Brooks and Krugman

Bobo has a question:  “Is Our Country as Good as Our Athletes Are?”  He says we’re doing pretty well, in and outside of sports.  Surprising, since his party’s candidate paints the country as a dystopian hellscape…  Prof. Krugman says “Obamacare Hits a Bump,” but that it shouldn’t be hard to fix.  Here’s Bobo:

Pessimism has flavored this election campaign. America is in decline. The country is on the wrong track. We’re getting our clocks cleaned in global trade deals. We’re still suffering from the humiliation of Iraq.

The share of Americans who say that democracy is a “fairly bad” or “very bad” system of government is rising sharply. A quarter of young Americans feel that way, according to data drawn from the World Values Survey. A majority of young Americans believe that the United States should stay out of world affairs, according to a Chicago Council on Global Affairs report.

Yet when you watch the Olympics, we don’t seem like some sad-sack country in terminal decline. If anything, the coverage gets a little boring because we’re always winning! And the winners have such amazingly American stories and personality types (Biles, Ledecky, and, yes, Lochte).

American Olympic performance has been astoundingly consistent over the recent decades. With rare exception, we can be counted on to win between 101 and 110 medals Olympiad after Olympiad. The 2016 team seems on pace to win at least that many.

We’re not great when measured by medals per capita (New Zealand, Denmark, Hungary, Australia and Britain are the big winners there), but America does have more medals than any other nation in history, and that lead is widening.

Moreover, America doesn’t win because we have better athletes (talent must be distributed equally). America does well because it has such great systems for preparing athletes. Medals are won by institutions as much as by individuals. The Germans have a great system for training kayakers, equestrians and throwers — the discus or javelin. The U.S. has amazing institutions to prepare jumpers, swimmers, basketball players, gymnasts, runners and decathletes.

The big question is: Is the greatness of America’s sports institutions reflective of the country’s strong institutions generally, or is it more like the Soviet Union’s sports greatness, a Potemkin show masking national rot?

Well, if you step outside the pall of the angry campaign rhetoric, you see that America’s institutions are generally quite strong. Over the past decades, some developing countries, like Brazil, India and China, posted glitzy economic growth numbers. But those countries are now all being hampered by institutional weakness and growth is plummeting.

But America’s economic success is like our Olympic success, writ large. The nation’s troubles are evident, but our country has sound fundamentals. The American dollar is by far the world’s currency. The Food and Drug Administration is the benchmark for medical standards. The American patent system is the most important in the world.

Nine of Forbes’s 10 most valuable brands are American (Apple, Google, IBM and so on). The U.S. is the leading energy producer. We have 15 (at least!) of the world’s top 20 universities, while Hollywood is as dominant as ever.

America is also quite good at change. The median age in the U.S. is 37.8, compared with 46.5 for both Germany and Japan. The newer a technology is the more the U.S. is likely to dominate it — whether it’s the cloud or the sharing economy. According to The Economist, 91 percent of online searches are done through American companies’ services, and 99 percent of smartphones run on American-made operating systems.

Some American industries have declined, but others are rising. American fund managers handle 55 percent of the world’s assets. American businesses host 61 percent of the world’s social media users.

On the campaign circuit, global trade is portrayed as this great national disaster. We’re being destroyed by foreigners! The Trans-Pacific Partnership was the central dominating boogeyman at the Democratic National Convention, especially among people who have no clue what’s in it.

In fact, America succeeds in global trade about as well as at the Olympics. We rank third, behind Switzerland and Singapore, in global competitive rankings put out by the World Economic Forum. When trade is leveled by international agreements, American firms take advantage and win customers.

As Robert B. Zoellick noted recently in The Wall Street Journal, in the first five years after the U.S. has concluded free-trade agreements, the country’s exports to those places have risen three times faster than overall export growth.

Over the past five years, Zoellick wrote, the U.S. has run a $320 billion trade surplus in manufactured goods with its free-trade partners. The country’s farmers and ranchers boosted exports to free-trade partners by 130 percent between 2003 and 2013.

