Friday, March 30, 2012

Krugman: Eat your broccoli and shut up!

[Update]: I include commentary from David Henderson on Krugman's column. Henderson writes:
Well, guess what? I'm a health-care expert. In fact, I was employed as one for two years by the same boss who employed Paul Krugman, namely, Martin Feldstein. From 1982 to 1984, I was the senior economist for health policy with the Council of Economic Advisers. I don't find the comparison horrifying at all.

Here's why. If you don't buy health insurance until you're sick, then when you get sick, you drive up the price of health insurance for others. If you don't eat broccoli, and your not doing so makes you sick, you drive up the price of health insurance for others.

Now, there is a way around both conclusions: allow health insurance companies to sell insurance, as that term is generally understood. Let them price according to risk. Then, when people don't buy health insurance until they are sick, the price will be quite high and they will not be subsidized by others. Similarly with broccoli. If eating broccoli makes you healthier, and if that health can be measured, your insurance rates, all else equal, will be lower. Those who refuse to eat broccoli will have worse health and will pay higher rates.
 [End update]

Paul Krugman's recent column on the "broccoli" question reveals a number of things, including Krugman's insistence that government can create a wonderful medical system through coercion, and anyone who disagrees wants people to get sick and die. That is a pretty typical Krugman argument -- those who agree with him do so for the most evil of reasons -- and Don Boudreaux has his own rejoinder in his Cafe Hayek response:
Never mind that Mr. Krugman here implicitly demands that the Court do what all of a sudden horrifies so many “Progressives,” namely, ground its constitutional rulings on detailed analyses of facts and policy.  Such analysis would indeed expose several practical differences between commerce in vegetables and commerce in insurance.

Focus instead on Mr. Krugman’s failure to understand that there is indeed a relevant and looming similarity between broccoli and insurance – a similarity that likely sparked Justice Scalia’s question.  If my failure to buy health insurance puts upward pressure on health-care costs for other Americans – and thus justifies the government forcing me to buy insurance – doesn’t my failure to eat a healthy diet likewise put upward pressure on health-care costs for other Americans and, thus, justify the government forcing me to buy broccoli?  If not, why not?

Given government’s zeal to control ever-more aspects of private life, such questions are not Constitutionally trivial.
 With Michelle Obama jetting around the country telling people what they can and cannot eat, and the Food Police being ramped up, I find it interesting that Krugman attacks the whole "broccoli" issue. After all, the government that Krugman so lionizes is doing everything it can to force people to purchase and eat Obama-approved food and the Food Police are seeking and gaining more power every day.

As for insurance, I find it interesting that Krugman is so gung-ho about using coercion as a means to further what really are government schemes. The point is that if government can coerce you to purchase one thing -- semantics about products and taxes aside -- government can coerce you to purchase anything that Progressives believe is "good for society."

In the end, Paul Krugman is all about Rule of Force. Progressives like himself determine what is good for everyone else, and then others are forced to obey -- or go to prison. That is the reality of Krugman's Progressivism.

21 comments:

Salamano said...

I didn't buy the 'uniqueness' idea of the Health Care market. (I know various sides like to try to get the Supremes to rule on their case as if to say it means nothing in all other instances).

-Acquiring shelter (homes) is a 'market' everyone must participate in one way or another (or at the very least similarly to Healthcare)

-So is that 'burial insurance' concept one of the justices brought up. There are probably others too.

I think part of the argument for setting aside the larger constitutional issues or this case's applications in other realms was to consider the benefit it brings to those who are disadvantaged... But why not come up with a rule that confiscates all income over $100,000 and redistribute it to those who don't make as much-- "just think of the benefit it brings to millions!" etc. etc.

Anonymous said...

Once again you fail to actually portray what Krugman has written or address the actual issues.

