Friday, February 28, 2014

Disarming logic

A biology professor at Boise State University asks for some practical advice and pens one of the best op-ed columns of the year.

Wednesday, February 26, 2014

How to make the health system worse

Republicans' crocodile tears over people losing their health insurance coverage appear to have dried.

The House is preparing to take up H.R. 2575, which would alter portions of the Affordable Care Act to allow more businesses to avoid providing providing health insurance to their employees.

The legislation is co-sponsored by Rep. Howard Coble and other members of the Republican NC delegation.

An analysis by the Congressional Budget Office gives the easily predictable result--lots of people (about 1 million by the CBO's estimate) will lose their employer-based insurance each year.

On top of that, the CBO estimates that the legislation would
  • swell Medicaid and State Children's Health Insurance Program rolls by 500,000 to 1,000,000 people,
  • increase the number of uninsured people by up to 500,000, and
  • add to the federal debt by $73.7 billion over the next ten years.
Because costs of Medicaid and SCHIP are shared by the federal and state governments, the changes would add to state government costs as well.

Less private insurance, more public insurance, bigger deficits, and more costs for states--that's the Republican recipe for "reform."

Monday, February 24, 2014

Casting blame far and wide

When something goes wrong, do we need to blame someone?

Yes, according to an article in the Journal of Political Economy by researchers from Boğaziçi University, Bocconi University, and the University.

The researchers ran experiments that paired subjects. One subject had to make decisions about how money would be split between a risky and safe investment in an uncertain environment. After the uncertainty was resolved and the payout was determined, the second subject decided how much to reward (or punish) the first.

There were four possible outcomes from the first subject's decision:
  1. The person chose the risky outcome and the risky outcome made money (also more than the safe outcome),
  2. The person chose the risky outcome and the risky outcome lost money,
  3. The person chose the safe outcome and the risky outcome made money (and would have paid more than the safe outcome), and
  4. The person chose the safe outcome and the risky outcome lost money.
Although the first subject chose the investment, s/he did not have any influence over how the uncertainty would be resolved.

The researchers set things up so that under some circumstances
  1. the risky investment was the better bet (even though there was still a small possibility of a loss),
  2. neither the risky investment nor the safe investment was a better bet, and
  3. the safe investment was the better bet (even though there was still a small possibility that the risky investment would pay more).
In this set up, there was some scope for blame-worthy decisions. For example, choosing the safe investment when the risky investment had a higher expected pay-off or choosing the risky investment when the safe investment had a higher expected pay-off would each be "bad" decisions a priori.

What was interesting, however, was that the second subjects paid the first subjects less (punished the first subjects) even when they made the appropriate decisions a priori but the luck of the draw led to bad outcomes. For instance, subjects were often punished when they chose the risky investment, even though it had a higher expected pay-off, but the realized pay-off was a loss. That is, the second subjects appeared to shift blame for bad outcomes that were beyond anyone's control onto the first subjects.

Need someone to blame? Chances are you'll find someone.

Sunday, February 23, 2014

What Sheila Salter isn't telling you

Today's News & Record includes an op-ed by Sheila Salter, a 61-year-old self-employed marketing consultant from Chapel Hill, describing the cancellation (later rescinded) of her NC Blue Cross Blue Shield policy. provider (Blue Cross Blue Shield) suggested a new policy that would roughly replace my canceled one. They recommended a "bronze" plan--the cheapest plan I could buy. It cost a whopping $584 per month. My current plan, by comparison, cost me only $202 per month.

I could hardly contain my shock. My new Obamacare-compliant plan would cost me 189 percent more. It also increased my deductible from $3,500 to $5,000 and increased my co-pays from $25 to $45.
Ms. Salter made similar claims in testimony to the House of Representatives in November and in ads produced by the Koch-funded American's for Prosperity.

The (eventual) cancellation of Ms. Salter's insurance may be costly. However, Ms. Salter misrepresents some parts of her story and omits some others. The cancellation, regrettable as it is, is not nearly as costly as she makes it out to be.

