Krugman on the Oregon Medicaid Experiment
Since health insurance “reform” is back in the news, I’ve been boning up on stuff, including the famous Oregon Medicaid experiment. (The Wikipedia article on it is surprisingly good, in case you never really figured out what everybody was talking about a few years ago.)
To make sure I wasn’t getting duped by right wingers, I went back and reviewed what “the other side” said. And this response from Krugman is pretty funny, in how slippery it is:
Busy day, no additional blogging until much later. But you should be reading The Incidental Economist on the Oregon Medicaid study that’s creating a lot of fuss today. Basically, budget woes forced Oregon to allocate Medicaid access by lottery, giving a rare randomized experiment. Those who got Medicaid suffered much less financial distress and less depression; they received more preventive care; but on some (not all dimensions) their health wasn’t significantly better than those who lost out in the lottery.
Somehow, conservatives think this is a big win for their opposition to universal health insurance. Why? What it suggests is that the health benefits of ANY kind of health insurance are somewhat hard to identify over a two year period; so, are you about to give up your own insurance, or is your best bet that having that insurance is still a very good idea? And the financial benefits are a big part of that! Since you are going to treat your illnesses, better not to bankrupt yourself in the process, right?
…
Above all, you should bear in mind that if health insurance is a good idea — and you are nuts if you let this study persuade you otherwise — Medicaid is cheaper than private insurance. So where is the downside? [Bold added.]
It’s that last part that I put in bold that I find so funny/slippery. According to Krugman’s own logic, he himself should be willing to give up his current health insurance plan, in exchange for the same deal that people on Medicaid get. Would Krugman be willing to do that?
I’m assuming the answer is “no,” and then when Krugman explained why, he would see that his main point in his post unravels.
Crusading on Twitter
Here’s my Pinned Tweet:
God loves you more than you can possibly imagine.
— Robert P. Murphy (@BobMurphyEcon) May 16, 2016
Maybe once a week or so, I’ll get some wiseguy (sometimes with and sometimes without malice) who will respond with a Bible verse listing an Old Testament death penalty for something that sounds innocuous to modern ears. For example, someone said, “Yeah, God loves us unless we work on the Sabbath!” and quoted a verse about the death penalty.
I didn’t argue with the guy since it would be pointless, but this is a beautiful illustration of the immense chasm between theists and atheists. If the God of the Bible exists, then He is clearly the owner of everything under any type of libertarian view, and He can set whatever rules He wants for people standing on His land.
Furthermore, unless you demand immortality, no matter what, “God kills you.” The distinction between dying because of a command God gave to Moses, versus a command God gave to your failing heart or an earthquake or a lion, is not that significant in terms of moral culpability for God.
Finally, it’s entirely possible that “God kills you” for breaking a rule, and yet you still end up in heaven. (For example, some Christians think that Ananias and Sapphira were still saved, even though they fell dead at Peter’s feet when they lied about how much money they received for a land sale.)
So in light of these considerations, my wiseguy critic comes off like saying, “Oh, you think Jimmy’s dad loves him? Well then why did he send Jimmy to his room for hitting his sister at the dinner table? No loving father would do that, since all life occurs in the dining room.”
But of course, the typical atheist wouldn’t even think of things on these terms, but instead would imagine a human king imposing a rule like this. And yes, from a secular perspective, killing someone for working on the Sabbath (or talking back to parents, or committing adultery, etc.) would be horrifying.
Even so, I don’t think it’s really coherent to criticize the Bible-believing Christian (or orthodox Jew) for holding a certain belief if we strip away all of the other elements of the worldview. My critic is reduced to saying, “If we assume I’m right that God doesn’t exist, then you’re wrong Bob for saying He loves us.” Well, I can’t argue with that, but it’s also not too embarrassing to my position.
On Facebook recently I said something like this:
“Some people deny the obvious reality that humans are evil, in order to be happy. Other people accept the truth, and become miserable misanthropes. Christianity teaches you that humans are evil but shows you how to love them with joy nonetheless.”
A lot of people flipped out. Fast forward to today: I could be wrong, but I think I had a crossover from Facebook and this guy on Twitter made the following remark on my tweet about the new Transformers movie, referring back to my controversial Facebook post. And he was “right” from a secular point of view, but once again, dipping into Christianity, his snark posed no challenge. (BTW this guy comments a lot on my tweets and is generally friendly, so I don’t think this was intended to start a huge fight. Also it’s possible I am reading too much and he wasn’t referring to my FB post, but I’m pretty sure he was.)
