by Tyler Cowen
on November 25, 2012 at 9:40 am
1. Brad DeLong has a question about ACA, and DeLong on Cowen on Nagel, and here Plantinga reviews Nagel.
2. Authors choose their favorite books of the year, from The Guardian.
3. Some reasons why celebrities and start-ups should not trade.
4. Ross Douthat wants to find a way to abolish the payroll tax.
5. EconGirl on Michael Sandel.
6. How are cell phones reshaping Indian prostitution and the fight against AIDS?
4. America has a lot of different kinds of taxes, tariffs and fees. It seems that there are popular arguments that they should all just be lower. Rinse and repeat, and you might have revenue of of line with expenditures. Strangely people who don’t like current taxes sometimes suggest completely left field ideas like a VAT or carbon taxes as substitutes. Dollars to donuts there would be the same sorts of editorials that any such thing, once enacted, should be lower too. That’s the way it will always be when you run things on tax-feel rather than budget balance. I’m pretty sure our varied taxes, tariffs and fees are close enough, and that their levels can be nudged into sensible alignment. I don’t trust revolutionaries. I think they are trying to distract me with a “rabbit!” argument.
Incentives matter! These taxes have very different incentives. I would much prefer less carbon to less employment…
Just waiting for vitriol to fly at TNR for publishing the Plantinga review.
“How dare they publish a review that aids readers to independently assess a book that does not share our warmly cherished progressive dogmas? “
I enjoyed the Plantinga piece, but I think the author is dismissive of deep time. As if we should have an intuition of what is possible, or impossible, over a billion years. More broadly, Plantinga takes on a battle of asserted certainties (“The probability .. is vanishingly small.”) when a smarter argument would suggest uncertainty and humility.
Like you I enjoy reading the flowery language associated with trying to debunk science. But you’d think these writers would learn from history that the “here’s something science can’t explain so science must be wrong” argument has not had great success. In fact it’s easy to imagine Nagel is smart enough to realize this and is just taking trolling to a master level.
I’m not sure which cherished progressive dogmas are supposed to be threatened by Plantinga, but I have to say that I ended up with a view of Nagel’s book that is fairly close to Delong’s. (This is based on the portion I read — I gave up fairly quickly.) I was looking forward to a well-argued book that attacked my priors, but a lot of Nagel’s argument, such as it was, seemed to rest on assertions that themselves rested on nothing at all. He states again and again that the evolutionary account of the origin and diversity of life is vanishingly unlikely. OK. Maybe so, but the opposite seems just as plausible to me, and as Nagel seems to be making a probabilistic argument, it would be helpful to understand how he’s deriving his odds. Perhaps he lays out a mathematical argument later in the book, but the impression I got from the portion I read was that we were meant to take this as obvious. Unfortunately, humans are very bad at reasoning probabilistically, and I don’t get the impression that Nagel has any special skills here.
The older I get the more it feels like entire industries of thought are built on ideas that no one actually believes but rather they would like to believe for a variety of reasons. It seems like Nagel is trying to fill a role in that space here. There really is no other way to account for traditions such as religion that continue on long past their shelf life.
Right, and an application of the weak anthropic principle kicks in here. Whatever “p” is, we have no clue how many planets might be capable of supporting some sort of life for some time in the universe. We simply live on the one we know for a fact can. The expected number of planets supporting life is p*N; we don’t know much about p and know even less about N. We haven’t even explored the surface of Mars in any real depth yet.
1. Well, first of all, there is that Iowa study that says we aren’t lagging if you actually look at life expectancy. Not to mention, has anyone really looked at healthcare outcomes rather than the irrelevant life expectancy statistic? I’m trying to channel Arnold Kling here, but the libs knew about this as far back as 2009.
First, why, exactly, should there be an exponential relationship between GDP per capita and health spending per capita, as implied by the “fitted” curve in the plot? Switzerland has a GDP per capita pretty close to America’s yet its health spending/GDP is about 12% compared to America’s 15-16%.
Second, it’s never been clear to me what the purpose of nit-picking life expectancy statistics is. The U.S. spends a huge amount of money on health care compared to other countries: what’s the marginal benefit of that additional spending? It appears to be extremely small.
Finally, why is it being referred to as an “Iowa study”? I have noticed this trend of citing studies by the institutional affiliation of the authors — presumably in order to give the study a measure of prestige by associating it with a university. The “study” in question is actually a Powerpoint presentation delivered to the American Enterprise Institute and only one of the presenters is affiliated with any university in Iowa.
what’s the marginal benefit of that additional spending? It appears to be extremely small.
