economics vs. the EPI letter on the minimum wage
The EPI letter:
July will mark five years since the federal minimum wage was last raised. We urge you to act now and enact a three-step raise of 95 cents a year for three years—which would mean a minimum wage of $10.10 by 2016—and then index it to protect against inflation. Senator Tom Harkin and Representative George Miller have introduced legislation to accomplish this. The increase to $10.10 would mean that minimum-wage workers who work full time, full year would see a raise from their current salary of roughly $15,000 to roughly $21,000.
So far, so good. Indexing would be a nice move forward, assuming that we're going to have a minimum wage (MW). They go "normative" in recommending a policy with an interesting array of benefits and costs, but ok. They ignore far better policy choices in the same realm, allowing politics and pragmatism to get in the way of an opportunity to educate.
These proposals also usefully raise the tipped minimum wage to 70% of the regular minimum.
70% is arbitrary; why not 100%? "Useful" is an odd choice of terms. Servers would find their compensation shifted from tips to income. It's useful that there would be less tax evasion among servers. Some would lose their jobs.
This policy would directly provide higher wages for close to 17 million workers by 2016. Furthermore, another 11 million workers whose wages are just above the new minimum would likely see a wage increase through “spillover” effects, as employers adjust their internal wage ladders.
The economists are correct to point to the spillover effects-- by the way, the most compelling reason why unions like this proposal. (See: South Africa and a connection between the MW and racism.) And the economists are assuming no job loss-- benefits only, so far. They could address/fix that below, but unfortunately, they won't.
The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet. At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers.
Wrong. Yes, for those who keep their jobs, things would get better. But only a small percentage of MW workers are heads of household.
In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.
Wrong/over-stated. There is some debate in the literature on the size of the employment effects and the more subtle negative effects-- in the private sector. But there is little evidence about increases in the MW of this magnitude-- and the evidences available are quite sobering. With the initial MW in the 1930s, Puerto Rico was quickly given a waiver after the MW devastated its labor market. And in more recent history, other U.S. territories were given exemptions from the "federal" MW law, anticipating the same problems.
Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.
Wrong, wrong, wrong-- and aggravatingly stupid. How can an artificial (price or) wage increase in competitive markets make things better overall? If this is good for an economy, why not increase the MW to $20 or $50 per hour. You can argue for a higher MW, but keep obviously-stupid stuff like this out of your mouth.
did you know that Jackie Robinson wrote a book?
Baseball Has Done It includes comments by Jackie Robinson (JR) as well as his narration accompanying a series of mini-interviews with players, coaches, and owners. The players range from stars to the relatively unknown. The interviewees describe a range of experiences-- on how things were growing up and how things were for them in baseball. The interviews depict a wide range of views-- on how to handle the difficult situations they encountered with newly-integrated baseball and the state of race relations in America at the time of the interview
JR graciously notes that he was not the first "Negro" to play in the major leagues: Fleetwood Walker and his brother Weldon played for the Toledo MudHens in 1884 (30). And he notes that the same sort of discrimination happened in other fields of entertainment. He cites Florence Mills who had the #1 song in 1925 but was never allowed to sing in a white establishment. "The 1920s were called the Golden Age of sports, but no Negro was allowed to face Jack Dempsey in the ring, Bill Tilden on the tennis courts, Bobby Jones on the links; no Negro pitcher faced Babe Ruth." (40)
JR said regular season fans could be hostile, but Spring Training was a lot rougher, esp. in Florida. Ironically, Los Angelenos were "in certain respects...less understanding than Southerners and even more were openly hostile." (41) And his "Southern teammates were more reliable than some Northerners. I knew where I stood with them. After they knew me better, they were regular guys on the field. The Northerner might give you the glad hand, but after he discovers that you have as much ability...he's a different person altogether." (73) One hears this sort of thing off-and-on even today-- about overt vs. covert racism; honest dealings vs. condescension.
In response to all of this, JR famously chose to "turn the other cheek" for two years-- and then was given latitude by Branch Rickey in 1949 to fight/stand for his rights, etc. Even so, he clearly "picked his battles", not letting "small things" set him off. Along the way, JR's teammates were supportive. He gives details, including the famous moment where PeeWee Reese put his arm around him at second base, during a game (55, 80).
JR had strong ideas about the best way to proceed, but generally respected those who chose other paths. (In contrast, he noted that Roy Campanella had been critical of his approach [123]. And there were limits to JR's tolerance: he critiqued Willie Mays and Maury Wills for failing to speak in general and submitting to an interview for his book in particular [208-209].)
JR spends a big chunk of the book on Branch Rickey: his initial interview with him (which included Rickey yelling racial taunts at him to se how he would respond); his strong words of encouragement to JR; his desire for his team to win; the history of his thought process that led up to the big decision; the wisdom of the decision to have JR play on the farm team in Montreal.
JR also talks about Bill Veeck-- who combined a quirky preference for novelty with a desire for profit and winning team. Veeck was the first owner to integrate an American League team-- with Larry Doby (68-69). Next up were the Giants with Hank Thompson and Monte Irvin (chapter 8). Late in the book, JR describes the integration of Latin players, including Minnie Minoso and Vic Power.
Within a decade, integration had exploded and life in baseball was forever changed: "Colored players" on every team by 1959; in 1963, "51 Negroes and 24 colored Latins"-- 15% of the players-- including five batting champs, six Rookies of the Year, and six MVP's. Ten of the top eleven batters in the NL (and 3 of the top 10 in the AL) were non-whites.
Of course, as a labor economist, I find the economics of discrimination to be fascinating. For example, in competitive markets, it is costly to engage in personal discrimination: avoiding good workers, employees, tenants, etc. because one wants to indulge odd tastes and preferences about traits unrelated to "productivity". Moreover, in a competitive setting, if you discriminate and I don't, then I have a competitive advantage over you-- and will find it difficult to stay in the market.
