Links to Consider, 11/2/24
Armin Rosen revisits Nixon-era journalism; Timothy Taylor on Jason Furman on America's health care system; Darren Whitehead on Digital Detox; Scott Sumner on what economists know
The media organizations Crouse observed were blighted with self-regard, with the television networks in particular viewing themselves “as omnipotent and sacred institutions, like the presidency.” For journalists, proximity to the presidential campaign, or a feeling of participation in it, became an unhealthy source of professional and even personal meaning.
Crouse’s The Boys on the Bus was written in 1972, well before Rosen was born. But I think that it is correct to reach back to Richard Nixon for parallels with the Harris campaign.
Furman argues for cost-sharing when it comes to health care expenses, on the grounds that people need to have some connection to what they are actually paying for health care, because if they don’t do so, they aren’t likely to think about tradeoffs. He writes: “The financing of healthcare is already very opaque with a typical family of four spending about $32,000 annually but possibly only noticing the about $3,000 they pay out of pocket or maybe also the about $6,000 they contribute to the premium for their plan. The rest of the money is in the form of foregone wages (the incidence of the employer contribution for health insurance) and taxes for healthcare.”
Jason Furman’s article is behind a $$$wall. When my book on health care, Crisis of Abundance, came out in 2006, Cato invited Jason to discuss it. He said,
This book, I think, has a great diagnosis and discussion of the issues in health care which is basically the first half of it.
He went on to scorn my proposed solutions. Those involved trying to increase cost sharing while allowing the very poor and the very sick to benefit from insurance. That is still the fundamental challenge for American health care policy.
I just watched the video for the first time (obviously, I heard his original talk). As a Democrat, he has faith in a technocratic approach, with a central board deciding which procedures are worthwhile (so that insurance will pay for them) and which are not worthwhile (so you pay out of pocket). As a libertarian, I had in mind a more decentralized solution, where individuals pay out of pocket until they reach a point where the burden of their treatments on their income gets high, and then the government provides some aid. Of course, if you want to buy some very comprehensive health care cost coverage and call it “insurance,” as a libertarian I would not stop you.
Anyway, I would concede that there is a lot to be said for Furman’s bias toward a technocratic solution. In the event, the board idea went by the wayside, derided by Sarah Palin as a “death panel.”
I wrote a TL;DR version of the book.
We encouraged participants to remove “distraction” apps (social media, games, news, etc.) and keep only utility apps like phone and text.
The other thing I find myself doing is buying physical books instead of e-books. Paper does not stimulate me to become distracted the way that a screen does.
Economists are much more aware than average people of the damage done by a wide range of economic policies, including bans on direct sales of autos by manufacturers, rent controls, occupational licensing laws, the Jones Act, prohibition of kidney sales, sugar import quotas, nationalized air traffic control, residential zoning and a zillion other examples I could cite. Check out twitter to see all the highly intelligent people who were shocked a few weeks back to discover that our ports have third world levels of efficiency. Like, you didn’t know?!?!?!
I would add that economists know that the working poor face very high marginal tax rates. We know that Social Security and Medicare are in financial trouble,
substacks referenced above:
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"Economists are much more aware than average people of the damage done by ... the Jones Act."
That the Jones Act is a favorite punching bag of Economists goes to show what Economists tend -not- to make themselves aware of.
To explain, let's consider thee other hypothetical acts.
First to pass was the "Global Free Trade in Cement Act", which allowed cement to be imported from any country without tariff or conditions on how it was made. Because cement is heavy and bulky and cheap and transportation costs significant, domestic producers were still able to compete with the cheapest ones abroad.
Next to pass was the "Clean and Fair Domestic Production of Cement Act." This required only the US plants to only hire unionized workers and give them higher than market wages and benefits, to not use coal - the cheapest fuel - to smelt the limestone into clinker, and to comply with the most stringent safety and environmental standards in the world.
