Krugman on Government Fiscal Hole: “Death panels and sales taxes is how we do this.”
In 1984, one of the minor characters early on disappears because he was just too enthusiastic in his zeal for Big Brother. I always think of this guy when Paul Krugman unfurls his refreshing candor and explains the full implications of his brand of political economy. The below clip is from a talk Krugman gave in DC back in February, but it confirms the “paranoid” warnings of those claiming that death panels and middle class tax hikes are on the way. Krugman literally says this. (HT2 Lennie Jarratt)
The smoking gun analysis starts at the 1:00 mark when Krugman explains:
Eventually we do have a problem. That the population is getting older, health care costs are rising…there is this question of how we’re going to pay for the programs. The year 2025, the year 2030, something is going to have to give….We’re going to need more revenue….We won’t be able to pay for the kind of government the society will want without some increase in taxes…on the middle class, maybe a value added tax….And we’re also going to have to make decisions about health care, doc pay for health care that has no demonstrated medical benefits. So the snarky version…which I shouldn’t even say because it will get me in trouble, is death panels and sales taxes is how we do this.
I encourage you to click the video (you can just start at the 1:00 mark) to see Krugman’s nonchalance and the audience laughter. Ha ha ha, the government deciding who lives and dies because it’s taken over health care, and right-wingers are routinely mocked for making the exact same claim. How droll.
Not all of your Krugman Kontradictions hit the target, but this one is a double plus bullseye.
Krugman really said it.
I say Krugman immediately give all his wealth to the middle class and then kill himself. Practice what you preach.
I don’t want his wealth, I just want him to provide a little more elbow room on the planet by doing the decent thing and offing himself. After all, the planet’s overcrowded right? Mommy Nature is threatened with imminent destruction by the human ecological menace, right? By checking out voluntarily he would set an inspiring example to a new generation of Neo-Keynesian meddlers.
I really don’t want anybody to kill anyone for any reason.
I would prefer Krugman realize health plans are a consumer good like any other and the best method of controlling how much care somebody receives is at time of contract, between offer and acceptance.
Regarding Krugmans wealth, I don’t want it but does he really earn it? If not for the brainwashed, I doubt he would have a market. My taxes pay to brainwash his customers, geesh…
He needs to donate more to charity and advocate for middle class tax break commiserate with corporate America tax breaks, Military tax breaks, Church tax breaks and all the others. Why are we stuck funding this entire charade? We are the producers, we do the work. Sure we don’t organize, they get more money, I respect organizers. But these takers are making me sick.
What if Krugman is OK with you being killed because you defended yourself against kidnapping due to you refusing to pay your money at the point of a gun?
I am sure he is.
He has to be, or else he’d be an anarchist.
That goes true for everyone.
The issue is that not everyone really understands the foundation of statism, either because they don’t want to think about it as it is too shameful and embarrassing, and possibly terrifying, or they have convinced themselves it isn’t real, in order to sleep at night. Or, in the rare cases, they know enough about it, but their moral constitutions are such that they enjoy and relish in watching, or causing, pain and suffering.
Yes we are surrounded by thief’s and murders. Although with todays collective economics and property, it can be difficult to determine who is stealing what from whom. For example, you steal something from you local government. Are you a thief or did they steal it from you in the first place? Determining property ownership has become nearly impossible, I suppose this is the intent. Basically, property has been dissolved. The antithesis of liberty.
Ephesians 6:12
12 For our struggle is not against flesh and blood, but against the rulers, against the authorities, against the powers of this dark world and against the spiritual forces of evil in the heavenly realms.
Bob, Not that this matters for your point, but that’s a very sloppy transcript. There are a lot of mistakes in it.
I’m being serious when I say that I am glad you are a stickler for grammar and spelling. It’s a thankless job, that sometimes incurs scorn and eye rolling. But if we’re going to make strong arguments, it’s key.
Speaking of grammar…
In my opinion Henderson made a grammatical error. His “There are a lot of mistakes in it” is like fingernails on a chalkboard to my ear. The singular “lot” begs for a singular “is.”
Counter to my opinion is the following: If the object of the preposition “of” is both plural and countable then the preceding verb (“are”) is plural.
With that nit picked I agree with you. Lousy grammar and spelling is to a strong argument like a dirty car is to a first date.
I thought you’re supposed to say “are” when the subject (i.e. “mistakes”) is plural.
Sure. You’re supposed to say “are” when the subject is plural.
Is the subject “mistakes” or “lot?”
I would say mistakes.
The words “a lot” refers to how many of the subject is being considered.
There is a dog. Subject: dog.
There are two dogs. Subject: dogs.
There are a lot of dogs. Subject: dogs.
MF: An anarchist in favor of the centralization of language.
If you disagree with what he said, then that’s the topic (hone in on that), but if you’re instead focusing upon the English grammatical rules, then you’re a conservative.
IOW, I think that this argument above is nonsense (from both sides).
Anarchism is a political philosophy, Joe.
It is universal, if you will. It obligates every individual to abide by a certain code of conduct.
When you see me advocating for Dan to be locked up by force for saying “is” rather than “are”, then we’ll talk about my hypocrisy.
I agree with MF. David is using “lot” as an adjective not a noun.
Newp. The subject is ‘lot’, a noun. You can imagine the word ‘group’ in its place, as far as sentence structure goes. Group and lot might behave differently in terms of singular vs plural.
I thought adjectives cannot be subjects. I thought adjectives are predicates of subjects.
Rick, yes lot could be used as group, but I read it like David was using it in the sense of a quantity like “a large amount”. Try replacing “a lot” with “many”.
There has been a lot of improvement in my English today. Thank you!
You can have adjectives for any noun.
I ran it through my natural language processing program and it identifies “lot” as NN, which is a type of noun – either singular or mass noun. However, that is the type of problems that problem natural language processing often has. I’m sure David meant it to give quantity to the word mistakes.
You’re right. If a noun then “lot” means something other than what Henderson means, namely “lot” would mean something like a collection of things in an auction.
Rephrase Henderson’s sentence from “There are a lot of mistakes” to “A lot of mistakes exist” and it’s evident that MF is right.
The three words together, “a lot of,” are used as a single term, an adjective, meaning “many.”
Use of what’s apparently the object of a prepositional phrase as the subject of a sentence disturbs the order of this simple brain.
Raja,
And if more than one you would say,
There HAVE been a lot of improvements in my English today!
The subject is “a lot of mistakes”, grammatically equivalent to:
“a heap of beans”;
“a ton of apples”;
“a stack of magazines”.
Interestingly, at auction, “a lot” might just be one item, or many items, depending on the auction. However, in common usage “a lot of” has taken the equivalent meaning “many”. Thus: “There are many mistakes in it”.
This mental conversion is of course completely grammatically wrong, but English is a bastard language which can never be really wrong in an absolute sense. However you say it, you are still speaking English, and it is still a bastard language, and it always will be. That’s what makes it right.
There is a whole pile of beans in your yard.
There are a whole pile of mistakes in your logic.
FTW! Great explanation, Tel!
Of course tope men like him will be exempt. Healthcare rationing is only for little people.
top men, “my kingdom for an edit button.”
This is the frustrating thing. They all know where they’re taking the system, but if anyone objects, they act like spoiled teenagers: “WHO SAAAAAIIIIDDD we were going to raise taxes? WHO SAAAAAIIIIDDD we were going to use comparative effectiveness research and approve all treatments by committee?”
It’s one thing to disagree with each other on principle, but to behave this way is just downright offensive. What else could it be called?
Neoconservative tactics.
Bob, Krugman has been using this slogan for years:
krugman.blogs.nytimes.com/2010/11/14/death-panels-and-sales-taxes/?_r=0
“I said something deliberately provocative on This Week, so I think I’d better clarify what I meant (which I did on the show, but it can’t hurt to say it again.)
So, what I said is that the eventual resolution of the deficit problem both will and should rely on “death panels and sales taxes”. What I meant is that
(a) health care costs will have to be controlled, which will surely require having Medicare and Medicaid decide what they’re willing to pay for — not really death panels, of course, but consideration of medical effectiveness and, at some point, how much we’re willing to spend for extreme care
(b) we’ll need more revenue — several percent of GDP — which might most plausibly come from a value-added tax
And if we do those two things, we’re most of the way toward a sustainable budget.”
“not really death panels, of course, but [just a panel of bureaucrats who will decide when we will let you die instead of continuing to pay for your care]”
So…. exactly death panels?
“we’ll need more revenue — several percent of GDP — which might most plausibly come from a value-added tax”
What he is saying here is “I hate both production and consumption, because I’ve decided I’m not a Keynesian economist anymore, but a misanthrope DISGUISED as a moron (I mean, Keynesian economist).”
No no no no. Krugman loves consuming stuff, especially when it comes at the expense of producers.
Well, yes. A misanthrope loves consuming things – he just doesn’t want anyone else to. And since a VAT would indirectly raise prices to absurd levels and severely reduce supply, it’s quite clear that he doesn’t care. The harm of a VAT is evident everywhere one exists. It doesn’t benefit either producers or consumers – it only benefits the thieves in government.
Stop focusing on the long term real side and start focusing on the short term nominal side, where it’s easier to pull the wool over the eyes of those you want to most exploit.
Actually I believe VAT will raise prices and thus reduce demand. A strange position for a Keynesian I would think.
When you suffer verbal diarrhea (can’t stop blogging and talking) I guess internal consistency of arguments is not top of the priorities.
^^^^
+1000
“Actually I believe VAT will raise prices”
Indirectly. What it will do is raise costs of production, which – like a minimum wage – will lead to producers going under or cutting back production. Reduction in supply leads to higher prices, which then leads to a reduced demand for products.
None of this will be seen by Keynesian analysis, however, because – as MF pointed out – it’s all about the nominal figures. (Is there really a difference between NGDP-targeting and standard AD nonsense?)
Matt, you have to get your cause and effect correctly. Think about why raising production costs will drive producers out of the market or into lowering production.
I insist, PK, the high priest of Keynesians, is advocating a measure that will repress demand.
“Think about why raising production costs will drive producers out of the market or into lowering production”
Price losses. Losses cannot be sustained. Production, therefore, diminishes until price >= cost.
But a lot of people believe that raising the cost of production will directly raise the price, as if price is determined by (and not just lower-bounded by) said cost. If I raise the cost of producing apples 10%, this will not cause the price to rise similarly – supply and demand will not suddenly meet at a price level 10% higher, without other changes.
