Streetwise Professor

The latest extra-legal, ad hoc attempt to stave off the cataclysmic consequences of Obamacare, and the utterly inept implementation thereof, is quite something to behold.  Because the vaunted Healtcare.gov website does not incorporate a payment function (such an exotic concept, I know) and because insurers are receiving so much bad information, it is likely that a pathetically small fraction of the pathetically small number of individuals who have run the gauntlet to complete an application will actually pay their premiums in time to be covered by 1 January, 2014.  To avoid the catastrophe of large numbers of individuals finding themselves uncovered in the new year, the administration is “strongly encouraging” (euphemism alert!) insurers to play claims on policies that have not been paid for.  Moreover, since there is mounting concern over access to physicians, the administration is also “strongly encouraging” insurers to pay claims for physicians and hospitals that are not in the networks associated with the policies the insurers have issued. Furthermore, there is further “strong encouragement” that insurers pay to renew prescriptions that are not covered under existing policies.

With respect to the paying claims on unpaid-for policies, the administration is essentially enforcing insurers to extend credit in a business that does not normally extend credit.  In private insurance markets, policies doe not come into effect until premiums are paid.  Given that a good fraction of those on exchanges are likely not to be very creditworthy, this exposes insurers to the risk of substantial credit losses.  Since the policies were priced on the presumption that they did not embed credit, insurers are exposed to losses for which they will not be paid.

Are insurers to be compensated for the inevitable credit losses?  By whom? The Federal Government?  If so-has such compensation been duly authorized by Congress?  (Rhetorical question.)  If Congress hasn’t authorized it, where is the money going to come from?

If not-is this diktat not an unconstitutional taking of the property of insurers?  Does it not compel them to provide services without compensation?

Similarly, insurers designed policies, physician and hospital networks, and premiums to trade-off costs and benefits.  To economize on premiums, they limited network access.  Forcing them to provide costly access to a broader network, but not permitting changes in premiums, is yet another taking

In other words, Sebelius is trying to play Santa Claus, but in so doing, is running afoul of the Takings Clause.  The property of private insurers is being taken without compensation. They are being forced to provide valuable things (credit, access to a broad physician network, prescription coverage) for which they are not being paid.  All to shield the administration from the catastrophic consequences of the baked-in defects of Obamacare, and its comical incompetence in implementing it.

The lawlessness of this administration, especially when it comes to Obamacare, is quite beyond belief.

For the past weeks, Shanghai has been enveloped in a choking toxic smog.   This is a tremendous embarrassment to China, so two official news agencies responded by attempting to find the figurative silver lining in the literal cloud:

In online articles, state broadcaster CCTV and the widely read tabloid the Global Times, published by the Communist Party’s official People’s Daily, tried to put a positive spin on the smog problem.

The Global Times said smog could be useful in military situations, as it could hinder the use of guided missiles – giving the example of smoke used by Serbian forces against Nato airstrikes in the Kosovo war.

Meanwhile, broadcaster CCTV listed five “unforeseen rewards” for smog, including helping Chinese people’s sense of humour.

This came to mind when reading this NYT article which makes every excuse possible for the next predictable failure of Obamacare: the dropping of group coverage by small business, resulting in turning over millions of employees to the tender mercies of The Website From Hell, Medicaid, or, if they’re lucky, the government approved Junk Insurance Plans that would be unconscionable if an insurance company sold them to you (according to Obama, anyways).

All in all, I find the Chinese propaganda more amusing and plausible than the NYT’s.

The Fascism With A Smile campaign to fool suckers into signing up for Obamacare is in full swing.  The White House is engaged in a flood-the-zone campaign to get people to Get Covered.

What a concept! Imagine if they had, I dunno, a website where people could sign up, send their information to an insurance company, pay their premium.  That would be amazing!

But today this campaign surpassed the ability of even a Swift to satirize.   The White House posted this on Twitter.

Peace. Piece. I know.  I always have such a hard time knowing when to use which.

