Pursuit of Truthiness

my gut tells me I know economics

ACA Repeal- Is There Any Safe Way Out?

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It’s not the first time I’ve thought so, but it now looks like efforts to repeal most or all of the ACA are now well and truly dead, and Republicans are wondering what to do instead.

The option currently on the table is the so-called “skinny repeal” of the ACA that repeals only the individual and employer mandates, leaving the rest in place. I haven’t said much about the repeal efforts so far, partly because I don’t think the economics of the issue are likely to change minds on either side. But the “skinny repeal” is one case where the effects are a bit different than you might think at first.

It might seem like a “skinny repeal” is a compromise position between full repeal and no repeal, and so it would have effects on premiums, the number of uninsured, and other outcomes of interest that are in between the two. But in fact, it is likely that repealing  the individual mandate alone would be worse than either full repeal or no repeal, because it more likely to cause an adverse selection death spiral.

Basically, pre-ACA in most states, individual insurance was cheap if you were healthy but hard to get if you were sick. With the ACA insurers had to sell to everyone (sick and healthy) at the same price, so healthy people were forced to pay more but sick people benefited. Take away only the individual mandate but leave the other parts that make insurance more expensive and healthy people leave the market; when only sick people buy insurance then average costs go up, so premiums go up, so more healthy people leave… and soon insurers will just leave the market because they are losing so much money, so both healthy and sick people are worse off.

I can see the political appeal of doing guaranteed issue but dropping the individual mandate; it sounds like a compromise, and dropping guaranteed issue sounds mean (you must hate sick people) while dropping the mandate sounds nice (freedom!). But it is likely to be the worst of both worlds. Several states have found this out the hard way, including Massachusetts (in a fascinating political twist, this was actually why Romneycare really was different from and better than Obamacare).

If Republicans really want to kill off part of Obamacare in order to take a scalp and say with a somewhat straight face they kept their repeal promise, the employer mandate is much safer to repeal on its own; it might actually strengthen the exchanges by pushing more healthy people on to them, and it was a bit bizarre and counterproductive in the first place from the economist’s perspective. Just repeal the employer mandate, claim victory, and go home. Or, while I’m dreaming, turn to reforming the supply side of health care instead of messing around with insurance.

 

 

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Written by James Bailey

July 27, 2017 at 4:14 pm

Want single-payer? Figure out how to fix Medicare.

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The biggest barrier to single-payer in the US, other than politics, is the inefficiency of Medicare. Medicare alone spends more than $2000 per American but only manages to cover 14% of us. Yes, they are a particularly costly 14%- but some governments, like Greece and Portugal, manage to cover 100% of their population by spending similar amounts.

Medicaid spends just under $2000 per American and manages to cover 20% of the population. Together our two big government health programs spend about $4000 per American and cover 34% of the population. Almost every country with universal coverage manages to achieve it while their government spends less than $4000 per person.

This means that Medicare and Medicaid are collectively either 3 times better, or 3 times more inefficient, than the government health programs in other rich countries. Which do you think it is?

The problem isn’t that American taxpayers aren’t willing to finance universal coverage. The problem is that they already pay enough for a competent government to bring about universal coverage, but our government does not seem to qualify.

Written by James Bailey

March 1, 2017 at 11:11 pm

Why I Don’t Post About The Latest Outrage

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Most of all, because when a dozen of my Facebook friends are already posting about the same thing, it would be boring to repeat them.

But I also seriously wonder if making that 13th post might do more harm than good. Not just because it might lead people to hasty over-reactions that do obvious harm. But because talking about problems doesn’t always have therapeutic effects; sometimes it can very directly make things worse.

First, because it can be bad as therapy. Second, because making it seem as if the outrageous behavior in question is common makes people more likely to do it– even for the worst crimes. Finally, because making it seem as though more people are victims facing an unjust world they can’t do anything about removes their internal locus of control, leading to all manner of worse outcomes.

