Obama Did Not Lie

Say you’re planning a vacation trip to visit the castles of England. You’re thinking maybe you’ll see a castle a day, with lots of time for leisurely drives and exploration in between. Your spouse, meanwhile, has drawn up a rigid schedule that will get you to twenty sites in seven days. In the course of trying, gently, to point out how impractical this is, you ask: “But how can we possibly make it from Harlech to Alnwick in under two hours?”. Your spouse, fed up with this discussion, replies: “We’ll take a rocket ship, okay?”

Actually, of course, your spouse knows perfectly well that you won’t be taking a rocket ship. So: Have you just been lied to? It seems to me that you clearly haven’t been. A lie requires an intent to deceive. You have, perhaps, been treated with contempt, and that can be just as unpleasant as a lie. But it’s not a lie. In order to lie, you’ve got to have some chance of being believed.

When President Obama said that he could provide health care to millions without taking any health care away from people who have already got it, he had no chance of being believed. The statement was absurd on its face. This is a law of arithmetic: If you invite a bunch of friends to share your lunch, there’s going to be less lunch for you. Everybody understands that.

Unless, of course, you make the lunch bigger. But there was never any plausible story about how the advent of Obamacare would suddenly increase the available quantity of medical resources such as hospital beds and doctors’ time. In the short run, there’s a fixed number of doctors, and nothing about Obamacare is going to change that. If those doctors start seeing new patients, they’ll have less time for their old ones. Not all the old patients will be able to have the same access they had before, so not all the old patients will be able to have insurance plans that guarantee them the same access as before.

Nobody over the age of six can have failed to notice that. So when the President said he could expand the availability of medical care while allowing everyone else to keep the care they’ve got, it was like saying he’d take us for a tour of England in his rocket ship. It had absolutely no chance of being believed, and therefore, it seems to me, does not count as a lie.
It counts instead as an expression of contempt for the many entirely reasonable people who tried to point out that it is not within a President’s power to suspend the laws of arithmetic.
That expression of contempt was arguably pretty contemptible, and arguably as contemptible as a lie. And of course he’s compounding it by trying to tell you with a straight face that everyone who has to switch health plans will end up with “better” plans that allow them to consume even more medical care. I could give you some pretty striking counterexamples among people I’m personally close to, but there’s no need for that, since anyone who grasps basic arithmetic can see that the president’s words cannot be true. But speaking untruths is not enough to make him a liar. For that, he’d have to speak plausible untruths, and he has too little respect for the American people to bother coming up with any.

Share/Save

105 Responses to “Obama Did Not Lie”


  1. 1 1 Thomas

    I think you should distinguish more clearly between health care and health insurance. Even people without health insurance did get health care. It was just not paid for by health insurance, but rather by other means (the recipients savings, or if there were none, the expenses were socialized).

  2. 2 2 Bennett Haselton

    Also, everyone was already entitled to emergency medical care, regardless of insurance. But some of those emergencies were brought on by not having access to the kind of early detection and prevention that would be covered by insurance.

    So if you take an uninsured person (who was already consuming, or going to consume, emergency medical care), and give them insurance that covers detection and prevention and thus reduces their need for emergency services, it’s logically possible to reduce the amount of services consumed, by insuring an additional person.

  3. 3 3 Harold

    Since the USA system costs 50% more for similar outcomes as you get in other countries there is clearly scope for improvements in value for money. Whether these could be achieved by Obamacare I don’t know, but it could in principle happen without suspending the laws of arithmetic. For example, hospital bed occupancy rate fell from 76% in 1975 to 68% in 2009. Now 100% occupancy is not possible, but I doubt that 68% is the optimum level of occupancy, although I could be wrong.
    http://www.cdc.gov/nchs/data/hus/2011/116.pdf

  4. 4 4 suckmydictum

    The castle thing was much too specific just to be a didactic example.

  5. 5 5 Sub Specie AEternitatis

    Indeed, to lie requires an intent to deceive. That is why to speak an untruth with a sincere belief that it is true (such as a ’03 claim that there was a WMD program in Iraq) is not a lie. That is also why a statement which is obviously not intended to be believed, such as sarcasm, does not qualify either.

    The question is whether the Obama’s statement was one he intended to be believed or something else, like sarcasm.

    Initially, one must note that sarcasm directed at an audience with the power to withhold something the speaker desires–here a presidential reelection–seems quite impolitic; not something a consummate politician (like almost everybody who has ever won the presidency) would be likely to engage in.

    The professor is quite right that Obama’s statement is not one which any intelligent or even basically informed listener could have believed. Indeed few of them did. But it does not follow that Obama had not intent to be believed by his actual target audience–the electorate.

    Let’s try another hypothetical: If I walked up to the professor and offered him try magical beans for his new bike, it is unlikely that I have an intent to defraud him because he obviously knows there is no such thing as magical beans, so I must have something else–perhaps some sort of joke–in mind. But if I made the same offer to a six-year old or a person known to me to be mentally deficient, and in particular if I then consummate the transaction, then I am very likely guilty of fraud.

    It is quite clear that the president, when he made that statement, assessed the electorate–the true target of the statement–to be more like six-year olds or mental deficients who would be likely to believe him in sufficient numbers.

    That this was a plausible assessment is supported by the fact that it was accurate! After the statement, the president was reelected, as an electorate which believed him might have, but an electorate which felt that he had mocked its inability to keep their current medical arrangements thanks to his eponymous law would not have been.

    In short: the president made his obviously false statement to a vulnerable audience knowing full well that the only parties which could have effectively disabused them, the press, would not do so. He knew the statement was false. He intended it to be believed. He lied.

  6. 6 6 thomasblair

    >>When President Obama said that he could provide health care to millions without taking any health care away from people who have already got it, he had no chance of being believed.<<

    This is accurate, but it's not what was promised. The promises, some variation of which were repeated at least 34 times, were:

    If you like your doctor you can keep your doctor.
    If you like your plan you can keep your plan.

    Neither one of these actually-quoted statements are beyond being believed by rational people, and indeed are plainly spoken and clear.

  7. 7 7 Steve

    It’s worth explaining why you don’t think the supply curve for medicine is very inelastic.

    If Obama said we are going to subsidize cars for a lot of people then it’s not hard to believe Americans would end up with more cars–we’d build more and import more. Why can’t we do that for healthcare. Doctors can work more hours, more immigrants can move here, we can expand hospitals and add beds, etc.

    It’s not technologically impossible, just prevented by heavy regulation (occupational licensing, visa caps, “certificates of need”).

  8. 8 8 thomasblair

    Additional info on the nearly three dozen mentions of the promises during speeches and in print: http://www.politifact.com/obama-like-health-care-keep/

    I think the most interesting of the bunch is the one 4 days before the exchanges went live wherein the President said, “Now, let’s start with the fact that even before the Affordable Care Act fully takes effect, about 85 percent of Americans already have health insurance — either through their job, or through Medicare, or through the individual market. So if you’re one of these folks, it’s reasonable that you might worry whether health care reform is going to create changes that are a problem for you — especially when you’re bombarded with all sorts of fear-mongering. So the first thing you need to know is this: If you already have health care, you don’t have to do anything.”