Are you sure? What would US life expectancy be if the US spent, per GDP, what France does? Would it be higher or lower?
Depends. Are we spending it on unnecessary MRIs and loading up the ER? Or are are paying smartly and not simply rewarding providers who order more tests and procedures?
The best comparison for the U.S. is Canada. It should be possible to compare white Canadians with white Americans living relatively close to the border and then compare health spending and health outcomes. I haven’t been able to find such a fine-grained comparison yet but the comparisons I have seen so far are pretty much a toss-up.
This is an econ blog so we should be interested in marginal benefit versus marginal cost. Americans spend a lot more on health; we would expect this spending to show up clearly and obviously in quantifiable health measures if it was money well spent. The fact that some people go to great lengths to massage the data in order to argue that, if you squint hard enough, you can kind of, sort of measure small differences in outcomes between Americans is actually evidence of the problem.
“why, exactly, should there be an exponential relationship between GDP per capita and health spending per capita”
The point is, there is one, more or less.
I don’t know the details of Sweden. Do you?
So, in other words, you really have no clue, and are simply guessing the result you want to believe.
“So, in other words, you really have no clue, and are simply guessing the result you want to believe.”
Your question was about what would happen if the U.S. spent the same amount on health as France. By definition, any answer to that question is a “guess.” As it is, there is a lot of literature on the subject of U.S. health spending including the McKinsey study from a few years ago, the Dartmouth Atlas of Health Care project and the CEA health care report from June 2009. The second part of your sentence is uncalled for.
Well, it is called for. Your assumption was that there is no measurable marginal benefit (see your first comment). When I ask you why you believe that, you then replied that you weren’t sure, which did answer my first question.
Look, I think a lot of spending on medical care in the US is wasted, but I, nor you, have any real clue what is wasted and what is not. Look at Jan’s comment above- simply assumes MRI use is wasted, but with no evidence. You are right- the evidence is lacking, which is exactly my point. If cutting expenditures down to the level of France reduced life expectancy in the US, what would be your response?
Kling et al claims on life expectancy seems to be that Japan, Europe, Canada, et al had life expectancy 5-10 years less than in the US, and they have in three decades only managed to match the US life expectancy by increasing spending at half the rate of increase in the US, which proves US health care is superior because we have stayed ahead by increasing spending so much faster we spend about twice as much per person today when we spent only a little more in 1980.
The attacks on the OECD data are simply desperate attempts to avoid the obvious truth – universal coverage increases efficiency – cost performance – lower cost, better outcomes – whatever you call it.
To me, the obvious truth is that European/East Asian demographics and lifestyles are more conducive to long life expectancies than US demographics and lifestyles. Do you suppose that if we adopted Japanese healthcare laws/regulations verbatim, then life expectancy in, say, East St Louis and Detroit would magically rise to Japanese levels?
East St. Louis and Detroit…are you saying it is a black thing?
Yes, this is a common refrain. won’t work in the United States because of the black population.
People don’t usually say it specifically, but this is what is meant.
In part. Much lower life expectancy.
The point is there is no mechanistic relationship between life expectancy and performance or spending on medical services.
Yes, a population that is less healthy will both have higher spending and lower life expectancy even taking out the outliers like car wrecks and gun shots.
Do you think lemon cars have lower “medical” costs and longer longevities than non-lemon cars?
The point is that those places have extremely low life expectancies that are obviously driven by non-healthcare factors. High rates of violent crime, obesity, chronic diabetes, drug and alcohol abuse, child abuse/neglect, family instability, etc. These life expectancy- reducing issues will still be around even if we change the healthcare deliver system to one that seems to produce long life expectancies in Europe or Japan.
DeLong asks a very good question, for once.
Why didn’t he ask this question before the so-called “Affordable” Care Act was passed?
…because politics rules economics.
I am guessing politics before and after. He is raising the question now because he can see the writing on the wall, and is trying to position himself to look smarter than he is.
Also the election is over and ACA is a fact of life now so there is no danger of free inquiry damaging a cherished political goal.
As ever DeLong commitment to truth underwhelms me.
The barriers for a foreign physician to practice in the U.S. are much higher than those for nurses. This will need to change. Doctors make big money in the U.S. and we can deter good Indian, South African and Greek doctors from choosing other countries if we make it a little easier to practice here.
Never heard of EconGirl before. Seems pretty clever/interesting.
Also, re: Douthart. There is some political truth here. Many Republicans I know were less warm to the payroll tax holiday than any other tax cut- I found this a bit curious.
