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America has two economies, and they’re diverging fast (brookings.edu)
194 points by siberianbear 26 days ago | hide | past | web | favorite | 156 comments

The charts have a number of issues. With some changes, they can easily show the significance along with the trend itself. I created a new version of figure 2, which fixes some of the issues:

https://svgur.com/i/F35.svg [SVG]

* Bar charts are preferred when presenting a population of something (people or jobs)

* Each Y-axis starts at zero

* Charts that (by definition) add up to 100% are shown as stacked

* The y-axis max is set to 100% where possible (except in one case, where this obscured the trend)

(I couldn't get Google Sheets to make a nice x-axis for the first chart)

Thank you! The charts really bothered me and this shows that the article is portraying the trends a little more aggressively than they really are.

I still think having only two data points (one during the Great Recession and one in 2018) reeks of cherry picking. I’d like the author to have provided more historical data to demonstrate the effect.

Your charts could never get published, they’re just not hyperbolic enough

> a series of genuine, penetrating shifts have been happening at warp speed through the last decade. These shifts are massively altering the two parties’ economic identities.

Thank you! And how did you learn these guidelines? Is there a book or blog post you recommend for data visualization best practices?

Nathan yau has a great book

tufte is the acknowledged reference

Very nice, thanks for creating that!

>"As such, the Democratic Party is now anchored in the nation’s booming, but highly unequal, metro areas, while the GOP relies on aging and economically stagnant manufacturing-reliant rural and exurban communities."

The analysis of averages can be misleading. Democratic districts appear to include both some of the poorest urban cores and wealthiest suburbs. I wonder how the GINI coefficient of Republican versus Democratic districts compares?

Also, the makeup of the 111th House was 256 D, 178 R and the makeup of the 116th House was 235 D, 199 R, a swing of about 10 districts to the Republicans. But note that in the 114th House the makeup had been 188 D, 247 R and the map was even redder.

> both some of the poorest urban cores and wealthiest suburbs

> highly unequal, metro areas

You're saying the same thing as the article, IMHO.

GINI coefficient of Republican versus Democratic districts

You can get an idea from the states.


It won't surprise you to reveal that Utah features the greatest amount of economic equality. When you chart Democrats' income it tends to be bimodal--poor people voting for tax money and rich people voting for [insert mystery reasons here--stopping climate change? ethnic interests? to please TV clowns?].

Mostly, the "mystery reason" is that self-interested voting is prevalent only among the needy and the greedy. At one end are those who feel it's necessary for their own survival (even when they're wrong or when the policies they vote for actually harm them). At the other end are the rentiers who never had any guiding principle other than self-interest. In between are the many reasonably-prosperous and mostly-urban folks who can afford to vote their conscience. When the personal effect of a policy ranges from slight benefit to slight harm, in neither case affecting one's basic quality of life or social standing, it becomes a lot easier to vote for policies that one sincerely and logically believes are best in a utilitarian sense.

The people you assume vote their self-interest have essentially zero effect via their individual vote, just like everyone else. I mean, if I said I voted for the Green party in every election ever, you would not be able to tell by the state of the country whether that is true, no matter who I am or what my economic situation is.

So I think you are providing illogical reasons for other people to have a certain pattern of illogical beliefs, which is like doubtful squared for me.

Edit: Maybe I would expect the pattern you describe, but I would describe the reasons differently, at least. It is fundamentally irrational to vote as though your vote affects anything, so perhaps the people who are successful and fulfilled through work would tend to be rational, and regard voting as personal expression - whereas people who are not so rational would be more prone to vote their self-interest. Then, of course, one would ask if the irrational in this sense are the groups you mentioned. I don't know.

I’ve heard more than one person on the greedy in say “I find candidate X detestable as a person but I knew I had a better chance at tax cuts.”

Sure, but we're talking about tendencies, the average ability for people in these different groups to vote in this way, not in absolute "everyone votes this way" terms.

9 low GINI states, Utah through Minnesota all have two senators from the same party. There are 6 Ds and 12 Rs.

18 high GINI states, New York down to Arkansas (Alabama excepted) also all have two senators from the same party. There are 16 Ds and 20 Rs.

States with a split Senate delegation tend to be in the middle of the GINI range. States with senators from the same party tend to be at the ends of the GINI range, and at both ends there is only a slight preference for Republicans given that Republicans were in the overall majority.

The average GINI for Democratic Senators is 0.4677, and 0.4619 for Republicans.

One major factor that needs to be considered when looking at these data is that the electoral districts (the unit of measure here) were redrawn with significant changes after the 2010 census (taking control of state legislatures in order to redraw the maps to be much more favorable was a key component of Republican strategy). As a result conparing 2008 and 2018 as if those congressional districts were the same may be skewed.

Yeah. I was disappointed to see that there wasn't a comparison between 2011 and 2013 to try to identify how big that effect was.

Wikipedia has images that can give a vague idea of the geographic shift (which I like especially because they show which districts flipped in the election). It looks to me that some of the major shifts were independent of gerrymandering (e.g. Dakotas becoming solidly Republican, Dem control solidifying over coastal Pacific and around NYC), while others might have been tied to it (e.g. compaction of Dem control in UT, AL, MS).

2010 election: https://upload.wikimedia.org/wikipedia/commons/thumb/a/ac/20...

2012 election: https://upload.wikimedia.org/wikipedia/commons/thumb/b/b8/US...

2018 election: https://upload.wikimedia.org/wikipedia/commons/thumb/4/48/US...

Wow, this really blew my mind. The divergence is striking. Even without words, the article really explains the contemporary social situation in the US. It makes me wonder if remote-work, high COL in tech hubs, higher-ed cost exhaustion, tech burn-out, and the next recession will reconfigure things. Like the article states, the amount of unbalance here can't be sustainable though "the market can remain irrational longer than you can remain solvent" kind of idea should be kept front and center in this discussion. I am worried a massive wealth transfer coordinated by the government (e.g., single payer healthcare, UBI, basic housing guarantee, free college, etc.) will entrench this divergence. I wish we had let the last recession ('08) actual happen instead of cheap money for a decade allowing us to kick the can down the road. Intervention in the capital markets a la the past decade probably amplified this phenomenon by pulling money from productive, structural capacity increases instead of to loss-leading Unicorns that wouldn't work in an economic system that accurately priced risk (i.e., higher interest rates). A company like Uber, though amazing to me and I use all the time, could only exist with cheap money for a decade. The idea of building a company by losing money for 10 years in order to build your client base is impossible if rates are high. That capital would have looked for more "real" investments that probably would have valued what these areas that lost GDP over the past decade could have provided.

