I believe that I last wrote here about what became the Affordable Care Act — aka Obamacare — in an entry posted on 28 July 2008. I've been meaning to write about it since, but I paused to await the outcome of NIFB v Seleblius, and then again to await the outcome of King v Burwell.

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To understand what really drove the Democratic Party to pass the Affordable Care Act, one may look at the experience of the Social Security Act (1935).

The programme of old-age benefits — which is what most Americans have in mind when they refer to Social Security — is one that had been failing slowly over the many decades of its existence. Population growth has slowed strikingly, and life-spans have been extended significantly, so that the number of people paying into the system has declined dramatically relative to the number of people to whom payments have been made. At the same time, in various ways the typical payment per individual has been allowed to climb. The tax used to fund it has never collected enough revenue to do so indefinitely. At times, revenues have been much greater than benefits; but, none-the-less, there has never been a moment over the last 50 years or more when the demographics did not show that, within the expected lifetime of a young person, promised benefits would exceed revenues and exhaust whatever had been saved under the revised programme.

Congress did not plan for the old-age benefits programme to fail, slowly or otherwise. Congress simply didn't take a careful look at the future. The immediate concerns of Congress were to exploit the political gains to be had from promising a pension programme, and to short-circuit political support for the ruinous Townsend Plan.[1] But this slow failure has proved to be hugely rewarding to the party most responsible for effecting the programme.

Because the programme has failed slowly, there was sufficient time for a large share of Americans to become dependent upon it. It was even, for a while, said to be the third rail of American politics — analogous to the rail delivering current to an electrically powered train, in the sense that touching it would prove fatal. As failure has recurringly loomed, Republicans (having increasingly become the party of opposition to the New Deal Coälition) struggled with how to respond to the failure of a programme with such broad support, while the Democratic Party has been able to position itself as rescuer. The slow failure of their creature has been an important part of the success of their party.

Although supporters of the programme often speak and write as if opponents would simply and abruptly withdraw benefits from all recipients, a more common suggestion has been to phase-out the present programme in favor of an overt poverty-relief programme. Thus, for example, those born after some point in time would received reduced benefits — perhaps in some cases no benefits — if they had income or wealth measured above some levels. This idea meets resistance not only from those who would lose benefits, but from those who would then find themselves on welfare.

Younger people, looking at a future tax burden, and perhaps doubtful that the next major reforms will prove sufficient to maintain the programme through their own retirements, are most often open to suggestions of reform. But, as time passes and they age, they find themselves having paid much of the tax that they might earlier have hoped to avoid, so that the principal pecuniary result of a phasing-out would be either to deny them benefits or to place them on welfare. Additionally, as they age, so do their parents, who go from being perhaps middle-aged to being elderly.

A sense may often be retained that they would have been better-off had the programme been phased-out when they were younger,[2] and that those now young would be better-off if the programme were phased-out now. There is, thus, something of the flavor of a sub-optimal Cournot-Nash equilibrium to it all. A lot of people would admit that the programme ought not to have been instituted; but, since it was, and since they would personally be hurt by an attempt to end the programme, they will not assist in an unwinding, and may even actively oppose an unwinding.

And, so, they are increasingly inclined to support the Democratic Party, which continues to promise to do whatever is necessary to keep the programme going.

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The Affordable Care Act was intended to creäte another slowly failing programme with a large number of people dependent upon it. There was no illusion on the part of most of those who voted for the Act that this programme would be the one exception in the history of large state programmes. They might not know the core reason that such programmes perform so badly, but they've had plenty of observations of failures. As with the Social Security old-age benefits, each time that failure loomed for Obamacare, the Democratic Party could position themselves as rescuers of the programme and thus of the people dependent upon it in order to receive medical treatment. And the Republican Party would again be forced to choose between protecting their brand and protecting their jobs. The public might perhaps conclude that they would have been better-off had the programme not been brought into existence in the first place, but they'd see themselves now being made still worse-off in any unwinding, however an unwinding might benefit later cohorts.

