Contributors

Wednesday, March 28, 2012

OMG!

Did you hear the big news? Obamacare is DEAD! After facing some questions on par with the Spanish inquisition, solicitor Donald Verrilli completely blew it, it's all over, and let's get ready for our new president, Mitt Romney.

Well, at least that's what the "liberal" media said yesterday (even though the actual decision won't be handed down until June). Since when are they all in the tank for the opponents of the law? They keep saying that people are being forced to buy health care. That's not true at all. You don't have to buy it at all. If you don't, you pay a tax, which is very, very Constitutionally valid.

Even the actual liberal media is behaving irrationally (see: hysterical old ladies). They seemed to completely ignore the tough questions that Chief Justice Roberts and Justice Kennedy asked of Paul Clement and Michael Carvin, who are challenging the law. For example, Roberts told Carvin that he was not addressing the government's point, "which is that they are not creating commerce in health care. It's already there, and we are all going to need some kind of health care; most of us will at some point."

And Roberts accepted the fact that the mandate was not an order but a tax. This is important to note because on Monday in response to questioning from Justice Elena Kagan, Verrilli noted that under the law, a person who chooses to pay the tax penalty rather than comply with the mandate will not be considered in violation of the law. So it’s a choice — not a unilateral command. If even one of the conservative justices agrees, he could vote to uphold the law on unexpected grounds. It's entirely possible that you would have four votes to uphold the law under the Commerce clause and two votes to uphold it under taxing power.

Kennedy said the government might be right that the interwoven markets of health insurance and health care are unique. "The young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries," Kennedy said. "That's my concern in the case." I also thought it was interesting that Clement acknowledged here that a system of national health care is likely constitutional even though the individual mandate was not.

This brings us to what may happen if the mandate portion is struck down. Robert Reich has an interesting take on this. 

If the Supreme Court strikes down the individual mandate in the new health law, private insurers will swarm Capitol Hill demanding that the law be amended to remove the requirement that they cover people with pre-existing conditions. When this happens, Obama and the Democrats should say they’re willing to remove that requirement – but only if Medicare is available to all, financed by payroll taxes. If they did this the public will be behind them — as will the Supreme Court.

But how could this happen?

Americans don’t mind mandates in the form of payroll taxes for Social Security or Medicare. In fact, both programs are so popular even conservative Republicans were heard to shout “don’t take away my Medicare!” at rallies opposed to the new health care law. There’s no question payroll taxes are constitutional, because there’s no doubt that the federal government can tax people in order to finance particular public benefits. But requiring citizens to buy something from a private company is different because private companies aren’t directly accountable to the public. They’re accountable to their owners and their purpose is to maximize profits. What if they monopolize the market and charge humongous premiums? (Some already seem to be doing this.)

All of this makes me wonder if this is the president's back up plan. Not only is he a constitutional scholar but he's a very smart and pragmatic guy. His opponents are being terribly naive if they are assuming that he fast tracked this case without having multiple contingency plans.

The other way to look at all of this is political. If parts of the law are struck down, that takes a galvanizing principle out of the campaign. In fact, if the law is upheld, the base is going to be very motivated to get out and vote for repeal (even though we all know that Romney isn't going to do that if he wins).

So, I guess I'm not really worried either way it turns out. It's too bad that some liberal folks are so worried that they have all but given up because I don't think they are really considering all of the possibilities here. And that's why I'm truly going to enjoy the "winning the argument/proved them wrong" victory dance that the right will do if the mandate is struck down.

Enjoy it while it lasts, folks!

54 comments:

Nikto said...

The problem with the "it's a tax" argument is that the bill called it a penalty instead of tax, because they wanted to avoid the stigma of adding a "new tax." This was a silly move, given that Republicans would have opposed it in any case not on its merits, but simply to deny Obama any kind of legislative victory.

No matter what you call it, the reality is that it is a tax, a tax on obstinacy and people who refuse to pay their own way. The crazy thing about this whole argument is that the mandate is a Republican idea, based on Republican ideals:

1) Get the government out of the picture by having everyone buy health insurance directly. Why collect a tax, then have the government pay health insurance companies to administer the programs? Keep the government out of the loop.

2) People should be responsible for themselves and pay their own way. Since hospitals must admit patients, the only reasonable thing to do is require everyone to pay if they can afford it. Regardless of age or medical conditions everyone runs the risk of breaking their leg on an icy sidewalk or getting hit by a bus. If they don't have insurance, I wind up paying for their treatment either through higher taxes or higher hospitals bills.

3) The mandate is pro-life. With millions of uninsured people out there, thousands will die due to lack of health insurance. Without routine health care eminently treatable problems such as diabetes to escalate into blindness, amputation, heart disease, and stroke, all of which are extremely expensive to treat. Those people who survive will go on Medicaid or Medicare and have gigantic medical costs for which the rest of us will pay for decades. All because these saps refused to pay their own way.

The most reasonable complaints I've heard are from people who say that health insurance would cost them $100/month and they can't afford it. But there are provisions for subsidies to help people in certain income categories. Since the mandate isn't in effect yet, they really don't know whether they'll have a problem at this point. In most cases they're either being mislead by Republican fear-mongering, whiners who just don't want to pay their fair share, or shills for Republicans who want to make Obama look bad by taking down the health care law.

juris imprudent said...

