Economic Despair

More and more, I am reminded of that old adage that “it ain’t what you don’t know that hurts you, it’s what you know that just ain’t so.”

A recent research paper from the Brookings Institution investigated one of those “things we know,” and came to some disquieting conclusions.

When it comes to staying in school, many economists talk about the “aspirational effects” of income inequality. When students look around them and see a better life, they are incentivized to invest in their own human capital—such as investing in their own education.

But what if that conventional thinking is wrong? What if inequality doesn’t incentivize students at the bottom of the income ladder to work harder, but rather disincentivizes them? This is one of the questions Melissa S. Kearney and Phillip B. Levine sought to answer in a new paper published as part of the Spring 2016 Brookings Papers on Economic Activity.

Among other things, Kearney and Levine found that low-income children growing up in states that have greater income inequality are dropping out of high school at higher rates than are children living in states with less income inequality.

The authors point to a concept they call “economic despair,” or a feeling that economic success is unlikely because the distance from the bottom to the middle of the ladder is too far to climb. If a student perceives a lower benefit to remaining in school, then he or she will choose to drop out—even if they aren’t struggling academically.

What is particularly interesting about this study is that it focused upon the perceived distance between the bottom and the middle of the income distribution—not the distance between the bottom and the top. The idea is that what they call “lower tail” inequality is a more relevant measure, because—although the top may realistically seem to be out of reach—making it to the middle would seem to be a more manageable goal.

The authors suggest interventions: mentoring programs that connect youth with successful adults, programs focused on establishing high expectations and pathways to graduation, or early-childhood parenting programs to build self-esteem and engender positive behaviors. Although such interventions might help ameliorate the problem, it’s hard to escape the conclusion that the effects would be modest, at best.

In fact, this study is one more “data point” in a picture that increasingly points to an inescapable conclusion: the level of inequality in America today is unsustainable and extremely detrimental, not just to the prospects of poor children, but to the nation as a whole.

We are in the midst of an election season that has unleashed a furious and troubling display of social dysfunction, in-your-face bigotry and populist anger. It’s hard not to attribute a significant part of that to economic realities that pit low-wage workers against each other and against a perceived plutocracy that has “rigged the system.”

Social scientists tell us that stable democracies are characterized by distributional equity, and the existence of a large and relatively secure middle class. Economists tell us that economic growth requires robust demand, generated by consumers with discretionary dollars to spend in the market, and a well-educated workforce.

When large numbers of people working 40 hours a week cannot earn enough to cover basic living expenses, when children don’t believe education offers them a path out of subsistence, democracy and the economy both suffer.

It’s past time to revisit some of the economic “facts” we think we know.

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About Those Polls….

A recent polling “primer” intended for journalists has some useful cautions for all of us being inundated with reports about the “latest polling results” in this weird campaign season.

We are always (usefully) reminded that even the best polls are but a snapshot of public opinion at the time the poll is fielded, so results depend upon what voters have heard and seen at that particular time. Subsequent campaigning can–and more often than not, does–change those perceptions.

It also should not be news that some polls are more equal than others: good polls are expensive, and a lot of what’s out there is at best unreliable and at worst, garbage. Composition and size of the respondent pool (the sample), design of the questions and a number of other flaws can make some surveys worse than useless.

But in addition to those standard cautions, recent changes in communications and the willingness of the public to answer questions cast further doubt on the accuracy of even the better-designed polls.

It should go without saying that “click on our link and tell us what you think” internet polls are worthless.

The increased use of mobile phones, especially, has challenged polling operations. That’s particularly true because there are significant differences in the populations that use cell phones and those who continue to keep their landlines, posing a huge challenge for the algorithms pollsters use to compensate for inability to reach mobile devices.

Further compounding the problem, the number of people willing to talk to a pollster when they are contacted has steadily declined; some estimates are that a mere 5% of those who answer their phones are willing to answer survey questions. Even if the number in the sample is increased in an effort to compensate, it is highly likely that the people who are willing to talk differ in some relevant ways from those who aren’t.

We saw the consequences of all this recently in the Michigan Democratic primary. The best polling has come a long way since “Dewey Beats Truman”–but most of what earns headlines isn’t the best polling.

The troubling aspect of this is that even garbage polls have the ability to affect people’s perceptions and ultimately, to affect election results.

