December 24, 2016

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Business December 24, 2016

The Economy Trump Will Inherit

Donald Trump calls the impact of trade deals on the US a “disaster.” But what kind of economy is he really inheriting and how might he affect it? Economics blogger Megan McArdle weighs in.

LINDA WERTHEIMER, HOST:

This is WEEKEND EDITION from NPR News I’m Linda Wertheimer. During his presidential campaign, Donald Trump hammered away at the troubles of the American economy. But if you look at the numbers, the economy doesn’t seem to be doing so badly. The unemployment rate is now 4.6 percent – half what it was when Obama first took office. Home sales are up. Energy prices are stable. The stock market is soaring. To talk more about what kind of economy Trump is inheriting and what happens next, we invited Bloomberg View columnist Megan McArdle into our studios. Thank you very much.

MEGAN MCARDLE: Thanks for having me.

WERTHEIMER: So many of the numbers we look for as indicators of our economy’s health are positive. I want to ask you for your take on them. Do you – let’s start with unemployment – 4.6. Is that – that is a good number, isn’t it?

MCARDLE: It is a pretty good number, but you have to qualify that because one thing that we have seen since this recession is that, unlike earlier recessions, we haven’t seen employment recover the way we would normally expect to. So the unemployment rate is low. What we haven’t seen is labor force participation is about three percentage points lower than it was in 2007. And if you have fewer people looking for work, you can get a low unemployment rate, but that doesn’t necessarily mean that things are healthy because people may have dropped out because they can’t find a job, and they just say, you know what? I’m not even looking anymore.

WERTHEIMER: President-elect Trump also talked a lot about international trade agreements, and it was his view that some of these agreements have hurt the sort of American workers you were just talking about. Do you think he’ll be able to renegotiate trade agreements, and if he does, will it help those people?

MCARDLE: The president does actually have extraordinary latitude on trade agreements and on foreign policy more generally much more than he does on domestic policy. So he could throw any number of monkey wrenches into the operation of our international trade agreements. But you have to ask, first of all, whether he will because it’s easy to talk about those things in abstract. But then when you start actually doing it, you know, there’s lots of interest groups that are going to be descending on Washington saying, please, please, please, don’t do this. He may want to get re-elected.

And then the more complicated question is does that help American workers? Because I think that, you know, 10 years ago when I was working for The Economist, I would have said, look, trade’s great for everyone. It’s win-win. It, you know, rising tide lifts all boats. And I think that we’ve actually decided there was an emerging consensus among economists that that actually hasn’t been the case. First of all, because some of the trade adjustment things we wanted to do, like retraining, haven’t worked out that well but also because China itself, such a huge economy, so many people, was such a shock to the system that normally over the course of a decade we would lose some jobs to trade. And some people would be hurt by it, but then other things would compensate.

The dislocations were too big for the economy to absorb as readily. That doesn’t, though, mean that undoing it is actually going to fix the problem. You know, there are things – you can’t – if you break a jar of mustard, you can’t put it back together and put the mustard back into the jar, right? It’s broken. And that I think is similar with a lot of these things that have happened. And those factories went and they’re not coming back no matter what we do.

WERTHEIMER: Mr. Trump is promising 4 percent GDP growth, which is up from the current 2 or so. Is that possible?

MCARDLE: It is theoretically possible, certainly for a few quarters anyway. But, you know, the president just doesn’t have that much control over the economy. And I think that actually, you know, all presidents promise that they’re going to make it grow. They’re going to do all these things. The good news is that they don’t have that much control over our economy.

WERTHEIMER: Which is also the bad news.

MCARDLE: It is somewhat the bad news, but if you think about it, if a president could come in and make the economy grow at 4 or 5 percent because he wanted to, that would also mean that a bad president could come in and give you a recession of negative 5 or negative 10 percent. You know, you can really screw up an economy if you want to. I think Venezuela is a good example of that right now. But in general, within the limits of the U.S. political system, the president has maybe a few tenths of a percentage point impact on our GDP growth. Most of it is Americans deciding to do things more efficiently, to create jobs, to invent things. President Trump can’t make that happen. No one else can either.

WERTHEIMER: Megan McArdle is a columnist with Bloomberg View. Thank you very much for coming in.

