This is Eric Rasmusen's Typepad Profile.
Join Typepad and start following Eric Rasmusen's activity
Join Now!
Already a member? Sign In
Eric Rasmusen
Recent Activity
We cannot conclude that it is difficult to prevent illegal immigration, because it hasn't been tried. Both Republican and Democratic administrations have simply decided to laxly enforce the law, and to take drastic actions to prevent state governments from enforcing it. Budgeting more money will not, of course, help with that problem. Enforcement plus penalties, e.g. 2 years forced labor for any illegal immigrant caught, could easily do so. Or, very cheaply, we could apply Becker (1968) and impose a term of life in prison on any illegal aliens caught, while spending less than we do now on enforcement.
1 reply
"an ambitious program of limiting carbon emissions from coal-burning electric plants and other sources of carbon dioxide. The hope is that the program if successful will inspire other countries, especially rapidly industrializing ones (notably China), to follow suit. The hope seems quite unrealistic. " A carbon tax has the same problem. It imposes costs on the US economy,to the extent that it is more distortionary than our current tax system aside from any beneficial warming effect, and it will only trivially help with any global carbon dioxide problem.
1 reply
I'm confused as to how we should measure the real cost and benefit of health care if it has price ceilings, if we're interested in wealth maximization. See http://wp.me/pNETr-lH . If anyone wants to enlighten me, please do. It surely has been thought about.
1 reply
The simplest explanation for the difference in health care procedure costs between countries is that the newspaper got it wrong. After all, we've got a newspaper reporting on a study by "health care plan industry leaders," which I suppose means Obamacare advocates reporting on numbers from an insurance lobbying group. It does look as if the measurement is of actual prices paid rather than list prices, though--"Prices for the United States are calculated from a database with over 100 million paid claims that reflect prices negotiated between thousands of providers and almost a hundred health plans." http://www.ifhp.com/documents/2012iFHPPriceReportFINALMarch25.pdf I don't see why an insurance company would be willing to pay unnecessarily high prices for procedures, however. A colonoscopy is a good example. It is unpleasant for the patient, so I doubt there is any great demand for it, unless state regulations compel it to be covered (which is quite possible). Indeed, I've wondered whether it would be cost-effective if the cost-benefit included the time cost to the patient. But insurance companies must think it's worth it, or why would they cover it? And since it is pre-scheduled and not something patients are likely to want a particular doctor for, couldn't the insurance companies easily exclude expensive doctors from their networks?
1 reply
I wonder if the causality goes not from risk-trimming to studiousness but more the reverse. Exogenously, law and medicine (like the traditional Greek-reading clergy) are scholarly, unlike, say, business. Scholarly people dislike risk. Thus, they created rules which limited upside and downside potential. Perhaps that was even efficient. Law and medicine are still low-risk, aren't they, for high-end talent? Being a big-time partner is risky, but isn't being an in-house lawyer less risky than being a middle manager? Or, you can work for the government at a comfortable salary, one better than a humanities professor's. This is even more true for doctors. There isn't really much downside risk, and you have to go out of your way to be a stand-out specialist or a hospital manager.
1 reply
The USA and India are large, with lots of groups that can logroll with each other and prevent a tyranny of the majority. In both cases, this wasn't always true and disaster followed--- North vs. South in the US, and Hindu vs. Moslem in India/Pakistan. Yugoslavia might have worked, except it unravelled, with the Slovenes leaving first. There is an interseting problem of multiple equilibria due to expectations mattering---maybe the Slovenes wouldn't have left, except that they thought Yugoslavia would break up. And maybe South Carolina wouldn't have seceded if it had thought other states would not follow (certainly once most slave states had seceded, Kentucky was in an awkward situation).
1 reply
The idea of an entrance fee is a good one. It could act as a "pollution tax", neutralizing the negative externalities of immigration in an efficient way. (If it can be paid in installments, though, there will be a big problem of deporting the welchers.) I think you underestimate the need for enforcement, though. People will do a lot to evade a tax on 200% of their annual income, which is what this would be for poor immigrants (or, perhaps, 600% of their pre-immigration income). This is a great solution for simplifying immigration by skilled people--- even those most hostile to such immigration would be persuaded if the immigration fee were big enough. For the unskilled, we would have to enforce the immigration laws, and for it to work, increase enforcement beyond its current level to some level more serious. We could do this, of course. If the government had the carrot of collecting more taxes if it enforced the immigration laws then it would be much more willing to enforce them. Even better: make illegal immigrants who are caught into indentured servants till their fee is paid off.
1 reply
"The economic significance of the disagreement has mainly to do with taxation. Taxing success that is attributable to pure luck does not have disincentive effects, and so is a cheap away of financing government." Caveat: One must be careful taxing risk-taking--- of putting oneself in a position to benefit from luck. This is much of what people mean when they say that variance in income depends on luck. Of course, some people are more risk tolerant than others because of luck.
1 reply
Last week I heard a paper on "kidney exchanges" presented. Al is willing to donate a kidney to help Bob, but his blood type doesn't match. Charles is willing to donate a kidney to help Don, but his type doesn't match. Thus, they make a deal: Al donates to Don and Charles donates to Bob. These can cycle, with 3, 4, 5, etc. donors. The presenter said a big problem is that the exchanges have to be nearly simultaneous, because after Al donates, Charles might welsh on the deal. Thus, a palatable reform would be to enforce barter contracts in body parts. This would not have to be enforced with specific performance. Money damages would be OK, perhaps liquidated with a bond posted in advance. The damages if not made specific would be the health loss to the person from not having the donated kidney he was promised, minus the operation costs.
1 reply
I guess I should ask on an econ blog instead, but getting back to trend seems too difficult. After all, the recession year's lost output is gone forever, including its investment in new capital. On the other hand, the economy should bounce back to full employment --- that is, normal unemployment of around 5%. Getting there requires a one-time growth spurt, which is normal at the end of recessions.
Post again on this idea. Will those who got Obama elected over Hillary Clinton and McCain be at all apologetic about that as they start to lambast Obama as a rotten fraud? I foresee some delicious opportunities for humor. (Check your comment software. the standard form does NOT work. The commentor has to Sign In first, and many will no doubt just give up in frustration.)
Eric Rasmusen is now following The Typepad Team
Jan 21, 2010