Archive for the 'public policy' Category

The Bones of an Idol

December 16, 2009

Health care reform is starting to look as sickly as the health care system it is supposed to fix. First, the public option vanished quietly a week ago. That was supposed to be OK, because Senate Democrats introduced the Medicare expansion which was supposed to cover more previously uninsured people, anyway – and have a greater chance of making it into the law books. Now the Medicare expansion is on the chopping block, too. What, then, is left of health reform?

The exact answer is likely to shift from day to day with the ebb and flow of Congressional politics, but the rough outline is this. First, the individual mandate is alive and well. Americans are required to have minimal health insurance, or else pay a fee. Second, the insurance exchanges are poised to become the biggest change to how consumers buy insurance. In these exchanges, consumers would be able to shop for health insurance much as employers can shop for company-based health insurance today. Third, a number of new regulations for health insurance companies have endured so far in the proposed bills: for example, requiring coverage for pre-existing conditions or capping differences in premiums or coverage by age or by salary. Fourth, as Jamelle writes today, there are “dozens of small measures and experiments aimed at controlling costs while also improving outcomes.”

Substantively, I am afraid, health care reform is falling apart. I have written before on the conflict between expanding health insurance coverage and cutting costs. The problem with health care reform used to be that it tried to do both – aggressively expand coverage while promising to cut costs. The problem with health care reform today is that it will probably do neither. Let’s look at the pieces still standing:

1. The individual mandate. Without further reform, an individual mandate only serves to drive the uninsured into a broken market. Even with generous subsidies, an individual mandate alone props up the status quo by giving insurance companies more customers without giving them incentives to change the way they do business.

2. The insurance exchange. Any insurance exchange. An insurance exchange presumes either that (A) the existing market works fine, or (B) the competitive pressures from the exchange’s creation will be so great as to make the existing market work better. (A) is untenable as a premise for insurance reform. (B) is an odd proposition, because insurance companies already compete to some extent. The exchange-based competition is only a question of degree. While it is a libertarian article of faith that more competition is always more better, actual evidence on competition’s effect on efficiency in the health insurance market is mixed in its implications for the insurance exchange.

3. New “fairness” regulations for the insurance market. These involve highly uncertain tradeoffs between cost containment and increased coverage, as I discussed here.

4. The “small experiments.” These are just that – small experiments, not far-reaching reform. They may well point the way to future improvements in the provision of health insurance and health care, but their place in a reform bill is auxiliary by definition.

To be fair, no reform bill will ever come with the guarantee that costs will be reduced or coverage will be expanded. The modern incarnation of health care reform began as a mishmash of policy proposals, which taken together may well have achieved some improvement over the status quo. Then, the legislative process got to work, axing parts of health care reform when it became politically expedient to do so. The bill that will eventually pass will contain the last policies standing, rather than the best policies to achieve the stated goals.

I consider this a natural outcome of the way we have been talking about health care and health reform. I remember passing a street demonstration this summer where people chanted and held signs to the effect of “Health care reform now!” Well, what kind of reform? Making all doctors wear Mickey Mouse ears on the job would reform health care, but probably not in the way these protesters had in mind. From the very outset, we had committed ourselves to talking about health reform either as all things that are good, or as the worst thing in the whole world. “Health care reform” became a mirror which reflected our personal ideas of what we thought reform should or should not look like. Because the actual bills failed to rally around a single proposal – “insurance exchanges now!” or “Medicare expansion now!” – their details became mere inconveniences in a larger ideological battle between Left and Right.

If this was still a policy debate, I would have suggested that we try to at least agree on a single goal to pursue for now – but pursue doggedly, until it is achieved. Cost control – through regulation, tort reform, or any other possible means – might be one such “compromise goal.” Unfortunately, the struggle over health care reform has ceased to be about achieving either lower costs, increased coverage, or any other substantive policy goal. It has become (or maybe it always was) about flexing political muscle. The credibility of President Obama and Congressional Democrats, and, by extension, electoral success in 2010, are what’s really at stake. So I wouldn’t be surprised, once the administration succeeds in getting a “health care reform” bill through Congress, if the result will bear only faint resemblance to the promises of efficient health care provision and equitable access to health insurance.

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College sports and the business of education – Updated

November 28, 2009

(Scroll to the end for an update on this post.)

Writing for the Times, Gilbert Gaul gives new voice to the old complaints about collegiate athletics: they spend too much and siphon money away from the “education” part of post-secondary education.

The rise of College Sports Inc. didn’t happen by accident. Administrators at many universities have allowed athletic departments to operate independently, like stand-alone entertainment divisions. They have separate budgets, negotiate their own TV deals and, in some cases, employ hundreds of coaches and staff. And as long as they continue to collect ever-larger sums from ticket sales, boosters and television, who is going to tell them to spend less?

