Medicine

Wow! Paul Krugman enters one of the most demagogue-rich arenas, medical care, without being demagogic. An intellectually honest reader can actually learn something useful.

Still, he’d best be a bit careful:

Think of (the coming political struggle over medical costs) as the collision between an irresistible force (the growing cost of health care) and an immovable object (the determination of America's conservative movement to downsize government).

Well, not quite. The basic productive capacity of the country, not blighted conservatives, is the immovable object. That limit can’t be just sneered away.

Chapter 7, paragraph 3 of The Official Editorial Writer’s Manual states: “Allowing some people to have better medical care than others simply because they happen to have more money is the height of barbarism.”

But what are the alternatives? A blanket subsidy for all medical care designed to give everyone the absolute best care theoretically possible at any given time, combined with no limits on what the medical establishment can try to produce and charge, creates an ultimately unsustainable tidal wave of medical research and development.

So somehow medical care is going to be rationed. And somehow medical R&D is going to be limited. If it’s not going to be by what people are willing to pay, then it will be by some officially sanctioned agency. Run by human beings. Who have their own prejudices. And friends and relatives. And who maybe meet strangers and research grant applicants bearing gifts. The inequality is no longer in wealth, but in political pull. Is there a reason to believe that this will be better?

The creationist "threat"

Posting her usual sensible observations, this time on the politics of evolution and its neo-creationist adversary, Intelligent Design, in the classroom, Megan McArdle notes:

Evolution, despite the NYT's hysteria on the subject, is not going anywhere. The legislatures won't allow it; if they did, the state courts wouldn't allow it, and if they did, the Supreme Court wouldn't allow it. End of story….

It’s a shame that that’s the end of the story. It shouldn’t be. Parents wouldn’t allow it, either. Not unless the Intelligent Design folks made a much better case than they have so far.

That is, most parents wouldn’t allow it, were they consulted. That some parents could envision a crackpot science curriculum being imposed upon them is surely one of the strongest arguments for a free and open (i.e. religious schools included) voucher system. Creationist parents are only trying to educate their children in the way they think is best. Under the current public school mechanism, influencing the elected school board is the way to do that. It’s the way parents are supposed to do that. Surely creationist parents would be much happier were they just allowed to choose the schools they wanted without going to all the political and legal effort required to elect a school board.

CAFE Standards (bleech)

What is it about the Corporate Average Fuel Economy standards that make people lose all sense of rationality? The issue is regularly phrased as if car makers could just make more efficient cars without any other sort of tradeoffs. Do they think American car buyers are just stupid? Do they think people buy cars without considering characteristics like fuel economy?

In the real world increased fuel economy comes by trading off performance, size, safety and/or comfort. Normal competitive pressures drive companies to keep pushing the technological boundaries out, so that we are regularly offered more of all five than used to be possible. But at any given time there are always tradeoffs.

According to the NYT:

Senator Kerry tried to counter this argument with the assertion that Detroit was capable of making more fuel-efficient cars, vans, trucks and sport utility vehicles without sacrificing safety….

"No American will be forced to drive any different automobile," he said, pointing to an advertisement for a sport utility vehicle the Ford Motor Company plans to market next year that is much more fuel efficient than current models.

Then why risk having the CAFE standards in the first place? Note that they are risky. As incomprehensible as it might seem to Senator Kerry, he might be wrong. If he’s right, the CAFE standards will have no impact on what people drive. Car companies will continue to improve fuel efficiency to meet consumer demand right on (or faster than) the CAFE schedule. But if he’s wrong, American drivers will be stuck with the “wrong” vehicles. Basically the CAFE standards have high risk with zero payoff.

Trade Deficit hysteria

EAMONN FINGLETON has a point (see the April Atlantic Monthly, not yet on line, as far as I can tell) about the News and the Trade Deficit (capital “T”, capital “D”). I grew up considering official whining about the Trade Deficit as timeless and ubiquitous as kids no longer obeying their parents and outfielders no longer hitting their cut-off men. 10 years ago you couldn’t turn an a TV without seeing James Fallows or Clyde Prestowitz droning on about how eventually everything in the US was going to be owned by Mitusbishi Heavy Industries.

But there haven’t been many “the trade deficit is going to eat our children” stories lately (or maybe I’m just not watching/reading the right things). Fingleton’s explanation, that the nefarious influence of “the foreign-trade lobby and the Wall Street securities industry,” is proliferating this “economic error” doesn’t ring true. Too many competing special interests can benefit from fomenting Trade Deficit hysteria. Could it be that for the first time in recorded history journalists are letting Econ 101 interfere with a good gloom and doom story? Hmm…. I doubt it, but I don’t have any better explanation. For their next trick, perhaps they could stop trying to explain every individual twist and turn in the Dow. Banishing the phrase “profit-taking” would be a good first step.

BTW, Fingleton completely fails in explaining why silencing the Trade Deficit hysteria machine is bad. He trots out three chestnuts of the “imports are evil” school: imports cost jobs, imports of military devices weaken our defense base, and foreign firms aren’t going to invest in US factories like American firms will. The first is a basic fallacy: it’s basically an iron law of the currency exchange market that reducing imports will reduce exports. There is no particularly good reason to believe that this will have any impact on jobs, although it imposing it by government fiat will hurt consumers. The second is not a trade issue. If purchasing foreign made weapons parts is too dangerous then the military should only purchase parts from domestic suppliers, or make them themselves. There’s no reason to drag foreign trade in general into the discussion. And the third requires the assumption that foreign firms are either less or more interested in making money than American firms (and that they can stay way long term). How else can you get a German firm choosing not to build a potentially profitable plant in the US, while an American firm will?