theintercept--2020-03-06--Biden Wants to Expand the ACA. Blue States Can’t Figure Out How to Run It in the First Place.

has a plan .
Forget Medicare for All , he has argued throughout the campaign .
The most important thing to do is protect and “ build on ” the Affordable Care Act : the legislation the former vice president famously whispered was a “ big fucking deal ” as President Barack Obama put his signature on it .
has a plan .
Forget Medicare for All , he has argued throughout the campaign .
The most important thing to do is protect and “ build on ” the Affordable Care Act : the legislation the former vice president famously @ @ @ @ @ @ @ ” as President Barack Obama put his signature on it .
“ I ’ m surprised that so many Democrats are running on getting rid of it , ” Biden said in a video publicizing his health care platform .
“ The Affordable Care Act was a historic achievement for President Obama , and if I ’ m elected president , I ’ m going to do everything in my power to protect it and build on it.
” His plan to “ build ” on the ACA is mainly to further subsidize @ @ @ @ @ @ @ : to increase subsidies and put a cap on premiums , to extend subsidy eligibility , and to add a public option .
That , argues Biden , is the soundest and most fiscally prudent approach .
Yet when it comes to actually making the system operate well , there ’ s a record that can be reviewed to gauge how reasonable a promise Biden is making .
Across the country , Democrat-controlled states have had over a decade to work on improving the law , relying on existing authorities or ones they @ @ @ @ @ @ @ .
The record is clear .
Even without the partisan obstacles of a nihilistic Republican opposition , Democrats have failed to build on the Affordable Care Act — not from a lack of good intentions , but because of the fatal complexity of the law itself .
That same complexity has kept the media from reporting on Democratic failures to build on its own law , which has created the space for Biden to be able to pretend that he ’ ll be able to do so .
But ultimately , it ’ @ @ @ @ @ @ @ ’ t figured out how to get the lights to work in the house , but are confident the answer is an expensive addition .
It has been 10 years since the Affordable Care Act was signed into law and six years since the exchanges started , but many Democratic states still aren ’ t effectively managing their marketplaces .
This has not been due to malice , budget constraints , or industry opposition .
It is mainly because the system creates such a complex series of counterintuitive provisions that most state policymakers @ @ @ @ @ @ @ how to maximize every lever at their disposal .
Collectively , these regulatory decisions made in blue states have cost low-income individuals billions , and needlessly caused tens of thousands to go uninsured .
The fact that Democratic states currently have the power to make the ACA noticeably better , but simply haven ’ t because they don ’ t understand their own law , shouldn ’ t fill one with confidence about the party ’ s ability to build on it by just adding more money .
Take the way that the @ @ @ @ @ @ @ are calculated , a major source of the law ’ s problems .
An individual ’ s subsidies are determined by calculating how much is required to make the second-cheapest silver plan cost them a set percent of their income .
That ’ s a level of design complexity that should have been rooted out in the beginning ; instead , everything else is based on it .
This means , perversely , that the lower official premiums are in one ’ s area for that second-cheapest silver plan , the more low-income @ @ @ @ @ @ @ care .
This issue is compounded by the fact that the Obama administration also decided to give insurers lots of freedom in how they design their insurance plans ’ weird blend of copays , coinsurance rules , and deductibles .
All silver plans were originally supposed to cover the cost of 70 percent of average covered benefits , also known as actuarial value or AV .
The Obama administration brought that number to 68 , and the Trump administration has since lowered it to 66 percent .
While states have the ability to @ @ @ @ @ @ @ that cover nearly 72 percent , almost none do .
New York regulators require silver plans to cover at least 70 percent .
California regulators have also required insurers to only sell one standardized silver plan that covers 71.8 percent since 2014 , and finally this year , Connecticut regulators followed suit .
In many Democratic states , the silver plan on which subsidies are calculated are ones that are as close to 66 percent AV as possible .
Prohibiting these low value silver plans would cost the state nothing and would help @ @ @ @ @ @ @ almost none do it .
If the insurance market includes buyers and sellers , complexity introduced into that market gives a clear advantage in the transaction to the seller — who creates the products , writes the language describing it , and sets the prices .
They have an army of functionaries dedicated to the task ; the buyer has at most a few hours they can afford to spend looking over the impenetrable paperwork .
Insurance companies , quite naturally , are gaming the system by offering multiple , nearly identical plans @ @ @ @ @ @ @ one of their cheap , narrow-network plans rather than a competitor ’ s , making it difficult for low-income people to afford insurance from any other company .
California and now Connecticut prevent this by only allowing insurance to sell one standard silver plan , but most states , including blue states , allow it .
This not only makes insurance more expensive , it also significantly reduces an individual ’ s choice of providers and makes shopping for insurance much more confusing .
There are some efforts in other Democratic-controlled states to @ @ @ @ @ @ @ in Virginia this year , state Sen. Creigh Deeds , a Democrat , introduced a bill to prevent insurers from offering two narrow-network plans , but Deeds told The Intercept its passage is in no way guaranteed .
“ I have too many bills , ” Deeds told The Intercept .
“ I don ’ t have time to work the bill the way I want to.
” With so many issues to address this session , complex technical fixes to deal with the poor design of the ACA ’ s subsidy calculation @ @ @ @ @ @ @ of low-income residents — easily get lost in the scrum .
This mishmash of incentives ends up hurting the working class .
Last year , Colorado adopted a much-hailed reinsurance program — intended to reduce what insurances companies paid out , and therefore what they charge insurees .
While it did reduce premiums for the segment of relatively well-off people paying full price for insurance on the exchange , it actually cut subsidies for low-income individuals , driving up their individual cost .
Similarly , the public insurance plan run by Los Angeles @ @ @ @ @ @ @ some years , but in 2018 made coverage marginally more expensive for some who qualified for subsidies .
Recent efforts by Democrats to improve the insurance market in Maine by merging the individual market with the small business market could easily backfire by just increasing costs for businesses with most of the savings going to the federal government instead of individuals .
as the blue state where regulators and legislators have the best grasp of the ACA exchanges and how to build on them .
From the beginning , California set up an @ @ @ @ @ @ @ .
Instead of chasing lower official premiums , it focused on how the system impacted most exchange users .
This year , California even started providing over $ 300 million in state subsidies for those who make too much in income to qualify for federal help .
However , even California has dropped the ball in important ways .
as the blue state where regulators and legislators have the best grasp of the ACA exchanges and how to build on them .
From the beginning , California set up an active purchaser exchange @ @ @ @ @ @ @ chasing lower official premiums , it focused on how the system impacted most exchange users .
This year , California even started providing over $ 300 million in state subsidies for those who make too much in income to qualify for federal help .
However , even California has dropped the ball in important ways .
One of the best ways to get people to sign up for insurance is to make it free .
For whatever reason , even premiums as low as $ 1 a month deter thousands .
However , @ @ @ @ @ @ @ California .
Some blue states like California and Oregon require insurance to cover abortion , but federal law prohibits subsidies from paying for this coverage .
This means the lowest-cost plan after subsidies must cost individuals at least a dollar a month , despite abortion coverage costing much less than a dollar a month .
California could use state funds to directly pay for abortion coverage for exchange users , a move that would only cost a few million dollars .
To put that in perspective , California spends $ 121 million a @ @ @ @ @ @ @ to sign up for insurance .
Spending a few million dollars to make some plans free would likely increase enrollment by tens of thousands — which would bring hundreds of millions in additional federal subsidies into the state , money California is leaving on the table .
The ACA allows insurance companies to charge older people three times as much as young people for insurance .
Although states can require insurers to charge everyone the same price , only New York and Vermont do as a result of rules older than the ACA @ @ @ @ @ @ @ premiums cheaper for young people — who are less likely to need insurance — to get them to sign up .
Once again , the subsidy design of the ACA creates a huge problem .
According to the ACA , the higher official premiums are for an individual , the larger their subsidies are .
So if premiums are lower for young people , then their subsidies also go down .
For example , in Los Angeles , a 31-year-old making $ 40,000 a year would need to pay $ 220 a month @ @ @ @ @ @ @ , but a 60-year-old need only pay $ 110 a month .
The age rule makes the whole system dramatically more complex .
Insurance on the exchange is offered at four levels — bronze , silver , gold , and platinum — with the intent to make shopping easier .
Bronze plans have the highest cost-sharing but lowest premiums while Platinum plans have the lowest cost-sharing but highest premiums .
The problem is letting insurers charge people more based on their age makes designing plans and advising consumers dramatically harder .
While premiums @ @ @ @ @ @ @ and out-of-pocket limits for these plans must be the same for all ages .
Take the example above .
If the 31-year-old has medical issues that require significant care , the best overall value for them is to buy a so-called platinum plan that offers the lowest deductible .
However , this is not the case for everyone .
A 60-year-old with similar medical issues should actually buy a bronze plan because the higher premiums for a platinum will actually cost them more than they could save from having a lower deductible.The weird @ @ @ @ @ @ @ the ACA means as you get older , you should often counterintuitively switch to buying “ worse ” coverage .
This makes it impossible to design simple plans and universally applicable buyer guides , which are the linchpin of systems found in places like the Netherlands and Switzerland .
to the ACA that House Speaker Nancy Pelosi is pushing is HR 5155 .
