Defense Production Vs. Markets - Barokong

Take your bets which produces more ventilators faster. From Marginal Revolution. First quoting New York Times, The White House had been preparing to reveal on Wednesday a joint venture between General Motors and Ventec Life Systems that would allow for the production of as many as 80,000 desperately needed ventilators to respond to an escalating pandemic when word suddenly came down that the announcement was off. The decision to cancel the announcement, government officials say, came after the Federal Emergency Management Agency said it needed more time to assess whether the estimated cost was prohibitive. That price tag was more than $1 billion, The president went on to invoke the defense production act, to somehow force companies to do it. MR: At $1.2-$1.5 billion that’s $15,000-$18,750 per ventilator which is well below the standard price of $25,000-$50,000 FEMA are you out of your minds? Haggling over $1 billion and wasting time? Lack of ventilators (and simple masks and gowns) are costing the Federal taxpayer $2,000 billion immediately, and $1,000 billion per month or so of lost GDP, to say nothing of 80,000 lives.  80,000 ventilators would have been a great deal at $10 billion! It is a classic example of how bureaucracies follow rules and cannot be expected to think. Sure, stocking up ahead of time we want a good deal. FEMA bureaucrats follow rules to get a good deal. With opportunity costs thousands of times larger, we don't. But they're not allowed to think. Which reminds me. Dear FEMA: The virus has been around since January. Why has nobody thought until just now that ordering up some masks, shields and ventilators might be a good idea? Trump also named Peter Navarro as the national Defense Production Act policy coordinator for the federal government. It will be fun to see if GM and Ford now actually do produce ventilators faster than other companies and ever become a significant source of supply, or if Mr. Navarro's interference leads to one snafu after another. BTW, one reason we're short of such a basic commodity as masks is tariffs on Chinese goods. Which by the way have just been suspended, a little noticed concession to common sense. But the Chinese, who could send us masks and ventilators quickly, are hardly in a mood to do so. Of course invoking the defense production act is political. Everyone in the Administration understands this basic economics.  I was listening to NPR coverage this morning and the only criticism from reporters and largely democratic governors was that Trump wasn't "doing enough" or had not invoked it soon enough. Well, now they get their way. Contrary good news from MR Now that the CDC and the FDA have gotten out of the way, we are producing more tests. Honeywell and 3M are already ramping up production of N95 masks. We should arrange with China to buy more. The Federal Government is playing a useful role by buying surgical masks from companies like Hanes. Ironically, we will be importing them from Latin America.... Using U.S.-grown cotton, the masks are being produced in Hanesbrands’ sewing factories in El Salvador, Honduras and the Dominican Republic. These factories would normally be producing T-shirts, underwear, socks, sweatpants and sweatshirts. (Note the stupid requirement to use American Cotton.) One of many stupid requirements still in place. Perhaps there is a silver lining, that people are starting to see how many regulatory and protectionist weeds impede production in the US.
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Pandemic Plan - Barokong

Graham Allison's wonderful book on the Cuban missile crisis teaches an important lesson: You cannot ask bureaucracies to think on the fly. They can execute plans, but don't ask them to innovate quickly. If, for example, it would be a good idea in a pandemic to allow people to withdraw from retirement accounts, or access sick leave even if they are not sick, don't expect this to happen overnight. Don't even expect customs to figure out that we shouldn't all be touching the same screen when we get off a plane. That's why we have plans for floods, earthquakes, terrorist attacks, hurricanes and more. And agencies regularly practice these. I opined in my last blog post a bit of horror that we seem to have no national pandemic plan, and our poor public officials are making it up as they go along. This turns out to be wrong. It turns out there is a national pandemic plan. I haven't read it all, but it does not seem to have been widely implmented or practiced, and it's interesting that I am not hearing any of our public officials reference it. It has a lot of recommendations for the private sector that I know my employer never heard of. It also seems silent on economic and financial questions -- how do companies with no sales keep from running out of money. I welcome comments from people who know this document. Is it, like the executive summary, just an airy wish list that got written and forgotten? Or is this an effective plan widely known in the Federal Bureaucracy. (Thanks to a correspondent for the link)
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Mind The Gap - Barokong