1) Part of the constitutional debate is whether health care is a comprehensive issue. Broccoli is just broccoli. If, on the other hand there were huge externalities impacting the entire food supply...
2) Health insurance is difference because a person can go through life without ever eating Broccoli. On the other hand, nearly everyone will have interaction with the health care system, and use private insurance as their method of payment. People wait until they are sick. Doctors simply do not, and cannot, turn people away.
3) Krugman makes a really valid point - what is the difference between collecting taxes to pay for national insurance versus requiring you to buy insurance on the private market? The fact is that both fall under the congress' taxing authority and the latter has been a standard conservative policy recommendation for years.
4) You argue that Krugman merely wants to impose his own personal preferences on the nation. But, that ignores the entire complexity of health delivery systems and the failure of private markets to adequately address this issue (to a large extent because doctors simply cannot deny care, even to the uninsured). I see no prescription from your end to the rising costs of medical care, or the number of uninsured - simply hyperbolic rhetoric.

ayassos said...

One area where I thought Scalia's analogy went off the rails was this distinction: the Commerce Clause is subservient to the Necessary & Proper Clause. There is a qualitative difference between the importance of a healthcare plan and specific menu items, I think, and the Necessary & Proper Clause (if there is any rationality left) should not be used to micromanage what's on your plate. HOWEVER, what really surprises me about Krugman is his unquestioning acceptance of the idea that the federal govt. should force people to buy a product from private industry. That's the thing that sets this plan apart. It's part of Krugman's "practicality," I guess - as long as it's Big Government and kind of liberal, it's fine. His other typical solution to the state-federal problem ("coercion") is also telling. He says that states shouldn't worry about money because the federal govt. just "gives" it to them. That sums up his attitude - never mind that it is individual citizens in states who pay the federal government the money the feds "give" away. Once the federal govt. is disbursing it, it's all free money. Fundamentally, his ideas are just ill-informed and ad hoc on so many levels.

farmland investment said...

The Supreme Court has really jumped in and dramatically shaken things up. The key issue is "where does it end?". If government can make a person buy health insurance, can they compel people to exercise on a regular basis? To eat certain foods? And who knows what else. Scary.

Mike M said...

Ayassos said: ‘the Commerce Clause is subservient to the Necessary & Proper Clause.”

Incorrect. The Necessary and Proper Clause is an enabling clause not a power with independent power. Thus it is not about which is subservient. They are two different things. The commerce clause is a power of substance granted to the Congress, the Necessary and Proper clause grants them authority to carry out the power they have been granted.

Anonymous said...

I bet liberals wouldn't be so enthused if a law required them to buy something to they didn't believe in, like a gun. What if a conservative congress enacted a law requiring all households to be armed so the cops are called less. All of a sudden they would all be constitutionalists.

Tel said...

Anon March 30, 2012 2:56 PM:

"3) Krugman makes a really valid point - what is the difference between collecting taxes to pay for national insurance versus requiring you to buy insurance on the private market?"

I believe that tax collection cannot be justified under the interstate commerce clause, and thus required the sixteenth amendment. Obama is attempting to get his mandate in under the commerce clause. Thus, Krugman is really arguing for a rejection of Obama's mandate if he believes there is no difference.

As for whether it might be a good law or a bad law, that's not the job of SCOTUS and irrelevant to the matter of the Constitution.

By the way, personally I think it's probably time to accept that the US Constitution no longer serves any purpose of limiting federal government power. I'd be surprised if anyone can name any genuine limitations that apply.

Anonymous said...

I'm fine with SCOTUS ruling in favor of Obamacare as I already have health insurance and if anything it will cheapen my rates in the long run with the larger pool to offset my cost. Also, we in the gun rights community will have the legal precedent to do what many of us have in recent years been considering given the empirical stats show gun ownership lowers crime. We'll pass a law that requires every household not headed by a felon own at least one registered and licensed gun for the protection of that household. Many choose not to do so today and that shows at least as much negligence and selfish inconsideration of the greater good on their part as not purchasing health insurance.

I note someone else has written on this matter as a means to scare liberals off, but as a liberal and a gun owner I ask why can't we have both?

Jordan said...

"4) You argue that Krugman merely wants to impose his own personal preferences on the nation. But, that ignores the entire complexity of health delivery systems and the failure of private markets to adequately address this issue (to a large extent because doctors simply cannot deny care, even to the uninsured). I see no prescription from your end to the rising costs of medical care, or the number of uninsured - simply hyperbolic rhetoric."


Poll after poll shows that the majority of Americans are satisfied with their health insurance. Also, close to half of Americans polled on their opinion of the Affordable Care Act call for its repeal. So Krugman is in fact imposing his preferences on the nation - your criticism does nothing to refute the original statement.

libertarian89 said...