While it increases the size of the subsidies and removes the income cliff to qualify for subsidies , it does nothing to address the problems with how the subsidies are @ @ @ @ @ @ @ .
The same is true of Biden ’ s health care plan , which increases the current subsidies but says nothing about changing the rules to end insurers gaming the system , the generational inequality the rules currently cause , or the massive incentive it would give states to game the rules .
When the ACA passed , Sen. Tom Harkin , a Democrat from Iowa , was optimistic .
“ I like to think of this bill as like a starter home , ” he said .
“ And this starter home @ @ @ @ @ @ @ improvements.
” Yet in the past decade , this old house has proven surprisingly difficult to fix up .
National Democrats who claim they want to build on the exchanges aren ’ t even talking about fixing its more obvious design issues , just throwing more money at it — all the while arguing that their solution is cheaper than a more holistic approach .
Even with ample time , not a single blue state has successfully made even all of the most obvious improvements , needlessly depriving low-income people billions in federal @ @

Illustration: Soohee Cho/The Intercept
Joe Biden
has a plan. Forget Medicare for All, he has argued throughout the campaign. The most important thing to do is protect and “build on” the Affordable Care Act: the legislation the former vice president famously whispered was a “big fucking deal” as President Barack Obama put his signature on it.
“I’m surprised that so many Democrats are running on getting rid of it,” Biden said in a video publicizing his health care platform. “The Affordable Care Act was a historic achievement for President Obama, and if I’m elected president, I’m going to do everything in my power to protect it and build on it.”
His plan to “build” on the ACA is mainly to further subsidize it while leaving the basic structure unchanged: to increase subsidies and put a cap on premiums, to extend subsidy eligibility, and to add a public option. That, argues Biden, is the soundest and most fiscally prudent approach. Yet when it comes to actually making the system operate well, there’s a record that can be reviewed to gauge how reasonable a promise Biden is making. Across the country, Democrat-controlled states have had over a decade to work on improving the law, relying on existing authorities or ones they could acquire legislatively or through administrative waiver.
The record is clear. Even without the partisan obstacles of a nihilistic Republican opposition, Democrats have failed to build on the Affordable Care Act — not from a lack of good intentions, but because of the fatal complexity of the law itself. That same complexity has kept the media from reporting on Democratic failures to build on its own law, which has created the space for Biden to be able to pretend that he’ll be able to do so. But ultimately, it’s as if the party still hasn’t figured out how to get the lights to work in the house, but are confident the answer is an expensive addition.
It has been 10 years since the Affordable Care Act was signed into law and six years since the exchanges started, but many Democratic states still aren’t effectively managing their marketplaces. This has not been due to malice, budget constraints, or industry opposition. It is mainly because the system creates such a complex series of counterintuitive provisions that most state policymakers don’t understand the law or how to maximize every lever at their disposal.
Collectively, these regulatory decisions made in blue states have cost low-income individuals billions, and needlessly caused tens of thousands to go uninsured. The fact that Democratic states currently have the power to make the ACA noticeably better, but simply haven’t because they don’t understand their own law, shouldn’t fill one with confidence about the party’s ability to build on it by just adding more money.
Take the way that the government’s subsidies for lower-income people are calculated, a major source of the law’s problems. An individual’s subsidies are determined by calculating how much is required to make the second-cheapest silver plan cost them a set percent of their income. That’s a level of design complexity that should have been rooted out in the beginning; instead, everything else is based on it. This means, perversely, that the lower official premiums are in one’s area for that second-cheapest silver plan, the more low-income people actually have to pay for health care.
This issue is compounded by the fact that the Obama administration also decided to give insurers lots of freedom in how they design their insurance plans’ weird blend of copays, coinsurance rules, and deductibles. All silver plans were originally supposed to cover the cost of 70 percent of average covered benefits, also known as actuarial value or AV. The Obama administration brought that number to 68, and the Trump administration has since lowered it to 66 percent.
While states have the ability to require insurance companies to offer silver plans that cover nearly 72 percent, almost none do. New York regulators require silver plans to cover at least 70 percent. California regulators have also required insurers to only sell one standardized silver plan that covers 71.8 percent since 2014, and finally this year, Connecticut regulators followed suit. In many Democratic states, the silver plan on which subsidies are calculated are ones that are as close to 66 percent AV as possible. Prohibiting these low value silver plans would cost the state nothing and would help both consumers and insurance companies, but almost none do it.
Insurance companies, quite naturally, are gaming the system by offering multiple, nearly identical plans.
If the insurance market includes buyers and sellers, complexity introduced into that market gives a clear advantage in the transaction to the seller — who creates the products, writes the language describing it, and sets the prices. They have an army of functionaries dedicated to the task; the buyer has at most a few hours they can afford to spend looking over the impenetrable paperwork. Insurance companies, quite naturally, are gaming the system by offering multiple, nearly identical plans. This ensures that subsidies go to one of their cheap, narrow-network plans rather than a competitor’s, making it difficult for low-income people to afford insurance from any other company. California and now Connecticut prevent this by only allowing insurance to sell one standard silver plan, but most states, including blue states, allow it. This not only makes insurance more expensive, it also significantly reduces an individual’s choice of providers and makes shopping for insurance much more confusing.
There are some efforts in other Democratic-controlled states to stop this practice. For example, in Virginia this year, state Sen. Creigh Deeds, a Democrat, introduced a bill to prevent insurers from offering two narrow-network plans, but Deeds told The Intercept its passage is in no way guaranteed. “I have too many bills,” Deeds told The Intercept. “I don’t have time to work the bill the way I want to.” With so many issues to address this session, complex technical fixes to deal with the poor design of the ACA’s subsidy calculation — to ultimately help a small share of low-income residents — easily get lost in the scrum.
This mishmash of incentives ends up hurting the working class. Last year, Colorado adopted a much-hailed reinsurance program — intended to reduce what insurances companies paid out, and therefore what they charge insurees. While it did reduce premiums for the segment of relatively well-off people paying full price for insurance on the exchange, it actually cut subsidies for low-income individuals, driving up their individual cost. Similarly, the public insurance plan run by Los Angeles made insurance cheaper for higher-income people in some years, but in 2018 made coverage marginally more expensive for some who qualified for subsidies. Recent efforts by Democrats to improve the insurance market in Maine by merging the individual market with the small business market could easily backfire by just increasing costs for businesses with most of the savings going to the federal government instead of individuals.
Photo: David McNew/Getty Images
California stands out
as the blue state where regulators and legislators have the best grasp of the ACA exchanges and how to build on them. From the beginning, California set up an active purchaser exchange and standardized its plans. Instead of chasing lower official premiums, it focused on how the system impacted most exchange users. This year, California even started providing over $300 million in state subsidies for those who make too much in income to qualify for federal help. However, even California has dropped the ball in important ways.
One of the best ways to get people to sign up for insurance is to make it free. For whatever reason, even premiums as low as $1 a month deter thousands. However, free plans don’t exist in California. Some blue states like California and Oregon require insurance to cover abortion, but federal law prohibits subsidies from paying for this coverage. This means the lowest-cost plan after subsidies must cost individuals at least a dollar a month, despite abortion coverage costing much less than a dollar a month. California could use state funds to directly pay for abortion coverage for exchange users, a move that would only cost a few million dollars. To put that in perspective, California spends $121 million a year just on outreach to encourage people to sign up for insurance. Spending a few million dollars to make some plans free would likely increase enrollment by tens of thousands — which would bring hundreds of millions in additional federal subsidies into the state, money California is leaving on the table.
The ACA allows insurance companies to charge older people three times as much as young people for insurance. Although states can require insurers to charge everyone the same price, only New York and Vermont do as a result of rules older than the ACA. The idea was to make insurance premiums cheaper for young people — who are less likely to need insurance — to get them to sign up. Once again, the subsidy design of the ACA creates a huge problem.
According to the ACA, the higher official premiums are for an individual, the larger their subsidies are. So if premiums are lower for young people, then their subsidies also go down. For example, in Los Angeles, a 31-year-old making $40,000 a year would need to pay $220 a month for the cheapest bronze plan after subsidies, but a 60-year-old need only pay $110 a month.
The age rule makes the whole system dramatically more complex. Insurance on the exchange is offered at four levels — bronze, silver, gold, and platinum — with the intent to make shopping easier. Bronze plans have the highest cost-sharing but lowest premiums while Platinum plans have the lowest cost-sharing but highest premiums. The problem is letting insurers charge people more based on their age makes designing plans and advising consumers dramatically harder. While premiums can vary by age, the deductibles and out-of-pocket limits for these plans must be the same for all ages. Take the example above. If the 31-year-old has medical issues that require significant care, the best overall value for them is to buy a so-called platinum plan that offers the lowest deductible. However, this is not the case for everyone. A 60-year-old with similar medical issues should actually buy a bronze plan because the higher premiums for a platinum will actually cost them more than they could save from having a lower deductible.The weird interaction of the many regulatory elements of the ACA means as you get older, you should often counterintuitively switch to buying “worse” coverage. This makes it impossible to design simple plans and universally applicable buyer guides, which are the linchpin of systems found in places like the Netherlands and Switzerland.
