A Citizen's Guide to Indiana

Ohio is looking to Indiana, specifically our toll road privatization, as an example of what not to do.

Opponents of privatizing Ohio’s Turnpike paint a bleak vision of Indiana’s Toll Road: a pot-hole ridden, poor quality, piece of “crap” with high tolls.

I have not driven up that way in a number of years, so I can’t comment on the accuracy of these characterizations. Since the 75 year lease (just 70 years to go!) went into place, on occasions where the Toll Road was an option, I have generally chosen alternate routes. Sure is nice of drivers in Northern Indiana to pay for a lot of road construction in the rest of the state though.

The AP has a story reporting that Delaware County has cut power to outlets around the county government building that were being used by Occupy Muncie demonstrators.

Delaware County commissioner Larry Bledsoe tells The Star Press that taxpayers shouldn’t be providing power for the protesters and that there are fire concerns if protesters were to run a heater inside a tent.

Keith Roydson has a longer story.

I’m the last one to minimize the right of county government to control county property; but the offered explanation about taxpayer money has a whiff of pretext about it. The follow up question would be how much electrical usage expense is attributable to the protesters? I suspect (but don’t know) that the commissioner would have no idea. And if you’re concerned about running heaters in the tent; prohibit running heaters in a tent. They can still bring kerosene heaters.

It looks like county officials want these folks gone. I’m not sure anyone really cared or were paying attention to them before; but now that there is a news angle, and it looks like they’re getting under someone’s skin, the protestors might just stick around. It’s like one of those mosquito bites that is much harder to ignore once you start scratching.

We, as a species, have apparently hit the 7 billion mark for the planet. One thing we can say for humans, our DNA is remarkably efficient at converting Earth’s resources into human shaped packages. So, if you’re a one-in-a-million kind of guy, there are 7,000 guys just like you. And now for something completely different:

“God has blessed us so much, I can’t afford to feed you anymore.”

Fred Clark, of Slacktivist fame, quotes some passages from John Kenneth Galbraith’s “Affluent Society” that are apparently dated, but which ring very true.

Galbraith discusses the Puritan origins of a moral imperative to work. Goods were vitally necessary; the loss of available labor to produce those goods was extremely detrimental to society; and, therefore, the penalty – deprivation of all or most of an individual’s income – was appropriate. The penalty was so justified that there was no moral obligation to help someone who wasn’t helping themselves by working.

Now, in a world awash with goods, the loss of an individual’s productive capacity is incidental but the penalty remains almost equally severe – even where the failure to work isn’t through sloth but through lack of obvious opportunities. And, yet, the quest continues for a moral justification to allow the affluent to settle into a comfortable disregard for those not sharing in society’s affluence.

More influential is the argument that stresses the inefficiency of government and sees its costs and taxes (those for defense apart) as a threat to liberty. From this comes the philosophical basis for resistance to government help to the poor. … Such doctrine, once again, allows the affluent to relax not with the ostentatious cruelty of Social Darwinism, but nonetheless in the contented belief that no ameliorative action is possible or socially wise.

Michele Healy, writing for USA Today, has an article entitled “Study: Gen X ‘slackers’ leading active lives.”

The study tracked 4,000 people born between 1961 and 1981 for 20 years. The report is here (pdf). Despite predictions that GenX was and would continue to be a generation of isolated slackers, they grew up, had families, are working reasonably hard, and have become vital members of their communities.

Near as I can figure, the youth of every generation are tagged by their elders as slackers who have it easier than their elders, listen to bad music, dress funny, and have weird haircuts. Then they step up, become productively middle aged, and worry about their own kids. Meanwhile, the elders continue to bitch about everyone younger than they are. Circle of Life.

And, the media will continue to report on worries about youth and surprise reports about how the last wave of youth turned out to be not so worthless after all.

Maureen Groppe, writing for the Indy Star, reports that Indiana is lobbying to waive new federal “medical loss” requirements. The law currently in place would require insurers to spend 80% of premium dollars on actually paying for health care instead of on other things like “profits, marketing, salaries and other administrative costs.” (The fact that the insurance industry denotes money used to pay for medical care as “medical loss” is telling.) From Maureen Groppe’s article:

If the federal government approves the state’s request to waive that new rule included in the 2010 health-care overhaul, some Hoosiers won’t get the refunds required from insurers who spend less than 80 cents of every $1 collected in premiums on medical care.

If the rule had been in place last year, Hoosiers who buy plans on their own would have received almost $24 million in rebates, according to estimates the state included in its waiver application.

Consumer Watchdog suggests that the application is based on Indiana politicians’ opposition to the healthcare reform law. The article does not really explain Indiana’s stated rationale for wanting the change. Anthem states that it will be in compliance with the law (it’s apparently at a 78% medical loss ratio, currently) but supports the state’s petition because it wants to preserve competition in the market.

Excuse me if I’m a bit skeptical about Anthem wanting a marketplace teeming with viable competitors. Certainly competition is anemic at best, currently. And, if Indiana political types want to take a stand against healthcare reform, this strikes me as a tin-eared place to do it. It’s hard to stand against the notion that most premium dollars should be spent on actual medical care instead of, say, executive compensation. Certainly, that’s not likely to be a position that resonates with the masses.

Very interesting post by David Atkins at Hullabaloo on a long time policy preference for Americans to be more invested in assets than wages. This helps explain some of the policy choices of recent decades without resorting to characterization of lawmakers as cartoonish supervillains. He keys on a passage from a 1975 Ronald Reagan speech:

Roughly 94 percent of the people in capitalist America make their living from wage or salary. Only 6 percent are true capitalists in the sense of deriving income from ownership of the means of production…We can win the argument once and for all by simply making more of our people Capitalists.