> what these areas that lost GDP over the past decade could have provided.

The data isn’t measuring areas that most GDP over the past decade. It’s measuring the average GDP per capita of areas that voted Democrat/Republican in 2008 and 2016, which is a different set of areas. What it’s showing is the economic sorting that happened in the 2016 election, with higher income suburban areas voting more consistently Democrat, with lower income rural areas voting more consistently Republican. That doesn’t say anything about the incomes of any given place, since the set of places wasn’t held constant.

And I think more important than the places not being held constant, the people weren't held constant either. That is, people move. Many of these more rural areas are basically seeing a massive exodus of young people who are moving to cities and other places with more opportunity. The people staying behind are then those who are older or those who find it difficult to move, or those who don't have the ambition to move in the first place. So the self-sorting then only accelerates.

> I wish we had let the last recession ('08) actual happen instead of cheap money for a decade allowing us to kick the can down the road. Intervention in the capital markets a la the past decade probably

The recession did happen and it ended, as recessions tend to do. Recessions are always much briefer than expansions. Cheap money is helping but much of the expansion is driven by consumer spending and tech innovation, in America and China especially. Companies such as Facebook, Apple , Disney, Walmart, Google and Microsoft making record profits every quarter and have so much cash they are giving it away in the form of dividends and buybacks. As evidence of how the US economy is not dependent on the fed, when the fed began raising rates in 2015-2017, the market still rallied. I don't see any reason for the era of low rates to end. In spite of the huge rally in stocks over the past decade, there is still an aversion to risk, and that is why capital keeps flowing into low or native yielding debt. Companies such as Ubere are spending a lot of money, but similar to Tesla, they are cashflow positive. The money is spent on outlays and other lagre expenses. When the expenses end, they will be profitable similar to Amazon. People keep predicting that things will eventually have to change, but maybe they won't. I n 2012-2014 there was talk of a tech bubble, but now valuations for FANG stocks is the lowest the have been in a long time.

> A company like Uber, though amazing to me and I use all the time, could only exist with cheap money for a decade. The idea of building a company by losing money for 10 years in order to build your client base is impossible if rates are high.

Not necessarily true. Tech VC funding for money-losing companies was huge in the late 90s despite high interest rates.

> The recession did happen and it ended, as recessions tend to do. Recessions are always much briefer than expansions.

I think the part of the recession that didn't happen was the failure and disintegration of at least a couple of very large banks and at least one car company, among other things. There was no fundamental reorganization to clean up a couple of decades of bad decisions, which signalled to the next round of players that high risk is not really high risk. One day the chickens will come home to roost.

>One day the chickens will come home to roost.

Will they though?

Having studied history for most of my life, I would say it's inevitable. The only question is how much suffering will accompany the reset.

> "I wish we had let the last recession ('08) actual happen "

wat. The great recession _did_ happen, and by all accounts came damn-near to devolving into a second Depression. There might be something to your complaints about capital markets' problems, but had to respond to that line...

> I am worried a massive wealth transfer ... e.g., single payer healthcare

Only in America is adequate health provision considered "massive wealth transfer"

It is a massive wealth transfer. It may be a good idea, too. Currently 2/3 of non-elderly people have insurance through their employers. If we need to extend coverage to those who don’t have it, those 2/3 will have to pay for the other 1/3. If we are proposing a massive income transfer of $3 trillion a year for the good of the country, we have to be honest about it.

The US spends almost twice the OECD median on healthcare as percentage of GDP (17% vs 9%). Almost all the other countries in the OECD have nationalized health care. Ending our current system and switching to something normal would in fact be ending a massive wealth transfer to the health care industry. In dollar terms, the difference between 17% and 9% of the US’s GDP is $1.7 trillion dollars per year. This is an enormous ongoing wealth transfer to a rather ineffective health care industry, which ranks below many countries that spend much less.

While potentially true (it's hard to say given US healthcare 1. produces much of the innovation that the rest of the world utilizes at subsidized rates and 2. provides more capital-intensive services per capita, and most healthcare is provided toward the end of life when much of it is futile), all developed nation healthcare systems have performed absolutely terribly over the last 50 years and just because some have performed less poorly doesn't mean that they're the ideal solution.

We should look back to a time before national one-size-fits-all healthcare regulations that, based on crude generalizations, regiment a complex industry at great cost to innovation, and monolithic central-government-administered programs with no end user price incentives.

We are overpaying for everything because healthcare should not be a for profit venture the government needs to step in and set a max profit of say 5%. Also we're paying for a lot of bad habits like overeating and not exercising. Lots of preventable diseases go into that mix, I dare say it's the majority of expenditures. There is virtually no governmental or social efforts being put into stopping those preventable diseases.

It's much more complicated than that. For one, healthcare gets more expensive with per capita GDP. This is the pattern across the developed world. Healthcare spending in the US is about where you would expect based on this pattern, given US per capita GDP is significantly higher than that of most developed countries. Medicare in the US is similarly much more expensive than comparable programs. For another, there are things the US does better than other countries, like treat heart disease and cancer.

Also like I said, other countries get to utilize medical innovation produced in the US at subsidized rates.

And yes, for-profit healthcare should be allowed. Healthcare workers aren't all volunteers. They're doing it for money. The same applies to investors. Having laws limiting investment to philanthropy and taxpayers is totally destructive.

Healthcare costs are going down in cosmetic surgery, unlike other healthcare fields across the developed world. Cosmetic surgery is driven by price conscious consumers and profit-motivated practitioners. Self-interest is a powerful motivator and ignoring that leads to misguided bans on for-profit healthcare and inefficient, rent-seeking government-run healthcare bureaucracies and government-permissioned private industries shielded from competition by regulatory barriers.

>>Also we're paying for a lot of bad habits like overeating and not exercising. Lots of preventable diseases go into that mix, I dare say it's the majority of expenditures. There is virtually no governmental or social efforts being put into stopping those preventable diseases.