Gaul holds that college sports use up too much money. I agree. But I can’t get behind his proposal to curb this spending:

If college presidents really wanted to halt the college sports machine, they could try two options. They could insist that athletic departments operate within their university budgets, like the English or biology departments; or they could ask Congress to rescind the tax breaks on the commercial income earned by athletic programs.

The “college sports machine” is not a monolith. This machine has two parts: revenue-generating blockbuster sports, which are run as a business (usually football and men’s basketball), and nonrevenue sports, which are run as a charity. The dominant business model in collegiate athletics has the former supporting the latter, and, ideally, kicking back a few bucks to the academic departments. When we talk about overspending in college sports, we conflate egregious spending on the moneymaking team (five-star hotel stays for football players) with “ordinary” spending on nonrevenue sports. Many if not most collegiate football programs in this country, for example, would probably be able to stand on their own. If most collegiate athletic departments need outside support, then perhaps it is spending on nonrevenue sports – and not excessive investment in revenue-generating ones – that is to blame.

I suspect that propping up nonrevenue sports is what’s hobbling collegiate athletic programs. Gaul suggests that limiting how much money athletic departments can make or spend will fix their overspending problems. But it seems that dropping the financial obligations of nonrevenue programs might be a surer way of getting college sports to pay their way. While I am speaking of both men’s and women’s nonrevenue sports, there is no getting around the issue of gender equality in sports with such a proposition, which runs directly counter to Title IX as it is currently enforced today.

Title IX states that “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” Because athletic departments are considered to be “education programs,” they have been required to demonstrate progress towards or accomplishment of equal opportunity in sports participation. Historically, colleges have done this by establishing new nonrevenue sports for women and cutting existing nonrevenue sports for men. If, as I propose, nonrevenue sports in general are curtailed, female student-athletes will disproportionately bear the brunt of disappearing scholarships, facilities, and staff.

That said, I don’t believe that dropping nonrevenue sports from collegiate rosters will deal any serious blow to gender equality in education or in the broader society. Remember that Title IX applies to college sports on the premise that sports represent an “education activity” that somehow contributes to a student’s education in that college. Running with this assumption, we might conclude from the numbers on sports participation that the real inequality is not between male and female student-athletes, but between student-athletes and everyone else. In 2002, fewer than 2.5% of students enrolled in any college participated in school-sanctioned athletics.* For comparison, when Rutgers and Princeton each fielded 25 men for the first football game ever, the players on the field represented over 11% of the schools’ combined student body.

But I would question even that assumption – that participation in collegiate sports offers men or women a leg up in the world, especially outside the revenue-generating programs. Competing in a varsity sport is at least as draining to a college student as holding a strenuous full-time job. Meanwhile, the socioeconomic gains from such participation are small and elusive: scholarship money is scarce, the “character-building” aspect is questionable**, and the contribution to one’s education is negligible at best, negative at worst. Thus, if participation in college sports cannot be legitimately described as “educational”, then such participation – equal or otherwise – should not be governed by Title IX***. More importantly, if participating in college sports does nothing for one’s education, then colleges have no business subsidizing nonrevenue sports and the student-athletes who compete in them.****

If you’re still not convinced, I ask you to at least get your story straight. Either participation in college athletics is essential to schools’ educational missions, in which case athletic departments should become even bigger money sinks in their quest to enroll anybody and everybody in organized sports; or playing college sports is not an educational activity, in which case it should be excluded from the purview of Title IX, allowing colleges to strip funding from no-revenue-getting teams, men’s as well as women’s. To me, the second story makes much more sense. I’ll take the real economic victory of cheaper tuition and solvent athletic programs over the fleeting moral victory of an athlete of any gender being able to get a .25 scholarship to play games that few people attend, watch, or follow.

Update (02/15/10). As Times blogger Tara Parker-Pope reports today, sports participation really does seem to improve life outcomes in adulthood. While this finding contradicts my original conclusion in this post, it leads to another less-than-rosy implication: because of low overall (organized) sports participation rates in college – see above – athletic programs should become even less profitable to level the playing field between current athletes and non-athletes.

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How Obamacare Might Increase Costs

September 9, 2009

For those of you following at home, the President gave a big speech on health care reform tonight. Specifically, he argued for a plan composed of three major planks:

First, …. it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.

[Second,] We will [create] a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. … For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need.

[Third, U]nder [this] plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers.

