17 Aug 2012


DeLong, Economics, Federal Reserve, Insurance, Krugman, Market Monetarism, Shameless Self-Promotion 16 Comments

==> This was a post I did on ethanol policy and food prices a few weeks ago. There’s a surprise.

==> Don’t worry about ethanol mandates causing high food prices. The US military is here to save the day.

==> There’s a famous econ blogger out there, who thinks the authorities need to boost Aggregate Demand, who links to one of my posts criticizing him and opens by saying, “So I see that the usual suspects…” Which blogger do I have in mind?

==> Dan McCarthy vs. Brad DeLong

==> Can’t remember if I already posted this…Anyway, I refuse to stick up BlueCross at gunpoint. Or at least, I won’t drive to the bank to do so.

16 Responses to “Potpourri”

  1. Tel says:

    This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. … The Affordable Care Act requires BlueCross … to issue a rebate to you if BlueCross … does not spend at least 80 percent of the premiums it receives on health care services, such as doctors and hospital bills, and activities to improve health care quality, such as efforts to improve patient safety. No more than 20 percent of premiums may be spent on administrative costs such as salaries, sales and advertising.

    Just out of curiosity, if BlueCross had pooled up all those rebate cheques and built a new gym in your neighbourhood then sent you an invitation to use it once a week for free — would you have been happier about that? Would you have used it?

    I mean, maybe they already offer those things, but let’s presume they put the extra money into offering something better.

    • Bob Murphy says:

      Tel do you mean if they did that on their own? Or if the gov’t made them do it?

      • Tel says:

        Well I’m pointing out that doing so would be one way to comply with the Affordable Care Act, so I guess I mean that the government made them do it.

        Whether or not that fact gets advertised is another matter… I mean there are far more insurance regulations than I’m ever going to understand in my lifetime so I accept that it is basically impossible for me to even know exactly what was free choice and what was government mandate. You only knew in this particular case because BlueCross explained it to you… and even then you have to take their word on trust.

        Let me ask another question, if they sent you a rebate cheque with a letter saying, “This is perfectly normal, be cool with it,” would you have banked that cheque?

  2. Gee says:

    I thought this was in interest comment from Sumner’s blog:

    Scott Sumner: “Everyone, I see lots of people saying I’m a central planner because I want the Fed to determine the money supply. But I don’t, I want the market to determine the money supply.”

    Wouldn’t it be more accurate to say:

    “I’m not a central planner because I want the Fed to control the money supply. Rather, I’m a a central planner because I want to control the money supply myself using a brilliant formula I invented. We’ll call it ‘the market determining the money supply’… yeah, I know, it sounds like double-speak, but people like that sort of stuff. It’ll stick.”

  3. Blackadder says:

    Saying that NGDP targeting is central planning is pretty weak tea. You might as well say that minarchists are central planners because they want the government to protect property rights.

    • Joseph Fetz says:

      Hmm… let’s see here. You’re comparing an arbitrary measure to be implemented vs. a social institution that has been in place since the dawn of civilization? You must be drinking the lowest shade of Earl Grey, a truly weak tea.

      • Major_Freedom says:

        Rape and murder have existed since the dawn of humanity too.

        You’re right. We should call rape and murder non-arbitrary, historically ingrained and beneficial behavior that is a part of economic progress, and not dare to question those who commit it as engaging in non-inevitable destructive behavior.

        • Joseph Fetz says:

          Major Freedom, please reread what I said and make your analogy fit the criteria. The crimes of rape and murder couldn’t even exist without property right, or at the very least natural rights. They are not social institutions.

          • Major_Freedom says:

            Remember Joe, I am a praxeologist.

            Social institutions cannot exist without property rights either. You’re trying to separate individual action into two categories in such a way that one of them is seemingly no longer human action oriented, what you call “social institutions”. Then, you say rape is not a social institution, but the coercion from a state is.

            I reject that distinction.

            The state is what we call a particular form of human action. Saying the state is a “social institution” doesn’t make it something other than a product of action.

            Rape and murder really do fit the criteria, you’re just not seeing it because you are not using the words “social institution” to describe those actions, but you are using those words to describe actions that we call the state.

    • Bob Murphy says:

      BA if you’re talking to me, I never said that. The central planner crack was mostly a joke, and anyway had to do with Scott specifying the actual type of housing that “China” should be building. So it would be a minarchist saying govt should build two more police stations on corner X, which would indeed reek of central planning.

      • Blackadder says:


        My comment was not directed at you, but at folks like Gee and Major Freedom.

        • Gee says:

          “You might as well say that minarchists are central planners because they want the government to protect property rights.”

          Yes, it seems that minarchists believe in central planning in some cases, and not in others. So what? Does anyone dispute that? It seems Sumner is like a minarchist in that sometimes he prefers central planning and other times not. Except that, he thinks it’s shameful to be called a “central planner” so he morphs the definition at his convenience.

    • Major_Freedom says:

      Except minarchists are central planners to the extent that they want the state to monopolize a good or service.

      As such, yes, NGDP targeting is central planning no less than territorial monopolies on security and protection.

      Just like I find it amusing to see pickpockets deny that they’re not robbers, on the basis that “real” robbers steal from warehouses and banks, so too do I find it amusing for central planning advocates in X, deny that they’re pro central planning because they’re not “real” central planners like Stalin or Mao.

  4. Andrew Keen says:


    I believe you made a mistake:

    “spend at least 80 percent of the premiums it receives on health care services” and “the company raises premiums by $5 million, so that its current administrative spending of $21 million ends up being 20 percent of total premiums” does not compute.

    If the company raised its premiums by $5M without raising its expenditures on health care services, it would now need to refund $6M. Maybe you meant that the company could find some way to spend that additional $5M in premiums on something that the government would classify as “health care services.” But if so, you didn’t make that clear enough in the article.

    • Simon says:

      Depending on the formula for the “rebates”, the additional $5M in premiums might be used for rebates instead of on extra health care.

  5. Ken B says:

    I don’t know where we had debates on whether the WMD screw up was a lie or a failure but the CIA’s mea culpa is now available http://www.foreignpolicy.com/articles/2012/09/05/a_classified_CIA_mea_culpa_on_iraq%20

    I’d say this bolsters those like me who blamed mindset and confirmation bias not the ‘Bushg lied’ crowd.

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