Bill,
If it's Obama, I will be relieved and worried (isn't that what lefties do?). You, I surmise will not be surprised but not particularly happy either. In the short term we will get a deal that cuts spending significantly and raises taxes minimally. The deficit will decline, albeit modestly. Income distribution will continue to favor the wealthy, although at a slower rate
If it's Romney, I will be disappointed and terrified. You, I imagine, will be cautiously optimistic. We will get a determined effort to reduce government spending, with the exception of military spending. The deficit will fall modestly. Income distribution will continue to favor the wealthy at a faster rate.
The economy will continue its steady if unspectacular improvement no matter who wins, assuming of course that we do get a deal on taxes and spending.
Our own fortunate economic circumstances will be affected not a whit. No, I take that back. You and Mrs Knabe will pay significantly more out of your own pockets over the course of your lifetime for healthcare.
Eli
Monday, October 29, 2012
A Plea For Evidence Based Economics
Bill,
I hope I won't offend when I note that the ongoing dust up over the timing of recovery from financial recessions has left me more skeptical than ever that economists policy ideas can be separated from the political philosophies they espouse. The endless tag team wrestling match between Krugman, Delong et al on one side and Taylor, Mankiw and Hubbard on the other may entertain but it doesn't edify. Much of the time it feels like a bunch of little smart assed schoolboys trying to out insult each other.
With regard to our ongoing healthcare disagreement, there is no need to apologize. We don't agree about a lot of things. It's part of what keeps this ongoing conservation from becoming dull.
There's a lot to criticize about Obamacare. Your prediction that it will do little or nothing to curb costs may turn out to be correct. We both agree that the present course is unsustainable. That said, any alternative system of healthcare distribution should have some basis in previous experience or experiment before it's unleashed upon the American people. Or at least, it should provide enough of a fail safe so that if it turns out to be an unmitigated disaster harm can be limited and correction can be made quickly. And it must, as a matter of simple morality, include access at some basic level for all. Lasik and plastic surgery can be left for those wealthy enough to want them to pay for them out of pocket.
Eli
I hope I won't offend when I note that the ongoing dust up over the timing of recovery from financial recessions has left me more skeptical than ever that economists policy ideas can be separated from the political philosophies they espouse. The endless tag team wrestling match between Krugman, Delong et al on one side and Taylor, Mankiw and Hubbard on the other may entertain but it doesn't edify. Much of the time it feels like a bunch of little smart assed schoolboys trying to out insult each other.
With regard to our ongoing healthcare disagreement, there is no need to apologize. We don't agree about a lot of things. It's part of what keeps this ongoing conservation from becoming dull.
There's a lot to criticize about Obamacare. Your prediction that it will do little or nothing to curb costs may turn out to be correct. We both agree that the present course is unsustainable. That said, any alternative system of healthcare distribution should have some basis in previous experience or experiment before it's unleashed upon the American people. Or at least, it should provide enough of a fail safe so that if it turns out to be an unmitigated disaster harm can be limited and correction can be made quickly. And it must, as a matter of simple morality, include access at some basic level for all. Lasik and plastic surgery can be left for those wealthy enough to want them to pay for them out of pocket.
Eli
Signal and Noise
Bill,
I spend my life dealing with sound. Not the audible sound we take for granted in every waking second of ordinary life, but so called high frequency or ultrasound, which, while undetectable to the human ear, provides a remarkable medium for detecting the internal contours of the human body. Every time the density inside changes, (blood to muscle, bone to air, etc), the opportunity for reflection is created. I'm not speaking metaphorically here, as the anatomy and function of the heart is revealed out in amazing detail. It's a process that that I simultaneously take for granted, and yet which still amazes me. It's my job of course to figure out what's important in the images created from these reflected sound waves, and to disregard what's extraneous.
That of course is also the job of our brethren in the national media. With 8 days to go in an excruciatingly close national campaign, I wager that we would both agree that they are failing miserably. Mostly we are being subjected to the breathless hype of the horse race (although I admit, for this political junkie, it's hard to resist.
A little more than a week from now, we may not know anymore than we do tonight. In the meantime, make sure you have shelter from the storm. We have plenty of room for you and yours.
Eli
I spend my life dealing with sound. Not the audible sound we take for granted in every waking second of ordinary life, but so called high frequency or ultrasound, which, while undetectable to the human ear, provides a remarkable medium for detecting the internal contours of the human body. Every time the density inside changes, (blood to muscle, bone to air, etc), the opportunity for reflection is created. I'm not speaking metaphorically here, as the anatomy and function of the heart is revealed out in amazing detail. It's a process that that I simultaneously take for granted, and yet which still amazes me. It's my job of course to figure out what's important in the images created from these reflected sound waves, and to disregard what's extraneous.
