*Seeds of Destruction*

by on August 10, 2010 at 7:29 am in Books, Economics, Political Science | Permalink

That's the new tract by Glenn Hubbard and Peter Navarro; the subtitle is Why the Path to Economic Ruin Runs through Washington, And How to Reclaim American Prosperity.

Beyond the usual market-oriented prescriptions, the book defends a price floor for oil imports, price indexing of social security benefits, it is anti-fiscal stimulus, anti-easy money, for job training programs, and for health care it advocates eliminating the tax deduction, removing state-level barriers to competition, and malpractice reform.  The authors also devote special attention to criticizing Chinese protectionism as a reason why American job growth hasn't been better.

I take Hubbard to be a (the?) future "kingmaker" for economic policy within the Republican party, with possible competition from Douglas Holtz-Eakin.  If you wish to know where those debates and proposals are headed, this is the book to pick up.

Andrew August 10, 2010 at 7:43 am

Surely everyone has seen this.

Bill August 10, 2010 at 8:38 am

1. Regarding a price floor for oil imports. La. ,Tex. and Alaska would be keen for that; Wyo and Colo. too. So, why don’t we have an energy tax today to fund this proposal and call it a carbon emission tax.

Oh, never mind. Was just looking for a handout if prices went lower, but not interested if I (the oil industry) has to pay for it.

Maybe we can have Tex, La, Wyoming, ND, and Opec set up a rainy day fund.

2.Re malpractice reform. I’m for it, but who pay for the healthcare of the individual who was subject to a malpractice injury. Do you think it is fair for the patient to bear the cost?

Most reform is done at the states, and the record is more than modest. And, no cost savings either, or changes in use of procedures. We have a lab experiment and the state level and should look at the results of that. Modest to nothing. And, who bears the cost of malpractice injuries. How about the taxpayer through SS disability. Wonderful.

3. Re state level competition on insurance. All in favor of a national insurance plan, leaving state insurance regulation in place and having a national plan which consumers can opt into. Depending on the Federal insurance plan, and what is covered before you can call the product “insurance”, you would have competition between state and federally regulated entities. I don’t think you would have a race to the bottom with the federal plan, but you would if you permitted interstate sales without either a national standard or a national plan. And, besides, will the Texas insurance commissioner really help a New Jersey resident with a problem with the Texas insurance policy. Doubt it.

4. Am for a gradual reduction of deductability of health insurance deduction, or permitting a deduction on only high deductable policies (dependent on income level). Also eliminate those stupid programs that force me to use or lose money each year. Have too many glasses.

Meg August 10, 2010 at 9:32 am

http://www.factcheck.org/2009/10/malpractice-savings-reconsidered/ suggests capping malpractice lawsuits could lower health care spending by 0.5%.

There’s also other options for hospitals facing difficult malpractice costs. For example, admitting mistakes immediately and offering compensation: http://www.plfo.org/advocate/volume_2_issue_2/the_medical_malpractice_debate/ or proactive risk management and error reduction: http://www.ajmc.com/issue/managed-care/2004/2004-04-vol10-n4/Apr04-1772p281-284

Since malpractice can be reduced by, for example, the introduction of checklists and other structural or cultural changes which doctors almost universally oppose, costs associated with malpractice can be used by administrators to force doctors to move away from the cowboy surgeon approach and towards evidence-based medicine.

Andrew August 10, 2010 at 9:35 am

It should be noted out that Navarro is a Democrat. He’s probably not a party chosen-one kind of guy, or perhaps what I might call a geographical democrat, but I’d hardly figure him for a Trojan horse.

Tom A August 10, 2010 at 10:06 am

I’m surprised you didn’t throw in the times article

http://www.nytimes.com/2010/08/08/weekinreview/08schwartz.html?_r=2

Rich Berger August 10, 2010 at 1:26 pm

Mike-

Please reread the definition of tract. Hint – this book does not meet the definition on at least two counts.

But maybe you are working with an alternative definition.

John Miller August 11, 2010 at 9:27 pm

1. How does one justify import price floors from a free-market point of view?

2. Removing tax deduction for employer-provided health insurance, allowing health insurance purchase across state lines as well as medical liability reform are three crucial pillars. Now we’ve to add repealing community rating, due to the widely discussed adverse selection effects and the chain of unintended consequences it entails: mandate, subsidies, implicit marginal tax rates etc.

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