Rising costs of production due to legal measures does not cause inflation, as is commonly supposed. (The other common error is that prices went up because “greed”.) What it causes is a reduction in supply.
Well, you say “we let you die” as if there isn’t still a private market that you can get care from. It’s not like Krugman supports the government banning private insurance.
It won’t take a person who sees private insurance coexisting beside nationalized healthcare as superfluous to make the leap to the idea that it should simply be regulated out of existence…
It won’t take a person… long…
Ugh.
Then why hasn’t it happened in France?
Yes, I’m sure they will never spell out to insurers what will and won’t be covered.
This Week video he was referring.
http://www.youtube.com/watch?v=tDnvmOQDkkw
Seeing how President Obama got into so much trouble lately just because he “forgot” to add footnotes and clarifications to his “You like it, you can keep it, Period” speech (looney right wing nuts, really stupid) and being a great admirer of Krugman I feel the need, for the benefit of you low intelligence people, to annotate adequately his comments above:
1. Death Panels: For low and middle income blokes. We rich or connected will have access to the best (expensive) private healthcare. Actually, since the best, brightest doctors and the most modern, innovative medical centers will soon refuse to accept the loyal and humble subjects porting Medicaid/Medicare/O’care cards, they will have more free time for me and my own. And seriously, did you ever sit in a waiting room with a mechanic, or waitress? We really could do without that experience, and we will.
2. The quality and quantity of health care for the loyal subjects will be consistently and continuously reduced over time. Its cost to them will increase. Sort of Moore’s Law in reverse.
3. All the same, loyal subjects will feel happy about this, their sacrifice will help those even poorer and uninsured to obtain the same crappy healthcare as they will now and in the future enjoy.
4. Therefore, this system is not only constitutional (pursuit of happiness dummies) it actually assures happiness for all. QED
5. Regarding VAT, please note that a very small VAT will assure sustainable budget FOR NOW. We’ll keep implementing new progressive programs and enlarging those already on the books (Law Of The Land you know) and so VAT will have to increase from 3% to 5% and then to 7% and…you got the point. Europe has VAT of up to 20%, and you know they are doing great, as I always have predicted.
6. VAT is not a regressive tax which we hate, the mathematical model to justify that is a work in progress.
“Europe has VAT of up to 20%, and you know they are doing great, as I always have predicted.”
Really, am I being consistently ripped off by my grocery store or what? In Poland our beloved liberal 1st minister raised vat from 22 to 23% 2 years ago. Higher vat goes for Sweden, Denmark poor Hungry.
There is no limit to the tax height in Europe, only lower bound at 15% – you’re not allowed to tax less.
>There is no limit to the tax height in Europe, only lower bound at 15% – you’re not allowed to tax less.
See this image first.
What sort of retard puts a lower bound on taxation?
Regulation and government intervention are the primary things keeping healthcare from following a technological economics quite similar to Moore’s Law.
I heard Moore’s law is going to cease being a law in the near future.
I wish they would repeal Murphy’s Law (no offense Bob).
MF, it’s hard to imagine it continuing, but it’s also crazy that it has lasted this long. The thing about innovation is that it relies on surprise. It’s easy to assume we are out of surprises.
I love the introductory paragraph on Wiki:
“Moore’s law is the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years. The law is named after Intel co-founder Gordon E. Moore, who described the trend in his 1965 paper. His prediction has proven to be accurate, in part because the law is now used in the semiconductor industry to guide long-term planning and to set targets for research and development.”
I love being human.
That explains a lot.
Depends on the technology that they have coming up. Silicon might get replaced with light-based processors.
If only someone found some quotes of Krugman mocking his ideological opponents who dared criticizing Obamacare by using the phrase “death panels.” That would really show his inconsistency and intellectual bankruptcy.
Well, OK, fine, I’ll do it (you’re welcome):
•August 13, 2009 “Right now, the charge that’s gaining the most traction is the claim that health care reform will create “death panels” (in Sarah Palin’s words) that will shuffle the elderly and others off to an early grave. It’s a complete fabrication, of course.”
•August 20, 2009 “It seems as if there is nothing Republicans can do that will draw an administration rebuke: Senator Charles E. Grassley feeds the death panel smear, warning that reform will “pull the plug on grandma,” and two days later the White House declares that it’s still committed to working with him.”
•February 25, 2010 “So what did we learn from the summit? What I took away was the arrogance that the success of things like the death-panel smear has obviously engendered in Republican politicians. At this point they obviously believe that they can blandly make utterly misleading assertions, saying things that can be easily refuted, and pay no price. And they may well be right.”
•August 30, 2009“Moderate Republicans, the sort of people with whom one might have been able to negotiate a health care deal, have either been driven out of the party or intimidated into silence. Whom are Democrats supposed to reach out to, when Senator Chuck Grassley of Iowa, who was supposed to be the linchpin of any deal, helped feed the “death panel” lies?”
•October 4, 2009 “The Republican campaign against health care reform, by contrast, has shown no such consistency. For the main G.O.P. line of attack is the claim — based mainly on lies about death panels and so on — that reform will undermine Medicare. And this line of attack is utterly at odds both with the party’s traditions and with what conservatives claim to believe.”
•March 21, 2010: “Politicians like Sarah Palin — who was, let us remember, the G.O.P.’s vice-presidential candidate — eagerly spread the death panel lie, and supposedly reasonable, moderate politicians like Senator Chuck Grassley refused to say that it was untrue. On the eve of the big vote, Republican members of Congress warned that “freedom dies a little bit today” and accused Democrats of “totalitarian tactics,” which I believe means the process known as “voting.”
Like I said, he still to this day believes that his opponents should be mocked if they say “death panels”. (See that post I linked to from August.). He doesn’t think that government insurance plans deciding what they’ll cover amounts to death panels, he just likes to use that phrase sarcastically.
Like I said, if he thinks it’s a lie, then his own “snarky” use of the term would be a lie as well.
Murphy, I posted a comment I think you will appreciate, but it says “Your comment is awaiting moderation.”
It’s a bunch of links to Krugman chastising others who spread the “death panel lie.”
I’m not sure how moderate this moderated comment was, but Krugman published it for the Samuelson Memorial. It’s probably not an example of Austrians taking the high road as Bob Murphy would prefer.
http://krugman.blogs.nytimes.com/2010/04/20/samuelson-memorial-2/?comments#permid=21
I like how Krugman links to his post on the “eight areas of economics Samuelson created”, all of which Rothbard upturned in “Toward a Reconstruction of Utility and Welfare Economics” and other writings.
1) Revealed preference – replaced with the much superior concept of demonstrated preference.
2) “Samuelson taught us how to use the concept of redistribution by an ethical observer to make sense of the concept of social welfare” – and Rothbard showed why that is nonsense, and only Pareto-optimality makes sense.
3) “What does it mean to say that international trade is beneficial? What are the limits of that proposition? The starting point is Samuelson’s analysis of the gains from trade, which drew on both revealed preference and his welfare analysis.” – Anything based on flawed concepts will be in error.
4) “Why must some goods and services be provided by the government?” – No such goods and services exist, as Rothbard eloquently demonstrated repeatedly.
And so on.
Too many links in one comment seems to upset it.
Too many is already two by the way..
OK, let’s go one at a time:
August 13, 2009 “Right now, the charge that’s gaining the most traction is the claim that health care reform will create “death panels” (in Sarah Palin’s words) that will shuffle the elderly and others off to an early grave. It’s a complete fabrication, of course.
*golfclap*
August 20, 2009 “It seems as if there is nothing Republicans can do that will draw an administration rebuke: Senator Charles E. Grassley feeds the death panel smear, warning that reform will “pull the plug on grandma,” and two days later the White House declares that it’s still committed to working with him.”
February 25, 2010 “So what did we learn from the summit? What I took away was the arrogance that the success of things like the death-panel smear has obviously engendered in Republican politicians. At this point they obviously believe that they can blandly make utterly misleading assertions, saying things that can be easily refuted, and pay no price. And they may well be right.”
August 30, 2009 “Moderate Republicans, the sort of people with whom one might have been able to negotiate a health care deal, have either been driven out of the party or intimidated into silence. Whom are Democrats supposed to reach out to, when Senator Chuck Grassley of Iowa, who was supposed to be the linchpin of any deal, helped feed the “death panel” lies?”
October 4, 2009 “The Republican campaign against health care reform, by contrast, has shown no such consistency. For the main G.O.P. line of attack is the claim — based mainly on lies about death panels and so on — that reform will undermine Medicare. And this line of attack is utterly at odds both with the party’s traditions and with what conservatives claim to believe.”
March 21, 2010: “Politicians like Sarah Palin — who was, let us remember, the G.O.P.’s vice-presidential candidate — eagerly spread the death panel lie, and supposedly reasonable, moderate politicians like Senator Chuck Grassley refused to say that it was untrue. On the eve of the big vote, Republican members of Congress warned that “freedom dies a little bit today” and accused Democrats of “totalitarian tactics,” which I believe means the process known as “voting.”
To be clear, Krugman still believes that the death panel charge is a lie; see this post from a few months ago:
krugman.blogs.nytimes.com/2013/08/10/death-panels-and-the-apparatchik-mindset/?_r=0
He’s just been saying “death panels” as a joke; see my comment above. He does not actually concede that Medicare and Medicaid deciding what care to pay for amounts to death panels.
He isn’t saying “death panels” is “a joke”.
He said in this latest clip that it’s “the snarky version.”
Snarky versions are not untrue versions.
Your argument is unconvincing.
He calls it a snarky version because it’s based on something that’s true, but it’s sarcastically using the phrase “death panels”. It’s as if Krugman was trying to convey that Obama can freely pursue liberal policies now that the election is over, and said something like “Obama can finally achieve his socialist utopia! Mwahahahaha!”
“He calls it a snarky version because it’s based on something that’s true”
Right, but the problem with your prior post is that in the past, Krugman has said that conservatives (like Palin, etc) who use the phrase “death panels” are spreading “lies.”
When he says “I might get in trouble for saying this”…it itsn’t because he believes that he will be spreading a “lie.” It’s because he accepts the underlying truth of it but is hesitant in using that particular phrase to his audience (but likely relishes in it in private).
He’s hesitant because he doesn’t want his words taken out of context to make it seem like he’s actually advocating death panels. He’s just sarcastically using the phrase “death panels” to refer to Medicare and Medicaid controlling costs. He doesn’t think that that actually qualifies as death panels, so he still thinks that Palin and the like are lying.
“He’s hesitant because he doesn’t want his words taken out of context to make it seem like he’s actually advocating death panels.”