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And Now, The Rest of the Story…

This will be my final post about my personal odyssey with the fine folks at Anthem. It will be brief, just to update those of you who’ve been so kind with your suggestions and good wishes.

You will be happy to know that Anthem has made medical school unnecessary.

Yep–when they finally returned the multiple calls from the hospital doctors, and those doctors had once again gone through the charts, the X rays, the reports from in-hospital PT, etc., they were told that according to Anthem’s algorithm, I am not a candidate for rehab.

Their algorithm, you see, knows more about my condition and needs than the medical personnel who actually examined and treated me.

As one doctor said, “why did I waste all that time in medical school?”

I’m going home. My younger grandchildren will come over to help my husband with my care, at least for a couple of days, and we’ll figure it all out. (As those of you who know me know, I’m a tough old bird.) But everyone in this situation–as you  can see from the multitude of comments here on the blog and on Facebook–isn’t as fortunate as I am, doesn’t have a support network that can step in. And according to the doctors and caseworker, I am far, far from the only person facing this bureaucratic malpractice. And I will follow up on several of your recommendations for filing complaints, etc., in hopes that I can keep at least some others from going through a similar fiasco.

The United States is the only developed country in the world that has chosen to socialize its medical care through the insurance industry.

I asked one of the doctors if they have these same problems with Medicare. They don’t.

For now, this blog will return to its originally-scheduled programming.

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Sticking to Principle

It’s a complaint we hear constantly from both ends of the political spectrum: we want to elect people who will “stick to their principles.” We’re tired of the DINOs and RINOs willing to negotiate with the political “enemy,” look for areas of agreement and–most scandalous of all–settle for results that are less than 100% of what “our” side demands.

Look, I get wanting principal. No one wants an elected official without a spine, or worse, a lawmaker willing to “sell out” her true beliefs to placate a big donor, avoid a primary challenge or cave to pressure from a bigoted segment of the party base.

The problem is, not every compromise is a deviation from principle.

There’s a big difference between ideological rigidity and acting in accordance with principle. It’s a difference that’s invisible to the zealots who see every issue as black and white, every encounter with reality and its inevitable complexities, and every effort to find workable accommodations, a betrayal.

Americans used to understand that it’s better to get half of what you want than none at all. We used to understand that legislation is complicated, and not every description of a bill provided in hysterical internet “alerts” by advocacy groups tells the whole story. We used to recognize that legislation goes through a lengthy process, and that what might have begun  as a step in the right direction might no longer be supportable, even by those who agree with the original intent.

Americans used to understand that issues are complicated, and that we are not well-served by people who refuse to admit or understand that.

And we used to understand that a willingness to blow up Congress and shut down the government in order to get what you want (yes, Ted Cruz, I’m looking at you), or a willingness to cause continuing harm to thousands of people by holding up water system repairs in Flint, Michigan because you don’t believe the federal government should be in the business of providing aid to states (yes, Mike Lee, I’m looking at you) is evidence of grandiosity and disregard for the consequences, not principle.

Effective governance and strategic negotiation aren’t as exciting as grandstanding and moralizing, but we used to understand that we are better served by the former than the latter.

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Confirming All Your Comments: Update on Anthem

Just a brief update for those who’ve asked: the doctors at Methodist have called Anthem several times, to appeal the denial of my move to rehab.

Anthem’s personnel have not deigned to respond. They have simply not returned any of the calls.

Think about that. I am a patient whose care is in dispute: Doctors and therapists who have actually treated me are advising a certain course of treatment. Functionaries with unknown credentials–none of whom has ever seen me–decline to accept their medical judgment.

And then they blithely ignore requests to even talk about their reasons. The calculus seems obvious: if we don’t call back, these people will eventually tire of their appeal effort and go away. We win!

The doctors, nurses and caseworker are apologetic, but this impasse isn’t their fault. They are frustrated and angry; my situation is just one of many they encounter on a daily basis. They are convinced–as I have become convinced–that Anthem and other insurers care nothing about the health of their policyholders. (A caseworker told me she met an Anthem claims adjuster who cheerfully admitted that denials are rewarded with bonuses.)

We talk a lot about transparency in government. It’s long past time to talk about transparency in health insurance.  Indiana’s Insurance regulators need to investigate these practices; to the extent we still have that quaint occupation called journalism, reporters need to investigate and report on them.

If my experience is remotely typical, they’ll find plenty of health providers and patients who are ready and eager to talk.

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