Category Archives: Economics

Miscellaneous economy stuff

Medicare for All

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Senator and Progressive-Democratic Party Presidential candidate Bernie Sanders (I [sic], VT) has the canonical version of Medicare for All; the other Progressive-Democrat candidates have only slightly varied versions of it.  Here’s Sanders on his Next Big Idea for health care provision and health care coverage:

You will have a card which has Medicare on it, you’ll go to any doctor that you want, you’ll go to any hospital that you want.

Right.  Been there, done that.  Both claims were straight up lies then, too.  There is a major difference, though, between Sanders’ two lies and ex-President Barack Obama’s (D) two lies: Sanders would make private insurance illegal—both the selling and the possessing.  That, though, only potentiates the power of Sanders’ lies.

As The Wall Street Journal mentioned on the other side of the link,

The point of Medicare for All is to cut reimbursement rates to Medicare levels, which government can now set so low only because private commercial reimbursement rates are so much higher. Cutting reimbursement rates would “probably reduce the amount of care supplied and could also reduce the quality of care,” CBO says.

Not could—would.  Reducing availability cannot help but reduce quality, if only from denying it altogether to many who need it or would merely benefit from it.  But that’s not the only pathway: that reduction in availability will flow, at least in large part, from that reduction in reimbursement rates.  As a result of that, those doctors and hospitals whose talents and skills warrant higher pay will limit their practices to the bare minimum.

That’s not out of personal greed, either: costs of care delivery go up markedly as the number of patients go up.  Absent meeting costs with fees charged, these providers would have no choice but to limit their costs by limiting their services and the numbers of potential patients served.

There’s another cost path, too: the more complex or difficult, or even merely rare, a medical problem, the more expensive it is to provide services for dealing with it.  Capped reimbursements will limit the availability of that care. And—lower reimbursement rates again—lower the quality of those providers willing to provide the care.

Avoid Debate

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It might make some folks uncomfortable.  That seems to be the position of Lance Morrow, a Senior Fellow at the Ethics and Public Policy Center, in his Wall Street Journal piece.  After all, goes the subhead on his piece:

It would push the country to angrier extremes on either side, stimulating fresh antagonisms.

Morrow urged us all to “stop and think” about the implications of having a debate, here on the matter of reparations for past slavery-related transgressions.

The notion may be too volatile to indulge in a presidential-campaign year.

Leaving aside Morrow’s other major concern—

By pressing the issue they may ensure the re-election of Donald Trump….

—the question remains: if not now, when?  Apparently, “later.”

Better to keep monsters, old and new, locked in the basement, and to let the conversation upstairs in the living room be as genteel as possible—even hypocritical. In matters of race hate, candor is overrated. Hypocrisy may be the moral way to go—until, as time passes, people become more civilized.

Yeah, it’s better just to let the matter fester, building to a later, vaster explosion.

Sure.

Puzzling Through Tax Breaks

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The Progressive-Democrats, and too many Republicans, in Congress are trying to sort out what should be done about expiring tax breaks.

Here are some of the expiring or about to expire tax breaks:

  • incentives for biodiesel production
  • deductibility of private mortgage insurance
  • tax credits for investing in low-income areas
  • employers’ family-leave plans
  • expansion of the earned-income tax credit

The answer is really quite simple and straightforward, if extremely difficult politically: let them all expire. Our Federal tax code should not be used for social engineering; it should be used solely for its constitutionally mandated purpose: to fund our Federal government.

Favorable Jobs Report, Therefor Cut Interest Rates?

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That’s the latest push, this time by Vice President Mike Pence.  He’s as wrong, though, as President Donald Trump, for all that he’s more genteel in his push.

There’s no inflation happening here. The economy is roaring. This is exactly the time not only to not raise interest rates, but we ought to consider cutting them[.]

Pence made this remark on the heels of Labor’s employment report announcing strong job growth, rising wages, and 3.6% unemployment.

No.  Interest rates where they are aren’t hindering our economy; on the contrary, they’re still a tad low.  Our economy is flourishing for a number of reasons, one of which is that interest rates are approaching more natural levels, not being held at below free market rates.  “Natural” here is defined in terms of the Federal Reserve’s legislated mandate—to maintain stable prices and low unemployment—and the Fed’s long-held optimal stable pricing goal of 2% inflation.

Cutting rates on the basis of a favorable jobs report (and one not entirely favorable: the labor force participation rate fell for the second straight month, and that rate is a factor in calculating the headline unemployment rate) would be a mistake.  Instead, the Fed should move its benchmark rates to levels consistent with its 2% inflation goal and then sit down, be quiet, and accept that the economy and employment rates will be noisy around that level (or any other level).

Animal spirits, after all, are hormonal, but within surprisingly broad ranges, they keep correcting back.

Socialism and Good Intentions

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Carol Roth, in her op-ed for FOXBusiness, said that Socialism begins with good intentions.

No, socialism does not.  Perhaps the first attempts did, but with its unbroken history of wealth concentration, power concentration, and utter failure—even for those in the concentrated top—before us and well known, that much is clear.  On the contrary, those proselytizing for and instigating socialist regimes have as their sole goal the accretion of wealth and power to themselves—and this time it’ll be different, this time they’ll pull it off.

Roth’s piece had a number of internal contradictions that illustrate the origins of socialist regimes, even though she seems to have missed them.

The first is her quote from Margaret Thatcher:

The problem with socialism is that eventually you run out of other people’s money.

Those pushing socialism know this a priori, though.  They have no concern for the future, just the current seizure of all that OPM.  They’ll get theirs, and to hell with anyone else.

Then she wrote,

Socialism is quite like robbing Peter to pay Paul….

That’s not starting out with good intentions.  Unless it’s a Good Thing to rob someone, especially if it’s someone you don’t like.

And this bit:

Socialism starts out with noble intentions, preying on the envy of the population….

It’s noble to “prey on” the base instincts of the poor?  It’s noble to take advantage of others’ envy, to encourage the weak immorally to act out that envy?  How does that “logic” work, exactly?

Socialism, in each of its iterations over the last 100 years has not started with good intentions.  It has started with the greed of the few with the skill to peddle snake oil.  Socialism accelerates downhill from there.