Category Archives: Business

The Senate Health Care Bill Plays a Sinister Joke on the Poor

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Here is the most generous way I can explain the policy goal that Senate Republicans are trying to accomplish with their health care bill, some version of which may finally get a vote next week. By deeply cutting Medicaid while offering adults who live below or just above the poverty line subsidies to buy inexpensive, catastrophic insurance coverage, they are looking to move people off of a government program they see as financially unsustainable, while ensuring poorer households still have some financial protection in case of a medical calamity.

My guess is that this has to be the story most Republicans are telling themselves to justify getting behind $756 billion of Medicaid cuts over a decade. They’re not leaving needy adults out in the cold; they’re transitioning them into the private market.

Even if you believe that narrative, however, in practice it plays a bit like a practical joke on the poor. We were all reminded of that much this week when the Congressional Budget Office released its latest assessment of the GOP’s legislation. It found that by 2026, a single policyholder buying a benchmark plan—those are the insurance options intended to be affordable using one of the law’s tax credits—would face an astronomical $13,000 deductible, versus just $5,000 under Obamacare. “For plans providing some benefits before the deductible was met, such as a limited number of primary care visits or generic drug purchases, the deductible would be higher,” the CBO notes.

In fact, for many Americans who stand to lose Medicaid coverage under the Republican bill, these deductibles would be higher than their total annual income. In 2026, the CBO expects that someone living at 75 percent of the federal poverty line would earn $11,400, $1,600 short of the threshold they’d have to hit before their insurer started paying any medical bills. Keep in mind, they would also be expected to pay 2 percent of their income toward this insurance, which, unless they’re were involved in a car wreck or got cancer, they’d likely never use.

Some people might be comfy with that idea. There are conservative intellectuals who believe that insurance should only be used in true emergencies, and we’d be better off paying for most medical care out of pocket. But insurance that doesn’t kick in before you spend a year’s wages barely even qualifies as catastrophic coverage, given that it still leaves your finances an utter wreck.

Unfortunately, the CBO analysis only covers an incomplete version of the Senate bill. The office did not have enough time to score the effects of the Cruz amendment, which would allow insurers to sell unregulated insurance priced based on a customer’s health as long as they also offer coverage that abides by all of Obamacare’s rules. That proposal won’t do the poor any favors, though. If anything, it should drive the deductiles on regulated insurance even higher, since that market would largely consist of sicker individuals. However, lower-income customers would likely have to purchase those ACA-compliant plans whether they were healthy or not, because only Obamacare-style insurance would be eligible for subsidies.

It should also be said that, technically, the GOP bill bans the sort of insanely high-deductible plans the CBO thinks are required to make its numbers work. That’s because it caps out-of-pocket spending at just $10,900 in 2026. That mostly reflects the bill’s shoddy, incoherent craftsmanship, and fixing the internal contradiction will either require spending more money on insurance subsidies or upping the out-of-pocket limit.

But stay focused on the big picture: The GOP’s bill is only really designed to help families afford cheap coverage with high deductibles, which will be all but useless to adults on Medicaid today. The tax credits it offers families to buy private insurance are geared toward purchasing policies slightly less generous than the low-level bronze plans now available on Obamacare’s exchanges (today, subsidies are keyed to more comprehensive silver plans). As the health consultants at Manatt noted Thursday, the out-of-pocket costs attached to those plans are already wildly unaffordable for low-income families; a household of two currently on Medicaid would have to spend at least 60 percent on their income before their bronze coverage kicked in.

The GOP health plan would boot people off of Medicaid onto insurance they couldn’t afford to use. And again, that’s the nicest thing I can say about it. Source:

Anthony Scaramucci Might Be Trump’s Trumpiest Hire Yet

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AFP/Getty Images

Of course Anthony Scaramucci is joining the White House. If you look at his career on Wall Street, in media, and in public life, he checks just about every box that Trump would want for a communications director—in part because there’s a remarkable level of Trumpiness to him. He’s like Trump’s younger, shorter double, except he’s a bit of a globalist and he can speak in complete sentences.

