http://www.nytimes.com/2010/03/10/business/economy/10leonhardt.html?emc=eta1
http://economix.blogs.nytimes.com/2010/03/09/health-care-reform-and-the-doc-fix/?emc=eta1
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/25/AR2010022504074.html?referrer=emailarticle
It was a privilege for me yesterday to be part of a "coffee" with the honors undergraduate students here at the university. "Health Care" came up as an issue they wanted to talk about, so we did.
When they asked me for my position on the subject, we basically shared that, overall, we don't need 1178 pages to fix two major problems: nobody should be denied health care insurance (no matter their prior medical history) and nobody should be terminated from medical coverage because the "insurer" has paid too much (parenthetically, what is "too much"?) in claims. This could, actually, be accomplished in one page.
Instead, we have a massive bill(s) that is so "inclusive" that there is something in it for almost everybody to be against.
We have attached David Leonhardt's article and his "Economix" post both authored on 3/9 so the information is current. In addition, we have attached the Washington Post "transcript" that Leonhardt refers to.
Leonhardt's perspective is that President Obama's overall plan is a "... terribly mixed back." It would not come close to eliminating Medicare's long term budget deficit. It would reduce the deficit only if a future Congress did not tinker with the various taxes and spending cuts scheduled to be phased in over the next decade, and what are the odds of that?
On the other hand, the plan would make progress in all sorts of areas. Insurance exchanges would create more competition. A Medicare oversight board would gain authority over reimbursement rates. Hospitals that committed certain medical errors would face financial penalties.
Leonhardt: "So which matters more: what the plan does, or what it fails to do? It's a tough call, and the answer depends on what you see as the alternative to the current plan."
Leonhardt mentions Paul Ryan, a top Republican on the House Budget Committee, as someone who has produced a reasonable alternative to the Democrats' plan (see attached). So, there are "reasonable" Republicans.
What's the bottom line to this bottomless pit? Right now, it is a bill that would spend $950 billion over 10 years to help the uninsured and small business employees buy insurance. Initially, the bill relies on accounting gimmicks to cover these costs. Most important, the insurance expansion does not start until 2014, holding down the 10 year cost. The taxes and Medicare/Medicade cuts in the bill are then big enough to pay for the bill. In the second decade the Congressional Budget Office (CBO) projects the bill would cut about $1 trillion from the deficit.
This is where we are.
Now, there is a separate issue related to health care that has to do with what is known in D.C. as the "Doc Fix". Leonhardt addresses this in his "Economix" blog (see attached) where he explains that in the 1990s the Clinton Administration (along with a Republican Congress - please note) passed a law cutting Medicare Payments to doctors. As one might imagine, this did not sit well. In the years since that law was passed, both Republican and Democratic Congresses have overridden that legislation. Officially, the law says these cuts will take place. The current health care bill(s) don't fix this problem.
"Something" should have been done by now. Paul Krugman, who understands the politics of the situation, and has some influence on those who are charged with passing health care legislation, actually thought we would have a new health care law before 2009 ended. We don't.
What happens next is anybody's guess.
Wednesday, March 10, 2010
Saturday, March 6, 2010
Senator Bunning's Universe
http://www.nytimes.com/2010/03/05/opinion/05krugman.html?emc=eta1
If you are a baseball fan and a Krugman fan, then you have a rare opportunity with this post to combine your level of interest.
Jim Bunning was a great pitcher for the Detroit Tigers and the Philadelphia Phillies during his Hall of Fame career. He is one of only 5 pitchers to throw a "no hitter" in both the National and American Leagues. After he retired from baseball, he went into politics.
Bunning has been in the U.S. Senate for a long time representing Kentucky.
According to Krugman, Senator Bunning "... exploited Senate rules to block a one-month extension of unemployment benefits." This caused an interruption of payments to about 100,000 workers (he eventually gave in).
Per Krugman: "But while the blockade is over, the lessons remain. Some of those lessons involve the spectacular dysfunctionality of the Senate. What I want to focus on right now, however, is the incredible gap that has opened up between the parties. Today, Democrats and Republicans live in different universes, both intellectually and morally."