And Roberts accepted the fact that the mandate was not an order but a tax.

Not sure where you got that. Everything I read said that only Breyer seemed to accept the tax argument.

Funny to watch you scurry about, as I agree there is no solid bet on how the Court will rule.

jeff c. said...

Funny to watch you scurry about,

Juris Imprudent wishful thinking again. That's not what he was saying at all. I don't think it's possible for you to be rational when it comes to Mark.

juris imprudent said...

M seems to believe that even losing is winning, because the mad genius of the White House had a plan for this. It's like a bad Hollywood script.

No one thinks the SG did a credible job. The argument today was about severability - which the PPACA did not include (as much of Congress's work does, where if one part of the law is struck down - other provisions remain in effect). It is an interesting question why Congress didn't do that and it would be very "activist" for the Court to imply severability in this case.

But hey, what can you expect when "we have to pass this bill to find out what is in it".

I will say it wouldn't surprise me for this to be a multi-opinion decision with different votes on different aspects. Maybe similar to Bush v. Gore, where there was a unanimous part and then the 5-4 split.

sw said...

what is dead is the oil subsidy bill that obama wanted. it died in the democrat controlled us senate. im sure nikto will have an excuse though.

Mark Ward said...

But hey, what can you expect when "we have to pass this bill to find out what is in it".

Have you ever considered how absurd this criticism is? Think about it for a minute.

Dr. Froncknsteen said...

I've thought about it for more than a minute and have to yet to see what's absurd about it. What's absurd is that the Speaker of the House actually babbled such idiocy. What's absurd is how true it was: hardly anyone in Congress had yet read the frickin' thing, let alone understand it, least of all the esteemed Speaker. I would be stunned and amazed if even a quarter of Congress has read the monstrosity even now.

juris imprudent said...

Have you ever considered how absurd this criticism is?

That isn't a criticism, it is what the Speaker of the House had to say when questioned about the contents of the legislation. I will agree that it is one of the most absurd things I've ever heard, particularly in context.

juris imprudent said...

All of this makes me wonder if this is the president's back up plan.

Apparently not.

Mark Ward said...

Ah, juris, you are so naive. Of course they have contingency plans. Think for a minute why they would say something like that and what benefit it would have to achieve their desired outcome.

Regarding Speaker Pelosi, I think it's safe to say that all three of us (me, juris, Dr. Fronck) have all said things in our life that were stupid. Now imagine having it paraded in front of millions of people, sound bited, taken out of context and beat to death in the modern media lexicon. Do either of you think you would do any better? I know I wouldn't.

Further, it's clear what she meant to say. We don't know how the law will function, really, until it's implemented. So what? Do either of you know what will happen for certain when you take some sort of action? I know I don't.

I think it's also really complete bullshit to rip her and not hear what either one of you would do in its place. Dr. Fronck, how would you solve the health care problems in our country? juris, you still haven't adequately addressed several of the problems in health care markets. Getting rid of insurance and having government run coverage for catastrophic problems is not really a solution.

juris imprudent said...

Do either of you think you would do any better?

I suppose you could ask me that when I'm Speaker of the House. You keep insisting that people who work for the govt are somehow better than the rest of us. Now you say, aw shucks, they're just like the rest of us. Nor do I remember Democrats going easy on something incredibly stupid said by Trent Lott. Need I even mention how you react to most of the things spilling out of the mouth of Michelle Bachmann?

juris, you still haven't adequately addressed several of the problems in health care markets.

To your satisfaction, I suppose not. Then again, you take an exceptional part of the overall market and use it as a stand-in for everything. I've made suggestions - just not ones you particularly like. I certainly don't believe in any grand scheme that is essentially one-size-fits-all, but you do (until of course the many exceptions start to crop up). Are you really willing to give up your current health plan for some untried universal proposal?

Mark Ward said...

You keep insisting that people who work for the govt are somehow better than the rest of us.

Well, they aren't and that's why I don't get the dig on her obvious mistake.

you take an exceptional part of the overall market

The various treatments, technology and drugs that save millions of lives everyday are not exceptional, juris. You are being terribly short-sighted here and (not a shock) tremendously insensitive to the health care needs of many people who would suffer and or/die without treatment.

Are you really willing to give up your current health plan for some untried universal proposal?

Medicare for all? You bet, which means it's not "untried." And I'm very comfortable having money with Social Security (from back when I was in the corporate world) and the TRA as opposed to having all of it invested privately.

juris imprudent said...

Well, they aren't and that's why I don't get the dig on her obvious mistake.

Gee, that's funny, because you always go on and on about how they know better for me than I do myself. Do you ever let two thoughts cohabit your brain?

The various treatments, technology and drugs that save millions of lives everyday are not exceptional, juris.

Yet you harp on dialysis, without any actual analysis. That one treatment is your proxy for EVERYTHING and you don't even make a solid case on it. And I have said, repeatedly there may be exceptions to my general prescriptions. You never move one inch off your base that the govt must do it all. I guess you don't like or trust your personal physician.

Medicare for all?

Well we already know where that is going - growth to a breaking point on cost. If you think you can universalize that you're nuts; we won't be able to afford it for the people that already are on it.

Either you don't have a very good health plan now, or you are blind-stupid optimistic that a universal plan will be better.

Mark Ward said...

Yet you harp on dialysis, without any actual analysis.

