Baum on Money: Wall Street Moneyball
Good morning. Pour yourself a fresh cup of coffee, sit back (unless you have an ergonomically correct computer set up) and enjoy your daily reads.
The American Action Forum has a new study on what sort of health insurance premiums young, healthy women should expect under the Affordable Care Act: A big increase in all 50 states. The average cost of a bronze, or minimum level, plan is up 193 percent, according to the AAF study. The website provides a state-by-state breakdown. (An earlier study revealed that a 30-year-old non-smoking single male would pay 260 percent more on average in 2014 compared with 2013.) The Obama administration says it needs 2.7 million "young invincibles" to enroll for the system to function. If and when these young folks negotiate the malfunctioning website, they can look forward to sticker shock on the other side.
The Washington Post's Robert Samuelson upends the self-serving myths used by both Democrats and Republicans to make their case for and against Obamacare. On the right: Conservatives complain that the U.S. is moving toward a government-run health care system. (The government already pays almost half of health-care expenses and subsidizes health care through the tax code, he says.) On the left: Obamacare is making insurance more affordable. (Actually not. It just shifts the costs.) Where does Samuelson come out? "Obamacare is backfiring on everyone."
Andrew Zatlin runs a one-man research shop, SouthBay Research in San Mateo, California, and according to the Wall Street Journal he's "knocking it out of the park." Like Billy Bean, the Oakland A's general manager, Zatlin mines huge amounts of data, "from semiconductor orders to vices like escort services," an indicator of discretionary spending. He even has a "vice index," which correlates well with consumer spending. What's his edge? He's an economist by training, but came through Silicon Valley, not Wall Street.
The debt ceiling in perspective
Every time the U.S. debt ceiling needs to be raised -- 90 times in the last 70 years -- the president reminds us that the statutory limit has nothing to do with new spending. The reason the government needs increased borrowing authority is because Uncle Sam has already committed to a higher level of spending, either through congressional appropriations or programs that are on automatic pilot. While it may seem obvious, economists Gary Becker and Edward Lazear, in a Wall Street Journal op-ed, make the case for a rule to control spending directly instead of the debt that results from it. Who can disagree? You don't fix spending by targeting the result. Only in Washington do they need to be reminded that the cart come before the horse.
For the dog who has everything
The BBC decided to investigate an MBA program offered by the American University of London, which bills itself as "a pioneer of distance learning." So the news organization submitted an application for Pete, a dog, complete with bio and previous work experience (no photo). Pete was offered an MBA degree for 4,500 U.K. pounds and no course work. The AUOL, which has a website but no physical presence in London, has some explaining to do.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)