Monday, October 26, 2009

The Auto Bailout as History


I spent some time on the internets last week engaged in an altercation with one Teresa Rice, of Pittsburgh, PA. Ms. Rice, the proprietress of a blog with the unprepossessing title “Teresaamerica.org,” had accused Ron Bloom, who runs the Auto Task Force at the Treasury Department, of being a secret “Maoist”.
http://teresamerica.blogspot.com/2009/10/another-white-house-mao-lover-ron-bloom.html
I bemusedly attempted to convince Ms. Rice and her cohort (a set of characters right out of the riot scene in "The Day of the Locust,") of the incongruity of believing that a former Lazard Freres banker with a Harvard M.B.A. was actually using his position in the Department of the Treasury to plot a new Great Cultural Revolution, but they were not to be deterred, and I found myself banned from the blog for may pains.

In any event, in the course of the episode I found myself listening to a terrific Brookings Institution podcast with Steve Rattner, who headed Bloom’s team during last Spring’s restructuring of Chrysler and General Motors. The entire discussion can be found here, along with a transcript:
http://content.usatoday.com/topics/more+articles/Organizations/Non-profits,+Activist+Groups/Brookings+Institution

Saturday, October 24, 2009

What is Government Good For?

I have decided to elevate the following exchange with "Eman," a conservative, from the comments section. If "Eman" decides to respond, I will give him a new comment:

Eman said...
Name one thing, other than fight war, government does efficiently.Name one program government had designed that has saved money.Name one thing government produces.



nyp said...
to "eman":you ask: "Name one thing, other than fight war, government does efficiently. Name one program government had designed that has saved money"Eman, there are many answers to your questions, but here are a few: a) Medicareb) the VA "Tricare" health system c) the universal healthcare systems of every other industrialized nationMedicare and Tricare have significantly lower operating and administrative costs than the private health insurance system. Medicare has has higher patient satisfaction than private system. VA Tricare has been uniformly aclaimed (since its overhaul by President Clinton and continued support by President Bush) for the excellence of its care for vets, especially those who have been badly injured. As for the universal care systems of our economic competitors, they all use a much lower percentage of their national wealth on healthcare, yet generally achieve equivalent or better health outcomes than we do. And citizens in those countries do not face financial ruin if they lose their jobs and have major medical bills, the way they do here.You also ask: "name one thing government produces"Again, there are many answers to your question, but I will start with this: human capital, through government-run colleges and universities and, especially, community colleges.Here is another answer: clean air and water, through the regulaton of private externalities.Here is a third answer: public parks.If you disagree with any of these answers, feel free to speak up.
October 22, 2009 6:02 AM

Eman said...
All the programs you have listed in your first paragraph lose money and the bureaucracies that run them are inefficient, uncaring and difficult if not impossible for the general public to deal with. They are labor intensive for the users and could be done much more efficiently by the privet sector. They bleed taxpayer money. Human capital? What the heck is human capital? The public education system in this country is not something you would wish to challenge me on. It’s a mess. Compared to other countries, we just plain suck. Public parks, though mostly nice, are poorly policed and unsafe for many because of the drugs grown on them. They never make enough money to pay for up-keep and the employees needed to do the needed maintenance. I quote you…“Medicare and Tricare have significantly lower operating and administrative costs than the private health insurance system. Medicare has has higher patient satisfaction than private system.”Tell me… Why is it that our healthcare system is the one rich people all over the world run to when they become ill? The Canadian system is so bad the doctors are asking for the government to allow privet insurance companies. The wait times for surgery are ludicrous. If Bill Clinton had been a Canadian when he needed his quadruple bypass, he would have DIED!! The wait in nine months!!!VA Tricare is only better than the care they had before but AGAIN, it is not self sustaining and taxpayers are paying for a poor system. It is not what you think it is. I know, my daughter is a Navy vet and she has more problems than Carter has peanuts.Your arguments are hollow, shallow and untrue.
October 23, 2009 3:10 PM


to "Eman": I am sorry that you wish to abolish Medicare, public VA Tricare (and, presumably, Social Security,) sell off the national parks, and end publicly-financed elementary and secondary education and public universities as well. I happen to disagree with you. I am confident that 99% of Americans would disagree with you as well. Most of us consider the programs I have just mentioned as great American triumphs, even though none of them are perfect. We recognize (even if you do not,) that market mechanisms do not work perfectly for every single aspect of life that people consider important. Although it is important that government programs run as efficiently as possible, it makes little sense to judge them, as you do, by whether or not they make money, since they are employed in situations in which for-profit mechanisms have been found not to work. No one in their right mind would expect the New York City subway system to make a profit. But the city could neither function without subways nor with a system that charged our citizens fares sufficient to turn a profit.
Moreover, most Americans strongly disagree with your very loose characterizations of these social programs. Consider, for example, what would happen to any elected politician anywhere in America who advocated abolishing, or even privatizing Medicare. He would be voted out of office at the next election. Similarly, try suggesting that the Tricare system be privitized, and people like your daughter simply be given some kind of voucher and sent into the private system. I think you know what the reaction would be.
The fact is, no matter how much you would like to disparage these social programs, both Medicare and Tricare are more popular among their users than the private system is with the rest of us. They are also much more cost-effective, perhaps because they don't have to pay gargantuan compensaton packages to health insurance executives. You seem eager to skip over that fact, and concentrate on sloppy accusations.
As far as other countries are concerned, you are simply wrong as a factual matter. Individual Canadians may have individual gripes about their system, but I really don't see a flood of Canucks swimming the St. Lawrence Seaway in order to get treated in the U.S. Again, any Canadian politician who dared suggest that Canada swap its system for ours would be retired from office at the next election. The same holds true for all the other industrialized countirs that have universal healthcare -- that is to say, everyone except us. (By the way, should I mention that the current U.S. reform proposals have nothing to do with a Canadian-style single payer system?)
Again, ask yourself why healthcare systems that you describe as being so horrible enjoy near-universal support among their consumers. It would be quite a paradox if you were to treat this as a "market failure" among hundreds of millions of consumers in multiple countries. Perhaps, instead, it is because the citizens of our competitors realize what your rigid libertarian ideology prevents you from accepting: that publicly-supported universal care systems provide, on the whole, better quality medical care than our system provides, and that they do so at a fraction of the price. Perhaps it is also because citizens of those countries are repulsed, as you should be, by the idea that a family should lose its access to health care if the father or mother loses their job, or that a family would be forced to sell its home and devestate its finances because its insurance would not pay for catastrophicl medical care.
Here, by the way, is the link to the OECD's statistics on how our system stacks up to everyone else's:
http://www.oecd.org/document/30/0,3343,en_2649_34631_12968734_1_1_1_1,00.html

And here is a link to a Commonwealth Fund study that ranks the U.S. dead last among all industrial nations in "amenable mortatlity" - that is, deaths that are preventable with timely and effective health care.
http://content.healthaffairs.org/ cgi/content/abstract/27/1/58?ijk ey=05uD000683MNE&keytype =ref&siteid=healthaff

Of course, you are correct that for super-expensive, high-end health care, the U.S. has many facilities that are second to none. That is why you have at least a partial point when you rhetorically ask "why is it that our healthcare system is the one rich people all over the world run to when they become ill?" That's not really true (it's pretty hard to find rich people in France, Germany, Australia, Switzerland, Spain, etc who "run to the U.S., although we do get a lot of third-world dictators). But I will grant you that our health care system works quite well for the rich.

It's the rest of us who have the problem.

Cordially,
NYP

P.S.: I appreciate your daughter's service to our country.