The big fix to the ACA that House Speaker Nancy Pelosi is pushing is HR 5155. While it increases the size of the subsidies and removes the income cliff to qualify for subsidies, it does nothing to address the problems with how the subsidies are calculated or how insurers game the system. The same is true of Biden’s health care plan, which increases the current subsidies but says nothing about changing the rules to end insurers gaming the system, the generational inequality the rules currently cause, or the massive incentive it would give states to game the rules.
When the ACA passed, Sen. Tom Harkin, a Democrat from Iowa, was optimistic. “I like to think of this bill as like a starter home,” he said. “And this starter home has plenty of room for additions and improvements.” Yet in the past decade, this old house has proven surprisingly difficult to fix up. National Democrats who claim they want to build on the exchanges aren’t even talking about fixing its more obvious design issues, just throwing more money at it — all the while arguing that their solution is cheaper than a more holistic approach. Even with ample time, not a single blue state has successfully made even all of the most obvious improvements, needlessly depriving low-income people billions in federal help.


theintercept--2020-03-06--Elizabeth Warren Should Endorse Bernie Sanders — Not for Him, but for Herself and Her Mission

2016 election , Elizabeth Warren made a calculation .
She had spent the last several years in the U.S. Senate building a base of power and wielding that influence to shape White House personnel and policy decisions , particularly in the Treasury Department .
She planned to do the same when it came to Hillary Clinton who , all of Washington presumed , was going to be the Democratic nominee for president .
Warren first met with Clinton in December 2014 and urged Clinton not to surround herself with Wall Street bankers .
The Clinton campaign followed up with her @ @ @ @ @ @ @ was also chief of staff on Warren ’ s 2020 campaign .
At the time , Warren was in the midst of a high-profile campaign against an Obama-nominated banker , Antonio Weiss , to the Treasury Department — a fight that she would later win .
Geldon brought it up .
“ He was intently focused on personnel issues , laid out a detailed case against the Bob Rubin school of Democratic policy makers , was very critical of the Obama administration ’ s choices , and explained at length the opposition to @ @ @ @ @ @ @ official in an email describing the conversation , later published by WikiLeaks .
“ We then carefully went through a list of people they do like , which EW sent over to HRC earlier … Over all , it was a polite and engaged but not exactly warm conversation .
They seem wary – and pretty convinced that the Rubin folks have the inside track with us whether we realize it yet or not – but open to engagement and to be proven wrong.
” In 2016 , Warren met with Clinton again @ @ @ @ @ @ @ the revolving door between Wall Street and Washington , making the pressure public at a speech at the Center for American Progress .
“ Personnel is policy , ” she said .
“ When we talk about personnel , we don ’ t mean advisers who just pay lip service to Hillary ’ s bold agenda , coupled with a sigh , a knowing glance , and a twiddling of thumbs until it ’ s time for the next swing through the revolving door , serving government then going back to the very @ @ @ @ @ @ @ ’ t mean Citigroup or Morgan Stanley or BlackRock getting to choose who runs the economy in this country so they can capture our government .
No.
” BlackRock was a reference to CEO Larry Fink , a rumored choice for Clinton ’ s Treasury secretary .
In order to win influence over Clinton ’ s personnel decisions , Warren believed at the time , she needed both carrots and sticks .
By spiking Obama nominees , she had proven that she had a stick .
The carrot was her decision not to @ @ @ @ @ @ @ , despite an ideological affinity among the two .
Sanders wasn ’ t going to win , Warren calculated , so she ought to husband her political capital and put it to the best use influencing Clinton .
Shortly after the Associated Press called the primary for Clinton , and after their second meeting , Warren endorsed .
Warren , of course , would never get to test out her theory , as Clinton never got the chance to put together a cabinet , though the names floated toward the end of the @ @ @ @ @ @ @ still bad — than they would have been without Warren ’ s pressure .
( Fink was swapped for Sheryl Sandberg or Lael Brainard . )
And the decision came at a cost to Warren , as Sanders did better in the primary than most expected , and Warren took fire for a lack of loyalty , creating bad blood that spilled into the 2020 cycle .
As Warren weighs again whether to endorse Sanders or stay neutral — allies are certain she would not endorse Joe Biden while the contest is still @ @ @ @ @ @ @ play again .
Is it better to endorse Sanders or preserve capital to influence Biden ?
this kind of calculation is that it relies on an utterly flawed premise : that influence is best won in return for political favors .
To the extent that Clinton would have moderated her hiring of Wall Street executives as president , she would not have done so out of gratitude toward Warren , but out of a fear of what Warren was capable of .
In 2013 , as a member of the Banking Committee with @ @ @ @ @ @ @ and outside , she had managed to block the appointment of Larry Summers to be chair of the Federal Reserve .
That ’ s where her power came from : sticks , not carrots .
And she was able to block Summers and other nominees because of her rock-solid alliance with activist elements of organized labor , outside progressive groups , and the broad social movement they represent .
Her 2012 Senate campaign had smashed records for small donors .
The stronger her bond to that outside movement , the more power she @ @ @ @ @ @ @ power she had on the inside , the more good she could do for people on the outside .
Indeed , the amount of harm she may have prevented by the single act of blocking the mercurial Summers from the Fed is incalculable .
From Warren ’ s perspective , then , the question of whether to endorse Sanders doesn ’ t need to be about what ’ s best for Sanders .
It should be about her — and how she can position herself to do the most good .
And the @ @ @ @ @ @ @ movement broadly , the stronger she is .
There are some who argue that Warren should refrain from endorsing Sanders and make a play to be Biden ’ s running mate — which would be a powerful position , given Biden ’ s declining faculties and well-known lazy streak .
But that argument also presumes that the best way for Warren to curry influence with Biden is by doing him a political favor ( it also presumes that Biden would ever choose her , a dubious assumption . )
But Warren ’ s @ @ @ @ @ @ @ she ’ s capable of doing to him politically , and for him politically — not in the goodwill a nonendorsement of Sanders might generate with the Biden camp .
Warren ’ s longterm threat to Biden and the party establishment is only as strong as her ties to the progressive movement , and the same is true of an eventual endorsement of Biden .
Her value in a general election to Biden is her ability to bring Biden the progressive vote and help him unite the disparate wings of the party .
@ @ @ @ @ @ @ valuable to Biden as an eventual endorser if she can actually bring progressives with her , and the most effective way she can do that is if she has endorsed and campaigned for Sanders .
The same calculation was true in 2016 .
Warren ’ s endorsement of Clinton would have been more valuable to Clinton had Warren originally endorsed Sanders , and would have had more of a unifying effect than it ultimately did .
Had Warren endorsed Sanders first , she ’ d likely have been able to bring more Sanders @ @ @ @ @ @ @ Clinton .
The other possibility — that with Warren ’ s endorsement , Sanders might surge back and claim the nomination — would also be a boon to Warren , who could name her position ( s ) in the new administration .
And , indeed , with an unstable president and an unpredictable pandemic , any outcome is possible .
But given the possible head-to-heads in the general election , and Biden ’ s demonstrated inability to campaign effectively , there ’ s more likely to be an administration for Warren to @ @ @ @ @ @ @ But , again , if Sanders falls short , and Warren and Sanders both endorse Biden , she will , paradoxically , have done Biden a significant favor by previously endorsing against him .
After a bruising primary , endorsing Sanders might not be what she wants to do .
But Warren should do it not for him , but for herself — and , as Sanders might say , for us .

Photo: Bridget Benett/AFP via Getty Images
Ahead of the 2016 election, Elizabeth Warren made a calculation. She had spent the last several years in the U.S. Senate building a base of power and wielding that influence to shape White House personnel and policy decisions, particularly in the Treasury Department. She planned to do the same when it came to Hillary Clinton who, all of Washington presumed, was going to be the Democratic nominee for president.
Warren first met with Clinton in December 2014 and urged Clinton not to surround herself with Wall Street bankers. The Clinton campaign followed up with her chief aide, Dan Geldon, who was also chief of staff on Warren’s 2020 campaign. At the time, Warren was in the midst of a high-profile campaign against an Obama-nominated banker, Antonio Weiss, to the Treasury Department — a fight that she would later win. Geldon brought it up.
Is it better to endorse Sanders or preserve capital to influence Biden?
“He was intently focused on personnel issues, laid out a detailed case against the Bob Rubin school of Democratic policy makers, was very critical of the Obama administration’s choices, and explained at length the opposition to Antonio Weiss,” wrote a Clinton official in an email describing the conversation, later published by WikiLeaks. “We then carefully went through a list of people they do like, which EW sent over to HRC earlier … Over all, it was a polite and engaged but not exactly warm conversation. They seem wary – and pretty convinced that the Rubin folks have the inside track with us whether we realize it yet or not – but open to engagement and to be proven wrong.”
In 2016, Warren met with Clinton again and reiterated the demand to shut down the revolving door between Wall Street and Washington, making the pressure public at a speech at the Center for American Progress.