Mind the Gap is an extraordinary blog post on land use regulations. (HT the dependably excellent Marginal Revolution.) It is great for its rincian, but most of all for its fresh voice. Sure, send one of my free-market economist friends in to examine the pathologies of any city, and we start almost reflexively on land use regulations. But the author is clearly from a different background -- the sort of person who "was in Hamtramck, Michigan a couple of years ago to participate in a pelatihan about reactivating neighborhoods." Lessons discovered the hard way, from different backgrounds, are often the freshest. The big point of the blog post is how land use regulations force a steppingstone pattern of urban decay. It's hopelessly expensive to convert any building "up" the economic foodchain of uses, so bit by bit buildings get used for less and less productive uses, that don't attract the attention of regulators, until they become vacant lots, or until a large commercial developer can come in, demand tax subsidies, and rebuild the whole neighborhood. The post starts with the story of a family that bought an old fire station a few years ago with the intention of turning it in to a Portuguese bakery and brew pub. Alas, Mandatory parking requirements, sidewalks, curb cuts, fire lanes, on site stormwater management, handicapped accessibility, draught tolerant native plantings… It’s a very long list that totaled $340,000 worth of work. They only paid $245,000 for the entire property. And that’s before they even started bringing the building itself up to code for their intended use. Guess what? They decided not to open the bakery or brewery. Big surprise. (The post is full of great photographs like this one.) So instead, the space has been pressed in to service as a printing shop for the family’s specialty advertising business. It’s a productive and profitable use of the existing space that doesn’t require structural changes or special regulatory approval. But it’s significantly lower down on the economic food chain, creates less taxable revenue, employs far fewer people, and does nothing to activate the town’s social or cultural life. And if anything were to happen to the building it wouldn’t be cost effective to rebuild so the lot would most likely remain vacant. There are plenty of empty parcels all around that attest to this reality. The conundrum Individually it’s impossible to argue against each of the particulars. Do you really want to deprive people in wheelchairs of the basic civil right of public accommodation? Do you really want the place to catch fire and burn? Do you want a barren landscape that’s bereft of vegetation? Here I think the blog missed the central masalah -- understandable since it's not from an economist. "you" -- we, the town, really does want these things. These are important, and desired, public goods. The dilema is, these things we want cost a lot of money. $340,000 for one firehouse. The town wants them, but is not willing to raise general taxes to pay for them.  It's sane enough to realize that it cannot make owners of existing properties fork over $340,000 per firehouse. So it passes, what is in essence, a lump-sum tax on people who want to start new businesses, or use the property up the economic foodchain. Alas, the people second-most-unlikely to be willing or able to pay such taxes are small-scale entrepreneurs trying to start a marginally better business in a run down neighborhood.  So nothing happens until either the town reverts to wasteland, or until nearby prospects brighten enough that a large commercial developer can move it back to the top of the food chain, and also extract enough tax breaks so that in essence the city does pay for the public goods from general taxes in the first place. The post though, is about this big lesson in urban decay: There is zero chance that any of these laws and procedures will be changed in my lifetime. However, it’s highly likely that before I die this gas station will close and the property will work its way down to a series of lesser uses until it remains vacant....And before I shuffle off this mortal coil the cost of maintaining the road and associated sewer and water infrastructure will outstrip this town’s tax revenue. (The post also emphasizes the dehumanizing aspect of parking and street regulations.) Another example, on trying to convert an old bank to new uses, the fire marshal happened to drive by and noticed there were people – a few dozen actual humans – occupying a commercial building in broad daylight. In a town that has seen decades of depopulation and disinvestment this was an odd sight. And he was worried. Do people have permission for this kind of activity? Had there been an inspection? Was a permit issued? Is everything insured? ... There was already a kitchen in the back of the building from when the place had been a Chinese restaurant. But the current rules required a long list of upgrades including a $20,000 fire suppressing hood for the stove and new ADA compliant bathrooms. It could all be done, but at a price point that would grossly exceed both the purchase price of the building and any conceivable cash flow the business might generate. One work-around was to have a certified and inspected food truck park in the back alley and deliver food into the building for temporary events. ADA portable toilets could be rented as needed. The building – now called Bank Suey – has continued along these lines as a rental hall for pop up events.. Clearly a move down the economic food chain. Cell phone antennas on the roof of a neighboring empty building are the next example. Our author has learned an important lesson. On a walking tour of town officials and development consultants pointed to empty buildings and described all the things that could be done to bring them back to productive activity: open up the blank walls and re-install windows, incubate all kinds of new businesses, paint, outdoor seating… I rolled my eyes. None of those things make any economic sense given the regulatory hurdles involved and the likely negative return on the up front investment The pattern instead, and the bottom line: anonymous blank inscrutable structures ... could quietly contain storage facilities or a non retail live/work space under-the-radar without attracting the attention of officialdom. If the inhabitants were really discrete they might be able to carry on unmolested for a number of years. Meanwhile the usual big money developers might buy enough of the neighboring buildings and vacant land – with the accompanying subsidies and tax breaks – to rapidly transform Main Street at a much higher economic level. There’s no in-between. You either get permanent stagnation or massive redevelopment. Baby steps are essentially illegal.
