Why NPR is having an internal debate over cursing on-air

While many news organizations wrestle with how to deal with coarse language, NPR is in the midst of an internal debate on how to handle vulgar or profane language. Its use of profane language could not only upset listeners but get it into trouble with the FCC, Paul Farhi writes. NPR’s basic rules say to avoid using obscene language on-air or in podcasts except when it’s conveying something newsworthy and only then when it’s fully bleeped out, but some at NPR have objected to the policy. Nina Totenberg says in a memo to NPR staff: “In life and death battles, it really would distract and sound stupid to bleep out such language. We expect it in such situations.”

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How mobile ad blocking in iOS 9 may force a shift by web advertisers and publishers

When print advertising began to change, print newspapers were forced to evolve, Charles Arthur writes, and web publishers may be forced to do the same once mobile ad blocking is available in Apple’s iOS 9. Arthur says the future of digital advertising may be in the form of sponsored content: “If the site generates the ad, it’s suddenly a lot harder to block.”

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Need to Know: July 31, 2015

Fresh useful insights for people advancing quality, innovative and sustainable journalism

OFF THE TOP

You might have heard: Comcast’s NBCUniversal was scouting out several new media companies as it tries to reach younger audiences who watch less traditional television (Wall Street Journal)

But did you know: NBCUniversal is expected to make big investments in BuzzFeed and Vox Media (Re/code)
NBCUniversal is close to a deal to invest $250 million in BuzzFeed. It’s also expected to invest in Vox Media in a deal that could value Vox at $850 million. The investments in BuzzFeed and Vox Media are part of an effort by NBCU CEO Steve Burke to invest in digital outlets that reach Millennial audiences that aren’t paying attention to NBCU’s TV networks. Kara Swisher and Peter Kafka write: “The idea is that NBCU can get a crash course on digital content and distribution from its new investments — and that those companies may want to distribute some of NBCU’s content as well.”

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+ Noted: Gannett’s new CEO says it’s “aggressively pursuing” large-market acquisitions, as well as smaller markets of at least 500,000 people if part of a purchase of a larger media group (Wall Street Journal); Shorenstein Center report says conservative media pushes the Republican Party further to the right (Shorenstein Center); NowThis’s new app Tap for News eliminates the need to decide what news to read by showing users a red button that they can tap to watch “a collection of very lightly curated 15- to 30-second videos on topics ranging from breaking news to science to entertainment” (Nieman Lab)

API UPDATE

The week in fact-checking
As part of our fact-checking journalism project, Jane Elizabeth highlights stories worth noting related to truth in politics and on the Internet. This week’s round-up includes how a newspaper learned to appreciate its eagle-eyed fact-checking reader, creative ways that fact-checking organizations are bringing in money, and a Twitter fact-checker who corrects bad information when he has some free time.

TRY THIS AT HOME

How news organizations integrate Slack into their workflow (Nieman Lab)
Work chatroom software Slack is breaking down walls in newsrooms between editorial and product teams, Laura Hazard Owen writes. Vox Media product director Lauren Rabaino says that using Slack keeps everyone’s workflows and projects transparent, but it also fosters a sense of camaraderie across teams. Fusion editor-in-chief Alexis Madrigal says: “You can get immediate feedback on something, but if someone comes into the room later, they might be able to add something, whereas if you didn’t go to a [physical] meeting, you’re not going to be able to contribute later.”

+ Our plan for enabling innovation through newsroom culture changes includes creating virtual spaces through internal chat systems such as Slack that create greater accessibility and shared awareness

OFFSHORE

Trinity Mirror tests an ad format that asks users to interact with an ad halfway through an article (The Drum)
Trinity Mirror is experimenting with “FreeWall,” an ad format that asks users to interact with an ad halfway through an article before they can read further. Users on both desktop and mobile will be asked to interact with the FreeWall ads, and they can continue reading free of charge afterward. FreeWall ads will be shown to users once a month in exchange for free access to content for the next month. Trinity Mirror’s strategy director Piers North says one of the goals of FreeWall is to monetize its mobile audience better.

OFFBEAT

Why Vine became part of the entertainment industry rather than ‘Instagram for video’ (Fast Company)
When Vine launched two years ago, it was expected to be the “Instagram for video,” but it’s ended up more as part of the entertainment industry as it attracts content creators who are looking to entertain rather than share parts of their life. With that shift, Vine has changed its focus to support those creators as well as users who are interacting with Vines rather than posting their own. Among the changes Vine has released that focus on viewers’ experience is a feature called “favorites” that sends users push notifications when accounts they follow publish new Vines and optimizing the app for high-quality video despite the upload times.

+ Earlier: How newsrooms used Vine in its first year

UP FOR DEBATE

Why NPR is having an internal debate over cursing on-air (Washington Post)
While many news organizations wrestle with how to deal with coarse language, NPR is in the midst of an internal debate on how to handle vulgar or profane language. Its use of profane language could not only upset listeners but get it into trouble with the FCC, Paul Farhi writes. NPR’s basic rules say to avoid using obscene language on-air or in podcasts except when it’s conveying something newsworthy and only then when it’s fully bleeped out, but some at NPR have objected to the policy. Nina Totenberg says in a memo to NPR staff: “In life and death battles, it really would distract and sound stupid to bleep out such language. We expect it in such situations.”

SHAREABLE

How mobile ad blocking in iOS 9 may force a shift by web advertisers and publishers (The Overspill)
When print advertising began to change, print newspapers were forced to evolve, Charles Arthur writes, and web publishers may be forced to do the same once mobile ad blocking is available in Apple’s iOS 9. Arthur says the future of digital advertising may be in the form of sponsored content: “If the site generates the ad, it’s suddenly a lot harder to block.”

