SHOP Exchange Glitches

Open enrollment for Obamacare’s second year begins next week. In the chaotic launch of HealthCare.gov, the Department of Health and Human Services (HHS) delayed the launch of the sister portal for small businesses. Now, the health insurance exchange for small businesses is expected to open, but it is still plagued with problems.

The Small Business Health Options Program (SHOP) provides an online portal for small businesses with fewer than 50 employees to purchase insurance. The website allows employers to provide a contribution towards an employee’s health insurance purchase.

A new report from the New York Times summarizes the issues discovered during recent testing:

For example, they said, some health insurance plans approved for sale on the exchange did not show up on the website. The site worked well with some web browsers, like Chrome, but not with others, like Internet Explorer and Firefox. Premiums and other charges for some plans were erroneously displayed as percentages rather than dollar amounts — 350 percent rather than $350, for example. For some households, the principal subscriber was listed as a dependent, or vice versa.

HHS is claiming that the website will be functional when open enrollment starts on November 15.

The future success of SHOP is doubtful even if HHS gets the website working. States had the option of creating their own SHOP or relying on the federal exchange. Several states decided to launch their exchanges last year. The results were lackluster:

California signed up 1.4 million people through its individual exchange, but its small-business exchange enrolled only 1,700 companies, with 11,500 employees and dependents. In Minnesota, the small-business exchange signed up 190 employers covering 1,500 people.

The low participation is not surprising since businesses can still purchase insurance outside of an exchange. The primary reason to use a SHOP exchange would be to receive a tax credit. Firms with fewer than 25 workers who purchase via the exchange are eligible for a tax credit to help offset the cost of the employer contribution. Credits can be as large as 50 percent of the employer contribution.

However, the tax credit is unlikely to induce many small businesses to use the exchange. Only a small number of eligible businesses claimed the previous version of the tax credit, which did not require the extra step of a SHOP purchase. According to the Government Accountability Office (GAO), many employers did not claim it due to the complexity in its calculations. Adding another requirement suggests even fewer employers will take advantage of the credit.  Additionally, GAO estimates that very few small firms offer health insurance as benefit to employees because the tax credit is small. Firms are not encouraged to provide the benefit.

HHS had an additional year to get its SHOP website development right. Reports suggest that HHS is still not ready, despite the large cost. But even if the website becomes functional, success of the overall SHOP program looks unlikely.

Afghanistan as Narco-State: End The International Drug War

The U.S. government has failed to stop the drug trade at home. Washington also has not created a competent, effective, and honest central government in Afghanistan. How effective will Kabul be in limiting opium production when American troops go home?

Not much.

A new report from the Office of the Special Inspector General for Afghanistan Reconstruction reports that opium production last year was the highest ever, 209,000 hectares, up 36 percent from 2012.

Alas, the sky is the limit. SIGAR warned:  “With deteriorating security in many parts of rural Afghanistan and low levels of eradication of poppy fields, further increases in cultivation are likely in 2014.”

Last year the United Nations Office on Drugs and Crime estimated that opium exports accounted for 14 percent of the country’s GDP. Unfortunately, explained SIGAR:  “the narcotics trade poisons the Afghan financial sector and undermines the Afghan state’s legitimacy by stoking corruption, sustaining criminal networks, and providing significant financial support for the Taliban and other insurgent groups.”

The Afghan public is understandably cynical. When I visited the country Afghans called large homes behind high walls lining Kabul streets “poppy palaces.” 

Drug production exploded despite $7.6 billion spent by Washington alone to stop cultivation and distribution. Noted SIGAR, “the recent record-high level of poppy cultivation calls into question the long-term effectiveness and sustainability of those prior efforts.”

The State Department’s response to SIGAR was a marvel of delusion. Production “is only one indicator of counternarcotics progress.”  And “we are making good progress in building the capability of our Afghan partners,” even as cultivation surges.

