A new game

Are you smarter than a Nobel-prize winning economist?

There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket.

This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either — they’re not in business for their health, or yours….

The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (”I hear they’ve got a real deal on stents over at St. Mary’s!”) That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

So, here’s the challenge for the economically literate readers here. Can you spot the flaws in Paul Krugman’s assertion that health care is a special case not subject to the basic laws of economics?

Liberal Fascism – Chapter Six

I found this chapter to be interesting, because it managed to be extremely informative without ever quite pulling a coherent case together. In certain places, it’s more than a little apparent that Liberal Fascism is a debut and I thought that this chapter was one of them. But the value of the historical material serves to redeem the structural flaws. On a tangential note, one of my great-uncles, an accomplished artist, was a devoted Dewey enthusiast. While I quite liked him, even as a child I could never quite lose the impression that there was something rather ominous about the philosophy.

Next week’s reading is Chapter Seven, “Liberal Racism: The Eugenic Ghost in the Fascist Machine”. The quiz for it will be posted on Saturday, August 1st.

Bank Failures: picking up the pace

Only two weeks ago, I estimated that bank failures calculated as a percentage of total deposits would be more than twice that of 1931. My estimate of 0.77 percent was actually a slight exaggeration of that which would be a straightforward doubling of the January-June total, since it included bank failures 46 through 52 that were actually reported on July 2nd. Therefore, from a strict calender perspective, they should not have been included in the failures of the first six months.

My reasons for stretching the period for two days to include those additional seven banks were twofold. First, the FDIC always reports bank failures at the end of the day on Friday, so it’s probable that most of those seven banks actually filed their paperwork prior to the end of June. Second, because the pace of the failures appears to be increasing, leaving them out would have led to an estimate that was likely to be too low.

This was almost certainly the right decision because with one Bank Failure Friday still left in July, one bank has failed for each of the twelve days since the column was published on July 13th. These 64 failed banks held deposits sufficient to bring the running total to $34.9 billion for the year; when multiplied by 12/7, this indicates a 2009 deposit failure rate of 0.79 percent. Furthermore, the shaky state of the $7.6 billion Corus Bank and the $14 billion Guaranty Financial Group strongly suggests that failed deposits will exceed one percent of the $7.6 trillion in total bank deposits by the end of the year. This would be more than THREE times the percentage of failed deposits in 1931.

I have to admit, I always find it to be a little ominous when my alarmingly bearish observations turn out to be too optimistic.

The myth of the flat earth

It would appear that the Darwinist habit of attempting to shift the discourse by attacking their critics in lieu of defending their beliefs is not a new one:

Christian theologians, almost without exception, likewise accepted the fact that the earth is a sphere. The only two Christian writers known to have advocated a flat earth were a 4th-century heretic, Lactantius, and an obscure 6th-century Egyptian Monk, Cosmas Indicopleustes. Later, these two obscure and uninfluential writers were used as the prime evidence to prove that the flat-earth view was accepted by the Church as a whole—or at least by large parts of it.

While I was aware that the Catholic Church had never declared any doctrine of a flat earth, I wasn’t aware that the Darwinists had dug so deeply into the obscure and the heretical in order to provide a basis for their misleading accusation of a dogmatic Christian belief in a flat earth. Lactantius and Cosmas Indicopleustes – this is the first I’ve ever heard of either man – weren’t exactly Tertullian and Origen, much less Augustine and Aquinas. Also, if anyone is in possession of any information that contradicts the information at the link, I’d quite like to see it.

Because as it stands, this tends to call the intellectual honesty of the nineteenth century champions of Darwinism into question in addition to further demonstrating the historical unreliability of the secularist camp.

A RINO’s doubts

David Brooks wonders why he calls himself a Republican:

It made me wonder, are they really my guys? Do I have guys anymore?

Certainly in childhood I felt a strong affinity for the Democrats. Everybody I knew was one. The Democrats were obviously forces for justice and morality. Then sometime in adulthood I did come to naturally assume that the Republicans were the vehicles for the things I thought were best.

But you never know the workings of your own mind until you get an unexpected cold blast from somewhere deep inside. The thought that I’m part of the G.O.P.’s fan base sent such a blast, though it’s complicated.

Needless to say, he is very far from the only Republican to wonder why David Brooks calls himself a Republican. There’s certainly very little that’s “republican” about his ideology as evinced in his columns. And Gail? They really don’t….

Health care: the economic obstacle

It is up to Mr. Orszag to help the president deliver on two bold promises: to provide near-universal health care without adding to a budget deficit already at record levels, and to reduce health-care costs for regular Americans and businesses. Those promises have Mr. Orszag on a quest to whittle down health-care costs currently borne by the federal government and to find ways to change how medicine is practiced. But the history of medical cost control, like the push for universal health care, has been fraught with trouble. It’s much harder to cut spending than increase it — as Congress demonstrated when it created, then expanded, the Children’s Health Insurance Program, and when it added prescription-drug coverage to Medicare.

Translation: The Obama administration’s goal is “to provide near-universal health care” (expanded demand) and “to reduce health-care costs for regular Americans and businesses” (decrease in price). Now, even those of you who are not economics majors should have learned enough here to know that increased D combined with decreased P requires a big shift of the supply curve downward. To the extent Obama’s plan implements his two goals, an similar order of magnitude downgrade in the amount and quality of medical services are unavoidable. There is no way to avoid this as the economic logic is remorseless.

Meanwhile, Jonah Goldberg explains how ObamaCare cannot possibly be considered a “right” in any meaningful sense of the term.

Fake Steve Jobs on China

His fake conscience is uneasy:

We all know that there’s no fucking way in the world we should have microwave ovens and refrigerators and TV sets and everything else at the prices we’re paying for them. There’s no way we get all this stuff and everything is done fair and square and everyone gets treated right. No way. And don’t be confused — what we’re talking about here is our way of life. Our standard of living. You want to “fix things in China,” well, it’s gonna cost you.

This is a real problem. One simply can’t manufacture anything in the West if one wishes to be able to sell it to Western customers. And then, the fact that Western customers aren’t actually paying for a significant percentage of these things, but buying them on credit only compounds the problem.

Add David Ricardo’s theory of Comparative Advantage to the list of things supposedly settled of which I have grown skeptical.

Now they’re just getting absurd

On the other hand, I suppose climate change that isn’t happening is every bit as dangerous as terrorists who aren’t attacking:

Massive crop devastation, melting glaciers, water shortages, millions of displaced people — all of these will drag the US military into conflict if global climate change goes unchecked, a Senate panel was warned today.

The Senate Foreign Relations Committee hearing, convened by Senator John F. Kerry of Massachusetts, focused on what so far has received only modest attention in the climate change debate: the effect it is bound to have on national defense.

“Addressing the consequences of changes in the Earth’s climate is not simply about saving polar bears or preserving the beauty of mountain glaciers,” retired Navy Vice Adm. Lee F. Gunn, president of the American Security Project, told the panel. “Climate change is a threat to our national security.”

And frankly, even if AGW/CC was occurring, I don’t know if the U.S. military would be up to the challenge of defending the American people from rampaging super-evolved aquatic polar bears anyhow.