Sumber http://barokongnetwork.blogspot.com

Privatize Tsa And Atc! - Barokong

In the aftermath of 9/11, there was some debate whether TSA should be federal employees, or run privately, and paid for by airlines. Government does not have to actually employ people in order to regulate, supervise, and make sure standards are followed. Similarly, there has been a longstanding debate whether air traffic control should continue to be run by the federal government rather than privatized, as it is in Canada. Now that TSA and ATC turn out to be the straws that break the camel's back on federal government shutdowns, perhaps it would be wise to revisit both decisions!
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Deregulation - Barokong

Many of us free-market types bemoan how poorly designed regulation hurts economic growth. But unlike "stimulus," regulation is a death by a thousand knives. Each one seems innocuous, but they add up. It's hard to tell the story without details. There is no handy government statistic on "impact of regulations." We tend to talk about what we can easily measure. Likewise, there is a general sense that the current deregulation effort may be helping, but again without details it's hard to know if this is truth or spin. In this context, I just learned of an interesting new website at the Brookings Institution that tracks Trump Administration deregulation efforts (HT Daniel Henninger at WSJ).  I get the general sense that Brookings isn't too happy with it and wants to expose removal of useful regulations. But they've done a nice job, so you can read it both ways. Yes, the big ones you've heard of are there. The Waters of The US Rule, The Coal Fired Powerplants Rule, Title IX, Asylum Seeker restrictions, Fuel Economy standards, lots of rules pecking away at capital standards for financial institutions (so much for procyclical capital!)  and so forth. It's interesting quite how many are not really Administration deregulations, but compliance with the Supreme court throwing out Obama kurun regulations. This really is what the Supreme Court battle is about. It's also interesting actually how short this list is. For all the talk of "deregulation," you would think thousands of individual rules would be on the chopping block. But I enjoyed this mostly for details for all the little ones you don't read about every day, a little peek into the bowels of the regulatory state. Affordable Housing Program Amendments The Federal Home Loan Bank Act requires each Federal Home Loan Bank to establish an affordable housing acara to enable members to provide subsidies for long-term, low- and moderate-income, owner-occupied, and affordable rental housing. What? You might have thought Trump officials were going to stage a book burning of that one, but no, it's modest This proposed rule invites comment on several amendments to the regulations governing Federal Home Loan Banks, among others, giving Federal Home Loan Banks additional authority to allocate their Affordable Housing Program funds and relaxing or streamlining certain regulatory requirements. Baby steps, baby steps Letting Youth Work with Patient Lifts The youth provisions of the Fair Labor Standards Act... HO7 prohibits youth [16 and 17 year-olds] from working in occupations that involve the operation of "power-driven hoisting apparatuses," including a power-driven patient lift--a device that assists patients receiving health care to be transferred between resting places. The DoL claims that patient lifts differ substantially from other equipment that HO7 governs (e.g. forklifts, cranes), and that patient lifts are actually safer than lifting patients manually. In response to bipartisan requests from Congress, the DoL proposed on September 27, 2018 to remove the operation of power-driven patient lifts from the list of activities that HO7 prohibits. Sensible, and I'm glad to see we can be bipartisan about something. That the Federal Government maintains a list of devices that 16 and 17 year olds may not use, that list includes forklifts, might be turning some Founders over in their graves. Labor law is a particular nightmare, as anyone who has dared to actually hire someone will quickly tell you Joint-Employer Standards Joint-employer standards determine whether two employers are joint employers of a group of employees under the National Labor Relations Act (NLRA). This influences the responsibility and liability that these joint-employers hold towards the employees under labor practices and worker protection laws. Examples of cases where these standards hold relevance are staffing agencies and subcontractors that contract workers to other firms and franchisor-franchisee relationships. The rest is appropriately sleep-inducing, but not for labor lawyers who want to make a killing, and in the process kill Uber, locally-owned McDonalds, and unintentionally complete the death of the labor market by anything except very large organizations with big HR and