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Weekend Ponderance

I don’t like to comment too much on the daily politics that makes for much of the news headlines. So, I don’t have anything to offer you here on the ObamaCare vote itself, or the politics of the Syrian problem and so forth. But I am very intrigued by some of the commentary on it. Take this recent post from the (worth reading) folks at the Incidental Economist:

 I’m posting because we should absolutely expect implementation glitches, hiccups, mistakes, and misfires to (a) vary by state and (b) depend, in part, on the type of political squabbling that keeps Obamacare at the top of Wonkbook.

I absolutely agree. And I don’t think it would be fair for Team Reebok to point to this as a problem anymore than I think it fair for Team Nike to point to Team Reebok intransigence as the reason for the hiccups. I have, what I think, is a deeper point. And no, I am not accusing the folks at TIE of being psycho-irrational statists.

My point is this. In this apologetic for blundering through the early stages of a massively complex government program, we are told that this is to be expected. That trial-and-error is the part of the process. That learning will happen. That efficient rule-making will happen and so forth. Which sort of begs the question (in a big picture sense), doesn’t it? Don’t folks who dislike markets, and markets in the health care sector in particular bemoan the fact that markets operate by trial and error, that there is no plan, that there is learning by doing, that it is out of control and can’t guarantee particular outcomes? Of course they do. And now when that’s a problem in a planned program, it’s suddenly to be expected and no reason need be given for why the trial-and-error, learning, updating and feedback process in this new political arena is somehow going to outperform a free alternative? Weird.

What’s also weird is this. Isn’t the allure of planning that this sort of thing is minimized or even eliminated?

Nice job.

5 Responses to “Weekend Ponderance”

  1. Greg werbin says:

    Not for me. It seems to me that the pre-ACA quasi-markets for health care goods had a number of persistent, undesirable structural features, and these are the targets of the ACA. ER overuse (probably) does not arise from tatonnement. Trial and error could be a suitable tradeoff in exchange fr a serious policy crack at some serious issues.

    And of course that doesn’t apply to other markets. Trial and error in labor markets, for instance, is one of the big problems because “errors” (getting laid off after a market correction) propagate forward to affect future “trials” (a litotic layoffs have been shown to negatively affect mental health, which could in turn hurt the job search).

    • wintercow20 says:

      Of course, the policies in place, like the mini-ACA in Massachusetts that were targeted at precisely the overuse of ERs has not really led to a reduction in uncompensated care costs and ER use. That’s not evidence against planning on its own, but it does raise the question of whether the error part of this trail has embedded in it the learning mechanisms that other institutional arrangements have? For example, what will the response in MA be to the “failure?”

      Furthermore, the trial and error process propogates errors in a planning setting as well. So, when one gets laid off as a result of labor market trial and error (assume for now this is all market driven business cycle stuff or market driven tech change stuff), yes there is a “black mark” on a laid-off worker going forward, but that does not imply that rigging labor markets is the solution – it does suggest that reasonable safety net programs could be enacted that are very welfare improving, which is my point about planning.

      • wintercow20 says:

        Here is the newest research on the relationship between mental health and layoffs (I may post this as a separate post):

        The Effect of Depression on Labor Market Outcomes
        by Lizhong Peng, Chad D. Meyerhoefer, Samuel H. Zuvekas – #19451 (HE)


        We estimated the effect of depression on labor market outcomes using
        data from the 2004-2009 Medical Expenditure Panel Survey. After
        accounting for the endogeneity of depression through a correlated
        random effects panel data specification, we found that depression
        reduces the likelihood of employment. We did not, however, find
        evidence of a causal relationship between depression and hourly wages
        or weekly hours worked. Our estimates are substantially smaller than
        those from previous studies, and imply that depression reduces the
        probability of employment by 2.6 percentage points. In addition, we
        examined the effect of depression on work impairment and found that
        depression increases annual work loss days by about 1.4 days (33
        percent), which implies that the annual aggregate productivity loses
        due to depression-induced absenteeism range from $700 million to 1.4
        billion in 2009 USD.


  2. Harry says:

    As they argue, there are always glitches in the grand plan that “progressives”, communists, social democrats and others propose, and attempt to implement.

    Without going into a list of steady failure to provide the material happiness they have promised for more than a century and a half, let me talk about National Health Insurance, AKA Hillary Care.

    I remember it well. I read the entire bill, and wrote to my Democrat congressman about it. I met with him about a different abomination of government power, but did learn how appalled he was about the future of HillaryCare. That meeting was, if I remember correctly, in 1993.

    What happened was that Harry and Louise had questions about what Hillary and professor Ira Magaziner from Brown had cooked up. Phil Gramm stood up in the U.S. Senate and said it would be over his dead body that socialized medicine would be passed, and that was it.

    There was much hand wringing after it went down, and I read many arguments about the strategic mistakes decided by Hillary and Ira — in particular, that they had aired their smart progressive ideas too early, and had opened themselves to the scrutiny of the Enemy, a mistake that neither Lenin, nor Nancy Pelosi, nor Tom Harkin, nor any wise leftist would have made. Bad legislative strategy.

    So when ObamaCare went down on Christmas Eve, Ben Nelson and Mary Landrieu had their willing spaghetti arms twisted. As the Vice President told the President, this is a big f****** deal. Now that is one gentleman speaking to another.

    Were I a smart, dutiful, student at the U of R, having read most of the required reading for many of my classes (nobody does everything), I would be mad as hell over Obamacare. I would be mad as hell over the inspirational messages in the unisex toilet stalls, urging! us to support carbon taxes.

    Had I watched television, instead of studying in a library carrel for the next Rizzo quiz, I might have watched the amazing Dennis Kuchinich interviewing Bashir Assad, and thinking Assad was speaking more sincerely than the President did for maybe the past three years, plus or minus three years.

    • Harry says:

      I should have said,”Were I that student, and had been watching television…”

      Of course it is easy to be in the war room and imagine this student jumping out of the foxhole and running up the hill against a hailstorm of green and red bullets, putting his or her GPA in the balance, not to mention expulsion, excommunication by the Spanish Inquisition, burning at the stake, being spurned by people of the opposite sex, purged, erased, etc. But you still can be mad as hell.

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