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    Maxine's Essays

    • 21st Century Regress
      Sometimes it seems like the world is going to hell and there's absolutely nothing a girl economist can do about it.
    • What Exactly Are We Crowding Out?
      The current economic downturn isn't a random draw of a black ball from an urn containing white balls and black balls. There's no sampling distribution. Very specific policies and actions landed us here. Now we must decide not only what policies need to be put in place to prevent it happening again, but also what policies would best drive us out of the ditch faster and sustainably.
    • I Wish It Were Only Butter
      We should be giving up some butter if we must. We should not give up education or health investment (or infrastructure or the environment (hello, BP). They may be the only legacies of any value that we pass on to our children and grandchildren.
    • Rational Health Investment?
      The obvious "market solution" is to improve the long run return on investments in health among the disadvantaged through meaningful and effective publicly funded education. The obvious short run "market solution" is to reduce the costs of investment and the shadow price of health for the disadvantaged by providing health insurance cover and reduced out-of-pocket costs.
    • The Socrates Parameter
      To the extent that our limbic systems respond to such engineering by over-riding the judgment of our frontal lobe and to the extent that our frontal lobe is deprived of the information it requires to make a rationally self-interested judgment, we are not only pigs and fools, we are slaves.
    • The Economic Rewards of Virtue
      If individual virtue tempers our "piggy" desires and conditions our choices to something that is both individually and socially better, then the economic rewards of virtue as embodied in and promoted by societal norms and institutions are far greater than we have ever suspected. As economists, we would do well to recognize this when we teach U max.
    • The Market for Morals
      Markets then are places where more is exchanged than goods and services, labor and product, credit, and interest. They are places where we also develop the personal virtues of temperance and prudence and the social virtues of benevolence and justice. When they function well, they produce trust, loyalty, and sympathy among those who trade there.
    • Post-Modern Applied Economics: It’s the Error Term, Stupid
      Maxine believes it’s time to refocus attention and discussion on the error term. It is often where much of the action is in our models. It is where unexpectedly catastrophic events dwell resulting in fat tails. It is where our animal spirits manifest and cause us to do the right thing or the wrong thing or the thing everyone else is doing rather than the self-interested, fully-informed rational thing. It is where God and miracles and chance dwell.
    • Intergenerational Win-Win: Health Insurance, Education, Environment, Infrastructure
      So when we’re talking about fiscal stimulus packages and we’re borrowing from our grandchildren to finance them, we should be thinking about how to use stimulus monies to create value for those grandchildren AND stimulate our economy.
    • Short-term Private Payoffs, Long-term Social Costs
      The real health reform discussion, the one we should be having, is “What must we do to create a health system that is both efficient and fair?” The answer will almost certainly include relegating the private sector to markets where market forces or regulation are effective at aligning short-term private incentives and goals with long-term societal interests. If such markets are scarce or non-existent in health, then the private health sector will be of limited value.
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    08/30/2010

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    Most people aren't in the debate; in Converse's survey, 84.5% don't reason about policy at all. See. Scroll down.

    Given that, political activists need to rely on other ways of getting policy made. We may not all be doctors, but that doesn't mean we "deserve" malpractice.

    “genetic information would be used by private health insurers, not to manage risk better, but to sort on it better, thereby defeating the ostensible purpose of insurance.”

    No, that’s exactly the purpose of insurance: to quantify risk as accurately as possible and then distribute the cost of covering that risk proportionately across the insured, while making a profit commensurate with the insurer’s risk and trouble. (Why proportionately? Because otherwise a competitor would be able to underbid you on some segment of your market and leave you worse off than if you did charge proportionately when that segment leaves your plan.)

    “Mercifully, our ethics and our values require them to have access to health care.”

    Which is humane and appropriate, but does not describe “insurance.”

    I’ve noticed that the debate about “health care” is almost always really a debate about “health insurance”; and at that point it has already gone astray. I sometimes think that if we could ban the use of the words “health” and “insurance” in the same sentence, we might begin to get somewhere.

    “You were all wondering how someone could say, ‘Keep your government hands off my Medicare?’ Well, there you have it. Now that I've told you, I'm still not sure I understand it.”

    From what you quoted, it sounds as if your relative actually believes that his or her Medicare premiums are commensurate with what ordinary insurance would cost. Perhaps this person really doesn’t realize that the government subsidizes Medicare though payroll taxes. It’s not just government run, it’s government financed.

    The other part of this, of course, is the American dread of “socialism.” I put it in quotes because it’s the word, not the concept, to which Americans react. I doubt that most Americans even grasp the concept. It means to them something like big, grey buildings with ugly, cold people dressed in grey who require you to fill out long, grey forms to request permission to buy a new toaster, which you might get in two or three years if you're lucky (and when you get it, it will be grey).

    “Capitalism,” on the other hand, is treated like a religion. Americans act as if they believe that since money is power, if God allowed some person (or organization, or corporation) to have a whole bunch of money, He must have wanted him to have a whole bunch of power. It’s the Divine Right of Kings ( http://en.wikipedia.org/wiki/Divine_right_of_kings ) all over again.

    The cherry on top is people’s astounding ability to rationalize. What they want to believe that applies to them is always the exception, and what fits their established beliefs about the rest of the world is never proved false by their direct experience.

    Shit. As a race, I think we’re doomed. Thanks for reminding me. ;-)

    i was going to say something about letting the likes of rush limbaugh and glenn beck control the national dialog, but ill just go with coises's assessment:
    "Shit. As a race, I think we’re doomed."

