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They would get an F (actually, we at Rochester are too polite for that, we actually give out “E’s” instead of Fs. Does teaching the laws of economics make me a racist, gay-bashing assassin? Here are just a few samples:

I absolutely reject that notion

Well, now that is awfully scientific. When someone questions you, simply say, “I reject the notion.” Does that win a debate these days? Did the Jets beat the Pats today? “I reject that notion” says the Pats fan. Did Bush trash our civil rights? “I reject that notion” says the neocon. But this is the lease of the problems here. Simply put, call things what you want, tax, fee, mandate, or something else. You are increasing the burden of government, both directly and indirectly on a large swath of people you campaigned on not harming. No amount of pushing the costs downhill or behind a curtain (cap and trade anyone? what’s the matter with a direct tax?) makes them any less real. It just makes it harder for the typical voter to see them, and makes it easier for you to call me a racist and assassin for pointing out that there is no difference in practice between these things.

The feds have been pulling this nonsense for years. We pay more in fees and in indirect regulatory costs (and inflation) than we do in federal income taxes. So President Bush got to say he reduced taxes just by lowering some marginal tax rates. How can you look at him with a straight face when you realize that tax revenues exploded under his regime? How can you look at him with a straight face when payroll tax collections skyrocketed during his regime? How can you look at him with a straight face as the price level increases by 2% to 3% per year (inflation taxes anyone)? How can you look at him in the face when the cost of adhering to environmental regulations alone amounts to hundreds of billions per year? No, you do not get a free pass just because the burden you are imposing on us is not called a tax.

Back to the article:

“What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore,” said Obama. “Right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase.”

Where to begin? I like to see how a man of the left finds it unacceptable that “other people are carrying your burdens!” Seriously! He gets a free pass on this? Not from me. And remember, this is someone we embraced talking to our schoolchildren, you know, just to motivate them. If that is how we want it, then our little schoolchildren ought to know when he is behaving like one.  And some more science, “NOBODY” considers it a tax increase when we are forced to have auto insurance. Not a few people or less than a majority of people? Nope, absolutely nobody.

But wait a minute – can the uninsured both be a burden and a charity case at the same time? It is a fancy semantic dance to be able to get away with this. Because if he acknowledges that he is only talking to people who can afford insurance but choose not to get it, does that not undermine some of the justification for health care reform? We have Medicaid for folks that cannot afford it, and Medicare for folks that are older. If you are not in those groups (many in the latter group notwithstanding) then you can technically afford insurance.

Oh, by the way, even some of the left seem to understand this “tax” thingy.

He told CBS’ “Face the Nation” that he will keep his pledge not to raise taxes on families earning up to $250,000, and that much of the final bill – hundreds of billions of dollars over the next 10 years – can be achieved from savings within the current system. Coming up with the rest remains a key legislative obstacle.

Snickers and coughs from the audience … “bull_h_t!” First of all, by increasing the federal budget deficit by over a trillion dollars from the previous imprudent spender, you are increasing taxes on all manner of people. By borrowing today instead of taxing people today does not change this fact. The debt will have to be serviced by future taxes. If you don’t think this will happen, then the debt can either be repudiated – turning us into an official banana republic (I don’t think we are that silly), or it can partially be inflated away. In any of those scenarios, the burden of government largesse will be “shared” throughout the population. And the more that it takes the form of inflation, the worse it will be for folks earning less than $250,000.

The other nonsense in this statement is the idea that this health care program can pay for itself. I thought insurance companies were greedy profit seekers? But their margins happen to be in the low single digits (3% if I recall correctly). Why are they not efficiently extracting these hundreds of billions for themselves now? Does it make sense for greedy profit seekers to use resources this inefficiently?

Obama put his support behind the idea of taxing employers that offer high-cost insurance plans.

At least he knows this is costly. But did he ever learn about tax incidence? By placing a cost on employers, does he really believe that workers bear none of this? It flies in the face of basic economic theory and mountains of evidence. Here is but one example (Anderson, Patricia M., and Bruce D. Meyer. “The Effects of the Unemployment Insurance Payroll Tax on Wages, Employment, Claims and Denials.” Journal of Public Economics. v78.n1-2 (2000): 81-106.). Just as I mentioned above, by tucking the taxes inside of other programs, he gets away with saying he is not raising taxes specifically on you, but do you care about semantics?

Obama told Univision’s “Al Punto” (“To the Point”) that the strong opposition to his plan is part of a political strategy.

Yup, political. I am famous for that. Hardcore Republican. Does teaching proper economics now constitute a political strategy? I guess when prices go up, I should be teaching that we don’t know consumers’ likely responses – in order to be politically neutral. I guess when we claim the payroll tax is share evenly between employers and employees, I should not demonstrate how that the legal incidence is irrelevant, and that relative supply and demand elasticities matter – you know, in order to be more neutral and unbiased. I guess I should be claiming that oil reserves have been falling for years, that resource prices have been increasing for years, that there is no such thing as dead weight loss, that opportunity costs are an interesting “theory”, that scarcity is a concept made up by economists seeking to maintain their academic positions, and so forth. Really?

And even if it is not on the economics, does opposing something on moral grounds make it political? If so, then I am guilty as charged. The problem is, he is actually right. The “right” has jumped all over this topic as a way to damage the President – doing much damage to the understanding of what the major health care problems really are. They are hacks – who will find blogs like mine just to cherry pick some information to their liking, and then willy nilly apply it to all manner of issues. But the left is equally guilty. They find their favorite economic theory such as externalities or information problems, and then run around claiming that these things screw up the reasonable functioning of virtually every market, and therefore justify government intervention. They, too, are hacks. And the worst part for folks like me, who make a living talking about and studying these things, is that it seems the political process leads to the demonizing of me and my “ilk” for having the temerity to speak out about the bad economics.

The American health care “debate” is making me stupid. I should not even be responding to it. And I am upset that I do not have the control to just let it be. Maybe if the government put a tax on blog posts, I would be more careful in the things that I posted. But so long as this market failure is allowed to persist, I guess I will continue to publicly make a fool of myself.

One Response to “If My Eco 108 Students Pulled Such Nonsense”

  1. Harry says:

    I hope the wise Wintercow is not getting heat from his fellow searchers for wisdom.

    I, too, am tired of the health care debate, but we are nearing what may be the socialists’ last fling.

    Every time I see these people on television, I’m reminded of the scene in Apocalypto, where the high priest sacrifices yet another blue-painted freeman to appease Kulkukan, in the season of his society’s discontent, blaming bad harvests on something other than himself or the crowd, implying that more human sacrifice will do the trick. One of the best parts is when the crowd cheers, just as a head is thrown down the pyramid to be caught by skilled men with nets to catch it. The priest gets lucky with a solar eclipse, saving him from spilling a further river of blood that day, but we all know how he will end up.

    Remember that Jaguar Paw eludes his tormentors, saves his family, and takes them into the forest from the men who come in ships, who would impose a better order for the heathen.

    This parable is both disquieting and hopeful. I’m sure it’s on a CD, and maybe you should schedule a viewing.

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