Monday, June 29, 2009

Greg Mankiw - Selective Statism

It seems *nationalized healthcare* is the one statist goal that Greg Mankiw isn't afraid to take on. The same probably goes for the New York Times which recently ran a column of his on this very subject. Judged narrowly, it's a well-written, well-reasoned piece:

The Pitfalls of the Public Option

In the debate over health care reform, one issue looms large: whether to have a public option. Should all Americans have the opportunity to sign up for government-run health insurance?

President Obama has made his own preferences clear. In a letter to Senators Edward M. Kennedy of Massachusetts and Max Baucus of Montana, the chairmen of two key Senate committees, he wrote: "I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest."

Even if one accepts the president’s broader goals of wider access to health care and cost containment, his economic logic regarding the public option is hard to follow. Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don’t need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices.

An important question about any public provider of health insurance is whether it would have access to taxpayer funds. If not, the public plan would have to stand on its own financially, as private plans do, covering all expenses with premiums from those who signed up for it.

But if such a plan were desirable and feasible, nothing would stop someone from setting it up right now. In essence, a public plan without taxpayer support would be yet another nonprofit company offering health insurance. The fundamental viability of the enterprise does not depend on whether the employees are called "nonprofit administrators" or "civil servants."

In practice, however, if a public option is available, it will probably enjoy taxpayer subsidies. Indeed, even if the initial legislation rejected them, such subsidies would be hard to avoid in the long run. Fannie Mae and Freddie Mac, the mortgage giants created by federal law, were once private companies. Yet many investors believed — correctly, as it turned out — that the federal government would stand behind Fannie’s and Freddie’s debts, and this perception gave these companies access to cheap credit. Similarly, a public health insurance plan would enjoy the presumption of a government backstop.

Such explicit or implicit subsidies would prevent a public plan from providing honest competition for private suppliers of health insurance. Instead, the public plan would likely undercut private firms and get an undue share of the market.

You know, it's stuff like this that make the Greg Mankiw's of our world dangerous.

He can be perfectly lucid on one matter like healthcare here....which burnishes his credentials, but then he abuses that earned respect on other matters - such as his misbegotten carbon taxes.

These two-faced clowns are dangerous simply because the sheeple are wholly dependent on *received opinion* and are only fluent in base dichotomies. And, ultimately, Dr. Mankiw amounts to nothing more than a *useful idiot* to be trotted out and hid behind at the convenience of bad people.

Obviously, this so-called *public option* is a ruse, a Trojan horse if you will, for an eventual 100% nationalized health system. As Robert Moses would say, "All you have to do is drive the first stake!"

Now, above I cautioned to judge Mankiw's column *narrowly*. Recall these lines:

Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don’t need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices.

Okay Greg, you are correct.

BUT, by that same logic, DO WE NEED government-run (subsidized) education???!!!

I won't hold my breath waiting for Greg Mankiw to be arrested by self-awareness and pen that column!

He'll be loathe to indict the system that he's gamed so well. Remember, he's probably made tens of millions off his textbook alone selling it to over-leveraged, tax subsidized, naive college students.

And, that's a shame because, well, competent, in-demand professors would probably make a whole lot more money if Big Government got out of college education. Because, as it stands, schools spend all their resources angling for, well, more resources - from the Feds that is. An effective teacher is not valued in this system - only those who bring research monies, image, and much-needed political influence to the university.

My last point sounds crazy, right? Perhaps it's a stretch.

But consider this. This Mankiw is sneaky. He recently wrote a blog post where he tries to scare (I'll bet) his doctor friends against Obama universal healthcare. He essentially tells them their wages will be cut - but does so in his typical, invertebrate way. He *wonders* and rhetorically asks his *students*:

Explain how a large government healthcare plan (a "single payer" being the extreme case) could potentially reduce the wages of healthcare workers....

And he dangled this graph comparing American doctors' incomes versus those of in countries with nationalized healthcare:

Do you get my point?

Since Mankiw asserts that a *public option* for healthcare will diminish the wages of healthcare workers....

Does it not follow that having Big Government so involved in education reduces the wages of teachers below what they'd earn in a freer market?

Of course it does!

By the way, I've taken this tack before with government school teachers. I've tried to tell them that they would earn MORE money and have better working conditions in a free market, non-union environment. Well, the competent teachers would anyway.

I've asked them if it bothers them that their fellow teachers who are horrible get paid the same as they do. I say that there is no other workplace in America where such *inequity* wouldn't cause employees to grumble, and quit.

And all I get is blank stares - from these people who really are wholly unfit to be sculpting young minds.

Remember, they're not teachers....they're merely clerks in a vast bureaucracy.

I've written a whole lot on Dr. Mankiw - click here.

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