“Personnel is policy,” she said. “When we talk about personnel, we don’t mean advisers who just pay lip service to Hillary’s bold agenda, coupled with a sigh, a knowing glance, and a twiddling of thumbs until it’s time for the next swing through the revolving door, serving government then going back to the very same industries they regulate. We don’t mean Citigroup or Morgan Stanley or BlackRock getting to choose who runs the economy in this country so they can capture our government. No.”
BlackRock was a reference to CEO Larry Fink, a rumored choice for Clinton’s Treasury secretary. In order to win influence over Clinton’s personnel decisions, Warren believed at the time, she needed both carrots and sticks. By spiking Obama nominees, she had proven that she had a stick. The carrot was her decision not to endorse Sen. Bernie Sanders during the primary, despite an ideological affinity among the two. Sanders wasn’t going to win, Warren calculated, so she ought to husband her political capital and put it to the best use influencing Clinton. Shortly after the Associated Press called the primary for Clinton, and after their second meeting, Warren endorsed.
Warren, of course, would never get to test out her theory, as Clinton never got the chance to put together a cabinet, though the names floated toward the end of the campaign were arguably less bad — though still bad — than they would have been without Warren’s pressure. (Fink was swapped for Sheryl Sandberg or Lael Brainard.)
And the decision came at a cost to Warren, as Sanders did better in the primary than most expected, and Warren took fire for a lack of loyalty, creating bad blood that spilled into the 2020 cycle.
As Warren weighs again whether to endorse Sanders or stay neutral — allies are certain she would not endorse Joe Biden while the contest is still alive — that same calculation is at play again. Is it better to endorse Sanders or preserve capital to influence Biden?
Photo: Mark Peterson/Redux
The problem with this kind of calculation is that it relies on an utterly flawed premise: that influence is best won in return for political favors. To the extent that Clinton would have moderated her hiring of Wall Street executives as president, she would not have done so out of gratitude toward Warren, but out of a fear of what Warren was capable of. In 2013, as a member of the Banking Committee with a coalition of allies, both inside and outside, she had managed to block the appointment of Larry Summers to be chair of the Federal Reserve. That’s where her power came from: sticks, not carrots.
And she was able to block Summers and other nominees because of her rock-solid alliance with activist elements of organized labor, outside progressive groups, and the broad social movement they represent. Her 2012 Senate campaign had smashed records for small donors. The stronger her bond to that outside movement, the more power she had on the inside.
Had Warren endorsed Sanders first, she’d likely have been able to bring more Sanders people with her when she switched to Clinton.
The more power she had on the inside, the more good she could do for people on the outside. Indeed, the amount of harm she may have prevented by the single act of blocking the mercurial Summers from the Fed is incalculable.
From Warren’s perspective, then, the question of whether to endorse Sanders doesn’t need to be about what’s best for Sanders. It should be about her — and how she can position herself to do the most good. And the stronger association Warren has with the progressive movement broadly, the stronger she is.
There are some who argue that Warren should refrain from endorsing Sanders and make a play to be Biden’s running mate — which would be a powerful position, given Biden’s declining faculties and well-known lazy streak. But that argument also presumes that the best way for Warren to curry influence with Biden is by doing him a political favor (it also presumes that Biden would ever choose her, a dubious assumption.)
But Warren’s real power with Biden rests in what she’s capable of doing to him politically, and for him politically — not in the goodwill a nonendorsement of Sanders might generate with the Biden camp.
Warren’s longterm threat to Biden and the party establishment is only as strong as her ties to the progressive movement, and the same is true of an eventual endorsement of Biden. Her value in a general election to Biden is her ability to bring Biden the progressive vote and help him unite the disparate wings of the party. Clearly, then, Warren is more valuable to Biden as an eventual endorser if she can actually bring progressives with her, and the most effective way she can do that is if she has endorsed and campaigned for Sanders. The same calculation was true in 2016. Warren’s endorsement of Clinton would have been more valuable to Clinton had Warren originally endorsed Sanders, and would have had more of a unifying effect than it ultimately did. Had Warren endorsed Sanders first, she’d likely have been able to bring more Sanders people with her when she switched to Clinton.
The other possibility — that with Warren’s endorsement, Sanders might surge back and claim the nomination — would also be a boon to Warren, who could name her position(s) in the new administration. And, indeed, with an unstable president and an unpredictable pandemic, any outcome is possible. But given the possible head-to-heads in the general election, and Biden’s demonstrated inability to campaign effectively, there’s more likely to be an administration for Warren to serve with Sanders as the nominee.
But, again, if Sanders falls short, and Warren and Sanders both endorse Biden, she will, paradoxically, have done Biden a significant favor by previously endorsing against him.
After a bruising primary, endorsing Sanders might not be what she wants to do. But Warren should do it not for him, but for herself — and, as Sanders might say, for us.


theintercept--2020-03-06--Coronavirus Matters, the Stock Market Doesn’t, and Thinking It Does May Literally Kill Us

It ’ s easy to criticize Santelli , but he was just taking the logic of America ’ s obsession with the stock market a few steps further than normal .
For decades , whenever we ’ ve faced a choice between the reality of human beings and little numbers on a screen , we ’ ve always gone with the little numbers .
Yesterday CNBC ’ s Rick Santelli went further , staking out the position that stocks losing value is actually more terrifying than millions of deaths .
“ Maybe we ’ d be just better off if @ @ @ @ @ @ @ Santelli sagely explained .
That way , lots of people would expire quickly , thereby removing the uncertainty that ’ s been plaguing investors .
If you ’ ve been spending any time online or watching cable TV , you ’ ve gotten the message that humanity now faces two grave threats — a novel coronavirus and the crashing stock market — of roughly equal importance .
This is something profound about our mental weather .
A huge fraction of America ’ s mental energy , and definitely the Trump administration ’ s @ @ @ @ @ @ @ market ’ s gyrations .
This in itself has been debilitating for us , no matter the direction in which it ’ s gyrated .
Now the coronavirus may be about to teach us a harsh lesson in what this fixation has done to us .
The glare of the stock market ’ s imaginary wealth has blinded us to what real wealth actually is .
To understand this , you have to look at some basic facts about what the stock market is , and what it isn ’ t .
After @ @ @ @ @ @ @ 2001 , Courtney Love , lead singer for Hole and Kurt Cobain ’ s widow , announced that she was buying $ 200,000 worth of stock to support the United States .
While her intentions were good , this was also completely pointless .
You can understand her mistake , though .
To be alive in America is to be assaulted by endless high-decibel blather about the critical importance of the stock market .
There are entire TV channels devoted to it , new highs are always celebrated on network news , it @ @ @ @ @ @ @ newspapers , it ’ s on an app that comes preinstalled on your iPhone , and the president is constantly yelling at you about it .
Yet the stock market has little direct relevance for regular people .
By some estimates , the richest 10 percent of U.S. households account for over 80 percent of American stock ownership .
The richest 1 percent by themselves own half of that , or 40 percent of stock .
Half of Americans own no stock at all .
Once you understand this , the media ’ @ @ @ @ @ @ @ .
It ’ s as though half of the national news was yammering about the weather in Greenwich , Connecticut .
( “ Our top story on ABC World News Tonight : This afternoon Greenwich was unseasonably warm.
” ) And no one notices how bizarre this is .
By contrast , think about economic facts with concrete relevance to the lives of normal people : the unemployment rate , whether the middle class is getting raises , if the minimum wage is going up , strikes , health care , workplace safety @ @ @ @ @ @ @ ticker about that .
The Stock Market vs. You That ’ s not to say that great news for the stock market never matters for regular Americans .
But when it does , it can be bad for most of us .
The economic journalist Doug Henwood explains it straightforwardly : “ The reason the stock market has done so well for all these years is precisely because the working class hasn ’ t. ” In the 36 years from the end of World War II to Ronald Reagan ’ s inauguration in @ @ @ @ @ @ @ American workers almost doubled ; it went up about 100 percent .
Meanwhile , the return on the S & P 500 over that period ( with dividends reinvested ) was 700 percent .
In the 39 years since , the median compensation of workers has inched upwards perhaps 30 percent .
But during this time the S & P has gone up over 2,100 percent — that is , three times what it did in the decades after World War II .
But don ’ t just take Henwood ’ s word @ @ @ @ @ @ @ 18th century economist Adam Smith is so beloved by the U.S. right that staffers in Reagan ’ s White House wore Adam Smith ties .
Here ’ s what Smith wrote in his most famous book , “ The Wealth of Nations ” : “ The rate of profit does not , like rent and wages , rise with the prosperity , and fall with the declension of society .
On the contrary , it is naturally low in rich , and high in poor countries , and it is always highest in @ @ @ @ @ @ @ ruin.
” The significance of this for the stock market is that the value of a stock is , in theory , the value of its current and future cash flow — essentially the value of the company ’ s profits .
But as Smith wrote , high corporate profits aren ’ t a good sign for the rest of us .
This is true for both straightforward and complicated reasons .
The straightforward one is that profits are partly a measure of the bargaining power between workers and stockholders .
In poor @ @ @ @ @ @ @ less leverage , so they can ’ t get their share of the money , leaving more left over for their employers .
After decades of attacks on unions , the U.S. has started to experience this dynamic .
