As you know, Vox is Ezra Klein’s latest attempt to package leftist ideology in a “data driven” / non-ideological facade. You knew they were committed to being data driven / non-ideological when their first major hire was to bring Matt Yglesias in as the executive editor. (This is where I bemoan the lack of sarcasm font, by the way.)
Many, including me, realized fairly quickly that Vox was really an effort to mainstream the idea that 1) ObamaCare is great no matter what the bad news is and 2) single-payer will eventually be the only way to “fix” the great ObamaCare. They’re not really hiding it anymore. I expect it to eventually be some version of “Shut up! Single-payer is the sh*t!” in a daily post soon.
Anyway, a couple of days ago Ezra Klein posted this speech by Nobel Laureate Thomas Sargent delivered at a commencement ceremony at Berkeley a few years ago. Drew over at Ace of Spades already started the process of showing how the speech actually undermines Klein’s worldview, but I’m going to show you how every point Sargent makes directly undermines Klein’s beloved ObamaCare.
Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.
1. Many things that are desirable are not feasible.
You know, like promising to simultaneously provide “affordable insurance” to the previously uninsured while keeping costs down and allowing people to keep the plans they liked.
2. Individuals and communities face trade-offs.
ObamaCare was sold on the idea that there were no trade-offs. If the trade-offs were brought to people’s attention – aka if ObamaCare supporters didn’t lie – it probably wouldn’t have passed.
3. Other people have more information about their abilities, their efforts,
and their preferences than you do.
Do I need to really explain how this is exactly what ObamaCare doesn’t do? Really? Was Klein really this unaware of what he was reading? This is an argument for free (or at least freer) enterprise, not a centrally managed monstrosity like ObamaCare.
4. Everyone responds to incentives, including people you want to help. That
is why social safety nets don’t always end up working as intended.
5. There are tradeoffs between equality and efficiency.
Yes, let’s put the most inefficient organization in the country – The US Government – in charge of health insurance. And, in the name of equality, lead people to believe that someone else is going to pay for it.
6. In an equilibrium of a game or an economy, people are satisfied with their
choices. That is why it is difficult for well meaning outsiders to change
things for better or worse.
You mean like “junk” policies that ObamaCare made illegal? Like that?
7. In the future, you too will respond to incentives. That is why there are
some promises that you’d like to make but can’t. No one will believe those
promises because they know that later it will not be in your interest to
deliver. The lesson here is this: before you make a promise, think about
whether you will want to keep it if and when your circumstances change.
This is how you earn a reputation.
Like it, keep it. Period.
8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.
ObamaCare, apparently, can be changed / extended / suspended without approval from Congress. So… there’s incentive to delay stuff for political purposes. This is why you do not give the government this much power. Ever.
9. It is feasible for one generation to shift costs to subsequent ones. That is
what national government debts and the U.S. social security system do
(but not the social security system of Singapore).
10. When a government spends, its citizens eventually pay, either today or
tomorrow, either through explicit taxes or implicit ones like inflation.
These two go together. And again, ObamaCare. Duh.
11. Most people want other people to pay for public goods and government
transfers (especially transfers to themselves).
ObamaCare, like leftist ideology in general, is based on this idea that someone else will pay more so you don’t have to. The problem is that eventually the ones who do pay more figure out how not to pay more.
12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.
This last one doesn’t cleanly relate to ObamaCare but the general idea is that the market is based on the decisions of millions of individuals and it’s impossible to predict the future… wait. I guess it does cleanly relate to ObamaCare after all.
Maybe Klein was hungover from partying with General Electric bucks or something. He clearly wasn’t paying attention to the speech he claimed tells you all you need to know about economics. The irony here is that he’s sort of right! This speech tells you a lot about economics and if you actually pay attention to it, compare it to the prevailing economic theory of the Obama administration and people like Ezra Klein, you realize quickly that the Left is wrong about economics.
And that’s hilarious.