Wednesday, March 28, 2012

The rich are getting richer. Liberals demand we send them money every month

The reality of disparity of wealth is less control over physical resources, than control over the direction of society. The rich aren't really rich, but merely the infinitely overdrawn - that is what the money the Fed has pumped into the world economy did, prop up the super wealthy.

The problem is that the left is now as captive to financial interests as the right is to resource extraction and labor extraction. Case in point is the dogma over the "health care mandate." This is a mandate for almost all Americans to send money to insurance companies. While the numbers will be small at first, there is nothing to stop governments from cutting subsidies over time, and for employers to continue to opt out of providing health insurance. The penalties are smaller than the costs of doing so. More over, the dogma from the technocratic establishment is that if there is not a mandate, prices will spiral upwards as healthy people opt out, and sick people opt in. But prices have continued to spiral upwards in Massachusetts, even with a mandate.

The reality of health insurance is, that for most people, it is a lousy deal. Look at it as a bet, the MLR is the amount the house "pays out." Even the most generous numbers have MLR's paying out 77% based on a Senate inquiry. That's worse than a slot machine. Since much of care is in the last year of life, for a person before they are about to die, the loss ratios are closer to 40%. Now, if you pay in 1 dollar and get back 40 cents, why? Insurance companies, by negotiating discounts with providers, can make the gap look bigger, but the government could do that as well, even absent government insurance. The bottom line here is that it is impossible to say, on one hand, that the rich getting richer is a problem, and demand, on the other, that ordinary people pay insurance companies on a game of massively negative expectations run by... the same rich people.

Saturday, March 24, 2012

The Hangover Games

Shorter Hunger Games: The Liberal Industrial Complex is killing our pure kids from the hinterlands, but violence still won't solve anything.

What the film is, is a mash up of populist delusions on the world, which is to say, one, no wonder it is so successful, and two, no wonder it is so corporate.

When Marx called religion the opium of the masses, he really didn't understand what entertainment was going to be like.

Sunday, March 11, 2012

Education is a painful thing

Some of that growth has resulted from a phenomenon called Baumol’s disease, after the economist William J. Baumol, who described it in a 1965 article he wrote with William G. Bowen. The basic idea is that while productivity gains have made it possible to assemble cars with only a tiny fraction of the labor that was once required, it still takes four musicians nine minutes to perform Beethoven’s String Quartet No. 4 in C minor, just as it did in the 19th century.

One can plow through the first movement in about 9 minutes, but the whole quartet will take an ensemble closer to 24 minutes even if rushing a bit.

Also, as is often the case with Thaler, the empirical data does not agree with his suppositions very well. In fact, there has been a dramatic increase in many degree programs in the time to degree. The increases have not been even, for education the length of time is now 6 yars longer, an increase of 1/3. This trend peaked some two decades ago, but the ebb has been far less than the rapid increase in the 1970's.

What is interesting is that time to degree was lower when there was institutional support, indicating that when the institution was paying, it wanted people done. Conversely, for all students, in constant dollars, the average indebtedness has tripled, at a time when salaries have not gone up that much in the corresponding fields, so Thaler's explanation that a fixed time activity has to go up in unit cost because it is competing with technologically affected wages, is not born out by data. Any one who knows his work would not be surprised

However, these numbers are what one would expect if college were a rent, and the cost were some percentage of the difference between having, and not having a degree, because the difference would go up, even if wages for college graduates were rising slowly or stagnant, because what matters is the difference in risk adjusted wages, which includes, of course, unemployment risk.

The colloquial term is "a racket."