[Plura-list] Podcasting "Breaking In"; Democrats, health care monopolies, and market failures; Shelter is a toxic asset

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2021/09/27/lethal-dysfunction/

Today's links

* Podcasting "Breaking In": Why you shouldn't take career advice from successful writers.

* Democrats, health care monopolies, and market failures: Market health care is a fatal disease.

* Shelter is a toxic asset: NIMBYism is a fatal disease.

* This day in history: 2001, 2016, 2020

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

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🪖 Podcasting "Breaking In"

This week on my podcast, a reading of "Breaking In," my latest column for Locus Magazine. It was inspired by the writers who are just starting out and looking for advice on how to advance their careers - and my realization that I have none to give. 

https://locusmag.com/2021/09/cory-doctorow-breaking-in/

After all, when I broke into science fiction, the web barely existed, the field was dominated by three print magazines, and the publishing, distribution and bookselling worlds were radically different in nearly every way.

When I was just starting out, I'd hang on established pros' accounts of how they broke in, and it took me years to figure out that their advice on how to sell to dead editors at defunct magazines wasn't going to do me any good.

Instead, I got my best advice from my peers - other writers seeking to break into the field, who were painstakingly comparing notes on markets, contracting terms, payment rates, and editorial tastes. 

But established writers *were* important to me! The encouragement I got - some of it organized and sustained, some of it glancing and in passing - was hugely important in keeping me going in the long years while I struggled to improve my work to publishable standards.

Here's the podcast episode:

https://craphound.com/news/2021/09/26/breaking-in-fixed/

And here's a direct link to the MP3 (hosting courtesy of the Internet Archive, they'll host your stuff for free, forever): 

https://archive.org/download/Cory_Doctorow_Podcast_402/Cory_Doctorow_Podcast_402_-_Breaking_In.mp3

And here's the RSS for my podcast:

https://feeds.feedburner.com/doctorow_podcast

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🪖 Democrats, health care monopolies, and market failures

As the US health care system reels under shortages and capacity issues, Matt Stoller reminds us that the brittleness of the US health care supply chain predates covid, and is directly attributable to monopolization, and its handmaiden, corruption.

https://mattstoller.substack.com/p/the-villains-behind-our-medical-supply

As Stoller writes, the last decade has seen the health care industry plagued by shortages of basics: "from saline to epinephrine to chemotherapeutic agents to antibiotics, to sterilized water."

The FDA has maintained a drug shortages advisory page for years, long before covid hit, with doctors prescribing less-familiar, more error-prone meds to patients because the standard-of-care drugs were unavailable.

https://www.fda.gov/drugs/drug-safety-and-availability/drug-shortages

Now, obviously covid exacerbated this situation, and in response, a lot of manufacturing has shifted back onshore - but it's not really helping. It turns out that the same system that created the brittleness in health supplies is now maintaining it.

Stoller identifies Group Purchasing Organizations (GPOs) as a key culprit. GPOs originated as hospital buying clubs, consolidated catalogs of medical supplies available at discount prices. But as the buyers and the sellers grew more monopolized, GPOs took on a sinister role.

It started in 1987, when lobbyists convinced Congress to weaken the anti-kickback laws that had kept GPOs honest. Freed from a prohibition on taking bribes, GPO buyers began to source hospital supplies based on the size of the "commission" rather than value for money.

This is chokepoint capitalism at its finest. The GPOs were the only way to reach the majority of the market for health supplies, and they would only carry your merchandise if you paid them commissions.

This is what Amazon does: charge "advertising fees" and "fulfillment by Amazon" surcharges from sellers on its platform to appear higher in search results, which can climb to over 50%.

Likewise, it's how Spotify operates, extracting high fees from labels to be featured on playlists and in "radio" streams. 

It's what monopolistic grocers do to food manufacturers, too.

This is one of the dynamics by which monopolism spreads. In order to keep prices low while bribing GPOs, medical manufacturers had to merge (eliminating competition), outsource (lowering labor costs), lower quality, and eliminate buffers and other slack in the system.