This is one of many reasons why producers would seek restrictions against competition. JR fingers Cap Anson for leading a collusive arrangement against Negros in baseball. In this, we find the common desire to lock out competitors, bolstered by government. Anson didn't want to compete as hard-- and his racism was correlated with that desire-- so he fought for segregation and used peer pressure and regulation to accomplish his goals. Likewise, some owners were bigots-- and didn't want to compete with non-bigots (or the less-bigoted)-- so they sought integration regulation from the industry (and the government who condoned it).
JR points to some fascinating examples of this. In 1901, John McGraw tried to pass off a Black as a Native-American (32), but the plan didn't work. JR repeatedly claims that baseball led the way in integrating many restaurants (56), hotels (86, 100), movie theaters (100), and entire smaller Southern towns (111), clubs and neighborhoods (185). They tried to retain segregation, but they started to lose customers and reversed course.
JR saw it happen quickly-- when the tide turned. But he imagined this, at least nationwide and in the hearts of people, as a slow and steady process (218). He didn't trash law, but thought it had an exaggerated importance, especially when it would not be enforced (149). I think he would also point to what might be called the "Spike Lee-- Do the Right Thing" effect. In that movie, the Italians are bigoted toward "Blacks", but their favorite entertainers were all Black.
As an aside, JR provides a sad commentary on discrimination and its impact on building human capital: "My brothers, their friends and acquaintances, all older than me, had studied hard and wound up as porters, elevator operators, taxi drivers, bellhops. I came to the conclusion that long hours over books were a waste of time. Considering my situation, I was not far wrong." (44)
Finally, JR's discussion of language is interesting and useful: "Nigger is offensive only when employed in a derogatory senses...We object to boy or girl in reference to adult Negroes...Girl, as applied to a woman who is a mother or even grandmother, is particularly insulting." (63-64) In this, JR points to the intent behind the language. While I understand why some people find it bothersome for African-Americans to use the term "nigger" and while their use of that term undermines their critique of it, they still have a point: it is different, depending on the context in which its used. Along the same lines, JR's critique of "girl" is now (quite) dated-- as the term has become quite popular, even across racial lines.
A h/t to Matt Welch, whose excellent article put me onto the book in his Reason essay.
The misleadingly titled Baseball Has Done It was not some kind of gee-whiz celebration of the sport’s integration. It was a forceful attempt to document the human struggles involved in that monumental project, through first-person accounts from black and white players and coaches ranging from Branch Rickey to eventual homerun champ Henry Aaron to accused racist Alvin Dark. Robinson’s explicit aim was to apply lessons learned from baseball to the raging civil rights debate of the day.
Reading the book in 2013 doesn’t just deliver a sharp slap of a reminder about how disgustingly racist much of this country still was within recent memory. (Black players still routinely faced “whites only” public accommodations in Florida during the 1960s, for example.) It also calls into question just why a contemporaneous history of great ballplayers discussing their struggles faded into immediate obscurity while Glory’s paean to segregation-era ball rocketed to instant fame...
Freezing Jackie Robinson in 1947 amber also lets baseball—and society—off the hook for all the governmental and private racism that was still actively poisoning the country two decades after Branch Rickey’s great experiment. Better to remember that one magical year than dwell on all the different southern minor leagues that were still being integrated well into the 1960s. When your face is unlovely, it’s always more fun to look at old photographs than the bathroom mirror.
Perhaps the most surprising part of Baseball Has Done It is Robinson’s report that during his Hall of Fame induction ceremony in 1962, “No one mentioned that I was the first Negro in the Hall of Fame, or that another bastion of prejudice had fallen. No one was thinking about such things that day.” He says this as a point of pride, that the quality of his performance—the content of his baseball character—was evaluated on its own merits and found victorious. Maybe one day that can again be true.
Atkinson's WWII books
I've read the first two of Atkinson's "Liberation Trilogy" on World War II. (Two out of three ain't bad, right?) An Army at Dawn (AD) covers the war in North Africa (1942-43) and The Day of Battle (DB) covers the war in Sicily and Italy (1943-44). I was as familiar as the average bear on World War II. In other words, I knew virtually nothing about the first two parts of the European campaign-- the warm-ups and tightening-the-noose that were the African and Southern European campaigns.
The African campaign was useful for clearing the Mediterranean and to provide a base of operations to attack Italy. The Italian campaign was useful for knocking out the Italians, diverting German resources, and providing us with a place nearer to Germany's doorstep. Atkinson makes clear that, as well, Africa and Italy were vital for revving up the American war machine (production), training soldiers, and working out (some of) the kinks in everything from supply processes to command structure.
A key theme is the role of Africa (and then Italy to a lesser extent) in the development of rookie soldiers and its leaders. At least initially, "war was fought by ignorant armies on a darkling plain" (AD, 116). "A callow, clumsy army had arrived in North Africa with little notion of how to act as a world power. The balance of the campaign-- indeed, the balance of the war-- would require learning not only how to fight but how to rule" (AD, 159). In a way, the early parts of the African campaign were deceiving since victory (over the French) was relatively easy (AD, 160). But that would change, soon enough. As such, Atkinson describes how the troops "matured" from naïve to hardened and cynical to "hating" the enemy (AD, 461-463).
Without these experiences, the European campaign (or an earlier European campaign)-- against the best German troops-- would have been a logistical, leadership and fighting disaster (AD, 377, 539-540). Along the way, the Allies had poor strategy-- a combo of both sins of commission and omission; foolhardy attacks and failures to pursue. Two surprising (and counterproductive) angles were that the leaders tried to combine troops of different nationalities and that the leaders (especially the Brits) valued personal glory or better corporate outcomes (AD, 276, 373, 403, 499)
But the Allies, particularly America, had overwhelming production (AD, 413-415; DB, 252). A lot of this was the result of diverting a lot of effort from personal consumption (forced rationing) and peacetime industrial production (DB, 8-9, 450). Given the material advantages, in one sense, the war became a matter of competitive attrition: the Allies inevitably wearing down the Axis vs. the Allies tiring of trying to wear them down. (See: DB, 254, 582-583. See also: North vs. South in the American Civil War.) This led to unintended consequences, such as the development of the bikini (DB, 9)! And quite surprisingly, production began moving back toward normal in 1944 (DB, 313). In one sense, the war was "a struggle not between rival ideologies or opposing tacticians, but between systems-- the integration of political, economic, and military forces needed for sustained offensive power (452). Of course, the "ideologies" included politics and economics-- impacting our ability to produce (vs. Germany), but I know what Atkinson means.