FOR THE WEEKEND

+ “Death of a young black journalist”: Charnice Milton was a 27-year-old local journalist in D.C. who was killed on her way home from an assignment by a bullet aimed at someone else, remembered as a shy but intrepid journalist committed to covering her native southeast D.C. community (New Yorker)

+ Why science can’t trust journalism: Felix Salmon writes that the science world is extremely open about how they come to their conclusions and collect their data to allow replication, but no one in journalism is transparent about how their articles are created and no one tries to replicate anything (Fusion)

+ “The illusion of audience ownership is becoming harder to sustain”: John Herrman says as a single Facebook video can get more traffic than a week’s worth of a news site’s content, it’s becoming clear who audiences really belong to (The Awl)

+ A laid-off journalist started a Facebook group to help other journalists in similar situations figure out their “Plan B,” and it now has more than 2,600 members who share job openings, news of coming layoffs, and stories of how they’ve moved on from journalism (Poynter)

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Medicare beyond age 50: Lessons for the future

As Medicare reaches age 50, we see periodic signs of limited efforts to move beyond its youthful exuberance as a full-fledged pay-as-you-go, fee-for-service, universal entitlement program and toward a somewhat more market-oriented direction. Most notably, the last decade since the passage of the Medicare Modernization Act of 2003 has produced rapid growth in enrollment in Medicare Advantage private plan options. Over 30% of Medicare beneficiaries are enrolled in these more market-based alternatives to the traditional Medicare fee-for-service program. Give or take 50 years, that might be considered modest progress in moving back toward a path not taken by Medicare’s original architects, even as they needed to maintain more of a “private market” face to cover such an unprecedented expansion of the federal government’s role in health care financing and regulation.

A 40^th anniversary article on Medicare in the winter 2005-2006 issue of Health Care Financing Review by Edward Berkowitz of George Washington University provides an excellent summary of the key history, including several options discarded along the way to final enactment of Medicare:

• In somewhat earlier congressional efforts to enact a Medicare compromise proposal in 1962, Senator Jacob Javits (R-NY) helped to negotiate a feature, accepted by the Kennedy administration, which allowed elderly people with private health insurance coverage to keep their coverage. Medicare would reimburse the private carriers for benefits that coincided with those covered by the program.
• In 1964, Representative Wilbur Mills (D-AR), the chairman of the Ways and Means Committee and chief legislative architect of the final Medicare law, asked the Social Security Administration to develop a plan that allowed the use of the Blue Cross^® plans to administer hospital insurance and Medicare’s billing operations as “fiscal intermediaries.” This served the initial political objective of keeping the federal government removed from getting involved in the routines of health care finance. (But not for long!)
• In further debate over proposed Medicare legislation in 1964, Javits also proposed the creation of what he termed “complementary private health insurance” for elderly individuals. His goal was to limit the federal role to covering the costs of hospitalization and skilled nursing home care, while covering doctors’ bills and outpatient care through what he described as “…low-cost private insurance plans to be developed on a nonprofit, tax-free basis with special provision for concerted selling and risk pooling.”
• Under another consumer-choice proposal by then-Representative and future New York City mayor John Lindsay (R-NY), elderly beneficiaries could either accept government health insurance, to be run by the States, or a private health care plan. If they chose the private health plan, they would receive an increase in their social security benefits.
• Some portions of these concepts actually were incorporated in the Johnson administration’s Social Security proposals at the end of 1964 and the beginning of 1965, but they faced opposition from many Democrats. They ultimately took the more limited form of a “voluntary” Medicare Part B program for non-hospital medical costs, funded equally by beneficiary premiums and general revenues.

The final Medicare legislation of 1965 delivered a comprehensive public entitlement program for almost everyone age 65 and above, instead of more targeted assistance to more vulnerable seniors that might have relied primarily on subsidized private markets. Younger taxpayers were conscripted to cover most of the higher costs that followed. As they say, the rest is history. It offers some useful lessons in comparing Medicare’s past with the possible future of the five-year-old Affordable Care Act (ACA) version of “Obamacare.”

First, temporary supermajorities in Congress can have a longer lasting impact by enabling enactment of unique legislation that institutionalizes sweeping changes in national policy and then becomes hard to modify significantly for decades. The 89^th Congress of 1965 and the Johnson administration had far greater leeway to overcome past resistance to the role of the federal government in health policy and the practice of medicine after winning landslide victories in the 1964 election. Even though those supermajorities in Congress and popular support for Great Society initiatives eroded substantially within a few years (see, e.g., Vietnam War, civil unrest, etc.), the key elements of a vastly expanded welfare state fueled by entitlement programs – including Medicare – took root and largely remain (in somewhat modified form) five decades later.

Lesson: Repealing and replacing Obamacare is not going to happen quickly or easily, or even substantially, without much more concerted effort and detailed strategy than opponents have displayed thus far.

Second, economic cycles are not simplistically predictive of political ones, but big swings in either direction matter. Medicare was propelled ahead during an optimistic era of rapid economic growth that assumed few limits to future prosperity. Obamacare was pushed through the national political arena in the midst of the Great Recesssion and economic pessimism about the future of the USeconomic system.

Lesson: Economic cycles can drive political change when they accentuate major electoral swings that favor incumbent officeholders (during good times) or depose them (during suddenly disruptive downturns). The Obama administration did not “let a good crisis go to waste,” even if doing so subsequently cost it control of both houses of Congress.