The most important misrepresentation is that a $584 per month "bronze" plan is the cheapest she could buy. In fact, the $584 plan is the most expensive "bronze" plan she could buy. There are seven other "bronze" plans in Chapel Hill; the least expensive costs $150 less per month.

Friday, February 21, 2014

Good for thee but not for me

ExxonMobil CEO Rex Tillerson's affection for fracking is a sometimes thing.

ThinkProgress explains.
As ExxonMobil’s CEO, it’s Rex Tillerson’s job to promote the hydraulic fracturing enabling the recent oil and gas boom, and fight regulatory oversight. The oil company is the biggest natural gas producer in the U.S., relying on the controversial drilling technology to extract it.

The exception is when Tillerson’s $5 million property value might be harmed. Tillerson has joined a lawsuit that cites fracking’s consequences in order to block the construction of a 160-foot water tower next to his and his wife’s Texas home.
Maybe this experience will give Mr. Tillerson some appreciation of how fracking and its infrastructure affect surrounding properties.

But probably not.

Tuesday, February 18, 2014

160,000 NC residents enrolled thru health exchange--so far

There's good news to report about the new individual health insurance exchanges that are now operating under the Affordable Care Act.

Nationally, just under 3.3 million people enrolled in individual insurance plans through the state- and federally-run exchanges during their first four months of operation, according to figures from the U.S. Department of Health and Human Services. In North Carolina, just over 160,000 people had selected an individual plan.

Although NC is 10th among states in population, it was 5th among states in private, individual health insurance enrollments during the first four months of the insurance exchanges. An additional 48,000 people were assessed as being eligible public insurance for Medicaid or the State Children's Health Insurance Program.

To put the figures in context, approximately 1.7 million North Carolinians lacked health insurance prior to the exchanges opening.

The high levels of enrollments aren't the only good news.

Monday, February 17, 2014

Gov. McCrory--job destroyer

"Petty" and "thin-skinned" already appeared prominently on Gov. Pat McCrory's resume.

To those, you can now add "job-destroyer."

The Charlotte Observer explains
An employee at a Myers Park gourmet food store was fired after Gov. Pat McCrory’s security detail complained Sunday about a comment the worker made to the governor.

On Sunday afternoon, McCrory was shopping at Reid’s Fine Foods when Drew Swope, a 45-year-old cook, said he asked if he could help McCrory.

After realizing he was speaking with the governor, whom he disagrees with politically, Swope said he told McCrory, “Thanks for nothing,” and walked away.

Swope said the governor was upset at his comment and began “yelling” at him. He said McCrory said he was a customer and shouldn’t be treated that way.

He said the governor and his security team complained to the food store owner, who then fired him.

Wednesday, February 12, 2014

Locke Foundation's "Massachusetts Miracle"

Last month, the John Locke Foundation released a report, "Tax Cuts for All," that purported that the tax reform that North Carolina enacted in 2013 would result in lower average net taxes for every income group in the state by 2015. For the report, the JLF relied on numbers computed by the Beacon Hill Institute at Suffolk University in Massachusetts.

The numbers look miraculous.

Contrary to some other analyses, the JLF and its Massachusetts partner find that total taxes paid by every income group will be lower in 2015 than they would have without the reform. Specifically, they estimate that 
  • households with incomes below $25,000 will save a total of $79 million,
  • households with incomes of $25,000 to $50,000 will save $68 million,
  • households with incomes of $50,000 to $75,000 will save $58 million,
  • households with incomes of $75,000 to $100,000 will save $78 million,
  • households with incomes of $100,000 to $200,000 will save $201 million, and
  • households with incomes above $200,000 will save $369 million.
The enormous tax savings for the small number of households in the top income category would be great news for them, but the more modest projected savings for other households would also be good news (just not as much good news as the very, very rich).