Corporate America has become ruthlessly successful at holding down the compensation of their workers and using the money saved for their own luscious , luscious profits .
From World War II to 2000 , after-tax corporate profits generally accounted for 5 to 7 percent of the U.S. gross domestic product .
It ’ s @ @ @ @ @ @ @ , and still stands at almost 9 percent .
On the other side of the ledger , compensation for corporate employees as a percentage of GDP rose steadily from World War II until 2000 .
Since then it ’ s collapsed , with a slight rebound recently .
As Henwood points out , even this makes the situation appear better than it is , since the massive pay packages of corporate executives are counted as employee compensation .
Corporations can also wring profits from countries in more complex ways .
Every business enterprise @ @ @ @ @ @ @ excel at seizing the value for themselves , and forcing their societies to pay the costs .
The fossil fuel industry is the world ’ s premier example : The value it generates goes to stockholders and executives , while it offloads the cost of destroying human civilization onto the planet ’ s other seven billion people .
Financial Bubbles Feel Great Until They Don ’ t The U.S. has experienced two gigantic financial bubbles in the past 20 years : the dot-com bubble and the housing bubble .
Both bubbles felt fantastic @ @ @ @ @ @ @ that they were suddenly wealthy .
Then the bubbles burst , wreaking extraordinary damage on regular Americans .
When the smoke cleared , it was obvious that the only people who ’ d gotten rich were various well-dressed charlatans .
Measured by the stock market ’ s recent highs , it was in similar bubble territory , and in fact still is .
A standard way to measure the cost of a stock is its P/E , or price-earnings , ratio : the ratio of the cost of a share to the company @ @ @ @ @ @ @ to one version of the P/E ratio , over the past 150 years the average of the S & P 500 has been about 15 .
Until its recent face-plant , the S & P was trading at a P/E of about 33 , so more than double the historical average .
By the end of business on Thursday , it was still over 28 .
Thus stocks almost certainly remain overpriced and could fall much further .
Another way to look at the value of stocks is the ratio of the total @ @ @ @ @ @ @ the U.S. gross domestic product .
This rarely reached 100 percent until the last 1990s .
Before current selloff , the stock market was reporting that America ’ s public corporations are worth 200 percent of the U.S. GDP , the highest level ever .
The good news is that , again , the stock market has little direct relation to the underlying economy .
It could continue falling with few consequences except for an uptick in anguished Trump tweets .
All that should be reassuring for anyone with standard anxiety about the @ @ @ @ @ @ @ feeling a deep , non-standard anxiety about it , a kind of anxiety that ’ s never on TV .
The problem with the stock market is not it going up , down , or sideways .
It ’ s what our obsession with it has done to us .
It ’ s that paying attention to capitalism has made us think like capitalists .
It exerts a gravitational-like pull on our psyches , nudging us psychologically to the right and shredding our instincts for social solidarity .
First , there ’ s @ @ @ @ @ @ @ even a modest amount of stock , you ’ ll likely find yourself ambivalent about companies squeezing as much money as possible out of their employees , even if you ’ re one of them .
Rather than thinking about how to work with everyone else to stop the Fortune 500 from ravaging America , you ’ re hoping to get your teeny-tiny personal share from the ravages .
“ A lot of middle and upper middle-income people identify with the stock market ’ s fate , ” says Henwood .
“ Instead @ @ @ @ @ @ @ , they see it as their friend.
” But a true friend would not incentivize you to profit from climate collapse .
You know you should join a mass movement to stop global warming , but … your Exxon stock is doing great , so you figure that when the Antarctic ice sheet collapses , you can sell it and buy a house in Manitoba .
Next there ’ s the perspective the stock market encourages everyone to adopt about financial bubbles .
Consider what it actually means for anyone panicking about the @ @ @ @ @ @ @ .
The sad fact is that their 401 ( k ) ’ s value was never real , just as the cheap homes built in Florida suburbs at the height of the housing bubble were never worth $ 1.2 million apiece .
What everyone has been counting on — hopefully without consciously realizing it — was that stocks would remain overvalued until after they sold them in retirement .
That is , they were depending on being able to take advantage of someone else by selling them an overpriced asset , like a @ @ @ @ @ @ @ makes us see others not as fellow citizens with whom we ’ re all in this together , but as potential marks .
You can only buy low and sell high if you successfully fool others into selling low and buying high .
The economist John Maynard Keynes famously described this type of “ investing ” long ago : “ the actual , private object of the most skilled investment today is … to outwit the crowd , and to pass the bad , or depreciating , half-crown to the other fellow.
” @ @ @ @ @ @ @ Market May Literally Kill You Before a new strain of coronavirus began sprinting around the world , all these problems with the stock market may have seemed abstract .
But they are now extremely concrete .
Think about what we could have done to prepare for this moment , if we ’ d been less mesmerized by little numbers on screens and paid more attention to the reality right in front of us .
One aspect of reality is that some diseases are extremely contagious and can kill you .
That ’ s @ @ @ @ @ @ @ better off right now if we had robust , universal health care , even the people who had to sell some of their shares in Apple to help pay for it .
Likewise , scientists have been warning for decades about exactly this kind of infectious disease .
One of their suggestions was for the U.S. government to help pay to improve the public health infrastructure in poorer countries .
We may all quite soon regret not doing this , even if it would have required making Amazon pay a tax rate greater @ @ @ @ @ @ @ stock price .
And if we ’ d been less transfixed by what corporations were doing , we could have realized what they can ’ t do .
In the imaginary world of economic textbooks , a huge pharmaceutical company would have poured tens of billions into developing the capacity to more quickly perfect and manufacture vaccines in huge volumes , so that the omniscient stock market would reward them for their prescience .
Here on Earth , the stock market would have punished any company that took such a big risk with @ @ @ @ @ @ @ ’ t see that the only way to better prepare for the new coronavirus would have been with much greater government action .
And there are pernicious effects of our stock market love affair that are even more subtle .
When deciding what to do with their lives , young people learn what to value from adults , and what adults have been telling them is that what ’ s valuable is corporate wealth .
Imagine how much better we ’ d all feel now if 1,000 of America ’ s smartest financial @ @ @ @ @ @ @ important , respected thing they could do was become an epidemiologist .
But instead of investing in genuine wealth , the kind of wealth that keeps us alive , we preferred to chase the phantom wealth of the stock market .
Now as the phantom wealth dissolves , we may come face to face with our decision to be poor in what truly matters .

If you’ve been spending any time online or watching cable TV, you’ve gotten the message that humanity now faces two grave threats — a novel coronavirus and the crashing stock market — of roughly equal importance.
Yesterday CNBC’s Rick Santelli went further, staking out the position that stocks losing value is actually more terrifying than millions of deaths. “Maybe we’d be just better off if we gave it to everybody,” Santelli sagely explained. That way, lots of people would expire quickly, thereby removing the uncertainty that’s been plaguing investors.
It’s easy to criticize Santelli, but he was just taking the logic of America’s obsession with the stock market a few steps further than normal. For decades, whenever we’ve faced a choice between the reality of human beings and little numbers on a screen, we’ve always gone with the little numbers.
This is something profound about our mental weather. A huge fraction of America’s mental energy, and definitely the Trump administration’s attention, are consumed by the stock market’s gyrations. This in itself has been debilitating for us, no matter the direction in which it’s gyrated.
Now the coronavirus may be about to teach us a harsh lesson in what this fixation has done to us. The glare of the stock market’s imaginary wealth has blinded us to what real wealth actually is.
To understand this, you have to look at some basic facts about what the stock market is, and what it isn’t.
Screaming About Stocks
After the terrorist attacks of September 11, 2001, Courtney Love, lead singer for Hole and Kurt Cobain’s widow, announced that she was buying $200,000 worth of stock to support the United States. While her intentions were good, this was also completely pointless.
You can understand her mistake, though. To be alive in America is to be assaulted by endless high-decibel blather about the critical importance of the stock market. There are entire TV channels devoted to it, new highs are always celebrated on network news, it’s on the front page of newspapers, it’s on an app that comes preinstalled on your iPhone, and the president is constantly yelling at you about it.
Yet the stock market has little direct relevance for regular people. By some estimates, the richest 10 percent of U.S. households account for over 80 percent of American stock ownership. The richest 1 percent by themselves own half of that, or 40 percent of stock. Half of Americans own no stock at all.
Once you understand this, the media’s stock market mania is maddeningly hilarious. It’s as though half of the national news was yammering about the weather in Greenwich, Connecticut. (“Our top story on ABC World News Tonight: This afternoon Greenwich was unseasonably warm.”) And no one notices how bizarre this is.
By contrast, think about economic facts with concrete relevance to the lives of normal people: the unemployment rate, whether the middle class is getting raises, if the minimum wage is going up, strikes, health care, workplace safety. There’s no cable TV ticker about that.
The Stock Market vs. You
That’s not to say that great news for the stock market never matters for regular Americans. But when it does, it can be bad for most of us. The economic journalist Doug Henwood explains it straightforwardly: “The reason the stock market has done so well for all these years is precisely because the working class hasn’t.”
