February 2014 archive

Cross posted from The Stars Hollow Gazette

On Tuesday, the Congressional Budget Office released it’s latest report on the Affordable Care Act’s impact on the economy. In the report it estimated that the work force would be reduced by 2.3 million workers by 2021 (pdf). Needless to say, the right wing media and Republicans seized on this as proof positive that Obamacare was a “job killer.”

Well not so fast, this is what the report said:

CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor-given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked. [..]

The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor.

In other words, this isn’t about jobs, it’s about whether or not workers will choose to work less in order to hold on to their eligibility for subsidized health care or Medicaid.

The Washington Post‘s fact checker, Glenn Kessler clarified:

First, this is not about jobs offered by employers. It’s about workers – and the choices they make.

The CBO’s estimate is mostly the result of an analysis of the impact of the law on the supply of labor. That means how many people choose to participate in the work force. In other words, the nonpartisan agency is examining whether the law increases or decreases incentives for people to work. [..]

Some might believe that the overall impact of the health law on employment is bad because it would be encouraging people – some 2.3 million – not to work. Indeed, the decline in the workforce participation rate has been of concern to economists, as the baby boom generation leaves the work force, and the health care law appears to exacerbate that trend.

Moreover, the argument could go, this would hurt the nation’s budget because 2.3 million fewer people will pay taxes on their earnings. That’s certainly an intellectually solid argument – though others might counter that universal health care is worth a reduction in overall employment – but it’s not at all the same as saying these jobs would be lost.

On the brighter side, before a House hearing on Wednesday the Director of the CBO Doug Elmendorf made this argument:

“The reason we don’t use the term ‘lost jobs’ is there is a critical difference between people who like to work and can’t find a job – or have a job that’s lost for reasons beyond their control – and people who choose not to work,” he explained. “If someone comes up to you and says, ‘The boss says I’m being laid off because we don’t have enough business to pay,’ any other person feels bad about that and we sympathize for them having lost their job. If someone says, ‘I decided to retire or stay home and spend more time with my family and spend more time doing my hobby,’ they don’t feel bad about it – they feel good about it. And we don’t sympathize. We say congratulations.”

Matt Iglesias at Mother Jones makes a very salient point about the impact on the job force:

Obamacare will reduce employment primarily because it’s a means-tested welfare program, and means-tested programs always reduce employment among the poor.

If, for example, earning $100 in additional income means a $25 reduction in Obamacare subsidies, you’re only getting $75 for your extra work. At the margins, some people will decide that’s not worth it, so they’ll forego working extra hours. That’s the substitution effect. In addition, low-income workers covered by Obamacare will have lower medical bills. This makes them less desperate for additional money, and might also cause them to forego working extra hours. That’s the income effect.

This is not something specific to Obamacare. It’s a shortcoming in all means-tested welfare programs. It’s basically Welfare 101, and in over half a century, no one has really figured out how to get around it. It’s something you just have to accept if you support safety net programs for the poor.

It’s worth noting, however, that health care is an exception to this rule. It doesn’t have to be means tested. If we simply had a rational national health care system, available to everyone regardless of income, then none of this would be an issue. There might still be a small income effect, but it would probably be barely noticeable. Since everyone would be fully covered no matter what, there would no high effective marginal tax rate on the poor and no reason not to work more hours. Someday we’ll get there.

Optimistically, people leaving jobs or working less may be an opportunity for someone else to take their place. On the other side it could increase costs for employers who would then reduce the number of people they hire. This is an educated guessing game that we would not be engaged in if there were single payer or a public option that leveled the playing field.

Cross posted from The Stars Hollow Gazette

Rep. Steve Cohen (D-TN):

“It is ludicrous, absurd, crazy to have marijuana at same level as heroin. Ask the late Philip Seymour Hoffman if you could. Nobody dies from marijuana. People die from heroin.”