Heart disease, cancer, gasto-intestinal issues, mental disabilities...should I go on? Nearly all of these people will not leave the market if the price goes up.

we won't be able to afford it for the people that already are on it.

That's why the very little talked about cost control measures in ACA are very important. You really need to start looking at this issue from the point of cost and not the people that need the care. Frivolous law suits are not the end all and be all of why health care costs as much as it does.

or you are blind-stupid optimistic that a universal plan will be better.

Well, I guess personal experience will tell you what you need to know...unless you are 65 right now.

juris imprudent said...

Heart disease, cancer, gasto-intestinal issues, mental disabilities...should I go on?

Not all of those are daily life and death health matters. Some are highly dependent on life style choices. So yes, do go on - after you put some thought into it.

That's why the very little talked about cost control measures in ACA are very important.

Ah, the IPAB? You do know that there has been a board on MC costs around for years - and Congress just ignores the advice on how to control costs (since that entails bad politics). The IPAB would be no different. Even if Congress said it was "independent", Congress would over-ride it the moment there was any political heat.

Frivolous law suits are not the end all and be all of why health care costs as much as it does.

Did I say it was? Or was that one of those voices in your head? Please try to converse with me instead of him.

Mark Ward said...

Some are highly dependent on life style choices

That's right. But that's why everyone has to take responsibility for those choices because everyone affects the entire health care market-public or private.

And just because it may not be a life or death matter doesn't make it any less inelastic, demand wise.

and Congress just ignores the advice on how to control costs (since that entails bad politics).

Yes, and that's a great disservice to this country. It has to change and so far neither party seems to have the guts to address it.

juris imprudent said...

because everyone affects the entire health care market-public or private.

No, they take responsibility for their healthcare not the healthcare of everyone else. After all, the most important health care outcome is their own.

inelastic, demand wise

You keep saying virtually the entire healthcare market is so, then you have to point to some very exceptional and small parts of that market for evidence. That isn't very honest.

Yes, and that's a great disservice to this country.

Well for fuck-sakes it is what they do regardless of which party is in control. Are you just going to base law on the assumption that someday those fuckers behave differently? What fucking planet are you on? You want to ignore the intent of people [the Founders] who well understood that human nature - and created a divided govt with checks and balances; a system that frustrates all idealists chock full of such good intentions.

Mark Ward said...

No, they take responsibility for their healthcare not the healthcare of everyone else. After all, the most important health care outcome is their own.

juris, you just don't get it. This is the problem with the libertarian mindset. You simply can't accept the fact that other people's decisions affect YOUR life. When someone has an emergency and needs care and doesn't have insurance, all of us still end up paying for it. We are not a nation of rugged individualists.

You keep saying virtually the entire healthcare market is so

No, I'm saying that a significant number do. I wouldn't exactly call heart disease and cancer exceptional. Good grief...

You want to ignore the intent of people [the Founders] who well understood that human nature

This one has always cracked me up. First of all, I've shown that the founding fathers didn't exactly adhere to their initial intent of the Constitution. They had to adapt to practical reality and (gasp!) changed their mind.

And I'm really tired of the "liberals think all people are good" argument. I don't. Most people are a blank slate and their socialization creates who they are. Just because it's government power doesn't immediately mean that it becomes "bad."

Why does the human nature question come into play only with government power and not private power? Because when it comes to the free market, people always act for the benefit of their fellow man, right? Sheesh...

juris imprudent said...

You simply can't accept the fact that other people's decisions affect YOUR life.

The Great Web of Life, is that it? If you are an alcoholic meth-head it does NOT affect my life style choices (presuming you don't crash a car into me while you are high). I get that you are a Christian and have all that "brother's keeper" bullshit floating around in your brain and desire to redeem souls - not my problem.

I wouldn't exactly call heart disease and cancer exceptional.

Smoking is a life style choice and has a major impact on incidence of both. But do go on - how those are just like cholera or polio or STDs. Which are real public health matters that no amount of rugged individualism can actually address. [Note that I do understand the limits of individualism and why we form govt in the first place - unlike the voice in your head you are arguing with.]

First of all, I've shown that the founding fathers didn't exactly adhere to their initial intent of the Constitution.

The Alien & Sedition Acts. Funny how that is never the example you want to use.

Most people are a blank slate and their socialization creates who they are.

Most? What are the other people then - just the product of their genes? That is spectacularly muddle-headed.

...people always act for the benefit of their fellow man, right?

No they don't and the market doesn't depend on them to - you should know that because you've quoted the man who famously made that observation. So - dishonest, desperate or just situationally stupid?

GuardDuck said...

When someone has an emergency and needs care and doesn't have insurance, all of us still end up paying for it.

Now tell the rest of that story Mark. Explain EXACTLY why that is.

Here's a tip - look for it in the year 1986.

Mark Ward said...

But do go on

Nice pivot there, juris but I've put up numbers for people that are suffering from heart disease and cancer. 27 million suffer from heart disease and 19 million from cancer. Do you think that is exceptional? Take a look at this list...

http://www.cdc.gov/nchs/fastats/default.htm

Let's find some more "exceptional" diseases that in NO way, shape or form have inelastic demand.

Diabetes...27 million
Asthma...18.7 million
Digestive Disease...15 million

Should I go on?

The point isn't that whether not it's self inflicted. The point is that many of these people are likely to not leave their markets if the price goes up.

just the product of their genes?