Amazon wins over its customers by promising them low prices and free shipping. GPOs win over hospitals by sharing their bribes with top administrators. Monopoly produces monopoly, and monopoly begets corruption.

https://www.wsj.com/articles/where-does-the-law-against-kickbacks-not-apply-your-hospital-1525731707

Which is why covid's onshoring of manufacturing has not alleviated the supply-chain problems in the health sector. We can make stuff onshore, sure, but hospitals will only buy it through GPOs.

But GPOs will only carry it if it is priced competitively with stuff from Asian sweatshops, and if the bribes are also competitive. It's not like onshore manufacturers can shop around, either.

GPOs underwent a wave of mergers in the 1990s, so four companies control 90% of US hospitals' $300b in annual spending. Monopoly begets monopoly. 

What's more, by spreading bribes to hospital administrators, GPOs eliminated the need to keep prices down.

Instead, the final price represents an equilibrium between hospital administrators' greed for kickbacks and hospital management's willingness to pay. 

Like all corruption, GPOs are a way to concentrate gains (bribes to GPOs and hospital buyers) and diffuse losses (lower quality goods at higher prices made by workers  earning lower wages in a system that periodically seizes up due to shortages).

The worst is yet to come. Because this system concentrates production in facilities where maintenance, redundancy and fail-safes are neglected in order to maximize the funds available for bribes, it is vulnerable to even mild shocks.

This is how America ran out of saline (AKA salt water!): Baxter cornered the market for it, shut down production everywhere except Puerto Rico where labor was cheap, and then had no contingency plans for when a hurricane hit the island.

https://www.wsj.com/articles/where-does-the-law-against-kickbacks-not-apply-your-hospital-1525731707

There are more shocks to come, and America is systemically vulnerable to them. Its lawmakers and regulators have not reined in this dangerous corruption - instead, they've abetted it. Take Obama's FTC chairman Jon Leibowitz - he now lobbies for GPOs!

https://www.ftc.gov/system/files/documents/public_comments/2017/12/00222-142618.pdf

That may finally be changing - the Biden admin has specifically targeted single-source goods and GPO monopolies in its analysis of America's resiliency problems.

https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-chain-review-report.pdf

But before you get too optimistic, recall that centrist Dems are masters of snatching victory from the jaws of defeat. Take the issue of dental care, a dysfunctional area even by US standards.

Denying dental care is a cruel and senseless policy. And yet all forms of US health insurance either under-cover dental work, or fail to cover it at all. 65% of Medicare recipients don't have any dental coverage.

Even people who do have dental coverage find it woefully inadequate. Getting two crowns under our family's dental coverage - the "gold-plated" coverage offered by a blue-chip employer - costs $2,500 over the insurance maximum.

No wonder Americans wryly call their teeth "luxury bones" - the part of your body that health-care treats as optional, despite the serious consequences for health, wellbeing, employment and self-esteem caused by poor dentistry.

It's a particularly American disease: one of Luke O'Neil's readers describes being reduced to tears by the realization that his Taiwanese dentristry bill would only come to $20 - for "3 visits + surgery + medication + 3D x-rays".

https://luke.substack.com/p/the-american-healthcare-system-damages

It's not like the Dems don't know this. They're even promising to do something about it. They've proposed extending dental coverage to Medicare...in seven years.

As O'Neil says, "This is almost the platonic ideal of Some Democrat Shit. These people need help. Our plan is to give it to them well over half a decade from now. It makes no sense. They don’t even seem to want to reap the immediate political benefits of such a move!"

Centrism destroys politicians' time-sense, as Harold Meyerson writes for The American Prospect: "Child care subsidies are set to phase in over six years. Medicare negotiation with pharmaceutical companies over prescription drug prices won’t begin until 2025."

https://prospect.org/politics/liberalism-and-time/

"As to the bipartisan infrastructure legislation, one admittedly conservative estimate has it that no more than $20 billion will be spent by the end of 2022."

