Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
November 15, 2013 at 9:59 AM
It has been a messy rollout for the Affordable Care Act, the “market-based” program originally devised by the conservative Heritage Foundation (which has now disowned it) and enacted in Massachusetts by the Republican Party’s last presidential nominee.
Ezra Klein of the Washington Post wrote this morning that “Obamacare’s success would’ve affirmed the theories underlying Obama’s presidency — theories that could then be picked up by future presidents. Instead, Obamacare is systematically blowing apart the very premises it’s based on.” He continued:
The reliance on Republican policy proposals did nothing to generate Republican support. Instead of showing the falseness of partisan divisions, Obamacare has proven how deeply entrenched they truly are. Far from introducing innovation and efficiency into the system, the decision to build a complex, 50-state public-private hybrid has introduced towering complexity into the project, and seems, potentially, to be beyond the government’s capacity to do well.
On the other hand, Kevin Drum of Mother Jones urged Democrats not to panic. “This is a bleak moment for Obama, but it’s not his Iraq or even his Katrina.” Still, the president’s reliance on cooperation from the giant insurance companies, trying to work within an extremely complex health-care sector, a government undermined by the GOP House and his own administration’s incompetence has made a mess. The presidential “fix,” although it might not completely undermine ACA, has provoked a backlash, starting in Washington state.
Doing nothing only perpetuates the hugely costly system now in place and leaves tens of millions uninsured.
What’s the final result?
Read on for some of the most interesting business and economic stories of the past week…and the haiku.
This Week’s Links:
• The 777X: ‘Under my thumb’ | Timothy Egan/NYT
• The Justice Department’s willful blindness to the willful blindness of CEOs | New Economic Perspectives
• The anatomy of health care in the United States | The Incidental Economist
• Shale’s effect on oil supply forecast to be brief | NY Times
• Explainer: How does the Fed stimulate the economy | Money Watch
• Rethinking the rise of inequality | Economist’s View
Today’s Econ Haiku:
‘Market based’ health care
Meets enfeebled government
A sick compromise
October 25, 2013 at 10:41 AM
The mess of HealthCare.gov, the $400 million portal for citizens to sign up for coverage under the Affordable Care Act, has many parents. Some two dozen private contractors were involved, especially CGI Federal, which has a checkered history in its work for the federal and state governments.
The government itself bungled the rollout, including the administration issuing rules late out of fear of giving Republicans ammunition against the program. The GOP-controlled House blocked funds. Now the White House says things should be running smoothly by late November.
To be sure, this is the “market-based” program originally cooked up by the conservative Heritage Foundation — which now disowns it — and was implemented on a state level by the GOP’s last presidential candidate. It is a windfall for the private insurance industry and would insure millions who are now without coverage.
Medicare works quite well and with much lower administrative costs than the private insurers. And some state exchanges are doing well. Perhaps most importantly, demand for Obamacare appears high.
Read on for some of the best business and economic stories of the week…and the haiku:
August 2, 2013 at 10:56 AM
The Seattle Times’ Carol M. Ostrom has a story today about what the Affordable Care Act will cost for Washingtonians. Yes, Obamacare is on the way, despite the Republican-controlled House of Representatives voting 40 times to repeal it. Paul Krugman has written that the program is “the right’s worst nightmare” because it will work. Over at National Review, Veronique de Rugy predicts that premiums will skyrocket — even though members of Congress and federal employees will be sheltered. Norm Ornstein, a distinguished man of the right, has denounced the “unprecedented — and contemptible — attempts to sabotage Obamacare.”
I’ve never been a fan. Obamacare is a massive profit-machine for the private insurance industry; that was the price of support to get it through, and cover pre-existing conditions. The president never considered a public option, much less Medicare for all. Whether it will be a job killer, or have unintended bad consequences remains to be seen. Here’s a factual look at where things stand now. The status quo is unsustainable. Little vouchers to shop for health care are a joke. So what happens next?
Read on for some of the most interesting business and economy stories of the week, plus the haiku…
This Week’s Links:
• Good news and less good news on the jobs report | Jared Bernstein
• The disturbing composition of the new jobs being created | Dean Baker
• The age equation in employment numbers | NYT Economix
• Five faces of this week’s fast-food strikes | Huffington Post
• Here’s the truth about Oregon’s ‘right to work’ initiative | The Oregonian
• What Janet Yellen did and didn’t get wrong about the housing bubble | The Atlantic
• How the execs who brought down Bear Stearns bounced back | Mother Jones
• Sale of AIG’s aircraft leasing unit remains grounded | BusinessWeek
Today’s Econ Haiku:
Janet or Larry?
I could have been more fed up
It might have been Tim
July 1, 2013 at 10:30 AM
Here’s a look at where the jobs have been added over the past 10 years: Heavily in health care. The chart is profound because the trend line showed virtually no effect from the Panic of 2008 (aka “The Great Recession”). Also, as millions of manufacturing jobs were lost after China’s entry into the World Trade Organization in 2000 and because of other factors, the 2000s even before the bust were a lost decade for jobs. But not in health care. Indeed, going back to 2000 we would be at a net jobs loss accounting for population growth without that one sector.
