2011 - %3, April

Though it's been billed as a courageous feat of fiscal responsibility, Paul Ryan's 2012 budget ultimately isn't a cost-control plan for the nation's health-care system.  It's a cost-shifting plan that simply moves the burden of paying for health care from the government to the backs of the elderly, poor, and disabled beneficiaries of government programs.  How much more will seniors and the disabled have to pay for their Medicare coverage under Ryan's plan?  According to the Congressional Budget Office, a lot more.  Kaiser Health News has the details:

For example, by 2030, under the plan, typical 65 year olds would be required to pay 68 percent of the total cost of their coverage, which includes premiums, deductibles, and other out-of-pocket costs, according to CBO.  That compares with the 25 percent they would pay under current law, CBO said. 

Why would they have to pay so much more?  Under Ryan's plan, Medicare essentially cease to function as an insurance system for beneficiaries.  Instead, seniors would given a set amount of money from the government to purchase insurance on their own, meaning they would pay a higher percentage of the overall cost of coverage. 

What's more, Kaiser News continues, traditional government-run Medicare is cheaper than private plans, partly because its payment rates to doctors and hospitals are lower and because the government has lower administrative costs.  Experiments in privatization have demonstrated as much: Medicare Advantage, a version of Medicare run by private insurers, has been riddled with waste, overspending, and inefficiencies.  So seniors would essentially be hit twice under Ryan's plan, paying more out of pocket for a product that costs more. 

On Tuesday evening, as election officials tallied the nearly 1.5 million ballots cast throughout the state, the two candidates traded the lead, but the race never looked close to finished.  Prosser, a sitting justice on the court, dominated conservative areas like Washington and Waukesha Counties, the latter the home turf of Governor Walker.  But Kloppenburg, a long-time assistant attorney general, fared well in urban counties like Dane, which includes the liberal capital Madison, and Milwaukee, home to the state's most populous city. 

There are still 24 precincts yet to be recorded by the Associated Press, which keeps a running tally.  Of those, 22 precincts are in districts where Kloppenburg has won the majority of votes already cast, including urban areas like Milwaukee (2 to be counted) and Dane (1 left).  In other words, the stragglers left to be tallied in this race could very well tip the scale to Kloppenburg. 

Now, with such a tight race, there will no doubt be legal challenges to the results, and possibly a recount.  That challenge could even end up before the state Supreme Court itself, at which point Prosser would no doubt have to recuse himself from the decision.  But even if Kloppenburg ends up falling short, progressives and unions can call the race a victory for them.  A few months ago, Prosser, who beat Kloppenburg in the four-way primary by 30 point, was expected to coast to victory. " Even if she comes up short, a very powerful message has been sent," says Robert Kraig, executive director of Citizen Action of Wisconsin. 

Members from the U.S. Army 173rd Airborne Brigade Combat Team conducts combat jump operations from a C-17 Globemaster III during a joint coalition training exercise March 23, 2011, at Aviano Air Base, Italy.  More than 1,400 personnel from the 173rd ABCT, the 8th Air Support Operation Squadron and Italian Army paratroopers participated in the weeklong event. ( U.S. Air Force photo/Staff Sgt.  Nadine Y. Barclay)

There is nearly a bipartisan consensus that any cuts to Medicare and Social Security should spare the baby boomers and the elderly.  And, certainly, retirees or people on the verge of retirement shouldn’t have their benefits changed radically.  But the consensus, like Mr. Ryan’s plan, goes too far. 

The reason is partly political.  Older people vote in larger numbers than younger adults.  And children, of course, can’t vote at all.  But beyond politics, Washington’s age bias depends on a basic misunderstanding of the budget — namely, that older people have already paid for their Medicare benefits. 

They haven’t.  For most Americans, Medicare resembles a giant welfare program.  They receive far more in government benefits than they ever pay in taxes and premiums.  The gap for a typical household runs to several hundreds of thousands of dollars. 

This is a point that few people ever make explicitly: today's retirees aren't merely getting benefits that they've paid for their entire lives.  They're drawing way, way more from Medicare than they ever put into it.  To make this concrete, here's an estimate from the Urban Institute of how much a single man who retired last year will get in lifetime Medicare payments. ( All of this has been adjusted for inflation.) 

This retiree is going to get three times more out of Medicare than he ever paid in.  So if it's really true that everyone needs to sacrifice, then why should current retirees, who are getting such a sweet deal from the rest of us, be excluded from the pain? 

