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The Red Line

Balancing Virus Response With Its Economic And General Health Consequences

By Red Jahncke on March 22, 2020
Balancing Virus Response With Its Economic And General Health Consequences

Connecticut is Not New York City, Where Strict Shutdown Policies Are Needed. CT Governor Lamont Should Issue and Follow Evidence-Based Connecticut-Specific Guidelines For Continuing His Schools and Business Shutdown and, Ultimately, For Lifting It.

CT Examiner, Republican American, CT Hearst newspapers - March 22 -26 ... The coronavirus is not the only threat we face. As I wrote in The Hill on last Thursday (3/19) and The Wall Street Journal editorialized last Friday, the 20th,, we may face a far greater threat from a collapsed economy, which would devastate everyone’s financial resources and their medical condition.

This should be of special concern in Connecticut which entered the current crisis already economically anemic and financially shaky.

While this may not be popular to say, we should rethink shutdown policies in Connecticut. Actually, it may not be unpopular. A new Pew Research
Center poll shows that 70 percent of Americans see the virus as a major threat to the economy, while only 27 percent see it as a major threat to their own personal health.

It should be a priority to keep people working and return to work the tens of thousands suddenly being idled. The Connecticut Labor Department received 56,000 unemployment claims in the first four days this past week versus a weekly average of 2,500.

A deep recession or depression would bring an inevitable deterioration in public health along with economic pain. It would push us backward down the Preston Curve, which demonstrates that life expectancy varies directly with income level: wealthy societies are relatively healthy, poor ones less so.

We should balance the “incidence curve” with the Preston Curve, putting as much effort into moderating economic devastation as we put into flattening the incidence, or infection, curve to keep coronavirus hospitalizations below hospital capacity.

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The Double-Barreled Coronavirus Threat: Death by Virus or by Ensuing Economic Disaster

By Red Jahncke on March 19, 2020
The Double-Barreled Coronavirus Threat: Death by Virus or by Ensuing Economic Disaster

The Hill, Thursday, March 19, 11:30amThe ultimate infection and mortality rate from the coronavirus (COVID-19) is unknowable at least for weeks, but the economic fallout is not. We appear headed into serious recession, if not depression. Bad economic times also affect public health and, ultimately, we might see more deaths from a deep economic decline than from coronavirus.

On Monday, China released its economic data for January and February, when COVID-19 erupted and the country went into lockdown. The data were much worse than analysts forecast: China’s factories slumped 13.5 percent, retail sales fell 20.5 percent and home sales plummeted 34.7 percent. This, in an economy that has experienced 9.4 percent average annual growth over four decades of uninterrupted year-over-year quarterly growth.

On Wednesday, Deutsche Bank forecast a full first-quarter Chinese GDP decline of 32 percent annualized. The bank predicted a second-quarter drop of 24 percent in Europe and 13 percent in the U.S. from first-quarter levels – a decline the Wall Street Journal said “would be the biggest in recorded history.” That is why the stock market has plunged more than 30 percent and U.S. Treasury interest rates have fallen to near-zero levels. (To avoid any confusion, Wall Street is an indicator; this is not to say it is in need of a bailout.)

In the face of such drastic economic damage and associated public health deterioration, we should consider how soon and why certain of the recently adopted shutdown measures might be lifted to prevent economic Armageddon.

The general construct and rationale for our extreme measures is to spread out over time the incidence of coronavirus infections, to keep it below hospital capacity. If illness spikes above capacity, there is no treatment available for many of the afflicted, and the mortality rate spikes as the untreated die. This construct has become known as “flattening the curve,” keeping the rising curve of coronavirus cases below a straight line representing medical capacity.

Why not increase that capacity? Most of the policy discussion seems to assume that hospital capacity is relatively fixed, but China built two hospitals in Wuhan in two weeks; New York Gov. Andrew Cuomo has called on the Army Corps of Engineers to build new hospitals here. The sooner and the more we increase capacity, the sooner we may be able to ease some of the extraordinary measures and mitigate the coming economic recession.

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Bloomberg: Will The Candidate Measure Up To The Campaign Architect?

By Red Jahncke on February 21, 2020
Bloomberg: Will The Candidate Measure Up To The Campaign Architect?

In the Democratic presidential debate Wednesday in Las Vegas, Michael Bloomberg the candidate badly underperformed Michael Bloomberg the brilliant campaign architect.