The miraculous part is that numbers suggest that the NC tax changes provide average tax savings across the income distribution.

However, there's just a teensy, weensy problem with the analysis--the numbers don't add up. Or rather, the estimated $853 million in total JLF savings across income groups in 2015 adds to far more than the anticipated savings from NC's official budget analysis.

The report claims to rely on many figures and estimates provided by the Fiscal Research Division of the NC General Assembly. But the FRD calculated that the tax package would only reduce revenues by $501 million in fiscal year that runs July 2014-June 2015 and $760 million in the fiscal year that runs from July 2015-June 2016. Thus, the 2015 calendar year savings would be somewhere between $501 and $760 million.

Yet the JLF and its Massachusetts partner find $853 million in savings.

Talk about your Massachusetts miracles!

Update (2/12/14, 2:15 p.m.): The JLF/Beacon Hill numbers have become more miraculous.

The FRD estimates that state revenues will drop $501-$760 million in 2015. However, the funds coming from taxpayers' pockets will only fall $434 to $706 million because the expansion of the sales tax also increases local government tax receipts.

Also, the JLF/Beacon Hill estimates don't treat the elimination of the state Earned Income Tax Credit as tax reform (low-income families are likely to see things differently). The elimination of the state EITC will cost low-income households at least $100 million per year.

These changes add more than $150 million to the discrepancy between the JLF/Beacon Hill numbers and the official state projections.

Tuesday, February 11, 2014

McCrory administration and NC General Assembly team up to punch $10-$40 million hole in Medicaid budget

They all can't be this incompetent. Can they?

What do you get when you combine the incompetent micro-managers in the North Carolina General Assembly with the incompetent bumblers in the NC Department of Health and Human Services?

A new $10 million to $40 million hole in the state's Medicaid budget.

The News & Observer picks up the story.
In August, the state’s Medicaid director asked the federal government for permission to postpone for three months the process for renewing Medicaid recipients’ coverage.

The federal government gave its approval, but the N.C. General Assembly didn’t. When lawmakers passed the state budget in July, they required the Department of Health and Human Services to get legislative approval for federal waivers.
The story indicates that the cost addressing the waiver that really isn't a waiver is somewhere between $10 million and $40 million.

Expect Human Services Secretary Aldona Wos to be along shortly with some explanation of how this is either President Obama's or former Gov. Bev Perdue's fault.

In the meantime, beginning teachers might not want to spend those promised raises.

Stop playing with other people's money

As the three regular readers of this blog will recognize, I'm rarely in league with Sen. Tom Coburn (R-OK) or Rep. Jason Chaffetz (R-UT), but I'm completely on board with their proposals to revoke the tax-exempt status of the NFL and NHL.

Through a special-interest provision inserted in legislation nearly 50 years ago, both leagues are treated as 501(c)(6) non-profit, commercial organizations--organizations like Chambers of Commerce, local boards of trade, and local real estate boards. Other 501(c)(6) organizations are supposed to promote general business or commercial interests, improve general business conditions, but not engage in business activities themselves.

Unlike other 501(c)(6) organizations, the NFL and NHL directly engage in business activities, such as merchandizing and negotiating broadcasting deals, that benefit their members. Absent the special provision, they would not qualify as tax-exempt. Indeed, other organizations that have specifically promoted their members' business interests rather than general business interests have had to forfeit their tax-exempt status.
Although the individual teams within the leagues are subject to taxation, the revenue that the league offices receive is not. Last year, the NFL--as an organization--received a more than a quarter of a billion dollars in revenue from its member teams. About a tenth of that revenue went directly into the pocket of league commissioner Roger Goodell.

The tax-exempt status amounts to a multi-million dollar annual subsidy to some of the wealthiest people and organizations in the country. The Joint Committee on Taxation estimates that ending the subsidy would return $109 million to the Treasury over the next ten years.

Struggling taxpayers simply can't afford multi-million dollar subsidies to billionaires. Stop the charity to the NFL and NHL.