Agreed. I think health outcomes are mostly a result of non-healthcare factors. Having safer, denser and more pedestrian friendly cities would go a long way in improving health for example.

What we're really paying for is the armies of data entry and clerical workers that have to back up every doctor in this country because they are in a constant arms race with the insurers about getting every claim paid. Compare any medical practice to just about any tech firm these days. My company has one office administrator taking care of 30 keyboard commandos. A typical medical practice has more than one clerk per doctor.

This is not normal. Go to any medical clinic in Europe, and it's no different from the tech sector. One office admin, lots of doctors and nurses.

And it's not cheap either.

Administrative costs are particularly high in the US, but they're high in lots of places: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013.... (Ex. 3)

If we cut hospital administration costs to Dutch levels (as a %-age of GDP) we could save about $140 billion per year. It's not nothing, but it's also only about 4% of total U.S. health expenditures. As noted in my response to a sibling post, all profit in the system amounts to another 6%.

So even if you cut out all profit,[1] and reduced administrative costs to Dutch levels, you get a 10% cut. It's not nothing, but it doesn't even get you 30% of the way there to cutting our costs to rich-OECD country levels (as a %-age of GDP). You still need to find another $875 billion or so to cut.

[1] Which is of course unrealistic, because drug companies in the EU make significant profits too, and most countries like Germany and the Netherlands have private service providers who make profits.

Profit doesn’t take into account inflated salaries which are tallied as expenses.

Right, but inflated salaries for who? US nurses typically start out at double what nurses in the UK earn. They can top six figures, which a nurse in the UK won’t touch. If you look at smaller US cities, the hospital is typically the largest employer. Cutting down to European levels of healthcare expenditures will require cutting jobs and cutting salaries for upper middle class people, and there is no political will to do that.

Here in Poland (where we have universal, state-provided health insurance), there are relatively few office admins, but the paperwork still needs to happen (perhaps less than in the US). The health care providers need to diligently fill it out in order to get paid by the state-run insurance. And since the doctors don't get admin help, they have to fill out the paper work themselves, which is a giant misallocation of their skills...

> Currently 2/3 of non-elderly people have insurance through their employers. If we need to extend coverage to those who don’t have it, those 2/3 will have to pay for the other 1/3

I thought the uninsured rate was closer to 10%. Some googling suggests 8% or 9%. This is short of 33%.

Of course many are insured but under insured, or insured but paying (or in I guess 66% of cases having their employer pay) for massive amounts of waste. There are entire industries like medical billing which don't strictly need to exist.

Insured through their employer is different than insured.

Yes but he implied that the employer-insured need to pay for both non-employer-insured and uninsured. If his 2/3rd figure is correct we can say it's about 23% in the former and 10% in the latter, but he just says 2/3rd needs to pay for 1/3rd.

If the 23% are already paying, why do they need a subsidy from someone else's employer? I guess there is an affordability issue and rising costs ... but this is true for everyone, even those who mask it by going through their employer.

Not necessarily when the medical industry is willing to give up some of its beyond the reason revenues.


Then again perhaps the level US healthcare is considerably higher and it would mean lowering the average quality and availability of novel treatments.

Health care is not wealth.

Your health is the most valuable thing you have.

If, for example, someone has a life threatening illness like cancer, they would gladly sell most of their stuff to pay to get their health back. Your health is more valuable than a garage full of Ferraris.

Taking care of that wealth is important. It baffles me how people can smoke sigaretes. It's like cleaning your Ferrari with a scouring pad.

No amount of wealth (which is a fancy word for lots of money) can buy health. Therefore, health is not wealth. It is, as you say, more valuable than that.

You can view inequality and bad health in the US together as a mutually reinforcing expropriation. On an individual level you cannot buy or sell health, but on an aggregate level they blur.


You’ve never been addicted to a drug, have you.

Eh, just because everyone deserves is doesn't mean it's not wealth. Lack of health care is anti-wealth.

Maybe you should consider that everyone deserves some wealth in general.

By definition

wealthy, adj. having a great deal of money, resources, or assets; rich

most people are not wealthy.

Health is not wealth.

You deserve access to life-saving health care you can't afford, even if you don't "deserve" to be rich.

Those 2/3 are already paying for the other 1/3. A hospital must treat anyone who shows up whether or not they can pay. The difference is made up via increased costs for those who can pay via insurance or tax payer funded hospitals.

"wealth transfer" is usually invoked as a dog-whistle for "communism" and "socialist" class warfare. It's literally true, but figuratively, it's a weaker form of "taxation is theft."


Help me understand which point you think is incorrect?

language like that just means someone is arguing, not reasoning

I disagree. The costs of health care are ridiculously high and rising. Out of the people who actually have health insurance, how many can actually afford a serious health issue? That number is getting smaller and smaller and as it shrinks, prices rise to preserve profit.

If something isn't done, health insurance will become an empty promise. Even when people have it, it will be to expensive to be truly useful. There are already segments of the population where this is happening.

IMHO, that is massive wealth transfer: collecting all the premiums from working people and transferring it to the health care industry.

You’re talking about a different thing than I am. The CBO estimates Medicare for All will cost $3 trillion per year. That will require a large wealth transfer to pay for. Even if it were half that it would require a large wealth transfer.

Paying for healthcare is, by contrast, not a wealth transfer because it’s payment for receipt of goods and services. As I outline in a response to a sibling post, profits account for just 6% of health spending. The rest goes to paying staff, for supplies and equipment, etc.

Which is also why cutting healthcare expenditures is a pipe dream. If you look at many places, the local hospital is the biggest employer. Nurses in the US make double or more what they make in the UK. Maybe we do a bunch of unnecessary tests, but we lay for lab techs to do those unnecessary tests. Real reductions in healthcare expenditures will require cutting salaries and cutting jobs, and that’s politically impossible.

You act like it's 3 trillion on top of what we already pay though. Obviously you and your employer quit paying insurance companies and that money goes toward the government program. Also the richest pay more in taxes on their income and "wealth" instead of being able to hide it overseas and buying up land. They'll have to sell some of that to pay the 2% wealth tax every year so they can't store it away for 10 generations of a dynasty.