MCARDLE: Thanks for having me.

Copyright © 2016 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Sports December 24, 2016

Latest In Sports: Putin Denies Sponsored Russian Doping

President Vladimir Putin denies his government sponsors sports doping, but some competitions have pulled out of Russia after new evidence emerges from an international inquiry.

LINDA WERTHEIMER, HOST:

It’s time for sports.

(SOUNDBITE OF MUSIC)

WERTHEIMER: Russia has lost hosting privileges for three international sporting events after a report showing extensive evidence of state-sponsored doping. Russian President Vladimir Putin, though, is denying his country’s government ever supported sports doping. NPR’s Tom Goldman joins us on the line to tell us where this story’s heading. Good morning, Tom.

TOM GOLDMAN, BYLINE: Hi, Linda.

WERTHEIMER: First of all, let me start with what Putin said at a press conference yesterday. He denied Russia was involved in state-sponsored doping, but did acknowledge his country has a doping problem. Is that an important distinction?

GOLDMAN: It is. It’s the difference between saying we do some doping like everyone else but denying that what they do in Russia is above and beyond. Well, what Russia has done is way beyond. There have been in-depth reputable media accounts coming out of Germany and the U.S. over the past few years detailing a Russian doping system, and then the scathing McLaren report this year prompted by those media accounts.

The report is chock full of physical evidence and facts – you can read them online – detailing a doping conspiracy involving over 1,000 athletes, the FSB – Russia’s security agency – and officials in the Ministry of Sport, which is part of the Russian government. That’s what’s meant by state-sponsored doping, and it directly contradicts Putin’s claim yesterday. Linda, the world knows what’s going on. As – and as you mentioned, Russia is losing sporting events because of it.

WERTHEIMER: Which ones? Which – what were the events pulled?

GOLDMAN: Well, earlier this month, the bobsled and skeleton world championships scheduled for February in Russia were moved to Germany. A couple of days ago, a top speed-skating event was moved. We don’t know where yet. And two biathlon events were moved – voluntarily by the Russians, I might say. In fact, the Russians were praised by the International Biathlon Federation for being proactive and taking the matter seriously. These actions are happening because of the McLaren report and the threat of boycott by athletes if the events stayed in Russia.

WERTHEIMER: So do you think there’s a chance that Russia might lose the very big event in 2018, the World Cup soccer championship? Will that be taken away?

GOLDMAN: Probably not. Very slim chance of that for several reasons. Economist Andrew Zimbalist, who’s written about the high cost of World Cups, says Russia has built from scratch seven soccer stadiums already for the 2018 event. There have been billions spent on stadiums and infrastructure. Politically, there doesn’t appear to be the political will to punish Russia from the heads of major sports organizations. Anti-doping historian John Hoberman told me those leaders live in an ethics-free zone.

The president of FIFA, soccer’s governing body, Gianni Infantino, already has said the World Cup isn’t moving and that FIFA isn’t the world doping police. And, you know, finally, don’t expect wealthy soccer players to threaten boycott like the Olympic athletes have done recently. They’ve got too much to lose.

WERTHEIMER: I also wanted to ask you about the NFL games this weekend.

GOLDMAN: Ah, yeah.

WERTHEIMER: What should we be looking for as we head toward the playoffs?

GOLDMAN: Well, you’ve got 12 games on this Saturday before Christmas. And certainly we’ll know a lot more at the end of today than we know right now. There are four teams in the playoffs – New England, of course, Seattle, Dallas and Oakland. We need eight more. And it may take until the end of next weekend before the field of 12 is complete.

But there are lots of interesting games today. Just to pluck out two, Minnesota is playing a suddenly red-hot Green Bay team, which looked done a month ago but now has won four straight. And the Miami Dolphins started the season one and four. Now they’ve won eight of their last nine. And they have a chance to make the playoffs, which would be quite a turnaround.

WERTHEIMER: What about a chance for those Cleveland Browns? Could they possibly make it?

GOLDMAN: (Laughter) Make what, Linda? You mean just win a game against San Diego? You know, there’s always a chance, you know, any given Sunday or Saturday, in this case. But there could be a more cosmic reason for the Browns’ winless streak to end. As you know, today is a rare confluence of Christmas Eve and the beginning of Hanukkah. There’s an alignment of the calendars and maybe of the heavens, which might be what’s needed for the Cleveland Browns to win a football game.