A series of small observations:
--There was much more back and forth than I had realized on what to do with Japan: short-term vs. long-term; and whether to focus on them vs. work with England to deal with Germany/Italy (10-18, 289-290).
--The initial landing in Africa (airborne and amphibious) is virtually unknown, but rivaled the landing on D-day in relative size (then), its overall importance to the war (without it...), and its ambition (31, 87, 88).
--The amazing (and often senseless) troop loss in World War II. (See also: World War I.)
--Two key battles: The Americans almost losing their beachhead at Salerno, including mixed decisions on whether to evacuate or not (DB, 226ff). And the French General Juin leading his troops to an important victory in a large-scale battle that turned the tide, late in the Italian campaign (DB, 511ff).
-Rome was more psychological than tactical per se. Not much was gained once they had a substantial beachhead/occupation in Sicily and then Italy. But it was good for morale-- there and at home-- to conquer Rome.
Not surprisingly, Atkinson gives space to develop key characters:
Patton goes from back-burner to celebrated to seemingly buried and headed for Western Europe. A year later, he was dead. "He was a paradox and would always remain one...Well-read, fluent in French, and the wealthy child of privilege, he could be crude, rude, and plain foolish." (AD; 35-36). "But the caricature of a raging martinet failed to capture Patton's nuances. Few officers had studied the art of war with greater care." And "He had proposed marriage...by riding his horse up the stairs and onto the terrace of her house." (DB; 45)
But Eisenhower is the most important figure-- particularly his strengths/weaknesses and his development into the general who would emerge to lead the Allies to victory in Western Europe. (AD; 59-60, 411-412) At the end of the African campaign, Atkinson writes "No soldier in Africa had changed more-- grown more-- than Eisenhower. He continued to pose as a small-town Kansan...retained the winning traits of authenticity, vigor and integrity...displayed admirable grace and character under crushing strain. But...naivete provided a convenient screen for a man who was complex, shrewd and sometimes Machiavellian." (AD, 533)
Others make smaller but noteworthy appearances. Other key military leaders such as Henry Hewitt, Terry Allen, Lucian Truscott, Mark Clark, and Omar Bradley. Teddy Roosevelt's son was a compelling figure. (See: AD, p. 86, for how little TR expected of him!) Audie Murphy's storied military career gets quite a bit of play. Newsman Ernie Pyle pops up over and over again. And I didn't know that FDR had been so adamant to aim for the unconditional surrender of the Axis from the beginning (AD, 293-294, 298). In this, he sounded like Reagan with the USSR.
Others make cameo appearances: for example, Colonel Claus von Stauffenberg who tried to oust/assassinate Hitler (AD, 464-465); "Kilroy"-- who always, already been "here" (AD, 517); novelist Joseph Heller and actor Jimmy Stewart (497).
A few other topics of interest:
1.) The sexual immorality and drunkenness of many troops in WWII comes up quite a bit (p. 39, 195-196, 435, 462-463 in AD; p. 29, 30, 136, 175, 247, 321, 446-449 in DB; see also: AD's 5, 462-463 on rape, murder, etc.; and DB's 308, 375 on gluttony by leaders.) "The Arab soldier is interested in just three things: women, horses and guns. The American soldier is the same, except that he doesn't care anything about horses and guns." (DB, 529). I don't bring this up to denigrate our troops. People-- particularly the young, away from home, influenced by peer pressure-- can do rough and even nasty things. On top of that, war presumably brings out the worst (and best) in people. But I find it interesting in light of the claims about 1950s morality-- that they represent some high-water mark (or at least the end of that tide)-- and the implications of those claims. (Stephen Ambrose makes similar observations in his work.)
Atkinson also gives us a few glimpses into religion directly. Ike believed that "the Almighty would provide him with a decent set of cards. [But] he appeared not to share the metaphysical feeling that God owed him anything specific." (DB, 50). But Ike's lucky coins also point to superstition (246). See also: Clark's 4-leaf clovers [DB, 183] and Truscott's Thomas Jefferson "Bible" [DB, 385]). But he also provides a picture of a baptism (DB, 428; see also: Randall Harris' prayer [DB, 70]). Given so few mentions, I'd guess that this not a point of emphasis/interest for the author.
2.) In DB, Atkinson explores a number of "Prisoner's Dilemmas". The initial reference is to two prisoners who are separated and incentivized to break a cartel that would otherwise be in their best interests. Both individuals have an incentive to collude, but especially with the right pay-offs, both can have a tremendous incentive to cheat on the (implied) cartel. The term is a big deal in "game theory" and economics-- based on imperfect information, in less-than-competitive market settings-- where collusion can be useful, at least on paper.
Examples? Soldiers were told that the other side would "cut off the balls" of prisoners (116). Atkinson shares the story of a Lt. Colonel who "repeatedly lecture" that "a captive can't fight", exhorting them to fight to the death-- before surrendering himself (116). News reporters agreed to kill a story that Patton had slapped a soldier (170), but the story broke a few months later (296). Soldiers were supposed to treat enemy soldiers well, but sometimes it was a little too inconvenient: "A soldier told to escort a captured German officer down the mountain soon reappeared. 'The son of a bitch died of pneumonia.'" (283) And apparently, the Germans had white-flag ruses (474), which led to a general distrust on both sides and a reduction in what would have been an optimal arrangement for the soldiers. Likewise, there was distrust about the use of (forbidden) mustard gas, which seems to have been caused by the U.S. (271-278)
3.) Miscellaneous topics: segregation (DB, 381ff); typhus and DDT (DB, 448); the mistreatment of Jews in Rome by the Germans (DB, 475-476), the eruption of Mt. Vesuvius in the middle of the war! (DB, 483ff).
CBO, ACA, Casey Mulligan, and empirical work
From the WSJ, a look behind the scenes at the CBO (on the ACA/ObamaCare): smart people who are generalists and apparently let science do what science does-- as they listen to researchers/specialists who necessarily know more than they do and self-correct...