compliance departments. Experimental Light Sport Aircraft for Flight Training Only aviation fans will get this one. Yahoo, only about 50 years late. Small Business HUBZone Program Historically Underutilized Business Zones (HUBZones) are economically distressed communities where the government seeks to encourage business and promote growth. HUBZone small businesses are those that have a principal place of business located in a HUBZone and 35 percent of their employees residing in one or more HUBZones. The HUBZone acara, which was established in 1997, provides contracting assistance to small businesses located in HUBZones. On October 31, 2018, US Small Business Administration (SBA) proposed amendments to HUBZone program regulations to reduce regulatory burdens for HUBZone small businesses. The usulan allows employees to be treated as HUBZone residents even if they move to non-HUBZone areas after the certification of the firm. The usulan also eliminates the burden for a HUBZone business to continually demonstrate that they meet all eligibility requirements at the time of each offer and award for any HUBZone contract opportunity. ...amendments are intended to make the acara requirements easier to understand and to make it a more attractive avenue for procuring agencies I read between the lines a classic boondoggle. Huge administrative costs, no impact, obviously too hard to fill out the forms to get "contracting assistance" and 22 years later the economically distressed communities are just as distressed as before. (I welcome correction, I don't know anything about it.) Transporting Bows and Crossbows Across National Park System Units Prior to this rule, individuals traversing National Park Service (NPS) areas were allowed to possess bows and crossbows that were "not ready for immediate use" without a permit only if they were using a mechanical mode of transport. Some roads maintained by NPS bisect private property, and are sometimes untraversable with mechanical vehicles. These lands were thus inaccessible for hunters and sportsmen transporting bows and crossbows via mechanical vehicles. On March 2, 2018, NPS proposed a rule that would change this: it would allow individuals traveling on foot and horseback to carry unloaded bows and crossbows without a permit. Self-commenting Affirmatively Furthering Fair Housing Rule The Fair Housing Act of 1968 calls on federal agencies with activities related to housing and urban development to administer their programs "in a manner affirmatively to further the purposes of" the Fair Housing Act. The Obama administration's Department of Housing and Urban Development (HUD) issued the Affirmatively Furthering Fair Housing (AFFH) Rule in July 2015, fulfilling the unmet mandate of the Fair Housing Act. The rule requires any community receiving block-grant funding from HUD to complete a comprehensive Assessment of Fair Housing (AFH) to analyze its housing stock and come up with a plan for addressing patterns of segregation and discrimination. On January 5, 2018, HUD Secretary Ben Carson issued a notice stating that HUD would immediately stop reviewing plans that had been submitted but not yet accepted...the National Fair Housing Alliance sued HUD for illegally suspending the AFFH Rule, which New York State joined on May 14, 2018. On May 23, 2018, HUD issued a series of three Federal Register notices... Taken together, these notices effectively nullify the AFFH Rule: ...On June 5, 2018, several states and cities filed an amicus brief opposing HUD's decision to withdraw the assessment tool, and New York State moved to intervene in support of the National Fair Housing Alliance's lawsuit. Note this is all about governments spending a ton of money to file reports with other branches of government, about promises to be made about, ... I guess future reports and plans, which everybody is suing everybody about. A nice example of how Mark Steyn calls us the "republic of paperwork." Railroad Noise Emission Badge Requirement Removal A rule removing the requirement that certain railroad locomotives and associated equipment display a badge communicating information about their noise control certification test. Calorie Labeling Rule A rule revising the type size labeling requirements for front of package calorie declarations for packaged food sold from glass front vending machines. Eliminating Unnecessary Regulations at the Treasury Department A rule removing regulations related to Treasury programs that are no longer in existence. Tip Credit Rule: Partial Rescission Partial rescission of a rule restricting the pool of employees eligible for tip sharing. Yes, the Federal Government has detailed laws, rules, and regulations governing exactly how the money in the tip jar at your local Starbucks gets divvied up. It goes on like this. Browse and enjoy. Of course I would love a site with similarly accessible description of what the current state of regulation is . But that will wait for another day.