    Hello

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    -Kathy

    I doubt if your aged relative is susceptible to rational argument, although by the same token it's not really her fault. Marcuse said it all in 1964 - see what he called "The Closing of the Universe of Discourse" in One Dimensional Man.

    The lesson here isn't that Udall's relative is stupid. It's that 50 years of intensive right wing propaganda has defeated the liberalism. The right wing has almost complete control of the media; media "liberals" are centrists and media "centrists" are sane conservatives.

    People have been whining about the media the whole 50 years, but no one has done anything, and whenever something like the Fairness Act or media monopoly comes up in Congress, enough Democrats cave in to ensure defeat. The Democratic Party itself does little or nothing to get its message out between elections, and confines itself to electioneering every two years, usually under crisis conditions requiring a move to the center (which is what the Democratic money people want). Elections are taken one at a time with no attention to the long term future.

    Under Clinton the Democrats figured out a way to convert soft "party-building" money (long term) into immediate-term electioneering money. That was like eating the seed corn; "party-building" is what was needed. But Clinton made his career on the move to the center and didn't want party building, because a stronger party wouldn't have to be centrist.

    That's the way the information economy works: you get the information you pay for (e.g., the spendy Financial Times) and people who rely on free and cheap media get precisely calculated disinformation. Freedom at work (in the Chicago School sense)!

    as per usual, ive found someone who says it better than i could have; so ill give you james howard kunstler:

    Of course, what has allowed Beck to occupy center stage is the failure of rational political figures to articulate the terms of the convulsion that American society faces, brought about not by communists and other John Bircher hobgoblins but by the forces of history. The failure at the political center is a conscious one of nerve and will, of elected officials in both major parties playing desperately for advantage in defiance of the truth -- this truth being that the USA went broke trying to swindle itself into prosperity. Add to this the failure of the law to go after the swindlers, which has undermined the fundamental belief in the rule of law that enabled this society to function as well as it did previously.
    Barack Obama personifies this failure these days, a politician proclaiming "change" who not only managed to change nothing, but promoted a continuation of the national self-swindling with legislation so dazzlingly prolix and complicated that no one can claim to have read either the Health Care Reform Act or the Financial Regulation bill, the two hallmarks of his tenure so far, neither of which will change anything about how we do these things. Why Mr. Obama has turned out to be such a weenie remains a mystery. Even the former communists at Russia Today laugh at the idea that he is a "communist" or a "socialist" and so do I. He certainly appears to be hostage of the more malign forces in society these days -- the medical insurance racket, the too-big-to-fail banks, the multi-national corporations.

    http://kunstler.com/blog/2010/08/one-lump-or-two.html

    It's revealing that the elderly relative thinks he/she 'pays' for the Medicare care they are receiving. There seems to be no awareness of the huge subsidy which makes that premium affordable. It's also revealing that the elderly relative does not know that in many countries with 'socialized medicine', the user also 'pays' for the care received. EVERY user pays and every payer receives; that's the 'socialized' part of the dreaded 'socialized medicine'.

    I think most people simply don't know how Medicare and Medicaid are funded and probably they don't really care to think much about it -- as long as they are receiving care, they don't, you know, care. Just so long as you keep your hands off 'their' Medicare.

    "Socialized medicine" is a boogie man slogan which people have been trained to be horrified by. It has any meaning they want to give it, or no meaning, but it's a bad thing.

    The bad guys took control of the public dialogue 30+ years ago. Ideas were not involved, it was all sound bites. Control of the commercial media by the owners and managers, plus a lot of subsidized propaganda from "think tanks" were what won the game.

    Will Democrats and liberals learn to respond, even 50 years too late? Or will they just continue to sit and whine?

    The problem isn't the current level of care that Medicare provides. It is the fact that the program has a huge unfunded liability and we will not be able to pay for future promises at this level of care. And it seems you forgot that 1/2 of the story.

    The answer, obviously, is to embrace the stupid: "Just say no to Socialized Medicine. What we want, is Medicare for all!"

    There, that wasn't so hard, was it?

    (Of course, the right-wing counter to this is that putting all those healthy younger people into Medicare, will bankrupt it, because everyone knows how cheap it is to care for the old, just look at their low premiums. So be ready for more stupid.)

    One of the first rules of business that I ever learned, was that if selling something depends on teaching the (potential) customer, then you are not going to sell much.

    @Rad Onc -

    #1, as if any other health insurance did not suffer the same funding problem, and

    #2, there is the hypothesis in the article, that in a single-payer system the single payer would have an incentive to care more about the future costs of the elderly, as opposed to the current system, where health insurers are happy to kick the can down the road, as long as down the road is past age 65. I can tell you that we develop some stupid habits when young (like sitting on our dead asses) that cost us when we are old (studies show larger benefits from exercise in the old, than in the young, measured as reduced mortality rate).

    same story: its about who controls the national dialog:

    "When our canvassers call on our members on their doorsteps, they hear Glenn Beck or Bill O'Reilly in the background," says Dan Heck, who heads a massive union-sponsored program in Ohio devoted to persuading its members to vote this November for candidates who would mightily displease Beck and O'Reilly. Heck's organization, Working America, was created by the national AFL-CIO in 2004 to reach out to white, working-class voters in key swing states such as Ohio, Michigan and Pennsylvania. "Right now, we talk to 25,000 people every week,"

    http://www.washingtonpost.com/wp-dyn/content/article/2010/08/31/AR2010083104880.html

    I say make Steven Colbert President and have him abolish socialized Medicare! If reason doesn't cut through to the teabrains maybe fear will.

    You must be using some unusual definition of the word "intelligent."

    That person sounded pretty goddamn stupid to me.

    Better one suffer, than a nation grieve. (John Drydon, British poet)

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