More on MassCare

It's really not looking good.

Teacher's unions still huge obstacle for education reform

Megan and the NYT explain.

A blatant handout to powerful Democratic interest groups.

So, Megan McArdle is totally right about the auto bailout and stuff...

I would paint a moral equivalence to Bush Republicans' Medicare Part D and the Florida vote--except that handout is perpetual and significantly bigger because it had broader public support, including from social welfare Democrats.

The benefits of health benefits

Megan responds to Ezra Klein.

The incoherent Senate debate

Megan parses...

The major [Republican] talking points are these:

1. This bill uses accounting gimmicks to front load the taxes and back load the spending, which is the only reason it's deficit neutral over the ten year window
2. The Democrats are refusing to let cuts to doctor payments stand, and also, doctors don't get paid enough
3. Millions of people are going to be added to Medicaid, which is a terrible program because providers don't get paid enough.  Also, it would be too expensive to add people to Medicaid.
4. Medicare costs too much, and also, shouldn't be cut.
5. The Republicans favor "real reform" which mostly seems to consist of liability caps.

...The Democrats had their own set of uncompelling talking points:

1. Insurance companies are evil institutions which deny everyone any care that costs more than a pack of Freedent gum.  Also, they cannot control health care costs without substantial government intervention, because they spend far too much on expensive procedures.
2. Ted Kennedy sure was a swell guy, wasn't he?  He'd be proud of every dang one of us today.  (It is impossible to exaggerate how great a role this point played.  There was a five minute stretch which consisted largely of people telling Ted Kennedy's replacement that Teddy would be awfully proud of him, and him saying, "No, really, Ted would be proud of you.)
3. Small and medium sized businesses are groaning under the weight of their health care costs.  Also, starting next year, we're going to force them to give you much more generous coverage from your employer, such as coverage for non-dependant "children" up to the age of 26.
4. This problem is incredibly urgent, which is why we have to pass this bill, which now takes effect in 2014, RIGHT NOW.

Blaming the president for unemployment

Megan says bugger off:

The president has very little control over employment in the economy. The stimulus undoubtedly kept the economy from losing even more jobs than he did. But the economy is undergoing a hell of a deep structural adjustment: from debtors to savers, from housing-and-finance led growth to . . . well, if we knew that, the recession would already be over. Those adjustments need to happen, because the previous situation was totally unsustainable. But they definitionally imply higher unemployment and less consumer demand in the short run.

A third stimulus might lower the unemployment rate a little, at least from where it would otherwise be. But it would not put us back at 5% unemployment, and it would have a lot of other costs, including further risking our AAA bond rating. Stimulus is at best an incredibly blunt instrument. And it is made blunter by all of the procedural checks we've accumulated over decades of government growth, not to mention very powerful public sector unions. FDR could tell his government to go out and hire people to paint hallways or build dams. The current president needs Environmental Impact Statements, public review periods, and the okay of ACFSME.

The fact is, most of the time, the best the president can do is avoid making things much worse. And though I have many disagreements with the specifics of Obama's policies, I'd say that largely, he's kept from making stuff worse, and eased the worst of the damage on hurting families. We could be doing more with more generous unemployment benefits or other income assistance, less with atrocious auto bailouts. But the economics of recession is truly a dismal science, and demanding that the president cure the recession is about as effective as expecting him to cure Hep C.

Agreed on all counts.

But this won't stop me from gawking at the laughably rosy scenario Obama's economic team painted to sell the stimulus last February:



Though I suppose reassurance is part of the president's role, so as to avert greater panic. Don't worry people, everything is gonna be just fine!

Revisiting the achievements of the Veterans Health Administration

Alas, it's nowhere near the success model of government-run care for the rest of us that progressives think it is.

"Seriously, stop worrying about hyperinflation"

Megan:

For someone who hangs out with libertarians a lot, announcing that you're okay with a small amount of inflation to relieve the sticky price problem, and that you think the Fed mostly does a good job, is akin to announcing that you've decided to take up human sacrifice to fill those lonely weekend hours. Nonetheless, I stand by the sentiment: inflation is not the big worry that our economy faces.

(continued)

Politicizing civil service

The Obama administration goes there.

Will elective abortions be crowded out?

Megan:

Some of the supporters of health care reform have rediscovered worries about crowding out. That's because it now looks as if the bill may not allow Federal subsidies to be used to buy insurance that covers abortions. Suddenly, a big chunk of the left sounds like a bunch of Republicans, warning about what happens to insurance markets when the government gets involved.

[..] Of course, if you think crowding out is real, there are a lot of other problems with the plan. Abortion is just the beginning of the distortions it will create in the health care markets.

Excise taxes, ctd.

Megan shoots it down.

Practical philosophy and national health care: a response to Megan

by Matt Flaherty

[Ed. note: Matt is a liberal friend of mine and a grad student in English at the University of Minnesota. He originally sent this to me as a personal email, and I decided it was about time I ask him on to guest blog at his leisure.]

