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Ryan points out that our fast growing, Forbes award winning, highly educated hometown is pulling up the rear when it comes to light rail. If I remember correctly, however, we had a pretty aggressive light rail plan that was pulled because the Federal Transit Administration let us know that we probably weren’t going to meet their estimates for minimum ridership. This was of course right before gas went to $4 a gallon, ridership on light rail exploded and a stimulus package came through looking to fund anything shovel ready. Timing can be well, unfortunate.
Derek Thompson mentions of hand an idea that actually pulls off that rare intellectual trifecta of being powerful, pragmatic and non-obvious. Couldn’t we cut to the heart of over-treatment in the US by paying doctors a fixed salary?
Or we could work incrementally away from overprescription by emulating the Mayo Clinic, which pays doctors a fixed salary to encourage doctors not to maximize their patient load or overprescribe.
The primary problem is that it’s not clear how that dovetails with a patient based practice. From a purely pragmatic point of view this might be a strong argument for some form of socialized medicine.
I am currently torn between two extremes: a health care system which does away with the government subsidy for insurance and encourages cash payment; and a system of totally socialized medicine. The market system sits well with me theoretically, but the socialized system seems to have more empirical support. The possibility of fixed salary is a point for socialization.
Megan McArdle is suspicious of the administrations promises that it will bring down costs. I am suspicious as well but perhaps for different reasons. Megan argues
I’d say we have substantial empirical evidence that we are not going to control the health care cost inflation which is busting Medicare’s budget, much less the new costs the administration is planning to add. We have been trying to control health care costs since the 1970s made it clear that Medicare was going to get really, really expensive. And any idea that you care to name, from comparative effectiveness research to healthcare IT to preventive medicine . . . these have all been on the table for more than thirty years, under one name or another. They haven’t happened.
That argument doesn’t hold a lot of water with me. If cost control comes to the United States it will come because we reduce the amount of health care people consume. We can and should have a separate argument over whether or not marginal health care spending actually makes you healthier. However, I think there is little question that if we buy fewer things we will spend less.
The more economically minded members of the administration, read Larry Summers, have essentially admitted that they want Universal Health Care because we can’t just ration Medicare. If we do the elderly will scream bloody murder as the best doctors refuse to see them. We’d have to ration everyone and we’d have to do it in the least transparent way possible; things like, “lowering payments to hospitals,” or “adjusting reimbursement schedules.”
What bothers me, however, is that the rest of the administration doesn’t seem to have bought into the idea of rationing. We pay less for health care than the French for example, because we consume less health care than the French. If you want to get to French prices you have to get to French levels of service. My fear is that they are caught up in the same mindtrap that seems to affect much of the public policy establishment: the seemingly unfounded notion that if you buy more health care that means that you will have a healthier population. Since France is healthier they must be getting more health care for their money, and we can emulate that. There is no evidence, that I am aware of, which supports this.
Few national voices, besides Tyler Cowen, seem willing to entertain the possibility that the vast majority of health care just isn’t that effective. Not here, not in France, not anywhere. We know there are some “killer” health care apps. Things like vaccination, antibiotics, satins and a few others that really beat back the march of death. However, outside these few there is only limited evidence that modern science is able to do things to extend your life. Understanding the extent to which this is true is key to successful health care policy.
I think Jim Manzi goes a bit far:
As a wise man once put it, “Government is not reason; it is not eloquent; it is force.”. In the end, if some group of people has operational authority over a preponderance of the military, and is prepared to use it, nothing else really matters. You either have to divide the military, capture its loyalty or create a greater opposed armed force; otherwise, all you have is a bunch of dead bodies that used to be idealistic people.
In economics we often say that government is an entity that can establish a monopoly on violence. That is, you are a government if you can direct force in such a way that it drives out all competitors. This perspective is insufficient, however. Government not only must be able to direct force but people must respect that force. They must yield to it. If they do not there is no government.
One cannot govern over dead bodies and dead people do not pay taxes. The mass exercise of force deadly on your own people whittles away the very thing you are trying to take control of. This is why effective totalitarian regimes depend on so heavily on fear. That fear can be internal or external. It can be the fear of gruesome, typically quasi-random, reprisal by the state or of an outside threat even worse than the state. However, if the people are unafraid there is little the regime can do.
It is also why so many regimes look to build a cult of personality, to exalt the dictator above all suspicion. If one could rule by force alone this would be unnecessary. It is necessary because at the end of the day the people must consent to being governed. They must respect the law. They must believe in the Hobbesian bargain, that without the regime life would be even nastier and more brutish.