This is the best case for years of expensive efforts? Even UNODC admitted that the Afghan State is beset by “fragmentation, conflict, patronage, corruption and impunity.” The Pentagon stated that “the failure to reduce poppy cultivation and increase eradication is due to the lack of Afghan government support for the effort.” 

Nevertheless, State said it looked “forward to the new Afghan government assuming a leadership role in this regard.”

Eradication was difficult enough when backed by a strong allied military presence. Wrote Vanda Felbab-Brown of the Brookings Institution, early programs were “manipulated by local Afghan strongmen to eliminate drug competition and ethnic/tribal rivals.”

Moreover, the eradication campaign, turned poppy farmers into Taliban supporters.  Eradication efforts also inflated Taliban revenues. As economist Jeffrey Clemens pointed out, the counter-narcotics campaign both redirected opium production to Taliban-controlled areas and raised poppy prices.

Operating on their own, the Afghan National Army and Afghan National Police will be hard-pressed to fulfill their most important responsibility to sustain the Kabul government against the Taliban. Drug interdiction inevitably will be a secondary objective for security forces which already suffer from corruption.

But no strategy likely would succeed even in the best circumstances. As noted earlier, attempting to suppress drugs could lose the geopolitical war without winning the fight against poppies. Even with greater development few legal opportunities would be better than poppy production.

Another approach is to reduce demand for drugs in Western societies to discourage production in Afghanistan. However, only the most draconian enforcement has much effect on drug use.

The West must set priorities in Afghanistan. Attempting to eradicate poppy production is almost guaranteed to lose the battle for hearts and minds.

Instead, allied policymakers should consider strategies to drain money and profit from the drug trade. Western governments should scale back the drug war.

Afghanistan could be allowed to produce opium for the legal morphine market. Ultimately the entire market should be legalized or at least decriminalized for adults.

Indeed, frustration with years of militarized eradication efforts, some in the midst of insurgencies akin to that in Afghanistan, has caused several Latin American governments to deemphasize enforcement.

As I noted in Forbes online:  “Afghanistan is merely one front in a global drug war. There are no good solutions. But Afghanistan and its Western-backers should recognize reality and abandon the futile and counterproductive campaign against the opium trade.”

The Neocon Moment: Showing Why Foreign Intervention Fails

With President Barack Obama further tarnishing his Nobel Peace Prize by starting yet another Middle Eastern war, exuberant Neoconservatives claim their moment has arrived. And it has: Neocon claims that war-mongering and nation-building serve America’s interests have become obviously ever more absurd.

In 2001 President George W. Bush initiated what was supposed to be The Neocon Moment, projecting a swaggering global presence in which the U.S. would bomb, invade, occupy, and otherwise intervene whenever and for whatever reason it chose. As I wrote for Forbes online:  “Autocrats would flee, candies would be tossed, enemies would be defeated, flowers would bloom, allies would comply, cakewalks would be held, democrats would flourish, and the lion would lie down with the lamb.”

Alas, administration policy wrecked Iraq. Although President Bush never repudiated what he’d done, he appeared to lose his taste for war.

Candidate Obama ran against the Bush presidency, but little changed U.S. foreign policy. No one could mistake the latter as a peacenik libertarian.

Except, apparently, for the Neocons. They now proclaim The Neocon Moment. Explained Matthew Continetti, “monsters [have been] brought forth by American retreat,” and “the threat of those monsters requires unilateral deadly force wherever necessary to kill our enemies and deter our foes.”

Retreat?

In fact, “The Neocon Moment” is distinguished by its failure. As evidence of the need for a return to swaggering interventionism Continetti offers a parade of horrors either created by Washington or well beyond its control.

There’s the Islamic State, which exists only because of the misguided Bush invasion of Iraq. There’s Ukraine, a testament to what happens when one encourages one’s allies to be helpless dependents while facing an adversary with a far greater interest in the outcome of any confrontation.

There are al-Qaeda affiliates in several countries, which arose in response to promiscuous U.S. meddling abroad and persisted in the midst of multiple wars. There’s Iran, in which Islamists overthrew a U.S.-supported dictator who took power in a U.S.-supported coup. There’s the Taliban, which survived more than a dozen years of Washington’s efforts at nation-building.