I think you are oversimplifying. Everything related to health care in the US is more expensive then anywhere else, from personnell to medication and supplies, to equipment. Cost is exaggerated at every step... Unecesary tests and procedures are part of the problem, bet even necessary procedures have costs associated that are inflated.

Yes, some costs come down when insurance actually pays. But this still doesn't bring costs down to amounts that we see in Canada.

More and more no one can pay for healthcare anymore. Perhaps it will cost $3 trillion the first year but costs will drop as prices standardize and we start to see care become predictable. The alternative is prices that continue to rise with more and more bankruptcies and, eventually, more deaths due to lack of care. Even the insured cannot continue to afford these rising costs.

Wealth transfer... from where? The federal budget seems plenty big. $700 billion was transferred to banks staring in 2008, $4.6 trillion was paid out in eight years. I'd prefer a proactive solution, perhaps it will cost less in the end then our current plan to do nothing and fight what little regulation has been put in place.

There's an additional wealth transfer between the owners of healthcare related stocks and non owners. If the US approached EU type health care costs we could easily give every one health care for free. The cost would come out of healthcare company margins.

Totally false. Total health industry publicly traded company profits (including drug companies, hospitals, and insurance companies) add up to about $50 billion per quarter, or $200 billion per year worldwide: https://www.thefiscaltimes.com/2018/11/12/Chart-Day-Big-Phar....

Total domestic hospital profits (including more than just public companies) is about $74 billion per year: https://www.modernhealthcare.com/article/20180104/NEWS/18010.... Insurance companies are $25 billion annualized: https://www.cnbc.com/2017/08/05/top-health-insurers-profit-s... ($7 billion per quarter for health insurers). The link above shows $100 billion in drug company profits worldwide; about half of revenues are in the US, so let’s say $100 billion in profits domestically. That’s $200 billion for the US healthcare industry, including non-public companies in addition to publicly traded companies.

Total US healthcare spending is $3.5 trillion. Profits account for just 6% of that spending.

To reduce healthcare spending to the same levels as the rich European countries like Germany or France we’d have to cut spending about $1.25 trillion. Cutting healthcare industry profits to zero (and note that there are for-profit hospitals and drug companies in the EU and they don’t make zero profit!) would reduce healthcare expenditures by just 1/6 of the amount required.

That's the big takeaway I wish more people understood. Health is broken not because of fat cats making obscene profits (although there are a few), but because we're fundamentally doing it wrong.

Its not one guy digging a ditch and charging too much. Its that for every 6 people digging, 5 are racing behind them filling it back in and all of them are charging us for the "service".

A better estimate for savings from some parts of the industry is revenue not profit. That’s because the work done by, for example, insurance companies is largely useless paper shuffling that doesn’t need to exist under single payer.

Edit: oh yeah, and marketing. So much health industry money ends up in marketing. Something almost completely unnecessary under single-payer as well.

The post I was replying to was talking about wealth transfer from people to shareholders. Profit is the proper measure of that.

As to cost savings, you can’t use insurance industry revenue because that includes money spent on services. And a lot of the “paper shuffling” does need to exist under single payer. Most universal healthcare systems aren’t nationalized systems like the UK NHS. Germany for example has mandatory membership in Public health insurance organizations for those making under 60,000 euro. There are 100+ of those. Then 15% of the population has private health insurance. Care providers are mostly private. So there is still medical billing that needs to be done. Most EU countries are similar in that regard, and unlike the UK NHS.

As to marketing, now you’re talking about a drop in the bucket. Pharma industry advertising adds up to just $6 billion per year.

I support pretty much any solution that provides guaranteed access to effective acute care (the fact that the ER can’t legally turn you away doesn’t mean it’s effective care).

But people who advocate for this position (which, again, I believe in) all too often live in a fantasy world where we can magically switch systems and pay less. If we keep paying US medical personnel their prevailing wages, there is no way we’re going to lower costs.

Nurses and doctors are too popular in the US to ever even suggest that we reduce their wages to European levels.

Acute care, including the ER, is a small fraction of the total cost of health care. If the health care problem was simply ensuring everyone access to a GP's office and an ER for emergencies, we'd have solved it by now.

Oh, absolutely.

Providing effective and low cost chronic care is an unsolved problem everywhere.

I can’t say that I support any and all entitlement schemes I’ve ever heard for chronic care, is why I was singling our acute care, where I do, but you’re right that I was mixing up arguments.

But of course when you provide low cost acute care, and don’t cover chronic conditions, there’s strong pressure for chronic problems to wait until they’re acute and harder to solve, and for chronic patients to use the acute system very inefficiently.

It is indeed a hard problem.

More preventative care—which, like all proactive things the US cannot seem to do—would also lower costs.

so a few things you're missing.

First, the location and timing of accounting profits is not the same as economic profits and the return on capital.

Second, what do you think the point of single payer negotiation with healthcare providers is? The NHS in britian negotiates prices on behalf of the entire country. This system in the US would massively move producer surplus over to consumer surplus by reducing prices through negotiating power.

Lastly, healthcare outcomes in the US are terrible and prices are astronomical compared to Europe, do you think it's a coincidence that their systems are centralized while ours is distributed? The US system massively favors capital returns over service cost and quality.

>> Total US healthcare spending is $3.5 trillion.

Yes, but some of this is funny money. Like when you go to the hospital and get charged $50 for a tablet of aspirin. I can see a coordinated national system to be far more efficient than the system we have now of fake list prices where some parties get a negotiated real price

As an European with family and friends working in health care in several countries, I think the general impression most people in US have about the European health care is idealized and very far from reality. It is not the place for a long discussion here, but we are having serious problems in most countries, from waiting lists longer than the expected patient's life to lack of "free" drugs that you have to buy yourself if you want to live.

As an European...what?

Am not saying the system is problem free, but I've had multiple surgeries done for free, whereas in the U.S I'd most likely go bankrupt.

Also the point about waiting, not only did I not have to wait, but are you seriously comparing this to a system where I don't have to wait if am wealthy, but can wait until I die if am not?

The medical bankruptcy thing is a misleading narrative: https://thehill.com/blogs/congress-blog/economy-a-budget/263...