Sumber http://barokongnetwork.blogspot.com

Noahlogic - Barokong

My little foray here into the blogosphere sometimes leaves me in slack-jawed amazement at the leaps of illogic in the commentariat. Such was the case last week, whenNoah Smith writing at Bloomberg.com, took on arecent post of mine about food stamps. My post was about food stamps, and about the language that people use to hide agendas in the policy debate. Scott Simon at NPR thought he had a big gotcha by repeatedly asking Congressman Adrian Smith "Is every American entitled to eat?" because the anggaran ajuan reduces food stamp payments. The title was "single payer food," as it seemed Scott's view of food was like many people's view of health care. This sent Noah on a tear about "free market purists" who disdain "single-payer" health care: In a recent blog post, Hoover Institute senior fellow John Cochrane likens single-payer health care to single-payer food: ... by drawing an equivalence between health care and food, Cochrane is ignoring the long history of economic research showing that the health-care market is very different from others.   Here I am left scratching my head. I did not, in fact, "liken single payer-heath care to single-payer food." I didn't mention health care at all. How can a post about food stamps "ignore" research on health economics? And if you spend 10 seconds googling you will find I have addressed all these arguments in other writing that is actually on this topic. You might not agree with my answers, but I don't "ignore" them. A bit of advice to Noah: OK, you can't be bothered to do any real research before mounting a personal attack on  Bloomberg.com. But try to make it all the way through a blog post before writing a takedown. (Or, back in the old days, before writing that "Cochrane is ignoring" something, basic journalistic ethics would demand that you contact Cochrane for comment, at which point Cochrane could point out that no, he is quite aware of Ken Arrow's work and has responded to it in rincian, especially when actually writing about health care, not food. Or an editor or fact checker would require that. Some news media still practice this kind of basic journalistic ethics. Bloomberg, we see, does not.) *** However completely unrelated to the subject at hand, though, Noah does bring up some interesting issues regarding health care. I'm grateful for the opportunity to rebut, because, as a matter of fact, I have written about health care,  and the attack gives me an opportunity to recycle some great old prose to prove that point. The issue at hand: Can markets work for health care and health insurance? Noah: There are so many problems with the health-insurance and health-care markets that it’s little wonder that they operate differently from the markets for food or cell phones. That's a misleading comparison. Health care is a complex personal service. The right comparison is lawyers, accountants, tax preparers, contractors, car repair shops, architects, gardeners, interior designers, bankers, brokers. These are all cases in which people deliver a complex service, and they know a lot more than we do. We hire their expertise as much as a product. Health insurance is insurance. The right comparison is car insurance, home insurance, personal liability insurance, life insurance, disability insurance, and more complex insurance associated with businesses, such as director liability insurance, product liability insurance, freight insurance, and so forth. All of these we generally leave to somewhat free markets. Nobody thinks there needs to be a single-payer contractor. (Well, maybe Noah does. I can't wait to see what kinds of bathroom tiles ContractorCare will pay for.) Just what is it about health care and insurance that have an essential market failure, and these do not? Noah summarizes a1963 Ken Arrow essay about health care, which Noah cites as research showing that markets cannot possibly work. The objections: .. the importance of adab norms.  People have all kinds of watak considerations associated with health care. They expect doctors to act honestly and selflessly, and not just seek profit Any time economists start telling you to pass complex regulations to enforce morality, run in the opposite direction. The Obama administration had something with the idea of "science-based" policy. At least let's get the cause and effect science right before we start making watak claims. Let's read economists about economics: ...incomplete markets. Can people really know all of the possible health conditions they might get, including how much they would pay to cure or treat each one? ... The answer is certainly no. ...uncertainty -- in health care, people don’t know what they’re buying until it’s already too late to make a different choice. Unlike food, which you buy over and over, open-heart surgery tends to only happen once. ...adverse selection. People with health problems are more likely to try to buy health insurance; and since insurance companies know this, they have to charge everyone more. ....tabiat hazard. After you’ve paid for insurance, the insurance company has every incentive to deny as many claims as it can get away with denying These are all the standard objections to markets. They are all theoretical possibilities, echoed in every econ 101 textbook. But are they true of health care and insurance? And so much so that the evident pathologies of a government run system is better? (Remember, the free market case is not that markets are perfect. It is the long and sorry experience that governments are worse.) And are they so much more true than they are of all the above listed complex personal services, that the latter can be left to markets but a vast government bureaucracy must not only provide for all but outlaw the private option? As it turns out, I have written about these things, in "After the ACA" easily available on my website and rather relentlessly promoted on this blog, especially p. 184ff, B. The Straw Man ...Critics adduce a hypothetical situation in which one person might be ill served by a straw- man completely unregulated market, with no charity or other care (which we have had for over eight hundred years, long before any government