Not understanding this, believing that regimes in the Middle East or elsewhere could realistically exist as pure tyranny is behind many of the foreign policy mistakes of the past few years. Let’s not make this mistake again.
But what is happening in Iran looks like an incipient revolution. There are people in the streets shouting “Death to the Dictator,” and “Freedom, Freedom.” This cannot be good news for a regime that literally controls the news. This is not a bunch of semi-professional protestors bused in from Berkeley. This is an overnight massing of people in protest of their newly elected government. These are people openly defying the decree of the Supreme Leader. These are people who allegedly are asking the police to join them. No, they are not calling the police “Pigs” or raging against the machine. They are asking the machine to march with them. They are claiming legitimacy. They are claiming the right to power.
Yet, this morning the Times ran a piece arguing that Ahmadinejad is consolidating power – that the ruling elite are even more united. Well, Mousavi is a member of the ruling elite and he has 100,000 people in the street chanting treasonous slogans!
No government can govern without at least the tacit consent of the people. That consent can be won through persuasion or through force. But, when the people will not consent, you have no government. When the people refuse to yield to the law, you have no government. When the people refuse to leave the streets, to go to work or to school, you have no government. You have a revolution.
Update: Per Sullivan this blog has gone green
This morning the dollar was up, stocks were down and the yield on the ten year Treasury note had retreated back near 3.7%. Looks like a flight to quality.
Over the past few days we’ve seen increasing reports from bloggers and journalists afraid that the rise in the ten year Treasury yields signals some fear about the US government’s ability to repay its debt. That story has never seemed plausible to me and today is further evidence that fear of global instability is behind most of the up and down movement of US bonds. When the world is scared it buys US Treasury bonds. When it is confident it sells US Treasury bonds. This is the major story.
My earlier fears that the revolution might be limited to an elite few seem to have been misplaced.
To some I extent I think the shortage of coverage on Iran may stem from widespread under-appreciation of the intricacies of Iran’s political sphere. Even NPR seems to suggest that Supreme Leader Ali Khamenei is dictator of Iran.
The decision comes after Mousavi wrote a letter appealing to the Guardian Council and met Sunday with Khamenei, who holds almost limitless power over Iranian affairs. Such an election probe by the 12-member council is uncharted territory, and it is not immediately clear how it would proceed or how long it would take.
If that’s your view then the Iranian elections were never anything more than a farce. That view, however, does not seem to be supported by the facts. By law Khamenei is elected by the Assembly of Experts who is in turn elected by the people. In practice it seems that Khamenei’s hold on power is contingent upon maintaining the good will of Iran’s clerical establishment.
To show just how convoluted Iranian politics seems to be, the head of the Assembly of Experts is Rafsanjani. Like Ahmadinejad’s chief opponent Mousavi, Rafsanjani is a reformist. He is also a former President himself and indeed lost the 2005 presidential elections to Ahmadinejad.
Thus Ahmadinejad’s suppression of Mousavi is contingent upon approval from the Supreme Leader. The Supreme Leader retains power only to the extent the Assembly of Experts, headed by Rafsanjani approves. Yet, Rafsanjani is a Mousavi ally. The circle of power feels like an eerie cross between a modern system of checks and balances and the inbred politics of Renaissance Italy. The fact that even NPR seems to mistake this for a simple dictatorship is disturbing.
Andrew Sullivan, Tehran Live and Tehran Bureau have been my major stops for Iranian election coverage. None of them, however, have really addressed the footage we’ve seen of Ahmadinejad’s massive rally on Sunday. Is this a genuine show of support? Why does it appear to eclipse in size and scope the pictures of protestors? Are we seeing only what we want to see from Tehran – a bunch of angry pro-Western rich kids who don’t represent the majority of the country?
That the Western blogosphere seems to be ignoring this is disheartening. If there was an easy explanation I find it hard to believe that it wouldn’t already have been offered.
We don’t know what will happen in Iran. Yet, it is possible that we are witnessing the beginnings of a modern democratic uprising in the Middle East. How this is not on every or indeed any major news channel is beyond me. On MSNBC there was a piece about abandoned kids, powerful but not overly timely. CNN had an anchor awkwardly reading tweets about hate in American, a little timelier. Fox News seemed to have a Glenn Beck rerun. This is hard to believe. Iran is the news of the day. Iran may be the news of the decade.