Architect will insulate candidate this time, preserving the hopes of many center-right Democrats that he can prevail over front runner Sen. Bernie Sanders (I-Vt.), an ardent socialist whom they consider unelectable.

Before the debate, Bloomberg the campaign
architect had maneuvered Bloomberg the candidate into third place in the RealClearPolitics average of national polls. Most likely, former Vice President Joe Biden’s epic collapse will soon leave Bloomberg in second place behind Sanders, setting up the showdown that is the predicate of Bloomberg’s candidacy.

Not being on the ballot guaranteed Bloomberg’s survival post-Iowa and post-New Hampshire, and it insulates him from paying the normal price, in Nevada and South Carolina, for his dismal debate performance in Las Vegas.

There’s no such safety net for the other candidates, who failed to carry out their necessary debate mission — namely, to slow a surging Sanders. Instead, they attacked Bloomberg and each other in a badly moderated food fight. For former Vice President Joe Biden and Sen. Elizabeth Warren (D-Mass.), this was a missed opportunity to revive themselves following disastrous finishes in Iowa and New Hampshire.


So, unless pre-publication polling is totally wrong, Sanders will win resoundingly Saturday in Nevada’s caucuses. A big Sanders victory means yet another defeat, and perhaps a fatal one, for each of the other candidates. That includes Pete Buttigieg, former mayor of South Bend, Ind., for whom it would create a serious loss of momentum going into South Carolina where his lack of black support is sure to be fatal.

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Bloomberg’s Rise Surprises Pundits — Has It Surprised Trump?

By Red Jahncke on February 18, 2020
Bloomberg’s Rise Surprises Pundits — Has It Surprised Trump?

When Michael Bloomberg entered the presidential race last November, he was scorned almost universally. Now, many Democrats hope desperately that he will be their savior, the only candidate who can prevail over Bernie Sanders, an ardent socialist they
consider unelectable.

After fourth and fifth place finishes in Iowa and New Hampshire, Joe Biden is toast, as is Elizabeth Warren, following her distant third and fourth place finishes.

Mayor Mike has rocketed into third place in the Real Clear Politics average of national polls, soon to pass plummeting Biden into second behind Sanders. This will set up a titanic civil war between Sandernistas and center-right Democrats.

None of this would have seemed remotely possible listening to political pundits last November. They dismissed Bloomberg’s bid, with several trite “truisms” about political tradecraft. First, money can’t buy the presidency. Second, his late entry would be fatal. Third, by skipping the first four contests, he would fall hopelessly behind. Fourth, his policy stands are all over the map, so he has no natural following or base.

First, his $50 to $66 billion (estimates vary) provide him a tremendous advantage, a massive war chest with which to beat Sanders now and Donald Trump in November.

Last November, few pundits stopped to think that, maybe, there was an obvious and compelling rationale for skipping the first four contests.

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Truck Tolls Won’t Work; New SEBAC Savings Should Fund Transportation

By Red Jahncke on February 5, 2020
Truck Tolls Won’t Work; New SEBAC Savings Should Fund Transportation

On Friday, January 31st, the Transportation Committee of the CT General Assembly held a public hearing on Governor Lamont's new 12-gantry heavy-trucks-only tolls proposal. Red Jahncke testified, along with many other members of the public. Above is the CT Public Affairs Network broadcast of Jahncke's testimony. The full nine hours of testimony can be accessed here: http://ct-n.com/ctnplayer.asp?odID=17098 Below is a transcript of Jahncke's testimony. In a few places, supplementary information has been added in brackets to clarify the testimony.

Truck-Toll Revenue Would Be a Mirage: Truckers Would Dodge the Gantries

By Red Jahncke on January 28, 2020
Truck-Toll Revenue Would Be a Mirage: Truckers Would Dodge the Gantries

There’s a new game in Connecticut. It’s called dodge-a-gantry. Right now, it is only a virtual game being played on Google Maps.

Governor Lamont's latest toll plan – he’s had many – is to toll only tractor-trailer trucks at just 12 highway bridges in the state. So what are truckers doing? They are getting ready to game Lamont’s proposed system. They are researching the best toll evasion routes, i.e. the best local roads to use to bypass the intended highway gantry locations.

The governor and his advisers have failed to take into account a unique and fundamental obstacle to imposing tolls in Connecticut.

