Rational allocation

George Will has seen why health care in the US costs so much, and it is (the) US (government).  He writes:

The president says that the health-care market "has not worked perfectly." Indeed. Only God, supposedly, and Wrigley Field, actually, are perfect. Anyway, given the heavy presence of government dollars (46 percent of health-care dollars) and regulations, the market, such as it is, is hardly free to work.

As market enthusiasts, conservatives should stop warning that the president's reforms will result in health-care "rationing." Every product, from a jelly doughnut to a jumbo jet, is rationed — by price or by politics. The conservative's task is to explain why price is preferable. The answer is that prices produce a rational allocation of scarce resources.

Blaming the government for the high cost of health care comes out of left field (that's a baseball metaphor) in this piece.  Will has in other words done nothing to establish that claim.  He has argued that Americans spend more on health care–the only reason he has given is this:

Today the portion of income consumed by those four has barely changed — 55 percent. But the health-care component has increased while the other three combined have decreased. This is partly because as societies become richer, they spend more on health care — and symphonies, universities, museums, etc.  

He hasn't addressed two very obvious objections to this: (1) just about every other advanced society pays less for health care and gets more (every citizen covered, better overall outcomes) and (2) paying more for health care does not entail getting more: A "free market" for health care services, in other words, may not produce the most rational outcomes.  That "truism" may not be so true.  And besides, very few people would really view their needs for basic health care as they would Cubs' tickets. 

All of this amounts to a subtle change of subject: let's not talk about (1) the uninsured, (2) the under-insured, (3) the insured but not for long, (4) the limitations of employer-based insurance on the lives of people, (5) the devastating effects of health care related bankruptcy (for people with and without insurance), (6) the empirically verifiable existence of vastly superior systems, (7) the rationing of health care to people who pay tons for it in a "free market," and (7) much more.  Let's instead talk about the glory of choices in the free market–shiny things, in other words:

Your next car can cost less if you forgo GPS, satellite radio, antilock brakes, power steering, power windows and air conditioning. You can shop for such a car at your local Studebaker, Hudson, Nash, Packard and DeSoto dealers.

Keep that in mind, folks, next time you're "free market shopping" for health care.

David Brooks on human nature

David Brooks asks:

Has there ever been a time when there were so many different views of human nature floating around all at once?

Answer: Yes.  But he proceeds:

The economists have their view, in which rational people coolly chase incentives. Traditional Christians have their view, emphasizing original sin, grace and the pilgrim’s progress in a fallen world. And then there are the evolutionary psychologists, who get the most media attention.

Only three?  Anyway, in addition to that colossal dumbness, he really wants to argue that evolutionary psychology, as emboddied in the work of one popular author's narrow view of evolution, is wrong, because, err, evolutionary psychology has gotten evolution wrong:

The first problem is that far from being preprogrammed with a series of hardwired mental modules, as the E.P. types assert, our brains are fluid and plastic. We’re learning that evolution can be a more rapid process than we thought. It doesn’t take hundreds of thousands of years to produce genetic alterations.

And so on.  So the problem isn't evolutionary psychology–since evolution as a theory seems clearly right to Brooks, it's wrong versions of evolutionary psychology.  And who can't get behind that?

 

Mr.Spock

Yesterday I mentioned Obama's response to the argument (made by George Will inter alia) that the "public option" (in part on account of its being not-for-profit) will kill private for-profit insurance.  Here again is Obama's response:

OBAMA: Why would it drive private insurance out of business? If — if private — if private insurers say that the marketplace provides the best quality health care; if they tell us that they're offering a good deal, then why is it that the government, which they say can't run anything, suddenly is going to drive them out of business? That's not logical.

Now, the — I think that there's going to be some healthy debates in Congress about the shape that this takes. I think there can be some legitimate concerns on the part of private insurers that if any public plan is simply being subsidized by taxpayers endlessly that over time they can't compete with the government just printing money, so there are going to be some I think legitimate debates to be had about how this private plan takes shape.

But just conceptually, the notion that all these insurance companies who say they're giving consumers the best possible deal, if they can't compete against a public plan as one option, with consumers making the decision what's the best deal, that defies logic, which is why I think you've seen in the polling data overwhelming support for a public plan.