Indeed, when the President acted to preserve the programme by ignoring the plain wording of the law, a large part of the defense of his action was that a substantial number of people had become dependent upon the programme. Even a great many people who had been insured, at lower cost, previous to the programme could have suddenly found themselves uninsured, and the programme was defended on the basis of a dependency that it had induced amongst those people. Meanwhile, the Republican Party, though returned to power largely because of voter discontent with the programme, has been widely criticized for not agreeing upon some view as to how health care ought to be allocated, and then presenting that view to the public. Many Republicans essentially propose adopting a position they are just stuck with Obamacare, since the Supreme Court has twice now refused to stop it.

However, Obamacare is not a slowly failing programme; it is a rapidly failing programme.

In my entry of 28 July 2008, I explained that the programme was effectively to tax the insurance policies of the healthy in order to subsidize the unhealthy; and that, in the absence of compulsion, the healthy would not insure, causing premia to spiral upward.

In order to make passage of the law politically palatable, the compulsion was relatively weak. The annual penalty for failure to buy insurance is well less than the cost of insurance, and the IRS is forbidden to attempt to collect the penalty (if not paid voluntarily) except by reducing the annual tax refunds of those against whom it is charged. I suspect that the Democratic leadership had some awareness that this penalty structure was going to be inadequate, but were thinking of this weak compulsion as the camel's nose — they planned to get the rest of the beast into the tent in some later session, with higher penalties and more freedom of action for the IRS. They didn't understand that they'd lose control of one chamber in the very next election.

So, indeed, many of the relatively healthy chose not to buy insurance, despite repeated extensions of the buying period. And, as a consequence, premia are going to rise by more than 10%. This increase makes insurance a bad buy for an even larger group of people, who will choose not to buy insurance next year. That will cause a further rise in premia. And so forth. Premia should be expected to increase by more than 10% every year, until the programme implodes as affordable insurance moves out of reach for a huge share of people. (With annual increases of more than 10%, premia would more than double over just eight years, but I do not expect the programme to survive to a doubling of premia!)

There was talk of how, if King v Burwell were decided against the President, Obamacare would go into a death spiral. In fact it was already in a death spiral. King v Burwell could have accelerated that sharply; if the spiral were faster, then the health-care system would have been less distorted by Obamacare, and the unwinding would thus be injurious to fewer people.

The sooner that it were admitted that Obamacare were in a death spiral, the sooner that a drum might be beaten for toughening penalties upon those who refuse to buy insurance. (Or for kicking the insurance companies to the curb, and establishing a more explicitly socialistic system.) But the President is not a man to admit to mistakes, nor do supporters want to admit to yet more deep problems in a programme that has already had many embarassments, as such an admission would increase skepticism. Further, the elected Republicans are unlikely to alienate their base by acting to pull Obamacare out of a death spiral any time soon, though most of them might do so from expediency were Obamacare to last-out a decade.

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[1] The Townsend Plan, advanced by Francis Everett Townsend beginning in 1933, was that each person in the United States over the age of 60 years were to be given a monthly pension of $200, conditional upon a requirement that the entire $200 be spent within a month. The theory was that this spending would result in an increase in economic activity that would, in turn, effectively pay for the pensions.

I won't endorse simply claiming that, since the CPI is now about 30 times that in 1933, $200 then would be equivalent to about $6 000 to-day. (Comparisons of so-called price levels becomes increasingly problematic as time-spans become longer.) None-the-less, one should see that a $200 monthly pension would have been rather breath-taking.

The Townsend Plan was supported by a very large number of people, and was especially popular amongst those over or approaching the age of 60 years, and amongst those economically responsible for the support of older people.

[2] This sense will be especially acute amongst those who understand that the Social Security old-age benefits crowd-out investment-savings for retirement. With reduced investment, the economy grows at a diminished rate.

It seems as if most economists do not know how to handle death.

What I here mean is not that they don't cope well with the deaths of loved ones or with their own mortality — though I suspect that they don't. What I mean is that their models of the very long-run are over-simply conceived and poorly interpretted when it comes to life-spans.

In the typical economic model of the very long-run, agents either live forever, or they live some fixed span of time, and then die. Often, economists find that a model begins to fit the real world better if they change it from assuming that people live that fixed amount of time to assuming that people live forever, and some economists then conclude that people are irrationally assuming their own immortality.