Third, opportunities to address chronic national policy problems in more market-based directions need to be advanced more aggressively and positively before the effective window for action closes. Just saying no and minimizing concerns eventually loses out to the political impulse to do something, even if it’s not well-designed or effective. A sad reflection on the stance of conservative political leaders in the early 1960s is that only the limited efforts of a handful of more moderate/liberal Republicans serving in Congress at that time tried to deflect the full force of a government-centric mass entitlement program like Medicare, rather than just offer what became largely rearguard resistance that failed to offer anything more attractive.

Lesson: The time to provide better alternatives when major health policy issues are framed for national debate is sooner, not later. Next time, critics of the ACA must bring something more than shallow alternatives to Obamacare to the national debate and insist on earlier, consequential votes on them on Capitol Hill. Just winning subsequent elections and then finding excuses for further delay and inaction won’t ever accomplish substantial policy reversals when it comes to health care entitlement programs.

Fourth, states failed to step up the plate in the early 1960s after passage of the Kerr-Mills program, which then added strength to the case for a more nationalized Medicare program approach. It’s 50 years later and conservatives are still counting on (red) state governments to help fill national policy vacuums and handle complex issues that Washington policymakers can’t, or won’t, resolve. How much has changed since 1965?

Lesson: Delegation to state government officials and decentralized decision making will need to become more realistic and accountable, and less rhetorically evasive, to succeed.

Fifth, we are no longer living with all of the illusions of the 1965 Great Society vision. Even the ACA debate of 2009-2010 acknowledged some of the limits of taxpayer resources and the federal government’s administrative machinery. (But not all of them, to be sure). Obamacare discarded early gestures toward a public option. The ACA targeted its still-massive subsidies to only the relatively lower-income portion of the population, rather than spread them across the board. ACA dollars primarily flowed through privately owned entities, albeit in hopes of coopting them politically. The ACA even pretended to achieve budget neutrality. Unfortunately, it tried to achieve this balancing act through accounting tricks, regulatory coercion, poorly disguised tax hikes, and improvisational administrative rewrites of the law that transcended past legal bounds.

Lesson: American political culture still seems to prefer choice and competition – even in health care matters – that is channeled more comfortably through mechanisms that look more private than public, and recognize that resources are not unlimited. However, establishing clear alternatives to Obamacare will require a stronger case for less generous, needs-based targeting of public subsidies and development of robust market alternatives that work better and more transparently. Those elements were not sufficiently on hand when Medicare was enacted.

Finally, our political system not only takes a long time to enact major policy changes that implement national programs like Medicare and the ACA. It then also takes far too long to reconsider and modify them substantially, let alone fully replace them. But we really don’t have any more years left to truly begin fixing more comprehensively the chronic problems and imbalances first launched in 1965, as well as those started in the ACA just five years ago.

I’m still looking forward to celebrating the first anniversary of that more important achievement, hopefully far sooner than today’s milestone took to reach.

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Double standard for e-cigarettes vs. medical marijuana

Did you read about the new review paper on medical marijuana published in the prestigious Journal of the American Medical Association? In case you missed it, the paper gave a less-than-ringing endorsement of marijuana’s therapeutic benefits.

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I was surprised by the anemic media coverage. It should be of national interest given that 23 states, in addition to the District of Columbia, have legalized medical marijuana. According to the JAMA findings, many of the conditions for which medical marijuana is being officially used, from spasticity associated with multiple sclerosis to sleep disorders, are supported at best by either “moderate quality” data — as the report put it — or “low quality” data across the 79 randomized, placebo-controlled trials reviewed by researchers.

I found only CBS News and Reuters covered the report as hard news and the Denver Post published an editorial (“Moment of Truth for Medical Marijuana”). These are big outlets, to be sure, but they are conspicuously modest in number. By contrast, the media can be relied upon to cover potentially harmful effects of vaping. In January, for instance, the New England Journal of Medicine published a report entitled “Hidden Formaldehyde in E-Cigarette Aerosols.”

Media coverage ensued: “E-cigarettes Can Churn out High Levels of Formaldehyde,” read the NPR headline. “E-cigarettes can Produce More Formaldehyde than Regular Cigarettes,” warned the Los Angeles Times. “Before You Vape: High Levels of Formaldehyde Hidden in E-Cigarettes,” cautioned NBC News. “Study Links E-Cigarettes to Formaldehyde, Cancer Risk,” said The Wall Street Journal. The Baltimore Sun, Associated Press (appeared in Washington Post), Reuters (appeared in Scientific American), and CBS News also picked up on the NEJM report.

The NEJM authors’ notable conclusion was that vapers are endangered by formaldehyde in the course of normal use. More specifically, the authors showed that when a vaping device was heated at high voltage settings – that is, overheated — the emitted vapor contained the carcinogen formaldehyde at five to 15 times the concentration found in cigarette smoke.

But – and this is key — no user would ever actually heat an e-cigarette high enough to produce the recorded levels of formaldehyde in the study. The resultant vapor (known as a “dry puff”) would be intolerably irritating to the throat. Indeed, when the NEJM researchers tested the same device at a voltage level normally used by vapers, they detected no formaldehyde.

Then, in May, a study in Addiction confirmed that formaldehyde in vapor poses no danger at normal heat settings. Toast is a handy analogy here. “Most toasters have a setting which burns the toast to a crisp,” wrote Peter Hajek of the London School of Medicine and Dentistry in Addiction. “Although burned toast contains carcinogen, it is highly unlikely that New England Journal of Medicine would publish a paper demonstrating this and warning people that toasts are carcinogenic.”