> A study published in the journal Health Affairs reviewed Justice Department data and discovered that among Americans who cited medical debt as a contributing factor in their bankruptcy filing, only 12 to 13 percent of their total debts were medical.

Also the studies that are invoked for that proposition don’t distinguish between bankruptcies due to medical bills and bankruptcies resulting from reduced income due to health issues.

Regular people have ended up in debt just to live, and can carry a surprising amount. If we build a society where everyone carries debt, often ongoing, it's hardly surprising just bunging another few thousand or tens of thousands surprise medical debt at them may break them. Even if it turns out to be just a proportion of total.

Your link makes no mention of mortgage or home loans. If they are included in the debts at bankruptcy, it's not in the least surprising that medical debt is "only" 12%.

The underlying DOJ review is addressed here: https://www.healthaffairs.org/doi/10.1377/hlthaff.25.w74

The 12-13% was unsecured debt (which would exclude mortgages, which are secured by the house).

> This past year, the U.S. Department of Justice (DOJ) responded to a request by Sen. Charles Grassley (R-IA) by examining 5,203 bankruptcy cases from the files of the U.S. Trustee Program. The filings occurred between 2000 and 2002, the same time frame as the filings studied by Himmelstein and colleagues. The DOJ reported that 90 percent of filers had medical debt of less than $5,000. Of those reporting medical debts, those debts accounted for only 13 percent of total unsecured debt. The DOJ summarizes the evidence against Himmelstein and colleagues' thesis as follows: “The conclusion that almost 50 percent of consumer bankruptcies are ‘medical related’ requires a broad definition and generally is not substantiated by the official documents filed by debtors.”

The study is a little old, but the “medical debt is the leading cause of bankruptcy” trope is also old.

OK, that rules out my second point then. Still the first applies. I don't find it terribly surprising that $5k could break someone's back. Plenty of folks seem to run at maximum possible credit. Others will no doubt be able to take it on the chin.

Never heard of it being the leading cause of US bankruptcy btw. My distinctly European perspective is it's problematic it's a possible cause at all.

It's not the 5K that does it, it's the $500k for heart surgery that will do it every time.

Yes, there are many success stories of people using the healthcare system in Europe (EU, more precisely), more than people winning the lottery, but there are also many stories of people dying because of the failures. In a few countries (especially Germany) the system still works pretty well, but in the majority it does not, it is in various degrees of failure.

what do you think the cause of that is? and why does germany still work well?

There are long waiting times to access American health care too, anyway, even with insurance. I feel like the people who make those sorts of claims must never do more than use the ER or walk-in clinics.

"paid by the state" and "free" are not the same thing and shouldn't be used as such. I realize I'm nit picking here, but when people banty about the term "free health care for all" I really do think there is a disconnect somewhere. It's paid for. And while the IRS may be an efficient system, the government certainly is not. Now, while I'm not opposed to medical coverage for all, saying that our government running insurance instead of rolling hospitals into one of it's emergency services, like police and fire, is a different discussion.

> It's paid for.

Using this definition, everything is paid for, and nothing is free except sunlight. This is obviously a useless definition.

“Paid for by [someone else]” is “free”. There is no other useful definition of the term.

Also: https://satwcomic.com/every-time

Well, considering I said maybe we should move health care to emergency services,like the police and fire services, added to that comic, I can only assume you completely missed the point of my statement. And while not everything is paid for except sunlight, everything the government provides IS paid for, yes. There is a ledger to be kept. I'm not some hard core conservative, nor am I some hardcore liberal. Like most Americans, I'm somewhere in the middle and am capable of more nuance and critical thought than I am given credit for.

I don't mean it as a pejorative at all. I am all for a universal basic health care setup (e.g., Medicare for all) because "we" (the insured and tax payer) are already paying for everyone's healthcare that can't afford it. If you go to the ER instead of PCP, we are paying for it; if you lose out on work because of preventable illness, we are paying for it; if you die early without adding productively to society, we are paying. But we currently don't have this system to pay for this from those who are making money. In other words, everyone is paying for this, but in reality it should be the higher earners that are paying more for this. That is what I see as a wealth transfer. People like you (likely) and me will have higher payroll taxes or income taxes to cover those who cannot afford. Please don't take this the wrong way--I am all for this. But it may entrench this inequality because it removes the "push" from the invisible hand of the market to get people finding ways to improve their lot in life--the whole basis of our current economic system. Again, not saying it is right or wrong, just commenting on how I think things are.

Healthcare is not a market. There's no price transparency, often no real choice (you can't choose your employer's insurer or what drugs you need), no real ability by consumers to assess the quality, and extremely high barriers to entry.

US healthcare functions more like a horrific reverse lottery where occasionally someone is sent a bill that bankrupts them for reasons they don't understand and had no control over.

The push from the market appears to mainly consist of a) engineering ways of preventing drugs coming out of patent b) absurdly increase margins on basic and necessary items c) insanely increase margins on items with limited competition, e.g. epipens, last but certainly not least, advertising to unbalance healthcare by encouraging the expensive over the appropriate treatment. Pharma prefers to find long term treatments rather than new antibiotics and other treatments that are a week or two then done. Much more money in an ongoing treatment than cure.

It's not the market, but far more US liability laws and willingness to sue that brings the US tendency to over investigate, diagnose and treat, is it not? That seems to be the sole advantage of the US approach over others, and even that can be questioned in many areas.

All of those market pushes seem to be in the interests of medical CEOs and stockholders, not patients and citizens. I am far happier with a system that tries to remove or limit those for benefit of everyone. That tries (fallibly) to achieve fairness on medical not solely market grounds. I would prefer more openness too, but after the infamous farce of monoclonal antibodies, that's not realistic.

Seems more like we need to keep that invisible, and very imperfect hand out of healthcare as much as possible. Then heavily constrain it where we can't keep it out.

So if people aren't faced with chronic illness and the fear of bankruptcy they won't have a drive to succeed and improve ghetto their lot in life? Are you seriously arguing that? That's absolutely absurd. Why would a sick person me motivated to be productive when they can go on Medicaid or to the er for free? I think you have it backwards.

I wish their charts didn't just draw straight lines from 2008 to 2018 data points. The data points in between could be meaningful.

