Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

31 March 2017

The Internet’s Most Deadly Spawn: AI and “Weaponized,” Individualized Propaganda and Fake News


[For comment on our weak Yankee defense against information warfare, click here. For some popular recent posts, click on the links below: In his classic novel 1984, George Orwell imagined a dictator called “Big Brother” who controlled all means of mass communication. By means of “newspeak” (which today we call “spin”) and occasional outright lies, Big Brother was able to slant people’s views of reality and current events. Thus he manipulated their understanding of social reality, controlled their political views, and maintained a totalitarian state. He even could get people to like the result.

As terrifying as it was, and still is, Orwell’s dark vision had a logical flaw. It was based on the media of mass communication of Orwell’s time—the “one-to-many” technologies of radio and television.

But we are all different. No only do we have variant genetic makeup, which presupposes different levels of intelligence, perception, understanding and doubt. Even more important, we all lead different lives and have different backgrounds, parents, experiences and education. What you say or show on video to push another person’s emotional buttons may not push mine.

So a single message won’t do for all. There will always be doubters, renegades, rebels and misfits who think differently from the mass. Without being too explicit about it, Orwell apparently presupposed controlling these recalcitrant folk by pedestrian means— the military and the police—as in all oppressive societies throughout history.

But Orwell never imagined the Internet. As we are all slowly coming to understand, it differs from radio and television even more than those media differ from the telephone, a mostly one-to-one means of communication (except for rare conference calls). Not only does the Internet allow one-to-many communication, like radio and TV. It also permits many-to-many communication (as in Facebook), and many-to-one communication, as in e-mail.

These Internet capabilities are well understood and much remarked. But another, much more powerful aspect of the Internet is only now beginning to be recognized. Its consequences are barely discernible now. But as investigations soon may reveal, they could include the election of Donald Trump and both the Trump campaign’s and the Russians’ roles in it.

The as-yet unappreciated aspect of the Internet is the impact of artificial intelligence, or “AI.”

When combined with AI, the Internet permits one-to-many communication and many-to-many communication in which a message is precisely tailored to each individual recipient. In other words, AI now makes it possible to “weaponize” political propaganda and “fake news” in order to push individuals’ emotional buttons individually. It makes possible individually tailored messages and videos, designed precisely for each individual receiving or viewing them.

The speed and massive informational capacity of modern computers not only allows today’s Internet media to do this. It allows them to send such messages and videos to millions of people at about the same time. From an individual, human point of view, recipients appear to receive separate “blasts” of propaganda virtually simultaneously.

But things can get even worse. With pedestrian encryption and erasure techniques, dark media can send these individually tailored messages secretly. Then they can erase them after they are read or viewed, or after they have been “posted” for a specified period of time. In this manner they can cover their tracks and avoid discovery by political opponents or the authorities.

With all this capability, it’s easy for dark media to assuage recipients’ doubt and raise new doubts. They can, for example, bombard each individual recipient with multiple variants of the same basic message, ostensibly all from different sources and different sites, but all ultimately motivated and prepared by a single, small human group. They can also overwhelm opposing messages with both variety and volume.

They key thing that most pols and policymakers fail to understand is what AI now makes possible. Today’s propagandist no longer needs an army of paid trolls, like that which Russia apparently uses in its now-routine attacks on Western democracies.

With clever enough AI programming, it is now possible to automate the entire process of preparing and sending the propaganda. Dark media can automate the production and transmission of “fake news,” even fake videos. Then they can respond automatically to opposing fake news and propaganda counterattacks. The entire process is analogous to so-called “high-frequency trading” in the world of finance.

For short messages, such as Tweets, the process can be almost completely automated, without significant human intervention. For longer messages, some online human composition and editing may improve the propaganda’s content and impact. It’s even possible to automate the process of producing short videos, of the type commonly posted on YouTube, with minimal human intervention, using available video clips and computerized voice synthesis.

How does AI let propagandists figure out what emotional buttons to press for each recipient? By gathering data from each recipient’s use of the Internet.

Here, for example, is a recent report on what information AI can gather simply by scooping up a prospective recipient’s “likes” on Facebook:
[W]ith a mere ten ‘likes’ as input [a particular computer] model could appraise a person’s character better than an average coworker. With seventy, it could ‘know’ a subject better than a friend; with 150 likes, better than their parents. With 300 likes, [this] machine could predict a subject’s behavior better than their partner. With even more likes it could exceed what a person thinks they know about themselves.”
With the aid of such intimate knowledge of a recipient, it’s possible to tailor propaganda precisely to his or her “likes” and dislikes on many social issues. In this way, it’s possible to maximize psychologically the chance of a positive response.

The quotation above may seem hyperbole, and it may in fact be a reporter’s personal take. But its general thrust is well within the capability of current technology. Even without AI, it’s a simple feat today for Web “crawlers” to collect massive amounts of data from publicly open Websites, such as those of most for-profit corporations and those of many public figures, political candidates and political parties. These people and institutions have every incentive to keep their Websites and Facebook pages free from privacy restrictions and therefore open to unrestrained data mining.

Against this background, a recent bill passed by both the Senate and the House, which President Trump is likely to sign, assumes sinister importance. By this bill, Congress would overturn an Obama-era FCC rule prohibiting Internet service providers from collecting and selling customers’ Web-browsing histories to third-party marketers without the customers’ consent. In other words, when/if this bill becomes law, it will create open season on use of voters’ entire Web-browsing histories.

Of course browsing histories are not the same as Facebook “likes.” But they are part of the complete online experiences of American consumers and voters. Indeed, checking a “like” box might be deemed a part of Web browsing and therefore fair game for rampant data mining under this bill.

The important point is that extensive Web-browsing histories, as much as “likes,” can be used to create an automated, online dossier on every American consumer. Pols and policymakers simply don’t understand how easy, quick and cheap it is today—with computer reaction times measured in nanoseconds and two-terabyte disk drives available to consumers at retail for under $70—to “mine” and store a single voter’s entire Web browsing history for future use.

Of course those data are valuable to commercial firms, which can use them to target ads more precisely and efficiently at consumers’ needs and desires. But the data are even more valuable to pols and propagandists, who can use voters’ Web-browsing histories to record what they read, what sources they return to over and over again, what issues matter to them, and to which causes and candidates they give real money. Then they can use these data to target “fake news,” “spin” and other propaganda precisely to each voter’s online personality. They can even automate the process of “weaponizing” their precisely targeted propaganda.

Thus does casual FCC-rule overruling, intended to facilitate commerce, threaten to undermine democracy and make all of pols’ stump speeches and in-person campaigning practically irrelevant.

Technology matters. It can shape a society, and it can undermine social order.

Twice on this blog (see 1 and 2) I have pointed out how practically absurd is trying to interpret our Second Amendment as our Founders did. In 1791, when they drafted and adopted it, breech-loading a single shot into a musket or pistol took about a minute—the powder first, the shot second, and a cloth tampon to hold both in place third. That minute allowed ample time for a crowd or even a couple of people to subdue a rogue shooter. Today’s technology, with which small arms with big magazines can discharge twenty or so rounds in a single second, creates far greater danger to life, limb and social order.

So it is with our First Amendment. The traditional theory for having virtually no effective control over speech is the “free marketplace of ideas.” If everyone can talk and write, the theory goes, readers and voters will have access to all competing ideas. They may stumble a bit in reaching the “right” conclusion, but the truth eventually will out.

That theory may have been viable at our Founding, when rival paper pamphlets were ubiquitous in our (then) relatively small cities, when each pamphlet typically ran just a few pages, and when opposing views were equally available. The theory was starting to crumble in the sixties, when the FCC adopted the “fairness doctrine” (which Ronald Reagan later abolished), requiring all broadcast attacks on political candidates to admit responses from those attacked on the very same broadcast channel. Today, the theory is an absurdly broken assumption about the Internet, in which there are millions of “channels,” each can contain book-length writings, video and audio, most users live in their own informational “bubble,” and clever media can propagandize them individually and even automate the process.

This is one of many reasons why it is so important to reject Neil Gorsuch as a candidate for the Supreme Court. His “originalist” view of the Constitution would allow him to ignore—selectively or totally, at his whim—the technological and practical realities of our time. Human history is littered with the bodies of nations and societies that did that, including a key model for our own government, ancient Rome.

I have worked in and around the computer industry for decades as a scientist, lawyer, law professor, and occasional, incidental computer programmer. As a lawyer, I drafted some of the first-ever commercial licensing agreements for AI programs. That was back in the 80s.

Although I cannot claim to have stayed abreast with AI over the years, I do know one thing. Even the best of our pols has absolutely no conception of how much and how quickly AI, applied to Internet-based propaganda individualized by data-mining, can change our society and the practice of politics and government. The level of understanding of the threat that I have seen in our pols’ public statements and hearings so far is pathetic.

Our pols are just starting to come to grips with the army of paid trolls and reams of fake news that Russia apparently mobilized to sway our recent election. What they don’t realize is that Russia’s attack on the information front, as effective as it may have been, was absolutely primitive compared to what AI now permits. Today, a small organization of less than 100 individuals can duplicate Russia’s army of trolls with automated equipment and software costing a few million dollars.

Moreover, the threat of weaponized AI propaganda can come as much from within as from without. According to two sources, Breitbart.com—Steve Bannon’s erstwhile avocation—may have used AI data-mining software offered by a firm called Cambridge Analytica, which has reported ties to the wealthy Mercer family that backed Breitbart.com early on and continues to finance an array of Republican and right-wing causes.

To put it simply, the information war against our democracy and our Democrats may have been a two-front war, waged both from Russia and internally from Breitbart.com and later the Trump campaign itself. Indeed Breitbart.com’s understanding of and access to modern AI capability may explain much of the inexplicable: Trump’s late-campaign appointment of Bannon as his chief campaign advisor and (after Trump’s election) chief political strategy advisor.

At this point, most of our pols are much like Gabby Giffords. Back in the 1790s, she might have retained all her faculties after the armed assault on her. Unless her assailant had hit her with his first musket shot, her sympathetic crowd would undoubtedly have subdued him while he reloaded and so avoided further (or any) casualties.

Similarly, our pols today are trying to fight Internet-era automated AI propaganda with an image of radio and TV in their minds. They seem blissfully unaware that they are facing a technological threat as different from radio and TV as today’s rapid-fire, big-magazine assault rifles are from eighteenth-century breech-loading muskets. In just a few years, that threat can make their floor speeches, their stump-speeches, and even their websites pathetically obsolete. If they can’t get their minds around the threat and meet it for the sake of our democracy, maybe they can for the sake of their own careers and their jobs, which AI can take away as easily as modern small arms maimed Giffords.