Almost all existing toll roads in other states are limited-access highways. Vehicles travel for several miles between entry-exit access points. To exit and re-enter these highways in order to evade tolls is an onerous proposition. Actually, in most instances, it is impossible, because every entry-exit access point has a gantry or toll booth, where vehicles are logged in and out and charged for the distance they have traveled.

In contrast, Connecticut’s highways are uniquely open-access with short distances between entry-exit points.

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An after-action report: Trump, Soleimani and Khameni

By Red Jahncke on January 16, 2020
An after-action report: Trump, Soleimani and Khameni

Donald Trump has been excoriated by critics for ordering the killing of the number one terrorist in the world, Qassem Soleimani. If he wasn’t number one, who was?

If Iran isn’t the very definition of an enemy and a threat to world peace, what nation is? Iran is a nation whose national slogan is “Death to America” and whose greatest aspiration is to wipe another nation off the map.

The president’s critics engage in some truly tortuous mental gymnastics to level their charges.

Take U.S. Senator Chris Murphy, Democrat from Connecticut. On New Year’s Eve, as Soleimani’s henchmen were ransacking parts of the U.S. embassy compound in Baghdad, he tweeted: “Trump has rendered America impotent in the Middle East.”

Simultaneously, Iran’s Supreme Leader – and Top Tweeter, Ayatollah Khamenei challenged the president with a taunting tweet: “You can’t do anything.”

Surprise: dead wrong.

Both Murphy and the Ayatollah responded, the former challenging the president’s authority to kill “the second most powerful person in Iran,” and Khameni with an ineffectual rocket attack.

Here’s one citizen’s after-action report.

Execution: If ever there were a surgical strike, this was it. Perfect execution. Two bad guys and their aides were eliminated without any collateral damage.

Authorization / Consultation: Despite delegitimizing semantics terming the killing an “assassination” and repositioning Soleimani as an anodyne national leader or military commander, he was the leader of the Quds Force, which was designated a terrorist organization by the U.S. State Dept long ago in 2007.

Critics want proof that Soleimani was planning an imminent attack, as if the Quds Force leader wasn’t planning attacks every single day of his life.

Windows of opportunity for surgical strikes open rarely and close quickly. Delay for significant congressional involvement might have jeopardized the opportunity. Moreover, POTUS operates in a White House that leaks like a sieve. Anonymous op-ed writers rove the hallways alongside whistleblowers, who communicate constantly and coordinate closely with anti-Trump Democrats and media reporters, who lionize these moles.

Justification: If Soleimani’s decades of mischief and his terrorist designation weren’t enough, Soleimani had just orchestrated an attack on an American embassy, sovereign territory under international law.

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CT Hospital Tax Exploits Medicaid to Finance Irresponsible Spending

By Red Jahncke on January 12, 2020

Hartford is exploiting an anomaly in the Medicaid program to extract billions from the U.S. Treasury, not to finance health care, but rather to finance otherwise unaffordable state spending, primarily state employee health care and retirement benefits.

This anomaly, or “shell game” (the term used in a U.S. Senate committee report) operates through the hospital tax. While all states impose this tax, no state imposes nearly as high a hospital tax rate. That’s what former Office of Policy and Management Director Ben Barnes told me in late 2017. He said Connecticut’s hospital tax scheme requires explicit federal approval, because the roughly 9% rate exceeds a 6% threshold that no other state exceeds.

The Medicaid program is a federal-state partnership providing medical care to poor citizens, with the federal government reimbursing states for about one-half to two-thirds of allowable fees and costs that hospitals and others charge Medicaid patients for medical care.  Under Obamacare, Connecticut and other states expanded Medicaid in return for much higher federal reimbursement percentages on the patients newly covered.

Apart from this straightforward reimbursement arrangement, states provide hospitals supplemental payments, with the federal government matching the payments, in order to achieve various policy objectives. The hospital tax exploits this supplemental payment mechanism in a manner which the General Accountability Office criticized strongly in a 2014 report.

Let’s start with some fundamental questions. Why is government taxing hospitals, which only serves to raise the cost of the nation’s primary providers of health care. Many are non-profit. Why tax non-profits? Many are for-profit and already pay corporate income taxes. Why levy a second tax? Hospital taxes are truly strange and wonderful.