The argument is not whether or not he “advocates” them. The argument is whether or not he believes they exist or don’t exist in Obamacare. That is the argument implied when he says death panels are a “lie”. That calls into question the debate over whether or not they exist.
You cay “controlling costs” is not a lie. But controlling costs IMPLIES controlling who gets the benefits and who doesn’t. That means death panels.
Major_Freedom, if you believe that controlling costs necessarily implies death panels, then first of all, do you believe that private insurance companies currently have death panels? And second of all, do you believe that Medicare and Medicaid already had death panels before Obamacare went into effect?
I am saying that if you’re going to call your opponents “liars” for saying there will be death panels, don’t then go around yourself saying there will be death panels.
By the way, are you splitting hairs between “snark” and “joke”?
If by “hair” you mean “the mother of all thick hairs”, then yes.
The difference between a lie (which Krugman claims it is when he addresses conservatives who use that phrase), and a truth (which Krugman claims it is when he uses the phrase), is not “splitting hairs”.
Then again, I thought you wanted to play the game of splitting hairs, by you trying to convince me of the nuances of somebody saying “death panels”.
It’s either true or it isn’t.
If you asked Krugman whether “death panels” is a lie, he would unequivocally say yes. He’s using the phrase as a sarcastic shorthand for the policy that he really advocates. It’s like if you said “My house is a mess. I think I need to implement some Gestapo-like rules on people leaving their stuff around the house.” It doesn’t mean that the policy you’re advocating is actually Gestapo-like.
Sorry, that explanation is horribly sloppy.
If death panels is a lie, then that means that which the term “death panels” refers, does not exist. It would mean Krugman thinks that there really aren’t going to be government agents deciding where to allocate scarce resources and hence choose who lives and who dies. But clearly he knows this does exist, since he referred to them himself.
He thinks that “government agents deciding where to allocate scarce resources” does not equal “death panels”. Now you may disagree with his position, but it’s simply inaccurate to say that he admits the existence of death panels. It’s as if Lois Lane said that Clark Kent cannot bench press 5 tons, and then she said later that Superman can bench press 5 tons, and then you said “Aha! She finally admits that Clark Kent can bench press 5 tons!” Now you can argue that Clark Kent and Superman are the same, but Lois Lane doesn’t believe that.
Except Krugman is calling them death panels.
Favoritism is coming big time. It can literally save your life! So be smart and try to get some good relatives or and friends at key positions in the future health care ‘business’.
Printing money to cover the deficits is kind of the same as a value added tax, no?
With the added “advantage” that the tax gets spread over everyone who uses dollars, not just poor and middle class Americans. Until they stop using dollars, that is. But that’s why we have the military, to ensure they keep using them.
This is all going to end badly. There are some glimmers of hope (Keep up the good fight, Bob!), but I fear we have passed the point of no return.
Unfortunately, Krugman et al think that the answer to too much debt is more debt, too much regulation is more regulation, too much theft, er taxes, is more taxes, etc. etc.
It ends when the walkers have consumed the productive class.
I like the way I use to be able to purchase my health-plan. The higher the lifetime limit, the higher the cost. I AM MY OWN DEATH PANEL! Not any more.
Here is Americas slogan, maybe the world for that matter?
Land of the free err, scratch that.
America, where 51% of the population control your future…
Instead of shopping around for plans based on what the lifetime cap is, you can now shop around for plans based on what kinds of care are covered by the plan. You can still be your own death panel if you want.
No, I cannot be my own death panel. A group of bureaucrats will determine when my time is up. IT will be different for every person. Hope you are special…
DEATH PANEL.
Let’s just abolish Medicare and let the Churches provide health care to seniors.
Will they still get their free scootmobiles?
Let’s abolish inflation and artificial .5% interest rates.
Let’s have free market medicine and experience price reductions like with computers.
Not everyone can afford a computer you tight-wad selfish a-hole. You are a bad person. I must convince you that are a bad person, because I need you to be guilt ridden into giving up your wealth without making a scene. No, that doesn’t make me selfish, because I’m really selfless in fighting for the little guy. No, I don’t give to charity right now. That’s your job. Because you can afford a computer. Sheesh,,,
MF, you are such a nutter (who talks like that?)
Last week, I received an ad from Staples for a Toshiba laptop for $269 with 4 GB memory and a 500 GB hard drive, (While we are on the topic of “administered prices”. )
What I wrote is what many think. I read between the lines.
Administered price of a laptop? No wonder we have depressions. If only that ad you received were digital, where the price could instantly change to the demand at the moment, then free market ideology would be right like those lunatic anti-violence people say it is.
In other words, we must either get rid of pricing altogether, or else we should lash out at the world in an orgy of senseless violence in order to eliminate imperfect economic life.
Yes, violence can bring us closer to perfection. We just have to define perfection the way I want. I don’t like your definition.
Okay.
Bob, you should be able to embed the video such that it starts straight at the 1 minute mark.
This page explains how: http://www.mydigitallife.info/youtube-allows-you-to-start-playing-embed-video-at-specific-start-time/
I can totally imagine Krugman being hauled off to “sensitivity training” because his own child turned him into the authorities for muttering “down with Keynes!” in his sleep, and then being very grateful for it too…
54 comments and still no DK or LK to defend Krugman. Have they been disappeared and unpersonned?
It’s kind of hard to spin this one…even if you’re a fan.
Or they’re busy…
DK is putting his lawyer hat on to explain it away. It’s taking a little time. LK is digging up some obscure statistics on GDP from some remote country that has actual death panels.
LK is busy with his 516th installment of “more proof that firms do not set prices the way the Austrian theory predicts” which refutes Austrian theory.
http://socialdemocracy21stcentury.blogspot.com/2013/11/lavoie-on-mark-up-pricing-in.html
Except that Austrian theory does not predict how prices are “set”. zzzzzz
“Except that Austrian theory does not predict how prices are ‘set'”
Really??
So Austrian price theory is meant to say NOTHING about the real world and real world price setting? That’s quite an admission, roddis. That you think your “Austrian” price theory is devoid of any description of reality.
Presumably, then, Rothbard is just speaking right out of his ***, when he says this:
“The entire apparatus of economic theory, built up over centuries, is devoted to demonstrating a great truth: that prices are set only by the demand of purchasers (how much of a good or service purchasers will buy at any given price), and by the supply or stock of the good.
Prices are set so as to “clear the market” by equating supply and demand; at the market price the supply of a good will exactly equal the amount of the good that people are willing to buy or hold. If the demand for the good increases, purchases will bid the price up; if the supply increases, the price will fall. Demanders consist of consumers, whose purchases are determined by the values they place on the goods, and various producers or businessmen, whose demands are determined by how much they expect consumers to pay for the final product. Current production, and therefore future supply, will be determined by how much businessmen expect that consumers will be paying in the future for the final product. “
Murray Rothbard, “Making Economic Sense,”
http://mises.org/econsense/ch92.asp
Austrian theory describes how the price setting mechanism works, but not in sufficient detail than an outsider can double-guess what the correct price would be.
As we have been through before, when Rothbard says, “clear the market” he does not mean what you think it means, nor is the Austrian meaning of this equivalent to other economic theories. It merely means that all the immediately available transactions have been completed, a “plain state of rest” and nothing more than that.
It does not mean market stimulus, nor does it mean every supplier has emptied his warehouse, or anything else like that.
A bit further along in the piece you quote is this:
This is what Bob Roddis is trying to explain to you, the knowledge of the market participants is part and parcel of the price setting process, and this knowledge cannot be codified by a regulatory agency.
“As we have been through before, when Rothbard says, “clear the market” he does not mean what you think it means, nor is the Austrian meaning of this equivalent to other economic theories. It merely means that all the immediately available transactions have been completed, a “plain state of rest” and nothing more than that.”
That is utter rubbish,Tel, and it is totally refuted by the plain statements by Rothbard right in front of your eyes:
Prices are set so as to “clear the market” by equating supply and demand; at the market price the supply of a good will exactly equal the amount of the good that people are willing to buy or hold, etc.”
If you really think that clearing of markets by equating demand with supply has no place in Austrian price theory, you are as deluded and ignorant as Roddis.
To make this simple, LK is insisting that Austrian theory predicts that firms will not cut production while maintaining prices and stocks of inventory through bad times and that evidence that they do refutes Austrian theory.
Recall that Tel found this most excellent quote from “MISES AND HIS UNDERSTANDING OF THE CAPITALIST SYSTEM” by Israel M. Kirzner:
The ‘‘supply and demand’’ that are continually in equilibrium in Mises’ world do not refer to the supply and demand schedules so basic to mainstream microeconomic theory. They refer simply to the circumstance that, in any situation, those potential transactors who have been aware of available mutually beneficial trade possibilities will have moved to take advantage of those opportunities. Of course, once those opportunities have been grasped, market activity ceases, and the ‘‘plain state of rest’’ has been attained.
To describe the price emerging from those exchange transactions as a ‘‘market-clearing price’’ (Salerno 1993: 121) is therefore misleading. Certainly the price permits all those who stand to gain by exchanging at that price—and who are aware of it—to exchange to the point where no known remaining mutually gainful opportunities exist. But the term ‘‘market-clearing price’’ (a term not used by Mises) is used in standard economics to refer to the exhaustion of all mutually gainful exchange opportunities under the hypothetical conditions of (relevant) omniscience. Standard economics indeed notoriously proceeds, in applying supply and demand theory to the real world, to operate as if conditions of relevant omniscience can be taken as given. Mises is certainly not making any such assumption of omniscience. His market prices are certainly not ‘‘market-clearing prices’’ (in the usual sense of that term). There is, one is able to reassure the puzzled reader, therefore no contradiction in his exposition. Real-world market prices are not the equilibrium prices of standard economic theory. (Real-world prices relate to equilibrium only in a very narrow sense, a sense to which no attention at all is given in standard theory.)
http://tinyurl.com/mzmnm6j
Note further that I explained to LK perhaps ten times that I did not agree with Salerno’s description of the “price setting” process and do not like the term “market clearing prices”. I don’t like either it when Rothbard says something similar. Which, of course, makes me a deluded idiot and a universally loathed “nutter”.
Tel’s original post on the subject:
http://tinyurl.com/kj5wmmc
As a prosecuting attorney for Keynesianism (as opposed to a fair minded thinker), LK refuses to understand Austrian concepts or to apply them fairly. Instead, he takes poorly worded statements made about the implications of Austrian theory said by the Austrian masters, sets them in concrete and insists that we are thereby all stuck with them forever whether they are right or wrong.