"...the CBO—Congress's official fiscal scorekeeper, widely revered by Democrats and Republicans alike as the gold standard of economic analysis—reported that by 2024 the equivalent of 2.5 million Americans who were otherwise willing and able to work before ObamaCare will work less or not at all as a result of ObamaCare. As the CBO admits, that's a 'substantially larger' and 'considerably higher' subtraction to the labor force than the mere 800,000 the budget office estimated in 2010...Mr. Mulligan's empirical research puts the best estimate of the contraction at 3%. The CBO still has some of the economics wrong, he said in a phone interview Thursday, "but, boy, it's a lot better to be off by a factor of two than a factor of six."...
The CBO works in mysterious ways, but its commentary and a footnote suggest that two National Bureau of Economic Research papers Mr. Mulligan published last August were "roughly" the most important drivers of this revision to its model. In short, the CBO has pulled this economist's arguments and analysis from the fringes to center of the health-care debate.
For his part, Mr. Mulligan declines to take too much credit. "I'm not an expert in that town, Washington," he says, "but I showed them my work and I know they listened, carefully."
And then a nice insight into how economists think (as economists vs. economists in their potential roles as public policy analysts, ideologues, etc.)
Mr. Mulligan reserves particular scorn for the economists making this "eliminated from the drudgery of labor market" argument..."it looks like they're trying to leverage the lack of economic education in their audience by making these sorts of points." A job, Mr. Mulligan explains, "is a transaction between buyers and sellers. When a transaction doesn't happen, it doesn't happen...I can understand something like cigarettes and people believe that there's too much smoking, so we put a tax on cigarettes, so people smoke less, and we say that's a good thing. OK. But are we saying we were working too much before? Is that the new argument? I mean make up your mind. We've been complaining for six years now that there's not enough work being done..."
The larger betrayal, Mr. Mulligan argues, is that the same economists now praising the great shrinking workforce used to claim that ObamaCare would expand the labor market. He points to a 2011 letter organized by Harvard's David Cutler and the University of Chicago's Harold Pollack, signed by dozens of left-leaning economists including Nobel laureates, stating "our strong conclusion" that ObamaCare will strengthen the economy and create 250,000 to 400,000 jobs annually. (Mr. Cutler has since qualified and walked back some of his claims.)
Mr. Mulligan is uncomfortable speculating about whether the benefits of this shift outweigh the costs. Perhaps the public was willing to trade market efficiency for more income security after the 2008 crisis. "As an economist I can't argue with that," he says. "The thing that I argue with is the denial that there is a trade-off. I argue with the denial that if you pay unemployed people you're going to get more unemployed people. There are consequences of that. That doesn't mean the consequences aren't worth paying. But you can't deny the consequences for the labor market."
Wiersbe's "50 people"
I'm not a huge fan of history or esp. biography. (I'm not averse to them; they're just not on the top of my reading list.) But Wiersbe's 50 People Every Christian Should Know was a really nice read-- a combo of mini-biography and (implied) devotional material. As you read it, you get a good overview of his subjects and it ends up being useful for reflection on what God has done and what he might want to do with you.
I had read a few commentaries by Wiersbe in the past. (As an aside, those are useful for organizing book studies and adding a few nuggets.) Likewise, these are quite accessible. He typically devotes 4-8 pages for each person. (A few get longer treatment.) His subjects are concentrated disproportionately in 19th century England. But they are drawn, about equally, from a.) the famous; b.) those whose names I knew, but knew little about them; and c.) those I had never heard about.
The work would be even more useful for preachers and teachers, since Wiersbe provides a wealth of recommendations on the material that the 50 have written.
Check it out!
Kristen Sauder's funeral and her on-going impact
It's been more than three weeks since Kristen passed-- and three
weeks since the visitation. I've been putting off this blog post for
awhile, since it would take some time and energy. But today is the day.
The visitation was an amazing testament to her work and her influence
for the Kingdom. About 3,000 people came through the line, expressing
condolences and sharing her impact on them. Her non-immediate / out-of-town family was blown away,
especially when they realized that not everyone at
Southeast has that kind of crowd (just because we're a large church). At the
funeral, there were 1,500-- a cool but rough time of grief and
celebration.
In particular, I wanted to make a note of Bob Russell's remarks at the funeral. He blogged on part of it.
As is common, Bob handled a difficult moment well, speaking truth
graciously and compassionately, but not shying from the tough questions.
Bob built his eulogy around Isaiah 55:8-9-- God, your ways/thoughts
are different/than ours: “For my thoughts are not your thoughts, neither
are your ways my ways,” declares the Lord. “As the heavens are higher
than the earth, so are my ways higher than
your ways and my thoughts than your thoughts.”
For his first point, Bob agreed with Isaiah, saying "if I was
God", I would not have taken Kristen off the earth. From the peculiar timing of it (the day they publicly announced that they were leaving
Southeast to do Further Still Ministries full-time-- to the immense pain her death has caused and will continue to cause
for family and close friends-- it's difficult to make sense of it. It
also seems like a missed opportunity-- from the unanswered prayers and
the opportunity for a miraculous healing to the
influence of a godly life that we will no longer experience in person.
Great stuff. But Bob's second point was absolute gold: "If I were
God, I would have created a woman like Kristen Sauder." (It still causes
me to tear up, writing this.) He described Kristen as beautiful,
sensitive, talented, "an outstanding speaker, writer,
wife and mother of four". He paraphrased someone in saying, "If you
measure a life by longevity, Kristen lived half a life. If you measure a
life by influence, then Kristen lived long and well."
At the end, Bob returned to the questions of "why" and "what's
the plan?" as he pondered God's providence: "Where is the promise
that, 'All things work together for good to those who love God'? Why
would God permit this to happen?" We serve a benevolent
God. So, we know that she has not died in vain. "Right now we can’t see
how that could be possible because of our human limitations, but there
will be good things. The seed of Kristen’s death will bring forth
positive fruit."
