Posts Tagged ‘Daniel Gross’

The Limits of China’s Economic Model

Tuesday, January 19th, 2010

Daniel Gross in Slate sees Google’s decision to stop acquiescing to the Chinese government as a portent of troubles for the nation – as a sign of a problem that will undermine China’s global economic position going forward, pointing out that the political decision to censor and even alter history as it was, has consequences:

Yes, Shanghai feels a lot like New York. But don’t presume that just because Americans and Chinese share a consuming culture that they also share a political one. As I stood in Tiananmen Square on a chilly November day, I turned to my guide. “That was really something, what happened here 20 years ago,” I said. “Yes,” he responded in his near-fluent English. “Those terrorists really killed a lot of soldiers.”

Gross sees the strength of China’s model:

For the last 30 years, China has been testing a new, inverted model: breakneck economic development while retaining strict limits on personal liberty. The Communist Party has wrenched the nation into the 21st century. The hardware is certainly impressive—the maglev trains, shiny new airports, and modern skyscrapers.

But he believes that manufacturing can only go so far – agreeing to some degree with David Brooks who describes the economic innovations of the future as being the result of a “protocol economy.” Gross explains:

And that’s the rub. Any type of political system can produce excellent hardware. The Soviet Union, which ruled Russia when Google co-founder Sergey Brin was born there in 1973, managed to produce nuclear weapons and satellites. Likewise, China has built truly impressive hardware: some 67 bridges now spanning the Yangtze River, a superfast supercomputer assembled entirely from parts made in China, high-speed trains. But in the 21st century, a country needs great software in order to thrive. It has to have a culture that facilitates the flow of information, not just goods.

Geithner on the Political Bind the Obama Administration Faces

Tuesday, December 29th, 2009

Timothy Geithner:

The country is torn between these two, not completely unrelated, basic impulses out there. One is that Washington is out of control; those people in Washington did this outrageous, take-over-the-economy type of stuff. And the other is that they haven’t done enough to help real people. The crisis came on top of this deep, terrible erosion in the basic level of trust in government and public institutions. That has made it much harder for people to believe that the policies we were [implementing were] going to help.

(During an interview with Daniel Gross of Slate.)

[Image not subject to copyright.]

Our Health Care Systems Undermines Entrepreneurship

Tuesday, September 29th, 2009

Ezra Klein brings together Andrew Sullivan and economist Jon Gruber to talk about entrepreneurship and health care. Quoting Gruber:

A system that provides universal access to health insurance coverage, then, is far more likely to promote entrepreneurship than one in which would-be innovators remain tied to corporate cubicles for fear of losing their family’s access to affordable health care. Indeed, even the Galtians among us should be celebrating the expanded potential for individual enterprise once the chains tying them to a job that provides insurance have been broken.

I think this argument should be more prominent in the debate – not because it’s the most important element – but because it demonstrates how integral to our economy health care is and undermines key right-wing critiques.

I wrote about this earlier in the summer:

If one wants to stimulate the economy by encouraging small businesses and entrepreneurship, there are few better ways to do it than to pass some sort of health care reform that makes it cheaper and more available outside of large employers. As Daniel Gross, financial columnist for Newsweek and Slate, explains:

An affordable national health care policy, which could allow people to quit their jobs and launch businesses without worrying about the crippling costs of premiums or medical costs, might be a better spur to risk-taking than targeted small-business loans.

I say this as a former small business owner and entrepreneur myself. One of my biggest concerns in working outside of an established business was that I was not able to get my health care through my job – which meant astronomical monthly premiums for a service I did not use – but which I could not be sure I would not badly need.

[Image by Matt McGee licensed under Creative Commons.]

Our Unhinged Debate on Health Care Reform

Monday, August 10th, 2009

Or, Large Majorities of Americans Support the Specific Reforms Obama Is Proposing, But the Debate Going On Now Has Confused Them Into Opposing It

Andrew Sullivan provides a pretty good summary of the policy questions at stake in the health care debate – slightly modified by me to make it a list:

  1. Should we demand that insurance companies provide policies to anyone regardless of pre-existing conditions?
  2. Should we help the working poor buy that insurance with subsidies?
  3. Are competitive exchanges for health insurance a good or bad thing?
  4. Would a public option or a co-op help bring down healthcare costs?
  5. Does it make sense for the government to study the effectiveness of various treatments as a guide for doctors?

These are the basic questions Democrats are trying to answer. The only real presumption Democrats made in creating these policies is that the government can be effective. The proposals on the table now are modest – tinkering even – in which market mechanisms, government regulation, and a government plan together are designed with three goals:

  • to provide more security and choice to those Americans already covered by banning abusive insurance company practices and allowing individuals to buy insurance on a health care exchange;
  • to institute certain incentives that will hold down the growth of health care costs – using market mechanisms in the Health Insurance Exchange, spreading information with the Independent Medical Advisory Committee, and with the public option;
  • to cover the 47 million Americans without health insurance (whose use of health care, which we already provide as a matter of right, creates a de facto $1,100 tax on each individual).

The various bills under consideration are so long and complicated because they attempt to make slight adjustments to the system we have – and to remain true to Obama’s promise that if you like your health insurance you can keep it.  They prohibit certain practices by insurance companies, they set up a Health Insurance Exchange, they may or may not allow citizens to choose a publicly run health care plan, they subsidize individuals who currently cannot afford insurance, they set up committees to study best practices. What they certainly do not do is attempt radical change.

This isn’t about the free market versus communism, or radicalism versus moderation. The anger at Obama’s health care reforms has little to do with what he or other Democrats are proposing. There are those with reasoned objections. But the Republican Party has instead embraced and encouraged the inchoate rage of people frustrated with the direction our country is headed, with the various moral dilemmas George W. Bush left for his successors, with the massive failure of the markets that caused our current recession, with the failures of the visceral politics and policies of George W. Bush. On Slate’s Political Gabfest today, this exchange captured pretty well the essense of the hyperbolic debate going on now:

DAN GROSS: In college, we had the primal scream where at a point in time people would open their windows and just yell randomly. It was done to relieve stress but you weren’t yelling a set of statements about how your workload was too high. You were simply yelling. And it strikes me…that the things they are yelling are not the reasoned case for doing health care reform in a different way. They’re saying things like, “Let’s take our country back!” or “Lies, lies, and socialism, communism, fascism.”

JOHN DICKERSON: Yea – it is a sort of Tourette’s of the political…

I want to repeat that there are reasoned cases to make against the various policies Obama is proposing – but aside from an odd blog post by a libertarian economist every now and then, I don’t see them made. Instead, we get the approach Jon Stewart described: “You know, the individual mandate is going to hurt small businesses by…aw, fuck it: YOU’RE ALL GOING TO DIE!!!”

That’s what we’re dealing with: cynical manipulation of an inchoate public anger by entrenched interests and the primal screams of a minority of people frustrated with the direction of the country – both of whom are trying to scare the majority into indecision and intimidate the Democrats into submission. Then there are the many – some of whom are wary of action on health care right now; some of whom are concerned about government spending;  some of whom support reform, but aren’t clear on the issues; some of whom are frustrated with Obama’s moderation. Very little of the public debate has to do with the issues addressed above. Instead, we have anonymous lies spread by email, we have right-wing organizations claiming that “Obamacare=Gov’t Funded Abortion and Euthanasia,” we have Sarah Palin claiming Obama would make her son go before an evil “death panel,” we have Senator Jim DeMinto comparing America under Obama to Germany under Hitler, we have people on the streets and in town halls  and on the radio claiming that Obama is instituting Nazi policies, we have protestors deliberately trying to shut down debate (pdf) and silence those in favor of reform. And I’m not cherry-picking the most egregious examples here – these are the tactics used by mainstream opponents of health care reform.

The response and the debate going on now is unfortunately unhinged from reality and has very little to do with any bill being considered. Americans started out in favor of Obama’s health care proposals – expressing support for both him and the policies he had campaigned on. Polling shows they still support the policies: 72% of Americans are in favor of the public option; 74% of Americans believe that health insurance companies should not be allowed to exclude those with pre-existing conditions; 71% of Americans believe that the fact that 47 million Americans are uninsured is a “very serious” problem, with 49% willing to accept higher taxes to cover these individuals. When Obama’s plan was described in neutral terms, 56% of Americans still supported it today (with 38% opposed). But as Obama and Republicans and Blue Dog Democrats all raised concerns about deficit spending and soaring health care costs, many in the public became wary of increased spending. And as Republicans and entrenched interests began to spread rumors of the health care reforms being proposed, Obama’s support dropped.

But now this debate has broken out into the open – and amid  all the accusations of Nazi policies and “death panels” and rationing and socialism! and “killing Granny” the American public can see what is really going on. Republicans will soon learn the truth of Abraham Lincoln’s aphorism:

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.

[Image not subject to copyright.]

In Case You Missed It: Best Reads of the Week on Whining Conservatives, Internet Battles, Peru, The Single Life, and the Unborn

Friday, July 31st, 2009

1. Whiny Conservatives. David Frum scolds conservatives for  quite whining and points out how silly they look doing so given how far the conservative movement has moved America since it gained power:

In 1975, the federal government set the price of every airline ticket, every ton of rail freight, every cubic foot of natural gas and every barrel of oil. It controlled the interest rates paid on checking accounts and the commission charged by stockbrokers. If you wanted to ship a crate of lettuce from one state to another, you first had to file a routemap with a federal agency. It was a crime for a private citizen to own a gold coin. The draft had ended only two years before, but not until 1975 itself did Congress formally end the state of emergency (and the special grant of presidential powers) declared at US entry into the First World War.

2. The Battle for the Internets. Fred Vogelstein writes in Wired about the brewing battle between Facebook and Google for the internet.