Fred sells Joe three apples for two dollars.
Supply is three apples.
Demand is three apples.
Supply exactly equals demand. Bravo! Let’s go home and eat our apples.
Where did Tel say this? Seems like a strawman to me, but I’m not surprised.
LK:
“That is utter rubbish,Tel, and it is totally refuted by the plain statements by Rothbard right in front of your eyes:”
“Prices are set so as to “clear the market” by equating supply and demand.”
You continue to misunderstand the terms being used. You see the same words, but you are attributing meanings Austrians are not using, and then attributing those meanings to the Austrians.
Clearing the market, equating supply and demand, the Austrian meanings of these terms do NOT mean what you believe they mean.
I’m well aware that Austrian do not think that economies ever reach a general equilibrium state or Mises “final state of rest”, but I’ve not stated or implied that they do above, so your latest comment is a another feeble straw man.
LK:
If you grasp that Austrians reject the notion that the economy can ever be at equilibrium, then you should have realized that markets cannot “clear”, nor can supply “equal” demand, for these phrases imply equilibriums are present.
And yet you continue to attribute existences of equilibriums to Austrians. It is precisely you who is setting up straw men.
The fact that the general economy will never reach a universal clearing of all product markets does not change the fact that Austrian price theory attaches great importance to flexible wages and prices so that individual product markets may clear or that there is a **tendency** towards market clearing wages and prices.
No doubt you’re now going to tell us that Austrian economics doesn’t even say that.
No doubt NO Austrian economist has EVER complained of trade unions preventing some wages in a particular sectors from tending towards market clearing levels.
Tell us another fable.
LK:
“The fact that the general economy will never reach a universal clearing of all product markets does not change the fact that Austrian price theory attaches great importance to flexible wages and prices so that individual product markets may clear or that there is a **tendency** towards market clearing wages and prices.”
You still have not shown you understand what any of those statements mean.
You seem not to be able to reconcile “fixed prices”, which are actually set according to subjective valuations, which can change, with the argument that markets tend to clear based on price changes.
Fixed prices does not mean the prices are actually constant. It only means prices for many goods tend to be set in accordance with costs of production.
Costs, of course, are not rigid either. They can change.
“No doubt NO Austrian economist has EVER complained of trade unions preventing some wages in a particular sectors from tending towards market clearing levels.”
You don’t know what that means either.
(1) that Kirzner quote in no sense denies that Austrian economics says that flexible prices and wages that converge to market clearing levels are necessary for equating quantity supplied with quantity demanded.
Kirzner says that market agents do not have omniscience:
“But the term ‘‘market-clearing price’’ (a term not used by Mises) is used in standard economics to refer to the exhaustion of all mutually gainful exchange opportunities under the hypothetical conditions of (relevant) omniscience”
(2) “Note further that I explained to LK perhaps ten times that I did not agree with Salerno’s description of the “price setting” process and do not like the term “market clearing prices”. I don’t like either it when Rothbard says something similar..”
Nobody cares about what you “don’t like”, roddis.
The use of the concept of market clearing prices and wages is a fundamental one in modern Austrian economics.
That you are incapable of understanding it, or are reduced to a bizarre denial of the use of this concept by Austrian economists reveals just how deep is your ignorance of modern Austrian economics.
It is a trade you dingbats.
Either both people walk away feeling good, or it does not happen.
All this socialism and people are literally starting to forget the concept of trade.
Forge about all this math, statistical analysis, professor egoism and all the rest.
Why do you statist make everything so damn complicated…
(1) You don’t understand what “clearing the market” means in Austrian economics.
(2) See (1)
(1) You don’t understand what “clearing the market” means in Austrian economics
I understand it perfectly well:
http://socialdemocracy21stcentury.blogspot.com/2013/11/vulgar-austrians-do-not-understand.html
(2) see (1).
Sorry LK, I don’t read garbage blogs.
What you say here is sufficient for me to know that you don’t understand it.
“So Austrian price theory is meant to say NOTHING about the real world and real world price setting?”
Not in any objective formulaic sense, which you continue to believe is the only option.
There is no formula that forces an individual to “set” a particular price over another.
Austrians talking about price formation in exchanges are not making economic principled arguments. They are making historical arguments about how individuals did or did not act.
Going forward, Austrians do not make any claims on formulae of price “setting” the way YOU understand the term “setting.”
You view it as a physical law.
Austrian economics is based on subjective value theory. You don’t even know what that means, do you?
““>So Austrian price
>theory is meant to say
> NOTHING about the real
>world and real world price
>setting?”
Not in any objective formulaic sense, which you continue to believe is the only option.”
“Objective formulaic sense”? Sounds like a bizarre evasion of the question.
“They are making historical arguments about how individuals did or did not act.”
So they are speaking of how prices were set in the past *in the real world*?
Or is it only in M_F’s cloud cuckoo land with magical flying unicorns?
“Objective formulaic sense”? Sounds like a bizarre evasion of the question.”
No, it’s a description of your approach.
“So they are speaking of how prices were set in the past *in the real world*?”
IN THE PAST, which is not subject to constant causality relations, because the past is a function of human action and learning. Human learning precludes constants in history.
Going forward, Austrians do not make any claims on formulae of price “setting” the way YOU understand the term “setting.”
You view it as a physical law.
Austrian economics is based on subjective value theory. You don’t even know what that means, do you?
Exactly right. All LK can do is find quotes. He cannot explain how subjective valuation logically leads to a mechanistic prediction of certain forms of “price setting”. Someone can set his prices by putting on a gorilla suit and bobbing for apples with various prices attached.
BTW, whenever we smack down LK on this pathetic “fixprice” meme, he almost always doubles down with yet ANOTHER set of quotes about alleged Austrian predictions about his special mechanistic form of “price setting”.
http://socialdemocracy21stcentury.blogspot.com/2013/11/vulgar-austrians-do-not-understand.html
If you can’t sell your inventory and decide to store the junk and lay off your workforce, haven’t the “consumers” forced you to incur storage costs AND an effective lower price (the same price received much later in time)?
Who “set” these new prices?
“Exactly right. All LK can do is find quotes. He cannot explain ..etc.
So Roddis is now saying that Austrian price theory says *nothing* true about how prices are set in the real world?
When Rothbard says:
“Prices are set so as to ‘clear the market’ by equating supply and demand; at the market price the supply of a good will exactly equal the amount of the good that people are willing to buy or hold.
he’s not even saying ANYTHING about the real world?
Good work, roddis, if your new half-baked theory is true, you’ve demonstrated that Austrian price theory is worthless garbage.
LK:
The “real world” is not limited to historical events.
In fact, one could argue that the real world consists of nothing but the here and now.
But in the here and now, there is no objective law of price formation.
In the here and now, there is human action.
Bob isn’t changing his story. What is happening is that your mindset keeps changing, due to you realizing you are having trouble understanding. You keep saying “So NOW you say” this, and “So NOW you are saying” that…but I don’t see any changed stories other than your attempts at trying to square a circle.
Yes, MF we know you’re as clueless as roddis.
Does Austrian price theory prescribe flexible wages and prices, that can be moved towards market clearing levels by buyers and sellers in trades, as an important part of how a free market should function, or not?
Yes or no?
Of course, you will not answer because you’re intellectually dishonest and bankrupt — just like roddis.
You’ll simply evade the question with more incredibly stupid straw man arguments.
LK:
“Does Austrian price theory prescribe flexible wages and prices, that can be moved towards market clearing levels by buyers and sellers in trades, as an important part of how a free market should function, or not?”
You have yet to display any understanding of what “market clearing” means in Austrian theory. You have also yet to display any understanding of what “supply equalling demand” means in Austrian theory.
We’ve gone over this and yet it keeps going over your head.
Austrians describe “flexible prices” because prices are a function of subjective preferences, which can and do change.
There is no objective law that says they must change and such and such a rate. Even if you OBSERVE a price remaining the same for 10 years in a row, this price is not “inflexible”. It is flexible by the sellers and buyers, who happen to choose a current price that matches a past price.
To make this easier for you:
Imagine aggregate spending suddenly collapsed by 50%.
Imagine massive losses are incurred for many firms across the country, due to revenues falling quickly, but costs falling with a time lag.
So far so good?
The key understanding here is “with a time lag.”
So far so good?
Here is what you have trouble with:
A 50% fall in aggregate spending is a consequence of changed subjective preferences.
These changed preferences are ONGOING.
As people are continually faced with lower nominal incomes, their ability to spend will decline. A declined spending will lead to a decline in investment spending, ceteris paribus. A decline in investment spending will reduce costs on business income statements. Costs will fall until the difference between total spending and investment spending is in accordance with prevailing time preferences, which of course are themselves changing as well, so there is no final state of rest here either, but a changed tendency.
As this occurs, prices are indeed changing. They are changing in such a way as to TEND to clear the market. At the same time, in the immediate moments, as they come and go, one could understand each moment as a final state of rest as a mental tool. But it is not to last.
You don’t understand Austrian theory. You don’t understand how to think like an economist. You’re intellectually weak and unable to advance. You’re stuck in a perpetual loop of ignorance.
“You have also yet to display any understanding of what “supply equalling demand” means in Austrian theory.”
This now implies that you seriously deny that Austrians define market clearing as a process where flexible prices in trades will cause the quantity demanded by buyers to equal the quantity supplied by sellers in a product market.
I expect C. Taylor in An Introduction to Austrian Economics (1980) is either totally misinformed about Austrian economics or perhaps you are the only person on the entire planet who understands Austrian price theory, and EVERY other Austrian wrong but you:
“The day-to-day tendency in the market is toward the establishment of an equilibrium price for each particular consumer good. Prevailing prices tend toward that price at which quantity supplied and quantity demanded are equal, a movement that attests to the price system’s capacity to coordinate the actions of persons engaged in different activities. The typical depiction of this tendency on a graph shows the equilibrium price at the point at which the market supply-and-demand curves intersect. Any price above or below the equilibrium price cannot persist because such a price will result, respectively, in either frustrated sellers or frustrated buyers. Prices are reduced by sellers if the market price is too high to clear the quantity offered; prices are bid upward by buyers if the price is too low to induce sellers to offer a quantity ample enough to satisfy the buyers’ demand.” (Taylor 1980: 56).