Near my house, there is a billboard that keeps a running count of how many transgender people have been murdered this year. I assume it was put there by some well-meaning group that sees raising awareness as a necessary first step to reducing the number of murders. But suppose there was a group whose goal was to make transgender people live in fear, scare others away from transitioning, and encourage more copycat murders- wouldn’t they want to put up the exact same billboard?

Next time you see some story that makes you angry, think before sharing it with everyone else. If it makes you feel better to post it, then I suppose you might as well, but please don’t post merely out of a misguided sense that you are necessarily making the world a better place by doing so.

Written by James Bailey

October 2, 2016 at 11:59 am

Stop Feeding the Trolls

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So many of the problems of this decade could be fixed by people learning not to feed the trolls.
Most obviously, internet comment sections would only be half as terrible as they are now.
Donald Trump wouldn’t have got the nomination without the huge amount of free airtime from news channels covering his latest outrageous statement.

Growing political polarization is partly due to how the straw man / weak man fallacy is amplified by trolls. Many actual news stories are about the outrageous thing some random Twitter egg on the other side said.
Terrorism would be cut in half if shooting a bunch of innocent people weren’t the quickest way to get famous.
….
I just wish there were an easy way to fix this without censorship. The necessary culture change sounds incredibly difficult, but I hope that with time we will learn how to adapt to social media and 24 hour news.

For a start, I plan to never do terrorists’ jobs for them by sharing stories of their terror. I encourage my friends to do likewise.

Written by James Bailey

July 22, 2016 at 3:12 pm

Brainiac, by Ken Jennings- Highlights

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“If I’d had my way, this would have been just another quickie C-list celeb cash-in, full of my shallow ghostwritten thoughts on why tolerance is good and pollution is bad, filled out with some baby pictures and holiday recipes.”

In fact, in addition to telling the story of Jennings’ time on Jeopardy, it is a fascinating history of trivia, and exploration of whether and how trivia can be useful. Much of this is about quiz bowl:

“Quiz bowl has become a de facto farm club for the big-time game shows… when I took the written test at my Jeopardy audition, I remember thinking how much more arcane and elaborate a quiz bowl question on each of the fifty covered subjects would have been. I felt like a runner who’d been training in high-altitude Mexico City, just to get his lungs in such supercharges shape that events at lower elevations seemed like a piece of cake.”

“I’m no trivia superhero- at every college quiz bowl tournament I ever played in, there were other players who could double my score….I got lucky.” You and me both, Ken.

Quiz bowl prepares people well for answering questions correctly, if not necessarily for the other parts of being on TV: “List the five cleverest, most charming things about yourself! Do it in one sentence! Be funny!”

“Jeopardy, by its own contestant rules, is a once-in-a-lifetime chance. If you get a cramp in the last mile of a marathon or don’t quite make it up Everest, there is always next year. but you only get one shot at Jeopardy, and odds are you’re going to lose that very first game. Jeopardy is a shark, mowing through America’s self-declared intelligentsia with its huge, shiny teeth, claiming victims at the implacable rate of two a night (check local listings). You have to be in pretty good shape to escape the teeth for a night or two, but they get everyone eventually.” Way to end this on a high note…

“Nostalgia isn’t what it used to be anymore.”

Written by James Bailey

July 2, 2016 at 5:28 pm

Pope Francis and Economics: A Partial Reconciliation

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It is always easiest to evaluate the views of others by fitting them into pre-existing categories. When Pope Francis released his first encyclical, Evangelii Gaudium, many people pegged him as saying “left-wing economics good, free markets bad”. This lead to celebrations on the left and denunciations on the right. Some thought him to be showing ignorance of, or even Pope Paul V vs Galileo style hostility to, economic science.

https://www.nationalreview.com/sites/default/files/cover_overlay_20150907.jpg

After actually reading much of the encyclical, I found it much more nuanced. In particular, the Pope seems to be deeply ambivalent about the welfare state, warning of those who exploit the poor for their own political interest. He would much prefer that people earn a living through work:

“Welfare projects, which meet certain urgent needs, should be considered merely temporary responses”

“it is through free, creative, participatory and mutually supportive labour that human beings express and enhance the dignity of their lives”

Of course, he does want these workers to be earning a “just wage”. While many readers will assume this implies a government-mandated minimum wage, Francis doesn’t go there; one could just as well expect that he is encouraging just wages through increased human capital, tax credits, employer generosity, or something else.