But just how similar are they?

Two-word nickname beginning with the word “The”? Check. Everybody calls Scaramucci “The Mooch.”

Ivy League background married to a streetwise persona? Check. Scaramucci, a 1986 graduate of Tufts University, attended Harvard Law but trades on his blue-collar roots in Port Washington, Long Island.

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Ideological fluidity and willingness to switch loyalties on a dime? Check. He supported Obama in 2008, only to switch to Romney in 2012. Then he loudly opposed Trump in highly personal terms in 2015—“anti-American”—before jumping aboard the Trump train.

Eagerness to be accepted by the great and good? Check. Scaramucci became a fixture at Davos, where he was a genial presence, known for throwing parties and back-slapping. (Would that I had the foresight to shoot video of his dancing.)

Good at producing shows? Check. His annual SALT conference in Las Vegas became one of the events in the financial industry. Each year, a truly impressive list of major hedge fund investors, politicos, and celebrities would flock to the Bellagio for the conference, which was covered by CNBC and Bloomberg TV.

Clubby hospitality business catering to carnivorous rich men? Check. Scaramucci is an owner of the Hunt & Fish Club, an overpriced Midtown restaurant popular with the finance set.

Media hound? Oh yes. Loved appearing on financial television so much that he revived the classic PBS show Wall Street Week in Review and hosted it on Fox.

Vindictive and somewhat litigious streak? Yup. When a CNN report erroneously said that Scaramucci had met with a Russian investment bank that had government ties, he quickly got up in the network’s business, arguing that the report was defamatory and reminding CNN that he’s a lawyer. (The New York Post reported that he threatened a $100 million lawsuit.) The three senior journalists involved in the story resigned and CNN retracted the story.

Heads-I-win-tails-you-lose business model? Check. Scaramucci’s Skybridge Capital was a fund of funds, a business model that is dying because it serves its clients so poorly. Essentially, funds of funds sell access to hedge funds, affording ordinary rich people and institutions the ability to get into investment vehicles that they can’t get into on their own. But they then charge significant fees—percentage of the assets invested plus a chunk of the returns—which tends to lead to returns that lag the market. For example, since its 2003 inception Skybridge’s Series G fund has returned 6.17 percent annually. In that same time period, an investment in the S&P 500 would have returned 9.46 percent annually. That is to say, a cheap, simple passive investment would have done 50 percent better.

Profitable dealings with investors from nondemocratic country? Check. Earlier this year, Scaramucci sold Skybridge’s hedge-fund business. The buyers were an entity called RON Transatlantic Advisors and HNA Capital, a subsidiary of China’s sprawling HNA Group.

Oh, and leering objectifier of women? Check.

In other words, Trump and his new communications head are perfect for each other. Which is either poetic—or just terrible. Source:

New York Goes to the Mattresses Against the Eviction Machine

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As the Trump era drags on, the hope that cities would be bastions of resistance has melted into air. In some cases, cities don’t have the authority to serve as an effective bulwark against Republican control of statehouses and Washington, and against federal agencies like ICE. In others, they don’t have the capacity to preserve or increase protections for the poor and vulnerable.

But there is still room for big, simple victories, like the idea Mark Levine, a city councilman from upper Manhattan, has been working on since 2014: Hire lawyers for tenants in housing court. On Thursday, the New York City Council passed a bill that will guarantee, within five years, legal representation for all low-income tenants facing eviction. Mayor Bill de Blasio has indicated he will sign it. An independent study commissioned by the New York City Bar Association estimated the law could keep more than 5,000 families from homelessness every year.

Of all the ways that the American financial and legal system leaves renters at a disadvantage, you’d be hard-pressed to find a more unequal terrain than housing court. Nationwide, 90 percent of landlords have attorneys, but 90 percent of tenants do not. Tenants don’t show up to defend themselves or don’t know how. In a randomized experiment performed by the Legal Aid Society, eviction warrants declined 77 percent when the tenant had counsel.