I could find no mention in the mainstream media of the Addiction study, however, apart from the comment sections of specialty medical or vaping blogs. Like the unfashionable JAMA paper on medical marijuana, which ran counter to the generally benign national attitude towards marijuana, the reassuring article on formaldehyde did not jibe with the growing view that vaping is somehow harmful. While no strong, organized lobby opposes medical marijuana, such vocal and visible entities as the Centers for Disease Control, the California Department of Health, the American Lung Association and the Campaign for Tobacco Free Kids routinely denounce e-cigarettes, insisting that the devices will renormalize smoking in society and serve as a “gateway” to smoking for teens. To date, the vast bulk of evidence regarding smoking and vaping patterns suggests that neither fear has materialized.

And it’s not just a media double standard for medical marijuana and e-cigarettes that exists. The government has just made it somewhat easier for researchers to explore the effects of medical marijuana use, while nothing has been done to make clear a path to conduct randomized clinical trials on difficult e-cigarettes as therapeutic (i.e., smoking cessation) devices.

In mid-July, the Obama administration moved to facilitate randomized clinical trials research on medical marijuana by lifting the burdensome requirement that researchers submit study proposals to the U.S. Public Health Service for review. This step in the four-step research-approval process, it turns out, added another layer of review that contradicts an FDA review requirement. The streamlining will help a bit, although other hurdles (e.g. obtaining marijuana samples for the study from the National Institute on Drug Abuse ) do remain.

Meanwhile, the route to randomized clinical trials research on e-cigarettes remains blocked.

Let’s say, for example, a researcher wants to learn if people with schizophrenia, a population which smokes at triple the rate of the general population, succeed in switching partially or completely to vaping. The researcher is stuck. Why? Because in order to compare e-cigarettes to other forms of cessation interventions, the FDA requires an Investigational New Drug (IND) application. And completing the application requires the researcher to submit information on the chemistry of e-liquid as well as manufacturing and control information. Gathering these data is time consuming, if doable at all, given the scores of producers, many of whom are based overseas.

If researchers cannot investigate e-cigarettes as a smoking cessation tool, experts cannot definitively respond to one of the major objections of critics who claim e-cigarettes have no demonstrated therapeutic effect. There is massive evidence from individual smoker self-reporting that e-cigarettes enable users to quit smoking or to cut down markedly–a recent example is here–but few rigorous or realistic head-to-head comparisons with patches and gum.

Last February, a group of four research organizations, including the American Association for Cancer Research and the International Association for the Study of Lung Cancer, wrote a letter to then-FDA Commissioner Margaret Hamburg protesting this Catch-22. “This regulatory hurdle makes clinical research with most if not all commercially available products impossible because scientists do not have access to the required information that would allow them to obtain IND applications,” they wrote. Studies already approved by NIH review committees and in some cases funded by the NIH or FDA, cannot move forward.

So we find ourselves in an environment where research on e-cigarettes, a technology with the potential to spur a transformation in tobacco smoking is being stymied, and where news of its promise is considerably less headline-worthy than dubious evidence of its harm. Yes, marijuana, too, may have therapeutic value–we simply need better quality evidence. Too bad e-cigarettes don’t enjoy the same good will and favorable press coverage that, for better or worse, has been bestowed on marijuana.

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Medicare at 50: Did it solve the right problems without creating new ones?

Today’s 50^th anniversary salutes to the enactment of the Medicare program on July 30, 1965 will emphasize how much Medicare changed the world of health insurance coverage and medical care for Americans over age 65. A closer look at the program’s origins and early history certainly confirms its primary accomplishments. However, it also suggests how improving necessary care for older Americans might have proceeded differently without producing some of Medicare’s chronic long-term problems that we continue to avoid dealing with today. (Part two of this post will examine how this history also offers some lessons to would-be repeal-and-replace critics of the five-year-old Affordable Care Act).

The standard history for Medicare’s origins usually begins with highlighting the inadequacies of existing insurance coverage for the elderly in the early 1960s. The most extreme pro-Medicare claims assert that only one-quarter of Americans over age 65 had “meaningful” private health insurance coverage. However, that calculation stacks the deck by setting the coverage bar fairly high. It uses either Blue Cross hospital insurance coverage of the time, or any other insurance paying 75% or more of hospital bills as its minimum threshold for providing adequate “comprehensive” coverage.

A higher, and more frequently cited, measure of insurance coverage for the elderly in the early 1960s comes from the 1963 National Health Survey. It found that 54% of Americans age 65 and above had some type of hospital insurance, compared to 71% for the general population over age 17. Even this difference between access to care for older versus younger Americans in the years immediately before Medicare can be reduced further, to some degree. The federal government’s survey excluded seniors who were covered under various government health and wealth programs. However, a large portion of the potential health care assistance to most older Americans under the Kerr-Mills program (enacted in 1960) or hospitals still under Hill-Burton grant obligations, was needs-based, and it often remained more hypothetical than immediately accessible. Federal assistance for the health care needs of the indigent elderly under Kerr-Mills in particular was implemented very slowly, if at all, by most states in the early 1960s.

Looking at most of these limited coverage numbers 50 years later often fails to place them, and related problems of access to health care for older Americans, in their proper context. First, health insurance coverage for retirees between age 65 and 74 roughly doubled in the 10 years from 1952 to 1962. According to 1965 congressional testimony by H. Lewis Rietz (representing several large insurance associations), by 1962, 60% of the non-institutionalized aged had some form of voluntary health insurance. On the other hand, health coverage for the non-aged also was growing rapidly and it tended to be more comprehensive and less expensive. In any case, health care (and health insurance) of the early 1960s cost much less compared to today in large part because medicine’s capabilities were more limited, and a much larger share of health spending (roughly 45%) was paid for out of pocket rather than through third-party insurance coverage.