Monday, February 10, 2014


Yet again, Gov. McCrory's state government fails to reassure.
N.C. environmental officials now confirm arsenic levels in the Dan River exceeded state standards for at least two days following the coal ash spill a week ago from a shuttered Duke Energy plant.

The N.C. Department of Environment and Natural Resources says it made an error when it indicated Thursday that the arsenic levels in the Dan River downstream from the spill were within state standards on Monday and Tuesday.
Was the NC DENR trying to bury the news? Consider the lead sentence from its Friday press release, announcing the failed tests.
All but four of the 34 water quality parameters analyzed as part of water testing near this week’s coal ash spill in the Dan River meet regulated levels for protection of human health and aquatic life, the N.C. Department of Environment and Natural Resources reported Friday evening. 
 And, as they say, four out of 34 ain't so bad.

Sunday, February 9, 2014

Hey UNCG sports fans

North Carolina offers its residents some great sports bargains. This year NC fans could buy Carolina Panthers football season tickets for as little as $390, Charlotte Bobcats basketball season tickets for as little as $344, or Carolina Hurricanes hockey season tickets for as little as $516. Granted, these bargain prices only cover the teams' nose-bleed seats, but a bargain is a bargain--and nobody is forced to buy a pro sports ticket.

The same can't be said of NC's collegiate sports, including at my own institution, where students are offered quite a different bargain.

As part of the cost of attending the University of North Carolina at Greensboro, each full-time undergraduate and graduate student is compelled to pay an annual athletic fee of $622. For in-state undergrads, the mandatory athletic fee accounts for 10 percent of the total tuition and fees charged by UNCG. Students have no choice in the matter--if they want to pursue an education at UNCG, the $622 annual athletics charge is added to the price of admission.

UNCG's mandatory athletic fee has grown at a brisk clip of 7.1% per year over the last six years--a rate that's nearly four times the growth of inflation. The University has jacked up the fee despite a recession that has hurt students' ability to pay for college, even faster growth in tuition and other fees that have raised the cost of schooling, and crushing loads of student debt that leave graduates struggling to make ends meet long after they've left the campus.

Friday, February 7, 2014

Statistical error in your favor: collect 600,000 jobs

A remarkable increase in U.S. jobs is buried in an otherwise unremarkable monthly jobs report.

The U.S. Department of Labor estimates that the country added a seasonally-adjusted 113,000 non-farm payroll jobs in January, a solid but by no means brisk growth figure.

However, the estimated number of jobs in January of 137.5 million was 600,000 higher that last month's estimate of 136.9 million in December.

The additional 500,000 jobs come from revisions that the government makes annually to its jobs figures.

The payroll employment figures are based on surveys of firms. The rosters for those surveys are drawn from records of existing firms and have trouble accounting for new firms that are created after the roster is drawn as well as existing firms that close. The government makes adjustments for these changes, but these adjustments tend to lag the actual changes, understating job growth in good years and job declines in bad years.

Each February the government compares previous years' survey numbers to other administrative records and readjusts the survey numbers. These adjustments added about 400,000 jobs to its estimates early in 2013 and about 500,000 to its estimates near the end of 2013.

On a percentage basis, the estimates don't change much--the revised December figure is only 0.37% higher than the original estimate. But even small percentages work out to big numbers when they are applied to large populations.

Overall, the Department of Labor estimates that annual job growth was 2.3 million last year instead of 2.2 million--about 10,000 extra jobs per month.

Sometimes mistakes can be good news.

Imagine what today's headline could have been

Two immediately pressing pieces of legislation are currently in front of the Congress: extension of jobless benefits for the long-term unemployed and extension of the country's borrowing authority.

Both pieces of legislation are worthy. One of the pieces of legislation--expanding the debt ceiling--is absolutely necessary. Both have enjoyed bipartisan support in the past (Republicans were happy to provide more jobless benefits and to raise the debt ceiling when their guy occupied the White House; in fairness, both were also happy to demagog these issues when the other guy occupied the White House). Both would almost surely pass if given up or down votes.