The first step is to educate themselves on AI and on the threat of weaponized, individualized AI propaganda and fake news. Then they must ask the right questions of the producers and users of these technological threats to democracy, our intelligence agencies, those who dealt with the Russians before and during our last election, the Trump campaign, Bannon, and Breitbart.com and its backers.

Adapt or die. That is the universal rule of biology. It applies to societies, too. This three-front investigation—of the Russians, the Trump campaign, and the AI weaponized-propaganda threat to democracy—may take some time. But without it, the loss of our Republic to scoundrels with no scruples and AI capability is virtually assured.

Endnote: As I did, the reader should take the principal source for this post with a grain of salt. It comes from an obscure Website “scout.ai,” which describes itself as “accept[ing] submissions of original science and technology reporting, speculative and science fiction on a rolling basis.” (emphasis added) This particular post did not state whether it fell into the italicized categories, but its organization, writing and use of quotations followed the format for factual reporting.

More important, the facts that I sought to check from other sources did in fact check out. Michal Kosinski, the reported author of the Facebook “like” data-mining program, is indeed a graduate of the University of Cambridge (UK), now an Assistant Professor of Organizational Behavior at Stanford Business School. This article from the New York Times corroborates the Trump Campaign’s use of Cambridge Analytica and their involvement with Bannon and the Mercer family.

The quotation on the value of Facebook “likes” comes not from Kosinski himself, but from a Swiss magazine’s report on his path-breaking study of assessing personal traits from Facebook “likes.” In 2013 this study was published online, apparently after peer review, in the Proceedings of the National Academy of Sciences of the United States of America. An online version of the paper is available here.

After doing as much research as I could do online in a reasonable amount of time, I concluded that the story in scout.ai, notwithstanding the website’s ambiguous self-description, both purported to be factual reporting and generally conformed with both the facts I could check and with my own understanding of AI based on a forty-year career working in and around the computer industry.

The threat is real. The only question today is whether our pols will rise to meet it or will remain sitting ducks for a disruptive and likely destructive technology.

The Death of Truth in America?

    “Those whom the gods wish to destroy they first make mad.”attributed to Euripides

    “Divide and conquer.” — Julius Caesar

I worked hard to publish the foregoing essay on March 31, the day before April Fool’s Day. I didn’t want anyone to think it was or is a joke. But in fact the whole phenomenon of targeted misinformation has aspects of a gigantic April Fool’s prank. The difference is that this prank will last far beyond April; it may never stop.

The joke is not on Hillary, on the Dems, or on the voters deluded by Internet lies to believe that Hillary was running a child-abuse ring. It’s not even on the Russians, whose recent spate of youth street protests against Putin may have been partly motivated by an American cyber-counterattack, or by secret, untraceable Yankee cyber-assistance to rebellious Russian youth groups.

The joke is on our entire species. It could, in the long run, kill us all, either by provoking a real war that goes nuclear, or by distracting us from our species’ key current task: slowing the acceleration of global warming. Or it could kill us by distracting us from the ever-present threat of a global pandemic, which President Trump has made more dangerous by defunding medical research.

In this blog, I have outlined the insanity of “total war”. That notion was a German invention from the First World War. It brought innocent civilians—for the first time in modern, supposedly “civilized” warfare—within the bull’s eyes of history’s most terrible and destructive weapons. In the Second World War, it motivated random V-2 attacks on London, the fire-bombing of Dresden and Tokyo, and the nuclear incineration of Hiroshima and Nagasaki. In the Cuban Missile Crisis of October 1962, it brought a large fraction of humanity—perhaps our entire species—within hours, if not minutes, of nuclear and/or radioactive annihilation.

Fortunately for our species’ uncertain future, the advent of more accurate weapons has reduced the likelihood of species seppuku in warfare. Newer weapons like drones, ninjas, snipers, and (soon) accurately targetable “dial-a-yield” nukes make it possible to kill the bad guys without wiping out whole cities of innocent civilians.

But now a similar process of social evolution appears to be starting in the less immediately lethal field of deliberate disinformation and delusion. Unfortunately, in that field the process of evolution is now going backwards, from limited combat among professional warriors to attacks on entire populations.

In the old days, “disinformation” was a prank that military intelligence agencies played on each other. It was a limited kind of information warfare waged by one group of expert, well-trained, cynical and alert professionals against another.

Now what we have, at least in incipient form, is a type of information warfare designed to distract and delude entire populations. This new cyber-ability, made practical by artificial intelligence (“AI”), brings that warfare against innocent (and naive!) civilians to a new level. It’s a modern, information-only counterpart to the sui-genocidal notion of “total war.”

The most notable instance is probably Russia’s attempt, with its army of online trolls, to influence our Yankee 2016 presidential election. That attempt appears to have been successful, at least in part. Nobody doubts the intention of the attempt, nor the outcome; only doubt as to the extent of the influence remains. Given the difficulty of precisely assessing the effect of any information initiative in the blood sport that passes for politics in America, we will probably never know for sure.

But Trump’s victory is not the only possible result of this “total cyber warfare.” Brexit may be another. In the unlikely event that far-right-winger Marine Le Pen wins the upcoming French elections, that might be a third. And, if the truth be told, the toppling of pro-Russian tyrant Viktor Yanukovych in 2014, in street protests and elections that followed in Ukraine, may have been a third—this time, a rare victory in Yankee cyber-warfare over Russia. At least Putin and his spooks think the whole event was designed and engineered by our CIA.

For a moment, let’s suppose the truth of these more-than-plausible speculations. If we do, a sad conclusion rises unbidden. In this sort of “total” cyber-warfare, we Yanks (and the West generally) are far more vulnerable than authoritarian societies like Russia and China.

There are three reasons for this conclusion. First, Western populations, as distinguished from those of Russia and China, must fight a three-front war. Not only must they fend off disinformation from foreign powers like Russia and China. They must also ward off disinformation coming from within their own nations, specifically their own political parties and factions and their own self-interested, private corporations.

With the 2016 election so close behind us, we are all well aware of the massive disinformation campaigns mounted not only by political parties, but by factions within them and various PACs as well. There is plenty of material there for multiple doctoral theses on cyber-information war, including the fake news that brought an armed nutcase into a fast-food restaurant for the purpose of stopping Hillary from abusing children. So I won’t dwell on this obvious point.

What’s less well known, and less well associated with cyber-information warfare, are the corporate instances of this phenomenon. The two most notable instances are already well-known to both pols and most informed citizens.

For over four decades, our Yankee tobacco industry concealed and distorted information and scientific research demonstrating the devastating effects of smoking tobacco on individual human health. At one point the CEOs of five major tobacco companies all stood up in testimony before Congress and swore that the nicotine in tobacco is not addictive. This corporate campaign of disinformation delayed effective control of the health scourge of tobacco for nearly half a century; today it still precludes direct regulation of tobacco as a dangerous substance.

A second corporate disinformation war is still going on today: global-warming denial. World-spanning corporations like Exxon Mobil spent millions and decades denying (1) that our planet is heating up and (2) our burning of fossil fuels is responsible. Yet these truths were and are accepted and indeed promoted by the overwhelming majority of qualified scientists and peer-reviewed scientific publications. The recent climate epiphany of the penultimate CEO of Exxon Mobil, Rex Tillerson, who is now our Secretary of State, only highlights how long, strong and politically effective corporate climate-change denial has been. And of course it’s still going on.

These corporate programs of disinformation kept Americans and our government from responding effectively to important scientific truths for decades. They pulled the wool over the eyes of the freest, most open great empire the world has ever seen. And they are still doing so, albeit perhaps in more limited ways.

In all this highly successful effort, our big corporations used only old fashioned, wholesale disinformation techniques. They used one-to-many advertising on radio and TV, “public relations,” and false statements that managed to skirt the letter of the law of libel, defamation, perjury and false advertising. Imagine what they could do with today’s retail technology of many-to-many lies and “fake news,” individually tailored to each recipient.

The second reason why we Yanks (and also Europe, Japan and South Korea) are more vulnerable to unrestricted information warfare than Russia and China is more fundamental. We are open societies; they are not. They have laws and large institutions designed specifically to control and censor both disinformation and real information, especially that coming over the Internet. China, for example, reportedly has [search for “50-cent”] 30,000 - 50,000 full-time Internet censors, as well as an estimated 250,000 - 300,000 party members paid to act as Internet trolls. And its censors are pretty effective: just try to find, online and inside China, a history of what happened at Tiananmen Square in June 1989.

We have no such protective laws, institutions or censors. Not only that, our First Amendment precludes our doing so.

Which brings me to the third and final point. Our First Amendment is our prime directive for speech, writing, video and news, including “fake news.” With few and very weak exceptions, its basic rule is that, in free expression, “anything goes.” So we have no real disincentives for disinformation, lies and fake news.

Sure, we have laws against defamation, false advertising, business libel, and child pornography. But those laws are narrow and weak. Defamation of a public figure (celebrity or pol, for example) must be done with “malice,” i.e., more than mere neglience, in order to justify a civil suit. An innocent or even stupid mistake (gross negligence) is not enough. That kind of malice is not easy to prove.

Laws regarding criminal defamation do exist, but they are hardly ever used. Our society simply doesn’t tolerate censorship, no matter how inaccurate and damaging the “speech” involved.

This basic feature of our society leaves us unavoidably weak on defense against lies and disinformation, no matter how strong and sophisticated our offensive capabilities may be. It may be, for example, that our CIA and other spooks ousted Yanukovych in part with a sophisticated, retail-level cyber-warfare campaign. But if Russia retaliated by putting Trump in the White House despite his obvious lack of experience and qualifications, who won that exchange?

The hard fact is that “truth” is now entirely up for grabs in our open and relatively defenseless society. It’s up for grabs because our First Amendment gives us no effective defense against lies—even tailored lies foisted on our voters individually, one by one, by a foreign power using AI. It’s up for grabs because we have no effective laws against lies and disinformation generally and no institutions to enforce them even if we did. It’s up for grabs because our big corporations are getting into the disinformation game, in their own self-interest. Our political parties and PACs are already there.

