Why markets can’t cure healthcare - Paul Krugman Blog - NYTimes.com

Why markets can’t cure healthcare - Paul Krugman Blog - NYTimes.com: "Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems — indeed, the only answer — is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory.

Not so."

Is the threat of speculation a reason to shun cap and trade? - Paul Krugman Blog - NYTimes.com

Is the threat of speculation a reason to shun cap and trade? - Paul Krugman Blog - NYTimes.com: "But there’s also, it seems, growing opposition to cap-and-trade from people who should be on the side of progress — but whose reaction is basically “Eek! Markets!Wall Street! Speculation! Bad!”

We don’t need this.

So let me talk a bit about why this reaction is 99% wrong, and bad for the planet."

Socialized Rationing of Burmese Language Education

Matthew Yglesias » Home Page: "If you’re a parent in Montgomery County Maryland, you pay taxes to the county and you get to send your kids to very good public schools. But even though the schools are good, they won’t just do anything you want. Your kid can learn Spanish at government expense, but the taxpayers won’t foot the bill for your kid to learn Burmese. But you don’t normally hear anyone say that the presence of a “public option” for elementary and secondary education involves “rationing” of foreign language instruction. If people have the means and want to arrange private lessons for their children of various kinds nobody is stopping them."

Economist's View

Economist's View: "Setting aside the particulars of the California case and whether or not the IOUs are actually functioning as money - that's debatable - very, very generally, the federal government has a budget constraint just like everyone else, well sort of like everyone else anyway -- most of us can't levy taxes or print money. Federal government finances must satisfy

G - T = ΔM + ΔB,

where Δ means 'change in,' G is government spending, T is taxes, M is the money supply, and B is bonds. The left-hand side is the deficit, and the right-hand is how it is financed. Thus, when G is greater than T so that there is a deficit in a given budget period, it must be financed by printing new money (ΔM) or issuing new bonds (ΔB)."

Economic View - The Invisible Hand, Trumped by Darwin? - NYTimes.com

Economic View - The Invisible Hand, Trumped by Darwin? - NYTimes.com: "IF asked to identify the intellectual founder of their discipline, most economists today would probably cite Adam Smith. But that will change. Economists’ forecasts generally aren’t worth much, but I’ll offer one that even my youngest colleagues won’t survive to refute: If we posed the same question 100 years from now, most economists would instead cite Charles Darwin."

Matthew Yglesias » Home Page

Matthew Yglesias » Home Page: "One issue with a lot of health care commentary (Michael Kinsley’s correctly maligned column for example) is that the concept of “cost” is somewhat ambiguous in a lot of these contexts. For example, on one way of looking at things, an initiative that raises $90 billion in tax revenue, reduces private health expenditures by $100 billion, and then provides equivalent services for $90 billion is very expensive. It costs ninety billion dollars! From another way of looking at it, though, it’s an initiative that saves $10 billion.

That’s the question of whether we’re talking about cost to the government, or cost in some more general sense.

Another issue has to do with value. If we cut $1 billion worth of regular pediatric care for poor children, that will “save money.” But that’s not the same as cutting $1 billion worth of unnecessary treatments for senior citizens out of Medicare. The latter would be a genuine saving; the former would just be denying useful services to people.

Pure fiscal cost to the government is an important thing to keep our eye on. Among other things, we need tax revenues to be adequate to cover the pure fiscal cost. At the same time, I think it’s a little perverse to view it as the main thing to worry about."

Matthew Yglesias » Home Page

Matthew Yglesias » Home Page: "

Here’s some historical data on female life expectancy in Russia:

...the dread U.S.S.R. actually did a perfectly decent job of providing the sort of goods—health care, basic education, subways, nuclear missiles, vast prison camps, satellite launch vehicles—that in most democracies are provided by the state. It did a bad job of providing things like appealing clothing, consumer electronics, popular entertainments, cars, etc. that are generally provided by the private sector. In Cuba everyone’s dirt poor and generally leave crappy lives with few goods, but the literacy rate is high and the state of public health is excellent considering the poor overall economic situation. And even in the United States, about half of health care is financed by the state—a free market approach to senior citizens would be a disaster."

Matthew Yglesias » Home Page

Matthew Yglesias » Home Page: "Via Ezra Klein, a RAND study of the impact of price changes on body-mass index indicates a modest impact. The implications for a soda tax? Ezra says “whether or not soda taxes are a good idea for raising revenue, they’re not likely to do a tremendous amount to change the national waistline.”