Let's go to Economics 101 (Krugman literally wrote the book): when the economy is deeply depressed, extending unemployment benefits not only helps those in need, it also reduces unemployment. "That's because the economy's problem right now is lack of sufficient demand, and cash-strapped unemployed workers are likely to spend their benefits. In fact, the Congressional Budget Office (CBO) says that aid to the unemployed is one of the most effective forms of economic stimulus, as measured by jobs created per dollar of outlay." Our thought here is that we'll go with Krugman and the CBO. The CBO is considered by members of both parties to be completely objective.
We have no interest here in dealing with politics but we need to explain or understand why some things happen and, in this case, the only explanation available from the Republicans is that unemployment relief "... doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work."
Have the Republicans seen the real unemployment numbers? Our thought here is that 17% real unemployment is a big number.
As Krugman points out, the difference between the Republican and the Democratic "universes" is not just intellectual, it's also moral.
We were big fans of Jim Bunning as a baseball player. As a lawmaker, not so much.
With this as predicate, we wonder at the future of health care legislation.
If you are a baseball fan and a Krugman fan, then you have a rare opportunity with this post to combine your level of interest.
Jim Bunning was a great pitcher for the Detroit Tigers and the Philadelphia Phillies during his Hall of Fame career. He is one of only 5 pitchers to throw a "no hitter" in both the National and American Leagues. After he retired from baseball, he went into politics.
Bunning has been in the U.S. Senate for a long time representing Kentucky.
According to Krugman, Senator Bunning "... exploited Senate rules to block a one-month extension of unemployment benefits." This caused an interruption of payments to about 100,000 workers (he eventually gave in).
Per Krugman: "But while the blockade is over, the lessons remain. Some of those lessons involve the spectacular dysfunctionality of the Senate. What I want to focus on right now, however, is the incredible gap that has opened up between the parties. Today, Democrats and Republicans live in different universes, both intellectually and morally."
Let's go to Economics 101 (Krugman literally wrote the book): when the economy is deeply depressed, extending unemployment benefits not only helps those in need, it also reduces unemployment. "That's because the economy's problem right now is lack of sufficient demand, and cash-strapped unemployed workers are likely to spend their benefits. In fact, the Congressional Budget Office (CBO) says that aid to the unemployed is one of the most effective forms of economic stimulus, as measured by jobs created per dollar of outlay." Our thought here is that we'll go with Krugman and the CBO. The CBO is considered by members of both parties to be completely objective.
We have no interest here in dealing with politics but we need to explain or understand why some things happen and, in this case, the only explanation available from the Republicans is that unemployment relief "... doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work."
Have the Republicans seen the real unemployment numbers? Our thought here is that 17% real unemployment is a big number.
As Krugman points out, the difference between the Republican and the Democratic "universes" is not just intellectual, it's also moral.
We were big fans of Jim Bunning as a baseball player. As a lawmaker, not so much.
With this as predicate, we wonder at the future of health care legislation.
Friday, March 5, 2010
China's Advantages
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/26/AR2010022602601.html?referrer=emailarticle
There is all this talk about the G-20, the G-8 (or G-7) but really, aside from the textbooks, the world has a "G-2": China and the U.S. With the G-2, it starts with money and goes on to China's export products giving the U.S. a "Wal-Mart Effect" lifestyle: "For every dollar taken from U.S. drivers' pockets at the gas pump in the form of higher prices ... low cost exports from China and elsewhere have put $1.50 back in terms of cheaper retail goods." (WSJ - 9/29/07)
The Washington Post has given us one of the latest perspectives on how China seems to be doing so many things better than the U.S. while they complain about how much of our debt they hold. The Post quotes Thomas L. Friedman as seeing some virtue in the Chinese Communist Party's monopoly on political power: "One party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."
And, of course, China is putting out more engineers than we are, they're going green faster than we are, at least they can build a high-speed train, etc. The NY Times seems to lead the charge in stories of how the U.S. is lagging China in growth. Of course, the Post points out that China's per capita income of $6,546 puts it somewhere above the Ukraine and below Namibia (according to the IMF).
About those "engineers". In 2006, the NY Times reported that China graduates 600,000 per year compared with 70,000 in the United States. The Times report was quoted on the House floor. The only problem was that China's statisticians count car mechanics and refrigerator repairmen as "engineers."