Most of all, truth is up for grabs because we no longer have any national institutions of truth, whether formal or informal, like the Big Three television news networks of my youth: ABC, CBS and NBC. These networks still exist, but they are shadows of their former selves, with a fraction of their former audience, a sliver of their former prestige, and only a remnant of their reputations for quality and accuracy. The closest thing we Yanks have to a reliable national truth-teller, like the BBC in Britain, is PBS. But it has very narrow viewership and is under assault by the GOP and Team Trump.

So we Yanks are as defenseless against concerted cyber-information warfare from Russia and China (or from our own corporations, rich folk and PACs) as we were against the military tyrannies of Germany and Japan during our isolationist phase before World War II.

To put it simply, our civilian population is a sitting duck. We are trending toward a state in which the wisdom of both Euripides and Caesar at the head of this essay can destroy us. A deliberately engineered inability to know truth from lies can make us mad. And both foreign enemies and our own self-serving corporate and political empires will divide us, confuse us and ripen us for conquest. Truth in America may truly be on its deathbed.

So what can we do? In the long run, we must strengthen our laws against lies and disinformation. But that’s a long-term project. Near-absolute freedom of speech is so engrained in our laws and culture that censorship of any kind is anathema. We Yanks will never have an “official” version of “truth,” let alone a single, dominant government news medium. And in any event, we are now so polarized politically that any attempt to cure our defenselessness by law or regulation will be viewed as an attack by one side on the other, and so will go nowhere.

We can, I suppose, begin to explore the possibility of some control over international lies and disinformation by treaty and international agreement. That, too, is a long-term project, but worth pursuing. Just as treaties on nuclear disarmament have reduced the risk of species self-extinction by accident or miscalculation, so international agreements might set some basic, salubrious ground rules for information warfare. Doing so would be in all parties’ long-term interest: Russia’s leaders no more desire another spontaneous youth rebellion or bloodless coup in a vassal state (like that in Ukraine) than we want another Trump, let alone a smarter, more diabolical one.

But the most promising path out of madness and division lies in our private sector—our news media and our individual reporters. At the moment, they are the sole credible repositories of truth in our society. They must work hard to increase their credibility and respectability by avoiding sensationalism, double-checking their facts, and spreading their influence into retail information media, including Facebook and Twitter.

If the New York Times and Washington Post, for example, can leverage their independence from Murdoch and other sources of crass commercialism and obvious bias, they might have a chance of becoming analogues to ABC, CBS and NBC in the old days. They might become cultural icons, sources to which everyone turns to resolve doubts arising from the blizzard of retail-level propaganda and “fake news” roiling through the Internet. That is a consummation devoutly to be wished.

We Yanks are a creative and innovative people. Until recently, we have had a marvelously open society—open to new people, new ideas, new technologies, and new possibilities.

But as an essentially optimistic and forward-looking people, we have often been blind to serious threats. We were blind to the massive military buildups in Nazi Germany and Imperial Japan until history’s most terrible war became inevitable. We were blind to the threat of world-destroying stockpiles of nuclear weapons until we and the Soviets almost extinguished ourselves and the rest of our species in October 1962.

Today, we are blind to the grave threat of misuse of the Internet that we Yanks invented and gave to the world. It’s the most powerful system of communication ever devised. But its power can be used both for good and for evil, and we are blind to its dark side.

China and Russia have taken steps to protect themselves from its dark side and to use its power against us. So far, we have focused on offensive capability, but our defense is pathetic.

If we are to keep our open society from foundering in a sea of lies and delusion, that blindness must end soon. The place to begin is with a full, fair, bi-partisan investigation of Russian influence in our 2016 election, the collusion (if any) of Team Trump in it, and the ongoing vulnerability of our open society to lies and disinformation, spread over the Internet that we invented, and magnified a million-fold by “weaponized” individually-tailored delivery with the aid of AI.

Footnote 1: This quotation has a long and tortured history, beautifully outlined with quotations from original Roman and Greek sources here. This history suggests that the quotation is a gem of human wisdom refined through the ages before reaching its modern English form.

Footnote 2: Before leaving office, President Obama announced that a cyber-counterattack against Russia would come at a time of our own choosing. He implied it might well be and stay secret. If such a counterattack had been in the works during the transition, the Trump Team would have been crazy to abort it or even to slow it down. For with all the evidence of possible collusion between Team Trump and the Russians, any evidence of such a move would be the kiss of death.

So the most likely causes of the brief Russian youth revolt are an American cyber-espionage counterattack or a spontaneous Russian youth movement so clever and advanced as to defeat the mammoth Russian cyber-warfare machine that may have put Trump in the White House. Either view is little more than informed speculation, but I find the former more probable.

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25 March 2017

Government by Showmanship, Bumper Stickers, Tweets and Blame


[For some popular recent posts, click on the links below: Imagine that you’re taking your seat on an A380 airliner, the biggest and most complex passenger plane now in regular service. While you’re buckling in, the captain makes an announcement. He says he just graduated from flight school that very same day but won’t know whether he passed his final exams until next week.

What would you do? Would you unbuckle and walk out? Would you stay on board and say a silent prayer? And if you learned this crucial bit of information before boarding, would you book another flight?

That’s pretty much how we Yanks now feel with Donald Trump at the helm. The problem is that voters behind a majority of electoral votes failed to make another booking. They even reacted with euphoria upon Trump’s taking office. Remember the “Trump Bump”—the extraordinary, unexplained rise in the stock markets, which now may be starting a secular retreat?

So now comes the fall. Depression follows a manic state as night the day. This week we learned that our duly elected President: can’t or won’t tell the truth reliably and doesn’t know what he’s doing in the White House. His own FBI head denied his “wiretap” accusation against his predecessor; and despite his incurious and hasty support, his party’s ginned-up “replacement” for Obamacare went down in flames.

Trump’s showmanship, which got him so many votes, just can’t seem to get anything real done. As he himself might say, “Sad.”

General Dwight D. Eisenhower—“Ike”—reportedly felt somewhat the same way. Unlike Trump, who never ran anything bigger than his thirty-person family business, Ike had been the Supreme Allied Commander, Europe. As such, he had won the Western Allies’ part of World War II. He had been responsible for leading millions of troops in one of the greatest war machines the world has ever seen.

Yet on becoming president, Ike said he felt humbled. Accustomed to military obedience, he found it hard to ken how much he had to persuade others, even as president, and even his supposed “underlings.”

When faced with one of the most dangerous demagogues in American history, Senator Joe McCarthy, Ike did the wrong thing. He chewed McCarthy out privately, as if he had been a military officer, rather than make Ike’s own distaste public and break the demagogue’s hold on the nation. So McCarthy continued to destroy people, institutions and lives until he finally imploded on his own. (If you’re too young to remember, just search for Joe’s name.)

If Ike were only a marginally effective president, after successfully running a mammoth war machine and winning the West’s side of the greatest war in history, what can we expect of Trump?

But it gets worse. If the truth be told, Trump is not some unprecedented anomaly, some diablo ex machina who crept up on the American people unawares. On the contrary, he’s the culmination of a trend in American politics going back nearly two generations. (At least we can hope that he’s the culmination, and that the American people will now wise up.)

Of course politics has always involved a bit of showmanship. But the current degradation of American politics into showmanship at the presidential level began with Ronald Reagan. Not only did he have a soothing, gravelly voice to match John Boehner’s. He also had world-class charm. But he had been trained as a Grade-B Hollywood actor, and that’s pretty much what he remained.

Abroad, Reagan’s showmanship actually worked. He jumped into the Cold War with all the enthusiasm of George C. Scott playing a rogue general in the movie Doctor Strangelove. Though his “Star Wars” anti-ballistic-missile shield was (and largely still is) fiction, it scared the Hell out of the Soviets. They couldn’t keep up with our rate of innovation, let alone our defense spending, and Mikhail Gorbachev the moderate rose to Soviet power.

At about the same time, Reagan himself had an epiphany. At first he had been totally ignorant of nukes and nuclear war. Then he learned from his generals that a real nuclear war between us Yanks and the Soviets would likely kill several hundred million people and destroy both civilizations irrevocably. So Reagan became a fan of disarmament, turned his charm on Gorbachev, and made huge breakthroughs in disarming by treaty. Those breakthroughs and the brief era of mutual trust they brought ended the Cold War.

Economics proved more complex and resistant to showmanship. On a back of a napkin in a bar, Reagan learned so-called “supply-side” economics from an obscure professor called Laffer. This unproven theory holds that you can jump-start an economy by massive public spending at the same time as you reduce taxes. The only thing you need to know about this theory is that Reagan’s own vice president, Daddy Bush, called it “Voodoo Economics,” and the name stuck. So today’s massive deficits and the bogus economics that supports them date back to Reagan.

The next step in showmanship came with Daddy Bush’s own son, Dubya (George W. Bush). Dubya has well-known trouble speaking English. So he compensated by expressing his thoughts in bumper stickers and frat-boy one-liners. When That Idiot Rumsfeld sent far too few troops and horribly mismanaged the unnecessary war in Iraq that Dubya had started, Dubya fended off criticism with bumper stickers. He called Dems “Defeatocrats,” refused to “cut and run,” and opined that it was better to fight them over there than over here—as if every Iraqi jihadi’s fondest dream was to attack us Yanks sleeping in our bedrooms.

Dubya’s two unnecessary wars are now the longest in our history. They are still ongoing, just with less direct combat participation on our part and consequently fewer casualties. The clock in Afghanistan now reads fifteen years and in Iraq fourteen. In comparison, our Civil War and our parts in the each of two world wars lasted less than four years, and our Revolutionary War lasted six. And President Obama achieved the primary goals of Dubya’s two wars—bringing bin Laden to justice and achieving some sort of closure for 9/11—with two helicopters and a team of Navy Seals.

The fallout from Dubya’s two unnecessary wars just keeps growing. You think IS could have gotten as firm a foothold in Raqqa and Mosul without the support of all the disgruntled Sunni Arabs in Anbar, displaced by That Idiot Rumsfeld’s summary dispersal of Saddam’s Army and chafing under the now-ruling Shiites, whom we put in charge? The rise of IS and the improving fortunes of Iran and Russia in that region followed from our unnecessary invasion and (temporary) occupation of Iraq as night the day. So did the wave of hapless Muslim refugees now pouring into Turkey and Europe.

Sometimes showmanship and bumper-sticker policies don’t work out quite so well as detailed expert assessment of risks and probable consequences. You would think we might have learned that lesson from Lyndon Johnson’s Greek tragedy in Vietnam.

