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Timothy Diette
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Timothy Diette is now following Jacob Vigdor
Jun 7, 2012
Timothy Diette is now following Caseyj
Jan 19, 2012
I agree with most of your article. But be careful about taking a few outstanding schools and using that as a measure of quality schools across a state. A few outliers are neither evidence for nor against it. On average, I am convinced you would rather enroll your children in a random Vermont school versus a random South Carolina school...but the cost is a whole separate issue as well.
Toggle Commented Jun 22, 2011 on Heading South at Vermont Tiger
Art: I would say it is a combination of all three that you list. Health is different, Arrow's (1963) article (recently cited as one of the top 20 articles in the AER's 100 years) clearly lays it out eloquently. I don't disagree with the last one (which is apparently what you see as the largest problem), but the first two are absolutely essential as well and why a pure "consumer driven" movement would fail. (note the importance of the word "pure").
Toggle Commented Feb 25, 2011 on It's all how you look at it at Vermont Tiger
Or you could contend that every health care market is broken and these aggregate to the "system". Private insurance, employer-based insurance, hospital reimbursement rates, doctor reimbursement rates, medical education (and barriers to entry), pharmaceuticals, information failures in consumer driven health care, etc. Hard to find a well functioning market within the health care system. This is what makes teaching a Health Economics course so interesting.
Toggle Commented Feb 23, 2011 on It's all how you look at it at Vermont Tiger
Well articulated Art. While Walrus picked on you "dr", it is on the BFP to craft a compelling story to have some reason why this is a deserving person over all the others who make due without the subsidy.
Toggle Commented Feb 2, 2011 on Who Needs Help? at Vermont Tiger
1. I fully agree with the skepticism. 2. I'm confused by your condescending attitude towards the economist being called doctor. That is the normal title for anyone with a doctorate. Would you call Art Woolf "Mr."? And would I rather have a doctor who knows a lot about helping patients or an economist who has spent their entire career analyzing the complex incentives and mechanisms of health care systems designing a new system? Do you want teachers to be the main drivers of education finance reform? 3. It is important to note that there are many models out there with results, this is not completely unchartered water where there is only pure theory to base estimates. I remain extremely skeptical and I agree with your points about the issues raised by politicians designing the system. As I stated a year or two ago on this blog, take a close look at Switzerland's health care system. That is one example of a system that uses market forces much more efficiently than we do here, has lower costs, private insurance, private providers, and universal coverage. Republicans should jump in and agree that universal coverage is an attainable goal, but there are market mechanisms that can be used to get there that will both be lower cost and more sustainable over the long run due to a better incentive structure.
Toggle Commented Jan 22, 2011 on Sing Hallelujah for Health Care at Vermont Tiger
John, Thank you for the very clear and careful analysis. A single payer model requires the government to do the job of insurance: negotiate prices with doctors, decide what treatments to cover, monitor doctor behavior, etc. As Arrow wrote in the seminar work on health economics in 1963, if society/government does not like the initial outcome of the market, the most efficient way to intervene is by transfers to the low-income/low-wealth. But my personal favorite has always been to give a sliding-scale of vouchers to individuals to purchase insurance from an insurance market (replace Medicaid). Again thank you for the careful analysis! Much more persuasive than rants we sometimes see!
Toggle Commented Oct 19, 2010 on The Liquid Metal Health Care Plan at Vermont Tiger
Are we allowed to be happy about the Dealer.com announcement of new jobs or are we supposed to only stress bad news or find bad news in good news?
Toggle Commented Apr 24, 2010 on A Tale of Two Stories at Vermont Tiger
Lazarus, A more realistic approach would be to slow automatic wage increases (say everyone gets 1%, which over time would be a wage reduction due to inflation). Then allocate the pool of money for raises as merit pay. I think the potential to make money if you are "very good" would help the long term prospects of recruiting talented individuals to become teachers. In the current environment, an excellent teacher knows they will be paid as an average teacher and so they should pick a different occupation. This lowers the average ability of our current teachers. (To those teachers out there, yes, there are still many talented teachers out there, but statistically this is not what the majority of our best college students view as a good career choice). Statewide teacher contract anyone?
Toggle Commented Feb 4, 2010 on Teacher Pay at Vermont Tiger
One added benefit of consolidation would be teacher contracts. The unions would be less able to play the game of just wanting wages of the average (which just leads to an upward spiral). As a former resident of North Carolina, I liked their county level (except for a few large cities) districts. North Carolina, with over 9,000,000 people, gets by with 118 school districts. One of the best districts is Wake County (Raleigh, Cary) with around 140,000 students compared to Vermont with 95,000 or so and heading down.