Projections of China's economic growth seem to shortchange the country's looming demographic crisis: it is going to be the first nation in the world to grow old before it gets rich. John Pomfret, one of the co-authors of the article, has been quoted as saying that before and we agree with the statistics (a sad result of the one child policy). By the middle of this century, the percentage of China's population above age 60 will be higher than the United States, and more than 100 million Chinese will be older than 80.
The article concludes that China is no enemy, but inflating the challenge from China could be just as dangerous as underestimating it.
We agree.
There is all this talk about the G-20, the G-8 (or G-7) but really, aside from the textbooks, the world has a "G-2": China and the U.S. With the G-2, it starts with money and goes on to China's export products giving the U.S. a "Wal-Mart Effect" lifestyle: "For every dollar taken from U.S. drivers' pockets at the gas pump in the form of higher prices ... low cost exports from China and elsewhere have put $1.50 back in terms of cheaper retail goods." (WSJ - 9/29/07)
The Washington Post has given us one of the latest perspectives on how China seems to be doing so many things better than the U.S. while they complain about how much of our debt they hold. The Post quotes Thomas L. Friedman as seeing some virtue in the Chinese Communist Party's monopoly on political power: "One party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."
And, of course, China is putting out more engineers than we are, they're going green faster than we are, at least they can build a high-speed train, etc. The NY Times seems to lead the charge in stories of how the U.S. is lagging China in growth. Of course, the Post points out that China's per capita income of $6,546 puts it somewhere above the Ukraine and below Namibia (according to the IMF).
About those "engineers". In 2006, the NY Times reported that China graduates 600,000 per year compared with 70,000 in the United States. The Times report was quoted on the House floor. The only problem was that China's statisticians count car mechanics and refrigerator repairmen as "engineers."
Projections of China's economic growth seem to shortchange the country's looming demographic crisis: it is going to be the first nation in the world to grow old before it gets rich. John Pomfret, one of the co-authors of the article, has been quoted as saying that before and we agree with the statistics (a sad result of the one child policy). By the middle of this century, the percentage of China's population above age 60 will be higher than the United States, and more than 100 million Chinese will be older than 80.
The article concludes that China is no enemy, but inflating the challenge from China could be just as dangerous as underestimating it.
We agree.
Tuesday, March 2, 2010
Disasters That Didn't Happen
http://www.foreignpolicy.com/articles/2010/01/04/it_didnt_happen
Moises Naim is the Editor in Chief of Foreign Policy and a well respected thinker on international issues of note. His perspective is that the worldwide financial crisis didn't cause the dollar to crash. Tariffs didn't come roaring back. The world's economies didn't grind to a halt.
Obviously, some of that is because of actions like the Federal Reserve (Ben Bernanke) sending $350 billion to the European Central Bank before the U.S. even had a stimulus bill pass at the very outset of the crisis. So, actions were taken to avert a worse outcome.
Naim points out that the International Monetary Fund estimated that the global economy's new and permanent trajectory is a 10% lower rate of GDP growth than before the crisis. But, that's not the same thing as a worldwide "depression". Naim lists the six most common predictions about the crisis that have been proven wrong:
The international financial system will collapse. It didn't.
The economic crisis will last for at least two years and maybe even a decade. It didn't. By the fall of 2009, the economies of the United States, Europe, and Japan had begun to grow again, and many of the largest developing economies, such as China, India, and Brazil were growing at an even faster pace.
The U.S. dollar will crash. It didn't. It's value actually increased 20% between July 2008 and March 2009.
Protectionism will surge. It didn't. Trade flows did drop dramatically in late 2008 and early 2009, but they started to grow again in the second half of 2009 as economies recovered.
The crisis in rich countries will drag down developing ones. It didn't. As the economies of America and Europe stalled during the first quarter of 2009, China's economy accelerated. China replaced the U.S. as Brazil's top export market. Thanks to Milton Friedman, countries like Chile were now being run conservatively in anticipation of potential worldwide economic problems.
Violent political turmoil will become more common. It didn't. We haven't seen it.
Overall, Naim has a point.
Moises Naim is the Editor in Chief of Foreign Policy and a well respected thinker on international issues of note. His perspective is that the worldwide financial crisis didn't cause the dollar to crash. Tariffs didn't come roaring back. The world's economies didn't grind to a halt.
Obviously, some of that is because of actions like the Federal Reserve (Ben Bernanke) sending $350 billion to the European Central Bank before the U.S. even had a stimulus bill pass at the very outset of the crisis. So, actions were taken to avert a worse outcome.