The biggest problem for elderly Americans in purchasing health insurance in the early 1960s was their relatively low family incomes. The analytical section of the 1963 National Health Survey noted that the two lowest income groups at the time (under $2000, and between $2000 and $3999, in annual family income) had disproportionately large numbers of elderly persons. After adjusting hospital and surgical insurance coverage rates first by age, and then by income, the Survey’s researchers concluded that “income is a more important factor than age in determining health insurance coverage.”

Subsequent decades of much more generous social security benefits, along with improved private retirement benefits and appreciation of home values, substantially changed the relative income distribution ranking of the elderly and freed many seniors from poverty, even without the additional income enhancements provided by Medicare’s protection against large medical costs.

In a series of influential research articles about a decade ago, MIT economist Amy Finkelstein provided a more nuanced analysis of Medicare’s effects on the health care economy, as well as the health and economic well-being of seniors. One of her most notable findings was that, at least in its first 10 years of operation, Medicare and the near-universal coverage it provided to seniors somewhat surprisingly played essentially no role in the dramatic decline in mortality rates for the elderly that began in the late 1960s. One reason for this lack of any discernible impact on this most basic measure of health outcomes was that, prior to Medicare, individuals with life-threatening, and treatable, health conditions sought care even if they lacked insurance, as long as they had legal access to hospitals. Individuals without insurance paid out-of-pocket, or relied on charity care.

However, this issue of legal access to care highlights the seminal importance of Medicare as an essential national program administered by the federal government during the 1960s struggles over civil rights. It must be saluted in particular for achieving substantial progress in extending access to hospitals for non-whites in segregated parts of the South.

In one study with co-author Robin McKnight of the University of Oregon, Finkelstein focused more on the economic risk-protection benefits (in other words, its value as “insurance”) that Medicare provided to the elderly during its initial years. They estimated that Medicare was associated with a substantial reduction in the elderly’s exposure to the financial risks of out-of-pocket health spending. The greatest such effects were for the top 25% of the out-of-pocket health spending distribution among seniors. Medicare’s introduction was associated with a 40% decline in their personal out-of-pocket spending.

Of course, those economic benefits to seniors produced both gains in expanded health care services and higher costs to finance them. Medicare’s introduction in 1965 represented the single largest change in health insurance coverage in American history. It triggered substantial new entry into the hospital sector, leading to a 37% increase in hospital spending within its first five years. Medicare powered much more rapid and extensive adoption of new medical technologies, and it fundamentally altered the practice of modern medicine. Finkelstein’s broader conclusion is that evidence from the early effects of Medicare’s enactment and implementation suggests that the overall spread of all health insurance coverage in the US between 1950 and 1990 may explain half of the six-fold increase in real per capita spending over this period.

Enthusiastic boosters of Medicare may view the massive expansion in health spending due to Medicare as a historic legacy worth saluting on its 50^th anniversary. It certainly has relieved much suffering, extended lives, and protected the financial resources of millions of seniors. If you value health care highly and believe we haven’t reached a point of diminishing returns at the margins of its highest spending levels, light up some more birthday candles and look forward to more decades of such growth.

But the more elusive calculation involves balancing the most visible gains claimed by Medicare advocates against the less visible offsetting costs Medicare also produced. They include medical inflation that caused health care spending to consistently outpace growth of the overall economy for most of the years since the program’s introduction (with the exception of a few recent ones). Other long-term costs include the mounting overhang of Medicare’s long-term unfunded liabilities still ahead to be underwritten by younger and future generations, as well as the program’s already sizable and growing claims on societal resources that might be directed toward other competing priorities. By one accounting measure, built on unrealistically favorable policy assumptions, the present value of the additional non-dedicated resources that would be necessary to meet projected Medicare expenditures from a 75-year “budget” perspective amounts to at least $27.8 trillion.

Aside from the basic numbers of budgetary imbalances and continuing fiscal pressures, Medicare’s institutionalization as the dominant payer in US health care also has locked in the worst features of a costly and inefficient fee-for-service delivery system that still rewards providing more volume, instead of better value, in most health care decisions. The mismatch between Medicare’s claims on the economy and our political willingness to pay for them in turn has produced an ever-more complex web of reimbursement rules and health care regulations in response that are far more successful in hiding or transferring costs than in reducing them. Moreover, although elderly Americans achieved substantial gains in insurance coverage and financial security through Medicare, younger ones fared far less well.

More on what this implies for where Medicare might have developed instead, and the future course of the Affordable Care Act, is ahead in part two.

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The week in fact-checking: Hey, how much for that fact check?

The American Press Institute presents a roundup from the world of fact checking, debunking and truth telling — just in case you haven’t been paying as much attention as we do.

Quote of the week

“I’ll summarize my prescription in four words: Less speed. More transparency.” — New York Times public editor Margaret Sullivan on an error-ridden Hillary Clinton story.

Behind the fact check
Many reporters have an Alan Gingras amongst their fans. You know, that eagle-eyed reader who sends you notes like: “Dear obit people: In 1960, Comfort moved his family to Tanganyika, not Tanzania. Tanzania did not exist then. In 1964, Tanganyika and Zanzibar merged to form Tanzania.” Here’s how one newspaper learned to appreciate its biggest fact-checking fan. Read it.

What? Something is fake on the internet?
A study by API researcher Andy Guess shows that misinformation on Twitter outpaces any attempts to correct it by a sad ratio of 3 to 1. So we wish Paulo Ordoveza had a little more time on his hands. The brains behind @PicPendant researches and corrects bad information on Twitter only “when he has down time, or is bored,” reports Columbia Journalism Review. Read it.