So Trump’s Tweets have firm precedents in the showmanship of Reagan and in Dubya’s bumper-sticker policies. The only difference was that Twitter was not yet in business during Dubya’s presidency. Had it been, he and Karl Rove no doubt would have learned to use it, though not perhaps with quite such patent mendacity as Trump.

This week’s greatest disaster for Trump and the GOP—the flameout of the effort to “repeal and replace” Obamacare—also has earlier origins. Sad to say, in this particular train wreck President Trump was something of an innocent and clueless victim.

It all started eight years ago, on the day after Barack Obama took office as president. As Obama’s immediate predecessor, Dubya had started two unnecessary wars and had presided over the worst economic collapse since the Great Depression. By my own calculation, Dubya and his Cabinet had already requested, spent or committed $3.5 trillion in bailouts and stimulus by the day of Obama’s inauguration.

To add insult to injury, Obama’s GOP rival, John McCain, had admitted he knew little about economics and had a well-deserved reputation as a military hothead. So the outcome of the election was pretty much foreordained, except for Obama’s race. As it happened, if you weight electoral votes by states’ GPD, Obama won not just by a clear yet small margin, but by a landslide.

Think about that. The GOP’s last guy had started two unnecessary wars, had seen a great economic crash on his watch, and had responded by bailing out the bankers responsible for it. The Dems’ guy was relatively new but had a solid record of moderation, impressive brains and academic credentials, and impeccable character.

So what could the GOP do? The only thing possible. It could try to blame all of Dubya’s bad deeds on Obama and hope the racism still raging through the country would make the blame stick.

Of course the GOP couldn’t blame it all on Obama’s “black” half directly. But it could, and did, make absolutely absurd claims that only racism could inflate with persuasiveness. And it could stonewall all of Obama’s initiatives and blame him for the consequences. That, too, it did, begrudging only the barest stimulus that could ward off total economic collapse, and opposing every other initiative, including Obamacare.

I called this the “Chutzpah campaign.” You take the predecessor’s record—one of the worst in American history—and you blame it and its consequences on the successor, even though he hasn’t yet taken office.

On its face, this ploy was illogical and outrageous—one of the greatest Hail Mary passes in the history of democratic politics. But it worked. It worked not only with the Crash of 2008, which was history by the time Obama took office in 2009. It also worked with Obamacare.

By opposing Obama adamantly from the beginning, the GOP pretended that Obama was trying to put something over on the American people, rather than to give our lower economic strata fair access to the “miracle” medicine that the rest of us enjoy. As I said in an earlier essay, Fox and the other GOP propaganda organs tried to make kids hate ice cream, and they succeeded.

Of course the GOP never had any alternative to Obamacare and never wanted one. Of course they weren’t willing to sit down with Dems and fix or improve it. They didn’t want a policy. They didn’t want to expand access to health care or to pay for it. They didn’t want to solve a problem. They wanted blame—blame that would stick. And the blame they got worked for them for two election cycles.

But as Abraham Lincoln is credited with saying, “You can fool all of the people some of the time, and some of the people all of the time. But you can’t fool all of the people all of the time.”

With Barack Obama out of office, unconscious racial fear has subsided, except among extremists. More important, the kids have tasted the ice cream and found it good.

Even more important, enough GOP pols understand the forces that put Trump in the White House and that, without Hillary, might have put Bernie there. So the so-called “American Health Care Act” died a well-deserved and early death, quite fittingly for a bill with no raison d’etre but blame, no policy, no hearings, and no serious purpose except a Hail Mary pass to reward rich GOP donors with massive tax cuts at the expense of the health of the poor.

What remains now is a question and a hope. The question is simple: whither Trump? Will he continue to play the rotten GOP game of showmanship, bumper stickers, Tweets and blame? Or will he decide to get things done, using Democratic votes and bipartisan cooperation? Will he break the polarized stalemate that has ruined our politics for a generation and threatens to ruin our nation? Only time will tell.

The hope arises not only from that possibility, but from something more abstract. There are signs that our era of showmanship may be coming to an end, and that our traditional Yankee pragmatism and expertise may be returning.

During Obama’s first campaign, I wrote an essay entitled “Revolt of the Experts.” In it, I lamented the rise of political propaganda and the fall of expertise. I praised Obama as an expert himself—former President of the Harvard Law Review and professor of constitutional law at the University of Chicago.

Experts spend long years acquiring their education and training. They understand the price and value of skill and specialized knowledge. So they tend to heed other experts, on things like medicine, health insurance, economics, and global warming. And so Obama did and does.

With the last generation of abysmal GOP politics as a negative example, and with the GOP’s epic fail in repealing and replacing Obamacare still ringing in our ears, we can hope for a revival of the traditional respect for specialized education and expertise that once made this nation great. There are signs all over, especially among the relatively young.

There is this op-ed by crack New York Times reporter David Leonhardt, explaining the nuances and consequences of Trump’s casual lies. There is this op-ed by former National Security Adviser Susan Rice explaining their consequences for national security.

But most of all there is the most recent half-hour of Washington Week, featuring young, dynamic reporters, some of whom appeared to have gained Trump’s confidence. To a man—and woman—they all presented themselves as neutral and objective. But all exuded a palpable aura of suppressed rage at the sheer loose and cavalier attitude of Trump and his supposed GOP “allies.” You could almost hear them thinking:
“We all went to good universities, and some of us went to graduate school in journalism. We work hard, and we work by a strict professional code. We have to make sure what we say or write is accurate and truthful. If it’s not, we have to retract and redo it. If that happens too often we lose our jobs.”

“We can’t stand to see a person or a party trying to run this whole country by shooting from the hip. It’s ridiculous for the GOP to expect anyone to vote for a bill ginned up from nothing in three weeks, when Obama took a year, building on Hillary’s 1993 failure and attemps by presidents and Congresses for over a century. It’s time for policy based on bumper-stickers, Tweets and Hail Mary passes to end!”
That same anger rages in me at age 71. It will be hard for Trump or anyone else my age to ken how much stronger it rages in young folk. They are our nation’s hope in this regard, for expertise and facts are the way we maintain contact with reality, and the young are the closest to them because they learn them in school. Without them, we lose contact with reality and become what we used to call “insane.”

Whether or not Trump survives “Russiagate,” he must still leap this hurdle in order to become an effective president. If he fails, he might well be impeached on another pretext. Today the odds of that happening by his third year in office are, in my view, up to 55%.

Footnote 1: Because of us Yanks’ continuous self-congratulation on “our” victory in World War II, I feel obliged constantly to remind myself and others that Soviet Russia, not the West, bore by far the greater share of the suffering and sacrifice in bringing about victory over Nazism.

Footnote 2: Those unfamiliar with real economics might be excused for confusing Reagan’s Voodoo Economics with Keynesian economics. Keynesian stimulus actually works and has been used by both parties over decades. It’s most salient example was our huge deficit spending on World War II, which finally brought us out of the Great Depression and insured our postwar boom.

In both cases, the government goes into deficit spending to stimulate the real economy. But only in Voodoo Economics does it also lower taxes.

Lowering taxes just makes it harder for the government to recover from deficit spending after the stimulus. It delays the return to fiscal normalcy and impairs the nation’s macroeconomic resilience meanwhile.

More important, lowering taxes is illogical. It’s supposed to stimulate the private sector. But Keynesian stimulus is needed only (and only works) when the private sector for its own good reasons is torpid and can’t get the economy going on its own.

For example, consider the Crash of 2008. Nobody in the private sector was investing in business because everyone feared a freeze of credit and a financial collapse that no new business might survive. You think a few percentage points of tax reduction could have assuaged that primal fear?

In theory, lowering the tax on capital gains might stimulate private investment in new business and therefore job creation. But it would take at least a year (the present capital gains holding period) even to start. And extending that holding period even longer—for example, to five years, as I have recommended to stimulate long-term thinking and suppress speculation, would extend the delay even further.

In contrast, lowering the tax rates on ordinary income—i.e., that which produces personal wealth—only encourages financial speculation and excessive personal spending on things like yachts, multiple mansions and private planes. It’s a corollary of the bogus “trickle down” theory, which has been proved ineffective over and over again, because it increases economic inequality, impairs social cohesion, and benefits no one but the already rich.

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20 March 2017

Trump Two Months Out


[For some popular recent posts, click on the links below: Introduction
1. Energy/Global warming
2. Health insurance
3. Good jobs onshore
4. Immigration
5. Economic stability
4. Geopolitical stability
Conclusion
Erratum

Introduction

It’s now been two months, precisely, since Donald J. Trump’s inauguration. Already it seems like two years, doesn’t it? Part of the reason is that we’ve all been talking about things we never dreamed we’d ever talk about.

We’re talking about how many innocent immigrants and American citizens are getting caught in a web Trump wove to show how tough he is on Muslims. We’re talking about how not to destroy private health-insurance markets that have just stabilized eight years after the enactment of “Obamacare.” We’re taking about how many bombs, missiles and drones we can make from the money we save by cutting all EPA climate science and much medical research, plus PBS, the National Endowments for the Arts and Humanities, Meals on Wheels, and heating subsidies to keep the old and poor from freezing in winter.

Last but not least, we’re talking about Donald J. Trump’s casual lies. We’re especially focused on his latest: that Obama wiretapped him during the transition. We’re not just talking about the lies themselves: we’re talking about whether any rational foreign government will ever again believe any American president after this one.

Isn’t that exactly what we should have expected from the Great Showman? Trump won the presidency by getting the entire nation to take its eyes off the ball. Now he’s working hard on getting us all to forget that there is a ball—or anything, for that matter, more important than he.

But that’s why I wrote my “benchmarks” post a week before his inauguration. I didn’t want anyone accusing me of moving the goalposts during his term. Some of the benchmarks were things that any rational president would want to do. But most of them were things that Trump himself had promised during the campaign. So I wrote that post to make a record of things he promised—and a few he should have promised—the folks who voted for him.

How’s he doing on those benchmarks two months out? You may think it unfair to ask so soon. But the body goes where the head goes, and (in Trump’s case) the head goes where the mouth goes. So the first two months of his mouth and Tweets ought to tell us something about how serious he is about his promises. Let’s take a look.

1. Energy/Global warming.

I put these twins first in my “benchmarks” post because they are by far the most important issues facing our nation and our species. How are we doing in making the transformation in energy sources that we know we must make, at least within the average lifetime of a child born today? And how are we doing in slowing (forget about arresting!) the global warming that every recent measurement suggests is beginning a runaway acceleration phase?

