Market Power

More on Obamacare

Greg Mankiw responding to Paul Krugman:

In my view, these comments are just off point. The Obama administration says it wants a public insurance plan that will compete on a level playing field with private plans (that is, without taxpayer subsidies). Is there any cogent economic analysis that suggests that such a policy addresses problems of adverse selection and moral hazard? None that I know. If it has to stand on its own financially, the public plan has no special advantage in addressing these issues.

In any event, it is not like the only alternatives available to us are a government-run health insurance plan or unregulated laissez faire. The most intriguing proposal in the current policy debate is the Wyden-Bennett bill (see this David Brooks column or this letter from CBO on the proposed legislation). That seems to be the best hope for truly bipartisan healthcare reform. At this point, given the legislative strategy of Congressional leadership, the hope is slim at best.

Also note Mankiw's comments on the substance, or lack thereof, of public debate on important topics.

Public Insurance Option

Greg Mankiw on the public health insurance option:  "Even if one accepts the president’s broader goals of wider access to health care and cost containment, his economic logic regarding the public option is hard to follow. Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don’t need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices."

I doubt that anything but public monopoly (in selling insurance to citizens)-monopsony (in paying healtch care providers) will be the long-term result of Obama's desired legisltation, if passed.  Neither will make this a better country for our children.

Link via JC Bradbury

Minimizing Costs - Theory and Reality

Law of supply:  the price of a product and its quanitity supplied are positively-related*.  The higher the price, the more incentive people have to offer a product for sale.  HT Glenn Reynolds

As King recently noted, it's easy to hold some factors constant when building economic models.  So in a theoretical world, it is relatively easy to hold, say, health care quality constant when wondering how minimizing health care costs (macroecnomically) would affect things.  In the real world... not so much.  But maybe Obama really wants to force people into dentistry.

*Backwards-bending individual labor supply curve noted.

Why Cap and Trade is Politically Preferred to a Carbon Tax

"First identified by Gordon Tullock in 1975, the transitional gains trap is now commonly taught in introductory economics courses. Tullock’s insight argues strongly for a carbon tax and against cap-and-trade as a means to restrict carbon usage."  A carbon tax is unlikely to pass because of three little letters:  T-A-X.  These days, it's near political suicide to impose higher taxes.  That's why some politicians raise "fees", etc.  Hell, a politician is probably more likely to get re-elected if he runs away to Argentina to sob than he is if he votes to raise taxes.

Ozzie Being Ozzie

"Ozzie being Ozzie."  We're not as stupid as you think we are, Mr. Guillen.  After all, we're not Sox fans.

What Goes on in the Clubhouse Stays in the Clubhouse, Unless It's the Cubs' Clubhouse

It was allegedly a White Sox employee who broke the news that Lou Piniella and Milton Bradley had a spat inside the clubhouse on Friday.  Since what goes on in the clubhouse is supposed to stay in the clubhouse, Sox manager Ozzie Guillen said he'd fire anyone caught doing that.  To that I say "horse hockey."  He might light a match to light that employee's victory cigar, but Guillen wouldn't fire someone for that breach of clubhouse etiquette when it comes at the Cubs' expense.

Mizzou - First Round University

Mizzou had at least one player drafted in the first round of the NBA draft (DeMarre Carroll to the Memphis Grizzlies), the MLB draft (Kyle Gibson to the Minnesota Twins), and NFL (Jeremy Maclin to the Eagles and Ziggy Hood to my Steelers).  That's just another welcome sign that the sleeping giant may have finally awoken for good.

Mark DeRosa Goes to the Dark Side

"I wonder how our fans feel about that one?"  Well, Mr. Sean Marshall, this fan merely shook his head and said "great" when he found out that former (popular and productive) Cub Mark DeRosa sold his soul to the devil and became a, gag, Cardinal.  As if watching his replacement in the line-up, switch hitting Milton Bradley, metastastize isn't punishment enough this season.

MJ, the Blazer

"Jackson Popularized Celebrity Ads."  Not only was he famous for blazing his hair during a shoot for a Pepsi ad, his making that ad blazed trails for other celebrity pitches for popular products.

Michael Jackson was a Heck of a Dancer

"The Dancing:  That Precision, Grace - and a Wicked Groove."  Although I respected it, I was never a fan of his music.  But the dude was the best pop dancer of his time.  Not even MC Hammer could touch him.