The Brookings Institution reported today that the health-care sector now employs 14.5 million people, or about 10.3 percent of jobs, spanning all levels of skills and wages. Its 22.7 percent growth rate compares with 2.1 percent jobs increase for all other sectors. Health support workers earn 37 percent less on average than all workers in large metros. But health-care employment and a robust biomedical/biosciences economy do not necessarily coincide.
February 26, 2013 at 10:13 AM
A decade ago, many states and metropolitan areas saw bio as their tickets to the future. The gambit didn’t work out for most of them (for my assessment of Phoenix’s effort, you can read here and here). Seattle was fortunate to have an established cluster, which was ranked No. 5 nationally in an influential 2004 report by the Milken Institute. How are we doing now? Hanging on, barely. A new report by Jones Lang LaSalle has Seattle as the nation’s tenth largest “established” bio cluster. The leaders: Boston, San Diego, the Bay Area, Raleigh-Durham, Philadelphia, D.C, New York, Los Angeles and — a newcomer to the list — Minneapolis. Among the “emerging” clusters are Westchester/New Haven, Conn., Chicago, Denver, Cleveland-Columbis-Cincinnati and Salt Lake City.
The report states:
Seattle has one of the fastest growing life sciences markets in the nation and has become one of the core cancer research markets in the nation. Puget Sound’s life sciences is comprised of nearly 1,000 firms employing more than 22,000 directly in the industry, with an additional 191,000 people employed in the hospitals and the medical field. One of the distinguishing features of the Seattle-area life sciences market is that very little manufacturing is done in the region. Nearly all Puget Sound-area life sciences industry activities are based on research and development. Unlike areas with a strong concentration of life sciences manufacturing jobs, when a growing Puget Sound company is purchased by a larger company, the frequent trend has been the employees and the companies to remain intact and local to Seattle. This is the case with many companies like Zymogenetics, which was acquired by Bristol-Myers Squibb in 2010; Blue Heron, which was acquired by OriGene Technologies in 2010; and Sonosite, which is being acquired by Fujifilm.
June 29, 2012 at 10:00 AM
The Supreme Court mostly upheld the Affordable Care Act, so everything’s settled, right? Hardly. Republicans are running to repeal it. The act itself is a dog’s breakfast of compromises and give-aways to the big insurance and for-profit health-care companies that keep costs here higher than in other advanced nations, while delivering overall inferior outcomes. Tens of millions will still be without coverage.
It’s amazing that other advanced nations have universal care, but America doesn’t. It puts exporters at a disadvantage and prevents healthy labor mobility — millions cling to a job for the health benefits rather than taking the risk of moving to an otherwise more productive job or becoming an entrepreneur. Yet a big portion of the electorate believes “socialized medicine” is immoral and only enables deadbeats. Polls show Obamacare, which is admittedly complex, is not widely supported. The New Yorker has an interesting article here about the difficulty of solving the problem here.
So what comes next?
Read on for the best links of the week and the haiku:
July 12, 2011 at 9:55 AM
Those who hold the superstition that an Ayn Rand “free market” is the cure to all ills — despite its disastrous results in 2008, etc. — meet every constructive idea to get the American economy out of the ditch with: “That’s industrial policy!” Industrial policy, you see, is always some failed commie central planning nightmare from the Soviet Union and eastern Europe circa 1980. And that’s been swept into the dust-bin of history.
In fact, America does have an industrial policy, one constructed by years of often convoluted, often ineffective measures produced by Congress and presidents, pushed by the army of lobbyists for the connected huge corporate interests.
American industrial policy includes big tax cuts for the wealthiest and legal tax dodges for big corporations; special treatment for a few big exporters such as Boeing and Caterpillar; huge agricultural subsidies; encouragement to offshore jobs; the Military-Industrial Complex (Iraq will buy F-16s from Uncle Sam); taxpayer backing for deregulated Wall Street and the TBTF banks no matter what they do; union-busting NLRBs; heavy subsidies for house building, especially sprawl, and house ownership; more subsidies for the fossil fuels industries; decades of federal support for airlines and freeways, but not trains and transit; a for-profit health system supported by Washington; incentives for job-killing mergers; failure to protect small competitors with antitrust enforcement against consolidation. I could go on. But none of this comes from the benign magic of the “free market.”
June 17, 2011 at 10:05 AM
Washington is hardly alone in the continuing jobs crisis. California lost 29,200 jobs in May (vs. our loss of 700). According to the U.S. Labor Department, 27 states and the District of Columbia lost jobs, 22 saw modest gains and one state was unchanged. In April, 42 states gained jobs. This is what happens with 1.8 percent GDP growth in the first quarter, on top of many other job-killing factors already in place.
One reader emailed me and said Washington’s problem was simply high taxes and too much regulation. Perhaps. Unfortunately, many low-tax, light regulation states also have very high U-6 unemployment, including Nevada, Arizona, Florida, North Carolina and South Carolina. High-reg, high-tax New York, Massachusetts and Connecticut have relatively low U-6. Texas is a petroleum power, and still has a state fiscal crisis and some of the worst performance in measures of social well-being in the nation.
I suppose one way to look at it is that Washington would be far worse off without booming Boeing, a recovering software sector, Amazon, ports and trade, the ag economy benefiting from high prices, etc. But the mismatch between certain high-skilled positions doing well and the rest remains high. And the economy is just growing too slowly to create many net new jobs. As for “austerity,” government cutbacks and failure to invest in infrastructure are job killers, and the private sector is not picking up the slack.