If I may sum up these points, Obama is essentially proposing to

1. Extract more value out of insurance policies, by expanding who, what, and how much is covered,
2. Improve accessibility to individual insurance policies, including a nonprofit, self-sustaining public option, and
3. Mandate that every American carry health insurance.

It’s a good plan for extending health insurance coverage to all Americans, which in itself is a worthy goal. But I am much more skeptical of its effect on health care costs. Health care reform has been billed as including powerful cost-cutting measures. But before we pour our faith into arcane budget estimates, we would do well to remember a few ways in which this plan may end up costing us more, not less, than our current (broken) system.

  • If you have insurance, you may end up getting less services for more money. This would directly contradict Obama’s promise, but it’s a reasonable possibility. Under this reform plan, insurance companies will no longer be able to save money by dropping customers or limiting their coverage. On paper, they would not be allowed to charge customers more, and would have to raid their profit margin to come up with the difference. But in practice, they will almost certainly try to get the money from customers somehow – directly through higher premiums, or indirectly through government subsidies.
  • If you don’t have insurance, you will get it (public or private, subsidized or not), and might therefore increase your utilization of health care. If people who today are being denied health care because of insurance shenanigans get the care they need, they might be healthier for it, but this care won’t come free.
  • Even if you get insurance but don’t increase your utilization of health care, you would still be paying for insurance. You might not use your new policy, but you would still be paying for it. That’s less money in your pocket, more money in the national health care expenditures column.
  • Not all of these cost increases are necessarily bad. Of course it will cost money to provide un- and underinsured Americans with lifesaving (or even just life-enhancing) health care. Of course everyone who can should pitch in to spread out the risk of ill health. If the economic times were good and (dare I dream) the federal government were running a surplus, I would gladly ignore all these factors. However, given a runaway national debt and a shaky economy, we simply cannot afford health care reform that costs more money than it saves. I have a hard time believing that Medicare and Medicaid waste and inefficiency are so great as to equal the costs of insuring the 45-some million uninsured Americans and providing improved health care for everyone.

    There are ways to improve health insurance coverage while tackling the fundamental inefficiencies of the market. I proposed one half-baked and politically unfeasible specimen a while back. In any case, if we cannot have health care reform that both expands coverage and reduces costs, then let us at least be candid about this limitation and the need for further reform. It wouldn’t have sounded as good in his speech, but President Obama would have been prudent to acknowledge that he will likely be far from the last President trying to reform a costly and inefficient health care system.

    That’s what I get for cheerleading

    August 13, 2009

    In this post, I argued that Cash for Clunkers would stimulate overall consumer spending, not just spending on cars. Well, the first month of data is in, and two findings stick out:

  • Automotive sales went up.
  • However, retail sales as a whole declined unexpectedly.

    In light of this, I freely admit that I had been too optimistic about Cash for Clunkers. However, I would caution against writing off the program altogether – its effect may have been too small to counteract some other factor(s) which depressed retail sales; and some of its effects, particularly in buoying auto manufacturing, may not have come into play yet.

    The Times reports on the rest of July’s retail sales data:

    The Labor Department reported that retail sales fell by a seasonally adjusted 0.1 percent from June, and were 8.3 percent lower than a year ago. Economists, who had been expecting an increase of 0.7 percent, called the numbers a sobering reminder of the persistent weakness in consumer spending, which makes up 70 percent of the United States economy. …

    Consumers spent 2.4 percent more on motor vehicles and automotive parts last month compared with June as the government’s popular “cash for clunkers” car-purchase program got under way, but any money that flowed into the pockets of car dealers seemed to come at the expense of other businesses.

    Retail spending excluding sales of cars and car parts fell 0.6 percent. People spent less on furniture, electronics, appliances, books and music, implying that American consumers are still wary of the weak job market and an uncertain economic recovery.

  • Can’t Get No Satisfaction

    August 1, 2009

    Mary Katharine Ham, writing for the Weekly Standard, compares the Obama administration’s Cash for Clunkers program to “the KFC grilled-chicken giveaway.” And that’s by far not the most troubling thing about her post. Rather, the low point – indeed, the wide canyon – comes when Ham criticizes Cash for Clunkers for its success. The government actually got people to buy new cars? that are more fuel efficient? The horror!

    Many Obama-supporters on Twitter* today have argued that the program is only a failure insomuch as it is a great success. You see, the Obama administration simply revealed the tremendous demand for $4,500 hand-outs fuel-efficient cars, and should be congratulated for that. The utter lack of competence, planning, or understanding of incentives is not an indication of the federal government’s unsuitability to mucking around in the private sector, but a reason to invite more mucking.