Megan McArdle's post on practical philosophy and national health care is a good one. It's quite helpful for her to initially ascend to the philosophical level of abstraction so as to deflate these objections from liberals, as she does here:

"I am sure that John Holbo would quarrel with some of these principles.  But on the broad package that he thinks leads to national health care, we're probably in rough agreement. ... Yet I do not think that they lead to national health care!"

This is a better argument technique because it takes the thunder out of the opponent's sails; even if now she can't score as many ideological points for her identity (she herself calls the libertarian position a "boring" one; one that only arise after her assessment of the way the world has ended up to be rather than provides the foundations for incontestable ahistorical value and truth).

Philosophers want to get people to agree on first principles.  It's our specialty—if everyone already agreed, we'd be out of a job. We're good at helping people to get rid of their ideologies that rationalize the status quo as necessary and inevitable so that they can be exchanged for (hopefully) policies that do a better job of promoting the greatest happiness, justice, and equality of opportunity for the greatest number. In fact, Megan has pretty good first principles—though I might describe these principles as socially democratic rather than libertarian:

Taxation should strive to equalize the personal cost of taxation among all members of society, not the dollar amount or the percentage of income.  That is, it is appropriate for Warren Buffet to pay a higher percentage of his income in taxes for shared public goods than I do, because the personal cost of taking 25% of his income is much lower than the personal cost of taking 25% of mine.

Societies should strive to organize themselves so that everyone in the society can, if they desire, acquire the means to provide their basic needs.

Societies have a right to organize themselves to improve the justice of their income distribution.  That organization may include taxation. It may also include property rights, or outlawing behavior like blackmail.

Just income distribution is not just a matter of relative position, but also of how the income is acquired, and absolute need.  I do not have any moral claim whatsoever on a dime of Warren Buffett's fortune, because I have a perfectly adequate lifestyle.  I still wouldn't have any claim on his fortune if he suddenly got 100 times richer, provided that he acquired that money through means that we regard as licit.

Perhaps the problem with the humanities/humanistic academia is that we are so invested in our discussion about first principles (and, like all people, we want to emphasize and discuss what we have expertise on) that we sometimes forget to do the grunt work of tracking down the economics, the nature of the world as it really is. Thus, while we may get our first principles right, half the time, we don't take the time to get an inadequate model of the world, and thus end up recommending programs (e.g., some marxist inspired tomfoolery) that don't work (of course, this would be more of a problem if people took us more seriously than they do). That's why teaching people to critically think for themselves is always going to be the most important thing we do in the humanities. We're better at getting cultural questions than economic questions right.

Though Megan and I (and Gherald, I'd wager) agree on almost all of these first principles, perhaps the problem with libertarianism is that it sometimes clumsily abstracts from (real) patterns it observes in the nature of the world up to identity-forming kinds of principles. Though this is merely a quibble, I do wonder what justification Megan has for this as an a priori principle (rather than a heuristic for action that fell out from the way that the world, governments, and human nature, happen to generally be?):

People have no obligation to perform labor for others. I may not force a surgeon to save my mother at gunpoint. (To be sure, I might.  But society would justly punish me for doing so.)

This, in my view, should not really be a first principle, but, as Megan aptly states elsewhere simply a "contingent, evolving arrangements that happen to work really, really well for encouraging many sorts of beneficial ...activity." The reason that people don't have an obligation to perform labor (if that is true) for others would only be because that arrangement more often, given the way that government works in the real world, leads to more aggregate happiness for the parties concerned. I would in principle, be certainly fine with forcing a surgeon at gunpoint to save my mother if I could not get him/her to agree through any other means. The only problem with this principle is its real-world application in practice (allowing people with guns to force doctors to do things would probably end up being a bad deal on the whole, thus the government prudently, though not "rightly" or "justly," limits the practice).

Also, Gherald's support for a flat tax (which he mentioned as his main disagreement with Megan's principles) always makes me nervous. Perhaps my fears are motivated by me overemphasizing the identity/first principles side of the equation. In other words, my nervousness stems from my belief in this principle: "the gvt should care nothing about intrinsic rights to money, or what people have earned for themselves, but should care only about balancing the promotion of happiness for its citizens (while, given the necessities of government in the empirical world, taking care to minimize the controversy and coercion necessary for this implementation and maximizing public support for any policies that it thinks might do this)." However, if my emphasis on this philosophical point obscures me from thinking coolly about the potential results of a flat tax (and these results actually would result in more happiness and less suffering), then my identity is a problem.

However, I sometimes worry that Gherald as a libertarian might be committing a similar error in emphasis, but on the opposite end—overemphasizing the world as it is part (e.g., flat taxes lead to more more innovation; survival of the fittest is human nature) and then clumsily abstracting from the way the world is to a first principle (flat taxes and inequality are thus always good, even if more innovation ends up arising at the cost of more suffering).