Hear hear. And it would it also have been very useful to see some data points from before 2008 to better understand the trends

I woke up early and can't get back to sleep so my phone is in Digital Wellbeing mode (grayscale screen). Those chart lines are nearly impossible to distinguish from each other. Should have gone with a dash or other marking.

or I don't know, maybe you should turn off your 'Digital Wellbeing mode'?

I get where you're coming from with this, but it's snarky and the parent comment does have a point: these charts aren't very good renderings.

There are no legends, so taken out of context you'd have to just know what the colors mean. In grayscale they are virtually the same, so you couldn't tell anyway. Even if they draw the lines the same, they could've used different style endpoints. Again though, without a legend you wouldn't know which is which. Even if you're not in "wellness" mode you may be in say, "color blind" mode (sadly not really optional) and in that case these may be particularly difficult to read.

They don't have vertical axes either, so putting the charts side by side or overlaid doesn't make sense, because you can't know if they are the same scale unless you compare the endpoint numbers. (Hint: they aren't the same scale.)

These charts aren't necessarily misleading by design, but they lack the fidelity they probably should have in order to be truly useful, particularly taken out of context.

They can, but that's not an option for colorblind people?

Absolutely true. That was not the argument made though.

Isn’t the point of it is to make everything less enticing for you to watch so you don’t do it?

“Blue” territories have seen their productivity climb from $118,000 per worker in 2008 to $139,000 in 2018. Republican-district productivity, by contrast, remains stuck at about $110,000.

How is productivity measured? I have wondered about this stat as I have seen it used many times over the years but I can't figure out what and how they are measuring or who is doing the measuring.

Take Weyerhaeuser as an example- they own 26 million acres of land across North America, have 10,000 employees and 7+ billion in revenue. Recently their corporate headquarters moved to Seattle. Is their 7 billion in revenue spread across all the loggers, drivers and mill workers in remote forest locations? Boeing is another example with headquarters in Chicago but as far as I know they don't make any planes in Chicago.

Are these stats pulled from census, irs, labor...? Am I wrong or cynical in thinking these are lazy stats and most of the "productivity" is attributed to the small percentage of employees in the corporate HQs? I can't imagine a fed bean-counter following around logging trucks in remote areas to make sure the productivity is attributed to the correct region.

Productivity is measured by dividing GDP by total hours worked, with the assumptions that GDP is caused by work and that the relationship is linear. The latter assumption is false and the former is highly suspect.

You raise a good question about localization of GDP. The global economy is a highly-connected network. It's often unclear how to draw valid conclusions from national accounts, let alone the local accounting attempted here.

That said, I think there most likely is a trend of the kind imagined by the authors and that it's showing up in these figures. Showing up is the most it's doing though.

This article shows that districts that tend to vote democratic are more prosperous, and the gap is growing. However, people who are more prosperous* (income > $200k) tend to vote Republican over all. I can't explain that. If I were going to guess it would be because older people tend to have more wealth and income in America (in general) and older people sku more republican.


Why would that be hard to understand. It makes total sense.

People making >200k probably use almost no government resources, and are sick of getting taxed up the arse left and right at any opportunity.

I’d be happy to pay more tax if I had any faith the money would be used wisely, but I don’t. Hence, my goal when voting is tax minimization.

If people who are wealthier are older they are getting social security and Medicare. Everyone is getting roads to drive on, police, and other government services. They probably are still sending their kids to public schools and moved into the “good neighborhoods” to get into better schools.

I make more than that and I am not sick of being taxed.

Use almost no govt resources....this is the problem. They use a ton they just don't realize it. The FAA to keep the planes in the air, FDA to keep food and medicine safe, Law enforcement to keep the streets safe, Roads, etc and on and on.....

Americans are spoiled and don't realize how much the government does for them.

For a truly low govt society they can move to various third world countries.

It's mostly gaslighting. Democrats win voters making $50K or less, Republicans win voters making $50K or more. There are a couple of small-ish inversions where Democrats do well with people making $150K-$200K and Republicans do well with people making $35K-$45K, and that gets spun out into all sorts of things it's not.

Trump's economic sweet spot, for instance, was $75K. Not coincidentally, that is the median income for a two-earner family of two white high school graduates. But calling that "the working class" really misses the point.

I don't think anybody is gaslighting. This report is all about facts, and all I was trying to do was point out another fact. The point remains that republicans are really popular in the places where there is less opportunity.

Here is a point I will make that is political: The places that are run by very liberal local governments, such as California and New York have the majority of the growth. I always see these articles about how business and people are fleeing to low tax places. Except the growth continues to swamp that effect.

> republicans are really popular in the places where there is less opportunity

No, I'm saying that's not quite it. There is an income correlation among white voters: the poorer a white voter is, the less likely he was to vote for Trump. It's just a very shallow one with a couple of convex points at a couple of income levels.

This makes me think about the book 'Coming Apart' [0] which was an eye opening read which predicts all of this. As a tech/media person in a democratic costal city, there is a whole other America that, it turns out, I know very little about.


As a dev from flyover country what was something that surprised you? Getting rid of misconceptions is the sort of glue that could prevent this.

I stopped reading when figure one showed only two data points on a chart without zero based y-axis. It portrays a divergence that -looks- like a multi factor difference, but is only a 20% at most divergence. This coupled without historical comparison for normal variance and the repeated use of excited adjectives, makes for an alarmist article.

I really appreciate how this article just presents information without trying to blame anyone or push a political agenda.

The Brookings Institution is a think tank with a stated bias & political agenda.

The last couple of paragraphs especially are pretty clearly pushing an agenda.

Not sure if you're joking, but just in case you're not... to me the political agenda was particularly clear.

I wasn't joking. Seems to me it could just as easily be used to support the "liberal elites are out of touch with real Americans" narrative as the "Tump voters are dumb bumpkins" narrative.

If the first two sentences weren’t enough of a clue, maybe you’ve just become numb to it all over the last 3 years.

Well, yes it could. Because it's a brilliant example of liberal elites being out of touch with real Americans.

You’re gonna need to explain what you mean by “real Americans” because I’m pretty sure the the urban, liberal, multicultural folks in this country outnumber the white, rural, conservative ones. What’s your criteria for a “real” American? (as if we didn’t already know)

If you already know, why do you need me to explain? Are you just trying to be smart? (as if you actually know)

Why did you dodge the question? Who do you consider a real American and why? And if the answer is "someone who self-identifies as an American", why do you think that doesn't include liberals?