Here are the numbers in New York: There are more than 150,000 housing court cases a year. More than 120,000 tenants would qualify for representation under New York’s new law, which offers counsel for households under 200 percent of the federal poverty line (about $50,000 for a family of four). Currently, fewer than 3 in 10 low-income households go to court with a lawyer. There are more than 20,000 evictions each year, and nearly half of all families in homeless shelters are thought to wind up there after eviction.

No complex legal reasoning is required here. Policymakers think lawyers can throw a wrench in the eviction machine simply because tenants often have a good case for not paying rent. In Baltimore, research by the Public Justice Center showed that 80 percent of renters facing eviction lived in units with serious defects “like vermin infestation, toxic mold, or broken appliances.” Just 8 percent of tenants had their claims heard by a judge; most either didn’t show up, or didn’t defend themselves.

In a rapacious housing market like New York’s, the profit motive behind evictions can be enormous—especially when the tenant occupies a rent-stabilized apartment that can be deregulated through vacancy. That means evictions eat away the rent-stabilized stock, which is by far the city’s cheapest way to preserve affordable housing. Meanwhile, rising rents make it harder and harder for the homeless to get back into apartments. The average length of shelter stay for families with children is over a year. The city’s shelter population is more than 60,000—the size of Palo Alto, California.

It will cost a lot to provide lawyers for 120,000 housing court cases a year: More than $200 million, by some estimates. (Then again, the progressive prince of Albany wants to spend more than that on a light show.) Under Mayor Bill de Blasio, the city has already allocated $64 million a year to tenant legal services, up from $6 million in 2013—a move correlated with an 18 percent drop in evictions.

The independent analysis, prepared by the consulting firm Stout Risius Ross, projects the policy will save New York money on balance: more than $100 million a year. Each case might cost an average of $2,500, Levine says, but each shelter stay costs the city nearly $45,000 a year. “You don’t have to avoid to many homeless cases before you recoup what you’re spending up front,” he explains.

And none of those balance sheets account for the social benefits that accrue from residential stability when a family can maintain access to the same schools, social network, and jobs. Studies suggest that eviction leads to job loss more than job loss leads to eviction.

This is not just a high-cost city problem. In Milwaukee, where Matthew Desmond set his Pulitzer Prize–winning book Evicted, there were 16,000 evictions a year in a city of just over 100,000 renter households. The numbers were similar in Kansas City, Cleveland, Chicago, and elsewhere, he wrote.

The basic right to counsel, affirmed by the Supreme Court in Gideon v. Wainwright for felony charges, has since been expanded to include a variety of cases. Housing court isn’t one of them. Organizations that provide lawyers to tenants have to turn away most cases, though just the presence of a lawyer can stop an eviction. (There’s even an app that helps New York City tenants turn their complaints into properly formatted documents, an indication of how even the most basic preparation can tip the scales in their favor.)

Not surprisingly, other cities are working on similar policies. In May, Washington, D.C. approved a $4.5 million pilot to defend low-income tenants. Kenyan McDuffie, the councilmember who sponsored the legislation, told WAMU, “I’d love to get where it’s a full civil Gideon where we are guaranteeing a right to counsel in areas where the stakes are extremely high for people in civil court.”

Philadelphia, where counted 20,000 annual evictions between 2014 and 2015, allocated a $500,000 grant to defend tenants earlier this month. Baltimore spent twice as much helping landlords evict tenants ($2.7 million on sheriff’s deputies to oversee 6,500 evictions) than it did helping tenants stay in their homes ($1.3 million). On Monday, Baltimore City Councilman Robert Stokes proposed an anti-eviction fund.

But New York’s program remains an outlier in both its scale and expense. Housing court functions as a weapon, Levine likes to say. After we spoke on Thursday, he called back with one more thought: “We’ve had a flood of inquiries in cities who are excited about it. This really proves that even in the Trump era we can still score wins at the local level. This proves that we still have the power.”

