It’s all about redistribution

Interesting post from Uwe Reinhardt, an economics professor at Princeton on the recently passed Senate health care bill. He writes that both the Senate and House bills appear to endorse this “solution” for health care costs:

Americans in the upper half of the nation’s income distribution will have to tax themselves in order to help subsidize the purchase of health insurance by families in the lower half of the income distribution.

The article is interesting, because Mr. Reinhardt is quite honest about the fact that the health care bill is mainly a way to redistribute the costs of health care. Another key quote:

This has meant that for young and very healthy individuals, premiums have tended to be relatively low. For older or sicker individuals, premiums have been high, sometimes prohibitively so.

Community rating is intended expressly to redistribute the financial burden of ill health from the chronically unhealthy to the chronically healthy.

Whether or not one considers that fair is a political call.

What he fails to point out is that in transferring the cost of health care from the elderly (what he calls the chronically unhealthy) to the young (the chronically healthy) we are actually transferring the cost from the (relatively) poor to the (relatively) rich. Who has a higher net worth, the average 65 year old or the average 25 year old? (Hint, it’s the one who has spent nearly five decades in the labor force accumulating capital).

It’s bad enough when we have to argue about redistributing wealth from the “rich” to the “poor”. But at least one can make a fairly consistent political or philosophical argument about why that would lead to more “fairness”. Transferring the cost from the young, who are on average far “poorer” than the elderly (who would be likely to benefit the most from health care reform since they are the biggest consumers of health care) is unfair and unjust. Too bad no one out there seems to be noticing.

Remember this prediction

From Washington Post columnist E.J. Dionne’s latest column on health care, comes this prediction:

The bill before the Senate would cut the deficit, not increase it, and would stabilize or reduce health care premiums for most people, not raise them. The proposal contains serious cost-control measures that can be built on over time. Passing health care reform is thus not only morally necessary, but also fiscally responsible.

If the Senate bill passes, I’ll send a note to Mr. Dionne asking him for a mea culpa when this prediction does not pan out. Part of my fascination though, not just with this column but with much of political conversation, is how people like this actually seem to believe what they’re saying. What amount of evidence is needed to convince such a person that the unintended consequences of government action will end up doing far more harm than the good intentions? I’m sure that more people will likely have access to health insurance if the health care “reform” legislation passes, but at what cost? It’s simply preposterous to think that it will be free.

The appeal of Sarah Palin

I admit it, I was a fan of Sarah Palin during last fall’s presidential election. I found her personal story interesting, but more importantly, I saw her as someone who would be willing to shake up the Republican party nationally as she did in Alaska. The day after she was announced as John McCain’s running mate, I donated to his campaign for the first time.

Alas, history was not on the side of the Republican ticket last year so even though Sarah Palin probably gave John McCain his best chance of winning, McCain’s fate was probably sealed long before he ever picked Palin. In addition, his public statements and erratic reaction once the “financial crisis” went into full gear (at one point “suspending” his campaign like that would make any difference) probably clinched the election for Obama.

But back to Palin. The problem with the hope that she would shake up the national party is that she was running for Vice President. As the vice presidential candidate, you don’t do any shaking up, you advocate for the guy at the top of the ticket. The other part that is interesting about the vice presidential candidate is that while the media (and the small portion of the public who are political junkies) had nearly two years to vet all of the presidential candidates (and many more years than that if you count all the years the candidates in the primaries had been in the national spotlight), they only had less than two months to vet Sarah Palin. So the narrative that emerged on Sarah Palin the politician necessarily emerged not only hastily, but in the midst of a highly contentious presidential election. To me this means that the “story” of Sarah Palin is far from complete and that she still has plenty of time to emerge as a serious political candidate in the future (see Matthew Continetti’s article in the Wall Street Journal for a good look at Palin’s political prospects).

Having said that (thanks Larry David and Jerry Seinfeld for making that phrase stick in my head), there is certainly a fair amount of anti-Palin sentiment (what’s an antonym for appeal?) which I think is understandable. In her appeal to “common sense”, she tends to snub “elites” and appears to harbor a certain anti-intellectual bias. This is not a positive trait when you are interested in winning a war of ideas. If you are interested in getting elected to national office, it might get you very far, even all the way to an election victory, but it does not help your supporters determine what kinds of policies they can expect you to support. Knowing that Sarah Palin is a “hockey mom” has a certain amount of folksy appeal to some, but that doesn’t do me any good in determining what her position on the nuclear situation in Iran would be, for example.

The inexact science of climate change, part 2

Turns out my previous post was somewhat prescient in describing the “inexact science” of climate change. Less than two weeks after I published that post, a story came out about what is now being called “Climategate” concerning emails that were hacked from a server at a British university. These emails contain frank discussion between leading climatologists over what appears to be efforts to exclude colleagues who qualify as global warming skeptics from the peer review process and efforts to manipulate data so that it reaffirms their conclusions regarding anthropogenic global warming.

I think it’s fair to say that these emails don’t substantially change the existing arguments either for or against “global warming”, but it should remind everyone that a little healthy skepticism is, er, well healthy and not to believe everything you read, whether it is written by journalists who are beholden to a code of journalistic ethics, or scientists who are supposedly beholden to a higher power known as the scientific process. They are all simply humans and make the same mistakes and respond to the same incentives as the rest of us.

UPDATE: It also appears researchers from the same university (University of East Anglia) have thrown away much of the raw data that they used to derive their predictions about global warming. As Russ Roberts says, that’s “not scientific”. My question is: doesn’t anyone else out there have this data? Surely, the “overwhelming consensus” that humans are responsible for global warming was not simply based on the output from this one university in Britain, right?

The inexact science of climate change

On the issue of global warming, or “climate change” as it is more recently known, call me a skeptic. I am aware of the data showing an increase in average global temperatures over the past half century. And I believe that activity from humans very likely played a part in that. I’m not a denier. But one thing I have always been uncomfortable with is the certainty with which global warming alarmists announce with ever increasing despair that we are headed towards a global catastrophe. Much of this certainty is based on the use of computer ‘models’ which are supposed to predict drastic increases in global temperatures over the next century.

There’s just one problem. Models are often wrong. I’m not talking about climate models in particular. I’m talking about computational models that are used to predict the activity of complex systems such as the Earth’s climate. You don’t have to have a degree in Computer Engineering from a top engineering institution (although I do) or have worked for one of the NSF-funded supercomputing centers (although I did) to understand that computer models can often be wrong, or at the very least incomplete.

Here’s a quote from a recent article from the Wall Street Journal’s Jeffrey Ball on the latest debate over climate change:

A few years of cooling doesn’t mean that people aren’t heating up the planet over the long term. But the cooling wasn’t predicted by all the computer models that underlie climate science. That has led to one point of agreement: The models are imperfect.

A U.S. Senate report (produced when the Republicans were in control of the Senate) contained the following quote on climate model uncertainty:

Climate modelers from four separate climate modeling centers wrote in the October 2000 edition of Nature that, “Forecasts of climate change are inevitably uncertain.” They go on to explain that, “A basic problem with all such predictions to date has been the difficulty of providing any systematic estimate of uncertainty,” a problem that stems from the fact that “these [climate] models do not necessarily span the full range of known climate system behavior.”

As James Taranto of the Wall Street Journal quipped in a recent column: “Can we all agree that the time for declaring that the time for debate is over is over?”