Perhaps this is a Freudian slip.  The administration knows that the success of Obamacare depends on a lobotomized population.  People who have lost a piece of their minds, if they had any to begin with. Or maybe it’s just that the creator of this propaganda has issues with Mom.  S/he wants to give her a piece of her/his mind.  But what about the “quality control”? The “editing” process?  Does everyone at the WH have Mom issues?

Isn’t it grand? Turning over control of 1/6th of the US economy to people who don’t know the difference between “piece” and “peace”, or who don’t care enough to make the distinction when producing propaganda intended to gull the great unwashed.

The next challenge for the administration: to grasp the subtle differences between “there”, “their”, and “they’re”.

We are so screwed.

Although the focus in Ukraine is the drama in Maidan, the matter will be decided by what happens in the barracks and the counsels of oligarchs.  Here are a couple of interesting articles analyzing how the oligarchs are leaning.  They suggest that the oligarchs would feel more secure in a more European country than a Russian one.  For a variety of reasons.  Because they fear being caught in a new Belarus, cut off from the ability to travel to their European homes.  Because they fear that once Ukraine is firmly in the Russian orbit, they would quickly be displaced by Russians.  Because they feel that their wealth, ill-gotten as it is, would be more secure if Ukraine became more European and less Russian: such is the logic of primitive capitalist accumulation.

This is all plausible, but one must also apply a little game theory.  There are multiple oligarchs, and if any one steps out alone he is vulnerable.  Yanukovich can isolate that individual, and perhaps get the other oligarchs to turn on him by promising them a piece of his empire if they support the government.  The collective action problem may well prevent the oligarchs from turning decisively on Yanukovich.  But no doubt there are communications going on behind the scenes.  Each is attempting to figure out what the others are thinking.  There are likely furtive efforts to conspire.  Whether they will be able to overcome the collective action problem, and unite against the government, remains to be seen.

I mentioned two decisive factors: the oligarchs and the army (including other security forces, especially those in the Interior Ministry).  These are not independent.  Money can buy armies.  Or at least units of armies.  Buying off army officers may provide the most bang (literally) for the oligarchic buck (or the Hryvna, as it were). We are talking about Sovok land here.  Everything-most notably the military and its weapons-is for sale.  (In the Chechen Wars, Russian army officers notoriously sold their units’ arms.  In some cases, to the Chechens.)

So what is going on for all the world to see in Maidan is important, and affects the dynamic, what is happening behind the scenes, is likely more important still.

Speaking of Maidan, yesterday the police engaged in some aggressive actions against the protestors.  Moving in, dismantling barricades, etc.  But then they withdrew.  The opposition rejoiced.

One interpretation is that the police lost their nerve, and were overawed by the size of the crowd and its refusal to be cowed.  But I wonder if perhaps something else is going on.  Whether these were probing actions, designed to test reactions, gather intelligence, and so on.  Let’s just say that I would not get too giddy about the apparent hesitation by the security forces.  Again: The unseen-what is going on inside the security forces-is as or more important than what is seen on the streets.

Back in the darkest days of the Cold War, the most frightening doomsday scenario was the the US would be forced to go nuclear because NATO forces would be overwhelmed by a conventional Soviet attack through the Fulda Gap.

Oh, how the worm has turned.

Now, the Russians are threatening that they will go nuclear in response to a US conventional attack.  There is something of a difference.  In the Cold War, the threat to NATO forces came primarily from massed Warsaw Pact armor.  Today, it is precision strike conventional weapons that give the Russians nightmares.  But just as the American fears in the 70s and early-80s were a confession of weakness in a major military category, the Russian fears today are a confession of their abject weakness in several major military categories.

Of course, given the source perhaps it is wise not to take this threat too seriously.  For the source is Rogozin.  You know, Rogozin the Ridiculous.

A friendly bit of advice.  If you are on a flight originating in the EU, and the flight is delayed more than two hours, the airline owes you cash compensation.  If the flight is delayed or cancelled, and you arrive at your destination more than 4 hours after schedule, for flights over 3500 km you are owed 600 Euros, or nearly a cool $1000 at the current exchange rate.  Lesser compensation is due for shorter flights, or smaller delays.