Uh...yeah. juris, seriously, I know you aren't that dense. There plenty of people that are genetically wired to have a whole host of behavioral issues.

No they don't

That's why there needs to be government regulation. Laws, juris, governing how the market works. It will never cease to crack me up how liberals are made fun of in one breath for thinking so well of human nature yet it is completely ignored when it comes to business.

juris imprudent said...

Nice pivot there

No, it is directly on point. Smoking and bad diet have significant impacts on your chances of developing heart disease or cancer. Same with Type 2 diabetes.

The point is that many of these people are likely to not leave their markets if the price goes up.

The point is that many can avoid being in said market by making better lifestyle choices. Your course, if you insist on caring for them as a result of their bad choices is ultimately to impose upon them to prevent those bad choices. You can't afford to do otherwise. It is the logical outcome.

There plenty of people that are genetically wired to have a whole host of behavioral issues.

You are either a blank slate or you are not. It is absurd to say that some people are, but others are not. My take is we [all] are not simply blank slates to be conditioned into whatever form society dictates. But I can see you falling for the Skinnerian fallacy.

That's why there needs to be government regulation.

That is not what Adam Smith said about why the market works absent the altruism (or oversight) you posit is necessary. You have quoted Smith, now you ignore him. I guess I have to chalk that up to plain old dishonesty.

Mark Ward said...

You have quoted Smith, now you ignore him. I guess I have to chalk that up to plain old dishonesty.

Just because I've quoted him doesn't mean I worship him as the end all and be all of all things economical. In fact, the word "economics" wasn't really in wide use at the time so you have to consider that he, like the founding fathers, were a product of their time. Their perception doesn't necessarily entirely apply to today. But you have always had trouble with nuance so...

juris imprudent said...

Just because I've quoted him doesn't mean I worship him as the end all and be all of all things economical.

So he is authoritative when it suits you. Yeah, dishonest for sure.

I don't worship him either. Are you confusing me with one of the voices in your head?

Mark Ward said...

No one is authoritative on anything...especially a guy from the 18th century and no knowledge of a global market let alone the industrial revolution. As with other great thinkers of his time, Smith detailed basic building blocks of how markets function and did so eloquently and intelligently.

juris imprudent said...

If someone has a better description of the market than he does after all this time, share it. If all this is just you saying it is so, then please stop and at least try to find some support for that. Because I'll take his word for it over yours.

Oh, and I do hope you never plan to use that quote by him again about how businesses are likely to behave - after all, times have changed and people are so much better now, including when they run businesses. [/sarc]

Mark Ward said...

Why does it have to be "better?" Can't it be juxtaposed with his ideas on the market? Obviously, there have been economic theories since his time. I would say the Nash equilibrium would be one very big example.

How about this for an Adam Smith quote?

"Wherever there is great property, there is great inequality."

juris imprudent said...

Why does it have to be "better?"

I guess I'm more of a scientist/engineer than a poet/artist. The whole point of a newer explanation is to do a better job explaining. Though this does remind me a bit of Paddy Chayefsky's Oscar acceptance speech.

On the other hand, from now on I will remember this discussion when you quote Smith about how business owners will connive and how they will seek favors from govt; after all what the fuck does a dead, white guy really know.

"Wherever there is great property, there is great inequality."

I don't have a reason to disagree with that, do you? I also don't have an irrational need to see absolute equality (save in the face of the law). You aren't as good a tennis player as Nadal - you shouldn't be compensated the same.

Mark Ward said...

As long as the world stays black and white, juris, then all will be well. If not, I'm certain that you can make it that way:)

Hey, how come no real response to my cdc list and your whole point about exceptional markets? Your answer is just "lifestyle choices" and that's it? Most cancer is genetic...how is that a choice? My view is that you are being pretty tone deaf here and (once again) are blaming the victim.

juris imprudent said...

As long as the world stays black and white

You have the most Manichean viewpoint I have ever encountered. You make Pat Robertson look nuanced. You have no business accusing anyone else of seeing the world in only black and white.

And I see you have no reply to the gross inequality between you and Nadal. Let alone how what Nadal has injures you (save for your sense of envy).

Most cancer is genetic...how is that a choice?

Got a link for that? Both of my parents were heavy smokers and died from lung cancer. There may be genetic susceptibility, but the health world is always stressing life style as key to health. Or is there really no obesity epidemic in this country?

Mark Ward said...

Let alone how what Nadal has injures you (save for your sense of envy).

This is a great example of the perception problem you seem to have, juris. You assume that I would be jealous of Rafa because he's a better player than me. From my view, this is true for a couple of reasons. First, you assume the worst in people and think they are all jealous, conniving ass hats. Second, you are jealous of others (although I don't think you are a conniving ass hat) so you ascribe how you relate to the world to me.

That's a big mistake because I'm pretty darn happy with my life. I supposed I wouldn't mind having more money so I wouldn't have to worry about my children's college fund or health care but, for the most part, I've got a great family great friends, fun kids, music, comic books, books, films and my wife's ass which, btw, I get 2-3 times a week. So what is there to be jealous of?