Imagine the headlines--and the increased respect for Congress--if both had received those votes yesterday.

Instead, a minority of Republican senators, including North Carolina's Richard Burr, blocked consideration of jobless benefits--even though a key Republican demand, that the cost of the benefits be offset, had been met.

And, the Republican House, which can't decide exactly which hostage to take (and eventually release), left town without a debt ceiling vote.

In the meantime, the rest of us are left to shake our heads and just imagine positive headlines.

Thursday, February 6, 2014

Replacing Dave

The Triad Business Journal offers great advice to any organization looking to replace a departing Dave.
It’s Tuesday afternoon and Dave ... walks into your office with an envelope in his hand. You think, “Uh oh, he’s resigning.”

He indeed resigns, and the moment he leaves you grab the phone to call HR.

...if you want to find the best possible person for your open job, stop thinking about what you want, and start thinking about what that ideal candidate wants.

When top performers change jobs, they want a position that offers something they don’t already have on their resume – something that takes their career into a new, unfamiliar realm. Maybe your ideal candidate wants to work on a larger scale, supervise a larger team, or master a new skill. Maybe she wants the prestige of working for your organization, or the pleasure of being a bigger fish in your smaller pond.
It's also great advice for any organization looking to replace a departing Pete, departing Joe, departing Chris, departing Chuck, or departing Geetha.

Tuesday, February 4, 2014

NC also dragging its feet on Unemployment Insurance

For seven months, North Carolina has delayed the processing of food assistance cases.

WRAL reports that over the same period the state has also dragged its feet on Unemployment Insurance (UI) claims.
The number of unemployed North Carolina workers who waited longer than three weeks for their initial benefit check increased after a new unemployment insurance law took effect last summer.
The delays in caseload processing are due largely to Republican-enacted changes in the state's UI system.

Besides reducing the amount of benefits, reducing the length of benefits, and imposing an extra week's delay in receiving benefits, Republicans put workers on the hook for any overage mistakes that the state made.

Closer scrutiny of new applications has led to delays in awarding benefits.

As with its problems with Supplemental Nutrition Assistance Program processing, the state is violating federal law. For UI, federal law requires that 87 percent of initial claims be paid within three weeks; however, NC has only been averaging 70 to 80 percent.

It doesn't seem that there is much that NC can do right--at least when it comes to its disadvantaged and vulnerable citizens.

NC FAST subsiding

Seven months in, the enormous, unconscionable backlog in Supplemental Nutrition Assistance Program (SNAP) applications and recertifications finally appears to be subsiding.

WRAL reports the good news.
Under the gun of a federal ultimatum, state and county health officials cut a longstanding backlog of food stamp cases nearly in half over the weekend.

Data released by the N.C. Department of Health and Human Services Monday show about 3,600 cases remain for workers to process before a Feb. 10 deadline, down from about 7,700 on Jan. 30. Case managers must complete these applications before next week or risk losing about $88 million in funding from the U.S. Department of Agriculture.
An "all-hands-on-deck" approach by North Carolina Health and Human Services Secretary Aldona Wos deserves credit for cutting the backlog.

The backlog has not been eliminated. The NC DHHS has prioritized the food assistance cases that would trigger a suspension of federal SNAP administrative funds--emergency cases that should have originally received expedited 7-day processing and cases that were delayed by three months or more. Thousands of other cases with one- and two-month delays remain and will remain--that's still thousands too many, especially considering that the new computer system that triggered this has been operating for seven months.

The good news itself also has an infuriating element: the NC DHHS was able to cut almost half of the backlog in a single weekend.

For months, Sec. Wos and the NC DHHS have engaged in a public-relations campaign in which they repeatedly downplayed the calamity and then turned to denigrating county case workers, previous administrations, health care reform, the media, and others when much of the problem--and the substantial hardship it was inflicting--could be solved with a few-day surge in workers.

