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Tuesday, November 6, 2007

Right-wingish economist: Problem with the poor is that they are poor, version 1,298,165

Note: this is a long post, but it is composed so that it can be quickly skimmed.

AS finds that Greg Mankiw is unpacking something in the NYT. Why is it that we know what that might be? (Just an aside - GM is superb, IMHO, when he is teaching, in his posts that explain what economists know, about fiat money or about oil price impacts. He derails, sometimes, when he jumps into these policy debates).

So far as I know (and it is limited), there has been no effort to do an economist's work on the cost figures, to actually show the sources of rapid cost growth in health care industry.

Certainly, the GOP have done little to improve the national statistics at this detailed level, to subpeona the kind of information that would really inform policy makers, to put the power of informed decision in the hands of the public, rather than private industry.
One has to chuckle a little at those trying not to be "scary", which is so much at odds with the politics of the GOP, even on economic matters, where people are 'scared' into voting against "the biggest tax increase in the History of the World". (see also, How the GOP Induce Fear Of Healthcare Reform Among Their Own)

On the points:

NUMBER ONE

Mankiw is channeling right-winger John Stossel, who was "unpacked" here a while back, in Libertarian Liberties. Suffice it to say that the WHO has already attempted to adjust the figures, it seems.

Violence may count

What's more, Mankiw seems impervious to the fact that the incidence of, say, hand-gun violence in the U.S. might be a function of our poor mental health - and more - because he dismisses it as unrelated to healthcare or well being.

NUMBER TWO

Few believe that they are getting value out of "insurance", yet Mankiw forges ahead with this: "Similarly, we should be wary of sweeping reforms of our health system if they are motivated by the fact that a small percentage of the population is uninsured." If "sweeping reform" is letting people buy into the same plan that Congress has, then who is being "scary" now?

What's more, if everyone is covered, then laws that force "universal coverage" should met no resistance, and certainly not be called "sweeping". But, here's a free-market conjecture that Dr. Mankiw should come to terms with, if he is going to join the public debate (lifted from comments to Becker-Posner blog):

Absent government regulation of coverage and costs, quality of insurance will continue to decline until the effect of buying insurance is identical to donating money to the insurance corporations.

Last, I guess it is o.k. to leave "some" behind, just not ... well, how many? Would Mankiw complain if some got taxed at 70% marginal rates, since they are just a "small percentage", anyway? You bet, but maybe not until it became a leading cause of bankruptcy fillings, as have healthcare costs ...

NUMBER THREE

"Our health care system is not perfect [understatement, yes?], but it has been a major source of advances in our standard of living ..."

What an outrageously distorted statement.

Science confused with health care delivery system

Breakthroughs in science have been a source of improvements in well being, but there is little to support that "our system" - the Nanny Corporation - has much to do with advances. (See also, What They Didn't Tell Douthat Comma Ross at Aspen, Most Likely).

We need a cost accountant, not an economist.

FWITW, this is also part of Kling's arguments, as best I understand them, that the main driver of cost in the system has the expansion to new and expensive treatments.

So far as I know (and it is limited), there has been no effort to do an micro economist's work on the cost figures, to actually show the sources of rapid cost growth in health care industry. Certainly, the GOP have done little to improve the national statistics at this detailed level, to subpeona the kind of information that would really inform policy makers, to put it in the hands of the public, rather than private insurers.

Instead, we have policy pronouncements, without the requisite economics data. It's not unlike Harvard professors to talk with great conviction on theory, however (to borrow a phrase from Henry Kissinger).

WHAT SOME ECONOMISTS DON'T WANT TO TALK ABOUT : SUCCESSFUL MODIFICATIONS

The case for improving health care doesn't (and shouldn't) reside completely with "scaring people". The case for rendering statistics in context has already been made on this blog (see, Changing Health Systems ... The Community Care Advantage? and "It's not the uninsured, stupid")

As outlined at that time, there are a number of situations in which the health of families and workers has been improved.

Such improvements can come at lower costs, even. Both direct and indirect, when productivity is given even a slight boost. Bear in mind that a 1% boost in productivity over four years, say, might amount to $100+ billion dollars.