Just before Christmas, the Connecticut General Assembly went into a special session, to approve unanimously a plan to extend the state’s stratospheric hospital tax for seven years. The plan will generate about $675 million annually, including $375 million in federal matching funds.


The plan requires the approval of the federal Centers for Medicare and Medicaid (CMS), which may not be forthcoming. In mid-2018, a U.S. Senate committee took a look at hospital taxes and issued a report calling hospital taxes “a shell game” and singling out Connecticut as a major perpetrator.

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  • here on The Red Line
  • CT Examiner - CT's Hospital Tax Exploits Medicaid To Finance Irresponsible State Spending, January 12, 2020
  • Republican American - State's Hospital Tax 'Shell Game' in Peril, January 15, 2020

    • Medicaid’s Federal-State Partnership is Subverted by States’ Hospital Tax Scheme

    By Red Jahncke on December 28, 2019
    Medicaid’s Federal-State Partnership is Subverted by States’ Hospital Tax Scheme

    The Medicaid program was established as a federal-state partnership, but it has become a partnership in name only as the result of a complicated maneuver in which states impose taxes on health care providers in order to extract tens of billions of dollars yearly from the U.S. Treasury via an arcane Medicaid financing mechanism. The scheme renders Medicaid almost entirely a federally financed — or over-financed — program.

    Almost every state employs this tax maneuver to
    trigger the annual release of matching funds over and above the money the
    federal government sends as its share of reimbursements to hospitals for
    medical services they provide to Medicaid patients. In a 2014
    report    , the General Accountability Office
    criticized these so-called provider taxes, which fall most heavily upon
    hospitals.

    One might wonder why the government is taxing
    hospitals, which raises the cost of the nation’s primary providers of health
    care services. Many are nonprofit organizations; why tax nonprofits? Many are
    for-profit organizations and already pay corporate income taxes; why levy a
    second tax? It is truly strange and wonderful.

    Take Connecticut, for example.

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    Don’t count out Michael Bloomberg — his unconventional strategy might work

    By Red Jahncke on December 5, 2019
    Don’t count out Michael Bloomberg — his unconventional strategy might work

    Michael Bloomberg’s entry into the presidential race about a week ago was panned almost universally. Political pundits dismissed his bid, many with trite “truisms” about political tradecraft. First, that money can’t buy the presidency. Second, that his late entry is fatal. Third, that by skipping the first four contests, he will fall hopelessly behind. Fourth, his policy stands are all over the map, so he has no natural following or base.

    But maybe Bloomberg has a strategy. After all, if he’s so dumb, why’s he so rich? Let’s hazard some thoughts on possible strategy. Maybe Bloomberg is crazy like a fox.

    First, let’s be realistic, his $50 billion provides him a tremendous advantage.

    Second, pundits have deemed his late entry to be fatal, as if late entry alone were as fatal as stage four pancreatic cancer. What has passed as analysis has been limited to references to the failure of other late entrants. Yet, none of the referenced candidates had Bloomberg’s money, and virtually all failed for reasons other than late entry — and the same reasons have felled early entrants.

    In 2016, late entrant Rick Perry was felled by momentary brain freeze about the third in his trademark list of three federal agencies he’d shutter. However, the earliest entrant in the 1968 contest, George Romney, was eliminated well into his campaign by just one word, “brainwashed,” and in 1972 another early contender, Ed Muskie, by a single sob on the campaign trail just days before the New Hampshire primary.

    Third, skipping the first four contests has an obvious and compelling rationale. To flip a popular saying: You can’t lose it if you’re not in it. This is a variant of the successful strategy of American revolutionaries: They ran away to fight another day. Bloomberg will survive the first four contests. Every other candidate, except four at most, won’t.

    There are virtually no delegates at stake in these early contests — just 4 percent of the total. The winner(s) of those contests will have virtually nothing to show for the enormous effort entailed, except bragging rights, which then must be defended in the next of the four contests to meet elevated expectations and to maintain momentum.

    Bloomberg won’t have lost any meaningful ground, unless one candidate rolls the table, winning all four early contests. What are the odds of that? South Bend, Ind., Mayor Pete Buttigieg has surged into the lead in Iowa and New Hampshire, but is mired in single digits in the following contest in South Carolina, where former vice president Joe Biden holds a commanding 19-point lead.

    If Bloomberg hasn’t lost anything, what has he gained by skipping the first four contests? Here it gets interesting.

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