Values, Healthcare, and Health

UPI reports on a research study by Matthew Davis from the University of Michigan.  Matthew finds that:

American seniors are getting healthier overall, but the well-educated, rich and white are seeing the greatest gains, a new study finds.

Matthew is amazed that rich and white folks are seeing the biggest gain despite Medicare for older Americans.  He thinks that the solution must come from government policies:

“Policies have to extend beyond just getting people access to healthcare to get at what’s driving disparities. The lack of improvement in health among all groups could imply that public health initiatives are leaving some people behind,” he added in a university news release.

Sidebar One: In the UPI report there are no Asians.  There are only whites, blacks, and Hispanics.  UPI does not link to Matthew’s study so we don’t know about the study and it might be that Asian are not of interest to UPI.  End Sidebar One.

Sidebar Two: Matthew is an assistant professor.  That means he is early in his academic career.  End Sidebar Two.

Matthew and UPI seem unaware that there is lots of discussion about culture and cultural values. Heather Mac Donald has a nice summary of the article by Amy Wax and Larry Alexander and the responses to it.  Of course, Amy and Larry have been called racists.  Here is part of what Heather said.

Today, the consequences of that cultural revolution are all around us: lagging education levels, the lowest male work-force participation rate since the Great Depression, opioid abuse, and high illegitimacy rates. Wax and Alexander catalogue the self-defeating behaviors that leave too many Americans idle, addicted, or in prison: “the single-parent, antisocial habits, prevalent among some working-class whites; the anti-‘acting white’ rap culture of inner-city blacks; the anti-assimilation ideas gaining ground among some Hispanic immigrants.”

Heather isn’t discussing health but some of the behaviors like opioid abuse and anti-social habits will directly have an impact on health while others might connect to health.  Charles Murray has been working in this area for years.  There are two issues: First. there lots of causes of health.  It could be (gasp) that there are genetic differences among races.  It could be that there behavioral causes.  Those behavioral causes might be cultural or they might be something else entirely.

Second, access to health care is not health care and neither of those is health outcomes.  It is possible but not likely that government policies are going to lead to equal health care outcomes for every group of people.

What is amazing to us but not Matthew is that there are lots of potential cultural causes but neither Matthew or UPI even considered them.  There is an astounding amount of discussion about Charles and Amy.  We need to consider adding two and two to get four.  Behavior has an impact on health.  Culture has an impact on behavior.  It seems highly probable that culture has an impact on health.

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We Are With Ramesh

Ramesh Ponnuru has an article at AEI, “The Republicans Need A Tax Plan For 2017, Not 1981.”  We are in general agreement with Ramesh and he cites a Weekly Standard editorial.  He notes four issues:

  1. Federal Debt is much higher now.
  2. The top income tax rate is much lower.
  3. Payroll taxes are a bigger issue compared to income taxes for most folks.
  4. US corporate taxes have become higher relative to other countries.

There is no surprise that Ramesh’s only suggestion is an expanded child credit that can be used against payroll taxes.  We hope this leads to the GOP making substantially lowering corporate taxes the first priority.  We are OK with some adjustment for payroll taxes but it is not an emphasis.

 

 

Due Process And Academics

Daniel Henninger discusses how the Trump administration through Betsy DeVos have stopped the attempt of the previous administration to end due process for people accused of rape at universities.  He asks the crucial question:

One has to ask: How in 2011 did this rule roll out of the Obama Education Department and become the law of the land in academia without so much as a peep of outrage from them or the American press?  [Emphasis added]

We often ask about them, academics, without much success.  Why did we as academics give the rights of free people away?  It is easy to see why we have no political clout when we fail to do what we are trained to do.  We are trained to think and reason about events.  Yet when this outrage happened generally we were elsewhere.  Daniel only slightly overstates the case when he says that there wasn’t a peep of outrage.