To be fair to Trump, these questions figured in his promises to voters only in a negative way. He promised he would ignore them and get on with the process of finding, extracting and burning fossil fuels. That, he said, was how to Make America Great Again.

So far, Trump has handled these intertwined issues exactly as he handles everything he doesn’t want to think about. He has ignored them.

Actually, he has gone beyond ignoring them. He has taken steps to relax the latest required fuel-efficiency benchmarks for cars. And, with his approval, his party in its budget has zeroed out all the EPA’s climate-science programs. So he has worked to lower the bar for fuel-efficiency of internal-combustion engines, and he has helped make it harder to know how much we are heating our planet.

Putting one’s head in the sand is the metaphor that comes to mind. In so doing Trump has made clear that he doesn’t care about the threat of global warming or the industrial opportunities inherent in energy transformation. He wants the tycoons of the past to remain the tycoons of the present and future, even though he made his own money in places far afield from cars and energy.

“Doesn’t care” is his precise state of mind. For Trump has allowed Rex Tillerson, his Secretary of State, to preserve the Paris Agreement, which has some climate goals but no teeth. Let China, Germany and others worry about global warming and get a head start on the clean-energy jobs that fighting it might bring. In the meantime, we’ll get rich fracking oil and making less-efficient but powerful and sexy cars.

Is this plan short-term and short-sighted? Sure. But it’s what Trump impliedly promised when he declared global warming a Chinese hoax. It might even work in the short term, which for Trump ought to be no more than four years. (If he’s this erratic, self-obsessed and punchy at 71, can you imagine how he’ll be at 75?).

2. Health insurance.

True to his campaign promise, Trump is working with the rest of his party to repeal and replace “Obamacare.” True to his word, he got his party to propose a replacement at the same time as repeal. So far, so good.

But if anything like the GOP’s current replacement bill passes into law, it will remind Trump voters of a basic cautionary tale. “Be careful what you wish for.”

Twenty-four million people—no doubt including millions of Trump voters—will lose their health insurance. They will have “access” to health insurance and a “choice” of plans. The plans will not be sham insurance; they will cover pre-existing conditions and avoid annual and overall monetary caps, following the rules for real insurance laid down by Obamacare.

But millions of Trump voters won’t be able to afford any of these plans. So many of them will suffer and die or go bankrupt trying to stay alive and healthy. The money saved by pushing them under will go primarily toward big tax cuts for the wealthy, which (in GOP orthodoxy) will “trickle down” to jobs for workers.

I’ve often expressed awe at the power of GOP propaganda, especially Fox. Nowhere in human history, insofar as I’m aware, has any propaganda machine been better able than the GOP and its apologists to get ordinary workers to vote against their own economic interests. They work by inflating and twisting fuzzy abstractions—“freedom,” “enterprise,” “self-reliance,” “markets” and “choice”—and belittling “dependency” (aka “freeloading”) while ascribing it to despised minorities and “socialism.”

As I’ve written, GOP propagandists and showmen have gotten kids to hate ice cream, in the form of real access to modern medicine when they need it. But will all the razzle-dazzle still work when people start to get sick and die? When they fill the emergency rooms of teaching hospitals and taste the general despair?

No one knows. The subject of health-insurance is complex. It’s not so obviously a daily necessity for everyone as a job. So Paul Ryan and Mitch McConnell are confident (or so they say) that Fox and their operatives can pull the wool over the working class’ eyes again. They think the workers who trashed Hillary and elected a raw newbie will be happy with the notion that they could afford to get well if only they were rich.

More vulnerable Republicans in Congress worry lest this particular hand of three-card monte will be their last. As one savvy pol said, it’s easy to delude voters about a benefit they don’t yet have, but it’s harder to take one they have away.

Only time will tell. But all of us should take notice. If the GOP and Trump the Showman can pull this off, they can pull off almost anything. They can, in theory, complete the transition of our American government from democracy to oligarchy to full corporate rule. After that, nearly everything important in individuals’ lives—except some of what goes on in their bedrooms—corporate boardrooms will decide.

So watch this one closely. It’s a test case, if not for drowning government in a bathtub, at least for making it practically irrelevant to most voters’ lives.

And don’t forget the nasty feedback loop. The less voters see positive changes in their lives, the less they vote, and the more Fox sways the few rabid voters who remain. If anything like the so-called “American Health Care Act” becomes law, the end of American democracy won’t be far behind. The bosses will have won decisively, down to life and death.

3. Good jobs onshore.

Climate and health insurance are life-and-death issues, but they are complex, abstract and contingent. Health insurance, for example, doesn’t matter unless and until you get injured or sick.

In contrast, jobs are how people live from day to day. Trump won the presidency by recognizing this fundamental fact of life, by condemning the steady drip, drip, drip of good jobs out of America, and by promising to fix it. (Bernie did the latter, too, but he lost to Hillary.)

During the campaign, Trump made a lot of promises about jobs. But only one of his promises made any sense. Imposing out-of-the-blue 35% tariffs on Chinese imports wouldn’t bring any lost manufacturing jobs back, but it might re-create the economic conditions that led to World War II. Imposing tariffs on products from factories that American plutocrats built abroad after fair warning might work to keep future jobs at home, but it won’t bring any already-lost jobs back. The only promise that Trump made in his campaign that would create real jobs soon involved building our infrastructure.

The non-partisan American Society of Civil Engineers says that by 2025 we need to invest $ 4.59 trillion in our infrastructure, which is outdated and falling apart. Well-established economic theory, called Keynesian economics, says that when private markets don’t create enough good jobs or do enough good work, government can by borrowing money; the resulting economic boost will pay the debt off in the medium term. So Trump could create many good, high-paying jobs simply by using government to borrow money and build, improve, repair or maintain public infrastructure—things like roads, bridges, water-and-sewer systems, the Internet and air traffic control.

It’s not as if this theory is untested. It worked before and during World War II, when unprecedented debt brought us out of the Great Depression and the resulting wartime prosperity paid off the debt in the postwar decade. It worked in several postwar recessions and has been used by both parties. It worked in the Great Recession just receding, albeit barely, because the GOP limited the debt to the minimum needed to avoid economic collapse.

Apparently aware of this well-tested theory, Candidate Trump promised to put a trillion dollars into infrastructure building. He said it was a good time to borrow money for that purpose, taking advantage of extraordinarily low post-Crash-of-2008 interest rates.

But President Trump’s promise of infrastructure building has run into a big Wall. No, it’s not the one on Mexico’s border. It’s another one built by Trump’s own party, his fellow Republicans.

We got a big hint about this Wall when Senate Majority Leader Mitch McConnell said, even before Trump’s inauguration, that job creation by infrastructure-building was “not a priority.” That’s catatonic Mitch-speak for “when Hell freezes over.”

Why has the Republican Congress put the kibosh on Trump’s best chance for creating millions of real, good jobs? Only two answers make any sense at all. First, letting government borrow money to build infrastructure and create jobs will make government more important and prestigious. That would violate the GOP’s primary ideology for over a generation, which is to downsize and even destroy government so that the bosses in their boardrooms can rule.

Second, if GOP ideology did not itself curse the plan, the 1% and 0.1% who finance the GOP’s campaigns would. They want money out of government and into their own hands, by means of reducing taxes on the wealthiest earners. The last thing they want is deficit spending—no matter how important or helpful to workers—because it might require raising their taxes later. Did I mention that selfishness has been the GOP mantra ever since Reagan?

GOP members of Congress have made some noise about getting the private sector to build infrastructure. But our dilapidated infrastructure has been there for decades, and our private sector has not risen up to rebuild or improve it. Do Mitch and his ilk think that a little jawboning will open the corporate coffers?

No, the profits available from roads, bridges, water-and-sewer systems and the like are too small for today’s corporate bosses. And if government allows them to squeeze supranormal profits out of this boring infrastructure, that will only hurt working men and women who must pay the tolls and water-and-sewage fees.

So this is where the rubber meets the road for Trump. He’s done everything he can to cultivate a reputation as a “tough guy” and a “winner.” But insulting women and journalists and telling bald lies doesn’t make you tough.

What makes you tough is winning an important fight with people who oppose you, when winning will help the millions who voted for you win, too. For Trump, that means fighting, and winning, the battle to create good jobs for members of the middle class who’ve lost them.

If that’s what tough means, Trump hasn’t even begun to qualify. Building the Wall won’t bring voters good jobs. Even making Mexico pay for it won’t. Denying and defunding climate science won’t bring good jobs; that will only let China and Germany get further ahead of us in the jobs that will come from energy conversion.

The sole, single and solitary thing that Trump promised and still could do would be to borrow money, before interest rates rise further, and put millions to work building, improving, repairing and maintaining our nation’s infrastructure. To do that, he would have to fight members of his own party and ally with Democrats, who would be happy to see (belatedly) the proper use of Keynesian economics that those selfsame members denied President Obama.

In other words, to keep his jobs promise to middle-class workers, Trump would have to fight a segment of his own party and actually become a real, nonpartisan leader.

That is his chief test, and that is the trial he must overcome to “Make America Great Again.” All else is noise in comparison: the rich can’t make America great by themselves.

4. Immigration.

Insofar as concerns immigration, Trump has acted much like a gypsy fortune teller. His “crystal ball” is his Wall, which he has tried to instill with the aura of magical powers. But no one—not even leaders of his own party—believes the Wall will appreciably stem illegal immigration from Mexico.

Sure, it will kill a few more hapless border-crossers in the Sonora Desert. But the vast majority of illegal immigrants will come in the same way they always have: by overstaying their lawful visas, by hiding out in vehicles that “La Migra” doesn’t search, or by crossing the border by tunnel, by air, or in other places where the Wall doesn’t reach. The Wall is simply a bit of razzle-dazzle to impress the rubes.

The rest of Trump’s immigration plan is also out of the fortune-teller’s playbook. Just like an ambiguous fortune, it all depends on how you interpret it. Will Trump deport all eleven million illegal immigrants, including those working peacefully and paying taxes here at home? Or will he deport only those who have criminal records? And if the latter, will he include even people caught driving with a broken taillight, or just serious felons such as murderers, armed robbers and rapists?

The simple answer is that no one knows. Candidate Trump has endorsed, explicitly or impliedly, every one of these options. His personal “fortune cookie” can cover them all. Maybe it depends on how well he slept or what he ate the night before.

But that’s precisely the point, isn’t it? Trump can declare “victory” no matter what he does and what happens, just like the gypsy fortune teller whose ambiguous “prediction” covers a whole range of possible outcomes.