    Here’s the deal. Conservatives have long argued that in this recession, no amount of government spending will have a lasting effect until consumer spending and production rebound. This critique has all but ruled out any government program as successfully stimulating consumer spending and the private production of goods and services. For example, take this Forbes piece from last February:

    If the Bush spending plan can’t productively stimulate the economy, what government economic plan can? None. Production does not need stimulation from the government; it needs liberation from the government . What a productive, dynamic economy requires of a government is that it restrict itself to protecting property rights from force and fraud, and refrain from interfering in free production and trade.

    In a time when consumer spending is beginning to seem more like playing financial Russian Roulette than fulfilling a civic duty, this critique is implausible. If consumers are holding off on consuming, no sane producer would fail to roll back production. You can’t force demand for something by merely making it – witness the unsold inventories of retail goods that have piled up as this recession dragged on.

    But you can force consumer demand by subsidizing it. And that’s what we’re seeing with the Cash for Clunkers program. When people are paid to buy new cars, they will buy new cars. There is no way to get around this – unlike the Arizona incentive for alternative-fuel vehicles Ham mentions, which did not stipulate that owners actually use alternative fuels. Every check cut under the Cash for Clunkers program stands for a new car purchased: no exceptions. And as demand for new cars increases, the production of cars – particularly their production in the U.S. by American workers – will be bolstered by this government action. Under the paradigm of conservative economics, we are witnessing nothing short of the impossible.

    * Ham cites Twitter as a source not once, twice, or even thrice, but four times in a short post. In Twitter veritas.

    Why Food Snobbery Is a Tough Sell

    August 1, 2009

    Writing for the Times,* Michael Pollan laments the (de-)evolution of televised cooking, and ends, as always, on a prescriptive note:

    The question is, Can we ever put the genie back into the bottle? Once it has been destroyed, can a culture of everyday cooking be rebuilt? One in which men share equally in the work? One in which the cooking shows on television once again teach people how to cook from scratch and, as Julia Child once did, actually empower them to do it?

    Let us hope so. Because it’s hard to imagine ever reforming the American way of eating or, for that matter, the American food system unless millions of Americans — women and men — are willing to make cooking a part of daily life. The path to a diet of fresher, unprocessed food, not to mention to a revitalized local-food economy, passes straight through the home kitchen.

    According to Pollan, there once was a beastie that roamed this great land freely, showing up at American homes every day for breakfast, lunch, and dinner. Its name was “Real Scratch Cooking,” and it brought joy to the heart of every man, woman, and child. Then, some evil corporations came along, and with a few engineering tricks and a little TV showmanship, convinced Americans to banish Real Scratch Cooking from their lives. And that, in a nutshell, is why Americans are so fat and unhappy nowadays.

    Now, why would Pollan spin such a fanciful tale? First, I will delight you with an obscure and irrelevant literary reference:

    It could be said that there was no one like Michael Pollan in the whole Republic. The Republic valued his services. He was of great use to it. But, for all that, he remained unknown, though he was just as skilled in his art as Chaliapin was in singing, Gorky in writing, Capablanca in chess, Melnikov in ice-skating, and that very large-nosed and brown Assyrian occupying the best place on the corner of Tverskaya and Kamerger streets was in cleaning black boots with brown polish.

    Chaliapin sang. Gorky wrote great novels. Capablanca prepared for his match against Alekhine. Melnikov broke records. The Assyrian made citizens’ shoes shine like mirrors. Michael Pollan was a food snob.

    See, Pollan has a vested interest getting us (back) into Real Scratch Cooking, because, as an inveterate food snob, he would love nothing more than to have his particular brand of snobbery validated by others. Oh, he may be a well-meaning snob, earnestly convinced that doing things his way (or, really, his and our ancestors’ way) is good and right for everyone. But the only thing that would explain his “my way or the highway” approach to Americans’ cooking eating habits is regular snobbery, not overwhelming concern for the public good.

    An analogy to Pollan’s writing comes immediately to mind: he is to food as a less profane Mark Rippetoe would be to fitness**. Oh, the two might motivate beginners in their respective fields to dig deeper, and even rope in some gen-u-ine newbies (fresh meat?), but their simple, authoritarian pronouncements – “cook food from scratch” and “squats and milk,” respectively – adapt terribly to the education of the masses.

    We can see proof of this in the comments section on the Pollan piece. There, some Times readers offer legitimate pushback:

    Cooking, like everything else, requires practice and repetition. If you cook fairly elaborate meals regularly and don’t exercise like an Olympian there’s a good chance you’re going to get unhealthily fat. Some people also may not be as thrilled by the effort of cooking and clean up as seems to be assumed. There’s a world of difference between the lovely fantasy of the beautiful, trim, industrious woman removing the baking bread from the oven and serving it to her gorgeous, always-appreciative family and the reality.