Naim points out that the International Monetary Fund estimated that the global economy's new and permanent trajectory is a 10% lower rate of GDP growth than before the crisis. But, that's not the same thing as a worldwide "depression". Naim lists the six most common predictions about the crisis that have been proven wrong:
The international financial system will collapse. It didn't.
The economic crisis will last for at least two years and maybe even a decade. It didn't. By the fall of 2009, the economies of the United States, Europe, and Japan had begun to grow again, and many of the largest developing economies, such as China, India, and Brazil were growing at an even faster pace.
The U.S. dollar will crash. It didn't. It's value actually increased 20% between July 2008 and March 2009.
Protectionism will surge. It didn't. Trade flows did drop dramatically in late 2008 and early 2009, but they started to grow again in the second half of 2009 as economies recovered.
The crisis in rich countries will drag down developing ones. It didn't. As the economies of America and Europe stalled during the first quarter of 2009, China's economy accelerated. China replaced the U.S. as Brazil's top export market. Thanks to Milton Friedman, countries like Chile were now being run conservatively in anticipation of potential worldwide economic problems.
Violent political turmoil will become more common. It didn't. We haven't seen it.
Overall, Naim has a point.
Polar Bears 3
http://www.msnbc.msn.com/id/35650398/ns/technology_and_science-science/from/ET
We would like to thank our students and former students for their continuing interest in what we post. Today's thought is based on an article forwarded to us from a reader.
Scientists have concluded that the polar bear evolved roughly 150,000 years ago based on new DNA studies. These studies appear to corroborate prior research.
Given this, there appears also to be a consensus amongst those same scientists that, at least once, 44,000 years ago, polar bears had to "adapt" to a global warming period. This involved herding to those places that continued to provide the environment they were used to. Some say that may be going on today - we are empathetic to those who try to "count" polar bears in order to see "where" they are and "how many" there are.
But, unless we are mistaken, there were no SUVs on the planet 44,000 years ago so we see an argument here for cyclical periods in the Earth's history where we had "cooling" and "warming" which were, in some cases, more severe than many doomsayers predict for now or the near future (this would be the same thought as was expressed quite eloquently by an MIT climatologist we quoted in our year end 2009 post).
We were pleased to see that Al Gore did chime in over the weekend about the heavy snows in D.C., Dallas and elsewhere and we plan on responding.
For now, we remain in the camp of people like George Will who have problems with the "global warmists" who claim that "anything" (like heavy snows) is a sign of global warming. As Will has said many times, we are in a 10 year period (or, is it 15?) where world temperatures haven't gotten any warmer. Would this too be a sign of global warming?
Meanwhile, our best to the polar bears who appear to be surviving modern life and are being carefully watched.
We would like to thank our students and former students for their continuing interest in what we post. Today's thought is based on an article forwarded to us from a reader.
Scientists have concluded that the polar bear evolved roughly 150,000 years ago based on new DNA studies. These studies appear to corroborate prior research.
Given this, there appears also to be a consensus amongst those same scientists that, at least once, 44,000 years ago, polar bears had to "adapt" to a global warming period. This involved herding to those places that continued to provide the environment they were used to. Some say that may be going on today - we are empathetic to those who try to "count" polar bears in order to see "where" they are and "how many" there are.
But, unless we are mistaken, there were no SUVs on the planet 44,000 years ago so we see an argument here for cyclical periods in the Earth's history where we had "cooling" and "warming" which were, in some cases, more severe than many doomsayers predict for now or the near future (this would be the same thought as was expressed quite eloquently by an MIT climatologist we quoted in our year end 2009 post).
We were pleased to see that Al Gore did chime in over the weekend about the heavy snows in D.C., Dallas and elsewhere and we plan on responding.
For now, we remain in the camp of people like George Will who have problems with the "global warmists" who claim that "anything" (like heavy snows) is a sign of global warming. As Will has said many times, we are in a 10 year period (or, is it 15?) where world temperatures haven't gotten any warmer. Would this too be a sign of global warming?
Meanwhile, our best to the polar bears who appear to be surviving modern life and are being carefully watched.