involvement at all), which nobody is advocating. They conclude that the hypothetical justifies the thousands of pages of the ACA, tens of thousands of pages of subsidiary regulation, and the mass of additional federal, state, and local regulation applying to every single person in the country. How is it that we accept this deeply illogical argument, or that anyone making it expects it to be taken seriously? Will not one person fall through the cracks or be ill served by the highly regulated system? If I find one Canadian grandma denied a hip replacement or one elderly person who cannot get a doctor to take her as a Medicare patient, why do I not get to conclude that all regulation is hopeless and that only an absolutely free market can function? Both straw men are ludicrous, but somehow smart people make the first one, in print, and everyone nods wisely C. Adverse Selection We all took that economics course in which the professor shows how asymmetric information makes insurance markets impossible due to adverse selection. Sick people sign up in greater numbers, so premiums rise and the healthy go without. George Akerlof’s justly famous “The Market for Lemons” proved that used cars cannot be sold because sellers know more than buyers. Yet CarMax thrives. Life, property, and auto insurance markets at least exist, and function reasonably well despite the similar theoretical possibility of asymmetric information. Life insurance is also “guaranteed renewable,” meaning you are not dropped if you get sick. Is the story even true? Do most people, with knowledge of aches and pains, really know so much more about likely cost than an insurance company armed with a full set of computerized health records, actuaries, health economists, and whatever battery of tests it wants to run? Or is asymmetric information market failure in health insurance just a myth passed from generation to generation, despite functioning markets in front of our eyes? Now the real world does see a big “adverse selection” phenomenon. Sick people are more likely to buy insurance, and healthy people forego it. But the insurance company does not charge people the same rate because it can’t tell who is sick or likely to cost more— the fundamental, technological, and intractable information asymmetry posited in your economics class. The insurance company charges the same rate because law and regulation force it to do so. The insurance company is barred from using all the information it has. Regulation seems to feel that we have the opposite information duduk perkara; insurers know too much. The centerpiece of the ACA, after all, is banning the use of information, that is, preexisting conditions, not a great regret that insurers cannot tell who has preexisting conditions in order to charge them more.  [Like many others Noah took both sides of this. People know more than doctors so the is adverse selection. Doctors know more than people so there are incomplete markets, and people can't shop.] This source of adverse selection is the legal and regulatory persoalan, not the information duduk perkara of economic theory, and easily solved. If insurance were freely rated, nobody would be denied. Sick people would pay more, but “health status” insurance or guaranteed renewability solve that dilema and eliminate the preexisting conditions dilema. Adverse selection due to fundamental information asymmetry in an unregulated market is, as far as I can tell, a cocktail-party market failure. It is a nice story, but does not quantitatively account for the real world. Furthermore, the ACA is not a minimally crafted regulation to solve the duduk perkara that people know more than their insurance companies can know about their health. Once again we are subject to the logical fallacy of accepting the entire regulatory structure because of one alleged failure of a hypothetical free market. D. Shopping Paternalism Defenders of regulation reiterate the view that markets can’t possibly work for health decisions: “A guy on his way to the hospital with a heart attack is in no position to negotiate the bill.” “One point I cannot agree with is that competition can work in healthcare, at least as it does in other markets. I cannot fathom how people faced with serious illness will ever make cost- based decisions.” “What about those who currently don’t have the background and/or the economic circumstances to consume healthcare, (e.g. take anti-hypertensive medicine instead of [buying] an iPhone)?” Ezra Klein trying to understand why healthcare prices are so high and so obscure, writes: "Health care is an unusual product in that it is difficult, and sometimes impossible, for the customer to say “no.” In certain cases, the customer is passed out, or otherwise incapable of making decisions about her care, and the decisions are made by providers whose mandate is, correctly, to save lives rather than money. In other cases, there is more time for loved ones to consider costs, but little emotional space to do so— no one wants to think there was something more they could have done to save their parent or child. It is not like buying a television, where you can easily comparison shop and walk out of the store, and even forgo the purchase if it’s too expensive. And imagine what you would pay for a television if the salesmen at Best Buy knew that you couldn’t leave without making a purchase." [Noah is also not being particularly original!] New York Times columnist Bill Keller put it clearly, in “Five Obamacare Myths:” "[Myth:] The unfettered marketplace is a better solution. To the extent there is a profound difference of principle anywhere in this debate, it lies here. Conservatives contend that if you give consumers a voucher or a tax credit and set them loose in the marketplace they will do a better job than government at finding the services—schools, retirement portfolios, or in this case health insurance policies— that fit their needs. I’m a pretty devout capitalist, and I see that in some cases perorangan responsibility helps contain wasteful spending on health care. If you have to share the cost of that tambahanM.R.I. or elective surgery, you’ll think hard about whether you really need it. But I’m deeply suspicious of the claim