And, if that even describes his position at all, would be my philosophical quibble. There the expertise of all us liberal philosophy folk ends: we simply have to use critical skills to get on with evaluating the nature of the world like everyone else. I've agreed with Gherald in the past that I think the libertarian side has done a better job of evaluating the world as it is part on this issue of health care. The Atlantic article by the businessman is roughly my current position now.

But to end this love-fest of agreement, here's a provocative response from the liberal side. No doubt it's too vague on many particular economic points that are key to the libertarian position, but it may, at least, make one more suspicious of how charitably minded folks in the actuarial profession really are, and more nervous about the potential of badly regulated but "free" business lobbies.

Practical philosophy and national health care

This post may well be the best I've ever read on health care, as well as my favorite on political-economic philosophy in general.

I'm really looking forward to some kind of rebuttal, as I honestly can't begin to imagine what one would look like.  Guess I'm too far in the tank.

(if anything, I'd try to come at it from the right and explain my support for a flat tax)

Does high speed rail have a future in America?

Megan looks into it. Basically, not much of one.

Fascism and Freedom

Writes Megan:

Are we ever going to retire the F-word? You know what I'm talking about: fascist. It seems that we can't go more than a few months without someone leveling this accusation at a president from the opposition party.

This is beyond moronic. The Bush administration did many bad things. But to call his administration fascist is both to completely abuse the term, and to belittle the millions of victims of fascism. Fascism is not just something of which you disapprove . . . nay, not even if that something involves the military. The things that the US did to its POWs can be very, very wrong without rising to the level of the Gestapo. And if you think that they are even close, I suggest that you reread the reports, and then go read some history of the Gestapo. Afterwards, tell me that you would be indifferent to being a captive of Nazi Germany or the US. Tell me whether you'd rather be a citizen of Iraq or Nazi-era Poland. That we even have to discuss this is ridiculous.

Similarly, the fact that Hitler liked government health care is really totally irrelevant to this discussion, thank you so much for not bringing it up. Hitler also liked cream puffs and dogs. Shall we get rid of anyone who shows similar predilictions? Not all forms of state intervention in the economy are fascist. Fascism is a particular thing, not the amalgam of everything you happen not to like. It is an embarassment to the right that anyone would even think of saying something so awful, much less put an effing Hitler moustache on a photograph of the man who is, when all is said and done, the president of the country you claim to love so much. Your fellow citizens elected him. Show some respect, if not to Obama, then to democracy.

Would it be too, too trite to say that some days I despair? Because I really do.

Why do Americans like Europe?

The architecture?

Public health-care and loss of innovation

Megan continues beating her drum.

Uh-oh

WSJ: Health insurance makes people fat?

A commenter at Megan's

I really love that logic. They'll get fat if we give them benefits because they know they can afford to actually see a doctor! If we just made sure they didn't have those benefits, they'd go exercise! And if we took away unemployment benefits and social security, they'd work really hard not to lose their job and make sound long-term financial decisions!

Obviously he's being dismissive. But, actually, yes, if he means they'd work relatively harder and plan relatively sounder. That's the magic of individual responsibility.

Which is why I have to laugh at liberals who think free/cheap health-care is some right that every person should be entitled to and thus be better off in every respect. Life doesn't work that way. There are always trade-offs to subsidizing benefits. You might even call the undesired ones unintended consequences. (gasp!)

Why Megan opposes national healthcare

A long post with good stuff.

Beating up on the Fed

Ron Paul, who clearly hates the Fed with a visceral passion, had some fiery stuff to say to Ben Bernanke yesterday:



Meanwhile, Bernanke seems to be getting rave reviews from global investors. Why is that? The easy money?

Hell if I'm equipped to make sense of whether the existence and operation of the Fed hurts the economy over the long term. But Megan's comment on central bank independence seems appealing:

Start with a stylized fact: in a democracy, there will be a strong tendency for monetary policy to favor debtors, because there generally more debtors than creditors. This is particularly true of America, with its lavish credit markets.

In the long run, however, strongly inflationary monetary policy makes everyone worse off; it impedes capital formation, lowering productivity.

Central bank independence works, not because the bankers aren't accountable to Congress (they are, after all, reappointed every so often), but because Congress is only weakly accountable for the actions of the central bank. If Congress were held to account for the actions of the central bank, Congress would appoint bankers who would do populist things that would make us all worse off. Most of the financial policy journalists I know have the sense that Congress actually supported most of what Paulson/Bernanke/Geithner did, but knew they did not dare enact it. They don't want a more accountable central bank.

So there is something magical about bank independence. It lets Congress cut against its basically populist political interests. You may think that makes it too bank-friendly. But it also means we don't have double-digit inflation, which is where we were headed before Volcker.