Update/Sidebar: Justin Dyer, from the much maleigned University of Missouri, makes a spirited defense of Scott Yenor at Boise State.  It is about the right to approach cultural issues academically rather than rape but it is a rare example of two academics being serious despite the pressure applied to them by administrators and others.  As Justin concludes: “The intellectual winds blowing in Idaho are ominous.”  End Update/Sidebar.

Thus, we, academics, are taken for granted by the left and properly not respected by the right.  We deserve our fate in the state legislatures.

Never Sorry On The Left

Jim Geraghty in The Morning Jolt provides a summary showing how free speech exists for the Left.  He reports:

A lot of right-of-center sports fans don’t particularly like Jamele Hill, the co-host of the 6 p.m. Sportscenter on ESPN, who tweeted Monday that “Donald Trump is a white supremacist who has largely surrounded himself w/ other white supremacists.”
Late last night, she issued the statement: “My comments on Twitter expressed my personal beliefs. My regret is that my comments and the public way I made them painted ESPN in an unfair light. My respect for the company and my colleagues remains unconditional.”

Think about how everyone spent eight years criticizing any mild comment about The Donald’s immediate predecessor.  Mentioning his middle name was verboten.  Now we have The Donald being accused of not just a being racist but a white supremacist surrounded by other white supremacists.  We would like to know who Jamele thinks they are.  Perhaps it is Betsy DeVos who is helping to reinstate due process at colleges for folks accused of rape and provide educational opportunities for inner city children.

Then there is Jamele’s statement.  It sure isn’t an apology.  We’re unsure as to why she thinks they painted ESPN in an unfair light.  She should show her love for ESPN because they didn’t fire her.  We don’t want Jamele fired but we didn’t want Curt Schilling fired either.  After that ESPN said:

ESPN is an inclusive company,” ESPN said in a statement. “Curt Schilling has been advised that his conduct was unacceptable and his employment with ESPN has been terminated.”

ESPN can fire folks as they see fit.  We don’t want to boycott them but their programming is less interesting lately so we watch less of it and rarely visit their website.  We would like them and the press to have some consistency in these situations but that isn’t going to happen.  Jamele deserves the same as Curt under ESPN’s criteria.  We don’t have a solution but it is easy to see why they are in financial trouble and perhaps the market will provide that solution.  Insulting half your audience is never a good idea for a mass marketer.  Doing it at a time when it is easy to cut the cord seems like bad business.  It will take the market awhile but ESPN and Disney will get a response for their behavior.  We do love markets.

What Is Audacious Tax Reform?

David M. Snick at the WSJ suggests we should apply the Warren Miller standard, go big or go home, to GOP tax proposals.  In David’s word, proposals should be audacious.  We are not convinced but here is our plan to meet that standard:

The Graetz Plan to reduce payroll and income taxes while adding VAT plus
Eliminate tariffs, death tax, corporate tax and gas tax and replace with carbon tax.

David is afraid that the current political situation will lead to

Fearing this outcome, Republican leaders are being tempted to play small ball. They might suggest modestly lowering the corporate tax rate. They might propose allowing full expensing of business investment, to be scaled back after several years. To help the middle class? They’ll throw in a modest hike to the standard deduction. Anything to get something done.

Not as audacious as our proposal and not our favorite choices but we would be delighted.  David thinks it is small ball.  What does he suggest?

Republicans shouldn’t play small ball. Their goal should be a tax-reform plan that will create robust economic growth, which in turn will help heal a bitterly divided nation.

Yup, we are on board for robust economic growth.  The key to robust economic growth is productivity.  So what does David suggest?

 At minimum, the standard deduction should be tripled. But reformers also need to think creatively. Tax reform, entitlement reform and health-care reform cannot be considered in isolation. Working families need relief across the board.

So his only two suggestions are: be audacious and triple the standard deduction?  We guess.  And even David recognizes that increasing the standard deduction will have little impact on because, as he says:

People who earn less than $50,000 a year pay an average effective income-tax rate of 4.3%.