Consider these basic numbers:
In the 36 years from the end of World War II to Ronald Reagan’s inauguration in January 1981, the median compensation for American workers almost doubled; it went up about 100 percent. Meanwhile, the return on the S&P 500 over that period (with dividends reinvested) was 700 percent.
In the 39 years since, the median compensation of workers has inched upwards perhaps 30 percent. But during this time the S&P has gone up over 2,100 percent — that is, three times what it did in the decades after World War II.
But don’t just take Henwood’s word that these things are connected. The 18th century economist Adam Smith is so beloved by the U.S. right that staffers in Reagan’s White House wore Adam Smith ties. Here’s what Smith wrote in his most famous book, “The Wealth of Nations”: “The rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin.”
The significance of this for the stock market is that the value of a stock is, in theory, the value of its current and future cash flow — essentially the value of the company’s profits. But as Smith wrote, high corporate profits aren’t a good sign for the rest of us. This is true for both straightforward and complicated reasons.
The straightforward one is that profits are partly a measure of the bargaining power between workers and stockholders. In poor countries, workers are poor and have less leverage, so they can’t get their share of the money, leaving more left over for their employers.
After decades of attacks on unions, the U.S. has started to experience this dynamic. Corporate America has become ruthlessly successful at holding down the compensation of their workers and using the money saved for their own luscious, luscious profits.
From World War II to 2000, after-tax corporate profits generally accounted for 5 to 7 percent of the U.S. gross domestic product. It’s since spiked as high as 10.6 percent, and still stands at almost 9 percent.
On the other side of the ledger, compensation for corporate employees as a percentage of GDP rose steadily from World War II until 2000. Since then it’s collapsed, with a slight rebound recently. As Henwood points out, even this makes the situation appear better than it is, since the massive pay packages of corporate executives are counted as employee compensation.
Corporations can also wring profits from countries in more complex ways. Every business enterprise creates both values and costs. Corporations excel at seizing the value for themselves, and forcing their societies to pay the costs. The fossil fuel industry is the world’s premier example: The value it generates goes to stockholders and executives, while it offloads the cost of destroying human civilization onto the planet’s other seven billion people.
Financial Bubbles Feel Great Until They Don’t
The U.S. has experienced two gigantic financial bubbles in the past 20 years: the dot-com bubble and the housing bubble. Both bubbles felt fantastic as they inflated, convincing many people that they were suddenly wealthy. Then the bubbles burst, wreaking extraordinary damage on regular Americans. When the smoke cleared, it was obvious that the only people who’d gotten rich were various well-dressed charlatans.
Measured by the stock market’s recent highs, it was in similar bubble territory, and in fact still is. A standard way to measure the cost of a stock is its P/E, or price-earnings, ratio: the ratio of the cost of a share to the company’s earnings per share. According to one version of the P/E ratio, over the past 150 years the average of the S&P 500 has been about 15.
Until its recent face-plant, the S&P was trading at a P/E of about 33, so more than double the historical average. By the end of business on Thursday, it was still over 28. Thus stocks almost certainly remain overpriced and could fall much further.
Another way to look at the value of stocks is the ratio of the total market capitalization of publicly traded companies to the U.S. gross domestic product. This rarely reached 100 percent until the last 1990s. Before current selloff, the stock market was reporting that America’s public corporations are worth 200 percent of the U.S. GDP, the highest level ever.
The good news is that, again, the stock market has little direct relation to the underlying economy. It could continue falling with few consequences except for an uptick in anguished Trump tweets.
But Here’s the Terrible News
All that should be reassuring for anyone with standard anxiety about the stock market. But everyone should be feeling a deep, non-standard anxiety about it, a kind of anxiety that’s never on TV.
The problem with the stock market is not it going up, down, or sideways. It’s what our obsession with it has done to us. It’s that paying attention to capitalism has made us think like capitalists. It exerts a gravitational-like pull on our psyches, nudging us psychologically to the right and shredding our instincts for social solidarity.
First, there’s basic class conflict. Once you own even a modest amount of stock, you’ll likely find yourself ambivalent about companies squeezing as much money as possible out of their employees, even if you’re one of them. Rather than thinking about how to work with everyone else to stop the Fortune 500 from ravaging America, you’re hoping to get your teeny-tiny personal share from the ravages.
“A lot of middle and upper middle-income people identify with the stock market’s fate,” says Henwood. “Instead of seeing it as their class enemy, they see it as their friend.”
But a true friend would not incentivize you to profit from climate collapse. You know you should join a mass movement to stop global warming, but … your Exxon stock is doing great, so you figure that when the Antarctic ice sheet collapses, you can sell it and buy a house in Manitoba.
Next there’s the perspective the stock market encourages everyone to adopt about financial bubbles. Consider what it actually means for anyone panicking about the value of their 401(k). The sad fact is that their 401(k)’s value was never real, just as the cheap homes built in Florida suburbs at the height of the housing bubble were never worth $1.2 million apiece. What everyone has been counting on — hopefully without consciously realizing it — was that stocks would remain overvalued until after they sold them in retirement. That is, they were depending on being able to take advantage of someone else by selling them an overpriced asset, like a Florida house-flipper.
This economic structure inevitably makes us see others not as fellow citizens with whom we’re all in this together, but as potential marks. You can only buy low and sell high if you successfully fool others into selling low and buying high. The economist John Maynard Keynes famously described this type of “investing” long ago: “the actual, private object of the most skilled investment today is … to outwit the crowd, and to pass the bad, or depreciating, half-crown to the other fellow.”
And That’s Why the Stock Market May Literally Kill You
Before a new strain of coronavirus began sprinting around the world, all these problems with the stock market may have seemed abstract. But they are now extremely concrete. Think about what we could have done to prepare for this moment, if we’d been less mesmerized by little numbers on screens and paid more attention to the reality right in front of us.
One aspect of reality is that some diseases are extremely contagious and can kill you. That’s why everyone in America would be far better off right now if we had robust, universal health care, even the people who had to sell some of their shares in Apple to help pay for it.
Likewise, scientists have been warning for decades about exactly this kind of infectious disease. One of their suggestions was for the U.S. government to help pay to improve the public health infrastructure in poorer countries. We may all quite soon regret not doing this, even if it would have required making Amazon pay a tax rate greater than 1.2 percent and hence denting their stock price.
And if we’d been less transfixed by what corporations were doing, we could have realized what they can’t do. In the imaginary world of economic textbooks, a huge pharmaceutical company would have poured tens of billions into developing the capacity to more quickly perfect and manufacture vaccines in huge volumes, so that the omniscient stock market would reward them for their prescience. Here on Earth, the stock market would have punished any company that took such a big risk with an uncertain payoff. Yet we couldn’t see that the only way to better prepare for the new coronavirus would have been with much greater government action.
And there are pernicious effects of our stock market love affair that are even more subtle. When deciding what to do with their lives, young people learn what to value from adults, and what adults have been telling them is that what’s valuable is corporate wealth. Imagine how much better we’d all feel now if 1,000 of America’s smartest financial engineers had heard instead that the most important, respected thing they could do was become an epidemiologist.
But instead of investing in genuine wealth, the kind of wealth that keeps us alive, we preferred to chase the phantom wealth of the stock market. Now as the phantom wealth dissolves, we may come face to face with our decision to be poor in what truly matters.


theintercept--2020-03-03--Rep. Joyce Beatty Gentrified Her Way Into Political Trouble

In 2013 , Rep. Joyce Beatty , D-Ohio , and her husband made a significant profit on a property sold to a developer , while her husband sat on the zoning board that approved the sale , according to public records and meeting minutes reviewed by The Intercept .
The buyer , developer Lifestyle Communities , purchased the property in Columbus from the Beattys one month after Otto Beatty voiced support for Lifestyle to turn the project into luxury condos at the city ’ s downtown zoning board , the Downtown Commission .
While Otto Beatty did not vote on @ @ @ @ @ @ @ that he was discussing the sale of the building to Lifestyle at the time — only that he was the owner of the land , and Lifestyle would do the developing .
Beatty abstained from another vote on alterations to the project , but voted on two other alterations to the project at the Downtown Commission over the years without disclosing his interest to the public .
“ I have spent time in this building every day for years , ” announced Otto Beatty to the commission in November 2013 .
“ I @ @ @ @ @ @ @ buildings [ as they are ] .
It ’ s not there .
I ’ m concerned about what is good for downtown .
It would be bad for downtown to lose the opportunity of having this project.
” Otto Beatty has been the longtime vice chair of the Downtown Commission , a zoning board which has enabled a transformation of the city ’ s downtown .
The condos that were developed had no affordable housing requirements , despite an estimated shortage of 35,625 low-income rental units in Columbus .
The condos rent @ @ @ @ @ @ @ bedroom to $ 2,600 a month for an 1,100-square-foot two-bedroom apartment in the rapidly gentrifying city .
Higher-end apartments are listed without a price .
The median rent for apartments in Columbus is $ 1,295 , according to Zillow .
Joyce and Otto Beatty have long been a power couple in Columbus .
Otto Beatty served 20 years in the Ohio House before resigning in 1999 immediately before being forced out due to term limits .