The fact is that immigration in general is no problem. It’s the means by which our society replenishes and rejuvenates itself, and the means by which we get people to do our worst and dirtiest jobs.

Trump’s party, the Republicans, understand this point well. They allow enough “off-the-books” immigration to man our slaughterhouses, clean our toilets, cut our restaurants’ vegetables (and our lawns), take care of rich people’s kids, and make the beds in our hotels and mansions. They even allow enough to wait for day jobs around the corner from Lowe’s and Home Depot hardware stores.

But by keeping undocumented immigrants “illegal,” afraid and in the shadows, they keep these workers docile, free from unions, and submissive. They keep them like a class of serfs as surely as the lords of yore kept their vassals.

I’m no mind reader, let alone of anyone as inconsistent and erratic as Trump. But I would be astonished if he has the slightest intention of changing this horrible system. Even if he did, his fellow plutocrats would dissuade him in the strongest possible terms, for they depend upon this cheap, submissive labor for their profits. (Trump’s Silicon Valley co-plutocrats are already beating on him to allow more immigration of people who take the hard college courses that our native-born students won’t.)

So Trump may indeed build that Wall, or as much of it as his penny-pinching co-Republicans will finance. He may indeed deport as many as a few million “illegals.” But at the end of the day, the system will remain unchanged, and immigration will remain a political issue for Republicans to demagogue far into the future.

If you think this is a “win,” then you are probably already a Trump supporter. Those of us who prefer real solutions to more than non-problems will continue to differ.

5. Economic stability

Why is our country more unstable now than at any time in my 71-year life? I can think of only three clear reasons. First, our economy is now more lopsided, with more wealth concentrated at the top, than at any time since our last Guilded Age. That Age, you may recall, ended with the Great Depression and the world’s most horrible war.

Second, our economy has far too many financial institutions operating under far too loose rules. The Dodd-Frank legislation, which Trump is disposed to let banks dismantle, does little or nothing to fix the primary causes of the Crash of 2008. To give just one example, there are still hundreds of trillions in face value of the same kinds of derivatives that precipitated the Crash, many of them in secret “dark pools” unknown to regulators, including the Fed.

Finally, none of the many bankers who caused the Crash of 2008 went to jail. None was punished personally (although some corporations were), and none really lost money, just a bit of future expectation. When people do bad things and are not punished, they tend to repeat those bad acts. Maybe they don’t right away; some wait a while. But a repetition under these circumstances is psychologically inevitable.

So if someone somehow emails me after my death, recounting the Second Great Depression as more global, more horrible and more punishing than the first, I would hope to have some way to respond, “I told you so.”

Fending off such an awful outcome would not be rocket science. First, it would involved winding down our astronomical inequality and reviving our middle class. Second, it would require reversing the over-financialization of our economy, principally by breaking up the big banks and beefing up Elizabeth Warren’s Consumer Financial Protection Bureau. Finally, although the horse has already bolted the barn since 2008, it would involve enacting some serious penalties so that perpetrators of another such financial collapse could expect to see some serious jail time and lose most, if not all, of their ill-gotten gains.

This is what economic stabilization means to me. It means changing the rules to make our economy less rigged and more equal and to deter obvious wrongdoing.

Has Trump done anything like this? Has he even talked about doing so? No, of course not. He has appointed foxes to man the chicken coops in his Cabinet, and he has treated every business man (they are nearly all men!), no matter how socially, technologically and morally bankrupt, as a privileged member of his elite social class.

Anyone who expects economic stability to emerge from this is delusional. This kind of behavior and this same laissez faire attitude led to the First Gilded Age at the dawn of the last century, and then the inevitable Crash of 1929, the Great Depression, our Second Gilded Age, and the Great Recession now agonizingly winding down. Without serious and substantial change, can a Second Great Depression be far behind?

6. Geopolitical stability.

Of all the problems and fields of politics discussed in this essay, geopolitical stability is the one in which Trump, in theory, has the greatest advantage. Why? Because Dubya, his penultimate predecessor, left him and our nation with a godawful mess abroad. If Trump can just continue Obama’s work cleaning up that mess, and not make any new messes or new wars, he can come out like a hero.

Dubya’s mess was so great that President Obama, despite Herculean effort and laudable restraint, was unable to clean it up entirely. And so we still have a broken and bleeding Syria spilling Islamic refugees all over Europe and the Balkans—a direct result of Dubya’s misguided invasion and occupation of Iraq. And so we have a China so puffed up with economic power as to ignore the treaties that it itself has made and push its own, ancient imperial “rights” in the South China Sea. And so we have a Russia so emboldened, and so concerned with invasive threats near its border (in Afghanistan and Iraq), as to revert to imperial ambitions in Syria and Ukraine and even to menace the Baltics.

Many of these ugly consequences flowed, in relatively straight lines, from our mindless invasions and occupations of two sovereign foreign nations, whose primary objective (bringing bin Laden to justice) Obama met with two helicopters and a team of Seals. The rest flowed from obsequious treatment of China, for the benefit of our plutocrats, which vastly exaggerated China’s economic power and sense of imperium.

Obama rightly wound down, but did not finish, the two needless wars. He avoided the tragic blunder of starting a new one with Iran—a nation with more than twice the population and many times the political, economic and military power of Afghanistan and Iraq combined. But much remains to be done, in Syria, with the Islamic State, in Ukraine, in the South China Sea, and in North Korea.

So Trump has a lot of work to do, and a lot of good he could do, in the international arena.

Is he off to a good start? Stability breeds stability. Instability breeds instability. So far, Trump has invariably made the wrong choices. Demeaning NATO, complaining of its cost, and impliedly threatening to pull out were destabilizing acts, best pressed in strict private, if at all. Whether or not based on an unlawful (and impeachable) quid pro quo, Trump’s cozy relationship with Russia risks encouraging further bestiality in Syria, further encroachments into Ukraine, and further imperial ambitions on Putin’s part, even in the Baltics.

These are not good starts. Nor is pressing Mexico to pay for Trump’s all-for-show Wall, when what Mexico most needs (as usual) is our help in restructuring its economy and fighting its narco wars.

Yet there are signs of possible progress. Unlike Showman Trump, Secretary of State Tillerson seems to be working well into his job. He speaks little and listens much—characteristics for which he was noted as an oil executive. Those traits will serve him well in diplomacy.

As a result, when he speaks his words resound. His threat of a pre-emptive strike against North Korea got the notice it deserved. It was long overdue.

What do voters and the world expect? After a generation of efforts by both parties, North Korea is still the world’s most dangerous rogue state. Unlike Saddam, it indisputably has nuclear weapons, and it’s developing missiles to deliver them. Unlike every other nuclear power, it continually threatens to use them. And its leader, a boy-man much like Trump himself, has absolutely no checks or balances and (having executed his uncle and murdered his half-brother) apparently no family or personal restraints.

So what are we to do with this monster? Wait until nuclear-armed missiles are in the air bound for Honolulu, San Franciso and Los Angeles and exclaim, “Gee! We thought he was bluffing!”

This is exactly what our nuclear-weapons modernization program, which Obama initiated as president, is for. Accurately targetable weapons, with “dialable” force of yield, could, if needed, destroy Kim’s weapons silos and (if it came to that) Kim and his sycophants in their bunkers. And, being able to apply only the necessary force, they could minimize loss of innocent life. Kim and China ought to know that we intend to use such weapons if Kim remains unrestrained and the risk of a nuclear strike against us becomes too great. There are only so many credible threats that a civilized major power should be required to take.

So there are times—rare times—when credible and rational threats can maintain stability. But not with Russia or China. Our basic dispute with both nations arises from a difference in world view. In both the South China Sea and Ukraine, we see disputes resolved by law and treaty, and Russia and China breaking them. Russia and China, for their parts, see their core national interests under threat and the law as small impediment to protecting them.

As the most battered nation in recent history, Russia has ample historical reason for the paranoia that leads to its perceived imperialism. China may have less; but it suffered the pangs of Western Imperialism for two centuries, rising only from the ashes of World War II.

Empathy and pragmatism both bid us deal cautiously with these two great powers. Avoiding, not provoking, war should be our foremost goal. Preserving geopolitical stability vis-à-vis them will be a difficult task, requiring flexibility in some cases and strength and determination in others. There is no field in which getting it wrong could have greater potential consequences.

Here Trump’s basic approach of fair dealmaking is, in theory, a good start. But a far better start is his pick of Tillerson as Secretary of State. In my view, Tillerson from the outset was and remains the among the very few Trump’s Cabinet who deserves to be there. The chance for stability will rise, and the risk of instability will fall, as Tillerson’s star rises with Trump. So Tillerson will have the unenviable task of dealing with an erratic and unstable leader at the same time as he deals with an unstable world. Godspeed.

Conclusion

A good showman can be like a good fortune teller: fun to watch. The crystal ball glistens. The words flow. Their meaning is ambiguous, so the teller can always say the fortune was fulfilled.

But ambiguous fortunes are not much good in predicting a real future, let alone avoiding the consequences of real events. Some day, reality will strike back.

That is the key challenge for a candidacy and a presidency so far built on little more than showmanship.

What happens when the ambiguous prediction or prescription meets the real world? Will Trump deport all the “illegals,” or just the worst? Will he get real jobs for his millions of voters? Or will he just “jawbone” a few thousand by getting big corporations not to close their US factories immediately, and call it quits? Will he let Russia and China run roughshod over their neighbors—our allies—on the pretext of dealmaking, or will he avoid war with deals that make sense, heal old wounds, and weave a fabric of rule by law?

At this point, two months out, no one can tell for sure. All we can say is that the prospects for Trump’s meeting his benchmarks are not particularly bright.

If he continues to get all his news from Fox, Tweet his instantaneous personal reactions, and ignore important detail, he will likely be impeached and removed for some key transgression that even the GOP cannot stomach. Or he will slowly be pushed upstairs as a figurehead, like a crazy uncle, while the real job of governing falls to members of the Cabinet, his own secret advisers, and perhaps even to members of Congress.

At this point, I put the odds of his impeachment and removal before his third year in office at about 45%. The times are too perilous and the pace of life too fast to tolerate another “Silent Cal” today. And Trump, with his preposterous claims, outright lies and near-daily tweets, is by no means silent.

The saddest thing is what Trump has done, or has not done, for his voters. He won the presidency primarily on the strength of promises to bring them good jobs. So far, he has done nothing to fulfill that promise but his usual mostly empty showmanship.