Not much power. But if you know how to use it, maybe you can get something done. Source:

What the voters were telling the GOP on health care

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Demonstrators oppose the American Health Care Act bill on Capitol Hill in Washington. (Zach Gibson/Bloomberg)

Health care just became an entitlement.

Not by law — that happened in stages over many decades, beginning with Medicare in the 1960s and continuing to the Affordable Care Act under President Barack Obama.

What happened last week was the American people ratified that they want health care — meaning federally subsidized health care. They expect it and will vote accordingly.

This is a big expansion of the federal role, and the reasons for it are clear. Over the past two-score years, health-care costs have mushroomed while median family income has barely budged. (From 2012-2016, health care rose 15 percent, at double the general rate of inflation.) People who once could afford it now want help — regardless of the party in power.

Yes, President Trump campaigned for repeal, but the voters didn’t mean it. They meant, maybe, to give the finger to Obama and to his signature legislation — but they didn’t mean that anyone should touch their coverage. Sen. Rand Paul (R-Ky.) and the Club for Growth can blather about repeal, but for a majority of voters repeal was a slogan, like “Build a wall” or “Lock her up.”

Some hard truths about health-care policy might now emerge. Social Security, which went through a similar evolution from conservative scourge to political third rail, is instructive.

Ever since the latter’s enactment in 1935, the right thundered that it had to be repealed, lest it sink the Treasury Department under a fiscal swamp. Barry Goldwater said it should be made voluntary — no mandate. He carried six states.

President Ronald Reagan floated a fantasy of privatization. President George W. Bush revisited the idea in 2001, just as the stock market was tanking. People reckoned that putting retirement savings into a tech bubble wouldn’t have been so shrewd.

Since the Reagan era (his rhetoric aside) the parties have agreed to fix Social Security, tweak retirement ages and so forth, as needed, but not challenge its existence.

Health care could use more than tweaks because of its complexity and because America has half a dozen significant programs — Medicare, Medicaid, the Reagan-era Cobra, the Clinton-vintage Children’s Health Insurance Program, the George W. Bush prescription-drug entitlement and the ACA. As that taxonomy suggests, the entitlement mind-set has been taking root for two generations, with Senate Republicans, it seems, finally catching up to the American public.

How to go about rationalizing that cumbersome and suboptimal patchwork?

Obamacare arose to plug a hole between two sets of incomplete programs — Medicare and Medicaid (covering the elderly and, initially, the very poor), and working families covered by private insurance plans.

The window existed by accident, not design. The New Dealers who legislated Social Security wanted to cover health care, too — everyone’s health — but didn’t have the political muscle. President Harry S. Truman proposed national health care and failed.

Corporate America was against it — but corporations, in that era, faced a powerful adversary: Big Labor. After the war, largely due to union pressure, Big Business began to offer health insurance to employees, at increasingly subsidized rates. Over time, this spread more generally into the private sector.

That still left uninsured people younger than 65 at companies not offering plans, as well as the unemployed, the marginally employed and many of the self-employed. That was the window for Obamacare.

But Obamacare is not, in an economic sense, an insurance program. Entitlements and insurance are inconsistent. You buy insurance for things you wouldn’t get otherwise. If you don’t have insurance on your home and it burns, you’re homeless. But you don’t buy insurance in case your family needs public schooling. If you have a kid, you send them free. You’re entitled.

By guaranteeing coverage for preexisting conditions, Obamacare was ensuring not insurance but treatment. The individual mandate — requiring healthy people to purchase coverage — was necessary to prevent the nonpoor from getting their treatment subsidized.

It’s analogous to saying, if you’re wealthy or even middle-class you have to pay school taxes, regardless of whether you have children. Which, in fact, we do.