    Or,

    I believe this article overlooks one factor that heavily affects the time people spend cooking, especially single young people: It’s often not economical to cook certain types of food if you work irregular hours and/or don’t have a family. Besides the time factor (which is significant), it’s sometimes hard to justify spending $50-100 on the ingredients for a meal that will only feed one person, when I can go to a restaurant and get the same meal for a fraction of the cost.

    Or even,

    I think the whole “foodie”/locavore/annoying Alice Waters” culture which shows disdain for the Food Network types contributes to the lack of cooking in this country. It’s great to know how to cook a “from scratch” meal and I enjoy doing it because I love cooking. However, some others who can cook well often seem to look down on those who assemble meals or buy takeout for whatever reason.

    I’ve seen them in action. I’ve seen them get invited over to people’s houses and then sneer to me (because they know I can cook) about the green-bean casserole and the parmesan from the green can on the pasta and how the host served Trader Joe’s wine instead of the good wine they, the great cooks, brought as a gift.

    I quote these comments at length not only because I agree with their arguments, but also because they come from (presumably) a variety of people, and not just one crotchety blogger. To intellectuals and foodies and intellectual foodies Pollan’s snobbery may hold truth and comfort, but below this rarefied realm, the fetishism of Real Scratch Cooking has only a shaky appeal.

    Lest this post be elongated even further, here is a list of just a few reasons why exhorting the American people to return to Real Scratch Cooking may be a bad idea:

  • Cooking takes time. This is the stupidest possible objection to cooking from scratch, but it holds immense purchase on our habits. It is stupid because it is so obvious – of course doing something well takes time – but it is still a legitimate objection: many Americans are not willing or not able to sacrifice hours out of their day to cook from scratch what they could cook or obtain otherwise.
  • Cooking takes money. In theory, cooking can be cheaper than eating out or relying on prepackaged or “nearly-ready-to-eat” foods. In reality, cooking entails many hidden and not-so-hidden costs that can quickly outweigh the nominal savings. For example, a half-pound of roast beef from the deli might cost $5; an equivalent quantity of steak might cost only $3. But to realize this savings one must avoid the following expenditures: the cost of other ingredients (oils, marinades), the cost of tools (grills, skillets, roasting pans), and the cost of excess raw ingredients, should the steak not come in a handy .500 lb package.
  • Cooking takes skill. Sure, practice makes perfect, but going from zero to kitchen hero is a process that would entail a good deal of unsavory errors and frustrating pitfalls. Asking people who don’t know how to cook to learn Real Scratch Cooking is much like asking people who have never learned to walk to qualify for the Boston Marathon.
  • Cooking takes motivation. Let’s face it – not everyone fantasizes about spending precious leisure time in front of the stove, or, as the first comment above notes, picking and cleaning up after dinner. Some people just aren’t going to be interested in labor-intensive forms of cooking no matter how much Pollan and his disciples might browbeat them. There are compelling reasons why cooking from scratch might be enjoyable, but there are many equally compelling reasons why people might just not want to do it.

    These are but a few of the possible objections to Pollan’s adoration of Real Scratch Cooking. Others include, but are not limited to: the false equation of home cooking with healthy eating; the elitism of asking people to turn cooking and eating into a hobby; and the lack of any suggested alternatives for people who may not want or be able to pursue the foodie lifestyle as prescribed.

    If we shouldn’t lecture people to drop everything they’re doing and get started on their “Real Scratch Cooking” re-education, then what message should we be disseminating about cooking, food, and their intersection? I believe the answer lies somewhere short of all-out Pollan-esque snobbery, but far beyond the laissez-faire approach of, say, the Intuitive Eating folks. Particularly, to have mass appeal and mass applicability, food manifestos should strive to offer a good-better-best continuum of food practices. For example, starting the day off with cereal and milk instead of a box of donuts is good; frying a couple eggs to serve with toast is better; and cooking a delectable omelet is best – or some such progression. This principle can be applied to all aspects of eating and (maybe even) cooking: an easy option just about anyone can try; a superior option requiring just a bit more time, money, skill, and motivation; and a very good option that would also be most difficult to execute. The downfall of advice that has its roots in snobbery – as does Pollan’s advice to return to Real Scratch Cooking – is that is addresses only the last category, giving the majority of people, who are unwilling to go to those lengths, neither aid nor comfort.

    * Link via the U.S. of Jamerica.
    ** I owe the comparison to the Brass Tack.