I was on a United flight from Amsterdam to Houston that was cancelled.  I called United to demand my compensation, and they were very, very responsive as soon as I mentioned the EU regulation.

Not that they advertise it, mind you.  I overhead another passenger mention it when we were deplaning upon arrival at IAH.  Per these regulations, the airline is supposed to apprise you of your rights.  But United didn’t in this instance.   So I’m performing a public service by letting you know what is due you.  If they do to you what they did to me and 100+ of my newest friends on Sunday, make the bastards pay.  I only request a 10 percent gratuity, to show your appreciation 😉

Unfortunately, it just works on flights originating in the EU, or airlines registered in the EU.  I had a Dulles-Geneva United flight cancelled in September, for which I get bupkus.  Which made the collecting the 600 Euros all the sweeter this time around.

Today saw a renewal of the massive protests in Kiev.  Indeed, they were arguably larger than those that occurred last weekend.  Organizers called for 1 million Ukrainians to meet at Maidan.  Crowd counts are notoriously unreliable, and it is doubtful that a million actually protested, but the photographs and videos of the events demonstrate that the demonstrations were massive.

So where from here?  Yanukovich added fuel to the fires that are inching towards him by meeting with Putin in Sochi.  Edward Lucas might have fueled the flames even further when he tweeted that a deal had been struck, with Yanukovich securing $15 billion from Putin, along with a substantial cut in gas prices, in exchange for a promise that Ukraine would join Putin’s simulacrum USSR, the Eurasian Economic Union, in 2015.  Lucas was quickly criticized for being too quick on the tweet, as it were, and spreading a thinly sourced rumor.  Putin’s Carney Peskov said the EEU had not even been discussed, that no deal was done, and that further discussions would take place at a technical level.  But the Ukrainian PM Azarov (who makes Yani look like a real charmer) said that a big deal is in the works.

But remember: they’re all Sovoks, so absolutely nothing they say is worth the air of the breath that carries the words.

A hamfisted crackdown in November was an inflection point in the crisis: the attack turned what had been a somewhat forlorn protest into a much more intense national movement.  (Well, semi-national: protests are massive in western Ukraine, and muted, at best, in the east of the country.)  This is no doubt making Yanukovich abstain from further violence.  The very size of the crowds, and the international attention they are getting, are also a deterrent.  There have been ominous signs-the surrounding of a TV station by the Berkut, warnings to evacuate government buildings some protestors have occupied-that force might be used, but so far the government has been restrained.

So Yanukovich will likely try to wait out the protests, in the hope that they will peter out.  This is probably a futile hope.  He made a similar calculation in 2004, and we know how that worked out.  If anything, the opposition is even more motivated today, as the stakes are perceived to be higher.  2004 was about a corrupt election.  2013 has been framed as a choice of tomorrows, between a humane European future with normal people in a normal country living normal lives on the one hand, and a return to a bleak past as a Russian satrapy.

What’s more, Yanukovich does not have the luxury of time.  Ukraine’s economic situation is desperate.  The country’s foreign reserves are down to about 2 months of imports.  Its interest rates are among the highest in the world.  It needs money, and it needs it now, or it risks fiscal collapse. The IMF has offered money, but on terms that make Yanukovich, his cronies, and his oligarch allies blanch.  Putin is apparently offering money, but on terms that would make a substantial part of the country, and virtually the entire western part, even more furious than it already is.  Today’s massive demonstrations were a response to a rumor of deal: think of the reaction to the reality of one.

Yanukovich, in other words, is caught between Putin and the people.  But it’s worse than that.  Neither trust him.  Both will think that if he sides with them, he is more than capable of reversing course later.

And he has to make his choice soon.

Putin has the cash.  Putin can offer other resources-notably, support to the security services.  Covert, preferably, but overt if necessary.