    This equivocation is getting tiring, especially for repeated statements, clearly expressed and defended against skepticism for the 3.5 years between passage of the ACA and the arrival of the cancellation notices coincident with the launch of the exchanges.

  9. 9 9 RPLong

    This is perfect. Excellent post.

  10. 10 10 Keshav Srinivasan

    Steve, if the government is increasing the money it’s willing to spend on healthcare, then won’t the price of healthcare services go up, which by the law of supply will make healthcare providers increase the amount of healthcare they provide? I don’t think that doctors and hospitals are at capacity; I don’t think that doctors are seeing the maximum number of patients they can possibly see, or that hospitals can admit no new patients.

    By the way, I have a very simple question: you say that people couldn’t possibly keep all their existing insurance policies. Well, what if the government passed a law *requiring* insurance companies and policy holders to keep their existing policies unchanged? Are you saying that the laws of arithmetic would imply that such a law would inevitably be broken?

  11. 11 11 Keshav Srinivasan

    Also, you say “Not all the old patients will be able to have the same access they had before, so not all the old patients will be able to have insurance plans that guarantee them the same access as before.” But since when do insurance policy guarantee that you’ll have a certain level of access to a doctor? Policies don’t say, “We guarantee that you’ll be able to make an appointment with Dr. Jones within 24 hours.” They simply say, “*If* make an appointment with Dr. Jones, then we guarantee that we’ll pay for your visit.” So I don’t see why insurance policies would have to be canceled for that reason.

  12. 12 12 Steve Landsburg

    thomasblair:

    The promises, some variation of which were repeated at least 34 times, were:

    If you like your doctor you can keep your doctor.
    If you like your plan you can keep your plan.

    Neither one of these actually-quoted statements are beyond being believed by rational people

    I think they are clearly well beyond capable of being believed by rational people. If six of us are sharing a pie, and one of us says “I’m going to invite 15 of my friends to share this pie with us, but don’t worry, none of your slices will change”, then I can’t imagine anyone taking that promise seriously. How is “If you like your doctor you can keep your doctor” any different from “If you like your slice you can keep your slice”?

  13. 13 13 Manfred

    “Nobody over the age of six can have failed to notice that.”
    … “It had absolutely no chance of being believed,…”

    Steve, the economics world lives in a world of rational agents, that (presumably) thinks things through, as you posit in your piece above. And rationality is fine. As an economist, I subscribe to it, too.
    But, in the real world, things are more complicated. Why did the electorate, then, vote for him twice, knowing that his signature bill, that as a nickname carries his own name, was based on false arithmetic?
    Either, they (the electorate) actually believed the (false) arithmentic, or there is something else going on, that I cannot explain.

  14. 14 14 Keshav Srinivasan

    Steve, has anyone in the country ever had a situation where they could not see a doctor not because of a lack of money, but simply because no doctor had any room to ever see them? Even if that circumstance does occur, does any insurance policy in existence offer the guarantee that such a circumstance won’t occur for their policy holders? I don’t believe that such guarantees exist, so I don’t see why that would be a reason for insurance plans to be canceled.

  15. 15 15 Keshav Srinivasan

    As an empirical matter, were there people with less access to healthcare after, say, Medicare passed in 1965?

  16. 16 16 thomasblair

    Steve,

    >>How is “If you like your doctor you can keep your doctor” any different from “If you like your slice you can keep your slice”?<<

    Yours is too shallow an analogy. We're not a country of 6 eating a pie and wanting to invite 15 more. We're a country of 7 already eating a pie, with 6 paying for it, and wanting to get the 7th guy to chip in.

    It's not a question of dividing resources. The division of the pie (consumption of health care) will be substantially the same pre- and post-ACA. Please be careful to make the distinction between health insurance and health care.

    The problem is that from the first presidential campaign through the push to pass the bill, and all the way up to at least the week prior to the exchanges going live, promises were made by a person with the authority to determine (through his subordinate department of HHS writing the regs) whether insurance plans can be kept by those in the individual market.

    He said they would, repeatedly, without caveats, and in no unclear terms. They weren't. He lied.

    On a related but admittedly emotional (and so seperate) note, is this really the point to which we've sunk as a nation – trying to find little twinklings in the penumbras of political speech sufficient for supporters to point to critics and say, "Ha, suckers! You should have known!"

    (Not that you are a supporter.)

  17. 17 17 Keshav Srinivasan

    @thomasblair What the law said is that if you had an insurance plan before March 23, 2010 and it didn’t undergo major changes since then, then it would be grandfathered. The reason that manu people in the individual market are getting their plans canceled now is twofold. First of all, some insurance plans have undergone major changes since 2010, so they’re no longer grandfathered. But the bigger reason that plans are being canceled is that in the past theree years, some insurance companies have tried to get as many people as possible to switch from their old (pre-2010) insurance plans to some new plan, so that they would lose their grandfather status and the insurance company can drop those people from that new plan. See this link:
    http://motherjones.com/kevin-drum/2013/10/are-all-those-insurance-company-cancellation-letters-too-good-check
    It’s basically a way for an insurance company to eliminate as much of its non-exhchange policies as possible, forcing those people to go onto the exchange in order to get them into a higher-premium plan.

  18. 18 18 Ken B

    @Manfred:
    Well, sometimes the purpose of an untruth is to be able to deflect or deny without engaging your interlocutor seriously. There are many common examples of this; many a Frenchman has a mistress who is never named, who existence is politley denied. I think there’s more than a little of that going on, whicjh Steve classifies as expressing contempt.

    Now I think most people are misreading Steve here, as he is being sly. He is really just pointing out *the story was so absurd a little thought would burst it*. The hidden premise is that the little thinking would actually take place.

  19. 19 19 RJ

    If six of us are sharing a pie, and one of us says “I’m going to invite 15 of my friends to share this pie with us, but don’t worry, none of your slices will change”, then I can’t imagine anyone taking that promise seriously. How is “If you like your doctor you can keep your doctor” any different from “If you like your slice you can keep your slice”?

    Because in this analogy you’re speaking of quantity of pie. A more accurate analogy is if there is a choice amongst three different flavors of pie, then you invite 15 other people over and say to your friends “If you like the pie you’re currently eating, you won’t have to change flavors.” but when the 15 other friends come over you are forced to select a different flavor.

    It doesn’t seem implausible that the people who came over last should share amongst themselves the pie that the others were least likely to care for and not take away from the others who had first dibs. Similarly, people who already had a healthcare plan who voted for Obama probably thought those who were latest to sign up would get whatever leftover options were available and not be forced off their current plan. Why does this make a person dense?

  20. 20 20 Harold

    Sub Specie AEternitatis raises in interesting point about when a lie is a lie. If I believe something to be true, but stick my fingers in my ears and say “LA LA LA” when someone tries to inform me about why my belief is false, can I be said to hold my belief sincerely? With the WMD issue, it is not so much that the politicians believed what they said, it is that they believed it in the absence of proper evidence because they wanted to believe it.

  21. 21 21 thomasblair

    @ 17, Keshav

    That is indeed what the law says. The problem is that Mr Obama either seems not to have gotten the message in the intervening 3.5 years (unlikely), or he lied repeatedly. He sold a bill of goods.

  22. 22 22 Russ Wood

    Prof. Landsburg, I enjoy your blog, but in this instance disagree with you completely. In fact, I wasn’t sure whether you’re speaking here seriously or facetiously. (I gather from comment 12 that you’re serious.)