That’s what’s so refreshing about Christianity. Even people who are mocking it end up affirming the unbelievable grandeur of Christ. For example, Bill Hicks once told some jokes bashing Christianity, and then he explained to the crowd (I’m paraphrasing), “Once when I was down South I did this routine, and after the show some guys came up and said, ‘Hey! We’re Christians and we didn’t like your jokes.’ I told them, ‘So forgive me.'”
That was (a) funny but also (b) further evidence that Jesus is the Messiah.
Bad Boys
Tom Woods, Kevin Gutzman, and I are all too hot for AP Government. I think this clip is apropos:
Potpourri
==> On Contra Krugman ep. 91 we have a lot of fun. I don’t have time to give a timestamp guide, but during the summary, Tom tells us how to pronounce “Qatar.” Then I point out Krugman’s unbelievable flip-flopping regarding health insurance premiums. Then Tom talks about foreign policy, and finally I talk about dollar strength.
==> I am starting a series at IER on “Clarifying Paris.” This is Part 1. An excerpt:
We see here the fundamental inconsistency in the descriptions put forth by the pro-Paris crowd: On the one hand, they argued that it was a historic agreement, one of the crowning achievements of the Obama Administration (and other governments), which was a vital part of humanity’s response to climate change.
Yet on the other hand, when President Trump says the costs outweigh the benefits for the US, the critics argue that the Paris Agreement was just a non-binding pledge and so there’s no point to pulling out; no big whoop. How can one possibly reconcile these two views?
These analogies are never perfect, but let’s try this one: Imagine a wife agrees that she and her husband will go on a vacation with their friends, and she verbally commits to splitting the cost of the beach house rental. Then the wife tells her husband what she did, and he says, “No way, that’s too expensive for us right now, I’ll call and cancel.” But the wife objects and says, “I didn’t actually sign a contract with them. Let’s still go on the trip, and when they ask us to pay our share of the bill, we’ll point out they can’t force us to, legally.” In this analogy, clearly the wife’s strategy is duplicitous; it is better for the husband to outright cancel the trip, even if the other couple has started making plans and will be really upset at the flip-flop. If the husband and wife have no intention of following through on her verbal pledge, better to let everybody know that upfront than to go on the vacation and have their friends guilt trip them the entire time.
==> This Scott Alexander post ran back in May, but it is amazing. He is pushing back against a piece at Vox concerning the press’ treatment of Donald Trump. (How can you not read it now?) I dawdled this long because I wanted to “do it justice,” but alas I am too swamped. But at least check out these great excerpts:
And whenever I mention this sort of thing, people protest “But Fox and Breitbart are worse!” And so they are. But I feel like Vox has aspirations to be something more than just a mirror image of Fox with a left-wing slant and a voiced fricative. It’s trying to be a neutral gatekeeper institution. If some weird conservative echo chamber is biased, well, what did you expect? If a neutral gatekeeper institution is biased, now we have a problem.
Roberts writes that “the right has not sought greater fairness in mainstream institutions; it has defected to create its own”. This is a bizarre claim, given the existence of groups like Accuracy In Media, Media Research Center,Newsbusters, Heterodox Academy, et cetera which are all about the right seeking greater fairness in mainstream institutions, some of which are almost fifty years old. Really “it’s too bad conservatives never complained about liberal bias in academia or the mainstream media” seems kind of like the opposite of how I remember the late 20th and early 21st centuries.
The way I remember it, conservatives spent about thirty years alternately pleading, demanding, suing, legislating, and literally praying for greater fairness in mainstream institutions, and it was basically all just hitting their heads against a brick wall. Then they defected to create their own.
and
In the hospital where I work, there’s a RESIST TRUMP poster on the bulletin board in our break room. I don’t know who put it there, but I know that anybody who demanded that it be taken down would be tarred as a troublemaker, and anyone who tried to put a SUPPORT TRUMP poster up next to it would be lectured about how politics are inappropriate at work. This is true even though I think at least a third of my colleagues are Trump supporters.
and then his amazing conclusion:
David Roberts ends by noting that he doesn’t really know what to do here, and I agree. I don’t know what to do here either.
