Thursday, August 23, 2012

Raw Ignorance Rules? Census Zombie Lives, Medicare Advantage Is A Failed Experiment In Privatization, and All Kinds of Wrong At Newspeak

After a well-deserved vacation, Paul's been back on the job since Monday straightening out the kinks (er, kooks!).

Just catching up on the "news" with him is quite eye-opening (and a hoot as he hits them where it hurts - in their integrity or lack thereof).


Paul Krugman - New York Times Blog

August 22, 2012, 6:32 pm

Is Someone Trying To Tell Us Something?

Occupy Video

A pretty good video compilation related to the Occupy Handbook, featuring some people you may know

Understanding Medicare “Cuts”

Jackie Calmes has a very good piece about those Medicare “cuts” Romney promises to repeal. As she emphasizes, all of these involve reductions in payments to insurance companies and health providers, rather than reductions in patient benefits. So what are we talking about?

Sarah Kliff had a good summary. Most of the proposed savings come from reducing overpayments to Medicare Advantage and reducing reimbursement rates to hospitals.
What should you know about these changes?
Medicare Advantage is a 15-year failed experiment in privatization. Running Medicare through private insurance companies was supposed to save money through the magic of the marketplace; in reality, private insurers, with their extra overhead, have never been able to compete on a level playing field with conventional Medicare. But Congress refused to take no for an answer, and kept the program alive by paying the insurers substantially more than the costs per patient of regular Medicare. All the ACA does is end this overpayment.

As for the cuts in hospital reimbursement, the key thing to know is that the hospital industry itself negotiated those cuts.
Here’s how John McDonough’s Inside National Health Reform describes it:

The negotiation involved the White House and high-level Senate Finance staffers. The agreement involved two numbers: $155 billion in reductions over ten years, and health insurance coverage for 95 percent of all Americans. At these numbers, hospital leaders were convinced that the revenue from the added covered lives would more than make up for their losses on the Medicare side, and it was a deal they could embrace.
So, does any of this sound like a devastating blow to seniors’ health care?

The Census Zombie Eats Another Brain

Back in 2010 all the usual suspects were going on about how there had been a huge increase in federal employment under Obama. This was funny, for two reasons: it was all about temporary hiring for the Census, and the meme continued to be part of what everyone on the right knew, just knew, to be true long after the Census blip was over and federal employment was back below its level when Obama took office.

Eventually, however, the thing vanished from the discussion, and I thought we’d hear no more about it. But guess who didn’t get the memo?

For what it’s worth, in this case I don’t think we’re looking at a blatant attempt to mislead; I suspect that we’re just looking at raw ignorance.

Kinds Of Wrong

Looking at the comments on my Niall Ferguson takedown (see Ezra Klein, Matthew O’Brien, James Fallows, and Noah Smith for more), I found my memory jogged about a point I’ve been meaning to make about the nature of error in economics.

It seems to me that when readers declare that some piece of economics commentary is “wrong”, they often confuse three different notions of wrongness, which are neither intellectually nor morally equivalent.

First, there’s the ordinary business of expressing a view about the economy that the reader disagrees with – e.g., “Krugman is wrong, because the government can’t create jobs”; or, if you prefer, “Casey Mulligan is wrong, because we’re suffering from demand problems, not supply problems.” Obviously it’s OK to say things like this, and sometimes the criticism is correct. (I’m not wrong, but Mulligan is!) But equally obviously, there’s nothing, er, wrong about being wrong in this sense: people will disagree, and that’s legitimate.

Second, and much less legitimate, is the kind of wrongness that involves making assertions that are logically or empirically indefensible. I’d put the Cochrane/Fama claims that government spending can’t increase demand as a matter of accounting in this category; this is a basic conceptual error, which goes beyond mere difference of opinion. And economists who are wrong in this sense should pay a professional price.

That said, I don’t think it’s realistic to expect the news media to be very effective at policing this kind of wrongness. If professors with impressive-sounding credentials spout nonsense, it’s asking too much of a newspaper or magazine serving the broader public to make the judgment that they actually have no idea what they’re talking about.

Matters are quite different when it comes to the third kind of wrongness: making or insinuating false claims about readily checkable facts. The case in point, of course, is Ferguson’s attempt to mislead readers into believing that the CBO had concluded that Obamacare increases the deficit. This was unethical on his part – but Newsweek is also at fault, because this is the sort of thing it could and should have refused to publish.

Now, I don’t expect a publication that responds to daily or weekly news to do New Yorker-style fact checking. But it should demand that anyone who writes for it document all of his or her factual assertions – and an editor should check that documentation to see that it actually matches what the writer says.

That’s how it works at the Times, or at least how it works for me. I supply a list of sources with each column submission; for yesterday’s piece it looked like this:
$4.3 trillion: lines 2, 3 and 5
Ryan cuts: (I count his Medicaid cuts relative to current policy, not policy including Obamacare)
Disproportionate benefits at top:
Ryan award:

Each time I send in a column draft, the copy editor runs quickly through the citations, making sure that they match what I assert. Sometimes the editor feels that I go further than the source material actually justifies; in that case we either negotiate a rewording, or drop the assertion altogether. Oh, and weasel-wording isn’t acceptable – implying something the facts don’t support is no more OK than stating it outright.

And despite all this, sometimes an error slips through. In that case, the response is a print correction.

We know what Ferguson is going to do: he’s going to brazen it out, actually boasting about the deftness with which he misled his readers. But what is Newsweek going to do?

Unethical Commentary, Newsweek Edition

There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek — I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:

The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.
Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.

Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true.

More than that: by its very nature, health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. So of course reform comes with a positive number for subsidies — finding that this number is indeed positive says nothing at all about the impact on the deficit unless you ask whether and how the subsidies are paid for.

Ferguson has to know this (unless he’s completely ignorant about the whole subject, which I guess has to be considered as a possibility). But he goes for the cheap shot anyway.

We’re not talking about ideology or even economic analysis here — just a plain misrepresentation of the facts, with an august publication letting itself be used to misinform readers.

The Times would require an abject correction if something like that slipped through. Will Newsweek?

Over the Hump (Status Update)

Not actually home yet, but done with the more strenuous bits, and I will be in Monday’s paper.

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