    Mr. Obama clearly intended people to believe him. He continued the lies about keeping doctors and plans despite internal debates over whether he should do so, given their inaccuracy. He could (and I am confident did) rely on the press not to question him seriously on it. He assured his party that O-Care would pass, because “this time, you’ve got me.”

    Normally intelligent, voting adults did, in fact, believe him. (I knew he was lying at the time, but I know plenty of people who believed him.) His aura as the first black, first post-politics President helped in selling the lie. The lack of press inquiry helped. Wishful thinking by the voters no doubt helped.

    Most importantly to your point, it was never an incredible claim. He COULD have structured O-Care so that people could keep their plans. (I believe that’s what he did for most union plans.) Of course, to give more people health care coverage would require some combination of increased government spending and/or reallocation of insurance cost among classes, both of which we have in O-Care.

    But when he was making those promises, none of those policy details of O-Care were known.

  23. 23 23 Wonks Anonymous

    The law takes a while to be implemented after it was written & passed, and I think it adds to the amount of subsidy paid by the government. It would be entirely coherent for him to claim there really will be more medical services because the government will be redirecting resources away form whatever we’d spend them on otherwise.

  24. 24 24 Keshav Srinivasan

    @thomasblair This is kind of a semantic issue. If a plan is substantially different than it used to be, is it still the same plan?

  25. 25 25 Will A

    I think that Obama’s statement highlights that Democrats are finally getting what the mainstream journalism has become:
    A means for reporting propaganda from both Political Parties.

    When Clinton tried to introduce health reforms, he was attacked because the press reported that people’s health care plans would change.

    Obama understood in 2010′s world he could just say, “your plan won’t change” and wait for the actual implementation (after the election) for the press to call him on his statement.


    Today on NPR’s Morning Edition, we’ll have Cokie Roberts explain that Obama is saying that people can keep their doctors and Republicans are saying that people won’t have to keep their doctors.

    We’ll then give a Democratic Senator 5 minutes of air time where she/he can give us unrelated answers to our questions.

    In fairness, we’ll also let a Republican Senator do the same.

    But first a humorous story about how thieves in California are stealing 100′s of thousands of dollars from walnut farmers. ‘It’s Nuts’

  26. 26 26 thomasblair

    @ 23, Keshav

    Ship of Theseus?

  27. 27 27 Gordon Landwirth

    @ Steve #12,

    You seem to be defining “keeping your doctor” invalidly. You are implicitly defining it as a reduction in the level of access to your doctor, but I don’t think that equates to being unable to keep your doctor. As just one example of how access could be reduced without someone being unable to keep his doctor, a doctor could spend less time with each patient (than he had previously, or than he otherwise would without the ACA) to accommodate more patients. I don’t think it would be valid to say that a patient has been unable to keep his doctor because he used to get 30 minutes with his doctor (or otherwise would get 30 minutes without the ACA) but now gets only 20 minutes.

  28. 28 28 thomasblair

    @26 Gordon

    Right. The value in “keeping your doctor” is the relationship – the shared and stored knowledge and history – more so than the absolute number of minutes spent in any given appointment.

  29. 29 29 Keshav Srinivasan

    @thomasblair Yes, we could easily get to Ship of Theseus issues of insurance companies could just change their plans as muh as hey wanted to and still maintain grandfathering. So you can argue that Obama kept his promise insofar as the plan you had kept indefinitely, as long as it is indeed the plan you had, as opposed to a new plan that merely has the same name as the plan you had.

  30. 30 30 Gordon Landwirth

    @ thomasblair #27,

    To be clear, I wasn’t saying anything about “value”. In fact, I’d say that value is generally diminished if a doctor reduces the amount of time he spends with each patient (unless that is achieved via efficiency gains that don’t lower quality). I was merely pointing out that Steve apparently implicitly made an invalid equation of lesser access to one’s doctor with being unable to keep one’s doctor. One is still keeping one’s doctor (one hasn’t lost one’s doctor), because one still has some access.

  31. 31 31 steve rose

    Landsburg writes, “Nobody over the age of six can have failed to notice that.”

    Many people over the age of six fail to notice this is false.

  32. 32 32 M. Smith

    This post is more an indictment of the electorate than an absolution of the President.

    Left unanswered is this question: If no one could possible believe the statement to be true, what was the motivation to make it in the first place?

  33. 33 33 thomasblair

    #30 Gordon

    No issues with your comment. I was adding the point that most people would see “keeping one’s doctor” as primarily valuable because of the relationship developed. There is certainly some value lost were appointment durations reduced to see more patients. It is just my opinion that the latter does not necessarily overwhelm the former.

  34. 34 34 Tony N

    But lying is a product of the messenger’s intent–not the lie’s capacity to deceive. I can intend to deceive my audience and fail miserably simply because I so badly underestimated their intelligence and/or my believability. But it doesn’t mean I didn’t tell a lie. Focusing on the audience and not the messenger’s estimation of the audience is wrong, IMO.

    I don’t think the proposition that Peter Cotton Tail exists is somehow more believable than Obama’s promise. Yet we know without question that the former is a lie when told to small children, and not a lie when told to adults, because we expect the former audience to believe it and the latter to, I don’t know, laugh.

    Obama wasn’t going for laughs or resorting to sarcasm out of frustration. He meant to be believed. After all, he convinced half the voting population to believe in him–and that’s pretty absurd.

  35. 35 35 Floccina

    I have another interpretation. I interpreted the statement to mean that people with plans that met minimum PPACA requirements could keep their insurance. In fact, I assumed that my $10,000/year deductible plan would be made illegal but I just got a letter for blue cross that my plan is grandfathered.

    Also it depends on the meaning of the word “insurance”. Take the mini-meds the normal definition of the word insurance seems to exclude them so the statement “if you like your insurance plan you can keep it.” would not include them.

    Of course Obama badly missuses the word healthcare all the time using it when he means health insurance so he may have said “If you like your healthcare you can keep it.” but that statement is almost meaningless.

  36. 36 36 Floccina

    I should add that I see that chock full of fraud but I give Obama a pass on that lie.

    I also think that he and many democrats use “healthcare” when they mean “Health insurance” purposefully to get people excised about supporting them which to me is a form of corruption.

  37. 37 37 Phil King

    This is poorly reasoned – the analogies you draw are baseless because people did believe his statements. Medical care and insurance are not something which you or I can touch and see easily and therefore rational people are prone to being duped by the statements provided.

    The entire reasoning behind health care reform is that its so confusing and creates bad outcomes because even though rational people operate within the system, the system was set up to nonetheless confound ordinarily rational people.

    A rational person has expectations about travelling. I don’t think anybody has any expectation with regard to health care.

  38. 38 38 Gabriel

    The fallacy of composition here is the assumption that since something is self-evident to an economist and his circle of peers, it must be equally self-evident to the population as a whole. That isn’t and hasn’t ever been the case.

  39. 39 39 bob

    Your entire premise that people think rationally is wrong. Its as if you told your 3 year old you would be taking your rocket ship. Its amazing at how many people in this country know nothing about economics of finance. But that is old news. Which is sad.