From there, Bob laid out a range of examples/possibilities. Of these,
I thought the reference to Elizabeth Elliot was most powerful-- that
Jim's death in Equador led to such amazing work in the decades that have
followed. At least for me, given my partnership
with Kurt in ministry through DC: Thoroughly Equipped, the most intriguing wrestling is over
God's plans for Kurt's future-- and the timing of his resignation as the
lead minister of the Oldham Campus of Southeast. As Bob asked: "What
if, at exactly the right time, there’s a new ministry
opportunity that opens up for Kurt and the next 40 years of his life
God gives him a double measure of His spirit and blessing?"
Bob closed with exhortations to trust and remain patient. We can
look for (and should be aware of) elements of God's providence. "What if you could interview her in heaven today and ask,
'Kristen would you come back to earth for another
40 years and live to be 85?' I think she’d respond...'Why would I want
to go back to the discomfort of a sinful earth? I trust the Lord to
take care of you. I’ll just wait for you here. Time passes so quickly, a
thousand years are like a day here. God’s ways
are not our ways. They’re so much better. You’ll see. Just trust
Him…and wait.”
A few other resources:
Kurt and his team will prayerfully consider where God would lead them
with respect to whatever ministry Kristen might continue to have. The
opening paragraph of this article describes some of that wrestling-- and the cool story that follows
provides a glimpse into what is possible. This reminds me of an old WSJ article on J. Vernon McGee's radio ministry-- now 25 years after his death. At the time of the article, the ministry would get letters addressed to McGee as if he were still on earth!
Here's a terrific article in the Southeast Outlook on Kristen from Ruth Schenk.
And finally, here's a similar story out of Purdue-- from a professor about a student who was shot in the incident there a month ago.
on the "coming out" of Michael Sam (and two types of discrimination)
The next shoe to fall in homosexuality and sports: Michael Sam "comes out" as a likely/prospective draft choice in this year's NFL draft-- in an interview with ESPN.
There are a number of noteworthy differences from Jason Collins' coming out last April.
1.) Sam identifies himself as an American, a college graduate, and a gay man-- noticeably different in his self-identification from Collins (a point I discussed at length when Collins went public).
2.) Sam's story is much more compelling-- and my memory in comparing the two is that Sam is (far?) more eloquent.
3.) Sam had already gone public with his team and wanted to control the way in which the information is released.
4.) Sam is an excellent athlete at the beginning of what looks to be a productive NFL career (with much to gain/lose). Collins was at the end of a marginal NBA career (and had little to lose, at least in terms of his pro sport career).
This last point makes Sam much more interesting to a labor economist-- as a potential employee in the NFL. Labor economists talk about two different types of discrimination: personal and statistical. (Economists also talk about "price discrimination", but that's in a different set of contexts.)
Personal discrimination is akin to bigotry (or favoritism). It is a negative (or positive) *personal* assessment, unrelated to a worker's productivity. Here: if a team's decision-makers don't like Sam *because* he has a homosexual orientation and chooses a homosexual lifestyle-- *unrelated* to his ability as a football player. (It's also possible that decision-makers would like him because of his orientation and/or choices, unrelated to his football ability.)
Statistical discrimination is akin to stereotyping-- where agents make important decisions with limited and costly-to-obtain information. *All* of us do this sort of discrimination, by definition-- hopefully weighing low-cost information well and holding our judgments lightly. (Think about how you vote or choose strangers for a pick-up basketball game.) Here: if a team's decision-makers have no problem with Sam's orientation or his choices, but they're worried about how his orientation and choices will impact the productivity of the team (or more broadly, the profitability of the company). Or maybe they see his courage and the way he handles the media-- and they *assume* a positive correlation with productivity on the field. They don't *know* how these "non-performance" issues will impact productivity and profitability, but they have to assess what they see and decide whether to bear the potential expected costs or benefits.
The two concepts are valuable to know about on paper. But in practice, it's difficult (if not impossible) to tell which is in play.
A comparison to Tim Tebow is instructive here. As an outspoken Christian, Tebow might be bypassed or downgraded *because* of his faith-- if an owner/GM doesn't like Christians (or at least Christians like Tebow). (Alternatively, Tebow might be more attractive to a decision-maker because of his faith-- beyond his playing ability.) That would be "personal". Or a team's decision-makers might believe that Tebow is a good enough quarterback, but reasonably estimate that he might otherwise help or hurt the team's productivity (or the team's profitability) as a distraction or somesuch because of his faith.
Is health care “different”? yes and no...
I
can understand why my three "starting points" were cut-- in the
interest of space
trade-offs within a journal. For economists, these are examples of
"re-creating the wheel"-- and thus, not a good choice for inclusion in a
journal article. But for the unwashed, these are important points to
make.
(They are a frequent part of my public presentations or at least the
Q&A afterwards.)
So, I'll publish them myself! ;-)
Below is "starting point" #2. Follow this link for #1 and this link for #3.
__________________
Is
health care “different” from other services—or is it “just” a service?
And if health care is special, what are the implications of treating
health care differently—e.g., as a “right”?
There is one sense
in which health care is different. It belongs in a category of goods and
services that are necessary for survival—at some threshold level. Above
some higher threshold, health quality is important for a “decent”
standard of living, the dignity of the human person, and extending one’s
earning power. So, the issue is not simply health for its own sake, but
its connection to other elements of life and one’s ability to pay for
health care in a market system.
Particularly beyond this second
threshold, health quality joins most other goods and services—a level of
health which is not essential, but desirable in varying degrees.[1]
Thus, there are aspects of health care which are highly inelastic and
others which are more elastic—a theme to which we will return later.
Note
also that the market is able to handle other important and intimate
services—e.g., food, clothing, and shelter; child care and elder care;
financial credit and planning, education, and veterinary care. So, the
claim that health care is different has more emotional and rhetorical
appeal than objective usefulness.
There is another sense in
which health care is clearly the same as any other good or service.
