Friday Randomness 8/7/09

Links

– Make sure to check out James’ You Do Not Have Health Insurance. People respond to incentives, managers are natural rent-seekers, and if you get sick on the job you can’t walk away from that job as easily. Since you have become locked in to your current job it’s common sense to believe the job will become worse for you. You’ve lost part of your ability to negotiate by not being able to walk away from the table.

As an example, friend of the blog Larisa’s comment from the previous entry:

I think I prefer “autonomy” to “economic freedom” because the term more clearly evokes concepts like dignity and lack of oppression..I was just thinking about this because I have had 3 different conversations with different friends who are hostages to their jobs because of health care – one faces constant sexual harassment but cannot leave or fight back and risk repercussions because she needs the health plan (having gotten sick while on the job she now has a pre-existing condition for any other health plan).

– If the back-of-the-envelope answer is that the middle-class maximize utility, and the rich wealth, what do the poor maximize? I’ve been meaning to read The Persistence of Poverty: Why the Economics of the Well-Off Can’t Help the Poor (more), and now is as good of a time as any. The argument is that standard marginal utility theory is a good approximation for the middle-class habitus, but bad for the poor’, since “if pains and troubles are high enough, extra pain and trouble just isn’t so bad.” Is the standard model also a bad approximation for the rich? Will report later.

Are community-involved lending groups successes breeding grounds for subprime lenders? Great post. I can’t even imagine how much a subprime lending group would be willing to bribe to get a list of mortgage holders who have gotten their start with community groups. All the more reason for a CFPA.

To lighten it up around here.

My First Fail. Brilliant.

– 60 Minute’s (1985) shocking exposé on the dangerous world of Dungeons and Dragons. Intro: “[D&D is not popular with] adults who think it has been connected with a number of suicides and murders.”

(part 2.) They make it 3 minutes in before asking Gary Gygax what the connection is between D&D and teen suicide, but only because it takes 3 minutes to set up the question.

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2 Responses to Friday Randomness 8/7/09

  1. Crayfish says:

    Re health insurance: a fascinating aspect of the US’s political struggle with the issue is that there are no attempts, by the government, politicians and especially the media, to highlight and assess the differences (and causes) between the US healthcare system (inclusive of HC insurance) and foreign systems, such as Canada, Australia and the UK. All of these countries have superior life expectancies and much lower shares of GDP allocated to health care. But these countries may share a common problem in the form of government provision of all or parts of the package. In the US, for some reason, it is much harder than elsewhere for the gvt services to be provided at private sector levels of best economic practice. There is an alternative to the Commonwealth’s legacy of National Health systems, that is the Dutch system of (1) mandatory insurance (2) government regulation of both health care insurance and health care provision, with things like an approved set of medications (and the prices that insurers will pay), maximum prices for treatments, hourly fees of various practitioners, guidelines as to what methods to employ in treatments, etc (2) private sector financing of health facilities. The system delivers very attractive societal outcomes (high health indicators, low infant mortality, longevity etc, as insurers have an incentive to keep their clients as healthy as possible. Despite the regulation there is no shortage of new entrants, although there is a leftover of supplier-dominated influence in that it is difficult to gain entry to medical education at universities. But in some neighbouring countries there is a relative abundance, which tends to mitigate. Also the legal system is “tort-unfriendly”. Dutch judges are appointed, but socially responsive and sit without juries. Tort awards tend to be orders of magnitude lower than in the US.

    The above just as an example what a “private” health care system can be that delivers results at least equal or superior to the NHS look alikes.

  2. Chris says:

    If the back-of-the-envelope answer is that the middle-class maximize utility, and the rich wealth, what do the poor maximize?

    The ones who are alive maximize lifespan, because the ones who don’t maximize lifespan aren’t alive. Extra pain and trouble is indeed not so bad – compared to death. The people who disagree don’t show up in the analysis because they’re dead.

    At least, that’s how I would describe the *truly* poor (which you fortunately don’t see that many of in America). America’s working class are probably best understood using the middle-class approach.

    As for the rich, I think they use wealth as a proxy for utility because, well, they already have everything money can buy except Veblenesque consumption signaling. Why they don’t take more leisure, I don’t know, except to point out that the ones who *do* take more leisure might not get into “the rich” in the first place unless they were born to it.

    Any major amount of upward mobility takes either extreme amounts of luck (e.g. winning the lottery), or working your ass off even after you’ve already satisfied your needs plus large amounts of luck. Lots of people work their asses off and don’t get very far, but on the other hand, if you stop when you only have everything you need, you’ll never enter the ranks of the truly rich. An obsessive inability to be content with any non-obscene level of wealth is a prerequisite to reaching the obscene levels. It’s the same way with professional athletics – you have to be good, you have to be lucky, but even more than that, you have to be obsessed.

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