  40. 40 40 James Kahn

    As others have pointed out, the premise was that people who are now uninsured but getting “free” care at emergency rooms would be getting less (expensive) care. So on that basis those who already were insured could plausibly believe the claim, even for a fixed “pie.” The lie was that it had already been built into the regulations that people would be unable to keep their plans and their doctors, even though it would have in principle been feasible.

  41. 41 41 Cari Beth

    I am one of the people that got the short end of the stick because of the APA, contrary to what Obama promised. Last year, my husbands medical insurance (which he received through work), sent me a notice that I was being dropped since I had other health insurances available for me.

    I was outraged. The other one available was Tri-Care which is vastly inferior to the coverage I received through hubby’s insurance. It is cheaper, yes, but vastly inferior being it is a government sponsored insurance.

    So I was forced off of hubby’s insurance into inferior insurance. Since Tri-care was available to me, I had NO CHOICE. I could not keep the health insurance I wanted.

    Contrary to what Obama said, I lost my health insurance that I liked. I now get inferior coverage.

    I still cannot believe they forced me out.

    I think Obama and Co suffer from chronic wishful thinking. That and completely ignoring predictions of unintended consequences.

    I hate totalitarians under the guise of do-gooders.

  42. 42 42 Al V.

    Regarding the question of whether people can keep their doctors, it is logical that some people would not be able to keep their doctors, for two reasons.

    1. Because more people will be covered under some form of insurance, more people will receive their medical care through primary care physicians and less through emergency rooms. Supply and demand would imply a shift, with there being more primary care physicians and less emergency room physicians. In addition, presumably people will have more visits to their doctors than they had emergency room visits. Thus, the total usage of primary care physicians will rise, even as the total cost of medical care drops. And thus, more patients spread across more doctors implies that some people will change doctors.

    2. The new insurance programs will line up doctors in networks, and some doctors will only be in some networks. Thus, some people will have to choose between keeping their doctor and keeping their insurance.

  43. 43 43 Brian

    Steve,

    Your reasoning on this is faulty. RJ’s response is basically correct. Using your own analogy of pie, Obama’s statement was something like this: “If you like the pie you’ve been eating, you’ll still be able to eat that pie. And if you like eating it with ice cream or whipped cream, you’ll still be able to do that.”

    Even if you know that more people have been invited and that your favorite pie might be gone before you get there, based on the promise you would be justified in expecting that a (possibly smaller) piece of your favorite pie might be set aside for you because they know you like that one, OR that more pie will be provided to cover the extra people. In fact, GIVEN THE PROMISE THAT WAS REPEATEDLY MADE, one might reasonably expect that the pie provider has the responsibility to ensure that sufficient pie is available, including plenty of the kind you have always eaten. Failure to ensure this would indicate that the pie provider NEVER INTENDED TO KEEP THE PROMISE AND HAS THEREFORE LIED.

    When you arrive at the party, you find that the pie provider never ordered the cherry pie you like AT ALL. Why? Because the pie provider believes that apple pie is better, and that those who think they prefer cherry will change their minds once they try apple. In any case, no one is allowed to have cherry. In addition, the pie provider doesn’t believe in marring the purity of apple pie with a dollop of ice cream, so you can’t have that either. You could have the ice cream with cherry pie, but since there isn’t any (none was ordered), you can’t have the ice cream.

    Under the circumstances, I think any reasonable partygoer would conclude that the provider lied about the pie, probably because they wanted to force the choice of pie on you but still wanted you to come to the party.

    Did the pie provider intend to lie at the time? Perhaps not. But by failing to do what’s needed to fulfill the promise, the provider has MADE THE PROMISE INTO A LIE.

  44. 44 44 Patrick R. Sullivan

    ‘ If six of us are sharing a pie, and one of us says….’

    Perfect example…of the false analogy. Haven’t heard of Tullock and Buchanan? Hayek, Sowell…?

    Will Rogers; ‘We are all ignorant, just about different things.’

    Bret Maverick; ‘My ol’ pappy always said, “You can fool all the people some of the time, and some of the people all of the time…and those are pretty good odds.”‘

  45. 45 45 trent steele

    INTELLIGENCE + NAIVETE, FLAVORED WITH SMUGNESS.

    Dr. Landsburg, you have just illustrated the “Ivory Tower” problem quite nicely. In your world every American is as bright as you and your fellow PhD’s, and has plenty of time to absorb and calculate the statements of smooth-talking politicians.
    Obama said these things because he thought they would be believed by the majority of Americans. And guess what? That was a good assumption. Sadly, most humans are not intelligent enough to be PhD. mathematicians and economists. But you only associate with those who are, and thus the “Ivory Tower” problem.
    Would we be here if every statement by a politician was processed by people with, not only your intelligence, but also the time to mull and investigate these claims? Certainly not. Yet here we are. As an economist I can tell you that, given those facts, it is clear to see that most rationally ignorant Americans believe the “lies” told to them by politicians, and that politicians anticipate this.
    Your blog post is the best example I can find for why academics should go out into the real world occasionally and see what real people are like. Then maybe we could start dealing rationally with the world, and stop dreaming that the Ivory Tower is a representative sample.

  46. 46 46 Sy

    Steve
    I believe thomasblair and Manfred are exactly right. The implication of your thesis is that all those who are now saying they weren’t expecting to have their policies cancelled, and are unhappy about it, are all either lying or are imbeciles. I expect that you would agree lots of people often believe political and economic fairytales, and they are not all under six. Much of political rhetoric is aimed, and successfully so, at the marginal voter. It is clearly not an irrational strategy.

  47. 47 47 Sy

    @ 17 and 24, Keshav
    “First of all, some insurance plans have undergone major changes since 2010, so they’re no longer grandfathered.” It depends on what you mean by “major,” it seems that even a $5 change in copay can disqualify the grandfathering of the plan.
    “[T]he bigger reason that plans are being canceled is that in the past theree (sic) years, some insurance companies have tried to get as many people as possible to switch from their old (pre-2010) insurance plans to some new plan.” What you are saying is ACA provides incentives to insurance companies to take people out of their current plans and put them into the new plans. Assuming your statement is true, how is that not a result of the “Obamacare” legislation?

  48. 48 48 Will A

    @ Cari Barth #41:

    I’m assuming your referring to health insurance companies doing something like this:
    http://www.mydaytondailynews.com/news/news/premier-health-dropping-health-insurance-for-worki/nbQd6/

    This practice isn’t part of Obamacare, this is a practice of your husband’s employer and employer’s health carrier doing their fiduciary responsibility of trying to maximum their value for their owner/shareholders.

    This is the free market place in action. If you don’t like the insurance provided by your own company find another job. Or your husband could get a job at an employer who has an insurer that doesn’t use the practice.

    If 80% of the people in your husband’s company threaten to quit unless this is changed, my guess is that your husband’s employer would rethink who it uses as its health carrier. He’s a good slogan they can use:
    “Less take home pay for our spouses.”

    Maybe you could lobby congress to add the following “non-totalitarian” clause to Obamacare:
    Health Insurers who sell employer based plans must provide coverage to spouses.