Or more likely you’re utterly unhinged.
if your new half-baked theory is true
The fundamental theory is that the terms of SUBJECTIVE voluntary transactions provide society with ESSENTIAL OBJECTIVE INFORMATION that cannot be replicated by other means. It solves “the knowledge problem” to the extent it can be solved. Everything else is a corollary of that. IF you are in the business of making and selling stuff and IF you prefer to maximize profits, then you will GENERALLY want to make only amounts of stuff you can quickly sell for a profit. The information provided by observing terms of transactions provides the best information to make that happen.
Is LK a liar, or is he stupid? Or both?
“Edward” may be catching on to LK:
Edward November 7, 2013 at 9:28 AM
Economics has a lot of short run long run dichotomies.
Far be it from me to defend the Austrians, whom i spend a great deal of time attacking, but here goes.
I dont defend them in the short run. No one denies the central truth of how prices are set by a seller. This is not a two-way auction market like the financial markets. But if consumers won’t buy, then the prices massive sellers set will have little meaning. First their inventories will pile up, then they will slash employment. If that doesn’t work, they’ll slash production. Finally, if THAT doesn’t work they’ll eventually as a last resort cut prices, to get rid of massive unsold inventory. (typically they’ll have temporary sales, massive price cuts for a limited time ONLY!, what Keynes referenced in the General Theory as cutting prices in the present relative to the future, which he agrees will work in the absence of debt deflation)
Sellers set prices through a central administrative cost plus mark up in the short run (BFD?) but they will make money in the long run only if consumers hit those prices
http://tinyurl.com/kcdp9yk
“The fundamental theory is that the terms of SUBJECTIVE voluntary transactions … etc/
This stupid rant does not answer the question, roddis.
Does Austrian price theory as below describe the real world or not?
“The day-to-day tendency in the market is toward the establishment of an equilibrium price for each particular consumer good. Prevailing prices tend toward that price at which quantity supplied and quantity demanded are equal, a movement that attests to the price system’s capacity to coordinate the actions of persons engaged in different activities. The typical depiction of this tendency on a graph shows the equilibrium price at the point at which the market supply-and-demand curves intersect. Any price above or below the equilibrium price cannot persist because such a price will result, respectively, in either frustrated sellers or frustrated buyers. Prices are reduced by sellers if the market price is too high to clear the quantity offered; prices are bid upward by buyers if the price is too low to induce sellers to offer a quantity ample enough to satisfy the buyers’ demand.” (Taylor 1980: 56).
And as for Edward he’s not refuting any Post Keynesian theory because no Post Keynesian denies that people must subjectively value a good to want to buy it.
LK:
“You have also yet to display any understanding of what “supply equalling demand” means in Austrian theory.”
“This now implies that you seriously deny that Austrians define…”
Non sequitur. Your lack of understanding Austrian theory does not in any way imply whether Austrian theory is right or wrong. They are two separate issues.
“…market clearing as a process where flexible prices in trades will cause the quantity demanded by buyers to equal the quantity supplied by sellers in a product market.”
That is not what the Austrian argument is.
“I expect C. Taylor in An Introduction to Austrian Economics (1980) is either totally misinformed about Austrian economics or perhaps you are the only person on the entire planet who understands Austrian price theory”
No, you just don’t know how to read Austrian theory in print. You see equal, and you don’t know exactly what or when there is equality.
Yes, no doubt “equating supply and demand” does not mean equating quantities demanded with quantities supplied by means of flexible prices moved by buyers and sellers in trades towards market clearing levels.
I expect every Austrian economist in human history is wrong, and only MF knows the meaning of these terms.
“Yes, no doubt “equating supply and demand” does not mean equating quantities demanded with quantities supplied by means of flexible prices moved by buyers and sellers in trades towards market clearing levels.”
You have still to explain your understanding of “market clearing levels.”
After many attempts at asking this from you, you have yet to even address it. The last time you tried to explain your understanding of it, you used the same term “market clearing” in your explanation, thus begging the question.
So again, for the 10th time, what exactly do you understand the phrase “market clearing” to mean? Remember, in Austrian theory, equilibrium is NOT reached, ever. You cannot possibly rasp the meaning of market clearing if you stay in this rigid concept equilibrium mindset.
“You have still to explain your understanding of “market clearing levels.””
It’s already explained above.
The market clearing value of a goods price is one where the quantities demanded by buyers are equated with the quantities supplied for sake by sellers.
“The market clearing value of a goods price is one where the quantities demanded by buyers are equated with the quantities supplied for sake by sellers.”
That is true for every transaction by construction. Every time a good is sold, it is demanded, and vice versa.
Where you are getting confused is believing that Austrians believe the world can BE in a STATE where ALL quantity supplied EQUALS quantity demanded. That is how you interpret the writings.
This all of course presupposes a state of rest, which to Austrians is a mental tool only. In a more time oriented understanding, there is no universal equalling of supply and demand…ever. Everything in Austrian economics TAKES TIME. But you are totally ignoring time. You’re abstracting away from time. You are trapped in equilibrium concepts that transcend time.
When Austrians argue that supply equals demand, they mean it in the praxeological sense, meaning what is actually taking place in market activity. They are NOT taking into account the psychological factors in people, such as “Why oh why can I not sell this particular good at this particular time at this particular price!?” These mental conceptions are IRRELEVANT in praxeologically constrained economics, which deals with catallactic actions.
What you are describing, unintentionally, are purposeful acts of individuals holding goods and services, for a particular period of time determined by their subjective preferences for those goods. This is of course WHAT EVERYONE does. Goods cannot be sold if they’re not held. Goods that are held means they are not being sold. Thus supply never equals demand in the praxeological sense. But using the mental tool of final states of rest, by which to understand the real world that is not at rest, Austrians sometimes argue that the final state of rest “occurs” in the immediate moment.
Since your mind explodes at the very notion of “withholding” goods, money, you name it, from “society”, due to your warped collectivist mentality, you cannot help but identify Austrian market clearing arguments, and supply and demand arguments, as relating to a round of trading over a finite period of time, and then there is nothing but black. A void. History comes to an end. You are seeking desperately for history to end, unintentionally of course, and yet history keeps on going, where quantities supplies and demanded are constantly changing, never EQUALLING in any sense but communicated using the mental tool of a “state of rest”.
For the millionth time, to Austrians, in a praxeologically constrained understanding, quantity supplied always equals quantity demanded, because trades are the only reality that is subject to catallactic analysis, i.e. of price formation.
But this is not as significant as you think it is for Austrians. It is a tangent. It isn’t a description of the world.
Prices don’t form on the basis of your mind only. If I put a sign on my front door saying “Will sell for $100 billion”, that is not a price in Austrian theory. It is a desire. A wish. According to you however, I “administered” this price, and because it isn’t going sold, there is a “market failure”, that because supply doesn’t equal demand, the government must print and spend money.
LK, your understanding of not only Austrian economics in particular, but economics in general, is so ridiculously shallow and pedantic, that I hope you at least have a few brain cells to realize that you will NEVER understand Austrian theory using anti-Austrian concepts. It’s like watching a pigeon playing chess.
Typo:
“Thus supply never equals demand in the praxeological sense.”
Should read:
“Thus supply never equals demand BUT in the praxeological sense.”
“Where you are getting confused is believing that Austrians believe the world can BE in a STATE where ALL quantity supplied EQUALS quantity demanded. That is how you interpret the writings.”
False.
And easily totally refuted by what I’ve said about this over a year ago:
http://socialdemocracy21stcentury.blogspot.com/2012/06/mises-on-tendency-to-equilibrium-in.html
You are, quite simply, a liar or completely stupid.
Take your pick.
I don’t read garbage blogs LK.
I can’t possibly be lying about what you said ON your garbage blog.
I recognize your opinion that I am “stupid.” Everyone is entitled to their incorrect opinions.
But from what you are writing here, it is clear you don’t know the very material you’re criticizing.
And I can’t help it that you contradict yourself.
If you keep asserting on this blog that Austrians believe what you claim they believe about market clearance, but on your blog you are saying something different, then that’s your problem.
Markets are ongoing. There is no praxeological “clearance” which would imply an actual equilibrium has been reached.
Austrian economics is based on ACTION. Keep that in mind when you read Austrian passages about markets “clearing”, supply “equalling” demand, and so forth. They aren’t meaning it in the equilibrium way you attribute to them, and yes, you are attributing that to them. It’s clear from your writings on this non-garbage blog.
“I don’t read garbage blogs LK.
I can’t possibly be lying about what you said ON your garbage blog.”
lol.. so you say don’t read my blog .. only you DO read it.
I suppose while using one of your many aliases?
Was it as Captain Freedom, or Sage_Advice, or Waaah, or George, Pete, David, Christof, Pete PetePete, or Private_Freedom ?
LK can’t even understand the definition of “hyperinflation”, so why are we surprised that he can’t comprehend market clearing?
I once read your blog way back in the past, but learned virtually every post is full of garbage.
Thankfully I haven’t visited it in quite some time. Don’t know exactly how long, but probably more than a year.
Those other usernames you have listed are not me.
I thought the only thing they have always been busy with is defending Krugman and whatever-Keynesianism!
Okay so perhaps this is just my own foolishness, but since deficits don’t matter why tax people at all? Why have a Value added tax for that matter?
It is how they control runaway inflation. They put the money, they take it out.
There are other available mechanisms for removing money from the system.
In reality, PK probably has no problem with no taxation near the zero bound, excepting of course that the concept of useful people making lots of money probably gives him bouts of rage incontinence.
The all-debt budget should be fine with Paul. We owe (most of) it to ourselves, after all.
Okay.
They tax because tax is political power.
Tax is social planning.
>Tax is social planning.
That’s the biggest load of garbage that I’ve read in a while.
Well if debts don’t matter then all government spending could be accomplished via debt without taxation. So why tax?
Tax is political power. When you receive an exemption or subsidy, you have received political power. The guy who received nothing is at a sever disadvantage.
Social planning.
Maybe deficits do matter?
Krugman believes that debt doesn’t have the first-order effects that people think it does, because he argues that we owe it to ourselves, but he does believe that it has second-order effects, like the distortionary effect of the taxes require to pay the debt.
Send the interest to my bank account, please.
Which people think that paying down government debt will make that money disappear from existence? That is the criteria that must be believed if Krugman’s claim of “what people think” is to be something other than a straw man.
At any rate, Murphy and Rowe have already shown that introducing government debt and taxing people to pay it back could reduce the lifetime consumption of every individual in the future.
While this isn’t a “cross sectional” decline, it is a meaningful decline. If we’re going to talk about whether or not debt affects the consumption of future generations, then looking at individual lifetime consumption is a legitimate counter-argument.