  • Beaten to the (HFCS-sweetened) punch

    July 15, 2009

    The Brass Tack just went right ahead and blogged New Yorker’s review of recent fat-themed books before I could get to it. I even had the article bookmarked and everything! Anyway, I guess that releases me from having to summarize the review myself:

    People have gotten fatter in the past few decades not because the nation’s willpower has suddenly been sapped by pod people, but because calorie-dense food has become much more abundant, and because humans are always easily manipulated psychologically by supersizing and the like.

    As Elizabeth Kolbert, the review’s author writes, this is a wee bit problematic:

    Type 2 diabetes, coronary disease, hypertension, various kinds of cancers—including colorectal and endometrial—gallstones, and osteoarthritis are just some of the conditions that have been linked to excess weight. (Last month, the Times reported that gout, once considered a disease of royalty, is, as the population gets fatter, making a comeback among the middle class.) It has been estimated that the extra pounds carried by Americans add ninety billion dollars a year to the country’s medical spending. No credible estimates exist for global costs, but, Delpeuch and his co-authors write, “Obesity is inescapably confirming itself as one of the biggest drains” on national health-care budgets.

    So far, we’ve heard about a variety of ways in which the obesity epidemic might be mitigated: through the tax code, through education, and even through better urban planning, to name a few. (e.g. discussions here and here.) As Brass Tack points out, these well-known initiatives may or may not be enough for the U.S., but to reduce and prevent obesity worldwide something else is needed. Here is where our takes on the situation diverge.

    As the Brass Tack writes, technology is the missing ingredient:

    The only real solution would be to make protein and vegetables competitive with grains in terms of price. If we could make in vitro meat cost-effective, one day a skinless chicken breast might be as cheap as an order of fries. (And factory-grown meat doesn’t torture animals.) We’d also need to really et aquaculture off the ground. And we’d need a new green revolution for non-starchy vegetables so they could be harvested more cheaply and watered with less. It’s going to take a whole lot more than a rooftop garden to do this.

    Now, her piece is titled “Obesity and economics,” and so my dissent may as well be titled “Obesity and sociology.” Because, for all the economic and technological factors that have gone into fueling the obesity epidemic, these factors have only been the “how.” The “why” of obesity stems from culture, and specifically the culture of food: what is food, when and how and with whom it should be eaten, and so forth. Basically, if people didn’t recognize fast-food french fries as food, it wouldn’t matter how cheap McDonald’s could sell french fries for, because the demand would just not be there. On a broader scale, people eat as they do because of a mix of old customs, new marketing, and timeless peer pressure – and, yes, because technological and economic developments have enabled them to eat so.

    So what’s the point of this – if you will – sociological take on obesity? Even if we remove the enabling factors – cheap corn, “supersize” portions, urban “food deserts”, total ignorance of nutrition – we will still be left with the root cause of obesity: the desire for a certain (and incidentally unhealthy) diet. And that means, so long as a caloric surplus is available, people will continue to get fat(ter). And that’s the good news; the bad news is that “food culture” is much more difficult to manipulate on a national scale than tax rates or commodity costs.

    Absorb what is useful

    June 4, 2009

    I don’t know if President Obama is big on kung fu movies, but he certainly seems to live by Bruce Lee’s dictum. In a departure from his campaign literature, Obama now says he is “receptive to Congressional proposals that would require Americans to have health insurance and oblige employers to share in the cost.” The Times has more:

    The president said he was open to proposals for “shared responsibility — making every American responsible for having health insurance coverage, and asking that employers share in the cost.” … “If we are going to make people responsible for owning health insurance, we must make health care affordable,” Mr. Obama wrote. “If we do end up with a system where people are responsible for their own insurance, we need to provide a hardship waiver to exempt Americans who cannot afford it.” …

    Mr. Obama’s letter affirmed his support for creation of a new government-sponsored health plan. “I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans,” he wrote. “This will give them a better range of choices, make the health care market more competitive and keep insurance companies honest.”

    Now, the three remaining supporters of Clinton’s 2008 Presidential campaign might be excused for foaming at the mouth a little. Then, Hillary Clinton promised an individual mandate to have health insurance, Massachusetts-style. Meanwhile, Obama’s plan called for a weak employer mandate, in which some but not all employers would be required to provide or help pay for health insurance. As of this writing, Obama seems to be moving away from this (most likely) less-effective policy and toward the individual mandate.