WERTHEIMER: NPR’s Tom Goldman. Thank you, Tom.

GOLDMAN: You’re welcome.

Copyright © 2016 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Health December 24, 2016

White House Sharpens Its Case For Obamacare, As Republicans Sharpen Knives

Oklahoma State University President Burns Hargis gets his blood pressure checked in a mobile medical unit parked at the state Capitol. Sue Ogrocki/AP hide caption

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Sue Ogrocki/AP

The Affordable Care Act is on the chopping block, likely to be one of the first casualties when President-elect Donald Trump takes office next month.

“We will repeal the disaster known as ‘Obamacare’ and create new health care — all sorts of reforms that work for you and your family,” Trump promised in Florida last week.

Before that happens, President Obama and his aides want to put a marker down on what they see as the law’s accomplishments over the last six years.

“When I came into office, 44 million people were uninsured,” Obama told reporters during his pre-Christmas news conference at the White House. “Today, we’ve covered more than 20 million of them. For the first time in our history, more than 90 percent of Americans are insured.”

So far, more than 6.4 million people have signed up for insurance coverage in 2017 through the federal exchange. Enrollments are on track to exceed last year’s total, with many coming from states like Florida, Texas, and North Carolina that were carried by Trump.

While expanded insurance coverage is the yardstick most often cited, defenders argue the Affordable Care Act has also helped limit rising health care costs and put more emphasis on the quality of care, not just how much is done.

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“While multiple factors are likely playing a role, payment reforms introduced in the [Affordable Care Act] have made substantial, quantifiable contributions to slowing the growth of health care costs in both Medicare and private insurance,” White House economists wrote in a report this month.

The report cites estimates from the Congressional Budget Office that Obamacare has shaved 1.3 percentage points off the annual growth in per-person Medicare spending.

For people who get health coverage through their employer, the slowdown has been even sharper, the report says. The cost of family coverage has grown just over 3 percent per year since the Affordable Care Act was passed in 2010. That’s a 45 percent reduction from the pace of the previous six years. While many workplace insurance plans now include higher deductibles and co-pays, workers’ out-of-pocket costs are still growing more slowly than they were before Obamacare, White House economists say.

The law also encourages payment reforms that reward doctors and hospitals for high-quality care, not simply performing a lot of tests and procedures. More than 30 percent of Medicare payments are now based on these “alternative payment models,” along with about 10 percent of payments for workers covered by private insurance.

To be sure, the Affordable Care Act remains deeply controversial. Americans who dislike the law slightly outnumber those who approve of it. That’s partly a reflection of the law’s partisan history. It was passed without a single Republican vote.

Implementation has also been rocky — especially the disastrous debut of the government’s insurance exchange website in 2013. Nineteen states — most with Republican leadership — declined to take advantage of the Affordable Care Act’s Medicaid expansion.

What’s more, after losing money in past years, many insurance companies have stopped offering policies on the government-run exchanges. According to the Kaiser Family Foundation, about 20 percent of people shopping for coverage on the exchanges this year have just one insurance company to choose from. With less competition, premiums on the exchanges have risen sharply: about 25 percent on average.

Despite these drawbacks, supporters say the Affordable Care Act has been a net-plus, both for individual customers who can no longer be denied access to health insurance and for the federal government which has steadily reduced its forecast of long-term health-care costs.

At the same time, the law has not proven to be the drag on job growth that many Republicans warned of.

“Since I signed Obamacare into law, our businesses have added more than 15 million new jobs,” Obama noted.

The president can point to a number of other positive indicators as he prepares to leave office, including long-awaited wage gains in the last year and a modest decrease in income inequality, stemming, in part, from higher taxes on the wealthy.

The president and his team are trying to document those gains, mindful that the next occupant of the White House wants to reverse much of what Obama has put in place.

“What the president-elect is going to be doing is going to be very different than what I was doing, and I think people will be able to compare and contrast and make judgments about what worked for the American people,” Obama said during his year-end news conference. “I hope that, building off the progress we’ve made, that what the president-elect is proposing works. What I can say with confidence is that what we’ve done works.”

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