A lot of people naively assume that just as people get poorer if they have to pay their debt, countries get poorer if they have to pay their debt. Now you can argue the OLG point, but that’s different from saying that debt matters for the naive reason that people think it does.
But who is stating this “naive” version you speak of?
Government debt matters because it is simply deferred taxation. Instead increase tax rates commensurate with spending.
Major Freedom,
“Which people think that paying down government debt will make that money disappear from existence?”
Most tall money these days enters the world as debt and remains debt, it is only logical to conclude that paying all debt would shrink money supply to nearly zero, yet all the interest would remaining outstanding. Where would the money to pay interest come from?
“Most tall money these days enters the world as debt and remains debt, it is only logical to conclude that paying all debt would shrink money supply to nearly zero, yet all the interest would remaining outstanding. Where would the money to pay interest come from?”
See Murphy’s Mises. org post on that very myth:
http://mises.org/daily/4569
Major Freedom,
I know this reply will appear above your comment linking to bob Murphy Mises. There is no reply button above your comment? What am I doing wrong?
Well anyways I read the entire Murphy article that attempts to debunk the interest shortage myth.
First of all I think Murph and Woods are really trying to make sure nobody has any excuse for additional rounds of monetary inflation. I whole heartedly agree, there are no good reasons and the interest shortage conundrum is certainly not a reason for more inflation. I also think they are trying to promote interest as a necessary market function. Again I agree. Usury is possible but interest is a beacon of freedom.
With that being said, I think Murphs example is overly simplistic and fails to analysis the timing of stock versus flow. There could be an interest shortage depending upon timing. However I must digress, if it were not for digital fiat fractional reserve banking with nearly zero reserves, we would not be having this conversation. Let me quote Henry David Thoreau. For the thousand hacking at the branches of evil, one is striking at the root.
If we had sound money, the interest owed by Mr. Brown would have spontaneously been created from the chores he did for Mr. Smith. Bob is still describing a slave /master scenario…
Strike The Root, End The Fed.
“There could be an interest shortage depending upon timing.”
Of course, just like there could be a food shortage, or water shortage, or any shortage, if the time factor suddenly changed.
I don’t see how this poses a problem for Murphy’s article.
Bob, I hate to defend Krugman but I think that when he was talking about “death panels” he was being ironic and referred to the treatments with no proven medical benefit that he mentioned earlier.
The real smoking gun here is that he either doesn’t realize or is being deliberately dishonest about the fact that it is impossible to tax the way out of the entitlements problem.
How does it differ from the death panels since you take into consideration that it’s not going to the individual but the said panel that decides what has “proven medical benefit”.
I’m all for proved, just let ME decide wheter you made a good case (or not), don’t pretend it’s any objective way when buch of bureaucrats do this ‘for me’.
Well, this is just about what the government will pay for. If you can afford a particular treatment on your own, either via private insurance or out of pocket, the government isn’t prohibiting you from getting it.
You’re ignoring the destructive effects new government programs have on existing and future private programs.
You’re ignoring the costs.
OK, if your only point is that government programs have costs, then I readily concede it. But if you say those costs include death panels, I wouldn’t concede that.
Firstly – your argument is correct on surface – yes they do not ban me from getting treatment somewhere else, yet. But I heard in Canada they actually do so (maybe I heard wrong idk.). But you’re wrong – this is what the government makes me to pay for (state has no money, it doesn’t even exist outside your head…). And if I’m wealthy enough after being robbed blind I am free to go search for the doctor with a cure for my disease if one exists (the doctor and/or the cure). Bastiat lesson – it’s not about what you see that is happening, it’s about what is hidden, never materialised because of the ‘government pays for healthcare’. MF gets it right. There simply won’t be any or not as much of private health care providers (depending how deep are American’s pockets and how it unfolds). The cost MF is talking about is not money – that too of course, but it’s not even close to the relevant part. The money and laws directed at centralised HC provider will make the entire field completely uniform. It won’t matter where you’ll go to the doctor, you’ll always get pretty much the same service. It’s akin to one MD per country – if he can’t cure you you’re s c r e w e d and I’m speaking from experience in such a system. Well you’re free to patronise whatever MD or treatment you like you’ll say – not if one doesn’t exist because the system which You advocate made it not to be at all. There needs to be money and number of people buying it to make particular approach to disease profitable. If state starves private sector medicine some cures just won’t emerge, some paths won’t be explored. No, a panel of bureaucrats is not moral nor rational way to decide which way HC will go, which treatment will receive funding and which will be abandoned. There are no angels when you talk about such position of power it’s certain the power will be abused. “But if you say those costs include death panels, I wouldn’t concede that.” Why? I already paid for this health care and this people will decide what care I am now – when I got sick – going to get, death panel to me. No death panels until you can buy yourself second insurance, quite certainly more expensive than it would be without ACA (sole VAT will make it happen), also less efficient due to effects i discussed is your position and I figure it’s quite uncomfortable. And stop saying government pays for anything – you’re making a fool of yourself. Look this guy just bought me a dinner, see – no dummy he pointed a gun at your head, chose the restaurant, picked the food you’re going to eat and made you buy it – now you’re free to do whatever you like with.
You’re ignoring the costs borne by private parties such as private insurers.
Who gets do decide what is “proven”? I mean no medical treatment at all can be proven in a mathematical sense, it is merely something that seems to work by experimental observation.
If the “death panel” happens to decide that some treatment happens to be more than what they want to pay for, they just decide it needs more “proving”.
Besides, if the residents of Washington were in any way legitimate about this, they would be putting themselves onto Obamacare rather than inventing excuses why they need exemptions. Krugman doesn’t need to care about “death panels” he knows he will never face one. It’s a little people thing.
How does a government health insurance plan deciding what kind of treatments it will pay for qualify as a death panel? Private insurance plans do the same thing all the time. Do they qualify as death panels as well?
As far as “exemptions”, I think you’re misunderstanding what’s occurring. Before Obamacare was passed, Congress and their staff was govered by the federal employee health plan, just like employees of private companies are often covered by their employer’s health plan.
Then Republican put an amendment into Obamacare that said that members of Congress and their staffers would have to buy their insurance on the exchange rather than get it from the federal employee health plan, so they would have to live under Obamacare. But if the government was paying for their insurance before, and they now had to go out and buy insurance on the exchange, where would they get the money to do that? If this was a private employer, Obamacare had an employer mandate that prohibited employers from canceling their plans and dumping their employees onto the exhange. But here we have an odd situation where the law *required* a particular employer, the federal government, to dump some of its employees onto the exchange. So unlike employees of private companies, these members of Congress and their staff would suddenly find themselves having to use their own money to buy a plan on the exchange, whereas before their plan was paid for by the government. That would amount to a pay cut, which was surely not the intended effect of he amendment, so what the Obama administration did is give them the cash equivalent of the money the government used to spend on their health plans, so that the government would still be paying for the health plans they would now buy on the exchange.
How in the world can you call that an exemption.
Keshav Srinivasan ,
“How does a government health insurance plan deciding what kind of treatments it will pay for qualify as a death panel? Private insurance plans do the same thing all the time. Do they qualify as death panels as well?”
Every private insurance plan has a lifetime maximum payout. Hospitals can “charity” above and beyond this amount if they want to.
Now, a panel of elected officials or at least representatives of elected official(bureaucrats) will determine your fate. There is no longer any lifetime maximums, it will simply be up to a government entity to determine your fate. How will they determine this?
Probably whoever sends them the biggest payola, hence death panel.
It’s true that private health plans are no longer allowed to have lifetime caps, but that doesn’t mean the government is going to start telling private insurers to not pay for certain kinds of care. If a private insurer wants to not pay for a certain treatment, that’s their decision, they’re not forced to deny that care by the government.
Similarly, government insurance plans can determine what care they’re willing to pay for. I don’t see how what Krugman is proposing is any different from what private insurers already do. Lifetime caps is not the only way that private insurers decide what care to pay for.
You’re ignoring the costs borne by private companies on the introduction of government programs. That negatively affects their ability to produce and offer services.
You’re presuming unchanged private relationships.
Reality check.
If there are no lifetime limits and no preexisting conditions, then there is no way to control cost other than with death panels.
This is why Krugam said in the above video that more taxes and vigorous death panels are they only way to control cost.
You are in denial.
Are you saying that the only way a private insurance company controls costs is through lifetime caps and exclusion of pre-existing conditions? That’s simply not true. They also control costs through their choice of what benefits the plan provides.
Yes, what benefits are provided is yet another predetermined item decided by me and insurer at time of contract.
Obamacare, does it have a list. Oh wait, this is yet to be determined by death panels.
Obamacare has a list of minimum allowed benefits. It doesn’t set a ceiling on allowed benefits.
You could call the Obamacare list of benefits “life panels” rather than “death panels”.
Keshav Srinivasan,
“so what the Obama administration did is give them the cash equivalent of the money the government used to spend on their health plans, so that the government would still be paying for the health plans they would now buy on the exchange.”
Seeing how the exchange lowers the cost of healthcare, these people just received a raise? You said they get the same amount of cash as the Fed health plan cost.
Congress and their staff were already in a federal employee insurance exchange, so they already had the cost-saving benefit of a large pool of customers being able to negotiate insurance premiums. So in that respect switching to exchange doesn’t change much for them. The only thing is the federal government was paying for the plans they bought on the federal employee exchange, so the Obama administration is giving them the same amount of money to buy a plan on the Obamacare exchange. So no, there’s no pay increase.
Without real numbers this conversation is pointless. It is my contention they had a Cadillac plan with Cadillac cost. If they get the same money yet now spend much less, they are pocketing the difference.
They’re not allowed to pocket the difference. They’re basically just given a voucher that can be used to buy a plan on the exchange.
SO a doctor or hospital will know who is a special Federal employee when they see voucher?
So much for being treated like everybody else.
No, the voucher goes to the insurance company, not to the doctor or hospital.
That anonymous comment was made by me by the way. I just forgot to sign in.
In a private agreement you make the deal up front, if you don’t like it, don’t buy it. Just walk away and buy somewhere else. This means the individual is faced with balancing cost of coverage against their personal risk, and they can put that balance pretty much wherever they want (to the limit of what insurance companies will cover). Death panels can’t happen because everything is agreed before hand. Admittedly, insurance companies are known for being tricky when it comes to contract details, but that’s a known limitation of the legal process. We could focus usefully on improving the legal system, but Obamacare isn’t doing that.
