by Tyler Cowen
on December 24, 2012 at 11:54 am
1. Free trade in Medicare benefits.
2. Eichengreen and Wyplosz on Peter Kenen.
3. Energy really is a binding constraint for the Indian economy.
4. Markets in everything, Ukraine coffin therapy.
5. The gamification of life.
6. How well did foreign aid to Haiti go?
7. Trends in economics publishing.
I would venture to guess that there might even be a person or two that the general director of the Mercatus Center could talk to about coal, and that those people would welcome the chance to bring their wisdom to state-run Coal India’s attention, as long as the return on investment was worthwhile.
Then there is that whole school of thought that thinks burning less coal is a good thing. Surprisingly, the democratic process involved in Indian seems to play a role – ‘Coal India has been tied down by a snarly regulations and political populism, as well as by concerns about the environment and the rights of displaced farmers.’ The article contrasts this with China, a true powerhouse in the coal burning world – ‘It is a situation that is unimaginable in neighboring China, where coal production has been aggressively expanded during the past two decades to feed the maw of industry, and farmers, the environment and safety standards have been brushed aside in pursuit of economic growth.’
Well, someone recently noted that centrally planned economies seem to be have their benefits in some situations compared to those where democracy is important.
Because the benefits of a polluted landscape is just the cost of doing business, after all. Though strangely, the Chinese now seem to be a bit less enthusiastic about coal, and are again using central planning – ‘China, the world’s biggest user and producer of coal, will limit domestic output and consumption of the commodity in the five years through 2015 to reduce pollution and curb reliance on the fuel.’ http://www.bloomberg.com/news/2012-03-22/china-to-restrict-coal-demand-output-to-3-9-billion-tons.html
Well, the Chinese are throttling back, and the Indians need to step in and fill the gap of state directed coal production, apparently.
More than half of Indians live in rural areas.
How can coal be a decentralized source of power? India lacks an extensive rail network to distribute coal everywhere – that would require a central plan to make the huge investment in rail, like existed in the US to build the US rail network that delivered coal everywhere.
And the power grid in the US required the central planning of the REA and the regulation that made universal access to the grid affordable no matter the marginal cost.
The REA and its rural electric imperative killed off a budding local power industry that was building farm based electric generation – wind generators charging batteries that fed DC electric appliances and lighting.
India is better off going with decentralized power by way of solar. Villages are installing solar to provide community center power for schools and charging appliances that can then be expanded to provide more access to individuals. And that will foster the individual investment in solar power. Solar power can easily supply all the power you need for a knowledge economy: power for cell phones to get market prices, power for LED lighting to read and study by, power for TV/radio for news and entertainment, power for computers for education and business. Even power for pumps to fill water tanks.
Solar represents capitalism – sacrifice consumption to buy productive capital assets that generates output that over time provides many times the consumption. Buying kerosene or coal (which are pillage), results in nothing the day after you burned up what you buy.
Re: #5 — the standard education model has based on “gamification” principles for years — and so are most of the new online courses, like MRU — what are quizzes and exams but another type of game?
The Haiti article was interesting, but like almost all critiques of the foreign aid establishment, likely to be ignored.
The article (understandably for the NY Times) mostly ignores the obvious and predictable causes on the Haitian side–deficient and rudimentary institutions, minimal civic trust, low average IQ and time preference, a population with high endemic levels of violence, unforgiving economic burdens, etc.
Would anyone have bet that the reconstruction effort would have gone well?
O, but as I’ve learned from Tyler (my absolute only source on Haiti), the big problem in Haiti is private for-profit employers, who exploit the poor Haitians. They must be driven out, and replaced by nonprofits and other saintly types. How could things go wrong?
3. The whole coal situation in India is a clusterfart.
They’ve been building dozens of GWs of coal plants based on the government’s promise of getting coal below international market prices, and now they’re shocked, SHOCKED, I tell you, to hear that the country doesn’t have enough coal to satisfy those promises (not at the subsidized prices, and probably not even in terms of coal in the ground).
The absurd amount of coal needed to power all of those plants will not come from Coal India, so it’s going to need to be imported at the international prices levels. That in turn is going to drive the price of coal generation through the roof, and in the end they will have wasted maybe half a million crore (~$100 billion) or more on plants that are going to sit idle.
Someone’s gonna take a real hit–be it Coal India, the generators, or the consumers.
They probably have the coal in the ground. India has the fourth largest recoverable coal reserves, about 10% of the world supply. Whether they’ll ever get it out of the ground is another question, but it’s there.
All it takes is getting rid of the people who think the land belongs to them because they farmed it for centuries.
The sacrificing of the few for the good of the many?
Obviously a strong government that promotes eminent domain taking for private profit is needed.
# 5 Gamification: That’s not about games; that’s about symbols, status symbols. Like “Racing for the Cure” doesn’t nothing directly for finding a cure for cancer, but tries to create an information cascade, or buzz–the same way paid customers in a new restaurant are supposed to signal quality. I remember stickers for luggage reading “I flew Business Class”. They signalled equally well “I overpaid”.
This is all random bs.
Merry Christmas, everybody!
Or as Ian Bogost puts it, “gamification is bullshit”
3. This is where you usually get called a racist.
6. This is where you also usually get called a racist.
5. We don’t need no stinking badges!
I thought the article would mention translating problems from the mathematical notation into an additive visual puzzle that people are more inclined to work on. That looks useful.
Why didn’t Dean Baker suggest outsourcing the operation of US Medicare-Medicaid to Canada’s Medicare administration; give Canada 20% of the money as profit, and have Canada operate Medicare to provide for the old,the poor, and all the otherwise uninsured with incomes below say $50K. At 125% of the per capita cost in Canada, a Canadian Medicare administration would easily cover 60-80% more people than Medicare-Medicaid currently cover with the same funding.
Or outsource to Japan. Or Taiwan. Or to Israel.
And who would complain about the two year wait for a death bed they would force on those waiting to die – the patients would simply have to learn to accept living two years longer.
First, one fact about Medicare not mentioned in the Dean Baker article: Not only does Medicare not outsource treatment abroad where treatment is often cheaper; it specifically denies reimbursement for treatment outside the United States. This is true for persons who have paid into Medicare and qualify for benefits who happen to live abroad, for whatever reason. This does not make complete sense.
Nevertheless, I find the Baker argument puzzling. Presumably, Dean Baker is a Keynesian and believes in the Keynesian multiplier. Medical care spending is one of the few areas of the US economy that is still growing and where people are, more or less, forced to spend domestically. In other circumstances, I would guess his argument would be the medical spending multiplier must be at least a factor of three. Yet, the assumption here seems to be that $1 spent abroad might save 50 cents with no consideration at all to the effect on local employment, tax revenues, etc. Maybe the argument is that transferring Medicare spending abroad will result in devaluation of the dollar so that doctors, nurses and medical technicians who lose their jobs can regain employment in assembling cars.
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