Putin may have an interest in getting Yanukovich to crack down on the protests.  Once that happens, the Ukrainian president will have nowhere to turn for support.  He will be totally dependent on Putin.  The primary consideration that may lead Putin to want to avoid a violent outcome is that it would inevitably be associated with him and Russia, and could lead to boycotts of the Sochi Olympics, or at least a drumbeat of stories that would detract from what Putin is trying to achieve with the games.

Although he doesn’t have a lot of time, given Ukraine’s parlous economic circumstances, since he has no good immediate moves to make, my guess is that Yanukovich will play for time and pray for a miracle.  When that doesn’t come, he will probably choose Putin, because that gives him at least a chance at survival.  And when he makes that choice, the possibility for a violent outcome is very real.

The eventual outcome depends in large part on whether Yanukovich can rely on the military.  The Berkut (his interior forces) are presumably reliable, but will the army stand idly by if Yanukovich attempts a Tiananmen solution?  (Remember the situation in Romania in 1989, where the military refused to fire on revolutionary crowds.  Similarly, during the coup in 1991, Soviet military units, notably a division of paratroopers under Lebed, refused to obey orders to surround the White House where Yeltsin was leading the resistance.)  In violent situations, those who control the resources with the greatest potential for organized violence prevail.

I have no idea what the situation inside the Ukrainian military is.  No doubt the Russians have penetrated it, especially at senior levels.  But whether it is a reliable force, or one that could turn on Yanukovich, I don’t know.  And sadly, even though this is arguably the most important determinant of where things go from here, the media is totally uncurious about it.  They are too wrapped up in the romance of what is going on in the streets to pay attention to the historical reality that what goes on in the barracks is far more important in determining how revolutions play out-or don’t.

One last word.  The Obama administration has been-again-MIA.  Yes, the loathsome Samantha Power tweeted support for the protestors, but as in Iran in 2009 the administration has been notable mainly for its absence on this issue. It should step up to the plate on this.  Because it’s the right thing, and because it could take Putin down a few pegs.

To put it in Navspeak, the egregious Guardian editor Alan Rusbridger has really screwed the pooch.  In testimony before a Parliamentary committee he admitted that (a) documents sent out of the country had names of British intelligence personnel on them, (b) he couldn’t be bothered to vet all the documents to ensure no names of intelligence agents were included in what he shipped out of the UK (to the NYT, specifically), and (c) paid Greenwald’s partner Miranda to mule the documents out of the UK (in stark contrast to his previous denials that the Guardian had paid Miranda).  Blogger Louise Mensch covered the hearing in detail.

This is a big deal because it is a crime in Britain to transport the names of UK intel personnel out of the country.  Even if it wasn’t a crime, it would be a very grave matter because it would put lives at risk, and would jeopardize British national security.  Not to mention the national security of UK allies, including the US, Canada, New Zealand, and Australia.

His defense? That release of the Snowden material is self-evidently in the public interest, and that there is no evidence that UK intel people had been put at risk.

In other words, Alan Rusbridger, elected by nobody, and who claims he should not be accountable to anybody, and especially not to the British government or law enforcement, has appointed himself the final arbiter of what is in the public interest.  What’s more, he claims to be able to know how people operating in the very clandestine world of intelligence cannot possibly be threatened by disclosure of their names.  (I would note that even if individual agents do not come to harm, their disclosure can lead to the harm of those they have interacted with, or the undermining of operations that would have otherwise reduced the risk of actions that could harm UK national security, or the lives of innocent individuals.)  (As Mensch notes, moreover, any individual whose name was leaked has suffered a severe career setback, as they are essentially undeployable in a covert role: something the Guardian understood when it came to Valerie Plame.)

And then there are the suck-ups who work for Mr. Rusbridge.  Luke Harding (@lukeharding1968) is a very special case. Bravura performance? Get a room, please.