Regarding cancer, what's the first question that is commonly asked regarding health history? Do you have any family members that have had cancer? For example, the causes of breast cancer are not fully known yet people who have family members with breast cancer have a much higher likelihood of getting it.

http://www.cancer.org/Cancer/BreastCancer/DetailedGuide/breast-cancer-what-causes

How about ovarian cancer?

http://www.cancer.org/Cancer/OvarianCancer/OverviewGuide/ovarian-cancer-overview-what-causes

With both of these, there are many ways to get these types of cancers not by choice.

I will agree that changing one's lifestyle is important and can reduce the risk. But you make it sound (as usual) like it's all their fault so fuck 'em. That's simply not the case.

juris imprudent said...

You assume that I would be jealous of Rafa because he's a better player than me.

Actually it is a superb illustration of great inequality - something you insist is intolerable, except here. Why is his success and wealth an exception in your moral universe? Didn't he fuck you over to get rich? Isn't his wealth undeserved?

First, you assume the worst in people and think they are all jealous, conniving ass hats.

Actually I don't think that, except when I am given convincing proof by the person in question.

Second, you are jealous of others

Projection/flipping. How boring.

But you make it sound (as usual) like it's all their fault so fuck 'em.

No, but I am arguing that people are not merely victims of cruel fate (perpetuated by the loving God that rules all of creation). The demand for health care, when it is essentially free to the person demanding it - is unlimited. Resources are not. Those resources will be allocated by some mechanism. Price is a pretty good mechanism - though not flawless. We all know that you slept through the micro-econ discussion of "moral hazard".

Mark Ward said...

Why is his success and wealth an exception in your moral universe?

He's not an exception. Really, you need to stop with this stereotype of liberals who are jealous of rich people. That's how YOU think liberals think because a part of you feels that way, in my opinion.

Didn't he fuck you over to get rich? Isn't his wealth undeserved?

I don't have enough information to answer this question. I thought we were talking about talent here, not money.

he demand for health care, when it is essentially free to the person demanding it - is unlimited. Resources are not. Those resources will be allocated by some mechanism. Price is a pretty good mechanism - though not flawless. We all know that you slept through the micro-econ discussion of "moral hazard".

If I slept through that one, where were you when the fact that governments can sometimes improve market outcomes was discussed? Did they have to take you away for disrupting the class with all that screaming and mouth foaming?

Health care isn't free and that's the problem. It's a unique market and the moral hazard issue is far more complex than it would be with an issue like minimum wage or rent control. You are correct in saying that price is a good mechanism but it's also the devil in the case because people are making a hell of a lot of money off of a captured buyer. This is how and why the government should step in...they are the best institution around to improve the market.

Until you accept this fact, there's not much point in further discussion.

juris imprudent said...

Really, you need to stop with this stereotype of liberals who are jealous of rich people.

I would if liberals would stop their efforts to convince me of this. What was the point about you quoting Smith on "great inequality"? If it isn't jealousy - then you must have suffered some injury. What exactly is the problem with someone being obscenely rich?

where were you when the fact that governments can sometimes improve market outcomes was discussed?

Never was discussed in a real economics class. That is a pure Markadelphia fever fantasy. The "improvement" is a figment of your imagination. There was plenty of discussion about how govt can distort a market - by granting and enforcing a monopoly, by taxation, cronyism, etc.

As for foaming at the mouth, please stop projecting your own behavior on to me. There was nothing angry about what I just said up there. Not even the part about your failure to understand moral hazard - that is simply a fact.

Health care isn't free and that's the problem.

Nothing is free - that is your problem. You believe in absurd fantasies.

Mark Ward said...

My point in quoting Smith was to show that he wasn't exactly the die hard libertarian that some have made him out to be.

Never was discussed in a real economics class.

I guess I took a "fake" one then with a text from a leading conservative economist (Greg Mankiw).

http://books.google.com/books?id=xoztFMavGCcC&pg=PA10&lpg=PA10&dq=governments+can+sometimes+improve+market+outcomes&source=bl&ots=5S0vCAM6uo&sig=tcRHioQIQofPBnq0fHl5aFo_vA0&hl=en&sa=X&ei=kbF8T-bUPJOCtgeb7-CNDQ&sqi=2&ved=0CFQQ6AEwBw

Thoughts on this section?

I guess if you don't like the facts then you can pretend they don't exist. Hey, look at what else I found...

http://www.basiceconomics.info/market-failures-and-externalities.php

Am I to understand that you never talked about market failure in your class? When did you take it? I took mine just a few years ago.

GuardDuck said...

But if government action is itself the reason for the negative externality then the call for further government action to produce a more efficient outcome is misplaced isn't it?

Your own examples of unpaid emergency room visits and dialysis treatment are both examples of market failure caused by government intervention that reduced market outcome.

juris imprudent said...

My point in quoting Smith was to show that he wasn't exactly the die hard libertarian that some have made him out to be.

That is either bullshit and you won't admit the truth, or you are admitting how fucking stupid you are about only listening to the voices in your head. I never claimed that about Smith. So there was no point in quoting him as a rebuttal.

You still can't say why inequality is bad and yet Nadal's wealth vis-a-vis your own is not. It sure looks like there isn't any principle involved.

As to Mankiw and the other link - you should have said you want to talk about externalities. I don't think that is going to help you much - unless you can identify an externality problem in health care markets. I can think of one - but it really doesn't help you.

I mean I would argue that health care markets are inefficient per market theory - but that is due to the decoupling of consumer choice from price, which is driven by our misuse of "insurance" to cost-shift. Have you got a different theory you care to explain?