1. There are huge externalities that are imposed on others and the rest of society if some individuals choose unhealthy or risky diet and lifestyle choices. If the federal government can mandate that you enter into a private contract with an insurance company because of "externalities" , using the same logic, it can also mandate that you engage or refrain from engaging on many other activities that also have externalities on society. Poor diet, risky lifestyle choices, etc..There are many factors that put upward pressure on health insurance premiums for everyone, so why doesn't the government mandate that people be healthy and go to the gym? After all, by not doing so, you are putting upward pressure on premiums right?

2. People can pay their medical bills without insurance. In fact many do, and this "cost shifting" phenomenon is does not have the type of effects on premiums the left claims it does. And anyway, even so, it is not relevant to the discussion on whether or not the mandate is constitutional.

Some people pay out of pocket either through their own savings or wealth, donations from friends, family or charities, or they take out loans. In other words, it is absolutely false to assume that anyone who goes to the hospital without insurance is "cost shifting" because many individuals do end up paying their bills through other avenues even if they do not have insurance.

3. The government has the power to levy taxes on tangible things like labor, for instance with payroll taxes. So as a voluntary condition of seeking employment, the federal government mandates that you pay payroll taxes. With the mandate, the tax is not being levied on anything, but rather, on individuals who refuse to engage in commerce. That is not a constitutional way to execute its taxing power. The federal government does not have the power to draft people into commerce in order to regulate them, then tax them if they refuse. That would be a totally unprecedented action by the federal government.

Whether or not some "conservatives" over 20 years ago, at one point in time, supported the mandate is completely irrelevant and has nothing to do with this discussion nor the constitutionality of the mandate. It was unconstitutional then and it is now. Regardless of what party supports it.


4. The health insurance market is failing precisely because of government intervention and a lack of market forces. If market forces were introduced into the equation, and the tax code was structured in order to allow individuals to shop for their own health insurance just like any other type of insurance, premiums would fall, quality would increase, and insurance would become more accessible.

Markets work. No sector of the economy is immune from the same market forces that bring quality up and price down no matter how "complex" it is.

Bottom line is obamacare is unconstitutional, this bill is a naked power grab by the federal government, it is precisely government intervention in the housing market that is the cause of our problems, and the broccoli anaogly is legit because it is an example showing that there are decisions we make and don't make in our everyday life that effect others in society either in a negative or positive way, and the government can't force us to make what it believes to be "optimal decisions" and then tax us because we don't obey them.

libertarian89 said...

health insurance market* sorry there are a lot of typos in that one. Regardless, I think I get my point across

macroman said...

You guys are absolutely right, from your POV, to focus on external effects and claim they don't justify any government action. External effects are indeed the reason your freedom gets restricted in all sorts of ways - you can't drive as fast as you like, you have to have a catalytic converter on your exhaust pipe, you can't make extremely loud noises at certain hours of the night, you can't shout "Fire" in a crowded theater and so on and so on.

You seem to be black and white thinkers; you think one case of a restriction in your freedom means every freedom will be restricted. The rest of the world considers each case in turn and comes to different answers in each case, i.e. others balance the issues (and don't put an infinite weight on every possible freedom). You can evoke the slippery slope argument but others put more trust in democracy (yet appreciate reasoned criticisms of it to keep us all alert). Did things turn out as bad as suggested in "Road to Serfdom" or in Ayn Rand's fevered imagination?

Many people believe Krugman's claim that the waste of the health insurance market is that insurance companies spend so much on finding out who really needs insurance to make sure they don't give it them. Hence they balance this health care issue differently.

C. Van Carter said...

Krugman states: "when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain."

People waiting until after they get sick to purchase insurance is only a problem because Obamacare requires insurers to cover those with preexisting conditions, and set premiums based on average costs.

C. Van Carter said...

Worth reading:

Are the Uninsured Getting a Free Ride?

Also, this amicus brief.

Anonymous said...

"By the way, personally I think it's probably time to accept that the US Constitution no longer serves any purpose of limiting federal government power. I'd be surprised if anyone can name any genuine limitations that apply." -- Scary but true what Tel up there says? I mean, if Homeland Security can set up barriers 50 miles north of the Mexican border to stop cars, what really are the limitations after all??

macroman said...

