[FoRK] Accidental theorist lost, wanted back

Stephen Williams sdw at lig.net
Thu Jul 16 10:02:41 PDT 2009

I agree that health insurance company reform is what is needed.  I think 
that the public plan is supposed to be competition that causes that.  
Better would be some creative incentives that encourage everyone 
involved to be ever more efficient.

It is being said that the public plan idea will be killed, and instead 
non-profit coops will be created.  This works pretty well for credit 
unions, despite long-term and constant constraint and attacks by 
commercial banks.  Being an entity separate from the government allows a 
lot of flexibility in how it is set up, incentivized, etc.  It can vary 
from nearly commercial to pseudo- or semi- governmental (Freddie Mac et 
al, postal service).


Jeff Bone wrote:
> Bryan Caplan, as usual, nails it:
>   http://econlog.econlib.org/archives/2009/07/the_world_needs.html
> The Krugman we've got is sold on the House health bill.  But the 
> Krugman we had, the thoughtful economist who wrote The Accidental 
> Theorist, would have responded differently.  Krugman Past, unlike 
> Krugman Present, would have pointed out that when the unemployment 
> rate is 9.7%, it's a bad idea to legislate an 8% payroll increase on 
> businesses that fail to offer health insurance.   Employers are 
> reluctant to hire workers at today's wages; how are they going to feel 
> once the marginal worker gets 8% pricier?
> It's not just Krugman who should be against such legislation at a time 
> like this; so should any sensible Keynesian.  If you're a dogmatic 
> believer in market-clearing, you might say, "No problem, wages will 
> fall to prevent a rise in unemployment."  But if you accept the 
> reality of wage rigidity, you know that's pie-in-the-sky.  In the 
> short-run, employers will mostly respond to higher labor costs by 
> letting workers go.  And even in the long-run, employers usually cut 
> real wages by keeping nominal raises below the inflation rate.  In an 
> economy with very low inflation forecasts for years to come, this 
> stealth adjustment process will take years.
> -- 
> This health care reform bill is a monstrosity;  almost everyone who 
> has anything to do with the health care industry abhors it, almost 
> everyone who pays for health care in one way or another abhors it, and 
> almost everyone who uses health care recognizes that this is going to 
> dramatically reduce quality of care and *raise* --- not reduce --- 
> costs across the board to everyone involved.  It's a bad idea all 
> around, from being a 1000+ page monstrosity that isn't even going to 
> be read before a vote to the very idea that the entity that does such 
> a good job w/ e.g. the USPS, Amtrak, Interstate road and bridge 
> maintenance, Social Security, and Medicare should even be *allowed* 
> anywhere near this critical industry.  In many cases the added tax 
> burden involved is going to eliminate the ability for (up to 60% of) 
> the current stay-at-home moms out there to continue doing so.  Not to 
> mention the fact that this will kill most of the small rural providers 
> and a large number of the smaller urban providers, private physicians 
> and group practices, etc.  And then there's the massive chilling 
> effect on job creation and maintenance, as noted above:  this will add 
> several percentage points *permanently* to our baseline unemployment 
> nation-wide, and slow new business creation while accelerating losses 
> in small businesses.
> As far as I can tell the only people that think this is a good idea 
> are the Dems in DC, died-in-the-wool partisans, and people that were 
> hoodwinked by Michael Moore's health care opus.  We *need* health care 
> reform but it should really be focused at *insurance company reform* 
> rather than creating another mass-entitlement and letting the 
> government "compete" with them (at a loss, funded by you and me.)  Oh, 
> and the ever-growing ranks of the completely economically-innumerate.
> Call your reps and senators *now* and oppose this absolutely abysmal 
> bill.
> jb

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