This is just one of many ways in which Paul Ryan's budget plan is the farthest thing imaginable from courageous, even though that seems to be the most common adjective to describe it.  Ryan ignores Social Security because he knows privatization won't fly and he doesn't have the courage to propose a mainstream reform of the system that would be unpopular with conservative mandarins.  He exempts seniors and baby boomers from his Medicare plan because he doesn't have the courage to take on a powerful Republican voting bloc.  He eschews details, basing the bulk of his plan on little more than theoretical spending caps, because he doesn't have the courage to explain what his spending reductions would actually mean.  He focuses most of his cuts on programs for the poor because he doesn't have the courage to tackle weak claims rather than weak claimants.  He gives the Pentagon a pass because he doesn't have the courage to stand up to hawks in his own party.  And above all else, he refuses to consider tax increases of any kind because he doesn't have the courage to take on Grover Norquist and tell his own caucus what every genuinely serious analyst already knows: the only way to tackle the long-term deficit is with both tax hikes and spending cuts. 

So explain to me: what's courageous about a Republican congressman proposing spending cuts for the poor, entitlement cuts only in the far future, tax cuts for the rich today, and hands off the Pentagon forever?  Nothing I can think of. 

Here's the latest on how much richer the rich have gotten: Last year, according to a USA Today analysis of corporate filings, median CEO pay jumped 27 percent.  Compare this to the paltry 2.1 percent pay raise earned by the typical American worker. 

Stock options have rewarded CEOs for layoffs instead of growth. 

In general, CEOs did so much better than everyone else due to their generous stock options, which surged in concert with last year's bull market.  Wall Street argues that there's nothing wrong with such incentive-based pay; it alignes the interests of corporate execs with their companies' shareholders.  But is that all that matters?  UMass economics professor William Lazonick notes that a huge chunk of corporate profits last year came not from legitimate gains, but from downsizing:

The fact that CEOs’ pay is rising along with stock prices underscores the disconnect between pay and companies’ true underlying performance, Lazonick says.  While companies in the S&P 500 boosted profit 47% last year, much of that was due to cost-cutting and layoffs, not from the creation of businesses and growth, Lazonick says.  Revenue, a gauge of the money flowing into businesses for selling goods and services, grew at a much slower pace than profit — and ended the year up just 7%. 

So in other words, a 7 percent pay hike for CEOs might have been fair; a 27 percent raise looks a lot more like profiting off the misery of the people who once worked for you. 

It's spring in Japan's ocean waters, the time of highest primary productivity, when lengthening days reawaken the hibernating marine foodweb. 

The satellite image above is from the area about 160 kilometers/100 miles north of the Fukushima I Nuclear Power Plant.  It was shot on 21 May 2009 and shows where Japan's two mighty ocean currents—the Kuroshio and the Oyashio—collide. 

The convergence zone is awesomely rich.  The Oyashio flows down form the Arctic, the Kuroshio up from the subtropics.  Where they meet you get all kinds of fascinating expressions of fluid dynamics—highlighted in the image above by eddies colored aquamarine by the presence of intensely blooming phytoplankton. 

Fluid dynamics drive biological dynamics too, and the phytoplankton are busting their tiny chlorophyll guts, so to speak, feasting in the collision zone—where nutrients are getting churned up from the seafloor to deliver nature's own signature blend of Miracle-Gro. 

According to the engineering specs for Earth, without phytoplankton making life from nonlife, there would be little life in the ocean, perhaps none in Japan or just about anywhere else. 

But this year the phytoplankton that feed everything else in the sea, one or four trophic levels removed, are likely to be sporting a couple of far-out new ingredients: iodine-131 and cesium-137. 

Atmospheric forcing (e.g., the radioactive fallout from air to sea via winds and rain)

(A single frame from an animation suggesting possible pathways for radionuclides in Japanese water.  Full animation here.  Credit: SIROCCO.) 

The SIROCCO group stress their disclaimers and I will too: These models are based on mathematical equations too simple to capture the dynamism and complexity of the physical and biological systems at play in the real world. 

Still, the models are a great starting point and are sure to get better fast. 

So far they suggests that the radionuclides falling from air to sea have spread ~600 kilometers/372 north-south miles along the shore, and ~150 kilometers/93 miles offshore.  Dilution goes hand-in-hand with dispersion, though, and these air-deposited radionuclides are 20 to 100 times less concentrated in ocean water the farther you move from the Fukushima plant. 

However the radionuclides being released directly into the ocean—from TEPCO's purposeful release of 10,000 tons of water, and from as-yet unknown leaking pathways—are acting differently. 

(A single frame from an animation showing ocean currents off Japan.  Full animation here.  Credit: SIROCCO.) 

The model suggests these ocean-released radionuclides are being naturally sequestered within 50 kilometers/31 miles of the plant.  But they're also more intense—1000 times more so around Fukushima than in the air-to-sea deposits further out. 