A government system forces the individual to get covered, decides what the coverage will be and then hands it all over to an administrative team with the power to change their minds when it suits them. If you thought that insurance companies were bad when it came to contractual details, government regulators are much worse, they can change at any time. Look how many times Social Security has been arbitrarily jigged around. Obamacare has already had the President stepping in to strategically decide to apply it in ways that suit himself.
About Congress and whether they are willing to muck in with the rest of the nation… the fact that they attempted to get an absolute exemption for themselves in the first place tells you everything — they knew they didn’t want to be part of it. You say Republicans forced Congress to buy insurance on their local exchange, but strangely Republican votes did not pass Obamacare, the Democrats got it passed with three-way control over government. How can Republicans “put an amendment into Obamacare” when Democrats controlled all three levels of government?
I would argue it was Democrat’s getting caught red-handed in front of voters that made them accept the Republican recommendation. TO do otherwise would have enshrined a blatant exemption that anyone could see. However, what they couldn’t have upfront they took by stealth.
The whole point of making congress and their staff lose their fairly cushy taxpayer-funded health plans was to bring them to the level of the average Joe. Sure they got upset when their tax-funded plans were cancelled. Sure they got upset when their health costs went up.
Wait a moment, news flash! A great many other Americans also found their existing plans being cancelled and found their health costs going up. These people also got upset. This includes employer funds as well. Government staff are pissing and moaning about and effective pay cut driven by rising health costs… join the club, buddy. Get out on the street and ask real people what their effective pay looks like.
The difference is, government can change the rules yet again… while normally the subsidised health care would only be available for the genuinely needy (forced charity is not real charity, but at least it keeps things stable), suddenly high paid congressmen also get a subsidy. How about that? Exemption by stealth anyone? But you can’t call it an exemption, right?
This of course is the way the whole system is going. Now we are moving to the point where unions will get exemptions. Hasn’t happened yet, but given the number of times Obama has promised that it absolutely won’t happen, you know it will do. Then there’s special cases for self insurance. Some groups of people can do it, others cannot, subject to regulatory whim. Next year a different group of people will qualify.
The full hypocrisy of the outcome only becomes apparent when you go back to basics and listen to Elizabeth Warren and “you didn’t build that”. The better off need to transfer their wealth to others, because of some fundamental debt that can never be repaid. If you buy electricity you didn’t really buy it, you owe more. If you pay a road toll, you didn’t really pay for the road, you still owe more. If you pay tax, it isn’t enough, you must pay bigger taxes.
The very fact that you have something means you owe it to someone else… except this rule does not apply to congress and the politically connected. In that one special case, they did built it, and they do apparently deserve to keep their wealth, and should they find themselves left short in any way by the new Obamacare legislation (or any other legislation) they must absolutely be “made whole” with full compensation.
This is a major problem in my eyes. The idea of a single panel deciding what medical approaches doctors must stop using. At a time when personalized medicine is becoming recognized as highly beneficial, anything pushing towards standardization instead is a bad idea.
One big target is tests. We always hear thst the US runs too many tests. Now they are trying to convince us that in many cases we would better off not knowing the information provided by tests.
On the whole, tests are very cheap in comparison to having something that goes wrong and you don’t know about it until too late. Logically you would expect a lot of tests to come out negative for the very reason.
Also, with improving technology and greater demand for tests we should be able to crank through more tests for less money. The whole lab-on-a-chip paradigm.
One of the hidden problems with Obamacare is the parallel push for central record keeping. Since people have good reason not to trust governments, they also don’t trust the record keeping authorities with any test results. As a consequence they don’t do the test at all.
We can see this with Vets coming back from war zones. Government happily sends them to war, but if they come back with the slightest symptom of upset they are rapidly diagnosed with every mental disease under the sun and their life becomes a living hell. Thus they do the logical thing and stay right away from any treatment… you couldn’t make this stuff up.
I fail to see what there is left to argue about. A government bureaucracy must make decisions about the limited resources it controls by decree. Because it is a GOVERNMENT bureaucracy, these decrees will be made to curry favor with favored groups. Sarah Palin warned that this was the natural outcome of government bureaucratic medicine. Krugman confirmed that he understands at least that such decisions will be made about those limited resources by decree. It matters not if these “policy makers” (one of DK’s favorite terms) are called “death panel” or something else.
How is this different from what private insurance plans do?
Prices, competition, alternatives, entrepreneurship etc….
AKA “freedom”,
The only way in which you could say that Medicare and Medicaid are restricting your freedom is by taking your tax dollars, right? Medicare and Medicaid making decisions about what kind of care they’ll pay for doesn’t restrict your freedom, does it?
You have to take into account the implications and consequences of the government enforcing Medicare and Medicaid programs, on the private healthcare market.
Enforcing “Obamacare” for example has had the consequence of people losing their current healthcare coverage.
Medicare and Medicaid have already long since had that consequence. This restriction of freedom is unseen.
Keshav Srinivasan
“The only way in which you could say that Medicare and Medicaid are restricting your freedom is by taking your tax dollars, right? Medicare and Medicaid making decisions about what kind of care they’ll pay for doesn’t restrict your freedom, does it?”
In a free market; choice, competition, profit motive, contract and other factors determine what care you get.
In a nationalized health plan you get what politicians say you get.
The criteria used to make the decision, and the ability of competitors to offer replacements or alternatives if you don’t like the decisions being made.
You can still go to a private insurer if you don’t like the government’s insurance plans.
I’ll take your house, but you’re still free to go buy another.
Really?
I introduce violence into the world, to bring about my desired institutions.
A consequence of my violence is an unintended effect on others who were to otherwise offer something similar to what I am offering.
Is it really honest to claim that if people don’t like my service, that because I allegedly do not have any effect on their activity with other service providers, that it’s a free choice being made by others?
You have to take into account the wider implications. You’re just focusing too narrowly on the obviously involved parties. You have to expand your horizon of cognition, and include the effects violence has on everyone.
Obamacare, I hope you realize, is hurting private insurance companies. You can’t believe that introducing Obamacare is nothing but introducing Obamacare among the same exact quantity and quality of private institutions.
Actually, I think on net insurance companies are helped by Obamacare, because of the individual mandate and the employer mandate giving them so many new customers, which makes up for the regulations they now have to comply with. That’s why they supported the bill when it was being passed.
I agree. It helps certain existing insurers. It probably hurts some and some prospective future insurers. Like most crony capitlaist schemes. But “it helps Obabm’s big business donors” is a weak selling point.
Mandates are not beneficial to people, or else they would have chosen to do that which is mandated on their own without the mandate.
Your thesis is a contradiction of basic praxeological principles.
Violence into peaceful affairs does not and never has “improved” everyone’s lives. It has only benefited some at the expense of others in the short run, and made everyone worse off in the long run due to lowered overall productivity.
Sure hey are. If my town mandates that you don’t use lead paint, then it’s beneficial.
It helps the ones that opted in assuming that enough healthy customers signup. That has yet to be determined. It hurts the insurance companies that opted out of the exchanges because their customers are not allowed to take subsidies. It also hurt the small insurance companies. Many of them went out of business or sold their business to the big insurance companies.
In the interest of saving money, there will b e many more mandates, like mandating companies to stop selling trans fats (announced by FDA today). Mandating you to eat your broccoli can’t be far away.
Major_Freedom, you say “Violence into peaceful affairs does not and never has “improved” everyone’s lives. It has only benefited some at the expense of others in the short run”. Does that mean that Austrians don’t believe in market failures or positive or negative externalities? Do they think that voluntary interaction always leads to Pareto optimal results?
“Does that mean that Austrians don’t believe in market failures or positive or negative externalities?”
Markets don’t fail. It prevents attempts of violent people to get what they can only get through violence. Thus, if someone cannot get a road, or school, or weapon of mass destruction, other than through violence, then according to him, the market “fails” to give him what he wants.
But that sort of “failure” is in fact a success, because others who would have been victimized by violence, are not victimized. Success to me is avoiding violence, not creating things you want that require violence.
As for positive and negative externalities, there will always be unpaid for benefits (e.g. you might benefit from my presence, even though you might not pay me, due to our property rights not clashing), and unpaid for costs (e.g. you lose potential profits because you were outcompeted by a superior producer).
Externalities are not supposed to be all paid for. Free markets don’t require this.
“Do they think that voluntary interaction always leads to Pareto optimal results?”
This is not related to Austrian theory. It is related to political theory.
In the absence of force, Pareto optimality tendency is guaranteed (I say “tendency” because humans are not perfect forecasters), because no matter what any individual does, they will seek to benefit themselves, and by virtue of absence of violence, they are not depriving anyone else of their persons or property.
Let me ask you this: since you believe that it’s possible for voluntary interaction to lead to a Pareto-inefficient result, due to the presence of positive or negative externalities, for instance, do you believe that it’s possible for a government action (I.e. via force or the threat of force) to ever get us closer to the Pareto frontier? Note that this is a different question than whether you think that the government action would be morally justified (presumably you don’t).
Keshav:
“do you believe that it’s possible for a government action (I.e. via force or the threat of force) to ever get us closer to the Pareto frontier?”
Of course not. Pareto optimality requires that should an individual be made better off, there cannot be anyone else who is made worse off.
If you initiate force against people, then those people are worse off, so even though others might benefit (in the short run) it’s not a Pareto improvement.
Major_Freedom, suppose an asteroid is hurtling toward earth and will kill all life on the planet, and the only way to stop it is for the government to get ten dollars from each person in order to build a device to divert the asteroid’s path. If people weren’t willing to contribute the money voluntarily, because they each preferred someone else to pay for it, would it be a Pareto improvement if the government taxed everyone in order to build the device? Again, I’m not asking you whether this would be a moral action.
Keshav:
If you assume in a hypothetical example that the only way of stopping people from getting killed is through initiating force against them, then what you are actually assuming is that those who don’t want to pay, are willing to risk their own lives in exchange for owning a certain $10 for a short period of time.
If a given individual does not want to pay $10, because they expect that others would value their lives more highly such that they would be willing to pay $20, then that individual is actually telling you and everyone else that they would risk their own deaths in order to save $10.
So your scenario is actually one where there exists individuals willing to take on a huge risk of dying for the sake of $10.
So what you’re talking about is a choice of one individual stealing from another in order to save themselves.
In other words, the question is whether it is Pareto optimal for one individual to stop another from risking their own lives, and refusing to sacrifice their wants for the sake of other people’s wants.
You want to live and not die from the asteroid, so you’re trying to convince me that it is a Pareto improvement to stop people from taking on a risk that they choose to take on.