Independent of its inelasticity, its production and distribution will
follow the laws of supply and demand. We may wish that this were not the
case. But individuals will still behave in their self-interests within
the market/government context in which they find themselves. It may be
uncomfortable to talk in economic terms about vital organs or adoption,
but the fact of the matter is that their “production and distribution”
are also decided within markets.[2]
Some
people like to describe health care as a “right”. There are political
or social rights—e.g., freedom of speech and religion—which impose, at
most, modest costs on others if I decide to exercise those rights. If I
worship at a church or read poetry out loud on a street corner, my
activities are minimally intrusive on others. But so-called economic
rights immediately imply a responsibility for someone else to pay for my
“rights”—by force if necessary.[3]
If you have a right to health care, then the government or other
parties can take my money so that you can exercise that right.
Of
course, these are quite different scenarios—even though the two
categories are often conflated. And even if one has a right to health
care, how far would that extend—a survival threshold, a “decent standard
of living” threshold, or some (other) arbitrary standard? Who decides
and what are the philosophical and practical implications of that choice
and who makes it? These difficult questions are generally unanswered
and even unasked.
Another distinction is inequalities caused by
lifestyle choices, as opposed to those connected to income and social
class. Although each is a function of individual decisions to some
extent, lifestyle choices are those over which one has more control—and
so, those differences could be considered “fair” or at least fairer
(Fleurbaey and Schokkaert, 2009). Does my supposed right to health care
depend on what I’ve done to help or harm my own health?
Mellor
and Milyo (2002) examine the effect of income inequality on individual
health status for both the general population and those individuals in
poverty. They find no consistent association between income inequality
and individual health status.
In any case, the wealthy can
afford more of all things. Should this ability include health care and
health insurance? To the extent that prices are not allowed to ration,
consumers and service providers will be less focused on prices and
incentives. One would hope that the subsequent non-price rationing would
be enlightened—determined by some sort of “reasonable” cost/benefit
analysis undertaken by those with strong knowledge and pure motives. But
it would be naïve to expect either condition to be universal or even
regular.
In a word, someone has to say there are things for
which “we” will not pay. Health care is a scarce resource and it must be
rationed in some way—whether by bureaucratic fiat, health management
organizations, money prices, or some combination.
Finally, note
that (well-constructed) insurance provides the possibility of an escape
from these dilemmas. Coverage for low-probability catastrophic events
and even a threshold of “decent” health care can be underwritten by
relatively inexpensive insurance. Later, we will see why this is not the
case—and how we can get there.
3.) Health care spending vs. outcomes
Why is U.S. health care spending so high, while certain health outcomes seem so low (relative to other developed countries)?
First,
recall that health care and health are not the same. All things equal,
more health care should lead to more health. But all things aren’t
equal.
Cutler
(1995) observes that higher national income will reasonably result in a
higher percentage spent on health care—and presents regression results
to back up the theory. So, wealthier countries are more likely to spend a
higher percentage of their GDP on health.
Cutler also notes
that the impact of increased spending on the insured is not
effective—not a particularly surprising result, given that health
insurance is so strongly subsidized and the price of heavily-insured
care is artificially low for the insured. After all, how many people
will pay attention to price and cost if someone else is picking up the
bill?
Another consideration is the manner in which health
outcome statistics are defined. For example, the United States is more
liberal in accounting for pre-mature births. Since “premies” are more
likely to die, this increases infant mortality and lowers life
expectancy. A broader critique of these statistics comes from Whitman
(2008) who critiques a World Health Organization report (2000) and its
implicit assumptions: “some of them are logically incoherent, some
characterized by substantial uncertainty, and some rooted in ideological
beliefs and values that not everyone shares”.
Whitman also
takes the WHO report to task because it makes no reference to variance
in lifestyle choices between countries: “The WHO approach holds health
systems responsible not just for treating lung cancer, but for
preventing smoking in the first place; not just for treating heart
disease, but for getting people to exercise and lay off the fatty
foods.” Of course, such problems are largely beyond the control of a
health care system and such an analysis is clearly inferior in that it
ignores individual and cultural preferences—as well as the inherent
trade-offs between health and other economic goods.
Lifestyle
choices are important, but systematically ignored in these discussions.
Proponents of more government intervention point to European countries
with heavier government involvement and better health outcome
statistics. But Singapore has considerably less government involvement
in health care—with one-fifth of U.S. expenditures per capita and
one-fourth in terms of GDP (Weber, 2008). Clearly, the level of
government involvement is not the primary explanation.[4]
It’s
worth noting that one would expect government intervention to be
relatively effective within a smaller, more homogeneous population. But
neither of those characteristics describe America. If one wants more
government activism on that basis, then advocacy of small, local, and
state experiments makes far more sense than leaping into one, grand,
risky, federal experiment.
One other difference has received a
lot of attention: differences in Medicare spending by region. The
assumption is that medical decisions are driven by “cultural” factors of
a sort—that doctors and patients grow accustomed to levels of health
care not found in other areas of the country. Moreover, these higher
spending levels do not seem to be correlated with better health
outcomes. For example, Wennberg et. al. (2002) find that rates of
illness do not explain differences in spending across regions.
Taken
at face value, this calls for decreased Medicare spending in those
regions—an opportunity to reduce expenditures without compromising
health care. Again, this is consistent with Cutler’s
(1995) observation that the impact of spending on the insured is not
correlated with outcomes. Rettenmaier and Saving (2009a) note that this
is “one of the leading rationales for reform” in Medicare. But this
factoid could be more easily used to motivate less rather than more
government involvement—with Medicare in particular and health care in
general.
They observe that “some of the variation in Medicare
spending can be linked to a state’s income, demographics, health market
conditions and the population’s underlying health risks”. They also
acknowledge that “there remains some persistent variation that has often
been attributed to differences in the way health care is practiced”.
But they find that “the same pattern of regional variation observed for
Medicare spending does not necessary hold when other measures are used.”
They also investigate the percentage of uninsureds as an
explanatory variable. “As expected, a higher uninsured rate is
associated with lower state health care spending in the
non-Medicare/Medicaid population. In contrast, a higher percent of the
population with no insurance resulted in higher Medicare spending per
enrollee, indicating cost shifting to Medicare.”
In any case,
this debate underlines the importance of closely equating care with
costs—restoring “price tags” to health care. This can only be
accomplished through market-based incentives.