As anyone can tell, Obama is making a point that that particular argument against the public option suffers from a logical defect.  In particular, he is claiming (I can't believe I have to spell this out, but you'll see in a second why) that the claim we have a perfectly competitive business environment must therefore be false, because the addition of new competetion would destroy existing competitors.  We therefore either have an artificial insurance market which cannot sustain substantial or real market-driven competition (which would be provided by the market driven choice of a not-for-profit model).  Or perhaps the private people just don't want competition from a plan more people would choose–in which case we wouldn't have a free market either.  Notice, dear readers, that Obama concedes there would be "healthy debates" about the nature of the private plan.  That's good–very conciliatory.  But if were up to George Will and friends, that debate can be resolved a priori, as a logical matter.  Obama, correctly points out that the allegation of the logical flaw is erroneous.

Enter Jake Tapper, journalist:

And, while I appreciate your Spock-like language about the logic of the health care plan and the public plan, it does seem logical to a lot of people that if the government is offering a cheaper health care plan, then lots of employers will want to have their employees covered by that cheaper plan, which will not have to be for-profit, unlike private plans, and may, possibly, benefit from some government subsidies, who knows.

 

And then their employees would be signed up for this public plan, which would violate what you're promising the American people, that they will not have to change health care plans if they like the plan they have.

First of all, it is not the case that all private plans are for-profit, but besides, Spock-like?  For Chrissake.  The question deserves a little spock-like criticism of its own.  Take the second part, how many employees have control over the health plan their employer chooses for them now–raise your hands.   

Barack Obama versus George Will

Sunday, George Will issued a column on the public option.  In this column, he argued that public option would drive the private insurance industry out of business.  Among other things, he wrote:

Assurances that the government plan would play by the rules that private insurers play by are implausible. Government is incapable of behaving like market-disciplined private insurers. Competition from the public option must be unfair because government does not need to make a profit and has enormous pricing and negotiating powers. Besides, unless the point of a government plan is to be cheaper, it is pointless: If the public option conforms to the imperatives that regulations and competition impose on private insurers, there is no reason for it.

That struck me as bizarre (I'm thinking of the Postal Service here).  Anyway, it struck Obama as odd as well.  Check out his response to the following question:

QUESTION: Wouldn't that drive private insurance out of business?

 

OBAMA: Why would it drive private insurance out of business? If — if private — if private insurers say that the marketplace provides the best quality health care; if they tell us that they're offering a good deal, then why is it that the government, which they say can't run anything, suddenly is going to drive them out of business? That's not logical.

 

Now, the — I think that there's going to be some healthy debates in Congress about the shape that this takes. I think there can be some legitimate concerns on the part of private insurers that if any public plan is simply being subsidized by taxpayers endlessly that over time they can't compete with the government just printing money, so there are going to be some I think legitimate debates to be had about how this private plan takes shape.

 

But just conceptually, the notion that all these insurance companies who say they're giving consumers the best possible deal, if they can't compete against a public plan as one option, with consumers making the decision what's the best deal, that defies logic, which is why I think you've seen in the polling data overwhelming support for a public plan.

I think Obama is correct to the extent that non profit companies compete in a free market all of the time.  Many hospitals don't need to make a profit, some insurance companies are essentially non profits.  I suppose the only remaining thing is the size.  But, as Obama correctly points out, a large number of people seem to favor that kind of insurance arrangement.  It would seem to be an odd limitation on their freedom to shut off that option.  

The public option

The ongoing (and coming?) health care debate will no doubt be a gold mine of sloppy and dishonest reasoning.  We've already noticed some examples of this already.  Just as the debate over gay marriage seems to inspire certain particular patterns of fallacious reasoning (the equivocation on "marriage" and the slippery slope), I think the health care debate will have its own definitive fallacies.  At the moment, I'm thinking that we'll see a lot of red herring–changing the subject from the less appealing facts of the matter (for instance, the fact that Americans pay more for health care and get less than other developed nations) to tangentially related, yet incendiary, notions such as "socialism."

But I think we'll also see a whole lot of weak analogy–in particular comparisons of health insurance to any other complex consumer product.  Here's one from George Will yesterday:

Some advocates of a public option say health coverage is so complex that consumers will be befuddled by choices. But consumers of many complicated products, from auto insurance to computers, have navigated the competition among providers, who have increased quality while lowering prices.

Those things are different in that they are largely optional purchases.  Sure, you "need" them, but you don't need them.  I might mention, by the way, that auto insurance is legally mandated for all drivers (yet another difference from health insurance–and I doubt, by the way, that Will would advocate such a mandate).  In any case, before one starts comparing health insurance to any other consumer product, one ought to take note of the vast differences.  Few products typical consumers (i.e., anyone of any income level) would absolutely have to buy involve possible outlays of hundreds of thousands of dollars.  And few of those products carry with them (often in their fine print) the real possibility of physical and financial ruin.