Neocons have no answer to any of these. They imagine a world of immaculate intervention, in which foreigners welcome being killed and never strike back. Alas, the more Washington attempts to micro-manage the globe, the more likely it is to be attacked.

Neocons also imagine a world in which America automatically deters and only America deters. No one would dare challenge Washington if the president exercised “leadership.”

In fact, countries with the most at stake will risk and spend more than their adversaries, as the U.S. demonstrated during the Cold War in Latin America. Does the U.S. have anything at stake in Ukraine and the Senkakus which warrants the risk of war? The answer is no.

One doesn’t have to look far to see the wreckage left by today’s interventionist consensus. Washington has attempted to fix the Middle East and Central Asia for decades. The result? War, instability, autocracy, brutality, collapse. U.S. officials consistently have demonstrated the reverse Midas touch.

The Balkans has turned out little better, with nationalist divisions still evident two decades after Washington imposed an artificial political settlement. Europe represents the globe’s greatest aggregation of economic power, but is not inclined to defend itself, preferring instead to rely on the U.S.

Only now is Japan finally emerging from hiding behind the “peace constitution” to consider a more active military role. South Korea continues to subsidize the North even as U.S. troops guarantee the former’s security.

It’s true: Americans are not living in the Libertarian Moment. Rather, we are living in The Neocon Moment, a testament to the foolishness and arrogance of those who believe themselves to be engineers of peoples, societies, and nations. Only when the American people insist that politicians make peace, not war, will The Libertarian Moment finally arrive.

Is There a Libertarian Vote?

The Gallup Poll has a new estimate of the number of libertarians in the American electorate. In their 2014 Gallup Governance Survey they find that 24 percent of respondents can be characterized as libertarians (as compared to 27 percent conservative, 21 percent liberal, and 18 percent populist).

For more than 20 years now, the Gallup Poll has been using two questions to categorize respondents by ideology:

Some people think the government is trying to do too many things that should be left to individuals and businesses. Others think that government should do more to solve our country’s problems. Which comes closer to your own view?

Some people think the government should promote traditional values in our society. Others think the government should not favor any particular set of values. Which comes closer to your own view?

Here’s a graphic depiction of the number of respondents who gave libertarian answers to both questions in the Bush-Obama years: 

Gallup Governance libertarians

Libertarians, who disagree with both Democrats and Republicans on major issues, have not been reliable voters for either party. They generally tend to vote Republican by about a two to one majority. But as David Kirby and I wrote in our 2010 study, “The Libertarian Vote in the Age of Obama”:

In 2004 libertarians swung away from Bush, anticipating the Democratic victories of 2006. In 2008, according to new data in this paper, libertarians voted against Barack Obama. Libertarians seem to be a lead indicator of trends in centrist, independent-minded voters. If libertarians continue to lead the independents away from Obama, Democrats will lose 2010 midterm elections they would otherwise win.

And of course the Democrats did have a bad 2010. If libertarian-leaning voters react against Obamacare, overregulation, endless wars, and the surveillance state, then Democrats are likely to have a bad 2014 as well. But Republican positions on immigration, gay marriage, and marijuana push libertarian voters, especially millennial libertarians away; that might account for the surprisingly weak showing of many Republicans in polls in a year when President Obama is unpopular and the economy remains dismal.

Read more about the libertarian vote in our original study or in our 2012 ebook.

Hat tip to Lydia Saad for the data and to Derek Lee and David Dewhurst for the chart.

Big Money in Politics?

As we hear the usual frenzied concern about big money in politics, Cecilia Kang and Matea Gold offer an interesting fact in today’s Washington Post:

Total political advertising in 2014 is expected to reach a record $2.4 billion, up $100 million from four years ago, according to estimates by the Kantar Media research firm.

That sounds like a lot of money. But the first thing I notice is that the increase from 2010 is only about half the rate of inflation. Given the increasing scope of government, it might be surprising that the increase has been so minimal. But divided government may have caused some potential donors to see fewer opportunities and/or risks in the next couple of years.

