Usually I try not to blog points which already have occurred to everyone, even if those points are true and important. But today I will do so.
First, the idea of an employer mandate for health care is a tax on hiring labor in a time when, if anything, the hiring of labor should be subsidized. On top of that is the proposal to tax health insurance benefits. Keynesians especially should be upset about these developments, although I haven't heard many peeps. Even if they favor this policy in the abstract, surely they are accustomed to the idea that the short run is very important, most of all for labor markets and aggregate demand.
Second, Joseph Stiglitz's idea that "the UN has a key role to play in "reforming the global
financial and economic system"" is a bad idea. It is a very bad idea. We're past the point where "they can't do any worse than we did" is a good or usable argument. Has the Public Choice revolution been such an unpalatable pill to digest?
On the brighter side, I did not agree with but enjoyed this comment from thehova (citing Michael Powell):
"Wilco" is a five-letter word for the quiet slaughter of all that is
elemental, passionate, and reverentially stupid about rock 'n' roll.
Tyler, please think like an economist and say a little more about the tax on employment. The numbers I read suggested that the tax would be approximately 375 dollars per employee per year (and only applies to companies with > 25 employees)… at the margin, how many jobs would this eliminate? 375 dollars is less than a dollar a day. How many jobs exist in the US for whom a 1 dollar a day is make or break as far as hiring? You might argue that for large companies the fees add up, but again, how much? I want a cost-benefit analysis, not just some knee jerk econ 101.
Further to Paul’s comment:
Some (most?) of the employed will surly be happy to accept a lower wage, as they now get health insurance included in their benefit package.
Also, employees now having health insurance that they did not previously have will demand more health services. How large will this effect be? How many more employed in the health and insurance industries?
Obvious stuff one would think, but I must be missing something?
Tyler- How is the “tax” of a health mandate not born by the employees, like every other payroll tax? If we believe our traditional views on incidence, the mandate is really a mandate to reallocate compensation towards non-wage health benefits. Granted their is always a dynamic that never seems to be considered in the long run incidence.
Since health care is a long lasting change does it make to sense to oppose it because of effects it will on a recession that will soon end. If it really it a problem they could just delay imposing the tax until 2011 or 2012 and fund it out of stimulus money.
“Some (most?) of the employed will surly be happy to accept a lower wage, as they now get health insurance included in their benefit package.”
Darn those surly employees!
When is the health-insurance task supposed to kick in? We aren’t supposed to be in a recession forever are we?
Isn’t the idea short-term stimulus to boost the economy (Keynesian-style) and long-term solutions to fix the structural deficit caused by impending increasing health care costs?
It’d be silly to avoid steps towards the long-run fix because they aren’t ideal short-term. Just pass a bigger short-term stimulus package to subsidize employment.
When should one comment the obvious…?
The site is called MARGINAL Revolution.
You’ll have to explain how “Public Choice revolution” is relevant for discrediting the UN, for those of us that didn’t go to George Mason U. Google tells me it means you can game political actors against themselves to achieve your own objectives if you slut your loyalties correct. Stiglitz is talking about establishing an alternative to USD as primary reserve vehicle.
You’re saying money market managers should reflexively go to USD in future recessions (even ones where a hyperinflating USA is trying for weak currency manufacturing exports?)…because…it would be too confusing to have different choices…and the other actors would be misrepresenting their economic and financial stats to gain reserve currency status?
If Republicans were in charge now (as they were in Canada last fall and fought stimulus tooth and nail), the developing world would be the only hope. Be nice to for world to have a Plan B if Republicans do find a pretty VP face with brains.
This is a meaningful article.
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