The Republican plan, as Holman Jenkins wrote in the Wall Street Journal, was worse because it was incoherent with regard to the philosophical distinction between entitlements and insurance. It stipulated coverage of preexisting conditions (the entitlement model) but did not include a mandate (the insurance model). In other words, although it encouraged people to retain their coverage, it would have left them free to go without “insurance” until they developed a symptom.

Going forward, it would help if the health-care discussion acknowledged that health care, up to a certain minimum level, is an entitlement. Americans are going to — and should — get treatment. The only honest policy debate is over the size of the entitlement: Who gets a subsidy, and how much?

Secondly, since health care is an entitlement, private health insurance should be allowed to wither. The only economic function for private, multi-payer insurance is for care that falls outside the public subsidy.

Thirdly, there is no particular reason to retain a separate program for people over 65. The employee-plan model was arguably more appropriate in the era when most people spent their careers at long-term 9-to-5 jobs. In the Uber economy, fewer people will be getting benefits at work.

Even worse, employer plans were and are based on an unspoken deception — a giant subsidy. Companies deduct the cost of their plans, but employees do not pay taxes on the benefits, a huge giveaway from Uncle Sam. The U.S. Treasury estimates this subsidy will cost $2.7 trillion over the next decade — three times the cost of the mortgage deduction freebie.

Subsidizing people because they have jobs makes no more sense than subsidizing people who buy homes.

Presumably, health-care subsidies should be based on need, tempered by the goal of fiscal prudence and moderated by incentives that reward sensible behavior.

Recognizing that heath care is — has become — an entitlement focuses the task. It reduces the terrain over which Democrats and Republicans have to argue (only about the money, as they say.)

The intellectual challenge for policymakers is to determine whether a variant of the ACA or a variant of Medicare can best deliver the entitlement. There is no need for both, not to mention for six overlapping plans. The public would be served by one well-crafted plan, not more.

Read more:

On GE and the myth of the CEO superhero

Researchers have a new theory for why companies are sitting on ungodly piles of cash

Hillary, A-Rod, Kate Middleton: The people Trump has knocked for refusing to ‘own it’ Source:

Scaramucci took winding path but finally landed a top job with Trump

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Anthony Scaramucci, who served on President-elect Donald Trump’s transition team executive committee, talks with media at Trump Tower in New York on Thursday, Nov. 17, 2016. (Photo by Jabin Botsford/The Washington Post)

President Trump’s decision to bring Anthony Scaramucci into a top White House role represents a remarkable political ascension for the investment veteran, who had bounced around several Republican campaigns before striking gold as a full-throated Trump supporter.

Scaramucci, known as “The Mooch,” is at least the third person offered the White House communications director job since Trump was elected last year. Jason Miller initially accepted the post but opted against it before he ever started. Michael Dubke had the job for a tumultuous stint several weeks ago but left after the White House lurched from one controversy to the next.

Trump has long admired Scaramucci’s unabashed loyalty and willingness to stick up for the president during hostile interviews on cable news. Scaramucci has an upbeat enthusiasm that White House officials believe has been missing from their current communications strategy, several administration officials said.

This would be at least the third Trump administration job that Scaramucci has been offered. He was set to be director of the White House’s Office of Public Engagement and Intergovernmental Affairs, but critics within the White House blocked him from ultimately taking that post.

In June, he started working in a senior role at the U.S. Export-Import Bank, but he will have only been in that job for roughly a month because he will be transitioning into the White House communications job very soon.

Scaramucci didn’t initially jump onto the Trump campaign. In 2015, he worked on Scott Walker’s presidential campaign, serving as national finance chairman, and then he latched on to the Jeb Bush campaign when Walker withdrew. He later signed up to help Trump with his campaign and rose as one of the most well-spoken advocates for Trump’s agenda, particularly the president’s economic goals to grow the economy.

Scaramucci has not always had the kindest words for Trump.  Before he joined Trump’s campaign, he said during a 2015 Fox Business appearance that Trump – as a candidate was “another hack politician.”