Here's a better thought. In the now, people are quite sure that they are alive. They are less sure about the next instant, and still less sure about the instant after that. The further that they think into the future, the less their expectation of being alive … but there is no time at which most people are dead certain that their lives will have ended. (If I asked you, the reader, how it might be possible for you to be alive in a thousand years, chances are that you could come up with some scenario.)

On the assumption that personalistic probabilities may be quantified, then, imputed probabilities of being alive, graphed against time, would approach some minimum asymptotically. My presumption would be that the value thus approached would be 0 — that most people would have almost no expectation of being alive after some span of years. But it would never quite be zero.

While I'm sure that some models will only work on the assumption that people impute absolute certainty to being alive forever, I suspect that an awful lot of models will work simply by accepting that most people embrace neither that madness nor the madness of absolute certainty that they will be dead at some specific time. Other models may need a more detailed description of the probability function.

As I've perhaps said or implied somewhere in this 'blog; I don't think that real-life probabilities are usually quantified; I would therefore be inclined to resist adopting a model with quantified probabilities, though such toys can be very useful heuristics. The weaker notion that probabilities are an incomplete preördering would correspond to some weaker notion than an asymptotic approach, but I haven't given much thought to what it would be.

Imagine that, under some law passed long ago, some group of persons was able to take $10 000 from you, without your consent. Further imagine that they spent this money on a statue of your beloved dog, Earl, and presented it to you.

The statue is actually rather nice. The artist truly managed to convey Earl's personality! Setting aside what it cost you, you'd like it a great deal. And, if you'd tried to have one made like it, it would perhaps have cost you $20 000, rather than $10 000. (They have many statues made, and get each at significant discount.)

None-the-less, you don't like it as much as you'd like $20 000; you don't like it as much as you'd like to have kept your $10 000. And no one else is willing to pay $10 000 for a statue of your dog.

Most of us would say that you're entitled to feel yourself worse-off, not-withstanding that, by some accounting, you've got a $20 000 return on a $10 000 cost.

Yet officials and other citizens who complain about Federal tax burdens (or about intervention in general from the Federal government) are often mocked as supposed hypocrites if they come from jurisdictions in which the Federal government spends more than it takes in revenue. The principle may be exactly the same. Even if the Federal government delivers money (rather than commodities) to the constituent state, if it requires that the money be spent in a particular way, then this is like compelling someone to buy a statue of Earl. And the constituent states were not themselves the taxpayers, so giving those states money without mandates still leaves people with reason to feel aggrieved, even when the money is more than that taken from taxpayer. (It is not as if each constituent state has just one taxpayer who is also its one voter, able then to direct how the money be spent.)

There has been and is a lot of confusion over the English word entrepreneur. Now, I say English word advisedly, because, though entrepreneur was derived from a French word spelled exactly the same way, a word is not merely a sequence of symbols, but such a sequence in association with a concept or set of concepts, and the English word entrepreneur doesn't have quite the same meaning as the French word.

The French word means contractor or, more generally, one who undertakes.

We didn't need a new word for contractor; it would be contemptible affectation of one sort or of another to introduce a longer French word for such purpose. In fact, there was some attempt to engage in that sort of affectation in the 19th Century, first in the entertainment industry.

But the sequence entrepreneur was reïntroduced to English in the mid-20th Century with the intention of identifying a narrower concept that meritted a word of its own. That concept was of a person who attempts to create a market where one does not exist — offering a new sort of product, or offering a sort of product to those who have not been purchasers of such things.

The entrepreneur is not merely a small business person, nor an active business person, nor an independent contractor, nor some combination of the three. The entrepreneur is an economic explorer, seeking to cultivate new territory — typically with pecuniary profit in mind, but sometimes just for the satisfaction of having brought a market into existence.

Whatever the motivation, it is in the rôle of attempting to create markets that the entrepreneur is the great hero and the entrepreneuse the great heroine of the market economy. And some unconscious sense of that heroism has passed through our society, causing business people aren't such explorers to want to label themselves entrepreneur. The word has become diluted in general use, and many people are using it as if, well, it meant no more than the French word from which it were derived. Economists with a fair understanding of the market process shake their heads in dismay. We need a word for those heroes.

There's a recurring joke that proceeds along these lines:

What do you call someone who speaks two languages? Bilingual. What do you call someone who speaks just one language? American.