Mark Ward said...

GD, hence the word "sometimes" in the rule. Obviously, there have been plenty of times when the government has meddled in the market when it shouldn't. There have also been plenty of times when it should have meddled and didn't. The latter here, I know, is anathema to you and a fine example of how you are not very logical, considering reality.

Your own examples of unpaid emergency room visits and dialysis treatment are both examples of market failure caused by government intervention that reduced market outcome.

Are you saying what I think you saying here? That treating someone who is about to die has "reduced market outcome?"

I never claimed that about Smith.

Well, good. I'm glad to hear it and be wrong!

Have you got a different theory you care to explain?

In terms of health care or some other market?

juris imprudent said...

Well, good. I'm glad to hear it and be wrong!

So, again - what was the fucking point. You were addressing me, not them. Where is the principle upon which you heap such concern over inequality? If it isn't principle, it must be envy. If it isn't envy - please explain what it is.

In terms of health care or some other market?

We're talking health care.

Mark Ward said...

So, again - what was the fucking point.

I didn't bring up Adam Smith, you did. And you did so in response to a comment about regulation which, I hope you will agree, has changed somewhat since the 18th century. I was trying to point out those changes to you and say that Adam Smith isn't applicable to everything related to economics in the year 2012.

Jumping back to something you said real quick, because it leads into my next point

You still can't say why inequality is bad

I have repeatedly. If two thirds of our economy is consumer spending and most of those people are seeing their wages stagnate and money run upwards (more inequality), then how can we move forward? They aren't spending money, juris, and that's why we are sputtering along right now. Certainly, it's getting better but it won't be sustainable unless we enact policies that fuel this engine.

As I have pointed out many times and with many testimonials, the wealthy can spend all the money they want but it won't give our economy its running legs. For that, we need both the public and private sector feeding that middle class engine. This is why we need health care reform.

Resources are not being distributed efficiently in many health care markets. In many ways, they are in market failure (or will be). This is particularly true of markets where suppliers can set prices above market equilibrium (which erodes consumer surplus) because there aren't as many suppliers or specialists. They do this to make as much profit as possible.

Even if we got rid of insurance cost shifting, prices would still be ridiculous due to inelastic demand. Essentially, people would have to die before the market did its thing and prices would come down because that's the only way they are leaving many of these markets.

So, with only the very wealthy able to afford these procedures, we are left again with the bulk of the people that drive this economy not spending money because they don't have it. Or worse, going into massive debt because they want to stay alive.

juris imprudent said...

If two thirds of our economy is consumer spending and most of those people are seeing their wages stagnate and money run upwards (more inequality), then how can we move forward?

OK, I see. So when you have railed about the rich and how they spend their money - it is really just about the overall health of the economy. Right. That's why you foam at the mouth so. That's why you go on and on about the rich fucking you over - because it's just about economic growth.

However, let's consider that consumption isn't necessarily the best basis for the economy (for several reasons). Your argument is that we must consume more to keep the economy going. Do you think there might be problems with that?

Resources are not being distributed efficiently in many health care markets.

Such as? That's a nice statement - it may even be true, what evidence supports it?

Even if we got rid of insurance cost shifting, prices would still be ridiculous due to inelastic demand.

The problem is you don't know that, you can only assert it. Nor are you allowing for the normal interaction of supply and demand - instead you have a static (and warped) point that you keep insisting upon. There is a limited demand for dialysis - just because the price were to drop significantly, you would not have more people using it. Likewise, a price increase is not going to chase many people out of the market (and even more true when they aren't paying for it). Of course if someone enters the market with a machine/process that is half the cost of the current one - people that do have to pay out of their own pocket would probably switch. So the old supplier loses business.

Now let's think something through - what is one of the big reasons why doctors costs are high? You know, office visits and the like. Why does it cost as much as it does to get services from a doctor?

Mark Ward said...

That's why you go on and on about the rich fucking you over - because it's just about economic growth.

Yes. This may come as a shock to you, juris, but I don't need money to be happy. My family does alright and that's just fine with me. Good health for my friends and family is at the top of my list. Of course, that can cost a lot of money these days.

However, let's consider that consumption isn't necessarily the best basis for the economy (for several reasons). Your argument is that we must consume more to keep the economy going. Do you think there might be problems with that?

Well, consumer spending and confidence are two thirds of the economy. This is a fact whether we like it or not...good or bad...I guess I'm wondering how we would change that.

Such as? That's a nice statement - it may even be true, what evidence supports it?

I'd say the number of people who go broke trying to pay for health care.

http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH

Take a look at this as well

http://www.annfammed.org/content/10/2/156.full

If health insurance premiums and national wages continue to grow at recent rates and the US health system makes no major structural changes, the average cost of a family health insurance premium will equal 50% of the household income by the year 2021, and surpass the average household income by the year 2033. If out-of-pocket costs are added to the premium costs, the 50% threshold is crossed by 2018 and exceeds household income by 2030.

I'd say that's pretty significant, wouldn't you?

The problem is you don't know that, you can only assert it.

Of course I do. It's common sense. I'm not going to leave the market for cancer treatment for a family member regardless of the cost. Are you? No one else will. It's essentially having a captive audience which is why the health care market is unique and in need of government regulation.

Why does it cost as much as it does to get services from a doctor?