Harding is a special case because he co-authored a book on Wikileaks in which he-wait for it-blasted Assange for not redacting the names of individuals named in the State Department cables stolen by Manning and released-via the Guardian-to the world.  So let me get this straight, Luke:  Assange was treacherous, but Alan I Couldn’t Be Bothered to Redact Names Because There Were Just So Many Bleeding Documents Rusbridge is a hero bravely defending liberty and a free press before Parliament.  Have I got that right?  What is it?  That was then, this is now?  Or, is it that Assange screwed the Guardian, so you had to find a club to beat him with, but wouldn’t dare turn the same club upon yourselves?  I guess I don’t qualify as a first rate intelligence by the F. Scott Fitzgerald definition, because I am having a really hard time of holding two opposed ideas in mind at the same time and still retaining the ability to function.  And believe me, your criticism of Assange and your defense of Rusbridge are about as totally opposed as ideas can get.

Harding is also a special case because he wrote a book about his experiences in Russia that was very critical of the Putin regime and the FSB in particular.  Yet he is mute on the subject of Snowden’s flight to Russia and control by the FSB, even though any sentient being without an axe to grind realizes that the greatest beneficiary of Snowden is Putin and the FSB that Harding claims to despise.

Luke Harding is the exemplar of a form of transitivity that characterizes the Guardian.  Yes, it often writes things that are very critical of Russia and Putin.  But its dislike of Russia pales in comparison with its hatred of the US and the UK government-at least the defense and intelligence establishments thereof.  So when it becomes an issue of the US vs. Russia-as is the case with Snowden-all criticism and even questioning of Russia is silenced, and screeching about the US and UK government reaches a deafening pitch.  In the Snowden matter, Ed’s complicity with and aiding and abetting of the FSB is never mentioned: indeed, anyone who suggests it is slimed as an NSA/GCHQ lackey.  When the FSB follows Harding, or breaks into his apartment, now that’s important.  That deserves a book!  But when the Guardian’s pet project provides incredible aid and comfort to that very same FSB, nary a word is spoken.  FSB?  What FSB?  This is all about NSA and GCHQ.  Snowden is a crusader for freedom, even though he is a tool in the hands of a regime that is inimical to freedom.  Following the party line.  Jot and tittle.

So when push comes to shove, when there is a choice to be made, the Guardian-and Luke Harding-make it plain where their real sympathies lie. They deserve no respect and no credibility.  And at least some-notably Alan Rusbridger-deserve the tender mercies of the law, with all the protections and procedures it affords him in the UK.  If it were Russia, not so much.

In his latest, desperate attempt to change the subject from Obombacare, BHO is following in the slipstream of another economic ignoramus, the Pope, and pushing for an increase in the minimum wage.  He evidently believes demand curves slope up, because he claims, via Twitter, that a 40 percent rise in the minimum wage will increase employment by 140K and increase GDP by $32.6 billion.  Not $32 billion.  Not $33 billion.  $32.6 billion.  That’s right, a forced rise in the wages of some individuals will somehow magically result in a rise in employment overall, and an increase in economic activity.

Just how that would work is a mystery.  My guess is that they are multiplying the rise in wages to those currently paid less than the new minimum wage of $10.10 times the number of hours worked (assuming no decline in that figure-which is bogus) times some magical Keynesian multiplier times some jobs/GDP ratio to get the 140K jobs and the $32.6 billion GDP increases.  The multiplier step would come from (presumably) the higher earnings translating into higher spending which raises the income of others who spend more and on and on.

But as Steve Landsburg rightly points out, when criticizing someone who should know better, even overlooking the highly unlikely assumption that the higher wage does not reduce employment, the higher income of those earning the higher minimum wage is a transfer from those who pay it.  So even if you believe in magical Keynesian multipliers, there’s nothing to multiply.  The income of some goes up, the income of others goes down by the same amount, so even if the consumption of some goes up the consumption of others goes down by approximately the same amount.  Meaning the Keynesian spiral (if you believe in such things) never gets started.

In other words, if this sounds like an economic perpetual motion machine, you’re right.

But maybe it would make sense if explained by an articulate spokesman.  You know, like this:

In his heroic efforts to alert Americans to the NSA’s threats to their civil liberties, Edward Snowden’s latest document release reveals that NSA colluded with Sweden to spy on Americans.