Sometimes, the reference is instead to the British. But let's consider the reality that lies in back of this joke.

The vast majority of people who are bilingual speak English as their second language. Why English? At base, because of the economic significance of those who speak English, especially of those for whom English is their native tongue. This significance originates in the past scope of the British Empire, especially in North America. The American economy was once the world's largest — at the present, the matter is muddled — and the combined size of the American economy with that of other primarily Anglophonic regions still exceeds that of the Sinophonic[1] or Spanish-speaking regions.

If no language had something like the economic significance of English, then most people who are now bilingual would instead be monolingual. As it is, they had good cause to know English, but it wasn't their first language, so they learned it as their second.

Thus, mocking people for being strictly Anglophonic generally amounts to mocking them for having been raised amongst the peoples of the linguistic group that has the greatest economic significance. It would be actively stupid to mock them deliberately on this score, and doing so thoughtlessly is not a very great improvement.

(I'm certainly not saying that there are no good reasons for those who know English to learn other languages.)

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[1] It may also be noted that the differences amongst what are called dialects of Chinese are often greater than the differences amongst what are regarded as separate languages. These variants of Chinese are labelled as dialects as part of a more general effort to create an illusion of national unity. Mandarin is a widely spoken language, but Chinese is really a family of languages.

Years ago, I planned to write a paper on decision-making under uncertainty when possible outcomes were completely ordered neither by desirability nor by plausibility.

On the way to writing that paper, I was impressed by Mark Machina with the need for a paper that would explain how an incompleteness of preferences would operationalize, so I wrote that article before exploring the logic of the dual incompleteness that interested me.

Returning to the previously planned paper, I did not find existing work on qualitative probability that was adequate to my purposes, so I began trying to formulating just that as a part of the paper, and found that the work was growing large and cumbersome. I have enough trouble getting my hyper-modernistic work read without delivering it in large quantities! So I began developing a paper concerned only with qualitative probability as such.

In the course of writing that spin-off paper, I noticed that a rather well-established proposition concerning the axiomata of probability contains an unnecessary restriction; and that, over the course of more than 80 years, the proposition has repeatedly been discussed without the excessiveness of the restriction being noted. Yet it's one of those points that will be taken as obvious once it has been made. I originally planned to note that dispensibility in the paper on qualitative probability, but I have to be concerned about increasing clutter in that paper. Yester-day, I decided to write a note — a very brief paper — that draws attention to the needlessness of the restriction. The note didn't take very long to write; I spent more time with the process of submission than with that of writing.

So, yes, a spin-off of a spin-off; but at least it is spun-off, instead of being one more thing pending. Meanwhile, as well as there now being three papers developed or being developed prior to that originally planned, I long ago saw that the original paper ought to have at least two sequels. If I complete the whole project, what was to be one paper will have become at least six.

The note has been submitted to a journal of logic, rather than of economics; likewise, I plan to submit the paper on qualitative probability to such a journal. While economics draws upon theories of probability, work that does not itself go beyond such theories would not typically be seen as economics. The body of the note just submitted is only about a hundred words and three formulæ. On top of the usual reasons for not knowing whether a paper will be accepted, a problem in this case is exactly that the point made by the paper will seem obvious, in spite of being repeatedly overlooked.

As to the remainder of the paper on qualitative probability, I'm working to get its axiomata into a presentable state. At present, it has more of them than I'd like.

I've never voted in a General Election for a Republican Presidential nominee; and, the one time that I registered as a Republican, it was to vote against Ronald Reagan in the 1980 primary election by voting for a candidate who had withdrawn. One may fairly conclude that I was anti-Reagan; I remain so. But I was-and-am also anti-Carter and anti-Mondale; indeed, I have never voted in a General Election for a Democratic Presidential nominee. And my dog in the fight over Reagan's legacy is truth as such, not the development or defense of one of the narratives of either of the two major political tribes.

Part of the conventional narrative of progressives and of Democrats is that our problem of homeless people became a crisis as a result of a ruthless expulsion of mentally ill people from hospitals, by the Reagan Administration, simply to save money. One problem with this part of that narrative was that, at the time that people were being deïnstitutionalized, there was very little in the way of protest from the other tribe, nor much from any other part of the political continuum.

