at school less prepared than the other kids, and the gap widened over the years. 

Now, according to Sean Reardon, there is also a gap between the middle class and the elite.  American society is increasingly stratified, he says, because elite parents are investing so much in the cognitive enrichment of their kids.

But is that really the right explanation?  The rich pulling away from the middle class is also exactly what we would see if test-taking ability has a substantial inherited component, and the American economy is increasingly selecting for people who are very, very good at taking tests. The latter is undoubtedly true, and there's some fairly strong evidence for the former, in the form of studies of adopted kids.  Such studies tend to show that adopted kids bear a much stronger resemblance to their biological parents in terms of lots of things, from weight to income to test scores, than they do to their adoptive parents.  Once you've hit a fairly basic parenting threshhold--food, health care, touching and talking to your kid, and not physically or sexually abusing them--the incremental benefits of more intensive parenting seem at best small, at worst unclear.  

I have no doubt that Reardon is right, and wealthy parents are investing more in their kids because they can.  But how do we know that this, rather than the fact of having parents who are great at taking tests, makes the difference. If you take a newly married graduate of the Naval Academy with strong SAT scores, do their kids show up at kindergarten meaningfully less prepared than the children of a hedge fund manager who makes many times more?

Are newspapers liberal because the market makes them that way?

David and Charles Koch, the billionaire brothers who fund a number of libertarian causes, are rumored to be interested in buying the Tribune Group, which includes the LA Times.  (Full disclosure: my husband received a one-year fellowship from the Charles Koch Foundation, and works for Reason Magazine, which I believe receives some funding from David Koch.)  As you can imagine, this has stirred up quite a bit of anxiety in some quarters.  Steve Pearlstein, the Washington Post's liberal business columnist, has suggested that perhaps the LA Times staff should threaten to quit if the Kochs buy the paper.

But regardless of labor action, my former colleague, Garance Franke-Ruta, writes that the Kochs effort is doomed.  Newspapers are liberal because their audience is liberal, she says.  And they're staffed by the people who live in cities, who are also liberal.

A friend who is 1) not liberal and 2) not in the news business asks me what I think of this.  Is it really impossible to imagine a conservative newspaper?  

Why no.  I don't have to even imagine.  The Wall Street Journal and the New York Post spring readily to mind.  So do smaller papers from smaller cities, like New Hampshire's Union Leader.  

Farm loans. Sympathetic administrations. And a judge who didn't worry about false positives.

A New York Times story this morning suggests a pattern of massive fraud and abuse, abetted by a complaisant government, in government settlements that were supposed to compensate for discrimination by the USDA against minority farmers.  

Long story short: black farmers complained that they had been discriminated against when seeking loans from a USDA program.   Those loans are supposed to help farmers buy seed and fertilizer, and float the long period between sowing and harvest.  They sued the Clinton administration, which settled even before they'd opened the discovery process.  This is known as the Pigford settlement, a name which will be familiar to readers of conservative news sites, which have been on this case for some time.

The New York Times reports that the judge initially restricted the settlement to people who had actually been farming during the period covered by the settlement, but some people complained.  What about people who had attempted to farm, but been stymied by their inability to procure government loans? Should they be shut out of the settlement?  So the judge expanded the criteria to include people who'd attempted to farm.  Unfortunately, the government doesn't keep track of people who have maybe thought about farming.  And apparently, it didn't have decades worth of records of the loans they'd denied.  So the government was forced to rely on the word of the applicants.  Here's what happened next:

Delton Wright, a Pine Bluff justice of the peace, recalled what happened after word of the settlement reached his impoverished region: “It just went wild. Some people took the money who didn’t even have a garden in the ground.” He added, “They didn’t make it hard at all, and that’s why people jumped on it.”

Stick to what you know

Jonathan Mahler has a very entertaining roundup of Curt Schilling's adventures in corporate life.  It seems that Schilling assumed that if he was good at being a pitcher, he'd probably also be good at running a video game company.  This was not the case:

Schilling had no idea how much time and money it took to build the software required for such a game. And he didn’t exactly help matters by weighing in with suggestions of his own. There was, for example, that instance when he mentioned in an e- mail that it might be cool to have mounted combat on flying pigs. The design team worked on nothing else for a week.