He is generally supportive of private property and business:

“The private ownership of goods is justified by the need to protect and increase them, so that they can better serve the common good”

“Business is a vocation, and a noble vocation, provided that those engaged in it see themselves challenged by a greater meaning in life; this will enable them truly to serve the common good by striving to increase the goods of this world and to make them more accessible to all.”

Like many on the left, the Pope is worried about inequality. But his reason for worry isn’t really about the distribution of material goods, so much as the social distance that economic inequality can create:

“the worst discrimination which the poor suffer is the lack of
spiritual care”

“No one must say that they cannot be close to the poor because their own
lifestyle demands more attention to other areas. This is an excuse commonly heard
in academic, business or professional, and even ecclesial circles”

For those worried about his Argentine background:

“I am far from proposing an irresponsible populism.”

He concedes a role for science in figuring out how best to do all this, though it does sound like he wants to make economics oikonomia again:

“Economy, as the very word indicates, should be the art of achieving a fitting management of our common home, which is the world as a whole.”

In any hundred page document, it can be too easy to cherry-pick quotes. Indeed this is what I have done here, if only to balance the much larger number of pieces that cherry-picked the quotes that seem to be from another side. But real people are usually more complex than a one-dimensional political spectrum.

Written by James Bailey

April 15, 2016 at 4:56 pm

Selfish Reasons to Have More Kids

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American moms spend more time taking care of kids today than they did in the 1960’s. This is perhaps the most surprising of many bold but well-backed claims in economist Bryan Caplan’s book Selfish Reasons to Have More Kids.

“According to time diaries, modern parents spend an incredible amount of time taking care of their kids. As expected, dads do a lot more than they used to. Since 1965, when the average dad did only three hours of child care per week, we’ve more than doubled our efforts. Given how little dads used to do, though, doubling wasn’t hard. What’s amazing is the change in the typical mother’s workload: Today’s mom spends more time taking care of children than she did in the heydey of the stay-at-home mom [13 hours/week vs 10].”

The major argument of the book, backed up by many twin and adoption studies, is that parenting matters much less than we think- at least as far as children’s long-term outcomes are concerned. A lot of kids’ outcomes seem to be determined by factors outside parents’ control; the biggest way parents do influence their kids long-term outcomes is through genetics. Adopted kids generally end up with education, income, IQ, and many other outcomes being much more similar to their biological parents than their adoptive parents.

In turn, Caplan draws two main conclusions from this argument. One, lay off the tiger parenting, since all it accomplishes is to make kids miserable. Two, for those who do want to influence their kids: “The most effective way to get the kind of kids you want is to pick a spouse who has the traits you want your kids to have.”

Other interesting points:

US kids are about 4 times less likely to die during childhood today than they were in the “idyllic” 1950’s. The reason people think otherwise is because Law & Order SVU has replaced Leave it to Beaver on TV (and the rise of 24 hour news, et c). Homicides actually have gone up a bit, but this is overwhelmed by the massive decline in deaths from accidents and disease.

I thought that government “child bonus” payments were ineffective at promoting fertility, but Caplan cites research showing the opposite. Same with mandatory paid leave- the possible positive externalities of extra kids make me start to rethink my knee-jerk anti-regulation stance.

Artificial wombs are something I’d only heard of in science fiction. But apparently semi-functional prototypes already exist, and only government restrictions are holding back progress.

IVF + surrogacy = totally outsourced babies. Any rules against mass production and/or use by fertile people? This seems like a good way for any rich person to create an army of clones.

Written by James Bailey

January 25, 2016 at 7:48 pm

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