“Every second that we spend in this country trying to enforce marijuana laws is a second that we’re not enforcing heroin laws. And heroin and meth are the two drugs that are ravaging our country,”

“And every death, including Mr. Hoffman’s, is partly the responsibility of the federal government’s drug priorities for not putting total emphasis on the drugs that kill, that cause people to be addicted and have to steal to support their habit.”

“When we put marijuana on the same level as heroin and crack and LSD and meth and crack and cocaine, we are telling young people not to listen to adults about the ravages and problems, and they don’t listen because they know you’re wrong.”

“You can’t name one person who’s died from a overdose of marijuana can you?”

Rep. Steve Cohen (D-Tenn.) tore into deputy drug czar Michael Botticelli on Tuesday, highlighting federal drug policy’s failure to address the substances “ravaging our country” while still considering marijuana to be as dangerous as heroin.

Speaking during a hearing of the House Committee on Oversight and Government Reform focused on the Obama administration’s marijuana policy, Cohen urged drug policy officials to rethink marijuana’s classification as a Schedule 1 substance, which the Drug Enforcement Administration considers “the most dangerous class of drugs.” Other Schedule 1 substances include heroin, LSD and ecstasy, while methamphetamine and cocaine fall under the Schedule II definition.

It is time to refocus and admit that the war on drugs has been lost.

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 6 is the 37th day of the year in the Gregorian calendar. There are 328 days remaining until the end of the year (329 in leap years).

On this day in 1952, Elizabeth II becomes the first Queen regnant of the United Kingdom and several other realms since Queen Victoria, upon the death of her father, George VI. At the exact moment of succession, she was in a treehouse at the Treetops Hotel in Kenya.

Elizabeth II (Elizabeth Alexandra Mary, born 21 April 1926) is the Queen regnant of 16 independent sovereign states known as the Commonwealth realms: the United Kingdom, Canada, Australia, New Zealand, Jamaica, Barbados, the Bahamas, Grenada, Papua New Guinea, the Solomon Islands, Tuvalu, Saint Lucia, Saint Vincent and the Grenadines, Belize, Antigua and Barbuda, and Saint Kitts and Nevis. In addition, as Head of the Commonwealth, she is the figurehead of the 54-member Commonwealth of Nations and, as the British monarch, she is the Supreme Governor of the Church of England.

Elizabeth was educated privately at home. Her father, George VI, became King-Emperor of the British Empire in 1936. She began to undertake public duties during the Second World War, in which she served in the Auxiliary Territorial Service. After the war and Indian independence George VI’s title of Emperor of India was abandoned, and the evolution of the Empire into the Commonwealth accelerated. In 1947, Elizabeth made the first of many tours around the Commonwealth, and married Prince Philip, Duke of Edinburgh. They have four children: Charles, Anne, Andrew, and Edward.

In 1949, George VI became the first Head of the Commonwealth, a symbol of the free association of the independent countries comprising the Commonwealth of Nations. On his death in 1952, Elizabeth became Head of the Commonwealth, and constitutional monarch of seven independent Commonwealth countries: the United Kingdom, Canada, Australia, New Zealand, South Africa, Pakistan, and Ceylon. Her coronation in 1953 was the first to be televised. During her reign, which at 58 years is one of the longest for a British monarch, she became queen of 25 other countries within the Commonwealth as they gained independence. Between 1956 and 1992, half of her realms, including South Africa, Pakistan, and Ceylon (renamed Sri Lanka), became republics.

In 1992, which Elizabeth termed her annus horribilis (“horrible year”), two of her sons separated from their wives, her daughter divorced, and a severe fire destroyed part of Windsor Castle. Revelations on the state of her eldest son Charles’s marriage continued, and he divorced in 1996. The following year, her former daughter-in-law Diana, Princess of Wales, died in a car crash in Paris. The media criticised the royal family for remaining in seclusion in the days before Diana’s funeral, but Elizabeth’s personal popularity rebounded once she had appeared in public and has since remained high. Her Silver and Golden Jubilees were celebrated in 1977 and 2002 respectively, and planning for her Diamond Jubilee in 2012 is underway.