Not only did it take a federal ultimatum to get Sec. Wos to feel any special urgency about actually dealing with a backlog that was keeping food from desperate families, but a reasonable-cost solution to that suffering appears to have been in-hand all along.

That's callousness of the first order.

Monday, February 3, 2014

"DIscredit Hayes"

The New Yorker details how Syngenta, a multi-national company with a large Greensboro presence, led an all-out charge to take down a critical biologist, Tyrone Hayes.
Hayes has devoted the past fifteen years to studying atrazine, and during that time scientists around the world have expanded on his findings, suggesting that the herbicide is associated with birth defects in humans as well as in animals. The company documents show that, while Hayes was studying atrazine, Syngenta was studying him, as he had long suspected. Syngenta’s public-relations team had drafted a list of four goals. The first was “discredit Hayes.” In a spiral-bound notebook, Syngenta’s communications manager, Sherry Ford, who referred to Hayes by his initials, wrote that the company could “prevent citing of TH data by revealing him as noncredible.” He was a frequent topic of conversation at company meetings. Syngenta looked for ways to “exploit Hayes’ faults/problems.” “If TH involved in scandal, enviros will drop him,” Ford wrote. She observed that Hayes “grew up in world (S.C.) that wouldn’t accept him,” “needs adulation,” “doesn’t sleep,” was “scarred for life.” She wrote, “What’s motivating Hayes?—basic question.”
Syngenta's campaign continued
According to company e-mails, Syngenta was distressed by Hayes’s work. Its public-relations team compiled a database of more than a hundred “supportive third party stakeholders,” including twenty-five professors, who could defend atrazine or act as “spokespeople on Hayes.” The P.R. team suggested that the company “purchase ‘Tyrone Hayes’ as a search word on the internet, so that any time someone searches for Tyrone’s material, the first thing they see is our material.” The proposal was later expanded to include the phrases “amphibian hayes,” “atrazine frogs,” and “frog feminization.”
Imagine how much good Syngenta could do if it devoted these resources to researching it products instead of researching how to undermine its critics.

Groundhog grade

Not-to-far-fetched news item: Emerging from his burrow on Sunday, Sen. Phil Berger saw his shadow, predicted that there would be six more weeks of third-grade for tens of thousands of North Carolina school children, and immediately crawled back into his burrow.

While above "news item" is fake, the prospect of a "Groundhog Grade" for NC third-graders and their families is all too real--and very much due to the ill-conceived meddling of Sen. Phil ("Punxsutawney Phil") Berger.

A while back, Punxsutawney Phil and his tea-party colleagues muscled through an education "reform" plan that requires third-graders to pass new reading proficiency tests. To give students the best chance of passing, most school districts are adopting a "portfolio" approach that subjects the students to 36 assessments.

Students who don't pass will be required to attend reading "camps" over the summer.

Those who don't attend the camps or fail the tests after the camps will get to do third grade over--and possibly over again.

Testing for the students is beginning and will continue for 12 weeks. It's hard to imagine much learning going on in the classrooms with students having to sit for the assessments and teachers having to conduct them.

It is estimated that somewhere between 37,000 and 75,000 students will fall short of the mark and be sent to the camps.

An analysis by the NC Department of Public Instruction  estimated that at least $18.3 million would be needed to fund the camps if 37,000 students failed the tests. However, in their wisdom, Punxsutawney Phil and his colleagues (who appear to have failed third-grade math) only allocated $15.5 million, leaving local school districts to pick up the rest of their tab.

It also looks like 37,000 is an optimistic figure--last year, more than 50,000 students (about half of all third graders) were short of proficiency.

Under-funded schools during the regular year; a long, drawn-out testing regime that interferes with learning; and woefully under-funded remedial programs are all a recipe for disaster.

If you inflicted this on NC families, you'd be crawling back into your burrow too.