Yeah, you're doing it again. Just make your point and then I'll counter with my own points. I know where you are going with this but I'm going to do you the courtesy of not putting words in your mouth (as you so often hate) and let you just answer your question.

juris imprudent said...

Yes

Sure, that explains why you foam at the mouth about it. Why you have proclaimed that the rich fuck you over to get and stay rich. Your only concern is the state of the economy. You really think anyone will believe that?

Well, consumer spending and confidence are two thirds of the economy.

There have been good arguments raised by both left and right on why that isn't sustainable. You as usual venerate the status quo.

I'd say the number of people who go broke trying to pay for health care.

That has nothing to do with efficient resource allocation. Any more than it is a market failure when you don't get all the free shit you want. It isn't just that you don't understand - it is that you insist that your ignorance is better than actual knowledge.

Of course I do. It's common sense.

No. It's too bad that you can't hold up your end of this conversation; the rest of that paragraph gave you a decent thumbnail to work with. But you don't really want to think, you just want to spout cheap rhetoric.

Just make your point and then I'll counter with my own points.

One substantial reason is that the supply of doctors is artificially constrained by the AMA (a cartel) with the full support of govt. They limit med school enrollments to make sure that unlike law or business schools, we don't have too many new doctors graduating.

I'm not going to thank you for not putting words in my mouth - since that is extremely rude to do in the first place.

Mark Ward said...

Your only concern is the state of the economy. You really think anyone will believe that?

It's not simply the state of the economy. It's the individuals who make up the economy that are my real concern. These are people's lives we are talking about, juris. I know that doesn't resonate in "rugged individualist" land but for those of us who live in a society where we care about one another, it sure does.

It isn't just that you don't understand

This makes no sense. When resources in a market aren't distributed efficiently, we see an erosion of surplus. An erosion of consumer surplus, as in this example, means that buyers are paying more than they should at a price that is higher than market equilibrium. They don't leave the market because their lives or, at the very least, decent health, depend on it.

You're stonewalling again and refusing to accept facts about human behavior.

we don't have too many new doctors graduating.

So, if there were more doctors, then we'd have more suppliers, right? As a result, prices would go down as people could shop around for care. That makes sense but where is your evidence to back it up?

juris imprudent said...

I know that doesn't resonate in "rugged individualist" land

Inside your head. Please pay attention to what I say, not what your imaginary ji says.

buyers are paying more than they should

Should? According to whom? How do you know what the equilibrium price is? Surely you may say it is "expensive" - presumably relative to something else whatever that something is - but how exactly do you know what the right cost is?

You are the one peddling fantasies as facts and I won't accept such a cheap substitute.

That makes sense but where is your evidence to back it up?

History for one. Before the AMA cartelization of med schools, doctors (as a class) were not compensated anything like they are now. Sure, some made a lot, but the community GP was just a regular middle-class person. Look at the contrast with lawyers - people who have always been of the same professional class as doctors. Again, some are spectacularly well-to-do - but median income is a different story. Also, look at the contrast between doctors and other health-care workers that don't have the benefit of the AMA cartel. Your health depends on more than just a doctor.

Is this source acceptable?

Mark Ward said...

According to whom?

The market. This is why I tell you to draw a supply and demand diagram (one with inelastic demand and an oligopoly) and see where the surplus goes.

Regarding the doctors issue, are you saying the AMA is at fault as well? What sorts of things could we do to change the way they operate? At this point, I think what you say here is accurate, given the evidence. More suppliers would certainly lower the price even if there was inelastic demand. Unless they all colluded, which is possible, but if there was a flood of suppliers entering the market, price would naturally go down.

juris imprudent said...

The market.

Dude, the market price is the one it is - the high one, not some imaginary one you believe is less than that.

The relative inelasticity of demand says qty demanded changes very little (in either direction) due to price variation. Which in the case of dialysis in particular makes sense - no one is going use dialysis just because it suddenly became cheap, and there isn't much alternative to dialysis when the price goes up.

What you seem to believe is that this means that dialysis providers can charge whatever they want, not what the market will bear, but the market will bear whatever they charge. So there is only one market price - not some jacked up price that dialysis costs and some imaginary price you believe it should be.

As it happens I'm pretty sure the price of dialysis is based pretty closely on the Medicare reimbursement price set by the govt. Very few individuals actually pay for their dialysis - it is paid for by insurance or Medicare/Medicaid.

Now you might see why this isn't a very good proxy for health care markets in general.

...but if there was a flood of suppliers entering the market, price would naturally go down.

Very good M. Remember that for future reference.

Mark Ward said...

I think you may be misunderstanding me. When there is an oligopoly or monopolistic competition, suppliers can supply less and thus charge above the price as set by the equilibrium of the market to increase profit. They can do this because buyers have little choice but to buy from them. The suppliers in such a market will not be concerned with efficiency of the market-only profit maximization.

Very good M. Remember that for future reference.

Ah, the libertarian arrogance again...

We are assuming here that all else is equal. Suppose demand goes up at the same time that more suppliers enter the market. This may happen with all the baby boomers wanting health care. The price may not budge. And what if they colluded? As always, there are other factors to consider and issuing imperial edicts about economics (especially when they suit your ideology) is terribly sort sighted.

juris imprudent said...

When there is an oligopoly or monopolistic competition, suppliers can supply less and thus charge above the price as set by the equilibrium of the market to increase profit.