But one simple heuristic: if everything you’ve tried so far has failed, maybe you should try something different. Right now, the neutral gatekeeper institutions have tried being biased against conservatives. They’ve tried showing anti-conservative bias. They’ve tried ramping up the conservativism-related bias level. They’ve tried taking articles, and biasing them against conservative positions. I appreciate their commitment to multiple diverse strategies, but I can’t help but wonder whether there’s a possibility they’ve missed.
Look. I read Twitter. I know the sorts of complaints people have about this blog. I’m some kind of crypto-conservative, I’m a traitor to liberalism, I’m too quick to sell out under the guise of “compromise”. And I understand the sentiment. I write a lot about how we shouldn’t get our enemies fired lest they try to fire us, how we shouldn’t get our enemies’ campus speakers disinvited lest they try to disinvite ours, how we shouldn’t use deceit and hyperbole to push our policies lest our enemies try to push theirs the same way. And people very reasonably ask – hey, I notice my side kind of controls all of this stuff, the situation is actually asymmetrical, they have no way of retaliating, maybe we should just grind our enemies beneath our boots this one time.
And then when it turns out that the enemies can just leave and start their own institutions, with horrendous results for everybody, the cry goes up “Wait, that’s unfair! Nobody ever said you could do that! Come back so we can grind you beneath our boots some more!”
Conservatives aren’t stuck in here with us. We’re stuck in here with them. And so far it’s not going so well. I’m not sure if any of this can be reversed. But I think maybe we should consider to what degree we are in a hole, and if so, to what degree we want to stop digging.
Diplomacy > Aggression
This guy emailed me and things quickly turned ugly. But then it turned around and we are agreeing to disagree. He gave me permission to post our exchange (with his name removed). After the dust settled, I realized that he honestly had no idea what my actual position was; if I had been the guy he thought, I would have been a jerk.
Anyway, maybe you will be as pleasantly surprised by this near-miss as I was.
Robert –
I respect the work that you’re doing in trying to explain value of Austrian school of economics, stressing its focus on building up from experience of individuals in the system as opposed to macro approaches that are driven by abstract concepts. However, from my personal examination of these aspects, I still find the Austrian school to be wrong in its assumptions about the individual drivers, as a result of which it over protects “freedom” of the system to run itself. In this day and age, expecting the government to keep its hands off the system is futile, in which event we do need (as you seem to be committed to do) to educate ourselves and others on how best to understand what’s really going on.
My reason in contacting you is to ask for your opinion of the work of Steven Keen, and this recent presentation that he makes, essentially taking your approach (bottom up) in order to explain why he thinks mainstream economics (and European Commission banking in particular) are completely wrong. See link here – https://www.youtube.com/watch?v=X4HPyxrih5w&t=903s
Thank you.
[name removed]
——————–
Hi,
Thanks for the note. I am pretty slammed with work right now but this is a review Gene Callahan and I wrote of his book a while ago:
http://www.gmu.edu/depts/rae/archives/VOL16_4_2003/6_BR_Murphy.pdf
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Thank you, but your review really perpetuates the basic gap of focusing on ideological differences (assume, for the sake of my comments though, that ideological includes a lot of jargon that may be correct, but is still jargon, not systemic behavior scientifically proven as true). If you do get the time at some point to watch the video link that I sent, I would like to ask your opinion on the examples that he uses to explain his perspective. Since I’m not an economist or academic trying to prove a point (just someone trying to understand the points), I would like to know if you agree with the point he is making with the examples. From that starting point (a point of hoped-for constructive agreement) I feel that I could begin to construct my own, more accurate understanding of the problems with our economic institutions and policies and how to work to improve them.
I personally believe that the traditional ideological position of “neo-classical” and Austrian economics is so committed to “free market” policies that, in effect, result in justifications for both Libertarianism (keep your hands out of or off of my business or assets) and implementation of the Greenspan and Bernanke “puts” (Fed involvement that is over the top intervention by the people who are supposed to be “free market” ideologues). There is so much gaming of the system by our institutions (government and corporations) that is perverse, all of which is “justified” by reference to either the Chicago School or Austrian School of economics, and none of which is truly scientific insofar as neither of these has any method by which to show how and why financial conditions consistently fly out of equilibrium (as opposed to your assumption that they naturally tend toward equilibrium). I am particularly impressed by Keen’s work specifically because of his “Minsky Model” (downloadable from his website) which he shows will perfectly explain why things like expanding levels of private debt push a financial system toward failure. As far as I can see, there is nothing in the work of either the Austrian School or the Chicago School of Economics which can model the disequilibrium outcomes. So, my focus on Keen’s work is on his use of real building blocks that I can understand without regard to any ideology on his part or mine. I hope that you can dig into this part of his work to see what I mean, overcoming the perception of bias that he is somehow steering you away from the ideological shoreline that you hold onto.