Not with a bang but with internal discontent. From Andrew Sullivan, both the Interior Ministry and a collection of Mullahs are express disapproval of the election.
On the Mullah’s
A committee of respected Ayatollahs (the spiritual fighters) have requested that the election be invalidated for the purpose of restoring the people’s trust in the Islamic Republic. We request the people to stay calm and not to provoke the government agents.
From the Interior Ministry
As dedicated employees of the Interior Ministry, with experience in management and supervision of several elections such as the elections of Khamenei, Rafsanjani and Khatami, we announce that we fear the 10th presidential elections were not healthy
Protestors in the street can be made to look like counter-revolutionaries, but jailing Mullahs and Ministry officials cannot be mistaken for anything but tyranny. These statements are huge. They are how governments topple.
If the US economy recovers before the end of this year the credit belongs largely to George W. Bush.
Let me be clear. In general, I am not a fan. I did not support the 2001 or 2003 tax cuts. I did not support the war in Iraq. In 2004 I switched my registration so that I could have a hand in choosing the person I thought most likely to defeat George Bush. Yet, credit must be given were credit is in fact due.
In September of 2008 the financial sector was on the verge of collapsing in on itself. I believed then and I believe now that the bankruptcy of Lehman Brother created turmoil that if left unchecked would precipitate a repeat of the Great Depression. The Federal Reserve or at least Ben Bernanke seemed to agree. Yet, major intervention required powers that the Fed Chairman did not believe he had. It fell upon the administration to create a plan that would rescue the financial sector. At a minimum this plan required the federal government to put vast sums of public money at risk for a highly unpopular group. This was not something that a Republican president would be inclined to do. It was a Republican president, however, that did it.
Critics might say that the plan was all Paulson. Bush if left to his own devices would have found some way to foul it up. This ignores the fact that at the end of the president is the decider and if the plan had failed, if a depression were upon us, we would not doubt be stamping another demerit on Bush’s record, not Paulson’s.
Following the implementation of the bailout the credit markets began to heal – slowly yes, but steadily. In September of 2008 most indicators of stress in the credit markets were off the charts. Today, many of those same indicators are not far off normal. At least to date the intervention has been a roaring success. The healthiest of financial companies are beginning to repay the bailout money and even the unhealthy ones have been able to raise private capital to help stabilize their balance sheets.
The alleviation of stress in the credit markets will allow the natural healing process to begin. It is only the beginning and we have a long way to go. Employment continue to fall, all be it at a slower rate. And, unemployment will rise well into next year. The economy, however, is no longer on the verge of a recession and the credit for that belongs to the Bush administration.
Chris Bradford says everything that you need to know about a city’s desirability can be found by examining wages and home prices. Free Exchange disagrees
Let’s say you’re interested in a city, on the other hand, where the person earning the median income can afford the median home and can live the median lifestyle, that is, where something without a few million dollars in wealth can enjoy a pleasant life. How to choose, then? As Mr Bradford notes, simple price/income comparisons put very different cities like Pittsburgh and Atlanta in the same category. More information is needed to make an appropriate choice
Here’s the thing though. Suppose that living on a shoestring in San Francisco wasn’t as good as enjoying the high life in Atlanta. Why don’t people just move from San Francisco to Atlanta? The fact that they choose not to implies that either there is something about San Francisco that attracts them or something about Atlanta that repels them.
Now that having been said, markets aren’t frictionless. There are costs to moving, finding a new job, finding new friends and being far from family. Some people are living in San Fran in large part because they have always lived there and getting out would cost more than staying. On top of that, population isn’t static. Lots of people are moving to Atlanta. The wage / home price model only truly holds for communities that are equilibrium – a hypothetical situation where everyone has made their choices and they’re sticking with them. This doesn’t accurately describe the Southern boom towns or the Midwestern ghost towns.
Lastly there is the complexity of fixed capital. I don’t want to go to deeply into this but part of the reason Detroit is so cheap is not just because no one wants to live there but because no one wants to live there AND there are a bunch of already built houses and shops. If we suddenly swept away many of those buildings the price of housing in Detroit could rise even if livability feel. This is the story of New Orleans in the immediate aftermath of Katrina.
With encouragement from Ryan Avent I am blogging again and now on a more or less steady basis. I am not importing the posts from my old blog because for the most part they don’t represent the style or quality that I hope to produce here. For those who really want to see, however, the old site is http://modeledbehavior.blogspot.com .
