More linky, less thinky

Lost finale, huh?  Man I don’t care.


If you’ve been reading Austin Frakt’s running commentary on health-care reform — and if you’re interested in the topic from either side, or even if you’re bored sick of HCR but happen to be worried about the debt/GDP ratio, you should be — you’ll have learned that for all the smarmy hysteria we get about health insurance companies, a large part of the growing cost of health care comes from the providers thereof.  If you haven’t been reading Dr. Frakt’s commentary, here’s a decent place to start:

He tells a delightfully Bastiatan parable, which I’ll quote in full:

Our frustration with the soaring cost of health care is like a mother upset with the increasing price of bread. When her son returns from the market with another high-priced loaf she hatches a plan. The following week, when bread costs $5 a loaf, she attempts to control the price by sending him to the market with only $4. The family spends less on bread that week, but they also don’t eat any since the boy couldn’t find a merchant willing to sell below the market price.

The next week bread is selling at $6 a loaf, and the mother tries another plan. Thinking her son lazy, she attempts to discipline him with competition. She sends her daughter with him to the market. Whichever of the two can obtain the lowest bread price will win the family’s respect. The winning price, paid by the daughter, is $7. She and the boy competed, but the additional competition on the buyer side sent the price up, not down (as one should expect).

What the mother isn’t noticing about the bread market, and many don’t recognize about health care, is that suppliers (bread sellers, health care providers) play a role in establishing prices. Regulating the price paid by buyers or the level of competition among them isn’t likely to produce the outcomes we might hope for without parallel action on the provider side of the market.

The government of Massachusetts, like other governments that want to Fix Things, isn’t looking past teh ebil insurance fat-cats.  As provider costs and thus provider prices increase in MA, the state government is holding insurance rates artificially low.  And as a result, insurers are trying to negotiate with providers:

Massachusetts health insurers say they want to freeze or slash payments to some hospitals and large physician groups this year, setting up the toughest contract negotiations in memory and creating the potential for disruptions in where patients get their care. Other providers would get small increases, at most.

Unlike in past years, insurers believe they have widespread backing from politicians, regulators, and employers to aggressively push back against large price increases, even if it means some unhappy providers drop out of insurers’ networks, forcing patients to find new doctors and hospitals.

Notice what is happening here. Regulators are squeezing insurers on rates. Insurers, in turn, are demanding lower price increases from providers. Those providers are, of course, fighting back. It isn’t yet clear what the outcome will be, in the short or long run.

From the politicians’ perspective, this is a perfect result.  The vilified insurers bear the risk of the negotiation, and the public opprobrium of cutting payments to caring, hard-working professionals like doctors and nurses who get starring roles in hit TV series.  Is anyone else drawing Merchant of Venice parallels?


Next we have Sheldon Richman on the curious observation that welfare programmes don’t seem to be improving, er, welfare:

It’s short, so I’ll quote it in full:

Despite what you may read at other libertarian sites, the welfare state is not the result of efforts by lazy poor people to enslave and live off the productive classes. Rather, it is the result of efforts by the political-social-corporate elite to subordinate and control the poor for a variety reasons — the same elite, by the way, that seeks to loot the productive classes. Missing or ignoring this distinction leads to a slew of fallacies, misstatements, and attitudes.

I’m excited but a bit skeptical about this hypothesis.  I’m excited because, like most good theories, it fits the observed facts with an audible “click”.  It explains, for example, how broadly- or universially-applied welfare programmes come into being without a huge groundswell of gimme-gimme entitlement among their beneficiaries.  (Fun fact: most of the people I know who’re eligible for government support are both fairly conservative and proud of their work ethics.  However, the plural of “anecdote” is not “data”.)  I’m skeptical because it provides a clear-cut fairy-tale Villain — “the political-social-corporate elite” — and those are big waving red flags for comforting falsehoods.  But put it in terms of public choice and incentives — without the “them vs. us” groupthink class-warfare shit — and it looks like a winner.


Carrying on the vaguely Agorist theme, we  note with delight that der Blaustrumpf has resumed blogging and given us this marvelous response to the dreary Rand Paul/CRA kerfuffle:

This post rightly notes that the present “debate” on the civil rights movement has been phrased entirely in terms of what the federal government did, and utterly disregards the grassroots civil-rights activists who took on an entrenched culture and state of racism at great personal risk.

The way the debate is being framed, there are only two sides:  private actors who, given the chance, will inevitably be racist, versus public (state) civil rights guarantors.  Citizens who organize without the state’s blessing drop out of the picture, as do the state policies that are racist in practice, if not in wording.  However, the policies are so deeply entrenched and institutionalized as to be invisible, or at least somehow less visible than a small-scale politician bungling a TV interview.

As others have noted approvingly, social opprobrium has fallen heavily on Rand Paul.  That is, private actors have been policing racially insensitive speech, presumably without the compulsion of the laws they champion as the sole vanguard against private racism. Which would seem to lead us to a contradiction:  if these commentators are capable of condemning racism by following their own consciences, why don’t they trust others to do the same?

(Emphasis added.)

Of course, this is true at a large and media-driven scale, and it mostly comes from people who didn’t know shit about Rand Paul until he presented himself as a cardboard cutout that could conveniently be labeled “racist”.  Defenders of the Civil Rights Act would no doubt retort that at a smaller, more intimate scale — within the monkeysphere — people would be much more willing to tolerate racism (grudgingly or cheerfully), and need to be forced out of it.  Whether the Civil Rights Act operates at that personal, visceral level is somewhat obscure.


Finally, here’s Doug Mataconis on the libertarian case in favour of the Civil Rights Act:

As usual with these things, one can’t consider the Civil Rights Act as a timeless and static piece of legislation.  It was a response to the conditions of its time, and Doug quotes David Bernstein to make that point:

“If segregation and discrimination in the Jim Crow South was simply a matter of law, federal legislation that would have overturned Jim Crow laws would have sufficed. But, in fact, it involved the equivalent of a white supremacist cartel, enforced not just by overt government regulation like segregation laws, but also by the implicit threat of private violence and harassment of anyone who challenged the racist status quo.”

“Therefore, to break the Jim Crow cartel, there were only two options: (1) a federal law invalidating Jim Crow laws, along with a massive federal takeover of local government by the federal government to prevent violence and extralegal harassment of those who chose to integrate; or (2) a federal law banning discrimination by private parties, so that violence and harassment would generally be pointless. If, like me, you believe that it was morally essential to break the Jim Crow cartel, option 2 was the lesser of two evils. I therefore would have voted for the 1964 Civil Rights Act,” Bernstein concluded.

Later on, he (Doug) brings in the Supreme Court ruling in the Slaughterhouse Cases, which is a good sign when civil rights law comes up.  I’m not terribly sanguine that, without Slaughterhouse, the Jim Crow regime would’ve “been under direct legal assault at the time of its birth” — it takes time for attitudes to change, and plenty of facepalmingly unconstitutional law has been passed and upheld simply because it seemed like a good idea at the time.  But without Slaughterhouse, Jim Crow would’ve been built on much shakier ground.


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