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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (126338)	12/4/2009 2:44:21 PM
From: JohnM	Respond to of 542597

However, during the last year, I have a hard time thinking of any situation where the left has been willing to put any faith whatsoever in the market. You use Krugman as evidence for this claim and, of course, I assume you know he is only one voice on the left. No doubt some serious searching would turn up some voices that said otherwise, if only slightly. But back to your claim. Given the events of the past year, it's hardly surprising that an awful lot of citizens would have lost faith in "the market." A great many of us believe that the most important source of the financial crisis during that period was the absence of serious state regulation of "the market", specifically of the large investment banks, of the mortgage market, of the burgeoning supply of esoteric derivatives, and so on. So, yes, I suspect, when all is said and done, you are right about the last year. But it makes sense. If "the market" were operating to enhance, in somewhat obvious ways, the common good, then the wide panoply of citizens who are looking to regulate it would not be doing so.

To: slacker711 who wrote (126338)	12/4/2009 4:17:05 PM
From: Mary Cluney	Respond to of 542597

<<<Can you think of any comments by Krugman that have been even neutral about letting the market solve a particular problem?>>> Why would anyone comment on stuff that is working. No one is advocating that we set prices on bread, wine, and roses. But health care, as the saying goes, is another matter: There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence. Why markets can’t cure healthcare (from Krugman blog) Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems — indeed, the only answer — is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory. Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow’s Uncertainty and the welfare economics of health care, which demonstrated — decisively, I and many others believe — that health care can’t be marketed like bread or TVs. Let me offer my own version of Arrow’s argument. There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket. This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either — they’re not in business for their health, or yours. This problem is made worse by the fact that actually paying for your health care is a loss from an insurers’ point of view — they actually refer to it as “medical costs.” This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems. And since there’s a widespread sense that our fellow citizens should get the care we need — not everyone agrees, but most do — this means that private insurance basically spends a lot of money on socially destructive activities. The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (“I hear they’ve got a real deal on stents over at St. Mary’s!”) That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners. You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don’t trust them — they’re profit-making institutions, and your treatment is their cost. Between those two factors, health care just doesn’t work as a standard market story. All of this doesn’t necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful health-care systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.