In the interest of fairness, I should point out that this entire piece, however bad, does not argue against the feasibility or desirability of single-payer health coverage.  In fact, it does a lot to make the case for it (though not on purpose).  Will's purpose is merely to argue against the "public option."  I think his argument is bad (citing as it does Mort Kondrake and a health insurance industry funded study), but I think such an option is a bad one (for other reasons).  

Das Kapital

Fareed Zakaria argues that Capitalism is not dead.  It's an odd argument, because he doesn't give one any idea of the alternative.  To my mind, it's one big equivocation between market innovation (a feature of capitalism for sure) and deregulation.  Who is not for market innovation?  No one really.  Who is for more deregulation of the kind that brought us the housing bubble?  That's a different question.  He writes:

In a few years we might actually find that we are hungry for more capitalism, not less. An economic crisis slows growth, and when countries need growth, they turn to markets. After the Mexican and East Asian currency crises — which were far more painful in those countries than the current downturn has been here — the pace of market-oriented reform speeded up. If, in the years ahead, the American consumer remains reluctant to spend, if federal and state governments groan under their debt loads, if government-owned companies remain expensive burdens, then private-sector activity will become the only path to creating jobs.

As I said, it's just hard to see what he's arguing against.  The argument today seems to be what kind of thing the government ought to do in a financial crisis (tax cuts? cash injection? temporary nationalization of banks?) not what broad economic theory it ought to have under ideal conditions.  But, if Zakaria is arguing for deregulation (or even privatization), then that is a completely different subject.

Morally hazardrous

Health care is the topic of the day.  People seem to agree that 46 million people don't have any at all.  People also tend to forget that having health insurance is not necessarily protection against going into bankruptcy.  For that matter, having health insurance for many does not entail they will get better care than those without, or any care at all.  It is generally agreed, however, that Americans spend more and get less per dollar than their counterparts in other developed nations.  That doesn't worry Robert Samuelson, however.  Nor does he bother to mention that astounding fact.  He writes:

How much healthier today's uninsured would be with that coverage is unclear. They already receive health care — $116 billion worth in 2008, estimates Families USA, an advocacy group. Some is paid by the uninsured themselves (37 percent), some by government and charities (26 percent). The remaining "uncompensated care" is either absorbed by doctors and hospitals or shifted to higher private insurance premiums. Some uninsured would benefit from coverage, but others wouldn't. Either they're healthy (40 percent are between ages 18 and 34) or would get ineffective care

The claim–how much healthier would the uninsured be–is quickly replaced by financial observations on how much care they do receive and who pays (and, oddly, whether this care would be any good).  That, I think, is misleading.  Certainly, uninsured teenagers who never have accidents and don't get sick wouldn't benefit at all from health care, but we're not talking about health care, we're talking about health insurance.  Not having health insurance is different from not having access to health care.  Most Americans, as John Stossel once pointed out (see "Is America Still Number One?"–the answer, would you believe it, was "yes"), have access to the best health care in the world (!!!).  Too bad, however, the question regarded whether they or anyone could pay for it.  To that, the answer is "obviously not."   

Aside from the red-herring like shift in topics, Samuelson abuses the quantifier "some."  Indeed, some–those who don't get hurt–would not benefit from coverage.  For the past three years I was one who benefited not from coverage.  Yet about a week ago, fate had it that I would begin to need to benefit.  You never really know when that will be.  A friend of mine in graduate school was young, healthy and uninsured.  A headache one day cost him 25,000 dollars.  

Safire on straw men

William Safire was one of the inspirations for this site.  No, not for his semi-erudite columns on language, but rather for the consistent sloppiness of his arguments in his op-ed columns.  He retired from op-ed writing shortly after we started this blog (almost five years ago!), so that was it for him, for us.  But he never stopped writing (so far as I can gather, I don't read it that often) his On Language column for the Sunday Magazine.

Recently he has been a go-to guy on the notion of a straw man, as if his supposed expertise on matters of language makes him a master of critical reasoning.  It obviously doesn't, as the following passage from last week's column will demonstrate:

Accepting the Democratic nomination in a huge football stadium way back in the presidential campaign of ’08, Senator Barack Obama displayed his oratorical talent by using one of his favorite tried-and-true devices in argument: “Don’t tell me that Democrats won’t defend this country!”

Who was telling him that? To be sure, his opponents were claiming that a Republican administration would be stronger on defense, but nobody was telling him or the voters that Democrats preferred abject surrender. At the time, reviewing that speech, I noted the rhetorical technique: “By escalating criticism, he knocked down a straw man, the oldest speechifying trick in the book.”