That of course is also the job of our brethren in the national media. With 8 days to go in an excruciatingly close national campaign, I wager that we would both agree that they are failing miserably. Mostly we are being subjected to the breathless hype of the horse race (although I admit, for this political junkie, it's hard to resist.
A little more than a week from now, we may not know anymore than we do tonight. In the meantime, make sure you have shelter from the storm. We have plenty of room for you and yours.
Eli
From Bad to Worse
Eli,
One of my big objections to Romney's campaign is sometimes he'll criticize Obama's policies and actions, good and bad, and in the process, adopt an even worse policy. For instance, his criticism of Obama's $716 billion cut to Medicare. Medicare needs to be cut. I would argue the cut needs to be deeper. I would argue the cut simply avoids the structural issue with Medicare. But Romney is arguing we shouldn't cut Medicare, when we should.
The video below is a another example. Should Obama have inserted the government into the bankruptcy proceedings of GM and Chrysler? I don't think so. But instead of making this argument Romney says Obama did the government interference incorrectly and in the video implies he, Romney, would have been easier on the GM and Chrysler and would prevent either Chrysler being sold to Fiat and/or preventing Jeeps from being manufactured in China.
I think this will come back to haunt Romney, should he be elected.
Bill
One of my big objections to Romney's campaign is sometimes he'll criticize Obama's policies and actions, good and bad, and in the process, adopt an even worse policy. For instance, his criticism of Obama's $716 billion cut to Medicare. Medicare needs to be cut. I would argue the cut needs to be deeper. I would argue the cut simply avoids the structural issue with Medicare. But Romney is arguing we shouldn't cut Medicare, when we should.
The video below is a another example. Should Obama have inserted the government into the bankruptcy proceedings of GM and Chrysler? I don't think so. But instead of making this argument Romney says Obama did the government interference incorrectly and in the video implies he, Romney, would have been easier on the GM and Chrysler and would prevent either Chrysler being sold to Fiat and/or preventing Jeeps from being manufactured in China.
I think this will come back to haunt Romney, should he be elected.
Bill
Sunday, October 28, 2012
What Could Possibly Go Wrong. The New New Deal and Clean Energy Spending
Eli,
I may have mentioned I'm reading Michael Grunwald's "The New New Deal," about Obama's Recovery Act. And I may have mentioned the details are so appalling I'm shocked the author could possibly still be in favor of the legislation.
In the category of "What could possibly go wrong?" Grunwald describes the clean energy programs to be run by the Department of Energy:
Bill
I may have mentioned I'm reading Michael Grunwald's "The New New Deal," about Obama's Recovery Act. And I may have mentioned the details are so appalling I'm shocked the author could possibly still be in favor of the legislation.
In the category of "What could possibly go wrong?" Grunwald describes the clean energy programs to be run by the Department of Energy:
"The Recovery Act essentially required the Energy Department to transform itself into a venture capital and project finance operation, which felt like requiring Homer Simpson to transform himself into an Olympic decathlete. The lumbering bureaucracy…would now have eighteen months to hand out $37 billion in grants, and even more in loans…For its three decades in existence, the department's main task had been overseeing nuclear materials. Now it was suddenly that largest clean-tech fund in history."Matt Rogers, the Stimulus czar at DoE,
"knew that a fivefold increase in its nonnuclear budget would be a challenge...but what really worried him were deadlines that would require spending about four times faster than usual."Create the largest clean-tech fund in history in an organization never equipped to do so. Spend FIVEFOLD the normal amount of money FOUR times faster than usual. What could possibly go wrong? Hubris.
Bill
Friday, October 26, 2012
An Apology
Eli,
I was too harsh in my response to you about information asymmetry and medicine, and I've had a huge case of the guilts ever since I posted it. Let me try it a different way.
I appreciate your point about information asymmetry and medicine. But I don't think those characteristics are particularly unique to medicine. There are plenty of everyday things we do as consumers and sellers which involve one party knowing more than the other, yet those markets function well. I have the same comment regarding fee for service. There are many markets that are fee for service and function quite well, so again, I don't think medicine is unique in that aspect.
As far as competition in medicine, I look at it two ways. First, we can look at evidence in other industries, like airline deregulation, natural gas pipeline deregulation, natural gas (drilling) deregulation, for instance, and see tremendous benefits to consumers (lower prices, more choice) after the deregulation occurs, and I would say because of deregulation.
So if it works in one market, is there anything about a different market that would suggest deregulation wouldn't work. Now the two things you have suggested, information asymmetry and fee for service, are quite common in unregulated industries, so in my opinion, you need to point to something else.
Here's my final thought about it. We both know what we are doing isn't working. We both know it can lead to a catastrophe for the country. So is it really that big a risk to try something a little out of the ordinary?