  49. 49 49 trent steele

    My wife asked me to post this as well:

    “Theories of this kind may be absurd from the scientific point of view, yet a social scientist who views them not as absurd verbiage, but as social facts, cannot but recognize them as powerful determinants of the social equilibrium. And their power consists not in their slight or great correspondence to the truth, but in their ability to move men’s emotions.”
    - Andrew Bongiorno, from his work on Pareto, in “A Study of Pareto’s Treatise on General Sociology”

  50. 50 50 trent steele

    Dr. Landsburg, you have just illustrated the “Ivory Tower” problem quite nicely. In your world every American is as bright as you and your fellow PhD’s, and has plenty of time to absorb and calculate the statements of smooth-talking politicians.
    Obama said these things because he thought they would be believed by the majority of Americans. And guess what? That was a good assumption. Sadly, most humans are not intelligent enough to be PhD. mathematicians and economists. But you only associate with those who are, and thus the “Ivory Tower” problem.
    Would we be here if every statement by a politician was processed by people with, not only your intelligence, but also the time to mull and investigate these claims? Certainly not. Yet here we are. As an economist I can tell you that, given those facts, it is clear to see that most rationally ignorant Americans believe the “lies” told to them by politicians, and that politicians anticipate this.
    Your blog post is the best example I can find for why academics should go out into the real world occasionally and see what real people are like. Then maybe we could start dealing rationally with the world, and stop dreaming that the Ivory Tower is a representative sample.

    My wife asked me to post this as well:

    “Theories of this kind may be absurd from the scientific point of view, yet a social scientist who views them not as absurd verbiage, but as social facts, cannot but recognize them as powerful determinants of the social equilibrium. And their power consists not in their slight or great correspondence to the truth, but in their ability to move men’s emotions.”
    - Andrew Bongiorno, from his work on Pareto, in “A Study of Pareto’s Treatise on General Sociology”

  51. 51 51 Will A

    As usual for me a very bad typo. I should have said:


    Here’s a good slogan they can use:
    Reduce our take home pay for the good of our spouses.

  52. 52 52 dbh

    This “it wasn’t a lie if you should not have believed it” theme seems to be a popular explanation of Obama’s lies. But of course, he is not trying to explain away claims that the ACA would increase access to physicians without increasing the supply of physicians.

    He was trying to explain away
    “If you like your plan you can keep your plan”
    “Period”
    “No matter what”

    One can redefine a lie as requiring not only lying, but lying in a way that is plausible. Then Bernie Madoff is not a liar because no one should have believed his claims of investing success.

    By any conventional definition of lying, Obama was lying all 34 times he made his claim.

    One can claim that it is not a lie if no one should have believed him. By that measure, Obama is incapable of lying because no one should believe anything he says.

  53. 53 53 Scott H.

    So, Steve… Which is worse? The issue with good lies is that you really can’t say if they are true or not. Being treated with contempt is right there in your face.

  54. 54 54 Steve Landsburg

    Sy:

    The implication of your thesis is that all those who are now saying they weren’t expecting to have their policies cancelled, and are unhappy about it, are all either lying or are imbeciles.

    Not at all. What I claimed, roughly, was that if you say you believed that *everyone* would be able to keep their coverage (i.e. if you say you believed Obama) then you are either lying or an imbecile.

    That’s perfectly consistent with the statement that truthful and intelligent people might be surprised to learn that *they personally* are among those who are losing coverage.

    There is no conflict between these statements.

  55. 55 55 dave

    I put my favorites on ‘icon view’ and I noticed that your page does not have an ‘icon’ instead its a generic ie icon. fyi.

  56. 56 56 Keshav Srinivasan

    Steve, if the government nationalized all the insurance companies, and then put all the remaining uninsured people into Medicare, then wouldn’t everyone keep their insurance plans?

  57. 57 57 Sy

    “Not at all. What I claimed, roughly, was that if you say you believed that *everyone* would be able to keep their coverage (i.e. if you say you believed Obama) then you are either lying or an imbecile.

    “That’s perfectly consistent with the statement that truthful and intelligent people might be surprised to learn that *they personally* are among those who are losing coverage.

    “There is no conflict between these statements.”

    I agree there is no conflict between those statements. Admittedly my comment was imprecisely stated. I’m saying that Obama made his repeated assurances with a purpose: to allay the concerns of those who had insurance and were happy with it but also were worried how ACA could adversely affect them. Otherwise, why make false promises if the target audience you want to convince will see through the rouse? If they knew they were being duped, it would not have been a rational strategy for Obama. It’s safe to say that not all of those people are at the six year old intelligence level (“imbeciles”).

    To be a bit pedantic, dictionary.com defines a lie as:
    1. a false statement made with deliberate intent to deceive; an intentional untruth; a falsehood.
    2. something intended or serving to convey a false impression
    3. an inaccurate or false statement
    The intent of the speaker is a factor, as is the accuracy of the statement. The listener’s ability to see through the attempted deception is not.

  58. 58 58 Steve Landsburg

    Keshav Srinivasan:

    Steve, if the government nationalized all the insurance companies, and then put all the remaining uninsured people into Medicare, then wouldn’t everyone keep their insurance plans?

    If six people each have three apples, and the government takes the apples and then promises to divide them among ten people by giving them three apples each, won’t everyone still have three apples?

  59. 59 59 Keshav Srinivasan

    Steve, the difference is that an insurance policy is not a guarantee that you’ll receive a certain amount of care. It’s a guarantee that IF you receive certain kinds of care, the insurance company will pay for it. So I see no reason why giving more people health insurance must necessarily lead to some people losing their health insurance.

  60. 60 60 jimbino

    Landsberg’s thesis is too silly to spend much time on. Most Amerikans believe in god, prayer, fiddling with crucifixes, talking snakes and donkeys, assumptions, resurrections, conversion of wine into blood and wafers into flesh.

    They, like the world’s most erudite–the Germans of 1933–can be made to believe anything, however outlandish. They simply believed he could create health care out of whole cloth, no more no less.

  61. 61 61 Keshav Srinivasan

    I also want to make the point that if you asked the average American whether doctors and hospitals would provide more healthcare in the short term if you gave them more money, they would answer yes. Now you may consider this economic illiteracy, but it’s not just a consequence of the laws of arithmetic, is it?

  62. 62 62 Henri Hein

    There is a problem here, but first, here is my situation:
    1. I had a health insurance plan that I liked.
    2. My insurance plan will be canceled after ACA goes into effect.
    3. I am upset about it.

    I will be shifted from a high-deductible plan to a more expensive plan, but one with a lower deductible. Since health care will be cheaper for me, personally, under this new plan, I have an incentive to use more of it, not less, compared to my pre-ACA situation. So I don’t quite follow the logic. Maybe my situation is not representative, but anecdotally, most incidents of dropped plans I have heard about have been similar.

  63. 63 63 Henri Hein

    @Will A, #48:

    Regulations made Cari’s plan more expensive. That’s why they dropped it. That, to you, is “the free market place in action?”

    So if a carbon tax made us drive less and sell our A/C units, that also would be “the free market place in action?”

  64. 64 64 Ken B

    @Keshav 59: Huh? The law of large numbers for one thing. Spread over enough people insurance is close to a guarantee that in toto a lot of healtchare funds will be consumed.

