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February 3, 2014

Latest Posts from Economist's View

Latest Posts from Economist's View

Paul Krugman: Delusions of Failure

Posted: 03 Feb 2014 12:24 AM PST

 The price of deceit:

Delusions of Failure, by Paul Krugman, Commentary, NY Times: The Republican response to the State of the Union was delivered by Cathy McMorris Rodgers, Republican representative from Washington — and it was remarkable for its lack of content. ...
The closest she came to substance was when she described a constituent, "Bette in Spokane," who supposedly faced a $700-a-month premium hike after her policy was canceled. "This law is not working," intoned Ms. McMorris Rodgers. And right there we see a perfect illustration of just how Republicans are trying to deceive voters — and are, in the process, deceiving themselves. ...
Bette's tale had policy wonks scratching their heads; it was hard to see, given what we know about premiums and how the health law works, how anyone could face that large a rate increase. Sure enough, when a local newspaper, The Spokesman-Review, contacted Bette Grenier, it discovered that the real story was very different... First of all, she was comparing her previous policy with one of the pricier alternatives her insurance company was offering — and she refused to look for cheaper alternatives on the Washington insurance exchange, declaring, "I wouldn't go on that Obama website."
Even more important, all Ms. Grenier and her husband had before was a minimalist insurance plan, with a $10,000 deductible, offering very little financial protection. So yes, the new law requires that they spend more, but they would get far better coverage in return.
So was this the best story Ms. McMorris Rodgers could come up with? The answer, probably, is yes, since just about every tale of health reform horror the G.O.P. has tried to peddle has similarly fallen apart once the details were revealed. The truth is that the campaign against Obamacare relies on misleading stories at best, and often on outright deceit.
Who pays the price for this deceit? In many cases, American families. Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing.
But conservative politicians aren't just deceiving their constituents; they're also deceiving themselves. Right now, Republican political strategy seems to be to stall on every issue, and reap the rewards from Obamacare's inevitable collapse. Well, Obamacare isn't collapsing — it's recovering pretty well from a terrible start. And by the time that reality sinks in on the right, health reform will be irreversible.

Links for 02-03-2014

Posted: 03 Feb 2014 12:03 AM PST

Why Inequality Matters

Posted: 02 Feb 2014 09:41 AM PST

Chris Dillow:

Why inequality matters: ...we lefties care about inequality not because we have some idea of what the Gini coefficient or share of the top 1% should be, but because we fear that three things that would make inequalities tolerable are - to some extent - missing.
Firstly, inequalities don't all arise from fair processes. One condition here - set out in Rawls' difference principle - is that inequality should be associated with "fair equality of opportunity". But this condition is obviously lacking...
Also, many inequalities arise not from free market processes but from what Acemoglu and Robinson call extractive institutions - the ability of the rich to use political power to extract wealth for themselves...
Secondly, we fear that inequality has adverse effects. I'm not thinking so much here of its impacts on economic growth, social cohesion (pdf) and other aspects of well-being... Instead, the danger is that inequality is, as Sean McElwee says, an "affront to democracy." ...
Thirdly, we've no great beef with inequality if it is combined with some form of risk-pooling. Even if our first two conditions were met, we'd favour some redistribution to mitigate the effects of bad luck - be it the bad luck of a bad draw in the genetic lottery or of being hurt by a recession. Of course, lefties define luck more widely that righties, but most of the latter should support some redistribution; Hayek, for example, favoured a basic income. ...

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