Saturday, February 27, 2010
China and the Dismal Science
http://online.wsj.com/article_email/SB10001424052748704804204575069123218286094-lMyQjAxMTAwMDIwNzEyNDcyWj.html
http://www.nytimes.com/2010/02/27/business/global/27yuan.html?emc=eta1
The Commerce Department announced this week that its initial estimate of 4th quarter 2009 GDP growth (5.7%) was going to be revised "upward" to 5.9%. Normally, we're used to downward revisions so that was something positive. But then, we have come to expect "negatives" from the "Dismal Science".
As Russ Roberts opined in yesterday's WSJ, some macroeconomists say if we just study the numbers long enough, we'll be able to design better policy. That's like the sign in the bar: "Free Beer Tomorrow."
For an economist, these are the best of times and the worst of times. We live in the best of times because everyone wants to understand what happened to the economy and what's going to happen next. Where's the job market going? Deficits? How well is "stimulus" working?
So many questions and so little in the way of answers. And so it is the worst of times for economists. There is no consensus on the cause of the crisis or the best way forward.
There were Nobel Laureates who thought the original stimulus package should have been twice as big (Krugman comes to mind). And there are those who blame it for keeping unemployment high. Some economists warn of hyperinflation while others tell us not to worry.
It makes you wonder why people call it the Nobel Prize in Economic Science. After all, most sciences make progress. Nobody in medicine wants to bring back lead goblets. Sir Isaac Newton understood a lot about gravity. But, Albert Einstein taught us more.
John Maynard Keynes has made a comeback from 50 years ago just in time to save us with government spending helping us to avoid disaster. So far "econometrics" has proved that there is always one more "variable" that is unaccounted for. Ed Leamer, a professor of economics at UCLA calls it "faith-based econometrics". When the debate is over $2 trillion in additional government spending vs. zero, we've stopped being scientists and become philosophers. Do we want to be more like France with a bigger role for government, or less like France?
As Roberts says, "... we should face the evidence that we are no better today at predicting tomorrow than we were yesterday. Eighty years after the Great Depression, we still argue about what caused it and why it ended."
So, the bottom line is that we should expect less from economists. Economics is a powerful tool, a lens for organizing our thinking about a complex world. That should be enough.
Unable to predict, or even explain our own economy, we jump into China's current situation and try to understand it. Just a year after laying off millions of factory workers, China is facing an acute labor shortage. Unskilled factory workers are being offered "signing bonuses."
Factory wages have risen as much as 20% in recent months. Obviously this can raise prices in the U.S. but it can also lead to greater inflation in China.
The immediate cause of this shortage is that millions of migrant workers who traveled home for the lunar New Year earlier this month are not returning to the coast. Thanks to a "half-trillion-dollar" government stimulus program, jobs are being created in the interior.
But many economists say the recent global downturn obscured a long term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.
Wages in Guangzhou for factory workers have risen from 80 cents an hour before the global financial crisis to 95 cents an hour to $1.17 an hour in the last few weeks. In some cases, higher wages could ease labor shortages by prompting factories to reduce their work forces.
Two powerful forces are still working to reduce the supply of young people headed for factories:
(1) The Chinese government has rapidly expanded post secondary education. Universities and other institutions of higher learning enrolled 6.4 million new students last year, compared to 5.7 million in 2007 and just 2.2 million in 2000.
(2) At the same time, China's birth rate has been sliding steadily ever since the introduction of the "one child" policy in 1977.
Labor shortages have returned quickly in recent weeks as these long-term trends have collided with a recovery in demand for Chinese goods.
Given that our economists, and those of us who follow them, have no real idea what's happening in our economy and a very feeble capacity to predict policy impact here (see the Obama administration's guarantee that the stimulus package would keep unemployment no higher than 8%), we will still venture to suggest that letting wages rise in China is a good thing (even if prices in the U.S. go up), while letting the renminbi rise against the dollar (as the Obama administration has urged) would erode China's advantage in export markets.
As Jing Ulrich, chairwoman of China equities and commodities at J. P. Morgan has said, letting wages rise benefits workers. Letting currency rise benefits currency speculators.
For those of us who read about our own economists and their various positions on issues, it sounds like Jing Ulrich makes much more sense than the "Dismal Science."
http://www.nytimes.com/2010/02/27/business/global/27yuan.html?emc=eta1
The Commerce Department announced this week that its initial estimate of 4th quarter 2009 GDP growth (5.7%) was going to be revised "upward" to 5.9%. Normally, we're used to downward revisions so that was something positive. But then, we have come to expect "negatives" from the "Dismal Science".