    There’s just one nagging little thing. Extending health insurance to more people costs money, and the prospective individual mandate lite, in which people are required to get insurance through the myriad private companies or a government plan does little to cut down these costs, either for consumers or for providers. It is trivial to show that unless insurance companies can effectively discriminate against high-risk consumers, the best insurance plan is one in which everybody is enrolled. Short of this drastic ideal, the more people are enrolled in a given plan, the cheaper that plan is per person on both the supply and demand sides, assuming enrollment is uncorrelated with risk. So a good way to equitably lower the cost of health insurance would be to enroll as many people as possible – regardless of risk – in a single plan. This would also have the benefit of cutting down on per capita administrative costs and duplicated overhead costs.

    How does Obama’s plan (or intentions) measure up to this ideal? By letting – nearly encouraging – consumers who are already insured to keep their current health insurance, it does nothing to lower costs for the policies of the insured (which greatly outnumber the uninsured). By allowing the uninsured to sign up for a government plan, it creates just another small insurer saddled with all the problems of the rest of the market. Finally, by encouraging some of the uninsured to seek health insurance on their own, it leaves them vulnerable to the steep premiums that rationally must be charged of individuals purchasing insurance solo.

    A real solution to the problems of American health insurance – bloated administrative costs, underinsurance, high prices – could lie just one radical policy away. If we take as constraints the ideas that 1. Americans will not accept the complete bulldozing of the private insurance market, and 2. there is no guarantee that a government-run program will be more efficient than a private one, there still remains a reasonable policy option that combines wider coverage with lower costs and room for market-driven innovation.

    Consider this: a basic government insurance plan, with mandatory participation, and a deductible-copay system similar to but more benign than existing private policies. This plan would extend basic coverage to everyone, including perhaps most preventative procedures, some ER visits, and limited consultation with specialists, among other things. It would not aspire to provide full health coverage to its enrollees – only coverage for procedures with positive externalities or those which most often bring needless financial strain upon low-income families – and would be priced accordingly. Everything else – prolonged hospital stays, expensive treatments, frequent trips to the doctor – could then be covered by supplemental insurance, which consumers could obtain from anyone. Such a dual-layer system would provide universal, low-cost (but limited) health insurance, without completely turning the health insurance sector into an arm of the government.

    Owners, not patrons

    May 27, 2009

    The government is poised to acquire ownership of 70% of General Motors, ostensibly in a move that will smooth out GM’s restructuring. As the Times reports:

    The latest plan for the troubled automaker, which is expected to file for bankruptcy by Monday, calls for the Treasury Department to receive about 70 percent of a restructured G.M. Including the more than $20 billion that has already been spent to prop up G.M., the government will provide G.M. at least $50 billion to get the company through Chapter 11, people with direct knowledge of the situation said Tuesday. By some estimates in Detroit, tens of billions beyond that amount may be required. …

    The prospect of a G.M. effectively owned by the government raises a number of thorny questions. Countless policy decisions — on matters such as fuel economy standards, tax incentives to replace aging cars and green technology initiatives — will present conflicting interests. …

    Aides to President Obama have consistently said they would be reluctant shareholders, and they plan no operating role in the company.

    “No one is going to put U.S. government employees on the G.M. board,” one person close to the ongoing discussions said on Tuesday.

    The day-to-day running of the firm, this person said, would be left to professional managers, and the government would not be involved in decisions about closing factories, renegotiating contracts or selecting product lines.

    There is a strong cultural obligation for the Obama administration to keep their hands off of business, even businesses in which the government would own a controlling stake. Not surprisingly, even with these reassurances there have followed the inevitable wisecracks about socialism and government-run enterprise. While American tolerance for most state-run businesses may be low, it is simply bad policy to rely on “professional managers” to bring GM back from capitalist Limbo. After all, GM has been in some form of restructuring for decades under the steering of “professional managers,” and has neither fully recovered from its market losses in the 20th century, nor successfully avoided collapse in this recession. How badly have “professional managers” mishandled GM? Consider this:

    The automaking losses have put GM in the kind of financial position lately associated with dying airlines and retail chains. The company has been frantically seeking cash to meet its financial obligations. GM has sold stock and tapped credit markets to raise $5 billion in the past year alone, mostly to pay operating expenses. If the financial squeeze grows too tight, GM might even file for bankruptcy protection under Chapter 11 to force concessions in its wage, pension and benefit packages.

    Thus wrote Time in 1992. Professional managers have not saved GM in the past, and it is odd to think they will do so in the future. Rather than the government merely becoming patrons of the same managerial cadre, it should carefully consider taking that dreaded active role, and finally changing the (faulty) way GM does business.