Sorry for the sarcastic version I posted yesterday.
Bill
I was too harsh in my response to you about information asymmetry and medicine, and I've had a huge case of the guilts ever since I posted it. Let me try it a different way.
I appreciate your point about information asymmetry and medicine. But I don't think those characteristics are particularly unique to medicine. There are plenty of everyday things we do as consumers and sellers which involve one party knowing more than the other, yet those markets function well. I have the same comment regarding fee for service. There are many markets that are fee for service and function quite well, so again, I don't think medicine is unique in that aspect.
As far as competition in medicine, I look at it two ways. First, we can look at evidence in other industries, like airline deregulation, natural gas pipeline deregulation, natural gas (drilling) deregulation, for instance, and see tremendous benefits to consumers (lower prices, more choice) after the deregulation occurs, and I would say because of deregulation.
So if it works in one market, is there anything about a different market that would suggest deregulation wouldn't work. Now the two things you have suggested, information asymmetry and fee for service, are quite common in unregulated industries, so in my opinion, you need to point to something else.
Here's my final thought about it. We both know what we are doing isn't working. We both know it can lead to a catastrophe for the country. So is it really that big a risk to try something a little out of the ordinary?
Sorry for the sarcastic version I posted yesterday.
Bill
Thursday, October 25, 2012
Information Asymmetry and Rationing as an Excuse for Everything
Eli,
Mrs. Knabe and I have purchased and sold a few houses over the years. Each time we knew more about the house we were selling than the buyer knew and each time we bought the seller knew more about the house than we did. Plus our purchase was rationed by what we could afford. So by your logic Government should do what? Every used car buyer knows less about the car he is purchasing than the seller. When a person decides to repair the car he has to ration how he will manage that expense within his budget. So by your logic the end result is what? I bought a book the other day. Paid about $30. What the bookseller didn't know was I would have probably paid more. That is information asymmetry. I ration my book buying. So the appropriate action of government is what?
Speaking of that bookseller, the more books I buy from it, the more it profits. That bookseller cleverly entices me with well written reviews in the Wall Street Journal and the New York Times. It tries to convince me to buy more and more books. Of course, I can't know what's inside those books as well as the bookseller and the author. Fee for service and information asymmetry! How do I manage?
I treated my nephew to lunch today. Do you know what the waiter tried to do? Prepare to be outraged. He offered me appetizers! bottled water! beer! He showed the specials to me! Fee for service! Information asymmetry!
I love my iMac and iPhone and iPad. Do you want to hear something outrageous? The App store sells things by the piece, fee for service. And its worse because Apple and the developer know much more about those apps than I do. Come to think of it iTunes has the same model. How in the world does the world survive?
Where has unregulated medicine worked? The US: Lasik surgery, plastic surgery. Not good enough? The picture below is from a Congressional Research Service report to Congress, "Life Expectancy in the United States."
No government sponsored health care, increased life expectancy, fee for service, information asymmetry and a rising standard of living. Medicare didn't being until 1966. Subsidized insurance as part of employment didn't begin until WWII.
Bill
Mrs. Knabe and I have purchased and sold a few houses over the years. Each time we knew more about the house we were selling than the buyer knew and each time we bought the seller knew more about the house than we did. Plus our purchase was rationed by what we could afford. So by your logic Government should do what? Every used car buyer knows less about the car he is purchasing than the seller. When a person decides to repair the car he has to ration how he will manage that expense within his budget. So by your logic the end result is what? I bought a book the other day. Paid about $30. What the bookseller didn't know was I would have probably paid more. That is information asymmetry. I ration my book buying. So the appropriate action of government is what?
Speaking of that bookseller, the more books I buy from it, the more it profits. That bookseller cleverly entices me with well written reviews in the Wall Street Journal and the New York Times. It tries to convince me to buy more and more books. Of course, I can't know what's inside those books as well as the bookseller and the author. Fee for service and information asymmetry! How do I manage?
I treated my nephew to lunch today. Do you know what the waiter tried to do? Prepare to be outraged. He offered me appetizers! bottled water! beer! He showed the specials to me! Fee for service! Information asymmetry!
I love my iMac and iPhone and iPad. Do you want to hear something outrageous? The App store sells things by the piece, fee for service. And its worse because Apple and the developer know much more about those apps than I do. Come to think of it iTunes has the same model. How in the world does the world survive?
Where has unregulated medicine worked? The US: Lasik surgery, plastic surgery. Not good enough? The picture below is from a Congressional Research Service report to Congress, "Life Expectancy in the United States."
No government sponsored health care, increased life expectancy, fee for service, information asymmetry and a rising standard of living. Medicare didn't being until 1966. Subsidized insurance as part of employment didn't begin until WWII.
Bill
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