Behind the fact check
Many reporters have an Alan Gingras amongst their fans. You know, that eagle-eyed reader who sends you notes like: “Dear obit people: In 1960, Comfort moved his family to Tanganyika, not Tanzania. Tanzania did not exist then. In 1964, Tanganyika and Zanzibar merged to form Tanzania.” Here’s how one newspaper learned to appreciate its biggest fact-checking fan. Read it.

The business of fact-checking

Accountability journalism can be expensive, and charging for the service is one way to fund it. Fact-checking organizations have come up with creative ways to keep the bills paid. Read it.

Fact-checking tips
Here’s a tip as we plunge into the 2016 election season: If a candidate’s TV ad, statement or talk-show rhetoric seems designed to scare the pants off you (“Today is some of the darkest 24 hours in our nation’s history”), be afraid. Not of the candidate, but of a potential lack of facts. Writing for The Conversation, historian Tony Ward reminds us that “dire warnings” can indicate a fact-less agenda. Read it.

Fact-checking science
When politics get mixed up with crustaceans, you get a fact check on the sex life of crabs. After Gov. Terry McAuliffe stated this week that Virginia actually is the birthplace of the so-called “Maryland crab,” PolitiFact Virginia treated us to a lesson on the mating habits of crabs. And used every crab-sex pun they could get away with. Read it.

Fact-checking Hollywood
If you like a little shade with your facts, you go right ahead and believe “Shady Music Facts” when it tweets that Paris Hilton makes $1 million per night as a DJ. And don’t read BuzzFeed’s analysis of the popular Twitter account, whose motto is: “Our tweets are 100% facts and we are completely unbiased.”  Don’t read it.

Fact-checking around the world
“Falsehoods come in many languages. Now, so does the truth.”  Students at Duke University’s Reporters Lab have created a video that shows the impressive (and sometimes entertaining) efforts by journalists around the globe who are working to improve accountability in their government. Watch it.

Do you teach journalism, politics or communications? Join the American Press Institute and panelists for a workshop in San Francisco next week. Read more and sign up here. 

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Happy 103rd birthday, Milton Friedman

Tomorrow is Milton Friedman’s birthday — he was born on July 31 in 1912 and would have been 103 years old tomorrow. Unfortunately, Milton died on November 16, 2006 when he was 94 years old. In an editorial in the Wall Street Journal following Professor Friedman’s death, they reported his loss with the same tribute Milton used when Ronald Reagan died, saying “few people in human history have contributed more to the achievement of human freedom.” In honor of his legacy and birthday, here are some of my favorite Milton Friedman quotes:

1. There is nothing as permanent as a temporary government program.

2. Inflation is always and everywhere a monetary phenomenon.

3. Inflation is caused by too much money chasing after too few goods.

4. Sloppy writing reflects sloppy thinking.

5. All learning is ultimately self-learning.

6. I’m in favor of legalizing drugs. According to my values system, if people want to kill themselves, they have every right to do so. Most of the harm that comes from drugs is because they are illegal.

7. Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.

8. The government solution to a problem is usually as bad as the problem.

9. The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.

10. The high rate of unemployment among teenagers, and especially black teenagers, is both a scandal and a serious source of social unrest. Yet it is largely a result of minimum wage laws. We regard the minimum wage law as one of the most, if not the most, anti-black laws on the statute books.

11. Industrial progress, mechanical improvement, all of the great wonders of the modern era have meant relatively little to the wealthy. The rich in Ancient Greece would have benefited hardly at all from modern plumbing: running servants replaced running water. Television and radio? The patricians of Rome could enjoy the leading musicians and actors in their home, could have the leading actors as domestic retainers. Ready-to-wear clothing, supermarkets — all these and many other modern developments would have added little to their life. The great achievements of Western capitalism have redounded primarily to the benefit of the ordinary person. These achievements have made available to the masses conveniences and amenities that were previously the exclusive prerogative of the rich and powerful.

12. President Kennedy said, “Ask not what your country can do for you — ask what you can do for your country.”… Neither half of that statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. “What your country can do for you” implies that the government is the patron, the citizen the ward. “What you can do for your country” assumes that the government is the master, the citizen the servant.

13. On the difference between public vs. private education: “Try talking French with someone who studied it in public school. Then with a Berlitz graduate.”

14. ‘Fair’ is in the eye of the beholder; ‘free’ is the verdict of the market. The word ‘free’ is used three times in the Declaration of Independence and once in the First Amendment to the Constitution, along with ‘freedom.’ The word ‘fair’ is not used in either of our founding documents.

15. What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself.

16. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from grinding poverty, the only cases in recorded history are where they’ve had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that, so that the record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

17. The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.

18. With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves.

19. The case for prohibiting drugs is exactly as strong and as weak as the case for prohibiting people from overeating.

20. The government has no more right to tell me what goes into my mouth [including illegal drugs] than it has to tell me what comes out of my mouth.

Bonus: You’ll find a great collection here of more than 30 Milton Friedman videos (the “Milton Friedman Speaks” lectures) on a variety of topics including “What is America?”, “Is Capitalism Humane?”, free trade, energy policy, the role of government in a free society, education and vouchers, the rights of workers, consumer protection, equality and freedom, and the future of our free society.

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Organized crime in the Americas: A call to action

Key Points

• Transnational organized crime (TNOC), in some cases abetted by hostile and lawless regimes in Latin America, is a principal threat to US security; however, US officials have failed to respond effectively.
• A narcostate has emerged in Venezuela, but US diplomats have coddled the criminal regime in defiance of ongoing US investigations and in violation of the president’s explicit anti-TNOC strategy.
• The United States should use law-enforcement tools to expose and punish senior Latin American and Caribbean organized-crime conspirators, to rally support for the benefits of the rule of law, and to reinvigorate antidrug cooperation.

Read the PDF.