This is a party that is hoping to win midterms in 2022, remember.

There was a time when progressivism was impatient: Medicare was up and running in less than a year, in 1965. Today, we are faced with urgent crises - a looming irreversible climate emergency among them - and we have no time for this foot-dragging.

Neither do the families who'll lose teeth or suffer debilitating chronic infections - to say nothing of the patients who will suffer needlessly or even die as a result of monopolistic shortages. The best time to act on this was a decade ago. The second best time is now.

(Image Nitram242, CC BY, modified
)

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🪖 Shelter is a toxic asset

Housing is a human right and a human necessity. 

Housing is also the designated path to intergenerational wealth accumulation and class mobility (it used to be housing *and* labor rights, but America got rid of those in the Reagan years).

https://gen.medium.com/the-rents-too-damned-high-520f958d5ec5

Housing can't be both an essential speculative asset and a human right. If the way you provide a better life for your kids is to buy a house and wait for its value to go up, then you require one of the essentials of human existence to get *much* more expensive.

This has an immediate effect: people who don't have houses can't afford them, and the people who do have houses vote for policies that make houses more valuable, including eroding tenants' rights. 

The fewer rights tenants have, the more rights landlords have, and the more a home is worth to a landlord, which means that house valuations go up across the board.

Landlords' and homeowners' interests aren't always aligned. Landlords favor lax zoning rules, because the market will value a home not just on how much rent can be extracted from it today, but also on how much the same land could generate if it sported an apartment building.

Whereas owner-occupiers tend to be NIMBYs, with an inchoate but near-religious certainty that allowing more homes to be built in their neighborhoods will "change its character" and "lower property values."

Taken together, this results in a perfect storm of terribleness. By the time the owner-occupier's kids are ready to find their own place, they enter a market of vastly overpriced housing, sky-high rents, and shocking undersupply of new homes.

That's basically where we are now. In "The housing theory of everything," a long essay for Works In Progress, Sam Bowman, John Myers and Ben Southwood walk through the myriad pathologies arising from rentierism and the undersupply of housing. 

They propose a plausible rule-of-thumb for measuring the gap between housing demand and supply: the difference in cost between building a new home and the cost of buying a comparable existing home is the price of NIMBYized zoning restricting housing supply.

That's a way to put a number on the benefit that accrues to landlords and owner-occupiers. But the other side of this is the costs that are borne by wider society. As is the case in any corrupt arrangement, the (concentrated) benefits are dwarfed by the (diffused) costs.

The accounting for those costs starts with the benefits of living in a "superstar" city. Some of these are pretty crude (the number of patents generated within a city might just be a measure of rent-extracting patent trolls, not innovation), but others are crisper.

There's a pretty clear "wage premium" for living in a big city, and it's sticky - so not only do you earn more if you live in a big city, you keep earning more after you leave, thanks to the skills and connections you make while in a busy center.

The authors cite a study published in the American Economic Journal that estimated that relaxing the density rules in NYC, SF and San Jose to the national average would boost US GDP by 8.9% - offsetting nearly all the losses from lockdown.

https://www.aeaweb.org/articles?id=10.1257/mac.20170388

And they point out that looser density rules aren't wild-eyed schemes - they're the norm in cities like Tokyo and Seoul, and were common in NYC until the 1930s. 

The authors propose moving to (or creating) dense cities as a better social mobility path than squatting on a house while its value appreciates - and the two are incompatible, because high housing prices in big cities make them inaccessible to people from small towns.

In 1960, a housekeeper who moved from Alabama to NYC would see 84% higher wagers (70% higher after rent). Today, the worker will see a 28% rise in income - but a real-terms pay cut after their rent is paid. 

For people who *do* make the move, the high price of housing negatively impacts nearly every part of their lives: the cost of extra bedrooms limits the number of kids you can afford. People unwilling to make the sacrifice end up in cheaper suburbs.