For an illustrative use of “harsh” economic language
in other, delicate areas where economic analysis is often eschewed or even
condemned, see: Schansberg (1999).
health care spending vs. outcomes
I
can understand why my three "starting points" were cut-- in the
interest of space
trade-offs within a journal. For economists, these are examples of
"re-creating the wheel"-- and thus, not a good choice for inclusion in a
journal article. But for the unwashed, these are important points to
make.
(They are a frequent part of my public presentations or at least the
Q&A afterwards.)
So, I'll publish them myself! ;-)
Below is "starting point" #3. Follow this link for #1 and this link for #2.
__________________
Why is U.S. health care spending so high, while certain health outcomes seem so low (relative to other developed countries)?
First,
recall that health care and health are not the same. All things equal,
more health care should lead to more health. But all things aren’t
equal.
Cutler
(1995) observes that higher national income will reasonably result in a
higher percentage spent on health care—and presents regression results
to back up the theory. So, wealthier countries are more likely to spend a
higher percentage of their GDP on health.
Cutler also notes
that the impact of increased spending on the insured is not
effective—not a particularly surprising result, given that health
insurance is so strongly subsidized and the price of heavily-insured
care is artificially low for the insured. After all, how many people
will pay attention to price and cost if someone else is picking up the
bill?
Another consideration is the manner in which health
outcome statistics are defined. For example, the United States is more
liberal in accounting for pre-mature births. Since “premies” are more
likely to die, this increases infant mortality and lowers life
expectancy. A broader critique of these statistics comes from Whitman
(2008) who critiques a World Health Organization report (2000) and its
implicit assumptions: “some of them are logically incoherent, some
characterized by substantial uncertainty, and some rooted in ideological
beliefs and values that not everyone shares”.
Whitman also
takes the WHO report to task because it makes no reference to variance
in lifestyle choices between countries: “The WHO approach holds health
systems responsible not just for treating lung cancer, but for
preventing smoking in the first place; not just for treating heart
disease, but for getting people to exercise and lay off the fatty
foods.” Of course, such problems are largely beyond the control of a
health care system and such an analysis is clearly inferior in that it
ignores individual and cultural preferences—as well as the inherent
trade-offs between health and other economic goods.
Lifestyle
choices are important, but systematically ignored in these discussions.
Proponents of more government intervention point to European countries
with heavier government involvement and better health outcome
statistics. But Singapore has considerably less government involvement
in health care—with one-fifth of U.S. expenditures per capita and
one-fourth in terms of GDP (Weber, 2008). Clearly, the level of
government involvement is not the primary explanation.[4]
It’s
worth noting that one would expect government intervention to be
relatively effective within a smaller, more homogeneous population. But
neither of those characteristics describe America. If one wants more
government activism on that basis, then advocacy of small, local, and
state experiments makes far more sense than leaping into one, grand,
risky, federal experiment.
One other difference has received a
lot of attention: differences in Medicare spending by region. The
assumption is that medical decisions are driven by “cultural” factors of
a sort—that doctors and patients grow accustomed to levels of health
care not found in other areas of the country. Moreover, these higher
spending levels do not seem to be correlated with better health
outcomes. For example, Wennberg et. al. (2002) find that rates of
illness do not explain differences in spending across regions.
Taken
at face value, this calls for decreased Medicare spending in those
regions—an opportunity to reduce expenditures without compromising
health care. Again, this is consistent with Cutler’s
(1995) observation that the impact of spending on the insured is not
correlated with outcomes. Rettenmaier and Saving (2009a) note that this
is “one of the leading rationales for reform” in Medicare. But this
factoid could be more easily used to motivate less rather than more
government involvement—with Medicare in particular and health care in
general.
They observe that “some of the variation in Medicare
spending can be linked to a state’s income, demographics, health market
conditions and the population’s underlying health risks”. They also
acknowledge that “there remains some persistent variation that has often
been attributed to differences in the way health care is practiced”.
But they find that “the same pattern of regional variation observed for
Medicare spending does not necessary hold when other measures are used.”
They also investigate the percentage of uninsureds as an
explanatory variable. “As expected, a higher uninsured rate is
associated with lower state health care spending in the
non-Medicare/Medicaid population. In contrast, a higher percent of the
population with no insurance resulted in higher Medicare spending per
enrollee, indicating cost shifting to Medicare.”
In any case,
this debate underlines the importance of closely equating care with
costs—restoring “price tags” to health care. This can only be
accomplished through market-based incentives.
Lifestyle
choices also extend beyond “health”. Krug et. al. (1998) finds that firearm mortality rates are eight
times higher in America than
in its economic counterparts (14.24 vs. 1.76 per 100,000)—and the rate in
the Americas exceeds those
in Asia by 95-fold.
distinguishing between health, health care, and health insurance
I
can understand why my three "starting points" were cut-- in the interest of space
trade-offs within a journal. For economists, these are examples of "re-creating the wheel"-- and thus, not a good choice for inclusion in a journal article. But for the unwashed, these are important points to make.
(They are a frequent part of my public presentations or at least the Q&A afterwards.)
So, I'll publish them myself! ;-)
Below is "starting point" #1. Follow this link for #2 and this link for #3.
__________________
Physical health is the goal in this realm—the economic good. Having health contributes to one’s level of utility or satisfaction. But it would be even better to have health without health care or health insurance. This also implies trade-offs between the desire for health and the cost of health care and health insurance.
In contrast, “health care” implies a lack of health prior to pursuing care-- or preventative care to deal with a potential lack of health. Health care services, for their own sake, are worthless. Health care which does not achieve improved health is without benefit. Health care is only valuable insofar as it improves health outcomes.
Health insurance is a mechanism by which some of the costs of health care are offset by a standard insurance arrangement or by some form of pre-payment. Individuals who purchase insurance are willing to bear those costs in order to reduce the expected future value of their health care costs—particularly in avoiding “catastrophic” costs. On the other side of the coin, health insurance companies are willing to accept premiums that exceed, in aggregate, the expected future benefits to be paid out.