In March 2014, General Martin E. Dempsey, the outgoing chairman of the joint chiefs of staff, told an audience of midshipmen at the US Naval Academy that “transnational organized crime [TNOC] from our southern hemisphere” ranked with Russia, China, and al Qaeda among the principle national security threats confronting the United States.[1] Criminality that used to emanate from particular countries has metastasized, operating across national borders, weakening the rule of law in the Latin American region as a whole, and sowing mayhem in countries with institutions too weak to resist.

The reach and impact of organized crime in the Americas has grown more profound in recent decades, as criminal organizations have adopted the practices and technology of a globalized economy to build transnational networks. In Latin America, antidrug cooperation—characterized by the promising progress of the US-backed security and development strategy known as “Plan Colombia”—has been dismantled in the last decade. A cadre of anti-US regimes, inspired and financed by the late Venezuelan leader Hugo Chávez, has effectively ended cooperation with US antidrug efforts. In some cases, these governments now aid, abet, or engage in narcotrafficking.

Just as antidrug cooperation is being undermined, criminal networks have grown stronger. Today, they are able to organize complicated conspiracies involving drug acquisition from suppliers in Colombia, transportation with the complicity of security officials in Venezuela, transit across porous borders in Central America, marketing and smuggling by criminals in Mexico, and money laundering in banks around the world. Terrorist groups such as the Colombian guerrillas and Hezbollah are profiting from many of these transactions.

To its credit, the Obama administration has produced a comprehensive anti-TNOC strategy.[2] However, the plan has not received the intense political support and resources required for an ambitious international law-enforcement campaign. Worse yet, in many cases in Latin America, US diplomats are not applying the Obama administration’s anti–organized crime strategy. For example, they have ignored the emergence of a narcostate in Venezuela; failed to impose sanctions that might have prevented criminality in Venezuela, El Salvador, and elsewhere; and stood by as Mexico’s new president reversed antidrug cooperation with the United States and let down his guard down at home.

President Barack Obama has ample opportunity to make significant strides against TNOC close to US borders by encouraging federal prosecutors to bring indictments against leaders of the Venezuelan narcostate; using executive orders to block and freeze the assets of corrupt officials and coconspirators; encouraging Mexico, Colombia, and other states to renew their commitment to international cooperation; and using public diplomacy to rally support for this international campaign.

The indictment of corrupt officials for their involvement in bribery schemes surrounding FIFA, the governing body of international soccer, won international acclaim for a team of US federal prosecutors in Brooklyn, New York.[3] Yet the damage done by TNOC—in human carnage and exploitation, public corruption, quality of life, and economic growth—far surpasses that caused by scheming FIFA officials. By opposing billion-dollar sociopaths, the United States can promote the rule of law by demonstrating its benefits to people besieged by crime.

Transnational Organized Crime: Definition and Response

According to a 2011 strategy document produced by the National Security Council (NSC):

Transnational organized crime refers to those self-perpetuating associations of individuals who operate transnationally for the purpose of obtaining power, influence, monetary and/or commercial gains, wholly or in part by illegal means. . . . Transnational organized criminals act conspiratorially in their criminal activities and possess certain characteristics, which may include, but are not limited to:

• . . . commit violence or other acts which are likely to intimidate; . . .
• . . . exploit differences between countries to further their objectives, enriching their organization, expanding its power, and/or avoiding detection/apprehension; . . .
• . . . attempt to gain influence in government, politics, and commerce; . . .
• . . . economic gain as their primary goal; . . . and
• . . . attempt to insulate both their leadership and membership from detection, sanction, and/or prosecution through their organizational structure.[4]

President Obama’s commentary included in that 2011 NSC strategy provided a straightforward description of how TNOC has emerged around the world, highlighting many of the dangerous characteristics found in Latin America and the Caribbean. The president committed his administration “to build, balance, and integrate tools of American power to combat transnational organized crime and related threats to our national security—and to urge our partners to do the same.”[5]

The NSC strategy directs 56 “priority actions,” including enhancing US intelligence; protecting the US financial system; strengthening interdiction, investigations, and prosecutions; disrupting the drug trade; and building international cooperation.[6] Unfortunately, in each of these areas, the United States is losing ground close to home, and the damage done to US security and interests in its own hemisphere is overwhelming:

• With hostile intent, US foes in Latin America have undermined US security by building a political-criminal alliance to disrupt regional antidrug cooperation.
• They have put government agencies and resources and state-run commercial enterprises at the disposal of smuggling and money-laundering operations.
• Public officials and managers of parastatal companies have afforded criminal and terrorist organizations easy access to the US financial system by using government-controlled firms to mask unlawful transactions.
• Governments have sustained terrorism against sister republics by helping irregular armed groups produce and sell illicit drugs, launder profits, and obtain weapons.
• Corrupt officials have manipulated diplomacy and politics to support allies in other governments and to impair government and law-enforcement institutions.
• And, most important, these government-backed criminal networks have increased the flow of drugs and profits to strengthen and sustain their dangerous conspiracy.

If President Obama is serious about fighting TNOC, his administration can begin by acknowledging the interlocking, complex political challenges and security threats in the Americas and by committing US foreign policy and law enforcement to more robust, effective, and urgent countermeasures.

Read the full report.