In one important way sports is not like economics. In Rio there are only three medals in each event. Global trade is not zero-sum. It spreads vast benefits across societies, while undeniably hurting some businesses in narrow fields along the way.

Of course, we have to take care of those who are hurt, but the biggest threat now is unmerited pessimism itself, and the stupid and fearful choices that inevitably flow from it.

Now here’s Prof. Krugman:

More than two and a half years have gone by since the Affordable Care Act, a.k.a. Obamacare, went fully into effect. Most of the news about health reform since then has been good, defying the dire predictions of right-wing doomsayers. But this week has brought some genuine bad news: The giant insurer Aetna announced that it would be pulling out of many of the “exchanges,” the special insurance markets the law established.

This doesn’t mean that the reform is about to collapse. But some real problems are cropping up. They’re problems that would be relatively easy to fix in a normal political system, one in which parties can compromise to make government work. But they won’t get resolved if we elect a clueless president (although he’d turn to terrific people, the best people, for advice, believe me. Not.). And they’ll be difficult to resolve even with a knowledgeable, competent president if she faces scorched-earth opposition from a hostile Congress.

The story so far: Since Obamacare took full effect in January 2014, two things have happened. First, the percentage of Americans who are uninsured has dropped sharply. Second, the growth of health costs has slowed sharply, so that the law is costing both consumers and taxpayers less than expected.

Meanwhile, the bad things that were supposed to happen didn’t. Health reform didn’t cause the budget deficit to soar; it didn’t kill private-sector jobs, which have actually grown more rapidly since Obamacare went into effect than at any time since the 1990s. Evidence also is growing that the law has meant a significant improvement in both health and financial security for millions, probably tens of millions, of Americans.

So what’s the problem?

Well, Obamacare is a system that relies on private insurance companies to provide much of its expanded coverage (not all, because expanded Medicaid is also a big part of the system). And many of these private insurers are now finding themselves losing money, because previously uninsured Americans who are signing up turn out to have been sicker and more in need of costly care than we realized.

Some insurers are responding by hiking premiums, which were initially set well below what the law’s framers expected. And some insurers are simply pulling out of the system.

In Aetna’s case there’s reason to believe that there was also another factor: vindictiveness on the part of the insurer after antitrust authorities turned down a proposed merger. That’s an important story, but not central to the broader issue of health reform.

So how bad is the problem?

Much of the new system is doing pretty well — not just the Medicaid expansion, but also private insurer-based exchanges in big states that are trying to make the law work, California in particular. The bad news mainly hits states that have small populations and/or have governments hostile to reform, where the exit of insurers may leave markets without adequate competition. That’s not the whole country, but it would be a significant setback.

But it would be quite easy to fix the system. It seems clear that subsidies for purchasing insurance, and in some cases for insurers themselves, should be somewhat bigger — an affordable proposition given that the program so far has come in under budget, and easily justified now that we know just how badly many of our fellow citizens needed coverage. There should also be a reinforced effort to ensure that healthy Americans buy insurance, as the law requires, rather than them waiting until they get sick. Such measures would go a long way toward getting things back on track.

Beyond all that, what about the public option?

The idea of allowing the government to offer a health plan directly to families was blocked in 2010 because private insurers didn’t want to face the competition. But if those insurers aren’t actually interested in providing insurance, why not let the government step in (as Hillary Clinton is in fact proposing)?

The trouble, of course, is Congress: If Republicans control one or both houses, it’s all too likely that they’ll do what they do best — try to sabotage a Democratic president through lack of cooperation. Unless it’s such a wave election that Democrats take the House, or at least can claim an overwhelming mandate, the obvious fixes for health reform will be off the table.

That said, there may still be room for action at the executive level. And I’m hearing suggestions that states may be able to offer their own public options; if these proved successful, they might gradually become the norm.

However this plays out, it’s important to realize that as far as anyone can tell, there’s nothing wrong with Obamacare that couldn’t be fairly easily fixed with a bit of bipartisan cooperation. The only thing that makes this hard is the blocking power of politicians who want reform to fail.

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