“Probably going to make Elizabeth Warren his vice presidential nominee,” he said.

He also once said Trump would probably become president of “The Queens County Bully Association.”

“You are an inherited money dude from Queens County, bring it,” Scaramucci said.

Scaramucci, like Trump, has deep New York roots and he worked at Goldman Sachs before starting SkyBridge Capital, an investment company. He hosted an annual hedge fund conference in Las Vegas that became a well-attended industry gathering, called the SALT conference, which helped him raise his profile.

Numerous appearances on cable news helped even more, and it was Scaramucci, in 2010, who asked President Obama during a CNBC town hall when the White House would stop treating bankers like “a piñata.”

He’s known as being very comfortable in the rough-and-tumble world of fighting back against negative press. CNN published a story alleging that the Senate Intelligence Committee was looking into whether Scaramucci met with a top executive from a Russian investment fund before the inauguration. Scaramucci denied doing anything wrong, the story was later retracted, and three CNN officials resigned. The moment was seen as a big victory for Trump as his allies, who have complained for months about negative media coverage. Scaramucci accepted CNN’s apology and his stature grew even more within the White House.

Still, Scaramucci is a well-known cable news speaker but has no experience delivering an effective White House narrative or communications strategy. He does, however, speak with a more populist and less political bent than other White House officials. He has said, for example, that more must be done to address income inequality, an issue the Obama administration tried to elevate with mixed success.

“You may not like the president, you might like the president, but we have to fix this problem whether you’re a Democrat or a Republican,” Scaramucci said at the SALT conference in May. “The rich people in this room, the wealthy people, you don’t want to live in a barbed-wire-encased security perimeter in your McMansion like they do in Latin America. So we have to fix this problem.”

[Passed over for White House job, Trump supporter finds his way back among Wall Street elite.]

He has also shown an openness to bringing more bipartisanship into the Trump administration as well, something that separates him from others who have deeper ties with the Republican National Committee.

At Mitt Romney’s annual Deer Valley retreat this June, Scaramucci attended and offered his ideas for how he would remake the White House’s communications team, according to someone who was there who spoke on the condition of anonymity to discuss details of the private event. He said the White House’s message has been muddled and needed to be made more clearly.

He suggested that if he was there he would start a daily “TV” show of sorts each morning, with a desk on the White House lawn. Each day they’d broadcast their own news report on the things they wanted to promote, having guests appear and even inviting Democrats to join and discuss the day’s agenda.

In Scaramucci’s 2016 book, “Hopping Over the Rabbit Hole, How Entrepreneurs Turn Failure into Success,” he told readers about how not to take criticism personally. 

He wrote that he went to the Lupus Foundation annual luncheon after being “ripped apart by bloggers and reporters,” and was seated near Trump. Trump noticed that he was downtrodden and asked what was wrong. 

When Scaramucci mentioned the media criticism, Trump responded: “Look, it comes with the territory. You are gaining a high profile, which means it’s time for people to start shooting at you. Buck up! Big deal you were raked over the coals a little bit. So what? It has been happening to me for over 30 years. I laugh at the hit pieces now. The sooner you build up your resistance, the better.” Source:

Heat doesn’t just make us cranky. It makes us dumb shoppers

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MLB baseball players get hit by more pitches when it gets hot, and the rest of us struggle mightily as well. (Patrick Semansky/AP)

We’ve all heard of heat stroke, that moment when your hot summer afternoon sweat crosses a line and you find yourself down for the count, seeing spots and fighting a headache.

But beyond heat stroke, we can also get, if you’ll allow me to coin a phrase, “heat foolish.”

A host of research suggests that as it gets hotter, people tend to make worse decisions: Not only do we get more ornery and cranky — we can also make unwise long-term decisions whose effects we’ll feel well after the temperature has dropped.

Even highly trained professionals are susceptible to heat foolishness. Take Major League Baseball players: During hotter games, the sport becomes more dangerous for batters, as cranky pitchers are more likely to throw pitches at them at speeds nearing 100 miles per hour.