As Russ Roberts opined in yesterday's WSJ, some macroeconomists say if we just study the numbers long enough, we'll be able to design better policy. That's like the sign in the bar: "Free Beer Tomorrow."
For an economist, these are the best of times and the worst of times. We live in the best of times because everyone wants to understand what happened to the economy and what's going to happen next. Where's the job market going? Deficits? How well is "stimulus" working?
So many questions and so little in the way of answers. And so it is the worst of times for economists. There is no consensus on the cause of the crisis or the best way forward.
There were Nobel Laureates who thought the original stimulus package should have been twice as big (Krugman comes to mind). And there are those who blame it for keeping unemployment high. Some economists warn of hyperinflation while others tell us not to worry.
It makes you wonder why people call it the Nobel Prize in Economic Science. After all, most sciences make progress. Nobody in medicine wants to bring back lead goblets. Sir Isaac Newton understood a lot about gravity. But, Albert Einstein taught us more.
John Maynard Keynes has made a comeback from 50 years ago just in time to save us with government spending helping us to avoid disaster. So far "econometrics" has proved that there is always one more "variable" that is unaccounted for. Ed Leamer, a professor of economics at UCLA calls it "faith-based econometrics". When the debate is over $2 trillion in additional government spending vs. zero, we've stopped being scientists and become philosophers. Do we want to be more like France with a bigger role for government, or less like France?
As Roberts says, "... we should face the evidence that we are no better today at predicting tomorrow than we were yesterday. Eighty years after the Great Depression, we still argue about what caused it and why it ended."
So, the bottom line is that we should expect less from economists. Economics is a powerful tool, a lens for organizing our thinking about a complex world. That should be enough.
Unable to predict, or even explain our own economy, we jump into China's current situation and try to understand it. Just a year after laying off millions of factory workers, China is facing an acute labor shortage. Unskilled factory workers are being offered "signing bonuses."
Factory wages have risen as much as 20% in recent months. Obviously this can raise prices in the U.S. but it can also lead to greater inflation in China.
The immediate cause of this shortage is that millions of migrant workers who traveled home for the lunar New Year earlier this month are not returning to the coast. Thanks to a "half-trillion-dollar" government stimulus program, jobs are being created in the interior.
But many economists say the recent global downturn obscured a long term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.
Wages in Guangzhou for factory workers have risen from 80 cents an hour before the global financial crisis to 95 cents an hour to $1.17 an hour in the last few weeks. In some cases, higher wages could ease labor shortages by prompting factories to reduce their work forces.
Two powerful forces are still working to reduce the supply of young people headed for factories:
(1) The Chinese government has rapidly expanded post secondary education. Universities and other institutions of higher learning enrolled 6.4 million new students last year, compared to 5.7 million in 2007 and just 2.2 million in 2000.
(2) At the same time, China's birth rate has been sliding steadily ever since the introduction of the "one child" policy in 1977.
Labor shortages have returned quickly in recent weeks as these long-term trends have collided with a recovery in demand for Chinese goods.
Given that our economists, and those of us who follow them, have no real idea what's happening in our economy and a very feeble capacity to predict policy impact here (see the Obama administration's guarantee that the stimulus package would keep unemployment no higher than 8%), we will still venture to suggest that letting wages rise in China is a good thing (even if prices in the U.S. go up), while letting the renminbi rise against the dollar (as the Obama administration has urged) would erode China's advantage in export markets.
As Jing Ulrich, chairwoman of China equities and commodities at J. P. Morgan has said, letting wages rise benefits workers. Letting currency rise benefits currency speculators.
For those of us who read about our own economists and their various positions on issues, it sounds like Jing Ulrich makes much more sense than the "Dismal Science."
Friday, February 26, 2010
Krugman on Health Care
http://www.nytimes.com/2010/02/26/opinion/26krugman.html?emc=eta1
Paul Krugman's "OP-ED" in today's Times addresses where we are with "Health Care."