Encouraged by his reviews for eloquence, President Obama has embraced the straw man frequently (as F.D.R. liked to emphasize it, “again and again and again”) with nary a peep of criticism. Two weeks ago, the Times correspondent Helene Cooper dared to note this president’s repeated use of digs like “I know some folks in Washington and on Wall Street are saying we should just focus on their problems.” Some folks, like those who, are never named but are always wrongheaded extremists. Her “White House Memo” was headlined “Some Obama Enemies Are Made Totally of Straw”; its subhead was “Setting them up to have someone to knock down.” Cooper, as the objective reporter, gave examples of conservative politicians who speak straw-manese, although none with such fluency.

I suppose Safire doesn't read the newspaper, listen to speeches, or know how to use google.  A constant theme of Republican arguments in the last two National election cylces has been that the Democrats would not defend this country (see any speech by Dick Cheney–chances are "we'll get hit again").  On top of this, Safire even straw-mans the alleged Obama straw man: Obama said "would not defend" and Safire says "preferred abject surrender."  Those are different.

More basically, Safire doesn't really get what makes a straw man a straw man.  Just because one uses "those who" or "some" does not mean one is using a straw man.  What makes an argument a straw man is the distortion or actual arguments, the selection of really weak and unrepresentative arguments (the weak man), or the whole-cloth invention of silly arguments and non-existent arguers (the hollow man) for the sole purpose of defeating them.  "Some" and "those who" may be a sign of a straw man, but it's not a sufficient condition for one.

Torture apologia chart

Say you need to justify torture, but with so many good arguments for it, you don't know which one to pick.  Well, now there's help.  Courtesy of Batochhio:

Torture Apologia Chart 

Click here for a larger size.  I'm sure this idea could be adapted to many other arguments–I think this has given me an idea.

The Green Hornet

When you have nothing to say against the actual arguments of your opponent–you know, her facts and inferences–you can always psychologize about her motives.  Cue the "you're just saying that because."  This, I think, would properly characterize George Will's response to any argument not his own (at least those which he doesn't straw man).  Today he enlists the help, as he often does, of a couple of fellows who say something he thinks makes his points about environmentalism, and by extension anything "liberal."  He writes:

In "The Green Bubble: Why Environmentalism Keeps Imploding" [the New Republic, May 20], Ted Nordhaus and Michael Shellenberger, authors of "Break Through: Why We Can't Leave Saving the Planet to Environmentalists," say that a few years ago, being green "moved beyond politics." Gestures — bringing reusable grocery bags to the store, purchasing a $4 heirloom tomato, inflating tires, weatherizing windows — "gained fresh urgency" and "were suddenly infused with grand significance."

Green consumption became "positional consumption" that identified the consumer as a member of a moral and intellectual elite. A 2007 survey found that 57 percent of Prius purchasers said they bought their car because "it makes a statement about me." Honda, alert to the bull market in status effects, reshaped its 2009 Insight hybrid to look like a Prius.

You can read the original article at the link.  This article doesn't seem interested in the actual realities addressed by "the green movement."  Here's a taste:

Little surprise, then, that they would start buying a whole new class of products to demonstrate their ecological concern. Green consumption became what sociologists call "positional consumption"–consumption that distinguishes one as elite–and few things were more ecopositional than the Toyota Prius, whose advantage over other hybrid cars was its distinctive look. A 2007 survey that appeared in The New York Times found that more Prius owners (57 percent) said they bought the car because it "makes a statement about me" than because of its better gas mileage (36 percent), lower emissions (25 percent), or new technology (7 percent). Prius owners, the Times concluded, "want everyone to know they are driving a hybrid." The status effects were so powerful that, by early 2009, Honda's new Insight Hybrid had been reshaped to look like the triangular Prius.

Of course, for many greens, healing required more than a new kind of consumption, however virtuous. In The New York Times Magazine's 2008 Earth Day issue, Michael Pollan argued that climate change was at bottom a crisis of lifestyle and personal character–"the sum of countless little everyday choices"–and suggested that individual actions, such as planting backyard gardens, might ultimately be more important than government action to repair the environment. Pollan half-acknowledged that growing produce in your backyard was ecologically irrelevant, but "there are sweeter reasons to plant that garden," he wrote. "[Y]ou will have begun to heal the split between what you think and what you do, to commingle your identities as consumer and producer and citizen."

And so forth.  One can always find someone who participates in mass action whose motives are not directly in line with the goals of the mass action.  But hey, that doesn't say much.  Some Nazis, after all, were just in it for the chicks.  That doesn't make their Nazism any less horrible.