I think I’ve mentioned a wisecrack of my old business partner before (in a play on Voltaire): “I may agree with what you say but I deny to the death your right to say it”. If there is any living person who has no right to comment on the Reinhart-Rogoff contretemps, it’s Lawrence Summers. In a Washington Post op-ed on the matter after several paragraphs defending his colleagues, Dr. Summers notes:
…while Reinhart and Rogoff’s work was shown not to support the claims made by prominent right-leaning U.S. and British figures regarding the urgency of deficit-reduction efforts, much of the joy taken on the left in their embarrassment is inappropriate. It is absurd to blame them for austerity policies. The authors of those policies chose the policies first and then cast about for intellectual ballast. While there may be no threshold beyond which debt becomes catastrophic, and while the British and American experiences both suggest that fiscal contraction in a slack economy where interest rates are near zero is inimical to growth, it is a grave mistake to suppose that debt can or should be accumulated with abandon. On all but the most optimistic forecasts, further action will be necessary almost everywhere in the industrial world to ensure that debt levels are sustainable after economies recover.
Why would I deny him the right to comment? Because he’s speaking from the “intellectual ballast’s” point of view.
I think there’s quite a different lesson to be learned. Economics remains a descriptive science rather than a predictive one. It is essential that policies be informed and guided but not molded by economics. Doing what economists tell us to do is an error, if only because they’re as subject to preferences, bias, and agenda as the rest of us are. If there is any lesson to be learned from the ARRA, the stimulus package, that’s it. Unless you’ve found Harry Truman’s fabulous one-handed economist.
Although I agree that economics isn’t a predictive science, the economics profession is “one-handed” in that there is near universal agreement that we need to slow or stop adding debt as a percentage of GDP; that it isn’t healthy to have high unemployment and it isn’t a good idea to pump billions in liquidity to the economy indefinitely because of high unemployment.
I can’t think of a single economist that would look at what the political leaders of the industrial world have done 2007-present and say “yeah, those are good policies.”
It’s almost as if the “science” of economics is mostly bullshit. Yeah, almost like that.
I suspect that morality — vague and innumerate as that notion is — may be a better way to tackle what we define as economic issues. For example, I think it’s immoral to pass my debts on to my kids unless I have a pretty compelling reason to do so, a reason that directly benefits them. (ie: mortgaging my house to pay for their education, let’s say.)
I also think it’s immoral to allow a fellow American to die for lack of medical care. And immoral for a tiny sliver of the population to control virtually all the wealth. And immoral for anyone who is able to contribute to merely receive. Immoral to use wealth to rig a system to one’s own benefit.
I think it’s a little better than that, Michael. Some principles of economics are sound; some are less so. We do know that we won’t create additional supply by means known and demonstrated to reduce supply, for example. As one of my economics profs put it, we don’t know how to produce wealth but we do know how to create shortages.
I also wonder about how many people in this country die as a result of excessive care compared with how many die for lack of medical care. Said another way, I don’t think our problem is inadequate care. I think our problems are that care is misallocated and too expensive.
Additionally, morality doesn’t stop at the water’s edge. If it’s immoral to allow someone to die for lack of medical care, it’s immoral of Americans to allow Zambians to die for lack of medical care. Why are we importing Zambian doctors into the United States?
The problem of morality modified by national interests is a fascinating and troubling one. Are we valuing an American life more highly than a Bangladeshi life? Obviously we are. But our inability to achieve perfect consistency is not in my opinion a valid reason for not making those efforts that we can. I don’t think we can opt out of morality, we’re stuck with it as a fact of life and we have to work our way through it. We still have to try to do the right thing, as hard as that is to quantify.
As for economics, I am absolutely sure there are very valid economic theories. It’s just that no one seems to have a clue as to how to separate them from the dumb ideas. Right now the sorting is by ideology and self-interest. Under those circumstances I think it’s a good idea to let academics work it out amongst themselves and keep them all well away from politicians and the media. If I were given god-like powers (and let’s all hope I’m not) I would send the economists back to their computers and journals, there to be as ignored as sociologists, psychologists, phrenologists and astrologers, until some hoped-for future when they emerge with some clear idea of what the hell they’re talking about.
In the meantime it is wrong to let a fellow citizen die for lack of medical care, and we can manage that. That’s do-able.
I certainly take your point that doctors are busily killing people with too much of the wrong care, but that’s a practical matter we should be able to manage. In fact we could look here to morality as a guide. It is morally wrong to perform a useless procedure for profit.