We have posted in the past on this issue and summarized it by saying that we don't need 1174 pages of legislation to assure that no person can be dropped from medical coverage because they "cost too much!" (i.e. that their claims cost the insurance carrier too much), and, that no person can be denied medical coverage because of a poor prior medical record. In the latter case, the number of new people covered could get as high as the 45 million figure often quoted, or 30 million at the low end of knowledgeable estimates. And, of course, it all depends on the 29 year olds who don't want to pay for coverage they don't need (until they need it).
In any case, Dr. Krugman told us last fall that we'd have a health care plan before the year was over. While he has a very high batting average (which is why we read him), it is very difficult to read the political tea leaves in today's D.C.
Today's reading is that Krugman, and the rest of us, hope yesterday's Presidential Health Care Summit will be the last act in the "... great health care reform debate." If so, as Krugman says, it will end with the Democrats offering moderate plans that draw heavily on past Republican ideas, and the Republicans responding with "... slander and misdirection."
How can an issue as serious, and as obvious, as this be so subject to partisan politics? Aside from the insurance industry lobby (incidentally, the bonus information on insurance industry executives appears to serve notice that "profits" are more than adequate), Republicans seem to be intent on showing America that they are protecting costs: "... for millions of Americans, premiums will go up." As Krugman so accurately points out, that quote is not "technically" a misrepresentation, since the CBO analysis of the Senate Democrats' plan does say that average payments for insurance would go up. But, the analysis also makes it clear that this would happen only because people would buy more and better coverage. The "... price of a given amount of coverage ..." would fall, not rise - and the actual cost to many Americans would fall sharply thanks to federal aid.
So, here we are: Krugman has centered the debate to ask how the Republicans plan to deal with the emotional center of much of the health care debate: the plight of Americans who suffer from pre-existing medical conditions. The answer is that the Republicans have no answer. Krugman's references to the House Republican plan as something that will "... afflict the afflicted ..." is an absolute classic. And, he's right.
Most of us with responsible opinions wish health care was not a political issue. We don't want to blame one party and support another. But, sadly, the issue has descended to that now.
Krugman has once again called it right. His batting average is in tact. He should join the Yankees in spring training!
Paul Krugman's "OP-ED" in today's Times addresses where we are with "Health Care."
We have posted in the past on this issue and summarized it by saying that we don't need 1174 pages of legislation to assure that no person can be dropped from medical coverage because they "cost too much!" (i.e. that their claims cost the insurance carrier too much), and, that no person can be denied medical coverage because of a poor prior medical record. In the latter case, the number of new people covered could get as high as the 45 million figure often quoted, or 30 million at the low end of knowledgeable estimates. And, of course, it all depends on the 29 year olds who don't want to pay for coverage they don't need (until they need it).
In any case, Dr. Krugman told us last fall that we'd have a health care plan before the year was over. While he has a very high batting average (which is why we read him), it is very difficult to read the political tea leaves in today's D.C.
Today's reading is that Krugman, and the rest of us, hope yesterday's Presidential Health Care Summit will be the last act in the "... great health care reform debate." If so, as Krugman says, it will end with the Democrats offering moderate plans that draw heavily on past Republican ideas, and the Republicans responding with "... slander and misdirection."
How can an issue as serious, and as obvious, as this be so subject to partisan politics? Aside from the insurance industry lobby (incidentally, the bonus information on insurance industry executives appears to serve notice that "profits" are more than adequate), Republicans seem to be intent on showing America that they are protecting costs: "... for millions of Americans, premiums will go up." As Krugman so accurately points out, that quote is not "technically" a misrepresentation, since the CBO analysis of the Senate Democrats' plan does say that average payments for insurance would go up. But, the analysis also makes it clear that this would happen only because people would buy more and better coverage. The "... price of a given amount of coverage ..." would fall, not rise - and the actual cost to many Americans would fall sharply thanks to federal aid.
So, here we are: Krugman has centered the debate to ask how the Republicans plan to deal with the emotional center of much of the health care debate: the plight of Americans who suffer from pre-existing medical conditions. The answer is that the Republicans have no answer. Krugman's references to the House Republican plan as something that will "... afflict the afflicted ..." is an absolute classic. And, he's right.
Most of us with responsible opinions wish health care was not a political issue. We don't want to blame one party and support another. But, sadly, the issue has descended to that now.
Krugman has once again called it right. His batting average is in tact. He should join the Yankees in spring training!
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