Your scenario is similar to this one:
If I am willing to risk my own death by jumping out of an airplane with a parachute, then there is a small probability that my parachute will not open. I am willing to risk that chance of death for the sake of 1 and a half minutes of thrill.
But suppose that someone else, namely you, do NOT want me to take on that risk, because you need me to remain alive in order to ensure that the risk of YOUR death is minimized. Say you need me to stay alive because I am the only one who can give you an operation to save your life.
Like you said, if we ignore morality, then the fact remains that should you initiate force against me to stop me from sky diving, in order to not only reduce my risk of death, but to save yourself, then the answer to your question is that no, it would not be a Pareto improvement to stop me from taking on a risk that I want to take on.
Major_Freedom, why are you looking at ex-ante preference as opposed to ex=post preferences? Wouldn’t the people of Earth thank you for saving them, since they would have been dead if you hadn’t taken any action, and their life is worth at least 10 dollars to them? So in that sense isn’t the state of the world that you have brought about better for each individual than the state of the world that would have occurred otherwise?
To take another example, suppose you had a street with 5 residents, which got very dark every night leading to people tripping and stumbling all the time. If you installed a 50 dollar street light, that would provide a benefit of $20 to each resident, but people aren’t willing to voluntarily contribute $10, since if a street light goes up it provides benefits to everyone, not just those who paid for it. So if the government imposes a $10 tax on everyone and put up the streetlight, wouldn’t that be a Pareto improvement, since everybody is $10 better off compared to if the government hadn’t taken any action?
Keshav:
“Major_Freedom, why are you looking at ex-ante preference as opposed to ex=post preferences? ”
Two reasons. One, because in one possible world ex post, the world would not exist. Everyone would be dead. Two, because ex ante preferences become identical to ex post preferences when the context is action.
“Wouldn’t the people of Earth thank you for saving them, since they would have been dead if you hadn’t taken any action, and their life is worth at least 10 dollars to them?”
You might not be aware, but you’re actually substituting their preferences for themselves, with your preferences.
If they believed their life was worth $10 to them, then they would have paid the $10 voluntarily. But they didn’t. Why? Because they were willing to take on the risk of their own death in exchange for $10. That of course means they accept the possibility that their choice might lead them to their own death.
Now, if you take their money forcefully, then what you did was you prevented them from actually taking on a risk that they themselves wanted to take on.
Of course, in a perfect world, I would love to jump out of an airplane with a risk of death, AND be prevented from jumping out of a plane if the context was that my main and reserve parachutes would not open. But I can’t have both. I can only have one.
According to your logic, because I might die from an accident during my normal life, then it would be better if you prevented me from taking on the risk of life, which is possible death, by you putting me into a coma so that I am prevented from taking on any risk of my death.
Then, 50 years later, you wake me up, and I am supposed to thank you for saving my life, because I could have died if I was awake and taking on risk of death voluntarily.
This is an extreme case to show you that your worldview actually entails putting the entire human race into a coma because ex post we might be able to conceive of possible ways people would die if they were not forced into the coma.
“So in that sense isn’t the state of the world that you have brought about better for each individual than the state of the world that would have occurred otherwise?”
No, because you forced people into a world they didn’t want to go in for themselves. If you say that’s not as important as you making sure they live, then logic dictates you don’t want anyone to be awake and free to move ever, because it is ex post certain you would save people from accidental death on the highway, or in a hospital, from robbers, from rapists, and yes, from asteroids.
“To take another example, suppose you had a street with 5 residents, which got very dark every night leading to people tripping and stumbling all the time. If you installed a 50 dollar street light, that would provide a benefit of $20 to each resident, but people aren’t willing to voluntarily contribute $10, since if a street light goes up it provides benefits to everyone, not just those who paid for it. So if the government imposes a $10 tax on everyone and put up the streetlight, wouldn’t that be a Pareto improvement, since everybody is $10 better off compared to if the government hadn’t taken any action?”
No, because your claim they benefit by $20 is imaginary.
People are not better off by being victimized by force. They are always worse off.
Again, you are substituting their preferences for themselves, with your preferences. What you are saying is that people are unable to benefit themselves, so they must be forced to do so at gunpoint. But precisely because they won’t do it unless they are forced at gunpoint, proves they really aren’t going to benefit from what happens due to the gunpoint.
In your example, people’s actions are telling you that they would rather trip and stumble at night, than pay the money for a streetlight.
You are saying their preferences are worthless, but yours are not.
What you are actually doing Keshav is that you are ex post rationalizing a way for you to guarantee your own life, by exploiting other people’s lives.
You don’t really care about saving other people’s lives, but rather, you want to save your own life from the asteroid, and you don’t want anyone else to stand in your way, including taking on a risk of their own death to save $10.
You don’t want others to take on that risk, because the implication is that your life would be a certain death, given that there is an asteroid, and given that they don’t pay.
For why aren’t you saving other people’s lives now, for taking on huge risks like race care driving, or skydiving? You are not stopping these risks of death because they don’t include your death if they are wrong.
But with the $10 tax per person in the face of an asteroid, your death is now at stake, so you need to rationalize harming others, to save yourself.
I won’t criticize you at this time for hurting others to save yourself. But please don’t try to convince me that you’re in favor of taxing people the $10 to save them. You’re only in favor of it to save yourself.
You introduce violence into the world to kick out people who may be in your house when you get back from work. Ancap talk of violence is just absurd.
They introduced violence first when they broke the lock.
What if your house was unlocked? Did they still introduce violence into the world?
The visitors initiated violence as soon as they walked into the house uninvited.
If you refuse to accept this to be violence, then OK, I’ll just take all your food, and all your water, before you ever have a chance to touch it to sustain your life. Then, as soon as you start to lay a hand on me, for harming your interests indirectly, I’ll do what you do and yell “Violence is NOW initiated!” and promptly consider you to be the aggressor.
Your talk is what is absurd. You want to believe human life is capable of being sustained without any material means of life.
And no, you can’t argue that squatting is not harmful to the owner’s life, because he doesn’t “need” the house when he’s gone. What you don’t understand is the logical consequence of applying the maxim you at this point are keeping to yourself. Any degradation to someone’s material goods harms them. What you are implicitly saying is that some harm is good harm.
Keshav:
Physical violence against persons cannot be the only aggression worth fighting back.
For imagine that I had a transporter gun that instantly vaporized every piece of food and every drop of water, within a 10 foot radius of your body, at no direct harm to your body. I won’t touch you, and I will only make all food and water disppear as soon as it comes close to you.
You would of course eventually die from my actions. But according to you, since I did not initiate physical violence against your body directly, I am somehow not the aggressor, and that you would be the aggressor if you tried to physically stop me from continuing to do it.
MajorFreedom,
“Obamacare, I hope you realize, is hurting private insurance companies. You can’t believe that introducing Obamacare is nothing but introducing Obamacare among the same exact quantity and quality of private institutions.”
Yes it will eventually destroy private insurance.
Necessity is the mother of invention. If you know that you must save for your old age, you will. If you are getting a welfare subsidy stolen from others to which you think you are entitled, society rots from within.
But that’s a different argument from saying there are death panels.
And if you don’t have to save for your old age, you will just buy a big car and cause Global Warming.
Not nesessarily so Keshav. Maybe the private insurer no longer exists because he lost customers to the govt plan or maybe the govt set rules he could not profitably follow.
Even if all the private insurance companies were put out of business (which Krugman doesn’t want, and which doesn’t even happen in single-payer countries like France), if you could afford it you can still pay for the treatment out of pocket. And if you think you think that it’s somehow unjust to not get something if you can’t afford it, that would make you a believer in positive rights, not a right-libertarian which is what the commenters here seem to be.
But now you’re changing topics. You asked me for a difference, and I gave you a significant one.
Isn’t coverage for uncertain future huge costs the whole point of buying insurance? So it’s no answer to say “well do without insurance then”. If I have to do without insurance sudenly, isn’t that a big difference?
The negative/positive rights distinction is, as I’ve come to realize, crap. It’s not as clear as you might think. I could assert a right to privacy (i.e., don’t distribute pictures of me) and it would impose a negative obligation on you. Rights talk really just confuses things.
Keshav Srinivasan,
“Even if all the private insurance companies were put out of business (which Krugman doesn’t want, and which doesn’t even happen in single-payer countries like France), if you could afford it you can still pay for the treatment out of pocket.”
You don’t understand markets.
Aninymous, is there some other way you prefer to talk? Perhaps the non-aggression principle that libertarians like to use, or the moralistic language of religion, or the symbolic language of deontic logic?
Gamble, what is it that you don’t think I understand about markets?
Ken B, yes, having to pay out of pocket is a significant difference. But is “death panels” the appropriate term for that difference?
With a private insurance plan you have a contract, and they can’t change the rules after the fact.
With government you have a Constitution and they regularly change the rules to suit themselves.
The essence of libertarianism is the keeping and enforcement of contracts. The essence of politics is lies lies lies for which there is no cause of action (and being really good at killing people).
http://www.washingtontimes.com/news/2013/nov/4/obama-brag-new-book-im-really-good-killing-drones/
The essence of libertarianism is the keeping of contracts? WTH? Why not liberty as the name implies?
Liberty implies contract.
Remember, in liberty you are not threatened with violence against your person or property to contract with others.
Tel,
“With a private insurance plan you have a contract, and they can’t change the rules after the fact.
With government you have a Constitution and they regularly change the rules to suit themselves.”
???????????
Bankruptcy? Hello? Its a lot easier for a private company to get out of a contract by declaring bankruptcy than to amend the Constitution, which required 3/4’s ratification by the staes.
Bob Roddis,
I thought the essence of libertarianism is the NIOFI principle ( no initiation of force against innocent people).
But YAY for simplistic platitudes!
There’s the prohibition against fraud and the NAP. It was that way in 1973 and I’ve never seen it changed. So you’ve been running your mouth all this time without understanding the prohibition against fraud?
It is simple. It takes a disturbed personality to distort and twist these simple concepts that most people already understand and practice in the real lives.
And so you have apparently never heard of secured transactions where creditors are granted liens on specific items of property owned by the debtor as security for unfulfilled obligations?
Have a good lawyer, and you can escape from anything
When you have a government judge who may take 6 years to decide that the sky is blue (or not), that is a necessity. In fact, that is the major problem facing folks these days on “the free market”. I’ve been a civil litigator for 30 years. I should know.
On a truly free market, good judges could be hired and parties could list the good judges in the contract who would settle any disputes. Some people have great talent in that area. Most do not.
You mean a good judge?
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