[name removed]
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[Then a day or so later, before I had responded, he sent another note:]
I hope my reply to your book review wasn’t too strident. In rereading your review I can see that you were responding “in kind” = economist to economist; using your established jargon to answer any commentary or criticism from Keen. Having said that, let me note that in a paper of only 3 pages, I counted references by you to over 16 different economic terms/concepts (society’s utility, network of practices, atomizing, social outcomes, etc.) that clearly mean something to you, but advance little to others who are just trying to understand why none of this makes real sense. And clearly, this comment would be applicable to Keen too – he “started it” so to speak by writing the book in the way that he did.
My point is that I am hoping that I can find a way to communicate with you that helps me really understand monetary policy and fiscal policy. My team is working on trying to find creative ways to deliver low-income housing and business development opportunities that could balance the economic inequality that exists in the US. A 10 year study by Richard Wilkinson (see his TED talk at http://www.ted.com/talks/richard_wilkinson.html + charts attached) shows how economic inequality, world-wide, is closely correlated to 11 different social dysfunctions. We have to start understanding this growing problem or it’s going to eat us alive. It’s a cancer that’s somehow hidden in the fabric of our social or economic world and we have to root it out. I sincerely doubt that a greater “free market” will do us any good – that only gives the rich the ability to get richer, which is why they fund all your studies and conferences = to justify their rape of the social and natural environment for their benefit. Sorry if that sounds biased, but is backed by science – real science.
[name removed]
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Thanks for the note. I know you have put a lot of research into your views and I realize I’m not doing it justice right now, but I’m really slammed with “day job” stuff for a while. I would say however that powerful rich people are able to exploit the vulnerable more easily in a society with a powerful State, because the powerful rich are more able to capture the State than the poor are.
Bob
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Thank you for acknowledging the disproportionate access to “freedom” in markets. The rich use their “freedom” a lot more effectively than others.
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[Then he sent another note later that day:]
My hope is that, some day that inequality (the freedom they’re wanting) isn’t so well supported by smart people like you who give them cover for their excesses.
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[Then I responded in kind:]
My hope is that someday smart people like you will realize that if you give the State the power to take money from rich people, it will end up hurting poor people.
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[He replied:]
As you know from all the work of economists, there is no State that exists without the right and power to take away money – that is what starts the ball rolling and keeps it rolling into the hands of the wealthy who obviously have more means of controlling the state, especially after the Citizen United decision gave them the right to fully buy all of our politicians.
Sad that you think your “protecting” the poor defenseless rich people.
—————————–
[Then I sent:]
This is the last email I can send right now. I want to note two things.
(1) If you go back and review your original email to me, it started out with you asking my opinion of Keen. You presented yourself as if you were asking my opinion and wanted my help. I took time out of my day to answer you, since I thought it was a sincere question. But quickly it turned into you lecturing me on my bias. I doubt this strategy has worked on others. I am truly pointing this out in case you don’t realize how annoying this comes across to someone who is just “meeting” you.
(2) Go re-read your last email. Your own argument suggests that the only way to protect poor people is to be against the State per se. That *is* my position:
https://mises.org/library/law-without-state
I’m guessing it’s not yours. So given your last email, why are you a supporter of the State existing?
RPM
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Wow. You have a created a really thick blanket for yourself. In reading your article on Law without State, I see the depth of your commitment to a totally “free market.” But one which is completely unrealistic (name one society that has ever experienced that in the history of the world).
Conceptually it may be possible in a multiverse that offers every alternative (1 out of a trillion potential universes). However, it would not be a realistic possibility in any world in which the wealthy exist, exercising their ability to aggregate power and manifest the creation of a State for their benefit (ex: how JP Morgan and team manifested the Federal Reserve System after their little meeting on Jekyll Island in 1913). Once started, then the wealthy perpetuate control by the State to deliver the most benefits possible to themselves. And “free market” apologists are used as perfect cover for their machinations (keep everyone’s hands off the system, so they can continue to manipulate it at their will). Your mythic dream of a pure free market is a wonderful cover for not needing to ever think through, with the existence of a State, what is needed in order to create an environment in which “market law [would] be more efficient; it will also be more equitable”. Your target end point is truly commendable, but it carries no commitment to achieving it in the real world that we actually live in.