So, practically overnight, the entire domestic cement production industry went into liquidation bankruptcy with no hope of reorganization, all the workers were fired, and the plants put up for auction for scrap. Cement consumers paid a few percent more for the product of a sector that was simply offshored, and made in a dirtier way that was less safe and with more net emissions as all that heavy bulk now had to be shipped across the ocean and then trucked to its destination. This was not due to "comparative advantage" except to the extent created by "regulatory arbitrage".
This was arguably unconstitutional, at least in spirit, and if you allow for the possibility that "constitutional" can mean something other that whatever at least five Justices claimed it meant the last time the specific question was considered. A lot of private property was entirely annihilated in value as a consequence of public actions and purportedly for public benefit, which qualifies as a "Taking" under the 5th Amendment, and should have entitled all the economic stakeholders to fair compensation for lost assets and expected dividends and wages, etc.
If there were some kind of fair mechanism for the government to pay the cost of its new laws and to compensate these parties, that might have been the end of it, but instead it was more like simple expropriation.
Then, ten minutes before the sector went entirely extinct, the politicians for districts where most of these plants were operating and workers were employed freaked out at the predictable consequences of laws they supported and didn't have to pay for. In that case, Economists were indeed aware of what was going to happen, and the politicians should have listened. But they didn't, and now they were in a pickle, because, in the nature of popular laws, they couldn't just reverse the regulations they had imposed on the sector. And, in the nature of international trade, they couldn't impose the same regulations on foreign producers (though the US sometimes pretends to try).
So, to "level the playing field" and make it viable for domestic cement producers to both (1) be in business, and also (2) comply with regulations, the government passed "The Johnson Act" (also, "The Domestically-Sourced Cement Act") requiring the consumers of cement to pay the full cost of "clean and fair cement".
And of course the Economists were well aware that the Johnson Act would radically raise the cost of cement for domestic consumers, and thus ripple through the economy, raising the cost of everything closely related to cement, and making lots of potentially and formerly viable projects with cement as a key input now non-viable.
But instead of demonstrating "awareness" of the whole big picture, Economists demonstrate obliviousness, and try to pick on the Johnson Act as if it was fair and valid to consider it in complete isolation of the whole history and circumstances. As such, they only talk about the negative consequences, and are consistently completely silent on the point about regulatory takings and fair compensation and who if anyone should pay the price of compliance with cost-ballooning laws.
If instead of simply calling for abolition of the Johnson Act they -added- that the rules making domestic production of cement so expensive should -also- be abolished, then they would demonstrate "awareness" of what the heck they were talking about. Treating the rest of the equation as "not my problem, so it's valid for me to discuss the topic as if none of that stuff is important or exists" could be called many things, but "awareness" is not one of them.
Any layman - or even laychild - can say, "US stuff expensive, foreign stuff cheap, who knows why, but who cares, lots of money to save, duh!" But the first thing an Economist who wants to be taken seriously as an "aware" scholar and intellectual should ask about the Jones Act is "Why, exactly, is a US-crewed ship, built and flagged in the US, THAT much more expensive than the comparable operation from even rich, developed countries?" Is it fair to have laws that burden entire domestic industries to the point of extinction with -nobody- having to pay the price imposed on that industry except those driven into bankruptcy? Is a lousy way of requiring somebody to pay that price to keep the domestic industry barely alive still not better than letting the whole thing go extinct?
So the problem is that Economists are often not aware that they are being overconfident in how "aware" they are.
I’m not at all convinced that money for drug addict single mothers provides better nourishment for the kids than food stamps. Which, with effort & a little lost value, can be turned into money. I’m now wondering about food stamp conversions for alcohol and cigarettes.
If money is a little better for the least poor 70%, but much worse for next 25%, and as useless as anything for the bottom 5%, does this mean money is a better policy than food stamps?
The most important thing economists know, but so often fail to elaborate, is that all decisions involve trade offs among imperfect and uncertain outcomes.
Govt building new housing in SF would help reduce the housing problem more than money, since govt regulations are stopping building more than a lack of money.