I’m not too saddened by the result, because as I’ve been saying the right way to think of public health taxes is as a revenue measure:"

Corporations and Campaign Finance

Why do corporations exist? Are they good or bad or both? What is their economic purpose?
See the Economist review of the movie, "The Corporation". It is available on campus computers here or you can search through the library proxy server.

Given what corporations are good at, should they be able to give unlimited amounts of money to political campaigns?

The Wonk Room:

Nineteen years ago, in Austin v. Michigan Chamber of Commerce, the Court upheld a ban on independent political expenditures–so-called “soft money” contributions–by corporate donors. As the Court explained in Austin, “the unique state-conferred corporate structure that facilitates the amassing of large treasuries warrants the limit on independent expenditures.” Corporations are designed to amass massive amounts of money, and they can use their enormous wealth to drown out individual voices, all while spending only a fraction of their treasuries.

Should the Court toss out Austin, it could be the end of any meaningful restrictions on campaign finance. In most states, all that is necessary to form a new corporation is to file the right paperwork in the appropriate government office. Moreover, nothing prevents one corporation from owning another corporation. Without Austin, even a cap on overall contributions becomes meaningless, because corporate donors can simply create a series of shell-corporations for the purpose of evading such caps.

Admittedly, Austin dealt only with independent expenditures, not direct corporate donations to candidates and their campaigns, but the Roberts Court’s apparent willingness to take on Austin directly is its boldest assault on campaign finance reform yet.

Trivia: Wikipedia says that Harvard College is the oldest corporation in the western hemisphere:

Harvard College ... (also known as the Harvard Corporation), ... Founded in 1636, ... was incorporated by the Great and General Court of Massachusetts in 1650. Significantly, Massachusetts itself was a corporate colony at that time – owned and operated by the Massachusetts Bay Company (until it lost its charter in 1684) - so Harvard College is a corporation created by a corporation.

Matthew Yglesias » Home Page

Matthew Yglesias » Home Page: "Via Noam Scheiber, if you’re interested in looking up the salary of your favorite White House staffer, just download this list here (PDF). It seems that Rahm and the various folks carrying an “assistant to the president” title make $172,200 while the most-junior staff clock in at $35,000.

I will say that one thing I like about Washington is that relative to other major American metro areas, DC is relatively egalitarian in economic terms. The $172,200 that the top White House staff make is good money but it’s hardly enough to put you in the stratosphere of the American economic elite. And yet, these are some of the most important and successful men and women in Washington. Go to New York or LA or Chicago and the biggest of the big shots will be making 10 or 20 times that.

UPDATE: Actually, "10 or 20 times that" is a huge lowball; they're making much more than that."

Economics and Politics - Paul Krugman Blog - NYTimes.com

Why would a rabid free-trade supporter like Krugman support tarrifs based upon carbon emissions? Is it like VAT? What would happen if domestic oil and gas were subject to pricey carbon caps, but imports were not?

Economics and Politics - Paul Krugman Blog - NYTimes.com: "The truth is that there’s perfectly sound economics behind border adjustments related to cap-and-trade. The way to think about it is in terms of a well-established theory — the theory of non-economic objectives in trade policy — that owes its origins to Jagdish Bhagwati, who certainly can’t be accused of being a protectionist. The essential idea is that if you have a non-economic objective, such as self-sufficiency in food production, you should choose policy instruments to align incentives with that objective; in normal circumstances this leads to consumer or producer intervention, rarely to tariffs.

But in this case the non-economic objective is to reduce greenhouse gas emissions, never mind their source. If you only impose restrictions on greenhouse gas emissions from domestic sources, you give consumers no incentive to avoid purchasing products that cause emissions in other countries; as a result, you have an inefficient outcome even from a world point of view. So border adjustments here are entirely legitimate in terms of basic economics."

Economics and Politics - Paul Krugman Blog - NYTimes.com

Economics and Politics - Paul Krugman Blog - NYTimes.com: "Ezra Klein wonders why we still have multiple agriculture committees when we hardly have any farmers, and proposed their abolition. But I’d propose the opposite solution: more committees to represent comparably-sized segments of the population.

We should, in particular, have several Congressional committees, plus a Cabinet-level department, representing Americans who play World of Warcraft, who outnumber American farmers."