Links to Consider, 8/16
A long podcast with Amit Varma and me; Brian Chau on the virtues of disgust; Matt Yglesias on the revolving door; My interview of Doyne Farmer
Amit Varma, who likes to make long podcasts, talks with me. About three hours, one of his shorter efforts. I wish I had talked less and let him talk more. He has interesting thoughts. If nothing else, you should look at his show notes. I like my discussion of the new economy of cities around minutes 46 through 50. Also my discussion of education about minutes 62 and 63. About two hours in, we get into TLP and my views of political psychology.
Disgust is not just helpful, but crucial, when there are asymmetric risks of contagion, collapse, or dysfunction.
Disgust probably evolved as an emotion to keep us away from germ-laden foods, animals, or people. But Chau suggests that
Disgust is a stopgap for social contagions. At least, it should be in theory.
Imagine if people were disgusted by socialism, so that capitalism had higher status. Or by non-profits funded by the wealthy, so that working for a profit-seeking business had higher status.
Perhaps having children would have higher status if people were disgusted by LGBTQ, which was the case during the baby boom. But that would make life pretty unpleasant for people with different sexual preferences.
According to Jonathan Haidt’s Moral Foundations theory, conservatives experience disgust more strongly than progressives. But I think that varies somewhat by topic. If you surveyed people about gas-powered leaf-blowers, or hunting trophies hung on a wall, or smoking, you might register stronger disgust among progressives than among conservatives.
Matt Yglesias writes,
Joe Biden’s administration, unlike Barack Obama’s or Bill Clinton’s, hasn’t included any businesspeople in the cabinet. That’s not a coincidence.
There has been a concerted, years-long, somewhat successful pressure effort inside the Democratic Party to start counting private sector experience as a negative.
…I want to make the case that Biden’s experiment in staffing an administration as fully as possible with professors and nonprofit lifers has not been a smashing success and that Harris should open the doors to talent from all walks of life.
Yes. And you my recall that I had a similar complaint about the people that I met at the NatCon convention. I do not trust anyone who has spent their entire life in the world of academia, think tanks, and government. I want someone who knows what it feels like to be part of a business trying to survive.
I interviewed Doyne Farmer, author of Making Sense of Chaos. He approaches economics in a way that differs considerably from the mainstream. He is a very careful as a researcher and thinker. He understands the challenge of communicating between his paradigm and standard economics.
He has had a fascinating career, starting in physics, moving to start a Wall Street trading firm, and then based on that experience challenging some standard economics of financial markets. He also expressed considerable humility, noting that there are many questions that he would like to be able to answer that either defy easy answers or require much more research effort. I recommend checking it out.
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I was once at a talk by Marc Hauser (later disgraced for data fabrication) in which he talked about how Nazis tried to trigger disgust towards Jews by likening them to rodents in their propaganda. Hauser ended the talk by saying that we would all be better off if we didn't have the capacity for disgust. I was sitting next to the anthropologist Rob Boyd who whispered to me: we'd be eating feces and mating with our siblings.
I've known Doyne for over twenty years via SFI, fascinating character, I'll check out the interview.
So yesterday we got a major announcement of the Biden/Harris "big success" negotiating drug prices down. Saved $6 billion! The NYTimes and "reality based community" (Noah Smith-sphere)
is of course ecstatic, and I expect it to be used in ad buy after ad buy this fall.
Here's the reality. The prices are actually worse then what the PBMs were getting after rebates and discounts for most of the drugs (the admin disputes this, but those are the real numbers). Somehow Medicare managed to negotiate worse prices. As Adam Fein of Drug Channels put it upon seeing the numbers, Medicare Fair Price ought to be called Maximum Fair Price. None of us know where they are coming up with the $6B saved figure.
Before even knowing this, insurers submitted bids based on the changes in the IRA. The Direct Subsidy, the amount that the government has to pay insurers per member, came in way higher than the trustees report. That's worth about $5-$7B. But that wasn't enough. It probably would have been even higher but we suspect they lopped some money off to pay for the "individual PDP demonstration" that will cost another $5B. In it the government just declares (probably illegally if we were a nation of laws) that it will just arbitrarily subsidize double digit premium amounts on behalf of the members for all PDPs to keep premiums from going up before the election. Also, they are going to narrow the risk corridors (money the government give you if you get your bid wrong) on just one side (the side favoring the insurer). Also, the program goes on for three years! Insurers bid high when they didn't know they were going to get a massive bail out. Imagine what they will do when they do know they are going to get bailed out!
So we've got $6B in fake "savings" and $10B+ in already realized costs, with every expectation they will only increase.
According to the NYTimes and reality based community, this is a great accomplishment. I expect that if we get a Harris administration we can look forward to four years of such accomplishements.