The last possibility, calling into question the usefulness of statistical research, is the most appealing to me. Time and time again esteemed occupants of Ivory Towers give their convoluted views of what’s going on and how to fix things, based on affirmed theories sanctioned by peer groups, historical trends and so on. And, while such data adds intellectual fodder to an analysis, it’s not always the be all or end all exemplified by hands-on reality. Much like the example given of housing, between 1945-2005, that housing prices always go up, the bumps and exceptions in the road become land mines for those who never consider the “what ifs,” worst case scenarios, or just plain outside-the-box circumstances.
I might add, that much like the housing theory proved to be inaccurate, this is a fine lesson for global warmists to consider as they continue to deride skeptics who are critics of iron-clad greenhouse gas conclusions as being the sole cause of climate change.
Said another way, I don’t think our problem is inadequate care. I think our problems are that care is misallocated and too expensive.
All one has to do is ponder the recent Oregon Study, reported on May 1st of this year, suggesting that “universal health care makes people happier but not healthier.” Health care can be slathered onto a person. But, the intangible forces of free will and self-determination, priceless catalysts for one’s well being, are often disabled, rendering people more passive by too much government help.
Implementation of morality is far more complex than what is being described by making comparisons between American and Bangladeshi lifestyles. What serves as moral in America might be viewed as irrelevant or even immoral in a 3rd world country. What makes Americans’ ‘happy,’ might be disruptive in a more simple society. Basically, I don’t think people should play God in deciding what is always ‘best’ for others.
Also, what is the morality difference between passing on ‘personal’ debts to one’s children, versus passing on national debt? Unless one lives on an island, national debt effects us all, no matter how personally unencumbered you are (unless, of course, you’re in the Warren Buffet league of wealth).
Lastly, putting so much credence in the powers of economists and academia, to lead the way, IMO, has led us more astray than anything else. The building blocks of this country, after all, were handed to us not only by thinkers, but also doers. Consequently, the common man — worker and/or engaged employer –often times has the best, uncomplicated solutions to a given fiscal problem, over some distant administrator or government higher-up. Those in the field of business, for instance, know more how business works by working it, than by those who construct and ponder, oftentimes, flawed or distorted data, to reach some kind of hypothetical compass in how to proceed.
It’s not just perfect consistency. It’s that our healthcare system raises costs everywhere. Spending more here causes people in Bengladesh to die because of lack of availability of care.
How do I know? Several ways. First, we pay more for healthcare by just about every measure than any other country in the world. Second, we import physicians. We compete with the UK, France, Germany etc. for physicians from India, Pakistan, Zambia, Bengladesh, etc. Our willingness to pay raises the costs everywhere. Third, you can tell that is, in fact, the case because the pay rates for GPs in the U. S., U. K., France, etc. are pretty close. That’s because GPs are much more interchangeable for credentialling and other reasons than specialists.
We need to make structural changes in our healthcare system, not just spend more. Spending more before making the structural changes will just aggravate a bad situation. It will mean that providing more healthcare here means providing less in Bengladesh. I think that’s immoral by any but the most nationalistic of standards.
I agree that economics has little predictive value. There are a few basic principles that are correct, like incentives matter, then it is mostly confirmation bias (mostly talking macro here).
Finally got a chance to look at the Oregon Study. Not sure what all of the fuss is about. The baseline level of health in the group studied is better than most of the patients I see around here with private insurance. They ended up with relatively few pts in each study arm. Need to do the study in PA where we have more fat people with really bad diabetes and hypertension, or better yet try Alabama or Louisiana.
Query for the right wingers- Now that my son is a physics major, when do they let him in on the climate warming hoax? Since they get big bucks, according to you guys, for perpetuating the scam, when does he get paid? Could use some help with tuition payments.
Steve
@steve, I haven’t seen an ungated copy of the Oregon study, but it seems that the population studied was limited to those near, but not qualifying for, Medicaid. That population is probably quite different from those on Medicaid. I assume they are not as poor (relatively speaking) and are not suffering long-term disabilities. Plus, I understand they had to enter a lottery, which means the population has at least some level of initiative and drive. Maybe I’m missing some of the details, but the lottery element seems very problematic to me, since I don’t equate applying for a lottery with random sampling.
OK, I found this description of the lottery:
the lottery:
“In April 2008, Oregon’s Medicaid agency re-opened the Oregon Health Plan Standard Program, which had been effectively closed since 2004, to approximately 10,000 uninsured adults with
incomes below 100% of federal poverty level. Using a lottery, individuals are randomly selected from a waiting list of nearly 100,000 uninsured individuals to receive an OHP application
packet.”