Many times, in public discussions, these three concepts are conflated. But they are distinct. In a word, one can be healthy without health care or health insurance; one can have health care or health insurance without having good or improved health; and one can receive health care without health insurance. And in the real world, we see all of the above.
two sobering caveats on health policy: the limits of markets and government
The following was dropped from my Independent Review article, "The Economics of Health Care and Health Insurance", in the editing process. (Here's my other journal article on health care/insurance.)
I can understand why the caveats would be cut-- in the interest of space trade-offs within a journal. But I believe the points are worth making. (#1 is pretty standard stuff for political economy; but #2 is a novel and especially important consideration on the limits of mkts and govt.) So, I'll publish them myself! ;-)
________________________
1.) Market proponents may find that the general public does not have sufficient interest in private-sector solutions. At least three significant factors could interfere.
First, many people look to the government to solve or at least address many of society’s problems—even when market solutions would be constitutional, more equitable, and more efficient. In particular, most people look to the government to deal with various aspects of poverty, including health care deficiencies. The level of idolatry toward government may have peaked recently, but it is still quite high.
Second, market-based solutions may fall prey to the same impediments to government-enhancing solutions: people are wary of change in an area where they perceive a messed-up system but are personally content with the status quo. Significant reforms often appeal to a majority. If the benefits of market reforms are difficult to understand, this may prove prohibitively difficult to achieve.
Third, public policy proposals must find a way to supersede the rational ignorance and apathy of the general public. Concentrated benefits to an interest group often trump larger but more subtle and diffused costs imposed on the general public. From insurance reform to tort reform, interest groups will exert themselves while the public is ignorant of the reforms, finds it not worth their efforts, or is fooled by the “good stories” spun by interest groups (Schansberg, 1996).
All that said, market-based solutions may have the floor in the near future—an opportunity to persuade the public and a reason for hope. The American public has embraced significant rollbacks of federal government power in recent years: deregulation of transportation and communication in the late 1970s and early 1980s; significant tax reforms in the 1980s; and welfare reform in the 1990s. In each case, passionate and informed leadership was able to accomplish reform for systems that were clearly sub-optimal. As such, a series of “common sense” reforms in health care and health insurance may be within reach.
2.) Our country’s health care problems may not be “fixable”. Consider an analogy. Markets require honesty and morality to function well. With perfect honesty and morality, then market disciplines and legal constraints for fraud and theft would be unnecessary. As honesty and morality diminish, market mechanisms and government enforcement can limit the damage. But without a threshold level of honesty and morality, markets and government will be insufficient to avoid significant harm. In a word, both are limited as a constraint to immoral conduct.
Something similar is in play with health care. For example, according to the CDC, about half of all Americans live with at least one chronic condition (e.g., diabetes, heart and lung ailments); chronic diseases account for 70% of all deaths in the United States; people with chronic diseases account for more than 75% of the nation’s medical care costs; and chronic diseases account for one-third of the years of potential life lost before age 65. Most of these conditions are connected to unhealthy lifestyle choices—and although smoking is decreasing, the problem of obesity is getting bigger (Finkelstein et. al., 2009, Manning et. al., 1989). In a word, if people are determined to live unhealthy lives, then there is no system which can fix the underlying problem. As Samuel Johnson once quipped: “How small, of all that human hearts endure / That part which laws or kings can cause or cure!”
Markets might dictate that the unhealthy would pay higher health insurance premiums and otherwise bear higher costs for health care. Markets and government can work to educate people about the cost of unhealthy choices (Ornish, 2004). Governments might regulate unhealthy substances and ration the availability of care. But the root issue of unhealthy people cannot be fully addressed by either markets or government. At the end of the day, this is largely a matter of personal responsibility.
Nye/Ham and Evolution vs. evolution
Didn't see the Ham/Nye debate last night. Had seven boys in my house, so I was quite busy. And wasn't all that interested anyway, imagining that they'd talk past each other a lot.
In the largest sense, the topic is over-rated. The Bible easily allows for a young earth or an old earth-- a fun topic, and something one should know when talking about such things with non-believers. And there's Gerald Schroeder in The Science of God who lays out why time will look different from earth vs. the center of the universe in a way that accommodates both views.
Of course, I'm quite comfortable with evolution playing a big role in God's creation. Maybe He used it for 14% or 92% of what we see. Whatever. And let's ignore the questions of how it all began and how life began. It's clear that evolution-- as a comprehensive "explanation" for all that we see-- is, obviously, mostly story: the skin of scientific explanation stuffed with a lovely (but vague) narrative.
It's interesting to poke around with most people on these topics-- because they're similarly open to what evolution might (not) have done. Since they don't have a eminently personal stake in the question, they are open. It can also be interesting to talk with people whose metaphysical beliefs require evolution to accomplish everything. But it can get tiresome too, since their faith-- and often, their blindness to the extent of their faith-- gets old.
Here's an article by Fred Reed from my pile. Not sure about the particular details of each animal (it sounds fine to me, but he could be wrong), but it's strong on the general weaknesses of "the faith".
how to create a slow, tepid and sad economic "recovery"
Let's make a list of the ways in which Congress, President Bush, and especially President Obama have worked to slow down the recovery. (Thanks!) Note the significant risks/costs *inherent* in:
a.) our recent fiscal policy sins of commission: troubling debt/deficits in current accounts-- with no sense of urgency or political courage for change in the near-term (I blame Bush and the GOP for a lot of this; they should have known better)
b.) related to that, the many and varied forms of "stimulus" that politicians have embraced out of ignorance/wishful thinking or from a crass/cynical desire to take credit for a recovery by passing policies that might seem correlated with economic recovery
c.) our continued fiscal policy sins of omission: lack of serious discussion entitlement reform for future debt (thanks to a lack of policy imagination and courage by GOP'ers-- and esp. the demagoguery of Dems)
d.) risky monetary policy: controlled by the Fed but certainly encouraged by elected folk
e.) a really slow roll-out of a massive public policy experiment with vastly unknown impacts at both a macro and micro level: i.e., ObamaCare
A-E are all kicks in the pants to the macro-economy and its micro parts, particularly private investment (which has been "amazingly" slow to "recover") and labor markets.