Why did you ask a question in bad faith?

> doesn't include liberals

Where did I ever say that, pray tell?

What exactly is a Real American?

If I ask you if you're American and you say yes, then guess what? You're a Real American.

People who dont hate freedom /s

YES. This article clearly answers what I was asking about a month after the presidential election.

"Why aren't Democrats trying to answer everyone's problems? And realizing that someone is telling you they have a need if they vote for the other party?"

Turns out, politics is in its own filter bubble. Democrats honestly can't relate to rural or manufacturing areas anymore, and Republicans can't relate to urban or technology areas.

> "Why aren't Democrats trying to answer everyone's problems? And realizing that someone is telling you they have a need if they vote for the other party?"

Not true in all cases. Particularly look at what is going on with farmers in the midwest voting directly against their economic self interest.

There are cultural interest that they have that supersede any economic interest. I’ll leave it to the reader to make their own inference.

Why is it bad when farmers in the Midwest vote their conscience, against their supposed self interest, but it’s good for rich programmers to vote against their self interest? The Trump tax cuts were good for me—am I obliged to vote for him?

I should have been clearer. Voting against your self interest is not an issue (and can even be admirable).

The issue I have is farmers relying on state welfare to stay solvent while they vote against their economic interests.


Well, Trump promised to restore rural American culture and way of life, to stop the change, reopen the mines, bring back the factories and the jobs. To turn back the clock on globalism and the leftist regulations which (as far as many such people were concerned) were the real reasons for the rural economic downturn.

He's a charlatan, though, and everything he promised was impossible, but conservative people by definition don't want change, culturally or economically, and "Make America Great Again" as a slogan means "turn back the clock to when the world made sense to us."

The Democrats, meanwhile, represent the very change rural Americans want to avoid. They embrace globalism and progressivism and multiculturalism. They want people to look forward, not backwards. But, looking forward, rural Americans only see their own relevance diminish. They don't want to live in a world where the government has to take care of them because capitalism has determined that robots and Chinese children are a better ROI than American labor, or where labor doesn't mean something.

But they will have to live in that world. We all will, in time, whether we want to or not.

Add to that decades of propaganda training Americans to associate the Democrats and progressivism with neo-marxism and atheism, that a social safety net is only for the lazy and indigent, that the "dignity of an honest day's work" is a thing that exists and matters, and it's easy to see why the Democrats' message falls on deaf ears. It's not even an entirely economic argument at that point, it's economics, culture and religion.

Corporate interests have successfully convinced rural voters that socialism and regulation are the great moral evils of their time, even though it's capitalists who exploit them and send their jobs overseas, in the name of the very values they espouse, and even though rural areas often depend on government subsidies and programs.

Trump's populism doesn't work because rural voters are stupid. It works because it appeals to people's fear about the future and their sense of being personally wronged by that future, on an emotional rather than intellectual level. You don't have to be stupid to fall for that, you just have to be vulnerable, it's a basic long con.

I would really enjoy seeing an article like this paired with analysis from somebody with the same education level but from the University of Chicago economics department or something like that. They'd probably tell two very different stories. A few things that jumped out at me:

Two of the sectors where the author is touting gains for Democrats both have significant left-leaning bias: academia and tech. How does that play into this?

Democrats are getting more college degrees now, but which degrees?

Why start so many graphs of Democrats doing better than Republicans in 2008 when we had a big recession and a new president who didn't prioritize rural America? Why not go back to 2000 or 1990 so we can get a bigger picture?

And pardon my ignorance, but "GDP per seat"? And why is this graph next to Median household income? Are they saying that the changes in median household income are causing "GDP per seat" to rise? Urban populations have changed a lot in the past 10 years, are we even talking about the same households?

Household income statistics are prone to distortions[0], GDP per seat is probably prone to even more, why not use GDP per capita? It feels like they were just happy to find two graphs where the Democrat line went up and the Republican line went down and they know most people will just glance at the graph without wasting their morning thinking about what GDP per seat really means and how it's affected by the population flows of the past decade.

[0] - https://www.creators.com/read/thomas-sowell/09/16/misleading...

I wonder how much the lack of high-speed Internet plays into the stagnant economic prosperity of rural America.

Not a lot. High-speed Internet is good to have, but it does not make your farm better, productivity higher and product prices higher. You don't "digitally enhance" your manufacturing plant with faster Internet unless the speed of Internet is keeping you from achieving better productivity - most of the time, not the case, plants have all local systems and they use SCADA, not fancy screens or kubernetes.

Perhaps the general hope is that we can replace all wealth due to manufacturing, resource extraction, food production, with that produced via internet advertising.

I haven't seen yet anyone eating internet advertising, living in it, heating with it, driving it etc.

Probably not much. It doesn't help, but by the time $60/mo is a lot to pay (for Comcast trash internet no less) you're already hurting.

Something this article doesn't specifically call out is age. Anecdotally, it seems that the upcoming generations are more liberal than the last, and that the older population is simply dying off. Perhaps someone can cite direct evidence of this?

I agree. The article is generally lacking demographic data. Are younger, better educated, more productive people moving from red to blue districts? Is the share of the population living in the red districts shrinking? There are a lot of open questions.

Are these conclusions correct though? They show the electoral map and the districts that were lost. Those are more rural and more traditional industry focused areas.

It is more likely that coastal Democrat's income and education was always higher than rural leaning counties and remained at par between these two time periods. To state that this materially changes the Democratic party is not right.

There are only two charts in that article that matter. The ones on productivity and education. These explain everything else in the article.

The article over generalizes on geography. My city is deeply red but it recently passed San Francisco in population and is growing faster in nearly all metrics including jobs, housing, wages, and so forth. I think the article is generally correct in that urban clusters tend to be more blue and rural areas tend to be more red, but that is a product of population density more than anything economically related. Despite my city now having more people than San Francisco it is also growing geographically and can maintain its average density. It is now geographically larger than Dallas. If this rate of growth is maintained this city may enter the top ten of US cities, both area and population, over coming decades and it will probably continue to be a red congressional district.