I'm not debating global warming with this comment. But please don't be irrational and base your opinion on a few observations. This is similar to people saying they once met a PhD working at McDonald's therefore it must be that PhDs are not worth getting (or bachelors) when in fact the pay disparity relative to a high school education has INCREASED (yes, even with the dramatic increase in college costs). Global warming suggests an AVERAGE change of a couple degrees over a decade or more (as I mentioned these #s could be off as I don't claim to be fully educated on this issue), this does not imply Vermont becomes Florida or it stops snowing. My apologies for those of you who posted to point out irony (such as the snow in during the Copenhagen Conference) vs. facts. As an independent, I do have to wonder how an issue like global warming became partisan. Are there no benefits to reducing the profits from oil we give to countries that hate us or reducing sulfur and other pollutants in the atmosphere? It at least seems worth talking about? As with all other issues, rational discourse is buried by "entertainment" news from the left and right. Shame on us, aren't we smarter than that?
Toggle Commented Jan 4, 2010 on Digging "Global Warming" at Vermont Tiger
Good stuff as always Art. Thank you for pointing out these perverse incentives in the current structure. One point of minor disagreement, and I know you are fully aware of this and avoided it to not clutter the discussion: "Welfare and income support systems are full of cliffs like these, where small changes in income cause much larger absolute changes in benefits. They can't be avoided,..." Actually, the cliffs can be avoided, it just requires continuous changes in benefits instead of categories. The classic example being Friedman's (among others) Negative Income Tax proposal. Economists then need to determine if any additional administrative costs are worth the removal of the cliffs.
Toggle Commented Dec 16, 2009 on The Power of Incentives at Vermont Tiger
It would be nice to have a law that after each assessment the tax rates change (go down in normal times of rising property values) to stay revenue neutral.
Toggle Commented Dec 9, 2009 on Getting Property Taxes Wrong at Vermont Tiger
Art, It is a sad day when people are treated like you have been. Research in the black-white test score gap (one of my primary areas of research) is inherently a sensitive topic, but that means all parties need to be careful and precise in discussing the issues. What if the RH considered asking someone (an academic researcher in education or U.S. Dept of Ed official) if this made sense before jumping to their own conclusion? While researchers do not agree on the complicated explanations for racial differences, it is clear that your approach is the sensible one for comparisons. Whether they agree or disagree with your approach it is inexcusable to jump from disagreeing with your method to calling you hurtful names. (something most of America could think about for a minute these days). They owe you a sincere apology.
Art, I don't think I was clear. I don't believe it is possible to have smart regulators either. That was my critique of Calomoris who seemed to blame the lack of appropriate risk models by the regulators. I would not expect regulators to have top risk models. I also agree most reforms will likely make things worse and that there are not clear answers (similar to Afghanistan).
Toggle Commented Nov 14, 2009 on Too Big to Fail? at Vermont Tiger
There are multiple Chicago (ie. conservative) economists who agree that the general idea of "Too Big To Fail" is valid and worth examining. The problem of moral hazard is real. Afterall, Goldman's current profits are partly a function of having access to capital with de facto insurance provided by the government. A new bankruptcy system to allow them to fail seems like it should be a center-piece of any reform (I think this gets at Art's point about a system easier to fix).
Toggle Commented Nov 12, 2009 on Too Big to Fail? at Vermont Tiger
Interesting take on it by Calomiris. I think he misses the point on a few places given what other economists have had to say. On his issue of failure to have models to measure risk brings us back to needing smart regulators. Not requiring AIG to hold reserves on the insurance they sold on mortgage-backed securities is an example of one basic issue. There is nothing wrong with the financial product itself, although the executives did not actually understand what their workers were doing or how to appropriately price the instruments. In addition (or substitute) for requiring reserves would be to simply require a record of the transactions so that those purchasing insurance could see the enormous bet that AIG was taking. Wise investors would realize that AIG would not actually be able to payout on the insurance policy. Of course, it still appears that it would have been wiser to allow AIG to go bankrupt as the primary beneficiaries of the bailout was Goldman and large European banks. Who was Treasury Secretary, oh yes, Paulson, former head of Goldman. I'm sure that is pure coincidence that Goldman was exposed to over $10 billion of contracts with AIG. The regulation changes did allow financial institutions to hold investment positions that were not previously allowed (or am I wrong on this)? It was their exposure to the new financial instruments that did them in.