Joyce Beatty was appointed to take his seat , rising to become minority leader from 2007 to @ @ @ @ @ @ @ at the Ohio State University and , since 2012 , the city ’ s congressional representative .
The Beattys have been major players in the transformation of Columbus , as it emerges from its deindustrialization period and rapidly gentrifies .
Yet the very changes spurred by the Beattys have now put her own seat in jeopardy , as insurgent challenger Morgan Harper has given her the first competitive primary since Beatty was sworn into Congress .
The two are set to face off in the Ohio Democratic primary on March 17 , with @ @ @ @ @ @ @ pace .
“ This appears to be a classic case of self-dealing by a government official , ” said Craig Holman , an ethics lobbyist with the good government advocacy group Public Citizen .
“ As a member of the Downtown Commission , Otto Beatty is expected to recuse himself from taking official actions that provide direct and substantial personal enrichment to himself of his immediate family .
Recusal doesn ’ t mean you just don ’ t vote , it means you remove [ yourself ] from the whole process .
The @ @ @ @ @ @ @ project carries influence with his fellow colleagues .
He should have stated straightforwardly that he had a conflict of interest and removed himself from the discussion.
” The inflated price for the sale of the Beatty building contrasts with the price that the similar “ Trautman ” buildings immediately next door sold to Lifestyle Communities just six months earlier .
In June 2013 , the Columbus Business Journal reported that the Trautman parcels were sold by the Columbus Downtown Development Corporation , the city ’ s nonprofit development corporation , for $ 750,000 @ @ @ @ @ @ @ property was appraised at $ 770,000 — roughly equal to the sale price .
The Beatty building next door , however , sold for $ 800,000 despite being assessed at $ 510,000 .
( Rep. Joyce Beatty ’ s financial disclosure lists the sale proceeds at between $ 1,000,000 and $ 5,000,000 .
That may be an erroneous overestimate , or the developer may have also purchased her clothing shop , Pieces for Wear , at the same location .
Beatty did not respond to requests for comment or clarification , nor did @ @ @ @ @ @ @ been purchased by the CDDC for $ 3.3 million in 2006 and 2007 .
The CDDC Board appears to have a close-knit relationship with Joyce Beatty .
Board members at the time , their spouses , and PACs affiliated with their companies have contributed over $ 280,000 to Beatty over her career .
The board and donors include Victoria ’ s Secret billionaires Abigail Wexner and her husband Les , who have generated controversy for their extremely close relationship with the late Jeffrey Epstein .
A close ally of Congresswoman Beatty , former @ @ @ @ @ @ @ subject of an FBI investigation over the sale of his real estate property in 2010 .
Coleman sold his house in 2010 to a Chinese businesswoman who was exploring using Columbus as a distribution hub .
Coleman sold the house to the businesswoman for $ 510,000 , who later resold the property for just $ 250,000 .
Coleman appointed Otto Beatty to the Downtown Commission .
facing an insurgent primary challenger whose viability is driven in significant part , ironically , by gentrification .
The high cost of living has fueled anger among @ @ @ @ @ @ @ — the gentrifiers — have been harnessed in other races as a force to upend the status quo .
In 2018 , gentrifying neighborhoods provided Alexandria Ocasio-Cortez ’ s margin of victory over incumbent Joe Crowley , and those types of neighborhoods are likely to side heavily in Columbus with the challenger , Morgan Harper , in the Columbus race .
During Rep. Joyce Beatty ’ s time as state House minority leader , the couple attracted controversy due to Otto Beatty ’ s work as a lobbyist for a payday lending firm @ @ @ @ @ @ @ bipartisan reforms to payday lending .
Beatty opposed the reforms until her husband ’ s work was revealed by the Columbus Dispatch .
Then state Rep. Bob Hagan said to the Dispatch about the reform legislation : “ So I ’ m running into a roadblock — and it ’ s not a very comfortable roadblock because I have been around too long to not realize something else is behind it .
It ’ s disappointing that this is what has been happening .
I don ’ t know whether this legal work @ @ @ @ @ @ @ I do find it disappointing.
” As the Cleveland Plain Dealer later reported , “ The revelation , which came after Joyce Beatty had puzzled political observers by staunchly opposing the payday lending legislation , shook up members of the House Democratic caucus who were unaware of Otto Beatty ’ s work in Virginia.
” Like Otto Beatty , Joyce Beatty was term-limited out of her state House seat , which represented the Ohio State University .
Beatty , after leaving office , went to work for OSU doing community outreach and engagement @ @ @ @ @ @ @ position made her one of the school ’ s leading voices in talks with the community around the question of gentrification , which OSU ’ s expansion drove considerably .
That position ’ s salary allowed her to inflate her pension from the State of Ohio to over $ 250,000 annually .
Beatty , ahead of winning the job at OSU , had claimed a Ph.D. from the University of Cincinnati/Pacific Western University , which was unaccredited and has since been forced to close by the state of Hawaii .
She no longer @ @ @ @ @ @ @ her congressional bio that she “ completed all requirements but her dissertation for a doctorate at the University of Cincinnati.
” Observers and opponents of gentrification in Columbus have raised concern about the cost of living increases that accompany rampant development like the Beatty project .
“ One of the problems that I see is that powers that be want to control everything in these neighborhoods instead of empowering people to be involved , ” said Joe Motil , a community activist in Columbus .
“ With agencies like the CCDC and the @ @ @ @ @ @ @ , they make the decisions , and they control the money to develop it .
They ’ re not empowering lower income people to purchase abandoned homes .
They are stacked with people with money who also contribute heavily to our electeds in city hall.
” Miranda Martinez is an associate professor at Ohio State who studies gentrification .
“ For me what has been interesting is how rapid the gentrification has been and how little public comment and input there ’ s been .
There often seems to be no provision for @ @ @ @ @ @ @ Martinez .
“ Columbus is turning away from a place that had relatively plentiful cheap housing into a place where that ’ s not the case.
” After the 2010 tea party wave , the new census knocked down Ohio ’ s congressional delegation from 18 to 16 .
Republicans began gerrymandering the state , and entered into negotiations with Otto Beatty and Joyce Beatty over the contours of the district that Beatty now represents , according to testimony by Ray DiRossi , a Republican operative involved with the gerrymandering effort .
DiRossi @ @ @ @ @ @ @ , including myself who had worked with [ Joyce Beatty ] thought that she would be an ideal candidate ” for the new gerrymandered Democratic district .
Stuffing so many Democrats into one district — Republicans referred to Columbus as “ dog meat voting territory ” and a “ Franklin County Sinkhole ” — enabled Republicans to amass a 12-4 majority in the House delegation , despite the state being more evenly split between the parties .
The heavily Democratic Columbus district helped Republican Steve Stivers get reelected in a newly drawn and @ @ @ @ @ @ @ helped make another suburban district more Republican .
DiRossi , meanwhile , testified that Republicans helped clear the path for Beatty by drawing a potential opponent out of the new district .
Republican Ohio House Speaker William G. Batchelder III denied he had ever referred to Columbus voters as “ dog meat ” but admitted he “ intend [ ed ] to draw a district that [ Joyce Beatty ] could potentially win.
” He noted that he was close friends with Otto Beatty and had served with Joyce Beatty .
Troy Judy @ @ @ @ @ @ @ , confirmed the arrangement , testifying that the “ relationship with Congresswoman Beatty and her husband Otto Beatty led him to have a priority to create a central district in Franklin County encompassing Columbus and having representation specifically for Congress [ wo ] man Beatty.
” There was a legal rationale for the admission .
Batchelder and other Republicans argued that they had drawn the district specifically for Beatty because of their close relationship with her and their earnest support for minority representation in Congress .
But the district court didn ’ t @ @ @ @ @ @ @ In sum , even accepting all of Defendants ’ proffered justifications for drawing District 3 , we conclude that they were secondary to the map drawers ’ predominant intent : conferring Republican advantage by packing District 3 and facilitating the cracking of Districts 12 and 15 .
We also conclude that District 3 actually packed Democratic voters.
” The potential opponent Beatty drew out of the district was Mary Jo Kilroy , who had beaten Stivers in 2008 , but lost to him in 2010 and had been signaling a rematch .
Kilroy @ @ @ @ @ @ @ a four-way primary , Beatty edged her out by 1,500 votes .
She then easily won the general election , and has served since .
While in Congress , Joyce Beatty ’ s estimated net worth has increased from $ 2.6 million to over $ 10 million , according to data collected by the Center for Responsive Politics .
As of 2016 , she was the 35th wealthiest member of the House .

In 2013, Rep. Joyce Beatty, D-Ohio, and her husband made a significant profit on a property sold to a developer, while her husband sat on the zoning board that approved the sale, according to public records and meeting minutes reviewed by The Intercept. The buyer, developer Lifestyle Communities, purchased the property in Columbus from the Beattys one month after Otto Beatty voiced support for Lifestyle to turn the project into luxury condos at the city’s downtown zoning board, the Downtown Commission.
