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MIT’s Gruber on ObamaCare

[UPDATE below.]

I am not being dramatic for purposes of blog excitement: It didn’t really hit me just how awful ObamaCare was going to be, until I read this interview with the chief intellectual architect behind it, MIT’s Jon Gruber. (HT2 MR) My understanding is that Gruber:ObamaCare::Krugman:ObamaStimulus. (If anyone thinks that’s a bad analogy, please explain in the comments.)

Now it’s a hostile interview, to be sure. But look at some of the stuff Gruber admits, for example:

[Hugh Hewitt]: So Jon Gruber, I don’t think anyone can deny that there will be millions of people with massive sticker shock, and as a result, in early January, there are going to be people who were previously covered who are not presently covered, whom if they encounter a catastrophic accident or illness, will be bankrupt of their assets. Don’t you agree?

[Jon Gruber]: There will be some people who were previously covered who become uncovered. I agree. I think there will be at least ten and probably more like thirty times as many people who were previously uncovered who become covered. So basically, you have to ask yourself is your rule for legislation you can’t create any losers? Because if that’s your rule, you might as well shut down the government.

Incidentally, it’s interesting that in his throwaway line at the end, Gruber echoed one of Rothbard’s points about the Pareto principle and anarchism. But I digress.

UPDATE: Actually, Gruber is much more closely tied to ObamaCare than Krugman ever was to the Obama stimulus package. Gruber is the guy, you may recall, who was going on the talk shows promoting ObamaCare, without them notifying the viewers that he had been paid a boatload of money by the government for consultation on the project. (Note, I’m not sure how I feel about stuff like that; depending on how it played out, it’s possible Gruber wasn’t trying to deceive anybody. I’m just reminding you of the controversy, because Glenn Greenwald and Krugman went toe to toe over it.)

Krugtron Confers His Invincibility to ObamaCare

Remember when healthcare.gov first launched, back on October 1, that Krugman wrote:

So, very early reports are that Obamacare exchanges are, as expected, having some technical glitches on the first day — maybe even a bit worse than expected, because it appears that volume has been much bigger than predicted.

Here’s what you need to know: this is good, not bad, news for the program….

The big fear has been that a combination of ignorance and misinformation would keep people away, that they wouldn’t sign up…Lots of people logging on and signing up on the very first day…is an early indication that it’s going to be fine, that plenty of people will sign up for the first year of health reform.

Yes, there may be some negative news stories about the glitches. But Obamacare is not up for a revote. As Jonathan Bernstein says, the only thing that matters is whether it works. And today’s heavy volume is yet another sign — along with abating health costs and below-expected premiums — that it will.

So you would think that in light of the actual reality–according to CNN, 106,000 Americans signed up for ObamaCare in the first month–Krugman would be sweating bullets.

Ha ha, I crack myself up. Here’s what Krugman wrote on October 29:

Suppose that healthcare.gov isn’t fixed by the end of next month. How bad is it for Obamacare? Would the program be doomed?

No, says Jonathan Cohn, because there are two layers of protection against poor signup…. First, there is a system of cross-subsidies to insurance companies…Second, the subsidies to individuals are designed to hold health costs down to 8 percent of income, which means that they will rise if costs are higher than expected.

Neither of these would be a good thing, since they would increase the budget cost, but they do mean that Obamacare’s survival probably isn’t on the line.

Actually, the biggest reason Obama and co. should be anxious to fix these things now, I’d argue, isn’t the fate of the program itself, which can survive even large early wobbles, but the midterm elections. If Obamacare is fixed, Republicans will be in the position of attacking a program that is benefiting millions of Americans; if it isn’t, they can still run against the legend, not the fact.

So a lot is riding on fixing the technological botch — but not in quite the way people imagine.

And remember, by “in quite the way people imagine,” Krugman was referring to himself precisely 28 days earlier, when he thought the enrollment numbers tilted in favor of his preferred policy.

You really have to sympathize with poor Krugman. Can you imagine how annoying it must be for him, to deal with “austerian” economists who refuse to admit they’re wrong in light of the evidence? They just keep pushing their preferred policy, inventing contradictory rationales as the facts on the ground undercut them. Man I don’t know how he summons the will to return to the policy debate each day, with opponents who behave like that.