    Say you are one of ten people who buy a lotto ticket this month. You have no guarantee you’ll win the million b ut you have a good shot, 10%. Now the govt gives everyone a lotto ticket. Does everyone still have a 10% shot? By your ‘no guarantee’ logic …

  65. 65 65 Harold

    #63 – is the market free if there are externalities? I would say not, but I am not sure what the opinion here is. If the carbon tax restores the price of carbon to what it would be if the externalities were internalised, then driving less and selling A/C units could well be the free market in action – or at least closer to it than the situation without tax.

  66. 66 66 Keshav Srinivasan

    @Ken B But President Obama didn’t make any promises about Americans being able to keep the level of healthcare they previously had. He talked about them keeping their insurance policy.

  67. 67 67 Ken B

    @Keshav 66: Which is exactly the point I addressed in 64. That’s the point of my lottery analogy. Insurance funds are still a finite resource; the amount of funds I can get and the level of assurance I can have the funds will be there is part of the insurance I had.

    We share a smallhouse. We have one fire extinguisher. I have a certaion levle of safety thereby. 10,000 new house go up and the one fire extinguisher is located in a central location. I still have the same level of safety?

  68. 68 68 Jack PQ

    71 percent of Americans support raising the minimum wage. Clearly you overstate the basic economic reasoning ability of most Americans (or most adults anywhere, really). To most Americans, it was believable, but since Pres. Obama probably also believed it, I don’t know if we can call it a lie. He made statements he was unqualified to make.

    http://www.gallup.com/poll/160913/back-raising-minimum-wage.aspx

  69. 69 69 Jay

    I normally agree with Steven in this blog, but I couldn’t possible disagree more here.

    I still have not read a decent response by the professor or anyone else as to the intent of saying such an absurd, unbelievable statement in numerous speeches (28 times I believe) if he didn’t intend for people to believe him. It wasn’t like he was trying to deflect an asked question in a press conference, these were written speeches at campaign election events (which he did win 2 of, but nobody believed him?).

  70. 70 70 Eric Nilsson

    “In the short run, there’s a fixed number of doctors, and nothing about Obamacare is going to change that.”

    From what I understand, Nurse Practitioners and Physicians Assistants (NP and PA, respectively), will be used for checkups at doctors’ offices. A problem arises, however, where graduating doctors avoid the more mundane practices, going instead into plastic surgery and dermatology, two practices to which money is attracted. Once upon a time, a visit to a doctor was a visit to a General Practitioner (GP). Those days are long past, the GP being replaced by the specialist.

    A visit to the doctor for a checkup may require a visit to a specialist, a pulmonologist, for example. This requires two charges. The pulomonologist may prescribe a visit to an even more specialized doctor, requiring a third charge. Testing at each level involves technology, at once expensive. I’m not sure, but I don’t quite see that the ACA is going to make this affordable for patients and offer worthwhile reimbursement to doctors.

    Another problem is that doctors, NPs and PAs will be rushed into practice, bypassing any health specialist-patient relationship.

  71. 71 71 Andrew Doris

    I think this post is wrong only because it vastly overestimates the economic intuitions of many people over the age of six.

  72. 72 72 Harold

    Jack PQ #68 – what specifically do you think the American population fails to understand about raising the minimum wage?

  73. 73 73 Daniel

    With regards to the pie example, there’s nothing about health insurance that is limited quantity. Supply for health insurance can expand pretty much with demand. In fact, one could argue that the more people in HI, the lower the average price would be. The reasons people are losing their insurance has to do with specific rules under Obamacare that essentially set a quality floor. So in this sense Obama was lying or not explaining the story very clearly.

    For doctors your right that labor supply is fixed in the short run. However Obamacare attempts to shift resources from the overstressed and overpriced hospitals to primary care physicians (people still get medical care, just at a more advanced stage of the disease as others here have pointed out numerous time). This could possibly lower the overall demand for healthcare since catching diseases early means potentially lowering the intensity and quantity of care required. So the jury is still out on this one since no one has actually received new health insurance yet, but I don’t think it’s as simply a story of a fixed quantity that you want people to accept, and I certainly don’t think that your belittling of people that could believe what Obama was saying holds up to closer scrutiny.

  74. 74 74 Jay

    Here’s one of the speech’s where he mentions this supposed non-lie for those agreeing with Steven:

    “So let me begin by saying this to you and to the American people: I know that there are millions of Americans who are content with their health care coverage — they like their plan and, most importantly, they value their relationship with their doctor. They trust you. And that means that no matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period. … If you like your health care plan, you’ll be able to keep your health care plan, period. … No one will take it away, no matter what. My view is that health care reform should be guided by a simple principle: Fix what’s broken and build on what works. And that’s what we intend to do” -June 15, 2009

    What exactly did he intend with these words if not to deceive and sell a bill of goods he had no intention to or could not deliver?

  75. 75 75 Keshav Srinivasan

    @Jay See my comment #17 for how the law actually did contain a provision that was in line with Obama’s promise, and the reason why some plans are being canceled now.

  76. 76 76 JN

    Lie or contempt it does not matter that much. He was selling a plan the same as any seller is half lying about his product when he tries to pitch it. Being healthy does not depend just on how much/good health care you get but how you live your life ( how, what and how much one eats, what and how many intoxicants one uses and how physically active one is) and also about how lucky one is (his genetic heritage and just random life facts – being hit by a meteor, etc.). So comparing USA with Japan medical systems and expenditures is fraught with the first obvious problem that Americans are not Japanese. However there are healthcare metrics one can use to compare and it does appear that Americans get less for their money.

    Now the question is how we change the system to get more for our healthcare buck. We will not be necesarilly be much healthier without adjusting our behaviors but at least we will spend that buck wisely. American answer after WW2 has been third party payer model. This has its advantages and disadvantages. The Dems have stressed the lack of insurance as the mai problem. This very likely is not true. The problem has been and after O-care will still be the prices.

    The system as it is already handles the health are needs of all Americans in way or another. Nobody dies on sidewalk. Everybody gets taken care of. It is true the uninsured can not get preventative care as easily, especially if they do not have enough available financial resources. However if the healthcare market had truly affordable prices they could get all that much easier than just by getting free insurance ( either Medicaid or subsidized private insurance). So the pie is already divided fairly even, or as even as it can be for a customized service. All kids get vaccinated, all severe pneumonias/infections, overdoses, broken limbs, hemorrhages, heart attacks, etc. (in the big scheme of things these are the things were healthcare makes most of its impaction lives saved and avoidance of severe sequelae) are the get treated no mater what anybody’s ability is to pay for those services. Adding those 30-45mil of uninsured to the insured pool is not going to affect much of the essential delivery of services. But it does affect the economy, the medical economics and will affect some areas of the system. Just because a 30 year old who now goes uninsured gets insurance does not mean he will show up necessary at the GP’s offices more than otherwise. He will likely still be an occasional user of primary care services.

    The real problem was for the 4-5mil of people who are uninsured and sick because they dropped off the insurance market due to pre-existent condition situation. This needed to be fixed, and will be fixed by the O-care. Of course maybe would have been easier for society and cheaper for the tax-payer to fix this by the Rep’s idea of subsidizing high-risk-pools at the state level and also allow experimentation at that level to more rationally spend Medicaid’s money.