Notes

1. Dempsey presented current threats as “2-2-2-1,” explaining, “Two heavyweights will influence our future strategy, Russia and China. Two middleweights, North Korea and Iran. Two networks, al-Qaida and transnational organized crime from our southern hemisphere. And one domain—cyber.” See Martin E. Dempsey, “Remarks at the Naval Academy to Class of 2014,” (speech, Annapolis, Maryland, March 26, 2014), http://ift.tt/1ORrlMR.
2. US National Security Council, Strategy to Combat Transnational Organized Crime: Addressing Converging Threats to National Security, July 25, 2011, http://ift.tt/1DkQzfj.
3. “Twitter Reaction to the FIFA Indictments,” New York Times, May 27, 2015, http://ift.tt/1dx99LK.
4. US National Security Council, Strategy to Combat Transnational Organized Crime.
5. Barack Obama, “Strategy to Combat Transnational Organized Crime: Letter from the President,” July 19, 2011, http://ift.tt/1JyIxqh.
6. Ibid.

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Not traditional jobs, but so what?

There are two parallel stories relating to the U.S. labor market today. The first is what I call the “traditional” labor market story, which relies on the official monthly employment data released by the Bureau of Labor Statistics. Although unemployment has declined markedly over the past several years, these data still show worryingly high levels of underemployment, as exemplified by the large number of involuntary part-time workers, discouraged workers and workers who are long-term unemployed. This labor market slack has served as a drag on wage growth. The other story might be called the “gig economy” labor market story, which is likely largely missing from the official data, but which shows up all around us, in anecdotes about Uber and Lyft, fights against Airbnb, and stories about TaskRabbit in the media. In this article, I argue that this new economy is a largely positive development, a source of optimism, and perhaps represents an opportunity for people hurting in the traditional labor market to change their economic outcomes. Here’s why.

Search and Match

A large literature in economics studies outcomes in labor markets, such as the rate of unemployment and unemployment durations, using search and matching models. These models are built using a basic assumption: the more time and energy required to find a new job, the lower the likelihood that workers will match with good firms and earn good wages. During the recession, research suggests that the costs of finding a new job became really high, perhaps because too many workers were looking for a small number of similar jobs. The evidence shows that workers had difficulty moving from low-quality to high quality jobs, and as a result, workers either remained in low paying jobs or accepted new jobs at low wage firms. According to the latest BLS data, there are approximately 2 workers for every job opening, suggesting that workers are either not willing to work at the current job for the given wage, or firms cannot find the right workers for the job because of skill mismatches or because workers do not live in the regions where jobs are being created.

If the reason for persistent underemployment is high job search costs and skills mismatch, then the new economy seems to be finding solutions. One example is the peer-to-peer digital platforms, such as Uber, which allow drivers and riders to “find” each other easily. The search and matching costs of this market seem to be significantly low. After an initial screening, Uber drivers can simply download an app in order to access these “jobs”. The app allows drivers to decide when they want to offer their services and for what periods of time. This flexibility may explain the impressive increase in Uber driver partners from zero to 160,000 over the period 2012 to 2014.

An obvious reason that these matches are more easily formed is that the cost to the “employer” of providing the job opening is close to zero. “Employers” typically do not provide any material support to the worker such as a cab, office space or even a guaranteed wage and benefits.The employees are not typical employees since they are not working fixed hours for pre-decided wages. This explains why this economy is variously called the “sharing economy”, the “gig economy” or the “collaborative consumption” economy. Everyone is in it together.

So how should we think of this new economy? Is it good or bad?

What’s Good?

According to a study of Uber conducted by Alan Krueger and Jonathan Hall of 607 drivers in December 2014, these individuals cited many reasons for their desire to be Uber drivers, but mainly they valued the flexibility and the ability to supplement family incomes. Sixty-six percent of drivers still had a full time job and eight percent had been unemployed prior to becoming Uber drivers. About 25 percent were actively looking for a full-time job and another 25 percent were looking for a part-time job. About 38 percent of people did this as their main job working more than 35 hours per week.
About 91 percent of drivers said that serving as an Uber driver helps them earn more income to better support the family, while 87 percent praised Uber’s flexibility and 74 percent said that income from driving with Uber can provide some stability while other sources of income can be unpredictable. Women drivers were more likely to mention flexibility as an important reason.
In another report for Airbnb, about 62 percent of Airbnb hosts in New York say that being able to provide this service helped them stay in their homes. Similar numbers were reported across different cities. Anecdotal evidence suggests that people using TaskRabbit who do two to three tasks a day can earn almost $3,500 a month. The full-time workers can earn as much as $6,000-$7,000 a month.

What’s Bad?

A problem often pointed out with this type of work is that workers don’t get a full package of benefits. So what will happen to these workers when they become unemployed or become temporarily or permanently disability? What about health insurance? There are two responses to this argument. First, the perfect should not be made the enemy of the good. Yes, an optimal outcome would be for the labor market recovery to be strong enough to allow these workers the chance to access full time well paying jobs. However, in this economy, too few people have that choice. Moreover, many people opt to use these jobs even when they have full-time jobs and many unemployed workers use Uber to supplement family incomes. While the situation is not ideal, the solution would not be to deprive workers of these jobs by mandating that employers provide all or nothing.

Second, should we even expect benefits to be tied to jobs? With the Affordable Care Act, workers can buy health insurance individually on exchanges instead of relying on it through their employer, which improves their ability to switch jobs. In addition, innovative technologies have made it easier for these 1099 employees to keep track of their taxes and set up tax withholdings automatically. According to Rachel Botsman, guilds like Peers.org and Freelancers Union are even creating ways for independent contractors to pool bargaining power to access discounted health insurance and telecom plans.

It is true that we don’t completely understand how and why these new markets work and it may be years before they get captured in official data. However, these new markets are clearly providing an important opportunity for workers to supplement their incomes at a time when the traditional labor market is still recovering from the Great Recession. Let’s not try to fix something that isn’t broken by enveloping the “gig economy” in political and regulatory battles. Our energies would be better spent finding innovative solutions for the economy we appear to understand.

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