Are economists in general in agreement that consumption and wealth taxes are preferable to income and payroll taxes? I think so, but the current system relies overwhelmingly on the latter, while every third word out of every politician’s mouth is ‘jobs’. Again, curious.
Many Republicans I know were less warm to the payroll tax holiday than any other tax cut- I found this a bit curious.
Not me. GOP dogma says tax cuts are only for the wealthy.
The dogma that says restaurant owners are the wealth creators, never the diners.
But the diners themselves can only spend from their prior production as business owners, net tax-payors, etc. Newly issued money, artificially cheap credit and tax receipts are just transfer payments. So yes, production is more important than consumption.
Baron Keynes was always going at things from the wrong end, and his economics were topsy-turvy too.
I tried to point out that millions of public sector rent seekers in state and local government, who don’t participate in Social Security, received no benefit from the payroll tax holiday. I think this is underappreciated on both sides of the aisle.
Well yeah, if you ignore all the historical evidence and all the statements made by every GOP politician, then yes.
4. Now that SS is truly pay-as-you-go the tax is working correctly, although it is still going to other people and not the imaginary lock box. At least it is going to people who worked from people who work. Erase that and then there is no distinction with a welfare program. Since people don’t like welfare Douthat might be right, but I wish we could operate explicitly rather than political marketing strategy. But as a regressive tax on people who are working it might work to flatten the taxation. Hmmm, deja vu all over again.
All that really matters is making sure everyone knows that the Democrats and to slightly lesser degree the Republicans spent the nest egg. What will likely happen is the Democrats will deftly demagogue the Republicans and the Republicans will bumble their way through.
4. No, the payroll tax is the best tax that we have. Uncap it and use the revenues to cut the income tax.
Agreed. The payroll tax is a revenue machine in an age when we desperately need to find revenues. Douthat should stick to what he knows: nothing.
Brian – EconGirl (Jodi Beggs) is like Yoram Bauman without the delivery in video form, but her blog is great for pop-behavioral topics and sports econ (when the Celtics are in the playoffs).
Both Jodi and Yoram have great videos, not sure what you mean… she used to teach under Mankiw at Harvard.
I thought she was still lecturing there, and don’t get me wrong: Jodi is great and her blog/videos are awesome. I just think YB should handle the comedy side.
Yeah, you’re right, just watched her AEA talk. She does strongly resemble Mindy Kaling, doesn’t she?
Yup, looks like DeLong has his number. Though I still haven’t read the book yet, looks as though Nagel has come out as some sort of Dinosaur-Platonist.
Still, Eliezer Yudkowsky amongst others would do well to take heed of some of the points Nagel makes, though I doubt it would change his mind much. For the same reason – I doubt any scientists are actually going to change what they do after reading Nagel’s book.
(I’m somewhat miffed to see that a famous philosopher can get acclaim for writing a book making some of the same obvious criticisms I made as a schoolboy…)
Hmm. Scientists posit the most direct explanations they can think of for observed phenomena. It’s all about Occam. Broadly Nagel says that unobserved and more complex explanations should be accepted by the scientists themselves? Personally I like a marketplace where scientists, at their booth, have their best materialist explanations and theists, at their booths, make either extending or opposing arguments. I don’t see it as useful at all to say that scientists should get in the business of the ineffable.
Science by definition seeks naturalistic explanations. My understanding of Nagel is that as a philosopher he is intuitively (and non-scientifically) evaluating whether the naturalistic explanations are satisfying. In saying “no”, he ends up sounding like creationists.
He might have avoided arguments about probability if he started from non-materialist philosophers like Schopenhauer, Rorty, or James and argued that these thinkers show that non-naturalistic alternatives are available.
Sorry, should have said Dinosaur Cartesian, shouldn’t I? In fact Nagel has always been a Cartesian hasn’t he? Should have known ever since that bat paper.
2. Way too many books. Seriously, what is a reader expected to do with such a list? Think of how another year passed away and all the great books that I have not been able to read (or unlikely to read)?
Watching Sandel’s Justice course online, I found myself talking to the screen, asking for someone, please, to add some economic thinking to the discussion.
Is there a more thorough effort out there that adds incentives to the topics?
Me too. Elimination of FICA is the tax cut that pays for itself. The current structure of SS and FICA is meant to hide the fact that SS is welfare but why would we need to force people into a retirement plan that is not welfare?
Eliminate FICA and you can then give every citizen over 65 (or 70) the same payout and that can save money without harming those in need..
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