Also, next door is a suburb that is possibly the wealthiest mid-sized city in the country and it’s also in this red district.

I stopped reading at "low-skill".

lol. Good point. I would like to see everyone's list on what a 'skill' really means. It would make a good basis for a discussion.

a quick edit: It's a question that really began gnawing at my mind over the last few minutes. What is a skill?

To tell you the (highly likely) truth, I could probably take on the jobs the authors hold and do a perfectly acceptable professional job given a desk, a library, a phone, a web browser, and a five minute head start. Are they 'skilled'?

Given much of the economic growth is in tech and tech tends to concentrate in urban centers, urban centers tend to be blue. Can this be much of a surprise? The Administration's self-promoted gains in manufacturing and mining are impaired by some of that technology. Automation has played huge roles in the very industries Trump heralded for his voter base in 2016. You no longer need an army of humans on the production floor or even in the coal mine, making those, formerly high-paying jobs, a thing of the past. This leaves an entire population of disenfranchised to whom immigrants are a major threat as is outsourcing. So these numbers and graphs should not be a surprise to anyone.


> the number of people in blue states moving to red states.

Blue states losing the "best and brightest" to red states would tend to reduce disparity, which is not what actually seems to be happening. If blue-to-red migration drives increasing disparity, it means that the loss to the blue state is less than the gain to the red state. Either those migrants became less productive in the process, or they were a net drag all along. Was that the point you meant to make?

California is bleeding, on average over the past 10 years, 60,000 people per year to Texas and that number is growing. California's total population continues to climb though (Texas is growing faster still though by about 2.5x). At the same time it appears Texas GDP per capita is growing twice as fast as California and will surpass California before the next census.

None of the data present, in either the article or the comments, align with Texas or California. Together those two are about 20.6% of the total US population. While there probably is a growing divergence exactly as the article claims it appears the described cause of that divergence is completely out of alignment with what the article claims.



Would (say high net-worth) people moving from blue to red states upon retiring match "become less productive in the process" scenario? This seems like a likely case (moving on retirement), but I'd suspect if this is true that there are some less affluent families that are moving to red states in order to "do more with less" which also seems likely to me.

"...number of people in blue states moving to red states." Citation needed. If you live in one of those blue areas, it sure doesn't seem like it. More people just keep showing up.

At least in the case of California, the web abounds with statistics showing net domestic outflow. My guess is that any population increase in CA is due to foreign nationals.

> It didn’t get mentioned in the article but a huge reason of this over the last 10 years is just the number of people in blue states moving to red states.

Huge reason for what? Income growth is happening in blue districts not red.

> It is no question that trump is winning again.

Last I checked he's getting crushed in polls by almost every major dem candidate.

He got crushed in the polls in 2016. He also lost the popular vote. But he could once again easily win the electoral vote and lose the popular vote.

Due to more gerrymandering I believe he could lose by up to 8 million or so votes and still win because of the electoral college. It's pretty depressing when you think about it.

Gerrymandering doesn’t have anything to do with the presidential elections. Gerrymandering refers to state legislations drawing districts to have an advantage in state and house elections. Electoral college votes are strictly determined by the census.

>Last I checked he's getting crushed in polls by almost every major dem candidate

Last time I checked too, but it's been a few years since I checked...

I suspect this is exactly what makes the Trump-style platforms viable even if they make no real sense.

In other words, Trump's Republican party is losing votes in more highly educated districts, which not surprisingly fare better in the information-age economy. Conversely, it gains votes in districts with a lower education.

Are the Republicans "Trump's party" or Trump is just riding the wave?


My guess is that the dividing line between 'Red' and 'Blue' is being renegotiated as we speak. The post-WWI political arguments, largely about economics, are being replaced by something new. Trump obviously has a good nose for these matters.

In case anyone was wondering why the level of statistical sophistication on show here would embarrass many an English major, the primary author, Mark Muro, was educated at Harvard and Berkeley, where he was presumably better at English literature than he now is at statistics or statistics-heavy journalism.

Here is his CV:


Including this gem from almost a decade ago:

“Bill Gates, Not Congress, Has the Solution to Global Warming.” The Avenue, A blog of The New Republic. January 25, 2010.

I'm glad that worked out so well for us.

Don't miss this:


Tl;dr: "wealth work" is here to stay, yes it's a "servant economy" but we should just tax and regulate, so that the servants feel better about their jobs walking the dogs of people too rich and lazy to walk their own dogs.

> Democratic districts have seen their median household income soar in a decade—from $54,000 in 2008 to $61,000 in 2018. During that decade the US had an inflation rate between 1 and 2%, which is around $5-10k. So really there was no "soaring" at all: democrats barely manage to hold on to their wealth/lifestyle while republicans are continuously losing and worse off than the years before.

Everyone in the country is losing except for Jeff Bezos and his caste of rich capitalists who are served by the corrupt politicians of either party.

I'm not Republican or Democrat, but I find the Math provided not agreeing with their conclusions.

Given more than 60% of tech workers do not identify as Democrat, the conclusions that tech workers are Democrats are silly.

I identify with only a few Democrat Candidates and fiscally think Democrats are regressive.

That said, Republicans also don't align with my social or economic views. (Tariffs and government spending)

If I had to guess why this article exists, they are pressuring people into thinking educated rich people vote Democrat.

> Given more than 60% of tech workers do not identify as Democrat

[citation needed]

But for clarity, I'd like to see "identify as X" and "identify as neither".

For some numbers which don't agree see https://www.vox.com/policy-and-politics/2017/9/6/16260326/te...

"They found that, broadly speaking, tech entrepreneurs are pretty liberal. 75.2 percent voted for Hillary Clinton in 2016, and 61.3 percent identified as Democrats"

Yeah dude doesn't realize there is the catch all part of independents who make up more registered people than either dem or republican party.

All of these think tanks devour money from God-knows-who and shit it out into a "lies, damn lies, and statistics" narrative for God-knows-what-purpose.

All I'm reading out of this--in-between the lines of course--is "Booga booga red staters! You're all going down into an abyss of poverty and opioid addiction. Better sell the farm, borrow six figures for a new job credential, prostrate yourself before any corporation that might take you in, move to the city, and spend $2k/month to live in a shoebox"

In other words, wall street wants even more tropical mansions.

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