The forceable incarceration of the mentally ill simply for being mentally ill was and remains deeply problematic; it operationalizes as the criminalization of victimless behaviors. Further, like almost every other state programme (essential or otherwise), actual practice bore little resemblance to supportive pontifications by educators and by journalists, regardless of which party were in power. The captivity of the mentally ill was a great injustice, which many progressives, classical liberals, and indeed conservatives wanted to see ended. Not a lot of thought was given to what was to happen to the inmates upon release.

Some of these people had been getting-by before they were locked-up. But the problem now was that the structures that they had earlier found or created in order to get-by were largely demolished by their incarceration. They had spent months or years — sometimes many years — in an peculiar society in which all or nearly all of the people around them were ill-adapted to ordinary life. Most of the possessions of those deïnstitutionalized had been dispersed or destroyed during their institutionalization. The victims didn't have homes. Those released had the stigma of having been locked-up. But, no, few people, regardless of ideological commitments, had much considered what the incarceration itself implied for the ability of the incarcerated to reädapt to the outside world.

We have a very similar problem coming upon us even as I write. It's not coming at us so fast or so slowly that the speed-of-approach should blind anyone; but none-the-less almost everyone is again blind, regardless of ideological commitment.

Our nation may be moving in the general direction of decriminalization of drug-crimes. Some constituent states are decriminalizing marijuana, and the Federal state seems to be allowing that decriminalization. The Presidential Administration is looking to scale back the penalties for crimes involving crack cocaine. And these changes ought to be happening. Consenting adults ought to be able to buy and ingest whatever they want. (Unfortunately, contrary to the apparent trend of decriminalization, many progressives are looking to outlaw tobacco products and to turn sugars into controlled substances.)

But with decriminalization would come the release of a great many institutionalized people. Once again, those released would have spent months or years or even many years in an environment where most of the people around them were ill-adapted to ordinary society. Most of their possessions would have been dispersed or destroyed. Many wouldn't have homes. They'll confront the stigma of having been imprisoned. (If they don't report their imprisonments on job forms and rental applications, then they'll have large, unexplained gaps in their histories!)

I don't offer you a solution to the problems to come. If the progressives wake-up to the problems before any large-scale release, then they'll devise some scheme of half-way houses that in practice will bear little resemblance to progressive theory, and assuredly victimize tax-payers.

No matter what, narratives will be formulated that obscure the current failure to anticipate a predictable, large-scale problem.

I've previously touched on the matter of there being markèdly differing notions all associated with the word probability. Various attempts have been made by various writers to catalogue and to coördinate these notions; this will be one of my own attempts.

[an attempt to discuss conceptions of probability]

I don't know that 'Net-neutrality were, in fact, a good thing; but, even on the assumption that it were, state action is not the proper way to promote it.

'Net-neutrality can be promoted by how people do business with ISPs. At one end, subscribers can consistently migrate towards those ISPs who deviate least from neutrality. At the other end, website owners can impede access by ISPs that do not practice an acceptable degree of neutrality.

In fact, Google and Facebook could effectively impose neutrality by announcing that, in one year, they would begin blocking access by providers who did not make pledges, renewed annually but each extending for ten years, to practice 'Net-neutrality. It might, however, require state inaction for these heavy-hitters to make such a demand. Specifically, Congress might need to clear a path in anti-trust law to allow such a policy.

Before installing an app from the Google Play Store, if you do not otherwise have familiarity with the app's developer, look at the time-stamp listed for the latest version. If this version is only a day-or-so old, then look at the time-stamps for the app reviews. If all of these are only from the previous day-or-so, then wait a couple of days before installing the app.

I discovered that scam-ware is being posted to the Play Store, sometimes with thousands of shill down-loads and shill reviews, to give to it the appearance of legitimacy. Google acts to remove this scam-ware, but it takes them some time to catch up to it.

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The Play Store review system is unfortunately very easily manipulated, and some developers are doing just that even for apps that are not themselves intended as scam-ware. Hundreds or thousands of shill reviews are posted over time. (These reviews are typically short, and sometimes absurd, as when a utility is said to be a great game.) Negative reviews are marked as Unhelpful by shills, and positive previews perhaps as Helpful; which, since the Play Store normally presents reviews ordered by Helpful-ness, means that negative reviews slide out of sight.