    The main problem with O-care is that it does not even begin to address the price of healthcare services. That is the fundamental lie that besets us at this point. And also O-care will cause dislocations in the system. Even before the ACA there was this huge trend of consolidation o the healthcare industry, trend beset by monopoly situations. Small practices are vanishing being replaced by healthcare behemoths – in many instances this has driven the prices up even though it is not all bad – modern medicine ca not be a “lone woolf” business anymore but requires team/multidisciplinary approach. but the big hospitals and healthcare networks have also bureaucratic problems and huge inertia. They also move a lot of the decisions away from practicing physicians to hospital corporate bureaucracies. It is not going to be the government dictating your physician but it will be the your ACA and insurance dictating it. as it has been the case so far; the idea of doctor-patient relationship being autonomous has been dead already for a long time – the insurance companies and employers have been doing this already for a long time. We can not choose what insurance we want. We pick what our employer is giving us. very few of us ca go to any doctor or hospital, but we have to follow our insurance network ( or pay more). So there has been a lot of confusion and political smoke blowing from both sides of the isle.

    Essentially the physicians are transitioning from being small business operator to becoming employed workforce. This will change incentives albeit it will have advantages as well. We also were already on the trajectory of having physician shortages (based on demographics that project increased life span and mostly based on rapid technological advancement – modern medicine can do a lot more now that 50 or even 10-15 years ago). This will get worse. And it is compounded by the uncertainty. None of us, physicians, have any idea where the system is going. This will affect much more the average citizen’s ability to get to hers/his preferred providers than the millions that will get insurance through O-care. Very few people thought so far about this problem. Of course we will have to have more physician extenders ( NP’s and PA’s) and of course we will have to change workflows and delivery to be able to deliver more care. But for this we will need a legal and financial framework that so far the politicians have not been able to provide.

  77. 77 77 Will A

    @ Henri Hein #63:

    Cari was complaining that she was being forced off of her husband’s employer health care.

    Before Obamacare, health care costs where escalating and this meant that employers faced increased medical premiums. This has resulted in a higher employee contribution toward the premiums and increased deductibles.

    Not providing coverage for a spouse seems like a good way for a company to save money on their premium and lower cost. From the article I posted, a spokesperson from Premier Health said:
    “This approach does have the potential to lower our costs, while still being assured that there is an option for coverage for those spouses who can access their employer’s plan,”

    My understanding is that health costs have been rising less rapidly since 2010 (who knows why), so it would be a difficult argument to make that Cari’s husband dropped her because of more dramatic increases in healthcare.

    I believe that a good argument can be made that Obamacare will make it easier for employers to have the types of policies that exclude spouses because employers can make the argument that spouses can get coverage on the open exchanges.

    However, I would not call a new set of regulation that makes it easier for an employer to choose whether or not to provide coverage to spouse “totalitarian”. I would say that imposing a set of regulations that make it easier for businesses to make different choices enables free enterprise.

    If the employer mandate is ever implemented this of course would be a different story.

    I don’t think that the carbon tax is an apt analogy. This would have the effect of restricting what business can and can’t do.

    I would say that if a carbon tax made individuals drive less and sell their A/C units, but it didn’t do this to businesses, then this would have a negligible effect on the free-market.

    If anything, it would encourage new markets. Business could rent A/C rooms during hot months. Business could also rent vehicle to individuals who need to drive long distances.

  78. 78 78 Jay

    @Keshav 75

    I read your comment and I think we disagree on the facts. It is my understanding that the way the law is written, the changes to the grandfathers policy can be quite minor and routine and they can lose their grandfathered status (this was supposedly on purpose, with HHS studies foreseeing that many will lose their grandfathered status within a number of years, hence the “lie” accusation). Normally individual plans get routinely changed and/or cancelled for any number of reasons, but the insurance company will offer a similar plan with similar levels of coverage, but that is different now since “similar levels” of coverage is now required to be much greater and a much higher cost.

  79. 79 79 Keshav Srinivasan

    @Jay It depends on what you consider a major or minor change, but these are the changes that cause a plan to lose grandfathered status:

    “A significant cut or reduction in benefits by eliminating all or substantially all of the benefits to diagnose or treat a condition, or any necessary element to diagnose or treat a condition.
    Raising coinsurance charges.
    Significantly raising fixed cost-sharing (i.e., deductibles and out-of-pocket limits) by more than medical inflation (as measured from March 23, 2010) plus 15 percentage points.
    Significantly raising copayment charges by more than the greater of: (i) medical inflation (as measured from March 23, 2010) plus 15 percentage points or (ii) $5 (adjusted for medical inflation).
    Significantly lowering the rate of employer contributions by 5 percentage points for any coverage tier.
    Adding or tightening an annual limit (with one exception).
    Reclassifying employees so that the reclassified employees are eligible for a different plan (even if it’s a grandfathered plan), without a bona fide employment reason.
    Failing to continuously maintain at least one covered individual (not necessarily the same individual).”

    But the reason that many people were projected to lose their grandathered plans (and the actual reason they are being lost now) was not, however, because of such changes, but rather because of insurance companies convincing people to leave their grandfathered plans and switch to non-grandfathered plans that can canceled at will by the insurance company, as discussed in the link in my previous comment.

    The actual number of people who have maintained a single plan from March 23, 2010 and have received a cancellation notice due to a change in the plan is very small. That’s not actually the case with the vast majority of the people receiving cancellation notices right now.

  80. 80 80 iceman

    78 & 79 — it seems to me that *whatever* the reasons for the cancellations, the issue is whether this was a foreseeable consequence of the legislation.

    77 – Does anyone know why we keep hearing that health care costs have been falling (or growing more slowly?) in recent years? Is the implication that this was somehow the result of legislation that had not yet been enacted?

  81. 81 81 Daniel

    @iceman,

    If you type in “cms historical health spending” to google, you can do the calculation yourself from their webpage. Essentially increases in health costs have roughly matched increases in income for the past 2 years. The slowing in health care costs probably has little to do with the main features of Obamacare. Instead, more likely it is the results of the lingering results from the recession. The healthcare sector persistently lags other parts of the economy, so that slow down in income this year will not affect rate of healthcare growth until several years later.

    So it’s probably premature to declare that Obamacare is slowing the growth in health spending. We’ll need at least 10 years post Obamacare data to answer that question.

  82. 82 82 iceman

    THx – why would I do the calculation myself when I have you to do it for me? :)

  83. 83 83 Will A

    @ iceman #80:

    The reason why I brought up the slowdown was in response to Henri who mentioned:
    “Regulations made Cari’s plan more expensive.”

    An Obamacare opponent would say as Daniel #81 did that the recession is responsible for the bending of the curve.

    An Obamacare supporter would say that the portions of Obamacare that went into effect quickly after adoption have bent the curve.

    What both would agree on is that the curve has been bending.

    Because of this, I believe it is a difficult to argue that Cari’s policy is being cancelled because of recent health care cost escalation.

  84. 84 84 Jay

    @Will A 83

    Both would agree that the overall healthCARE spending was curving (for whatever reason your bias inserts), not health insurance costs due to the legislation, unless I’m getting the CMS numbers wrong.

  85. 85 85 Keshav Srinivasan

    Steve, President Obama has just announced that people who received cancellation notices of their insurance plans will be able to keep their insurance after all. So do you think his new promise is a mathematical impossibility?