The only thing on his plate that might fulfill that promise is building infrastructure with real money, borrowed, the old fashioned way. But Trump now seems to have forgotten about that plan, with his characteristic loss of interest in anything that does not lead to his own immediate personal gratification.

If Trump could find within himself a reserve of leadership and perseverance sufficient to put that plan in effect, he could probably enact it, with the help of Democratic votes. He has no reason not to do so, for his GOP antagonists never wanted him as president and don’t really like him. They remain ready and willing to impeach and remove him whenever the pretext is sufficient. Most of them would vastly prefer Mike Pence, who unlike Trump is a known quantity and one of them.

But fighting for principle or for something real (besides his own profit) is not a big part of Trump’s resume. So his voters, like the rest of the nation, likely will be disappointed.

It’s a shame, when a little perseverance and strategy could go a long way toward Making America Great Again. At least it could do so in the eyes of the many workers who would have good jobs that pay good money, thanks to Trump, improving our second-world infrastructure.

Erratum:An earlier version of this post stated as my view that Secretary Tillerson is the only one in Trump’s Cabinet who deserves to be there. As my own earlier analysis shows, that’s not really my view. The three generals left after Michael Flynn’s well-deserved firing (Mattis, Kelly and McMaster) are, by all accounts, well qualified. Secretary of Transportation Elaine Chao has relevant government experience, as do Purdue at Agriculture, Acosta at Labor, and possibly Zinke at Interior and Haley at the UN. Too many of the rest appear to be charged with dismantling the offices they are supposed to govern and to have experience (or the lack thereof) to match that task.

Over-generalization is a pitfall of every thinker and writer, and I regret falling into it here.

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11 March 2017

Health Insurance for Dummies


[For some popular recent posts, click on the links below: Introduction
1. What insurance requires: a big risk pool
2. Balkanized and grotesquely inefficient administration
3. Sham insurance
Conclusion: what the future may hold

    “Nobody knew health care could be so complicated.” — Donald J. Trump
Introduction

Why do we Yanks have the world’s best medicine and the developed world’s worst health insurance? The reason is simple. Up to now, our medicine has been based on science: rigorous testing of safety and effectiveness. In contrast, our health insurance has been based on the farthest thing from science possible: political ideology seasoned with fuzzy thinking and greed.

The designers of our health-insurance system have built it by ignoring the science of economics and all the self-evident practicalities of health insurance. Instead, they have been fighting the last century’s battles between “socialism” and “free markets,” with only the vaguest notion of what those words mean in this context.

To add insult to injury, most pols confuse health insurance with medicine, at least in part. Exhibit A is our current president, who confuses “Obamacare,” which is mostly about health insurance, with health care. Exhibit B is the GOP’s latest legislative proposal for health insurance, the so-called “American Health Care Act.” (emphasis added.)

But health care and health insurance are different. They are apples and oranges. Health care, or “medicine” is how we study, diagnose, manage and cure disease and injury. Health insurance is how most of us, including our pols, pay for medicine. Medicine is a matter of science alone. Health insurance is a matter of economics and finance.

Rarely the twain do meet. At least rarely should they, unless ideology and fuzzy thinking cloud our judgment.

To understand the difference, you just need ken two simple points. Virtually every system of health care worldwide—including those with all the single-payer insurance systems—still has private doctors and hospitals that work for private or religious institutions, or mainly for the wealthy. In these systems, the private health care providers can charge whatever the market will bear because their “customer base” includes billionaires, the 1% and the 0.1%.

For example, the Intercontinental Hotel on the main campus of the Cleveland Clinic has two whole floors set up for oil sheiks and their large personal retinues. It also has several channels of piped-in video in Arabic.

Cost is no object for these patients. Their generous payment and charitable donations increase the Clinic’s capital base and advance its medicine for the rest of us.

But neither the oil sheiks not their American counterparts need health insurance. Some of the latter have it, merely as a matter or economy and parsimony. But they don’t need it. The most doctors and hospitals can cost them—in the worst possible case—is a few million dollars, and that’s chicken feed to them. That’s why our 1% and 0.1% are more concerned with lowering their taxes than with affordable health insurance.

Likely “private” medicine (for self-funding patients who self-insure) will never die, anywhere in the world. There will always be rich people who can afford whatever medical miracles the latest modern science can provide. And there will always be doctors who work partly or solely for them. (The rich can also be special targets of sophisticated quacks and scammers, but that’s another story.)

Yet the rich are not what health insurance is all about. Health insurance is a means for people who are not rich to afford the best medical care that our nation can provide when they get sick or injured.

Health insurance is also a means of paying for the advances in medicine that come from treating the hoi palloi. The more people doctors treat, the more they learn, and the more medicine advances. So the more people who can afford treatment, the better it becomes. In a democratic society, that’s both a means of satisfying the basic goals of democracy and a means of advancing medicine.

Health insurance is also insurance against societal catastrophe. In a pandemic, having any significant portion of the population untreated creates a huge disease vector into society’s heart. If the untreated are mostly poor servants, they bring the pandemic right into the homes, bedrooms, and kitchens of the rich. If they have no vaccinations, they destroy the entire society’s “herd immunity” and allow a controllable outbreak to become a plague.

So there are medical, economic, social and practical reasons for insuring that every citizen has access to the best medicine a society can provide, or at least to a reasonable minimum of care. That’s the function of health insurance in our modern world. It saves citizens from suffering and death that modern science can avoid, and it makes society stronger and better able to withstand medical assaults.

1. What insurance requires: a big risk pool.

Now that we know what health insurance is and how it differs from medicine, we must focus on the next most important thing about it. Health insurance is just a specific form of insurance. That simple, plain fact is both its most important feature and the single thing that most pols least understand.

What is insurance? It’s the system and business of pooling unpredictable risk among individuals and businesses. It uses lots of insureds (the “risk pool”) banding together to protect themselves against unforeseeable and unpredictable misfortunes by redressing them, insofar as money can do so, when they happen to one or more of the insureds.

Each insured pays a small annual amount, called a “premium,” into a fund. When disaster strikes one of them, the money from the fund pays to make him whole, up to any limits of the policy. This same basic rule applies to fire and disaster insurance on your home, accident and theft insurance on your car, and health insurance on your body.

There is, however, a big difference. Your body is infinitely more complicated than your house or your car. So there are infinitely more ways it can go awry or suffer. In addition, fixing your body using modern medicine is often far more expensive than fixing or even replacing your house or car. A single open-heart surgery or organ transplant, for example, costs far more than the average middle-class home.

What does this mean in practice? It means that health insurance is different from home insurance and car insurance because the pool of insured risks is infinitely larger and more complex. More important, whereas many home and car owners go through their entire lives without a single home fire, home disaster, car accident or car theft, very few people go through life without seeing a doctor, especially as they age.

So the pool of risk for health insurance is infinitely larger than for other common kinds of insurance. That means you need a much bigger “risk pool”—number of insured people—to lower the risk for each and therefore to lower the premiums.

Every advanced country but ours has concluded that you can minimize premiums only by insuring the entire population at once. That is, you must have a “single-payer” system that insures everyone.

This is not “socialism.” It’s arithmetic. The bigger the risk pool, the lower the premiums. It’s simple division, based on the essence of any insurance: lowering the risk for each insured by insuring as many as possible.

In raw theory, it’s conceivable that there might be some optimal level of insured population beyond which increasing the risk pool would not lower premiums. But to my knowledge, no one has ever so proved, and no one has ever even tried to do so.

There are four reasons why this is so. First, while there are good statistics for house fires and car accidents and thefts, there are no comprehensive statistics for every ill and injury that the human body may suffer.

Second, even if there were, those statistics would be a moving target. New diseases and maladies are constantly being discovered, as are new ways to diagnose, treat and prevent them. Unlike house fires and car accidents, which are slowly decreasing in number and severity under the advance of technology, medical services are increasing, as we learn about new maladies and find new (and often more expensive) ways to treat old ones.

Third, any attempt to base health insurance on a “snapshot” of the whole population’s risk profile would constrain medicine itself. For example, consider “personalized medicine” (medicine based on your own genome), which is coming to all of us soon. It’s going to make us all healthier and more resistant to diseases, including cancer. But it’s going to involve a lot more effort and expense, as we probe everyone’s particular genome to cure their ills.

Treating everyone, not just the rich, is going to advance the science and medicine of genomics far more rapidly than alternatives. Would we want to retard that salubrious advance in medicine by limiting its progress with an obsolete risk-pool snapshot?

The final reason why there’s no calculated optimum risk-pool size is that health insurance differs from house or car insurance in a crucial way. You can partially repair a house or car that gets damaged. Or you can buy a cheaper new or used house or car to replace a destroyed one. But you can’t do that with the human body. If you stop surgery or treatment when the money runs out, the patient will continue to suffer and may die. So you can’t have overall monetary “caps” on health insurance—not if you want it to perform its proper function.

A prohibition on caps is a sensible feature of any health-insurance legislation, just as it is with “Obamacare.” (That’s why the GOP’s “American Health Care Act” proposes to keep both “Obamacare’s” prohibitions on lifetime caps and annual caps.) But the absence of caps makes health insurance far different from other forms of insurance. It requires a much larger risk pool.

So as far as any non-ideologue can tell today, the best way to lower premiums for everyone is to have everyone—young, old, sick and healthy—in the same risk pool. That’s why President Obama, who started his presidential campaign without an individual “mandate,” enacted “Obamacare” with one. He wanted to get everyone in the pool.

No matter what you call it, or how you “spin” it, any health-insurance system that doesn’t meet that requirement is going to have higher premiums than otherwise. Again, this is not ideology or politics; it’s arithmetic.

Our developed-country allies get everyone in the pool by making health-insurance a part of citizenship and financing it with taxes. That’s a relatively unobtrusive way of insuring everyone. But it’s something that, for historical reasons, we Yanks are unlikely to do, at least at present.

So we now have a proposal for the so-called “American Health Care Act,” which will drop the mandate that individuals buy health insurance and try to entice everyone to buy it with incentives. Good luck with that! Virtually no one, including its authors, expects that such an approach will produce more insureds. And if it doesn’t, arithmetic, not ideology, will keep premiums higher on average.

There is a delicious irony in this “new approach.” If the GOP succeeds in breaking down the state-line and employer-by-employer barriers that now balkanize our national health-insurance risk pools, it may eventually produce a single-payer system all by itself. Here’s how.