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[Seeing an opportunity to deescalate, I wrote the following–and for real, I wasn’t being sarcastic:]
Thanks, I totally understand why you think I am being unrealistic.
————————————-
[He replied:]
Thank you for understanding me. And thank you for leading me to really understanding your perspective. I could have never guessed that without your directing me to the article, which I almost forgot to read. Wonderful learning experience for me.
————————————
…and then I said it was funny that he had misunderstood what my actual position was, and asked if I could post this.
Potpourri and Wonder Woman
==> Catholic readers in particular might want to take a look at this video for a school that is up your alley.
==> Von Pepe passes along this Gerry O’Driscoll post on the jobs conundrum.
==> Dan Sanchez’s review of Wonder Woman is a very thoughtful take, but I am going to disagree with him. I admit that he makes good points, and he supports each of his claims with evidence from the movie (warning: spoilers if you keep reading), but I can make the opposite case by citing evidence as well.
+++ Like Dan, I at first recoiled from the portrayal of WW1 as being due to the evil Germans. (I even made a Twitter joke about it, which half my readers misunderstood–the mark of a good tweet.)
+++ However, near the end of the movie, Steve admits that humans are all flawed and responsible for the war, and that even he himself may be guilty. Clearly the filmmakers were showing growth in Diana’s original, naive approach to the problem. So although I’m not saying their message was, “The Lusitania was an inside job,” I don’t think the filmmakers were trying to say, “Germany was 100% responsible for WW1.”
+++ Dan says, “Wonder Woman, who throughout the film racks up quite a body count of conscripted German youths, is not so much a princess of peace as she is a valkyrie for “humanitarian” war…” I don’t think that’s correct. I am pretty sure Diana doesn’t actually kill any Germans until after the big gas attack, when she is furious. E.g. in the occupied town, when she jumps into a building, she uses her sword to knock tables over etc.; she doesn’t cut anybody. Instead she uses her lasso or arms/legs to knock them over.
+++ For my last point, I just want to note that I can use the same evidence as Dan to reach the opposite conclusion. In his review, Dan first complains that the filmmakers leave out any role of war guilt for the Allied powers. Then Dan quickly moves on to explain how the real villain in the movie is not Ludendorff, but the British politician. Do you see the problem here? It seems Dan just contradicted himself. But he saves his narrative–that this is a blockbuster film pushing war–by saying the specific problem with the British politician is that he’s a Neville Chamberlain type. As Dan puts it well: “That’s right: a war god furthering war by seeking peace.”
But hang on a second. The big picture here is that just as the powers were negotiating the armistice, Ludendorff was going to hit London with a massive gas attack. And this was all orchestrated by Ares. So I think it’s a bit misleading to say “a war god furthering war by seeking peace.” Rather, it would be more correct to say, “a war god furthering war by inspiring massive weapons development to one side, while on the other taking steps to discredit the idea of peace.”
It is standard for libertarians to be suspicious of things like the PATRIOT Act–is it really a mark of patriotism? etc. So is it really a pro-war, pro-good-guys-in-gov’t message, to suggest that someone who is actively “seeking peace” could secretly be funneling support to the other side of the conflict, and really doesn’t want peace at all?
I’m not saying this is necessarily the film’s message–maybe Dan is right–but I’m just pointing out that any movie which is so cynical of government officials on both sides, might be a move in the right direction. Plus, I thought the no man’s land scene was awesome.
Potpourri
==> Jeff Tucker has had some good takes lately. I liked his piece on why the center-left hates Trump, and his article on the arrogance of the Paris Agreement.
==> Oren Cass on Paris Agreement.
==> I talk about the case for privatizing the SPR.
Murphy Podcast Triple Play
==> I haven’t had time to do the timestamp summary on these, but here and here are the latest Contra Krugman episodes. If you’ve never heard the distinction between “positive” and “negative” conceptions of liberty, make sure to check out the former one.
==> Here is the latest Lara-Murphy Show, in which we discuss the Department of Labor ruling on fiduciaries which kicks in tomorrow.
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