People in suburbs drive more, are more prone to obesity, and have far larger carbon footprints than their urban cousins. But suburbs can become cities - they just need to increase their density by building more homes.

New homes are good homes: they're better insulated, have lower energy and carbon footprints. The only thing standing in the way is NIMBYism, and the authors propose a way to address is: hyperlocal direct democracy.

"No construction would happen anywhere that a majority did not opt for it, but streets that voted for more density would become extremely valuable, so there would be a big incentive for homeowners in high-demand areas to vote for greater density."

https://policyexchange.org.uk/publication/strong-suburbs/

The fight against weaponized shelter - against housing as a commodity, rather than a human right - has gone global. Berlin just held a referendum on whether to expropriate corporate landlords and put housing into public ownership:

https://pluralistic.net/2021/08/16/die-miete-ist-zu-hoch/#assets-v-human-rights 

They overwhelmingly (56%-39%) voted in favor of the proposal. The vote is nonbinding, but the political cost of ignoring it will be steep, and 240,000 homes are at stake. That could make for a *lot* of happy voters.

https://www.reuters.com/world/europe/berliners-vote-expropriate-large-landlords-non-binding-referendum-2021-09-27/

The decision to accumulate wealth through owning other peoples' homes is a devil's bargain. Left unchecked, it creates a drag on all productive sectors of the economy, imposing a cost on all of us to the benefit of a minute elite of corporate rentiers.

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🪖 This day in history

#20yrsago TSA: calling Kip Hawley an idiot is not allowed https://www.flyertalk.com/forum/checkpoints-borders-policy-debate/606142-i-detained-tsa-checkpoint-about-25-minutes-today.html#post6440005

#5yrsago Ex-Wells employees who were fired for refusing to commit fraud launch $2.6B lawsuit https://www.npr.org/sections/thetwo-way/2016/09/26/495454165/ex-wells-fargo-employees-sue-allege-they-were-punished-for-not-breaking-law

#1yrago Ransomware for coffee makers https://pluralistic.net/2020/09/27/junky-styling/#java-script

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🪖 Colophon

Today's top sources: Naked Capitalism (https://nakedcapitalism.com/), David Reim.

Currently writing: 

* Spill, a Little Brother short story about pipeline protests. Friday's progress: 327 words (20444 words total)

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. Yesterday's progress: 681 words (2270 words total). 

* A Little Brother short story about remote invigilation.  PLANNING

* A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown."  FINAL EDITS

* A post-GND utopian novel, "The Lost Cause."  FINISHED

* A cyberpunk noir thriller novel, "Red Team Blues."  FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: Breaking In https://craphound.com/news/2021/09/26/breaking-in-fixed/

Upcoming appearances:  

* Reconciling Social Media & Democracy, Tech Policy Press, Oct 7
https://zoom.us/webinar/register/WN_O2qI4RJ8S7K2x6cpsQhnuQ

* From Wayback to Way Forward: The Internet Archive turns 25, Oct 21
https://www.eventbrite.com/e/from-wayback-to-way-forward-the-internet-archive-turns-25-virtual-tickets-163615196457

* Keynote for SeaGL 2021, Nov 5-6
https://seagl.org/news/2021/06/08/format-2021

Recent appearances:

* Infosec Apocaylpse (We're In podcast)
https://were-in.simplecast.com/episodes/cory-doctorow-and-the-infosec-apocalypse-SeDf3qB_

* Walled Culture
https://www.youtube.com/watch?v=_AnGd4PaG6U

* Poesy the Monster Slayer, Turn the Page
http://turnthepage.blubrry.net/2021/09/02/turn-the-page-episode-157b/

Latest book:

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p1562/_Poesy_the_Monster_Slayer.html.

Upcoming books:

* The Shakedown, with Rebecca Giblin, nonfiction/business/politics, Beacon Press 2022

This work licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

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