Joyce and Otto Beatty have long been a power couple in Columbus. Otto Beatty served 20 years in the Ohio House before resigning in 1999 immediately before being forced out due to term limits. Joyce Beatty was appointed to take his seat, rising to become minority leader from 2007 to 2008, before becoming a top official at the Ohio State University and, since 2012, the city’s congressional representative. The Beattys have been major players in the transformation of Columbus, as it emerges from its deindustrialization period and rapidly gentrifies. Yet the very changes spurred by the Beattys have now put her own seat in jeopardy, as insurgent challenger Morgan Harper has given her the first competitive primary since Beatty was sworn into Congress. The two are set to face off in the Ohio Democratic primary on March 17, with early voting already underway at a fierce pace.
Otto Beatty has been the longtime vice chair of the Downtown Commission, a zoning board which has enabled a transformation of the city’s downtown. The condos that were developed had no affordable housing requirements, despite an estimated shortage of 35,625 low-income rental units in Columbus. The condos rent from $1,600 for a 700-square-foot one bedroom to $2,600 a month for an 1,100-square-foot two-bedroom apartment in the rapidly gentrifying city. Higher-end apartments are listed without a price. The median rent for apartments in Columbus is $1,295, according to Zillow.
“I have spent time in this building every day for years,” announced Otto Beatty to the commission in November 2013. “I’ve explored trying to keep these buildings [as they are]. It’s not there. I’m concerned about what is good for downtown. It would be bad for downtown to lose the opportunity of having this project.”
While Otto Beatty did not vote on the question, he did not disclose that he was discussing the sale of the building to Lifestyle at the time — only that he was the owner of the land, and Lifestyle would do the developing. Beatty abstained from another vote on alterations to the project, but voted on two other alterations to the project at the Downtown Commission over the years without disclosing his interest to the public.
Otto Beatty, Rep. Joyce Beatty, and Lifestyle Communities did not respond to requests for comment.
“This appears to be a classic case of self-dealing by a government official,” said Craig Holman, an ethics lobbyist with the good government advocacy group Public Citizen. “As a member of the Downtown Commission, Otto Beatty is expected to recuse himself from taking official actions that provide direct and substantial personal enrichment to himself of his immediate family. Recusal doesn’t mean you just don’t vote, it means you remove [yourself] from the whole process. The fact that he expressed support for the project carries influence with his fellow colleagues. He should have stated straightforwardly that he had a conflict of interest and removed himself from the discussion.”
The inflated price for the sale of the Beatty building contrasts with the price that the similar “Trautman” buildings immediately next door sold to Lifestyle Communities just six months earlier. In June 2013, the Columbus Business Journal reported that the Trautman parcels were sold by the Columbus Downtown Development Corporation, the city’s nonprofit development corporation, for $750,000. Franklin County records indicate that the property was appraised at $770,000 — roughly equal to the sale price. The Beatty building next door, however, sold for $800,000 despite being assessed at $510,000. (Rep. Joyce Beatty’s financial disclosure lists the sale proceeds at between $1,000,000 and $5,000,000. That may be an erroneous overestimate, or the developer may have also purchased her clothing shop, Pieces for Wear, at the same location. Beatty did not respond to requests for comment or clarification, nor did Lifestyle.)
The Trautman properties had been purchased by the CDDC for $3.3 million in 2006 and 2007.
The CDDC Board appears to have a close-knit relationship with Joyce Beatty. Board members at the time, their spouses, and PACs affiliated with their companies have contributed over $280,000 to Beatty over her career. The board and donors include Victoria’s Secret billionaires Abigail Wexner and her husband Les, who have generated controversy for their extremely close relationship with the late Jeffrey Epstein.
A close ally of Congresswoman Beatty, former Columbus Mayor Mike Coleman, was the subject of an FBI investigation over the sale of his real estate property in 2010. Coleman sold his house in 2010 to a Chinese businesswoman who was exploring using Columbus as a distribution hub. Coleman sold the house to the businesswoman for $510,000, who later resold the property for just $250,000. Coleman appointed Otto Beatty to the Downtown Commission.
Beatty is now facing an insurgent primary challenger whose viability is driven in significant part, ironically, by gentrification. The high cost of living has fueled anger among longtime residents, and the new residents — the gentrifiers — have been harnessed in other races as a force to upend the status quo. In 2018, gentrifying neighborhoods provided Alexandria Ocasio-Cortez’s margin of victory over incumbent Joe Crowley, and those types of neighborhoods are likely to side heavily in Columbus with the challenger, Morgan Harper, in the Columbus race.
During Rep. Joyce Beatty’s time as state House minority leader, the couple attracted controversy due to Otto Beatty’s work as a lobbyist for a payday lending firm as the Ohio legislature was considering broad-reaching bipartisan reforms to payday lending. Beatty opposed the reforms until her husband’s work was revealed by the Columbus Dispatch. Then state Rep. Bob Hagan said to the Dispatch about the reform legislation: “So I’m running into a roadblock — and it’s not a very comfortable roadblock because I have been around too long to not realize something else is behind it. It’s disappointing that this is what has been happening. I don’t know whether this legal work is influencing her or not, but I do find it disappointing.”
As the Cleveland Plain Dealer later reported, “The revelation, which came after Joyce Beatty had puzzled political observers by staunchly opposing the payday lending legislation, shook up members of the House Democratic caucus who were unaware of Otto Beatty’s work in Virginia.”
Like Otto Beatty, Joyce Beatty was term-limited out of her state House seat, which represented the Ohio State University. Beatty, after leaving office, went to work for OSU doing community outreach and engagement for a controversially large salary. That position made her one of the school’s leading voices in talks with the community around the question of gentrification, which OSU’s expansion drove considerably. That position’s salary allowed her to inflate her pension from the State of Ohio to over $250,000 annually.
Beatty, ahead of winning the job at OSU, had claimed a Ph.D. from the University of Cincinnati/Pacific Western University, which was unaccredited and has since been forced to close by the state of Hawaii. She no longer makes that claim and instead writes in her congressional bio that she “completed all requirements but her dissertation for a doctorate at the University of Cincinnati.”
Observers and opponents of gentrification in Columbus have raised concern about the cost of living increases that accompany rampant development like the Beatty project. “One of the problems that I see is that powers that be want to control everything in these neighborhoods instead of empowering people to be involved,” said Joe Motil, a community activist in Columbus. “With agencies like the CCDC and the Downtown Commission, they buy the land, they make the decisions, and they control the money to develop it. They’re not empowering lower income people to purchase abandoned homes. They are stacked with people with money who also contribute heavily to our electeds in city hall.”
Miranda Martinez is an associate professor at Ohio State who studies gentrification. “For me what has been interesting is how rapid the gentrification has been and how little public comment and input there’s been. There often seems to be no provision for affordability as a concern,” said Martinez. “Columbus is turning away from a place that had relatively plentiful cheap housing into a place where that’s not the case.”
After the 2010 tea party wave, the new census knocked down Ohio’s congressional delegation from 18 to 16. Republicans began gerrymandering the state, and entered into negotiations with Otto Beatty and Joyce Beatty over the contours of the district that Beatty now represents, according to testimony by Ray DiRossi, a Republican operative involved with the gerrymandering effort. DiRossi testified that “a number of people, including myself who had worked with [Joyce Beatty] thought that she would be an ideal candidate” for the new gerrymandered Democratic district. Stuffing so many Democrats into one district — Republicans referred to Columbus as “dog meat voting territory” and a “Franklin County Sinkhole” — enabled Republicans to amass a 12-4 majority in the House delegation, despite the state being more evenly split between the parties.
The heavily Democratic Columbus district helped Republican Steve Stivers get reelected in a newly drawn and more comfortably Republican seat, and also helped make another suburban district more Republican. DiRossi, meanwhile, testified that Republicans helped clear the path for Beatty by drawing a potential opponent out of the new district.
Republican Ohio House Speaker William G. Batchelder III denied he had ever referred to Columbus voters as “dog meat” but admitted he “intend[ed] to draw a district that [Joyce Beatty] could potentially win.” He noted that he was close friends with Otto Beatty and had served with Joyce Beatty. Troy Judy, Batchelder’s chief of staff, confirmed the arrangement, testifying that the “relationship with Congresswoman Beatty and her husband Otto Beatty led him to have a priority to create a central district in Franklin County encompassing Columbus and having representation specifically for Congress[wo]man Beatty.”
There was a legal rationale for the admission. Batchelder and other Republicans argued that they had drawn the district specifically for Beatty because of their close relationship with her and their earnest support for minority representation in Congress. But the district court didn’t buy it, ruling that, “In sum, even accepting all of Defendants’ proffered justifications for drawing District 3, we conclude that they were secondary to the map drawers’ predominant intent: conferring Republican advantage by packing District 3 and facilitating the cracking of Districts 12 and 15. We also conclude that District 3 actually packed Democratic voters.”
The potential opponent Beatty drew out of the district was Mary Jo Kilroy, who had beaten Stivers in 2008, but lost to him in 2010 and had been signaling a rematch. Kilroy ran anyway against Beatty, and in a four-way primary, Beatty edged her out by 1,500 votes. She then easily won the general election, and has served since.
While in Congress, Joyce Beatty’s estimated net worth has increased from $2.6 million to over $10 million, according to data collected by the Center for Responsive Politics. As of 2016, she was the 35th wealthiest member of the House.