When the interstate and other barriers come down, the largest insurers will have a huge competitive advantage. Assuming all insurers are equally efficient, the largest ones will be able to offer the lowest premiums, just because they have the biggest risk pools.

Over time, the biggest insurers will gobble up the others with smaller risk pools and higher premiums, or will put them out of business. After a couple of decades, a single winner in the merger competition might become the sole, national private insurer—a monopolist. (Antitrust authorities would be foolish to resist, because insurance is a unique business, in which larger size in risk pools produces lower prices.)

But as we all know from the stories of the Epi-Pen and other pharmaceutical price gouging, monopolists like to gouge. So the huge, last-standing insurer would, by public demand, have to become a regulated monopoly, just like most local electric-power and natural-gas companies. Prices for insurance would be regulated by a Public Utilities Commission at the national scale, in order to prevent price gouging and force the last-standing insurer to offer the low premiums that its whole-nation customer base in arithmetic theory allowed. (For more on the economic reasons why we run private-utility monopolies as regulated monopolies, click here.)

2. Balkanized and grotesquely inefficient administration.

The second reason why we Yanks have the developed world’s worst health-insurance system is balkanized administration. Not only do we have many separate, private firms doing what a single-payer does in our advanced allies. Not only does each of those separate firms have to make a separate profit. We also have divided those firms by state lines and, in may cases, by the many private employers in which individual insureds work.

In other words, we have turned our national motto E Pluribus Unum (“From many, one”) on its head. Whereas we could have single payer just like our allies, we now have many insurers, whose risk pools are balkanized not just by private ownership, but by the legal jurisdictions of our fifty states (and additional territories!) and by the innumerable employers whose employees they insure.

It would be hard to imagine a better way to divide up the risk pool and produce higher premiums.

But premiums are not the only things that skyrocket. So does administrative expense. Each of these separate private insurance programs has distinct: (1) contracts, (2) administrators, (3) insurance forms, (4) claim forms, (5) rules for claims, (6) procedures for claims, (7) rules and procedures for appealing claim denials, (8) computer systems, (9) websites, and (10) mobile-device interfaces. As compared to a single payer system, this unnecessary duplication is astronomical.

No wonder our private health-insurance system has administrative expenses estimated between 10% and 17%, while Medicare has 4%! No wonder that, on a visit to my local health lab, I once saw four workers drawing blood and urine and five taking and verifying insurance information! From an administrative standpoint alone, a health-insurance system with so may small, rival contenders is about as inefficient as one can imagine.

And that’s not even accounting for the direct, arithmetic effect of smaller risk pools in raising premiums. Nor is it accounting for the private profit that each of these balkanized firms must draw in order to stay in business.

3. Sham insurance.

One of the greatest discontents of a private health-insurance system was the contractual shenanigans that private insurers pulled to save and make money. “Obamacare” eliminated the worst of them, and the so-called “American Health Care Act” would refrain from reviving at least the worst of the worst (pre-existing-condition exclusions and lifetime and annual caps). But it’s worth reviewing them briefly just to show how bad our private health-insurance system once got, and how far it strayed from what most people think of as “insurance.”

The worst offense, by far, was excluding pre-existing conditions. From the insured’s point of view, an “insurance” policy with such an exclusion is not insurance at all. Why? Because from a medical-scientific point of view, the risk that a pre-existing condition will reoccur, or that a closely related malady will, is much higher than the risk of other conditions as yet unsuffered. So what good is an “insurance” policy that doesn’t cover the most likely risks? Not much.

Anyway, recurrence of a pre-existing condition can make you suffer or die as much as any “new” disease and injury. So at best a policy with a pre-existing-condition exclusion is not really “insurance” because it doesn’t cover all relevant risks.

Finally, whether or not a particular individual previously suffered from a particular condition is irrelevant to the risk of the whole pool. If everyone were insured, as in single-payer systems, when and to whom a particular condition occurred would be statistically and economically irrelevant. It’s only relevant to a balkanized private system because it threatens decreasing one individual private insurer’s profits without hitting the others’.

The second contradiction in terms with health “insurance” is an overall (or annual) payment cap. What kind of health insurance has such a cap? If your house burns down or your car is hit and the insurance money runs out, you can buy or build a cheaper house or get a cheaper car. But you can’t get a cheaper body or a cheaper life. Nor can you stop surgery in the middle, when the money runs out, without killing the patient or increasing his suffering.

The whole point of having health insurance is to allow modern medicine to do what it can for you while you are still alive. The cost of doing so is part of the general risk pool, and the possibility of its exceeding predetermined limits is part of the risk that motivates having the largest risk pool possible, i.e., the whole population. In a single-payer system, likely no one would ever have thought of such caps; they arose only because insurers used to other types of insurance borrowed them inappropriately from house, car, life and casualty policies.

A third discontent of our private health insurance system is non-portable, employer-provided health insurance. If you have that kind of insurance, you can’t change employers without risking losing your health insurance. And with exclusions for pre-existing conditions, you might also have risked your health.

Many workers have stayed in jobs they hated, or which were literally killing them, for precisely that reason. That’s not health insurance: it’s a form of feudal servitude.

Not only that. As I outlined in detail some years ago, our entire employer-provided health-insurance system has become a burden on American industry, making it uncompetitive as compared to equivalent foreign industry that has non-private health insurance that employers don’t have to pay for. Thus does the GOP’s desire to assist all business ultimately disadvantage private businesses outside the health-insurance field, especially manufacturing. A small but significant part of our loss of manufacturing jobs over the past two decades is undoubtedly due to this private health-insurance burden that few, if any, foreign manufacturers have to bear.

A single-payer system, whether public or private, would get rid us of these discontents once and for all. At the same time, it would lower many premiums dramatically by expanding the risk pool from the employees of a single employer to the entire national population.

The last discontent of our private health-insurance system worth mentioning here is what happens to youth at the outset of their careers. Normally youth is a time for experimenting and testing, during which young people find themselves by trying out different jobs in different places. An employer-based system of private insurance is ill-suited for them, not the least because its insurance isn’t portable.

“Obamacare” tried to solve this problem by putting children on their parents’ health-insurance policies through age 26. But that’s a stopgap measure. Among other things, it assumes that the parents have private health insurance policies, and that they’re portable. Otherwise, putting kids on their parents’ policies is just another chain in the feudal bondage of employee to employer.

If policy makers want a maximal risk pool, including children still finding themselves, they are going to have to address those children specifically. If they don’t, the children probably won’t buy health insurance at all, for everyone knows that youth are invulnerable (until they aren’t).

The risk-pool tranche of healthy kids who feel invulnerable was much of what “Obamacare” tried to capture with its mandate. If other pols try with mild incentives, they are just going to have a still-smaller overall risk pool and higher premiums. Only single-payer can get these kids into the risk pool for sure, thereby maximizing its size and consequently minimizing premiums.

Conclusion: what the future may hold

The primary reason we Yanks have horrible health insurance is our balkanized, private health-insurance system. It has horribly sub-optimal risks pools for most, if not all, of the separate private plans. In addition, it has grotesque duplication and administrative inefficiency, resulting in astronomical administrative expense. This expense cramps not only the insurance industry itself, but the health-care providers and patients who have to deal with it. It’s like imposing the complexity of our income tax on the entire health-care industry.

We Yanks will not have an even passingly acceptable health-insurance system until we have some form of single payer, with the largest risk pool (and therefore the lowest premiums) that our national population of 320 million can provide. In comparison, do you know how many people your own health-insurance plan covers?

We might get single payer under another Congress and another Administration, as our pols and our people come to realize that the crux of the matter is not ideology, but arithmetic. The larger the pool of insureds, the lower the premiums will be. It’s that simple. Not all the spin, ideology and propaganda of pols and insurance-company mouthpieces can change that simple fact.

It’s early days yet, but discussion of the so-called “American Health Care Act” may actually help to illuminate these points. Because it dispenses with individual mandates, it will inevitably insure fewer people, thereby increasing average premiums by decreasing the total risk pool. (Individual policy premiums might go down if individual companies’ respective shares of the overall risk pool go up, for example, in a merger or consolidation across state lines.)

It’s hard to believe that the GOP proponents of this proposal have anything in mind other than: (1) justifying their eight-year mindless opposition to Obamacare and (2) pandering to their big donors’ desire to let the health-insurance industry’s mindless inefficiency and rewarding profits roll on. But if they did have something more in mind, it might be this. Their proposed new interstate insurance regime would create huge opportunities to increase separate private risk pools through expansion, merger and consolidation. So it’s possible that, on a time scale from two to ten years, some premiums might decrease (or slow their increase) somewhere, as a result of insurance-company mergers and remaining competition.

Yet eventually, if given the chance, the industry will consolidate and concentrate. Without government intervention, it will become an oligopoly or monopoly, just as has, for example, the airline industry. As it does so, the public will likely demand regulation, and the whole industry likely will become a regulated monopoly.

There will still likely be millions of uninsured, and so our society will still be vulnerable to disease vectors. Maybe poor and working people will suffer and die for lack of adequate or any insurance. But barring pandemic, the result for the insured will look something like a single payer (albeit private) system. Most or all of the grossly inefficient administrative duplication will have gone away. There will be one or a small set of contracts, claims, claim forms and procedures, and one or a small set of computers, software, websites and mobile apps.

Then the GOP can claim “victory” because the whole system is still private. Progressives can also claim a sort of victory because those who have health insurance at all will have something like a single-payer system and nothing quite like the grotesque administrative expense of today’s atomized multiple-payer system. So then we might all celebrate, most of the year, until the annual regulatory hearing, when all the agonies of the last eight years will come out again.

What this means is that allowing insurers to work across state lines is by far the new bill’s most important positive feature. Small, single-state and less efficient insurers will fight it tooth and nail. The big, efficient ones will support it. Together with other reasons for opposition, this provision could sink the bill, if only because there are many more inefficient and legally protected health insurers than efficient ones.

If the interstate provision fails and the the rest of the bill passes, it will cause massive insurance gaps and massive premium increases and basically set us back a decade. Even if something like the interstate-insurance part passes, the resulting industry consolidation could take twenty or more years.

A much shorter path to paradise would be to use discussion of the “American Health Care Act” as a means to inform our ignorant pols of the joys of arithmetic, and the agonies of ignoring it. Then, although nothing may happen under this Administration, a future President Warren, who understands arithmetic, might give us single payer far more simply and cleanly. If so, we Yanks, at last, would come into step not only with all our advanced allies, but with simple math and the common meaning of “insurance,” too.

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