“Hoppe Refutes Bleeding Heart Libertarianism”

I had nothing to do with the creation of this video. That’s how I can objectively say that it is the greatest thing I have seen in a week.

Potpourri

==> Dan Kish (my colleague at IER) says, “Leave the fracking states alone!” (You should hear him off the record.) In all seriousness, Kish is one of my go-to guys when I want to know the real reason something happens in DC.

==> I thought Michael Duff’s comment here was hilarious, not about David Friedman, but about all of us libertarians.

==> Glenn Jacobs (wrestling’s “Kane”) talks Austrian economics.

==> Remember the UC Davis cop who pepper-sprayed peacefully protesting students? Taxpayers are funding him $38,000 because he suffered after the incident. Shame on you people for complaining.

==> The EU doesn’t think US police are your friend…

==> Mark Skousen thinks the government may be adopting his macro model.

==> This is all over the place by now, but just in case you missed it: Check out these hilarious pro-ObamaCare ads.

The Economics of ObamaCare

I have a Mises Daily running through some basics. Example:

There are reasons for the particular provisions [of the Affordable Care Act], which sound superficially sensible (if you don’t know much about economics). Obviously, before the passage of the new law, there were millions of people without health insurance coverage. Although many of them were young and healthy — thinking they could risk going without coverage — many of them wanted coverage but couldn’t obtain it, either because of the price or an outright refusal of coverage because of a pre-existing condition.

Now, given that the government wanted to mandate that health insurers provide coverage to all applicants, there had to be specific rules on what premiums they could charge, and minimums on the type of policies offered. Otherwise, the health insurers could say, “Fair enough, President Obama, we will indeed give a policy to any applicant — even someone with brain cancer. It’s just that the annual premium for people with brain cancer will be $2 million, and we will cap our total payment at $100 per year. Who wants to sign up? We’re more than happy to comply with the new mandate.”

For those who want more than I discuss in the article, sign up for my forthcoming online Mises Academy class on “The Economics of ObamaCare.”

Tom Woods Talks MMT With Me

Here. Two things:

(1) I misspoke early in the interview, when I confused Abba Lerner with Oskar Lange. They both advanced the “market socialist” response to Mises during the celebrated Socialist Calculation Debate, but it was Lange (not Lerner) who wrote (somewhat tongue in cheek):

Both as an expression of recognition for the great service rendered by him and as a memento of the prime importance of sound economic accounting, a statue of Professor Mises ought to occupy an honorable place in the great hall of the Ministry of Socialization or of the Central Planning Board of the socialist state.

But just to be clear, I was right that Abba Lerner is the forerunner to today’s MMT guys.

(2) I summarize my view on MMT near the end of the interview like this:

“[T]hey run around with these accounting tautologies that yes, technically are accurate mathematically, but how they deploy them in policy discussions is completely misleading.”

Bureaucrats Want to Put a Black Box in Your Car

At any given time, bureaucrats are plotting ways to take your money and your privacy. This LA Times story relays yet another example:

WASHINGTON — As America’s road planners struggle to find the cash to mend a crumbling highway system, many are beginning to see a solution in a little black box that fits neatly by the dashboard of your car.

The devices, which track every mile a motorist drives and transmit that information to bureaucrats, are at the center of a controversial attempt in Washington and state planning offices to overhaul the outdated system for funding America’s major roads.
…
“This really is a must for our nation. It is not a matter of something we might choose to do,” said Hasan Ikhrata, executive director of the Southern California Assn. of Governments, which is planning for the state to start tracking miles driven by every California motorist by 2025. “There is going to be a change in how we pay these taxes. The technology is there to do it.”

The push comes as the country’s Highway Trust Fund, financed with taxes Americans pay at the gas pump, is broke. Americans don’t buy as much gas as they used to. Cars get many more miles to the gallon.

What’s really surprising is that the article explains that some libertarians are on board with the idea. I guess the idea is that a mileage-based tax is more efficient than a gallons-of-gasoline-based tax, when it comes to paying for road usage.

Two objections to such an argument are: (1) Even if the textbook mileage tax made more sense, we can’t trust politicians to set the “optimal” tax rate; giving them another new type of tax, will simply mean more revenue going to the government. And (2) do you really want government officials–who are already monitoring our communications–able to track your every movement in your vehicle?

Jon Stewart Deals With “You Can Keep Your Health Plan, PERIOD”