  86. 86 86 Will A

    @ Keshav Srinivasan #85

    It’s an impossibility unless the legislation requires insurance companies to sell existing policies to their existing policy holders in perpetuity.

    It would be like Carter promising “If you like the Ford Pinto you’ll be able to buy one” without passing legislation that required Ford to make a Pinto forever.

  87. 87 87 Will A

    I also forgot one other provision that would need to be there to make Obama’s statement possible.

    If any of the existing insurance companies goes out of business, then the U.S. government would need to start selling/administrating these policies to the bankrupt company’s policy holders.

  88. 88 88 Keshav Srinivasan

    @Will A Yet per comment #58, Steve seems to believe that as consequence of the laws of arithmetic, it is literally impossible for everyone to keep their plans while the government gives healthcare to new people, even if the government nationalized all the insurance companies. I assume that you disagree with his view?

  89. 89 89 Steve Landsburg

    Keshav Srinivasan:

    Steve seems to believe that as consequence of the laws of arithmetic, it is literally impossible for everyone to keep their plans while the government gives healthcare to new people, even if the government nationalized all the insurance companies.

    Your “even if the government nationalized all the insurance companies” seems to me to be bizarrely off topic. How would nationalizing the insurance companies cause there to be more medical resources (doctors’ time, etc) in the short run?

  90. 90 90 Daniel

    @Will A,

    I’m actually an Obamacare proponent, and I think it is possibpe that it will bend the cost curve, I just don’t think recent year slowdown is good evidence for this. I hope to have a paper out about this soon with Tom Getzen, but we’re not there yet.

  91. 91 91 Ken B

    Steve, Keshav believes that the plan, being a promise that cannot be an absolute guarantee, would be unchanged even if the likelihood of its being fulfilled fell. Thus he believes nationalized companies could offer the same plan since they would be making the same promise and all that would differ would be the likelihood they could deliver on that promise. He does not conceive of the reliability of the promise being part of the plan.

  92. 92 92 Ken B

    @keshav 85
    What Obama did was say he would exempt large number of plans from the law. Thus those plans would not extend more benefits nor cover more people. So this is not a counterexample at all.

    Let’s consider a slightly larger exemption. Obama exempts all insurance companies and all plans from all extensions of benefits and all extensions of those covered. Do you still think that this provides a counterexample in your argument with Steve?

  93. 93 93 Keshav Srinivasan

    Steve, I’ve made this point in earlier comments in this thread, but I think you’re not taking into account the fact that an insurance plan is not a guarantee that you’ll receive a certain level of care. It’s merely a guarantee that IF you receive certain kinds of care, it will be paid for by the insurance company. So it is possible to give more people healthcare without taking insurance policies away from anyone.

    The reason nationalizing insurance companies is relevant is not that it would create more healthcare resources (which it obviously wouldn’t), but rather that it allows us to talk about what is and isn’t a necessary consequence of providing healthcare to more people.

  94. 94 94 Keshav Srinivasan

    @Ken B Steve did not say anything about plan cancellations being a necessary consequence of insurance regulations. He said it was a necessary consequence of providing care to more people.

  95. 95 95 Ken B

    @94
    I don’t think you are getting my objection Keshav. You cannot cite Obama’s recent dictum to refute Steve as Obame *exempted* those plans from the regulations. Or said he would, it looks illegal to do so.

  96. 96 96 Keshav Srinivasan

    @Ken B But since Steve’s argument wasn’t based on Obamacare’s regulations, the fact that Obama’s fix had to do with exempting regulations is irrelevant.

  97. 97 97 Ken B

    @96
    Sure it is, because those plans are not part of the pie. Steve is saying stuff about dividing a set pie amongst more eaters. Whether he is right or wrong in his claims that is the premise. But no more eaters are being invited to the exempted pie. I can keep my auto insurance plan, would you cite that against Steve? Or a Canadian,s plan in Canada? Of course not, they don’t fit the premise: more to eat the set pie.

  98. 98 98 Keshav Srinivasan

    @Ken B In Steve’s analogy, the pie represents the total amount of healthcare resources available in the country. So exempting plans from regulation doesn’t create a new “exempted pie” or anything. There’s still the same fixed pie, and there’s still the fact that more people will be eating the pie than before the law went into effect.

  99. 99 99 Ken B

    @98
    Keshav, Yes if your point is just about affecting the total supply of medical hours but hospital beds etc. then you are right about this point. I still say the promise is affected, but you are addressing a different point.

  100. 100 100 Keshav Srinivasan

    @Ken B The only point I’m addressing is Steve’s argument that it’s impossible to provide healthcare to more people without cancelingy existing insurance policies. I think that point argument is mistaken, because insurance policies don’t make any promises about the availability of care.

  101. 101 101 Ken

    When President Obama said that he could provide health care to millions without taking any health care away from people who have already got it, he had no chance of being believed.

    No chance of being believed by whom? I’m quite sure that tens of millions of Americans believed Obama when he said that they could keep their doctors and insurance plans if they wanted. Then you go on to modify this to say “rational” people, and further go on to narrow the definition of “rational” to exclude what could easily be half the country. In other words, using your own logic, Obama understood very well that there are tens of millions of Americans who are not “rational” as you define it and told them a deliberate untruth in order to gain their confidence.

    Last I checked, by anyone’s definition, telling a deliberate untruth to irrational people in order to explicitly take advantage of a well known irrationality, falls well within the definition of lying.

  102. 102 102 Ken B

    @Ken 101
    You’re right of course, but Steve is just being sly. He is saying “You believed THAT? My six year old can see through THAT!”

  103. 103 103 Ken

    Steve is just being sly

    Steve is being dishonest and acting smugly superior.

  104. 104 104 Ken B

    Reason ahs a new piece on just the issue Steve identified, the supply of doctors. http://reason.com/blog/2013/11/25/who-will-treat-those-new-medicaid-patien
    I especially want to call Keshav’s attention to this.

  105. 105 105 Scott F

    Doesn’t all of this argument assume that hospitals and healthcare providers currently distribute resources and services in a competitive manner? If I understand the argument correctly it would go like this:
    There is a fixed amount of healthcare providers, beds, etc. The beds are all currently occupied by insurance holders up to the point when the MV to the holders = the MC of the most recently occupied bed. If we increase the number of insurance holders (people who previously wouldn’t/couldn’t afford insurance) then we start filling beds with people in an inefficient matter (i.e. with those for whom the MV was lower to begin with). It also takes beds away from the original insurance holders, the obvious conclusion if one knows basic arithmetic. This all assumes that there were no reserves in the hospitals and that they have no monopoly power, which I find near impossible to believe. If they do have even partial monopoly power, some subsidy (i.e. cheaper insurance for certain populations) may very well increase social gain. Not to mention that it may also cause people to use lower cost resources than they had previously (the Emergency Room issue). If your point is simply that TOTAL HEALTHCARE RESOURCES/CURRENT INSURANCE HOLDERS > TOTAL HEALTHCARE RESOURCES/(CURRENT + OBAMACARE INSURANCE HOLDERS), then that is an incredibly dull conclusion. More importantly can you make an argument that we won’t have a more efficient allocation of resources. More specifically, is there a simple argument that hospitals already maximize the utility of their resources in a competitive manner.

  1. 1 Some Links
  2. 2 Some Links - Unofficial Network
Comments are currently closed.