The Institute for Justice offers another timely way to look at the magnitude of political spending:

Money in politics, from Institute for Justice

You Ought to Have a Look: National Landmarks, Copious Food, Fingerprints, and Satellites

You Ought to Have a Look is new a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best articles and essays in recent days, along with our color commentary.

We have a couple of new introductions to make to our You Ought to Have a Look line-up.

We’re big fans of Daniel Botkin. He is an environmental biologist with a panoramic view of nature. He started his career as a forest modeler (that’s someone who predicts the future composition and structure of forests) and was a Government-Issue global warmer. Since then, he has written 16 books on the environment and has become a champion lukewarmer—a person who, like us, synthesizes the climate data and comes to the hypothesis that warming will be modest and readily adapted to. On May 29, he testified before the House Committee on Science, Space, and Technology, on systematic problems with the United Nations’ Intergovernmental Panel on Climate Change. On June 18, he was before a subcommittee of the Senate Environment and Public Works Committee.

Botkin has a thought-provoking piece this week in the National Parks Traveler—a website dedicated to all things National Parks. In his article, he critiques a report issued by the Union of Concerned Scientists (UCS) with the predictably alarming title, “National Landmarks at Risk: How Rising Seas, Floods, and Wildfires Are Threatening the United States’ Most Cherished Historic Sites.”  The paleolithic media were all over the UCS report when it came out six months ago, and it headlined several news shows on the dinosaur networks. For “balance,” we managed a few soundbites.

Botkin’s article is more in-depth than the UCS report, concluding that human-caused global warming gets far more attention than it deserves in the universe of environmental issues, which precludes appropriate attention to real issues.

Botkin writes:

However, global warming has become the sole focus of so much environmental discussion that it risks eclipsing much more pressing and demonstrable environmental problems. The major damage that we as a species are doing here and now to the environment is not getting the attention it deserves.

You ought to have a look at Botkin’s complete article!

A Few Words on ‘Gainful Employment’

The big higher education news this week is that the Obama administration released its “gainful employment” rules aimed squarely at beleaguered for-profit colleges, which are the schools most likely to offer programs that are explicitly about supplying job skills. This attack does not seem to come because for-profits are objectively worse performers than the rest of the decrepit Ivory Tower, but because it is easy to demonize institutions that—unlike much of higher ed—are honest about trying to make a profit. Oh, and because going after the real culprit—an aid system that gives almost any person almost any amount of money to go to college—would require federal politicians to take on a system they created, and that makes them look ever-so-caring.

Perhaps the only unexpected thing about the regulations is that they do not include cohort default rates—the percentage of an institution’s borrowers defaulting on their loans within two or three years of entering repayment—among the assessments of aid worthiness. Instead, they just use debt-to-earnings ratios. The American Association of Private Sector Colleges and Universities—proprietary colleges’ advocacy arm—suspects this was done because including the default rate was projected to ensnare some community colleges, and the administration wanted this to be all about for-profit institutions.

There is reason to believe this may be true. The administration has lauded community colleges as the Little Schools That Could for a long time, and, indeed, directly compared them to for-profit schools in its press release for the new regulations. “The situation for students at for-profit institutions is particularly troubling,” they wrote. “On average, attending a two-year for-profit institution costs a student four times as much as attending a community college.” What didn’t they mention? According to federal data, completion rates at community colleges are around 20 percent, versus 63 percent at two-year for-profits. The data aren’t perfect—they capture only first-time, full-time students who finish at the institution where they started—but it is a yawning gap that illustrates a crucial point not just about gainful employment, but overall higher education policy: emotions and political concerns, not objective analysis, seem to drive it.

And speaking of objective analysis: We will be hosting what should be a great, diverse panel discussion on Wednesday, November 5, that will look at the changing face of higher education—including, no doubt, gainful employment—as well as offer predictions about what the previous night’s election results might mean for higher education. Hope to see you there!