I’m not sure what caused this program to close, but the description suggests that this group is probably recently poor or disabled. If the lottery drew primarily from a pre-existing waiting list, its problem random.
@steve
Al Gore and his kind have milked the Anthropological Global Warming aka Climate Change for the big money. Your son will need to look for grant money, but it is probably drying up.
The wheels fell off the AWG bus in the summer of 2010. You may not have noticed, but most people outside the coterie of climate science have backed off. The data is thoroughly compromised, and as the data crumbles, the theory based upon that data is crumbling. Also, your accuracy is limited to your least accurate instrument. This is science 101.
The long term trend is that the Earth is cooling, but the short term trend is a cooling-warming cycle. We are presently between ice ages, and we are in the warming phase. The Greenland glaciers are still receding from the last ice age. Keep in mind that the Earth is about 4,500,000,000 years old. It is amusing that humans think they can affect the Earth especially in a human time frame.
You should get your son to explain the significance of the Earth’s magnetic fields and the atmosphere. It is fascinating. With the space telescopes, we are able to understand the importance of the Sun on the Earth much better. Solar Sun storms are a big problem, and the money for AWG would be better used for this research. The last one affected telegraph lines, but electronically, we are well beyond the telegraph.
” It is amusing that humans think they can affect the Earth especially in a human time frame.”
Really? Then all that stuff about the ozone layer and chlorofluorocarbons was false?
I’m all for it. How? Is there even a single Republican, anywhere, who would support a Canadian or French or Dutch option? Plenty of Democrats would be for something more far-reaching. I’d be for it. But we have no one on the other side who would even contemplate a more statist solution.
Show me even three GOP Senators who would even discuss a single payer. Show me a Republican presidential hopeful who would. For that matter, a GOP House member. Don’t you know that Hitler rose to power on the back of socialist health care?
You might as well wish for a pony.
Don’t you know that Hitler rose to power on the back of socialist health care?
Yeah, and like every other leftist movement from the last 250 years, it worked out fucking GREAT!
Reforming medical education would be a reasonable start. Why is medical education here, unlike practically everywhere else, graduate education? Why do we produce so few doctors relative to our population and import the rest? I think that for the $80,000 we’re paying per medical resident we might be able to make a few demands.
@michael, why don’t you point out three Presidential candidates for whom you’ve voted that supported putting in place a single-payer system.
@sam
When is the last you heard anything about it? Why has Al Gore not used this as exhibit A?
To my knowledge, the people who are studying it are still trying to understand the inner workings. It changes depending upon the weather, and it gets bigger and smaller. It has been stable for years, but it has not closed. Supposedly, last year they were able to detect a reduction.
The Earth is enormous, and most people have a problem fathoming the size. After the meteor last year, I found it amusing that Congressman wanted to know what NASA is doing about possible impacts.
Humans are no more significant to the Earth than a gnat on an elephant’s butt.
I did not intend to threadjack, and this is my last comment on the subject.
“When is the last you heard anything about it?”
We haven’t heard about, the depletion, that is, because international action was taken to stop the use of chlorofluorocarbons in aerosol sprays. See, What would have happened to the ozone layer if chlorofluorocarbons (CFCs) had not been regulated?:
The idea that human beings cannot effect their environment is silly. We do it all the time.
Michael,
I seem to recall several Republicans voting for Medicare part D. Meanwhile, the public option was killed in the PPACA by Democrats.
In short, things usually aren’t that simplistic and political support is highly dependent on context. I think that – right now – you are probably right, but the status quo doesn’t last forever.
Andy- Think of Medicare Part D as buying the votes of old people, so of course a lot of the GOP voted for it. It was their bill after all.
“Why is medical education here, unlike practically everywhere else, graduate education? ”
For those coming straight out of what would be high school, they typically have 6 years of schooling, rather than 8 here in the US. They also often have longer residencies. Not sure this makes much difference. It should also be pointed out that the training is free or much cheaper many other places.
“Why do we produce so few doctors relative to our population and import the rest?”
Not sure, but probably because we can. If our doc salaries were lower we would have to produce more of our own.
Steve
Steve,
Kind of my point. There are people on the GoP side who will contemplate a “statist” solution under the right circumstances.
For confidentiality reasons I cannot tell you how I have come across Mr Summers. Lets just say it is a Harvard connection. Naturally.
The report is not good.
Oh, and Reynolds perfect world crap. What a fucking moron.
There are things that can be done,,,,,,,,,,but nothing Michael has in mind. That’s just immature, incompetant – manager wanna be bullshit. Pure crap.
Just pure crap.