DeLong: Review of Paul Krugman, The Accidental Theorist
Econ 210a, U.C. Berkeley: January 27, 2010: One Economics or Many?

Five Economics Pieces Worth Reading: January 22, 2010

1) Via Paul Krugman: TA.C.Pigou: Economics of Welfare:

Corresponding to the above investments in which marginal private net product falls short of marginal social net product, there are a number of others, in which, owing to the technical difficulty of enforcing compensation for incidental disservices, marginal private net product is greater than marginal social net product. Thus, incidental uncharged disservices are rendered to third parties when the game-preserving activities of one occupier involve the overrunning of a neighbouring occupier’s land by rabbits—unless, indeed, the two occupiers stand in the relation of landlord and tenant, so that compensation is given in an adjustment of the rent. They are rendered, again, when the owner of a site in a residential quarter of a city builds a factory there and so destroys a great part of the amenities of the neighbouring sites; or, in a less degree, when he uses his site in such a way as to spoil the lighting of the houses opposite...

2) Howard Gleckman:

George Bush could have proposed the Senate health bill. If he had, those Republicans who now loathe the measure would be at the barricades defending it... think for a minute about the framework of this bill. As I’ve written before, it is pretty simple and not very radical. At its core is a health system that relies on employer-based private insurance to cover most working people. The old would continue to be insured by Medicare and the poor would be covered by Medicaid, just as they are today. The changes: Insurance companies would have to offer coverage to all, regardless of pre-existing conditions; everyone would have to obtain basic coverage or pay a penalty; exchanges would enhance the individual insurance market; the government would subsidize premiums for those who cannot afford them, including both individuals and small businesses; and Congress would take some small steps to slow the growth of health costs.

None of these ideas are new and most used to sit comfortably in the GOP mainstream. The Senate bill mimics the framework of the 2006 Massachusetts health reform, an idea that was pushed by Republican then-Governor Mitt Romney and, as we know by now, was supported by new Massachusetts Senator Scott Brown. This is what Romney said about the bill after it passed: "Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced." Sound familiar? The Bay State model was so important in the Washington debate that congressional health negotiators privately described their road to a final bill as “going down Massachusetts Avenue.”  

And the Massachusetts plan was not just Romney’s idea. Staffers at the conservative Heritage Foundation provided extensive technical guidance, and the broad outlines (if not all the details) were widely praised by the right—at least until the 2008 presidential campaign, when Romney denied parentage of his own reform bill....

In 1993, Republican senators Bob Dole and John Chafee proposed a reform that included an individual mandate, cost controls, and generous government subsidies. In 1994, a bipartisan bill sponsored by Chafee and conservative Democrat John Breaux included many of the same elements.... The bottom line is that much of the battle over health reform is not about substance at all. If it were, Democrats and Republicans could have gotten together last year and reached a workable consensus reform that, indeed, would look a lot like the Massachusetts—or the Breaux-Chafee—design. But that, it seems, was never in the cards. It was politically much more productive to caricature the plan as a government take-over of health reform or a big new tax on working people.    

3) Matthew Yglesias: Conservatives Love Universal Health Care Once It Happens, and Scott Brown is No Exception:

Specifically, the candidate says he doesn’t think Massachusetts voters need a federal universal health care plan since Massachusetts already has a universal health care plan: “We have insurance here in Massachusetts. We have some of the best doctors, nurses and hospitals in the country; that’s why people come here,” he said in the final debate. “Not only is this bill going to be bad for the state, my job is to be the senator from Massachusetts. I’m not going to be subsidizing for the next three, five years, pick a number, subsidizing what other states have failed to do.” A Brown advisor made this even more explicit. The national plan is very similar to the Massachusetts plan. And Brown thinks the Massachusetts plan is good. It’s just that Brown thinks the Massachusetts plan will, on net, transfer funds out of Massachusetts and toward other states: “In Massachusetts, 98 percent of residents are covered by insurance through our own state reforms. The plan is not perfect, and we need to get costs down, but we have already achieved near-universal coverage. There is nothing for us in a national plan except higher taxes and more spending to finance coverage expansions in other states. It’s a raw deal for Massachusetts,” he said.... [A]ssuming you’re interested in the issue of whether or not the proposed federal health plan will work well on the whole, Brown’s point of view strongly suggests that it will. Massachusetts did something similar a few years back and it’s worked so well that even Republicans like Scott Brown happily embrace it. Canadian Conservatives love Medicare, British Tories love the NHS, and Massachusetts Republicans love Commonwealth Care. There’s a pattern here.

4) BEST THING I HAVE READ TODAY: Pedantry: everything that bored you to death in high school:

I'm still reading Hobsbawm, and just finished the chapter on the Cold War. I find Hobsbawm is best read by doing a whole chapter in one sitting, then allowing it some time to sink in before embarking on the next chapter. Usually, it's just enough to time to read another book. Today, it was Dark Light by Ken MacLeod.... MacLeod has a good quote attributed to him: "History is the trade secret of science fiction.' It's an appropriate quote for a socialist, and he demonstrates it in Dark Light.

What sparked this post, however, is a minor bit nearly at the end of the book:

"Bad news. What about the Party branch?"
Endecott's sandy eyebrows twitch, very slightly.
"They're solid. Most of them."
"What party?" Annie asks suspiciously
"Uh, later," says Matt. He has an absurd flash-forward of her taking Endecott to task for Kronstadt, Makhno and the Barcelona Phone Company.

What do Kronstadt, Makhno and the Barcelona Phone Company have to do with each other? Well, this is perhaps an obscure bit of history. Kronstadt is well known enough as the moment the Bolsheviks took action against leftist anarchists who had taken over Kronstadt island near St-Petersburg. The Barcelona Telephone Company refers to a violent incident in the Spanish Civil War when communists took action against an institution controlled by the anarchists. And Makhno... well, Nestor Makhno was an anarchist with a small army who took over a big chunk of the Ukraine during the Civil War. Later, he was exiled to Paris and still has his fans among the anti- and not-particularly-Marxist varieties of socialist radicals. All, in effect, refer to incidents when more orthodox communists took action against socialist anarchists.

The thing is, for some people, Makhno was a terrorist. I'm one of those people, and one of the reasons is that they terrorised my grandfather's parents, and my granfather used to tell the story regularly. Not that Grandpa could ever have entertained this thought, but getting rid of Makhno was one of the better things the Bolsheviks did...

5) HOISTED FROM THE ARCHIVES: DeLKong (March 2003): Is It too Late to Ask to Be Born on Another Planet?:

A correspondent complains: "I'm not sure I want to live on a planet where Howard Fast can write Spartacus and Freedom Road, and still accept the Stalin Prize. Is it too late to ask for another planet?" The answer, unfortunately, is "Yes, if you are already alive it is too late to ask to be born on another planet." But we could try to fix the one we have...

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