Simon Johnson argued in a talk yesterday (and presumably in his latest book) that the way to bring down heath care costs is to explain to CEOs that since their companies are paying for heath insurance, high health care costs represents a tax on their business, and reduces their companies' profits and therefore their remuneration. They will then be motivated, Johnson argues, to lobby for reform that will change the relative bargaining power of buyers of health insurance relative to its suppliers.
My suspicion is that this won't work. There are two courses of action that CEOs are likely to take before lobbying for health care reform. The first is to stop paying for employee health insurance. We have already seen this when companies started laying off people and then rehiring them as independent contractors. A second, and even simpler option is to ship jobs over seas. Neither will lead to the desirable outcome of pressure being brought to bear on the provides of either medical medical insurance of services.
Wednesday, August 29, 2012
Sunday, August 12, 2012
Market distortions
Neoclassical economists bemoan government intervention in the economy through taxes, subsidies, quotas, price controls and the like. These distort the functioning of the free market.
The corollary, however, is the distortion of government and representative democracy by money, lobbying and incentives.
If business wants government to stop distorting its market then shouldn't government require that business not distort representative democracy?
The corollary, however, is the distortion of government and representative democracy by money, lobbying and incentives.
If business wants government to stop distorting its market then shouldn't government require that business not distort representative democracy?
Reaching out
As anyone who reads my reflections (probably no one) will have realized, I'm 1) talking to myself, and 2) becoming more liberal with age. This of course defies the old adage that in middle age a broad mind and a narrow waist change places; with me it's all getting broader.
Anyway, I digress. Over the last few years I've responded to email invitations from Democrats to support their re-election campaigns; the President and Elizabeth Warren, who I admire enormously, specifically.
However, it dawned on me today that of all the email I've ever received (and these days I'm getting four or five a day from the President, or the First Lady, or any one of numerous of his campaign staff), none, not a single solitary email has sought to sound out my opinion on the issues. Each and every one is simply an invitation to open my wallet.
So, I'm feeling increasingly disconnected and in an odd way disenfranchised. Voting for the lesser of two evils, neither of which one has had any had in shaping, doesn't give one a sense of connection to ones elected representatives.
The country is being boiled slowly and hasn't realized the water is getting hot. For the 99% it's a loosing battle. First, the cost benefit is not nearly as attractive as it is for the 1%. If you can invest $1M in lobbying to get legislation written as you want, you will make out like a bandit. For the rest of us, the ROI is nothing like as attractive.
And with increasingly favourable tax treatment and decreasing government oversight, the 1% can easily afford to redouble their lobbying. The 99% can't keep up, the the median income of the two groups continues to diverge.
"For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath." Mark 13:12
Some things, it appears, never change.
Anyway, I digress. Over the last few years I've responded to email invitations from Democrats to support their re-election campaigns; the President and Elizabeth Warren, who I admire enormously, specifically.
However, it dawned on me today that of all the email I've ever received (and these days I'm getting four or five a day from the President, or the First Lady, or any one of numerous of his campaign staff), none, not a single solitary email has sought to sound out my opinion on the issues. Each and every one is simply an invitation to open my wallet.
So, I'm feeling increasingly disconnected and in an odd way disenfranchised. Voting for the lesser of two evils, neither of which one has had any had in shaping, doesn't give one a sense of connection to ones elected representatives.
The country is being boiled slowly and hasn't realized the water is getting hot. For the 99% it's a loosing battle. First, the cost benefit is not nearly as attractive as it is for the 1%. If you can invest $1M in lobbying to get legislation written as you want, you will make out like a bandit. For the rest of us, the ROI is nothing like as attractive.
And with increasingly favourable tax treatment and decreasing government oversight, the 1% can easily afford to redouble their lobbying. The 99% can't keep up, the the median income of the two groups continues to diverge.
"For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath." Mark 13:12
Some things, it appears, never change.
Pay for performance
If Paul Ryan believes that a tax cut for the 1%, the entrepreneurial "job creators", will reduce unemployment, then he should support legislation that makes any tax cut contingent on the reduction in unemployment achieved.
At the end of each tax year if unemployment falls by say 2%, "job creators" get to keep their tax cut. Otherwise they pay full fare like the rest of us.
Surely this is exactly the kind of "pay for performance" that Republicans are so keen on?
At the end of each tax year if unemployment falls by say 2%, "job creators" get to keep their tax cut. Otherwise they pay full fare like the rest of us.
Surely this is exactly the kind of "pay for performance" that Republicans are so keen on?
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