Two studies of major league beanballs prove this. In one analysis of 826 professional baseball games, a team of researchers concluded pitchers were more likely to intentionally throw pitches at batters (and therefore more likely to hit them) on hotter days. The researchers found that nearly twice as many batters are hit per game when temperatures are 90 degrees or higher than when they’re below 70 and ruled out wilder pitches due to sweaty hands as the cause.

Another, larger study of 57,293 games suggests this pattern is about heat-motivated retaliation. On days when the temperature was 90 or above, if three or more of a pitcher’s teammates had been hit by an opponent’s pitches earlier in the game, that pitcher was about 15 percent more likely per pitch to hit a batter than when it was 59 or below. However, if zero of a pitcher’s teammates had been hit, the change in temperature didn’t really matter. In other words, the heat makes pitchers way more likely to engage in beanball payback — despite the fact that intentionally hitting a batter can cost players tens of thousands in fines or suspensions.

It’s not just baseball players who are heat foolish. The heat makes us all more easily enraged.

For instance, you’ve probably heard that spikes in temperature are linked with increases in violent crime — and it’s true. Studies of cities from Des Moines to Dallas have shown correlations between daily heat and daily violent crime in the summer months, particularly during evening hours. A study of Dallas data from the mid-1990s found that aggravated assaults roughly doubled when the average evening temperature rose from 75 to 95.

Road rage is also more prevalent when it’s hot. In one study, a research assistant sat in a car at a stop light in front of other drivers and failed to move when the light turned green. Motorists were quicker to honk their horns at this annoyance on hotter days, particularly when driving cars without air conditioning. Off the road too, people report being generally grumpier on surveys when they are sitting in a hot room rather than a cool, comfortable one.

But while most of us are probably at least somewhat aware that we’re crankier in the heat, hot weather also affects us in subtler ways. It turns out we’re programmed to “project” whatever we’re experiencing onto the future and make decisions as if the current state of the world were representative, even when it’s not. You probably know the adage that you should never go grocery shopping on an empty stomach, lest you come home with far too much food. (That adage is true, by the way.) It turns out that we make a similar mistake with weather: Just as hungry shoppers subconsciously assume they’ll be similarly hungry when it comes times to turn all those purchases into a meal, we also, when making purchases on hot days, imagine we’ll be similarly hot when using what we buy.

Economists call this general tendency “projection bias.” In one study of the phenomenon, a team of economists analyzed hundreds of thousands of catalogue orders placed by customers for seasonal clothing such as gloves and parkas. The researchers discovered customers ordered more winter clothing than they needed when the temperature was particularly low, which they would later return when their order arrived and the temperature had reverted to “normal.” Indeed, a decline in the order-date temperature of 30 degrees was associated with a 4 percent increase in the return rate for cold weather clothing.

While this study focused on unseasonably cold weather, the same patterns would be expected in the summer. On an extra hot day, I’m betting Amazon sees a spike in sales for sun hats, portable fans, cooling towels and mist spray bottles, and that these goods are also returned (unused) at a higher-than-usual rate than when those orders arrive in on a normal summer day.

Unseasonably hot days not only change our shopping behavior, they can also shift more consequential outcomes like our beliefs about science. On days they identify as unusually warm, people are more likely to believe in climate change and therefore more willing to donate to groups fighting global warming.

Given just how much heat prods us to make poor decisions — and given that this weekend promises to be obnoxiously hot across much of the United States — you may be wondering how to avoid catching a bad case of heat foolish.

There’s no foolproof method, other than perhaps switching sides of the equator in search of cooler temperatures. But for those of us whose private jets are in the shop, the biggest thing you can do to help yourself may be recognizing the potential problem.

Remembering that the heat warps your judgment could help you avoid some of its bigger pitfalls. When you’re shopping, be extra cautious about ordering things that you only really need on the hottest of hot days right when the temperature spikes. And if you’ve got a tough conversation to have with colleagues, friends or family, maybe wait until a cooler day — or at least until everyone involved has had some time in front of the air conditioner.