    “They can stuff their [food] credentials, ’cause it’s them that take the cash”

    March 22, 2009

    You know virtuous food (i.e., local/organic/sustainable or some other euphemism of the day) is doing well when Times articles about it move from the Fashion & Style section to Business. Saturday’s article chronicles the new momentum virtuous food – particularly organic food – has acquired thanks to a bit of White House boosterism. Andrew Martin writes:

    Mr. Hirshberg and other sustainable-food activists are hoping that such actions are precursors to major changes in the way the federal government oversees the nation’s food supply and farms, changes that could significantly bolster demand for fresh, local and organic products. Already, they have offered plenty of ambitious ideas.

    For instance, the celebrity chef Alice Waters recommends that the federal government triple its budget for school lunches to provide youngsters with healthier food. And the author Michael Pollan has called on President Obama to pursue a “reform of the entire food system” by focusing on a Pollan priority: diversified, regional food networks.

    Still, some activists worry that their dreams of a less-processed American diet may soon collide with the realities of Washington and the financial gloom over much of the country. Even the Bush administration, reviled by many food activists, came to Washington intent on reforming farm subsidies, only to be slapped down by Congress.

    The plot is familiar: intelligent foodies and farmers are trying to improve America’s diet with the help of a few Washington mavericks, only to be stymied by Congress and the evil agribusiness/food industry lobbyists which control it. Even the cast is familiar, at least on the pro-virtue side: Alice Waters. Michael Pollan. Mr. Hirshberg.

    Wait–Mr. Hirshberg? That’s Gary Hirshberg, chief executive of Stonyfield Farm. Mr. Hirshberg, according to Martin’s report, is fired up about changing the system:

    Back in Anaheim, Mr. Hirshberg, the head of Stonyfield Farm, said he, too, is optimistic that change is at hand. But he reminded the small crowd that the organic industry remains a “rounding error,” roughly 3 percent, of the overall food and beverage business.

    “We’re at the starting line,” he says. “This is our job, our government. We’ve got to take it back.”

    Do it, Mr. Hirshberg! Take back the government in the name of … multinational corporations. As Andrea Whitfill wrote last week in AlterNet, Stonyfield Farm is mostly owned by the Danone conglomerate, and Hirshberg happens to sit on the board of Dannon U.S.A. So is that talk about “taking back” the government in the name of virtuous food change from within, or clever marketing to sell Danone’s higher-priced yogurt?

    In fact, Mr. Hirshberg’s Stonyfield Farm is not alone in pushing virtuous product while being owned by a distinctly non-virtuous company. It seems that just about every organic or virtuous brand consumers are familiar with has been snapped up by large corporations. Take virtuous cereal brands, for example.

    “Cereals, like milk, are one of the primary entrance points for use of organics,” said Lara Christenson of Spins, a market research group for the natural products industry, “which is pretty closely tied to children — health concerns, keeping pesticides, especially antibiotics, out of the diets of children. These large firms wanted to get a foothold in the natural and organic marketplace. Because of the mind-set of consumers, branding of these products has to be very different than traditional cereals.”

    These corporate connections are often kept quiet. “There is frequently a backlash when a big cereal package-goods company buys a natural or organic company,” Christenson said. “I don’t want to say it’s manipulative, but consumers are led to believe these brands are pure, natural or organic brands. It’s very purposely done.”

    A little more digging shows that General Mills owns Cascadian Farm; Barbara’s Bakery is owned by Weetabix, the leading British cereal company, which is owned by a private investment firm in England; Mother’s makes it clear that it is owned by Quaker Oats (which is owned by PepsiCo); Health Valley and Arrowhead Mills are owned by Hain Celestial Group, a natural food company traded on the NASDAQ, with H.J. Heinz owning 16 percent of that company.

    Whitfill has more examples, and Allison Kilkenny has pictures. Virtuous cereal, virtuous drinks, virtuous snacks, virtuous dairy products – much of what’s on the shelf at your grocery store is made by Big Food (-owned) companies far, far removed from what most of us envision when we think about how virtuous food is (should be) produced.

    So what’s the big deal? Food activists have been telling us that the best way to get the food market to change is to vote with our money, spending more of it on smaller quantities of “good” food. Now we find out that the main channel through which we consume virtuous food – brand-name packaged foods – diverts our monetary votes to the coffers of the same companies we are trying to “punish.” That is not, in itself, the end of the world – or even of food activism. It may still be the case that virtuous food, in its most common forms, is better for us than other offerings from the parent Big Food firms. It may still be the case that corporate warriors such as Mr. Hirshberg will effect real “change from within” in the conglomerates they serve. It may still be the case that we can support virtuous causes by giving our money to one division of Unilever over another. Yet whatever may happen, it is definitely time for food activists to drop the “holy crusade” rhetoric in which organic/local/sustainable is the banner of the good, and “corporate” is the mark of the evil, and never the twain shall meet.