The good news is that the powerhouse of the Kuroshio Current—a humongous western boundary current like the Gulf Stream—appears to be forming a kind of firewall keeping the contamination away from Tokyo's coast and funneling it east. 

(A single frame from an animation suggesting possible vertical dispersion for radionuclides in Japanese waters.  Full animation here.  Credit: SIROCCO.) 

The SIROCCO model is also forecasting vertical dispersal in the ocean—an important consideration since at least some radionuclides will get incorporated into seafloor sediments and from there remobilized by living things that chomp on the seafloor. 

There isn't much that congressional fans of the planet can do to stop the bill that would forever bar the Environmental Protection Agency from regulating greenhouse gas emissions under the Clean Air Act.  The best they can hope for, at least in the House, appears to be renaming the bill.  A few options for renaming the "Energy Tax Prevention Act of 2011" that Democrats submitted to the Rules Committee as amendments:

"Koch Brothers Appreciation Act"

"Middle Eastern Economic Development and Assistance Act"

"Protecting Americans from Polar Bears Act"

"Oil Producing Economy Capitulation Act"

"Head in the Sand Act"

"Dirty Air Act of 2011"

"Termination of EPA Greenhouse Gas Regulation in Order To Eliminate the Clean Air Act"

Other amendments that Democrats have offered would seek to formally recognize that climate change is a problem that presents environmental, health, and national security risks. 

The House and Senate are both likely to vote this week on bills to block the EPA's greenhouse gas rules, and, as the Hill reports, the EPA riders are still dogging the budget fight.  Even if the efforts to gut EPA authority do pass, the White House affirmed on Tuesday in a formal "Statement of Administration Policy" that President Obama would veto such a measure. 

Have your own suggestions for what to re-name the EPA-gutting bill?  Weigh in below. 

A new paper suggests that countries start to experience growth slowdowns when their per capita incomes reach $17,000, a level that China will reach in about five years.  Ryan Avent:

The story this suggests is one that's quite at odds with the prevailing view in much of the world—that China's relentless growth will continue until it dominates the global economy.  Another possibility arises.  Within a few years, we may be reading "What's the matter with China?"  stories.  A growth slowdown and demographic difficulties will challenge the policy status quo and could potentially expose serious weaknesses in the growth model (as Warren Buffet says, when the tide goes out, one sees who's been swimming naked).  India, on the other hand, will be ascendent.  And that could make for a very different set of policy challenges and priorities within the rich world. 

I agree, and I'm surprised this isn't a more common narrative.  Demographic problems alone put serious limits on China's future growth path, and the slowdown in productivity once they hit the $17,000 income level will make things even worse.  China will plainly be a big player on the global stage for the rest of this century, but they're not going to take over the world quite as quickly as folk punditry often has it.  This is something to keep in mind the next time some hawkish outfit releases yet another study trying to scare everyone into big Pentagon budget increases in order to stave off the future red menace. 

House Republicans huddled late Monday and, according to a GOP aide, gave the speaker an ovation when he informed them that he was advising the House Administration Committee to begin preparing for a possible shutdown.  That process includes alerting lawmakers and senior staff about which employees would not report to work if no agreement is reached. 

Democrats are willing to endure a shutdown but are pretty obviously willing to compromise to avoid one.  Republicans, conversely, really want this to happen.  That's been obvious from the start, and we shouldn't allow anyone to let us to lose sight of this. 

With a government shutdown looking increasingly likely, Republicans are blaming Democratic leaders for failing to come to an agreement on government funding for the rest of 2011.  If House Speaker John Boehner (R-Ohio) and the Democrats fail to strike a deal by Friday, the government will shut down. " There's no other explanation except that [Harry Reid, the Senate majority leader] wants to have a government shutdown and blame it on Republicans," Rep. Mike Simpson (R-Idaho) told reporters Tuesday afternoon. 

But other Republicans have made it clear that there's major resistance within the GOP itself to any compromise whatsover.  Those Republicans have concluded that any deal that falls short of the drastic $61 billion in cuts that the House GOP is demanding would constitute abject failure.  Rep. Lee Terry (R-Neb.) explained the position of the House's right flank to reporters on Tuesday:

It's also clear from the number of people who have gone up at the microphone at our conferences that it's $61 [billion] or die…

Many of our constituents will think we've caved if it's less.  Now the reality is if you get to $58 or to $59 or $60 [billion], then say it's just silly to not take a deal like that.  But you never know.  There will be some that will say, if it's less than $61, if it $60.5 [billion]—someone's going to say it's not enough. 

There was a phrase coined for such posturing during the last government shutdown, when Newt Gingrich was speaker: the Perfectionist Caucus.  And if Boehner has too many ideological purists on his hands, he won't have any choice but to shut down the government—or else risk being stripped of his leadership role by his own caucus members.