So a thousand dollars in deductions nets them $43.  Increasing the standard deduction does nothing for growth and little for low income folks.  As David says and everyone recognizes, payroll tax is a bigger deal than income tax for folks in the lower quintiles of income.  See the Graetz Plan for one possible idea.

Then David invokes Reagan to suggest we favor Main Street over Wall Street.  We don’t know what David means by that as applied to tax policy.  We do know that Reagan understood that incentives matter and fought against those that denigrated his program as “trickle down economics“.  Sending a check to folks is the opposite of supporting robust economic growth.  Better incentives are the way to do that.  Substantially reducing or eliminating the corporate tax is the best way to support robust economic growth.  We are not sure if it qualifies as audacious.

Capital Investment And Growth

Recently we were discussing Reihan’s assertion (look it up it is really recent) that we should go for immediate expensing for capital expenditures rather than lowering corporate rates because capital expenditures are the path to productivity.  We were unconvinced because we see the path to productivity including software and R&D which are already immediately expensed.

Today we found a WSJ article by James Mackintosh that suggests some support for our vision.

Sidebar: We at first used argument rather than vision.  We changed it to vision because, as we said at the time, we have no data to provide.  It just makes sense to us that buildings and equipment are just part of the productivity story.  End Sidebar.

James is discussing the potential pitfalls of Amazon’s new headquarters.  As part of the background he reports:

The lesson from the long term is that companies with high capital spending tend to underperform. Kenneth French, a professor at the Tuck School of Business at Dartmouth College, calculates that shares in the 30% of U.S. companies with the lowest investment returned six times as much as those with the highest investment since 1963.

Along the way he gives examples of overspending including the 1840 British railway boom, peak oil, dot-com, and shipping.  In addition, James notes:

Investing in growth is more plausible. Academics have shown that higher R&D spending on average is followed by better stock performance than for companies with lower R&D spending.

James is far from conclusive on the subject but we continue to think that rates are more important than immediate expensing.  One reason is the evidence he provides on capital spending not leading to stock market price increases but R&D does.  Obviously, stock market prices and productivity are only weakly connected through profits.  It is not QED but it suggests some of the problems with capital spending.  It buttresses the basic argument that rates provide the incentive for profits and solve the problem with firms moving out of the country.  We have moved a little more strongly in favor of rate reductions over immediate expensing.

Today In Baseball

By today we mean today compared to 19 games ago.  On August 23 (MLB uses the end of the day) the Cleveland Indians were 20 games behind the Dodgers in the race for the best record in Major League Baseball (MLB).  Today, 19 games later, the Indians are four games behind the Dodgers in the race for the best record in baseball.  It matters because the team with the best record will get home field advantage in the World Series.

It is amazing that the Indians have won 19 in a row.  It is perhaps as amazing that the Dodgers have lost 16 of 19.

Sidebar: Excel has a binomial function.  Since ties are extremely rare in MLB, the binomial function works well for explaining baseball streaks.  One problem is determining the true winning probability for a team.  Should we use the winning percentage before or after the streak?  A second problem is the independence of consecutive baseball games.  Baseball, like almost all sports, has momentum so it doesn’t fully meet the independence requirement of the binomial function.  On the other hand, the list of winning streaks suggests that the binomial function is a pretty fair approximation.  In about 140 seasons with, say, 20 teams per season the longest winning streak without a tie is 21 games.  The probability of (21,21,.6) is 0.0022 percent.  One event out of 140 times 20 is higher, 0.0375 percent, but both numbers are tiny.  End Sidebar.

For the Indians the probability is 0.0061 percent assuming that they are a club that wins 60 percent of its games.  Assuming the Dodgers are a club that wins 60 percent of its games the probability of wining three or less out of 19 is 0.0101 percent.  If you think the Dodgers are a 70 percent team (they were .712 before the bad times) then the probability of winning three or less is 0.0002 percent. If you think that these events are independent then the probability of them both happening is the product of the two probabilities.  Independence is not unreasonable because the Indians didn’t play the Dodgers and they are in different leagues.  That product would be a truly tiny number.