Toggle Commented Nov 12, 2009 on Too Big to Fail? at Vermont Tiger
Art, Question: what do you think of the economists who favor regulation aimed at the structure. This would essentially move us back to Glass-Steagall where institutions must NOT combine businesses across the lines of commercial banking, insurance, and investment banking? I am not an expert in this area. As an outsider, the attractive part of this type of regulation would be that it does not require the regulator to be particularly smart and also does not impose regulations about how to run those businesses. The potential downside is whether there are significant economies of scope across these business lines that justify the added risk.
Toggle Commented Nov 12, 2009 on Too Big to Fail? at Vermont Tiger
Tom Licata, I am not sure if you will check back to read this as a response to your confusion about productivity and comparative advantage. I was referring to an increase in overall productivity (this means we can produce more of some goods or services using fewer resources). Productivity does not increase in all sectors of the economy equally. For example, part of the challenge in education is the lack of increase in productivity (and some would say decrease). As the economy overall grows more productive, this frees up resources to produce something else. One of those "something else" goods could be labor intensive farming that individuals value because it makes them feel good to pay a premium to a local farmer for a product (or they find it tastes better and therefore they are buying a higher quality product). I think the confusion may have been between increases in productivity for the society vs. productivity in locally produced goods?
Toggle Commented Oct 29, 2009 on Dangerous Addiction? at Vermont Tiger
RFC, are you suggesting that in past administrations you believe what they put out? Not sure why you would suggest a significant difference in brain power in DC. Directly to the point: it is likely a waste of money to attempt to count. This is the same reason why many advocated a tax cut for all workers (via the payroll tax) when there was a discussion about providing incentives to businesses for "creating" jobs. Even an honest person would have difficulty counting whether a specific item "created" or "saved" jobs. And clearly people have incentives to not be honest. This is not basic accounting.
Toggle Commented Oct 29, 2009 on That's The Way ... at Vermont Tiger
Good stuff, Art. Maybe ironically for Prof. Costanza, increased productivity also enables people to support inefficient production of "buying local" or some organic foods. (For this post, I will ignore real or perceived quality differences in these goods and whether carbon is properly priced)
Toggle Commented Oct 28, 2009 on Dangerous Addiction? at Vermont Tiger
I agree with a large portion of your comments. The point I will make is that markets allocate goods efficiently with no regard for equity. For most goods this is a socially acceptable outcome as few complain if everyone is not able to afford a luxury car, take trips to Europe, or eat caviar. By efficient, an economist is saying that those who are willing and able to pay the market price purchase the good. In order to have "demand", an individual must have the ability to pay for the good. (A man about to die from hunger with no money or access to credit has no "demand" for food). A purely private unregulated market would result in those who are poor or in poor health unable to purchase insurance. Afterall, no insurance company would sell a policy to someone with cancer for less than the cost of treatment. I agree with your criticisms of the AMA, mandates on coverage (although there need to be be some common mandates so that consumers are able to understand the product(health insurance) that they are purchasing), and other points. But in the end, the majority in society would not find the "efficient" outcome an acceptable outcome. Excuse the poor humor, but it is time for the U.S. to go Dutch (see their health care system).
Toggle Commented Oct 20, 2009 on Market Failure? at Vermont Tiger
Art, I love the graphic, it is one of my favorites for ed assessments. Given your prior posts and the posts of others on the Tiger (and more broadly in the economic research) not much of a surprise. Do you know if the test scores are broken down by district or county? It would be interesting to try to tease out differences in achievement and find schools/districts that appear to be particularly successful (or unsuccessful) given the per pupil spending and school/district demographics.
Toggle Commented Oct 14, 2009 on Math Test Results at Vermont Tiger
I fully support your position defending high-deductible plans with HSAs. But you fail to address the problem that you layout at the start of not having a mandate and how this pushes costs onto those with insurance. If there is one point most health economists agree on it is that an individual mandate is needed. The alternative is to allow hospitals to deny care to those in need of life-saving treatment if they do not have coverage. I imagine this is even less desirable. Republicans should focus energy on changing the mandate to be high-deductible insurance with HSA. Bobby Jindal put forth some constructive ideas on health reform in a letter to the Washington Post yesterday. But he did include one point you don't like above (coverage of preexisting conditions). While I disagree with some of his points, I appreciate his effort to make Health Care Reform an issue that Republicans care about and have ideas. http://www.washingtonpost.com/wp-dyn/content/article/2009/10/04/AR2009100402003.html?sid=ST2009100402030 On a similar note, David Brooks' column today presented the two approaches to policy reform. However, his vision assumes that Republicans agree with the challenges facing the nation and then think how to nudge the private sector in the right direction without government trying to figure out all the answers. http://www.nytimes.com/2009/10/06/opinion/06brooks.html?ref=opinion