One problem with this goal is that asset based income can be very unpredictable. It’s hard to mitigate that unpredictability when your need for the income is immediate because you need to eat and whatnot.

President Obama announced that he’s bringing the remainder of the troops in Iraq home by the end of 2011. It just goes to show how easy wars are to get into and how hard they are to get out of. The authorization of force against Iraq vote was made almost exactly 9 years ago; a vote that absolutely had to take place – for some reason – in October, 2011, before the 2002 midterm elections. (Chief of Staff, Andrew Card, said “from a marketing stand point, you don’t introduce new products in August.”) All of the Republicans and about half of the Democrats in Congress supported the resolution.

What I, and I believe many others, saw as a spinelessly political vote by DLC Democrats, particularly in the Senate by the likes of Evan Bayh, Hillary Clinton, and John Kerry, ultimately led to the primary defeat of Hillary Clinton in the 2008 election. In 2002, the leadership of what I like to call the Daschle Democrats was just awful. This was directly responsible for the popularity of Howard Dean – not because his policies were especially liberal, they weren’t; but because he showed some spine.

Bayh, Daschle, and the other finger-to-the-wind Democratic leadership recalled the Springsteen line, “you end up like a dog that’s been beat too much; till you spend half your life just covering up.” The later career paths of Bayh and Daschle suggest that a permanent cringe wasn’t the only factor; they also had to keep the door open for cashing in when they were finished with their “public service.”

As part of the conditions of the Iraq authorization of force resolution, the Bush administration gave a pinkie swear that it would try diplomacy before going to war. When it became clear that further investigation might seriously undermine their overblown claims of Weapons of Mass Destruction, the Bush administration charged into war without giving the UN Security Council the opportunity to vote on whether to have UN resolutions enforced.

Between October 2002 and March 2003, War against Iraq was marketed very effectively. Among other things, Bush administration repeatedly mentioned 9/11 and Iraq in conjunction with each other while being careful to avoid explicitly stating that there was a direct connection.

In October 2002 the U.S. Congress passed a “Joint Resolution to Authorize the Use of United States Armed Forces Against Iraq”. The resolution authorized the President to “use any means necessary” against Iraq, Americans polled in January 2003 widely favored further diplomacy over an invasion. Later that year, however, Americans began to agree with Bush’s plan. The U.S. government engaged in an elaborate domestic public relations campaign to market the war to its citizens. Americans overwhelmingly believed Hussein did have weapons of mass destruction: 85% said so, even though the inspectors had not uncovered those weapons. Of those who thought Iraq had weapons sequestered somewhere, about half responded that said weapons would not be found in combat. By February 2003, 74% of Americans supported taking military action to remove Hussein from power.

When the French suggested further inspections, the American response was a juvenile orgy of anti-French commentary among lawmakers, including “Freedom Fries” replacing “French fries” in the House cafeteria. Our media failed us, with ostensibly liberal (but demonstrably not) publications like the New York Times hyping administration proclamations of danger on the front pages and consigning reports undermining those claims to the back pages. Times reporter Judith Miller, in particular, gained notoriety for being a pipeline for administration propaganda masquerading as “anonymous source” reporting.

What have we gained and was it worth the cost? We’ll have to let some history pass and run the numbers to be sure; but my preliminary answers are the same as the answers I was giving when Andy Card’s marketing campaign was underway: “not much” and “no.” Saddam Hussein is dead, and that’s not nothing, but when compared to the billions of dollars spent, thousands of American lives spent (not to mention many times that many Iraqi lives spent), lost opportunities to address Afghanistan and al Qaeda earlier, the scales don’t come close to balancing. Hopefully, we can take away the lesson that optional wars of aggression aren’t worth the effort no matter how manly they make us feel and no matter how lucrative the military contracts we might award. Unfortunately, that kind of lesson tends to only have a shelf life of a generation or two.

The other day, I made a Twitter pronouncement that market forces should be embraced where 1) consumers have good access to information; 2) there is legitimate choice; and 3) the costs of production are not externalized on to people who are not parties to the transaction. (I like my blanket decrees to be in lists of three – e.g., profit should reward 1) labor; 2) creativity; or 3) risk; and government should be 1) of the people; 2) by the people; and 3) for the people.)

The process of fracking to extract oil strikes me as a market activity that doesn’t meet items #1 or #3 (of the first list). We don’t know what chemicals are in the solvent the frackers are pumping into the rock; and the frackers aren’t acknowledging, let alone paying for, the damage that is caused to those who come into contact with the waste from the process.

[Hydraulic fracturing] is the process of initiating and subsequently propagating a fracture in a rock layer, by means of a pressurized fluid, in order to release petroleum, natural gas, coal seam gas, or other substances for extraction. The fracturing, known colloquially as a frack job (or frac job), is done from a wellbore drilled into reservoir rock formations. The energy from the injection of a highly pressurized fluid, such as water, creates new channels in the rock which can increase the extraction rates and ultimate recovery of fossil fuels.

The EPA is signalling that it is getting into the business of regulating fracking. The usual suspects – industry and anti-government lawmakers – are criticizing the EPA for getting involved. But the market alone can’t keep fracking companies honest. We don’t know what, exactly, they are pumping into our streams and groundwater. We can’t honestly expect them to freely admit that they are contaminating the water that others drink or rely on for other purposes. And, the price of their product does not reflect the damage caused by such contamination.

Where the price doesn’t reflect externalized costs, the market is not efficient in allocating resources. Externalized costs are an involuntary subsidy that distorts the signals sent to the market place.

Regulation certainly has it’s problems, but I don’t think – by and large – libertarians, market enthusiasts, or anti-government ideologues are advancing effective responses to this sort of situation that do not involve a good deal of government regulation.