that a health care system dominated by powerful vested interests and mystifying in its complexity can be tamed by consumers who are strapped for time, often poor, sometimes uneducated, confused and afraid." “Ten percent of the population accounts for 60 percent of the health outlays,” said Davis [Karen Davis, president of the Commonwealth Fund]. “They are the very sick, and they are not really in a position to make cost- conscious choices.” Now, “dominated by powerful vested interests and mystifying in its complexity” is a good point, which I also just made. But why is it so? Answer: because law and regulation have created that complexity and protected powerful interests from competition. And is the ACA really creating a simple clear system that will not be “dominated by powerful vested interests?” Or is it creating an absurdly complex system that will be, completely and intentionally, dominated by powerful vested interests? But the core issue is these consumers who are “passed out, or otherwise incapable of making decisions about [their] care,” “strapped for time, often poor, sometimes uneducated, confused and afraid,” and “not really in a position to make cost-conscious choices.” Yes, a guy in the ambulance on his way to the hospital with a heart attack is not in a good position to negotiate. But what fraction of healthcare and its expense is caused by people with sudden, unexpected, debilitating conditions requiring immediate treatment? How many patients are literally passed out? Answer: next to none. What does this story mean about treatment for, say, an obese person with diabetes and multiple complications, needing decades of treatment? For a cancer patient, facing years of choices over multiple experimental treatments? For a family, choosing long- term care options for a grandmother with dementia? Most of the expense and problem in our healthcare system involves treatment of chronic conditions or (what turns out to be) end-of-life care, and involve many difficult decisions involving course of treatment, extent of treatment, method of delivery, and so on. These people can shop. Our healthcare system actually does a pretty decent job with heart attacks. And even then . . . have they no families? If I’m on the way to the hospital, I call my wife. She is a heck of a negotiator. Moreover, healthcare is not a spot market, which people think about once, at fifty-five, when they get a heart attack. It is a long-term relationship. When your car breaks down at the side of the road, you’re in a poor position to negotiate with the tow-truck driver. That is why you join AAA. If you, by virtue of being human, might someday need treatment for a heart attack, might you not purchase health insurance, or at least shop ahead of time for a long-term relationship to your doctor, who will help to arrange hospital care? And what choices really need to be made here? Why are we even talking about “negotiation?” Look at any functional, competitive business. As a matter of fact, roadside car repair and gas stations on interstates are remarkably honest, even though most of their customers meet them once. In a competitive, transparent market, a hospital that routinely overcharged cash customers with heart attacks would be creamed by Yelp.com reviews, to say nothing of lawsuits from angry patients. Life is not a one-shot game. Competition leads to clear posted prices, and businesses anxious to give a reputation for honest and efficient service. So this is not even a realistic situation. To be sure, some conditions really are unexpected and incapacitating. Not everyone has a family. There will be people who are so obtuse they would not get around to thinking about these things even if we were a society that let people die in the gutter, which we are not, and maybe some hospital somewhere would pad someone’s bill a bit. (As if they do not now!) But now we are back to the straw man fallacy. Once again, the idea that ACA is a thoughtful, minimally designed intervention to solve the remaining masalah of poor negotiating ability by people with sudden unexpected and debilitating health crises is ludicrous. As is the argument that we should accept the entire ACA because of this issue. Take a closer look at Keller and Davis’s statement: “strapped for time, often poor, sometimes uneducated, confused and afraid,” and “not really in a position to make cost- conscious choices.” We are talking about average Joe and Jane here, sorting through the forms on the insurance offerings to see which one offers better treatment for their multiple sclerosis or diabetes-related complications. If Joe and Jane cannot be trusted to sort through this, how in the world can they be trusted to figure out whether they want a fixed or variable mortgage? Which cell phone or cable plan to buy? To deal with auto mechanics, contractors, lawyers, and financial planners? How can they be trusted to sign marriage or divorce documents, drive, or . . . vote? We have a name for this state of mind: legal incompetence. Keller, Davis, and company are saying that the majority of Americans, together with their families, are legally incompetent to manage the purchase of health insurance or healthcare. And, by implication, much of anything else. Yes, there are some people who are legally incompetent. But—straw man again—Keller and Davis are not advocating social services for the incompetent. They are defending the ACA, which applies to all of us. So they must think the vast majority of us are incompetent. If not blatant illogic, this is a breathtaking aristocratic paternalism. Noblesse oblige. The poor little peasants cannot possibly be trusted to take care of themselves. We, the bien-pensants who administer the state, must make these decisions for them. Let me ask any of you who still agree, does this mean you? When you are faced with cancer, do you really want to place your trust in the government health panel, because they will make better decisions than you, with your doctor and family? Or is this just for the benighted lower classes, and you and I, of course, know how to find a good doctor and work the system? Choice is always between alternatives. Sure, some people make awful decisions. The question is, can the ACA