C Van Carter People waiting until after they get sick to purchase insurance is only a problem because Obamacare requires insurers to cover those with preexisting conditions, and set premiums based on average costs.

I don't get it. First, Obamcare doesn't exist yet. Second, AFAIK, if it did exist people would no longer be allowed to wait until they get sick, unless they want to pay a special tax. What are you trying to say?

macroman said...

Tel the US Constitution no longer serves any purpose of limiting federal government power.

And if the ACA is struck down by SCOTUS, which looks likely or possible, what then?

Mike Cheel said...

" Anonymous said...
"By the way, personally I think it's probably time to accept that the US Constitution no longer serves any purpose of limiting federal government power. I'd be surprised if anyone can name any genuine limitations that apply." -- Scary but true what Tel up there says? I mean, if Homeland Security can set up barriers 50 miles north of the Mexican border to stop cars, what really are the limitations after all??"

Papers please.

Sound familiar?

ALima said...

Why would wou want someone to mandate you purchase anything?

Anonymous said...

Truly, it's about broccoli, not health care insurance. Part 1.

The government caused the problem in the health insurance area when it imposed wage controls during World War II. Now our government wants to fix a problem it created by employing more governmental coercion. Government is the only entity with sufficient hubris to insist that coercion is a necessary element of liberty and the more coercion we have the more liberty we have.

No economic system will work well either in the aggregate or for individuals when the user of a resource is not the one paying for the use of the resource. That is why there is significant moral hazard inherent in any insurance scheme. That doesn't necessarily mean that various methods of providing insurance can't provide more benefit than harm, but merely that well designed insurance takes moral hazard seriously.

The government takes politics seriously. Any concern the government has with moral hazard is and ever will be subservient to politics. For this reason government is absolutely incapable of providing a moderately well conceived insurance scheme.

When the government imposed wage controls during World War II employers who could not compete for workers by raising wage rates instead offered "free" health insurance. Before that pretty much universally in the U.S. users of health insurance were paying for it directly. After that increasingly use and payment were divorced. That, and the control by state legislation over what health insurance policies must provide, is the primary cause of the problems with health insurance today.

Only two other things provide major contributions to the cost of health care. The first is also government, but in this case state and local governments that legislate that certain health care providers must provide care regardless of whether they will be paid. That would seem to have issues with the idea encompassed in the 13th Amendment. (Voluntary provision of these services in those circumstances is quite another thing and in most instances a good thing.) The second is the amount of things we can do today for the ill and injured compared with the amount of things we could do for them 50 years ago. Personally, I prefer not having the government control my access to this.

For me, this is compelling evidence that having the government at any level significantly involved in health care in other than an informational context is extremely bad policy. However, if bad policy was in and of itself unconstitutional, much of our governments work at every level would be invalidated.

The issue with broccoli has nothing to do with health care. See Part 2

Anonymous said...

Truly, it's about broccoli, not health care insurance. Part 2.

In the years since 1937, the Supreme Court has unconstitutionally caved in on the commerce clause. The commerce clause in the constitution is about things directly related to buying, selling, and transporting merchandise and to a small degree other transportation across state lines. The writers and adopters of the constitution were generally well versed in Adam Smith's Wealth of Nations, were convinced of the arguments made in it in favor of international free trade, and by the commerce clause meant to create a free trade zone among the states and, very importantly, meant to do no more than that. To contend that the expanse of the commerce clause as it is viewed today is consistent with having the written constitution that we have is quite literally intellectually dishonest.

However, we are currently governed by that sort of intellectual dishonestly. So dishonest in fact that the Supreme Court in one of the early civil rights cases in the 60s was willing to say that exercise of power by the national legislature under the commerce clause could be based on the interstate commerce implications of the flushing of a toilet. Well, if that's the case, it's a pretty easy argument to say the commerce clause power is triggered if you do not eat broccoli because as fewer people eat broccoli, its price will increase. As its price increases, fewer still will buy it until it is no longer available, with all sorts of unthinkable consequences.

That our government has degenerated to its current level of intellectual dishonesty is truly sad and I fear for the republic.