Wait.  Did I say Americans?  Sorry.  Got all wrapped up in the narrative.

Let me start over.  Edward Snowden’s latest document release reveals that the NSA and its counterpart the Swedish National Defense Radio Establishment  (“RFA”) cooperated to collect intelligence on Russia, including high priority targets such as the leadership.

A couple of comments.

First, I sure as hell hope so and am damned glad.

Second, um, isn’t the whole point of the NSA-and presumably RFA-to collect intelligence on foreign nations, especially those who are not just potential adversaries, but actual ones?  Hell, NSA’s primary reason for being for  decades was to collect intelligence of all varieties on the USSR.  The anti-terrorist mission which Poitras, Greenwald, etc., insinuate is the only legitimate basis for its current existence was pretty much an afterthought, and is still only a portion of what NSA does.  (IMO the NSA and the intelligence community in general have been mistaken in emphasizing its anti-terror role as a justification for its programs.  This has allowed the Snowden gang to raise doubts about the legitimacy of NSA’s non-terror-related activities, including collecting intelligence on foreign leaders and countries.  NSA should defend these activities.)

Third, this is a case where the US and Sweden have common interests, as is the case with the US and many of the other countries with whom it has cooperated, as revealed by previous Snowden disclosures.

Indeed, Sweden has long been, and continues to be, the subject of aggressive Russian intelligence and military operations.  These include Soviet submarine incursions into Swedish waters. (The lack of these episodes post-Soviet collapse are due more to the implosion of the Russian submarine force than any change in intent.)  They also include violations of Swedish airspace, including several recent simulated bombing runs on Sweden.

Given this history, cooperation between NSA and FRA is about as shocking, and about as alarming, as the cooperation between the FBI and local law enforcement on kidnapping and bank robbery.

As a near front-line state, with deep engagements and interests in eastern Europe and the Baltic, Sweden has no illusions about the threats posed by Russia.  Military. Economic. Criminal. (In Russia, these two are hard to distinguish.)  And yes, political.  Note that Sweden’s Karl Bildt has been among the most outspoken in criticizing Russia’s intimidation in Ukraine.  (Could he give John Kerry a blood transfusion?  He could use it. First the French, and now the Swedesare making Kerry and Obama look feckless and craven.  Read that sentence again to get the full significance of how embarrassing that is.)

The fact that Snowden, Poitras, Greenwald et al think that this revelation somehow reveals that the US is engaged in illegitimate acts tells you about their utterly unrealistic view of the justifiable activities of national intelligence authorities.  States have engaged in such activities since time immemorial.  They are an essential state function.  This revelation also shows that they believe that cooperation with the United States is inherently disreputable.  Because they believe like most hardcore leftists that the US is uniquely malign.  The criticism of those who cooperate with the US, and the elevation of the Russians-the Russians-to the status of victims tells you need to know all about whom they think are the bad actors.

The point is to put pressure on the US, and most notably, US allies, who cooperate out of self-interest with US intelligence agencies.  It has nothing to do with the privacy or civil liberties of the nations involved-the ostensible justification for Snowden’s theft-and everything to do with compromising the legitimate activities of free, democratic countries.

And who are the beneficiaries? Unfree, undemocratic ones.  Most notably Russia.  You know, the country to which Snowden fled, and which has given him asylum, obviously under the control of its security services, as self-righteously-and implausibly-as Snowden, Greenwald et al try to deny it.

Russia. The country of SORM.  Which those stalwart defenders of human liberty and privacy Snowden, Greenwald, Poitras, et al never mention ever.

What they reveal and what they refuse to discuss proves, day after day, that they are all objectively pro-Russian, and outrageous hypocrites to boot.  And sorry, but advancing Russian interests at the expense of American and Swedish (and German and British and Portuguese and French and Spanish and . . .) interests is utterly incompatible with a claimed purpose of fighting for liberty and privacy.  Because however imperfect these countries may be, on their worst day they are far superior to Russia on its best.