Which is true even when demand has great price elasticity. Just because there is a case where demand has low price elasticity does not say anything about the supply side of the market.

The suppliers in such a market will not be concerned with efficiency of the market-only profit maximization.

Market efficiency is not a supplier concern - profitability is. This was one of Smith's insights - simple rules can govern complex environments very well.

But none of what you say changes that as described the dialysis market price is the equilibrium price, not some imaginarily-jacked-up price by evil blood-sucking corporations.

We are assuming here that all else is equal.

Because we can suppose and imagine all kinds of things. The point is to observe what happens in the real world. In the real world we have seen gasoline consumption fall when price rises - just like theory says; as opposed to your whining about people not being able to adapt and demand being inelastic. In the health care world we got a law that said ER's cannot turn anyone away - and so they became a medical resource for all kinds of non emergency treatment. Wouldn't it make sense to change the law back to the way it was?

Mark Ward said...

But none of what you say changes that as described the dialysis market price is the equilibrium price, not some imaginarily-jacked-up price by evil blood-sucking corporations.

Oh, I agree that there is an equilibrium price in the dialysis market. I'm saying that's not what the suppliers are charging because, as you point out, they are concerned with profitability. In the unique market of health care, this presents a problem because there is not much choice in the matter. Without it, you die. This is true of cancer drugs (which my mother in law takes), heart disease treatments and medications (which my father in law and grandmother take) as well as a whole host of other markets.

The point is to observe what happens in the real world.

I agree and yet with this,

In the real world we have seen gasoline consumption fall when price rises - just like theory says; as opposed to your whining about people not being able to adapt and demand being inelastic.

you obviously aren't heeding your own words. Gas prices have risen in this country but demand remains high...partly because of world demand but also because the commercial industry in this country, for example, has to pay to fill up their trucks otherwise they lose business. If everyone in this country stopped driving, gas prices might go down a few cents. That's it. Because demand in other sectors is too high and too inelastic.

I get the feeling that what you are saying here is that the market for gas functions like an ordinary market. Prices go up, people buy less gas, prices go down....is that accurate?

Wouldn't it make sense to change the law back to the way it was?

Which was what exactly?

juris imprudent said...

I'm saying that's not what the suppliers are charging

On what basis? You keep saying that they charge a non-market-equilibrium price, when it simply could be that the market equilibrium price is higher than what you think it should be. I already pointed out that the price of dialysis is tied to Medicare reimbursement rate, and the cost is covered for most people by Medicare/Medicaid or insurance. What fucking more needs to be explained?

Gas prices have risen in this country but demand remains high

You are just fucking retarded sometimes. Do people consume less gas when the price rises or not? Do you consume less steak when the price rises? That doesn't mean you don't consume any at all because the price went up a nickel.

Which was what exactly?

Non-emergency patients can be turned away, so that people don't misuse an ER. Or are you going to now accuse me of wanting people to die on the doorstep of the ER because they weren't treated.

Mark Ward said...

, when it simply could be that the market equilibrium price is higher than what you think it should be

No, that's not what I think. With markets like dialysis, there are few suppliers so they can charge above market equilibrium. Do they overcharge because of insurance companies distorting price? Possibly. I still contend that if you directly sell to consumers they would charge above market equilibrium to maximize profit.

Do people consume less gas when the price rises or not?

It's not as simple as a yes or no question, juris, due to the nature of the product. Individuals are consuming less (a trend regardless of price in the US) but commercial customers are not. World customers, who pay far more for gas than we do, aren't consuming less because of price.

Do you consume less steak when the price rises?

False equivalency. Steak has more elastic demand than gas and substitutes like hamburger or roast. If the price goes up on steak, people will simply buy hamburger meat or a close substitute.

Or are you going to now accuse me of wanting people to die on the doorstep of the ER because they weren't treated.

No, I just wanted some clarification. I'd go along with that rule change.

juris imprudent said...

No, that's not what I think.

It is exactly what you argued above - that equilibrium is not the price you actually see.

You are a fucking idiot to argue that demand elasticity determines anything about the number of suppliers in the market. Even if demand were highly elastic, you could have a monopoly that would be market-inefficient.

It's not as simple as a yes or no question

Sure it is - but it doesn't work for you to be honest. The fact has been presented to you here, that when gas prices rise people consume less. You keep trying to argue that fundamental economics works except when you don't want it to. Childish and dishonest indeed.

False equivalency.

I wasn't equating them, but showing that the fundamentals work.

Black is white and up is down whenever Humpty-Mumpty wants.

Mark Ward said...

Sure it is - but it doesn't work for you to be honest. The fact has been presented to you here, that when gas prices rise people consume less.

No, that's not true. I've presented facts to you that you don't like so now you're falling back on the "Mark doesn't understand fundamental economics" rag which (surprise, surprise) is a more accurate description of yourself (due to your willful ignorance).

Again, there are many factors that come into play in terms of the market for oil and gas. Stating that "when gas prices rise people consume less" ignores several key factors. First, who are "people?" This is too vague to make your assertion accurate. Are they US consumers? World consumers as a whole? Commercial buyers? Second, you're not taking into account cartel behavior and oligopoly behavior. Third, have you considered what happens if demand is rising at the same time as price? What if demand rises which would, in turn, cause the price to rise?

Address these factors before you make silly accusations and personal insults. It would be more honest.