Indeed, Schilling didn’t know the first thing about the world outside baseball. That’s not hyperbole: He once asked the president of 38 Studios if employees got weekends off. Another time he suggested that they work 14 days straight so as not to lose their momentum. (No need for travel days when you’re playing only home games!) Schilling was so clueless that he had to be told by his wife’s uncle, a retired corporate executive, not to personally guarantee the company’s lease.

Schilling filled his board with family members and, to the dismay of his president, promised employees half of 38 Studios’ (notional) profits. He also insisted on retaining majority control of the company -- which became something of a problem when he started his search for outside investors.

Social networks are supposed to sell themselves. Apparently not.

When web publications have more pages than advertisers, they often run "house ads"--ads for the publication itself.  It's an increasing problem for the industry, because offering a digital page is cheap.  This is one of the reasons that web advertising has so far utterly failed to make up for the print ad revenue that publications have lost as traffic has moved online.  

This morning, I saw something a little bit surprising on James Lilek's site: a house ad for . . . Google.


I've never seen a Google house ad before.  And I had not, prior to this, been googling for information about Google+, or otherwise intimating to the search cookies that I wanted to be fed this sort of ad.  Which suggests one of two things: either Google is so disappointed in the performance of Google+ that it's willing to forgo ad revenue in order to try to goose a failing brand, or Google is no longer getting enough ad buys to fill its ever-growing inventory.  Either one is pretty interesting.

The new health care law requires Congress to buy insurance through the exchanges. That may be a problem.

Bit of a stir this morning, as Politico reports that Congress is considering exempting its staff from an Obamacare provision which will require all congressmen and staffers to get their health insurance through the exchanges.  Apparently, it's not clear that the government is authorized to actually pay for this insurance, meaning that the folks on Capitol Hill might have to buy insurance out of their own pocket.  (The ruling from the Office of Personnel Management, which governs this sort of question, is still pending.)

As you can imagine, Congress and their staffers are not happy about the prospect of paying for their own health insurance.  So Politico reports that they're discussing maybe getting together and offering themselves a little relief from the law.  Apparently, it's a lot easier to get Congress to talk about exempting themselves from Obamacare than it is to get them to talk about exempting the millions of other Americans who will be affected.

Ezra Klein argues that no, they're not talking about exempting themselves from Obamacare, just this specific provision, which Klein calls "a drafting error".  In response to which, I'd offer two observations:

First, this is, in fact, about exempting themselves from Obamacare.  This is a provision of Obamacare.  It is in the bill.  You may think that it shouldn't be in the bill, or that it shouldn't be in the bill in the way that it's written.  But--assuming that these discussions are actually happening--Congress is considering exempting itself from the one provision of the bill that actually directly affects Congress.  As far as they're concerned, this is exempting themselves from Obamacare; the rest of the bill affects Hill staffers only indirectly.  

People who are saying this is no big deal aren’t thinking things through.

This will be your second post today on the problem of collecting sales taxes on Internet transactions, because after I wrote the first post, it became clear to me that most people who are writing about it do not understand why this is onerous for small business. I mean, sure, hey, there's all these different rates, but that's what software is for!

It's pretty obvious that most of the people writing about the sales tax have never run a small business. They are thinking about the transaction from the point of view of the consumer, where you punch in what you want to buy, and the software painlessly calculates the percentage for you. Few of the commentators I've read have asked themselves what happens to the money after the software has collected the money. Do the sales tax fairies simply whisk it off to the nice folks at the state tax department?

Sadly, no. Rather, as an SBA guidebook for small businesses points out, you have to file a tax return with each and every locality for which you have collected tax. The bill streamlines this a bit, but you've still got to keep 50 states’ worth of records and file 40-odd states worth of returns. 

Generally, states require businesses to pay the sales taxes they collect quarterly or monthly. You’ll have to use a special tax return for sales taxes, and report all sales, taxable sales, exempt sales and amount of tax due. Not paying on time can result in penalties. As always, check with your state or local government about the process in your location.

About the Author

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Megan McArdle

Megan McArdle is a special correspondent for Newsweek and The Daily Beast covering business, economics, and public policy. A former senior editor at The Atlantic and writer for The Economist, Megan has a diverse work history including three small startups and a disaster recovery firm at Ground Zero.

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