bureaucracy and insurance companies really do better? Yet you would not trust them to buy your shirts? And once again does the entire gargantuan bureaucratic apparatus of the ACA follow, not from the proposition that there is some fundamental economic market failure, but because . . Americans are no good at shopping? No. Health is not too important to be left to the market. Health is so important—and so varied, so personal, and so subjective— that it must be left to the market. If you do not trust the vast majority of people to make the most important decisions of their lives, and a government bureaucracy can make better decisions on their behalf, you are a devout patrician, not a devout capitalist. Well, that was fun, wasn't it? You may or may not agree. You may think I go on too long. But you can't possibly write that I "ignore" Noah's arguments. By the way, if we're going to get huffy about "ignoring" classic writings of Nobel Prize winners on health care, Noah really shouldn't ignore this classic by Milton Friedman Noah also starts with a logical whopper: Americans, in general, support government-provided universal health care. A Pew Research Center survey taken in January found that 60 percent say that it’s the responsibility of the federal government to make sure that all Americans have health coverage. This should be on the SAT reading comprehension test. "Does the evidence support the proposition?" No. "responsibility... to make sure that all Americans have health coverage" is not "support government-provided universal health care." I support the former, and  not the latter. There are lots of ways, including involving extensive deregulation combined with robust charity care, to deliver "health coverage" without "government-provided universal health care." So this ends up, really, being another post about language and rhetoric. What is going on with Noah, and with Bloomberg, and their fellow travelers, that such gaping holes of basic logic pass muster? That you can write a personal attack without making it through a blog post, let alone doing 10 seconds of googling to find if your allegations have any basis at all? I'll leave it to you to fill out the names and analogies for the rhetorical strategy. I guess if they think so little of American's shopping competence, they think equally little of their critical reading capacity. Update: Thanks to a correspondent who pointed it out, we can now add Brad DeLong to the list of people who can't even be bothered to link to an article they want to "smackdown," let alone show any sign of reading it. This is, however, not news.
Sumber http://barokongnetwork.blogspot.com

United - Barokong

Commentators seem to have noticed a lot of the economics  of the United fiasco: Yes, don't stop auctions at $800. (WSJ review and outlook.) Yes, if you need employees at Louisville so badly, call up American and buy a first class ticket. Book a private jet. Or, heck, you're an airline . Bring up another plane. Don't drag people off planes to save a measly $500. The one economic point that I haven't seen:  the whole issue also comes down to airlines' use of personalized tickets to price discriminate. (And most of the TSA's job is to enforce that price discrimination by making sure you are the name on the ticket.) If you could resell tickets, the problem would go away. Then the airline must sell only as many tickets as there are seats on the plane, as concerts do. If people aren't going to show, they put their tickets on ebay -- or another quick peer to peer ticket trade platform -- and someone else buys them. Including the airline, if it wants to send employees around. Standby disappears -- want to get on the plane? Bid for a ticket. We still get efficiently full planes -- fuller, even -- nobody ever gets bumped, and the auction for the last seat is going on constantly. Yes, one of the hardest lessons in economics is that price discrimination can be efficient. Business class cross subsidizes leisure and pays for fixed costs. But the airlines could speculate in their own tickets as well, so its' not clear in a data mining race that scalpers would reap the price discrimination profits better than the airlines themselves. Holman Jenkins adds, in a brilliant column, While we’re at it, what’s wrong with Chicago airport security? Did not a single officer say, “I’m having no part of this. If United can’t deal with its overbooking mistakes in a civilized, non-cheapskate way, how is it my job to manhandle innocent customers?” This also smacks of our national malaise—police who need an armored personnel carrier before they’ll roll up and serve a warrant, who wait outside Columbine High until they’re sure the shooting has stopped. And do not the other passengers rebel at seeing such treatment? Well, maybe not the first time, but I suspect the next time they try to drag a customer off an overbooked plane, there will be a riot. Update : More at the always excellent Marginal Revolution.  One negative reaction, already on display at United -- the crush to get on the plane first will increase. Getting on United vs. Southwest is a study in bad incentives. Southwest: you get a number. People peacefully line up when called, and quickly get on the plane. Southwest also gives free (bundled in the ticket price) bags, so people aren't hauling trunkolads of junk for the overheads. United: Board by groups, and now everyone with a credit card is in group 1. They charge for bags. Midway through the scramble for overhead space, the bins fill up, then people have to start swimming upstream with their huge bags to gate check. If ever there was a way to make an airplane board slower, having people swimming against traffic with huge bags is it. The result, you line up like it's the New Delhi airport (or Southwest, circa 1995) and 100 million dollars of United plane plus crew sits on the ground.  I do it too (I'm a rational consumer!) Quite a few times I have had someone show up with a boarding pass with my seat number in it, and being there first makes a big difference.   Another fully rational response -- you really want to be a high mileage customer. The love/hate relationship with United will get deeper.
Sumber http://barokongnetwork.blogspot.com