3. Peru’s Moment. Most of the world has lost ground in the financial crisis and recession. Daniel Gross in Newsweek tells the story of one country that has managed the financial crisis perfectly (Peru), and their secret ingredient: leadership in the years leading up to the crisis:

In the latter half of 2008, being a poor, export-dependent, commodity-producing country set you up for a vicious downturn. But Peru has weathered the storm, in large part because President Alan García, an old leftist turned center-leftist, and the Peruvian central bank have proved adept at a set of capabilities notably lacking in the United States in recent years: sound fiscal and financial management. Fearful of a return of hyperinflation amid rapid growth, Peru’s central bank raised interest rates throughout 2008. Instead of spending the foreign currency that piled up on its books ($32 billion at the end of 2008), the government saved it. In 2008, Peru ran a $3.3 billion budget surplus.
And so, when troubles came, it was able to respond in textbook fashion. In December 2008, García announced a stimulus program, promising to boost government spending by $3.2 billion, and to take up to $10 billion in further measures. The total of $13 billion in promised stimulus doesn’t sound like much, but that’s equal to about 10 percent of Peru’s GDP.

4. New York Wins Again. Forbes has released a list of the top cities for singles. New York is – as in everything else – number one.

5. This strong, invisible and unacknowledged force. David Brooks (in a piece that Yglesias ridiculed, justly on some grounds) – manages to write an interesting meditation on the importance of the unborn to our society:

People live in a compact between the dead, the living and the unborn, and the value of the thought experiment is that it reminds us of the power posterity holds over our lives.

Bonus: This song came out months ago, but I just starting enjoying it recently, so here’s to sharing:

[Image by me.]

Health Care Reform To Stimulate the Entrepreneurship

Tuesday, July 21st, 2009

Paul Gigot of the Wall Street Journal editorial page makes the same argument many Obama critics have been making – beginning with Rush Limbaugh who attempted to blame the financial collapse on the fear markets had at the prospect of an Obama victory in the 2008 election to the present, as Gigot attempts to blame any lingering effects of this financial collapse – and its economic aftereffects – on fear of “the Obama agenda.”

But neither Gigot nor Limbaugh nor any other right-wingers seem to give any consideration to those drags on risk-taking that our current status quo creates.

Gigot apparently thinks that raising taxes on a handful of powerful individuals has a greater effect on reducing risk-taking than the prospect of global warming, than the lack of a health care safety net has on potential entrepreneurs.

The difference between Gigot and myself is that Gigot is concerned that this handful of powerful people will be less likely to take risks with their vast sums of money – along with a dozen or so major corporations having less ability to generate major profits by externalizing costs for pollution and health care to the society at large. If a corporation has to pay for the damage it causes, then it is – by Gigot’s standards – less free. This is true only in the sense that a tyrant is less free than an ordinary citizen because he is no longer able to impose his way upon others.

If one wants to stimulate the economy by encouraging small businesses and entrepreneurship, there are few better ways to do it than to pass some sort of health care reform that makes it cheaper and more available outside of large employers. As Daniel Gross, financial columnist for Newsweek and Slate, explains:

An affordable national health care policy, which could allow people to quit their jobs and launch businesses without worrying about the crippling costs of premiums or medical costs, might be a better spur to risk-taking than targeted small-business loans.

I say this as a former small business owner and entrepreneur myself. One of my biggest concerns in working outside of an established business was that I was not able to get my health care through my job – which meant astronomical monthly premiums for a service I did not use – but which I could not be sure I would not badly need.

Gigot and other right-wingers are not focused on small business and entrepreneurs – although they does invoke them as a fig leaf for political reasons. If they were they could see the advantage of a public health care option. Instead of defending the free market, Gigot and other right-wingers seek to defend a corrupt status quo in which decisions are made by a princely few rather than being made in the competition and varied decision-making bodies of a free market. Health care reform – if done right, with a public option – will remove a major obstacle to individuals taking their own risks, starting their own businesses; it will be a small step to diversifying decision-making and creating a more free market.

Gigot – by taking the dogmatic position he does – proves he is not serious about protecting the free market; he is only interested in protecting the interests of his cronies among the monied elite.

The Battle of the Rich

Wednesday, March 11th, 2009

Newsweek Finance editor and Slate contributor Daniel Gross and I seem to be thinking along the same lines, as we independently came to a similar response to his column of last week:

Last week, I wrote that the Republican claim that Obama is fighting a war against the rich was bogus. Over the weekend, I thought better of it. It turns out there is a war on the rich. Only it’s not being waged by vicious overlords in Washington intent on depriving honest, hardworking stiffs of their livelihoods. Rather, it’s a civil war, a war between the rich. It’s Park Avenue marauding through SoHo, Buckhead rampaging through Hilton Head, Palm Beach shelling Bal Harbour with the big cannons.

Call it the War Between the Estates.

While we both came to the conclusion that there is a battle going on amongst the rich, I came to a somewhat different conclusion about where to draw the lines in, as I wrote:

I realize that we are now observing a “Culture War” between the haves and the have mores, between the elites and the financial elites, between two opposing sides in the “overclass.”