As for MLB batters, my best advice: Duck — and stay away from Jonathan Papelbon. Source:

Former CBO directors in both parties defend the agency after White House attacks

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Office of Management and budget director Mick Mulvaney listens as President Trump speaks on March 17 at the White House. (Jonathan Ernst/Reuters)

The former directors of the Congressional Budget Office (CBO) — a bipartisan group that includes some of the nation’s most eminent economists — published a letter defending the agency on Friday morning, after weeks of strident criticism from the Trump administration.

President Trump’s deputies have attacked CBO publicly and relentlessly in response to its unforgiving analyses of Republican proposals to repeal parts of the Affordable Care Act, also known as Obamacare. Although the agency’s current director, Keith Hall, was appointed by a Republican Congress, the administration has argued that the methods the agency uses are unsound and that its staff favors the Democratic agenda.

Partisan criticism of CBO is nearly as old as the agency itself, which began operating in 1975. All the same, those criticisms have been particularly intense this year, amid a political environment in which partisan disputes over basic facts and arithmetic have replaced debates over values, principles and visions for the place of American government in society.

The unusual letter reflects that environment, although the text does not mention any specific criticisms or the White House explicitly. It is addressed to the top Democrats and Republicans in the House and Senate: House Speaker Paul D. Ryan (R-Wis.), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles E. Schumer (D-N.Y.).

“Relying on CBO’s estimates in the legislative process has served the Congress — and the American people — very well during the past four decades,” the authors write. The signatories of the letter include Douglas Holtz-Eakin, a conservative supporter of the GOP effort to dismantle Obamacare, as well as Peter Orszag, who served as budget director in the Obama administration.

CBO is tasked with providing lawmakers with impartial information about the federal budget, taxes and the national debt.

According to the latest projections from the agency, issued Wednesday, the Senate’s version of the GOP bill to undo Obamacare would result in some 22 million additional Americans going without insurance after a decade.

The federal government would save money, and premiums would decreased overall in the individual market under the GOP plan, CBO said. But at the same time, some consumers — particularly older adults in the upper middle class — could pay thousands more in premiums, and typical deductibles could increase to as much as $13,000 a year.

The Trump administration has argued that CBO failed to accurately forecast the effects of Obamacare when it was initially passed. The agency overestimated the number of people who would gain insurance under the law. In particular, according to the administration, CBO places too much emphasis on Obamacare’s requirement that every American carry health insurance, which in practice has been weakly enforced and widely ignored.

[How the CBO did at predicting the effects of Obamacare]

“Unfortunately, even nonpartisan and high-quality analysis cannot always generate accurate estimates,” Friday’s letter reads. “Policy changes are often complex, the economy is dynamic and defies precise prediction, and many policies are modified over time.”

Yet while those criticisms may be legitimate, the White House has gone further, with personal attacks on the agency’s motives and credibility, said Craig Garthwaite, a conservative economist at Northwestern University. The publicity campaign has included a video on social media, and Trump’s budget director, Mick Mulvaney, has described CBO’s career analysts as Democratic sympathizers.

The administration’s own claims about the effort to replace Obamacare with a new system have been suspect. Tom Price, Trump’s secretary of health and human services, said last weekend that the GOP plan would cover more people — a claim that few economists find persuasive.

“We should be looking to make good health policy,” Garthwaite said. “We shouldn’t be looking to make ideological health policy and then try to dress it up in fancy numbers.”

Congress established CBO in part because legislators needed an independent source of analysis on the federal budget — apart from what the executive branch was telling lawmakers. That mission has always resulted in tension between CBO and the president.

In 1981, an unfavorable report on President Reagan’s budget from CBO resulted in a failed effort by his allies to oust the agency’s director at the time, Alice Rivlin. Rivlin signed the letter along with the other seven full directors of the agency. Source: