Krugman Debates Stimulus, Health Care With Conservative Economist John Taylor (VIDEO)

Today on CNN's "GPS with Fareed Zakaria," economists Paul Krugman and John B. Taylor debated the origins of the financial crisis and President Obama's proposed health care plan. It was a lengthy, substantive debate, and well worth viewing:

Comments

[RomeoMD25]

Obama is dreaming.
Peter Schiff and Gerald Celente are absolutely on the mark.
Ask...what­'s behind the dollar? Answer: Nothing it's just green toilet paper.
Citizens are? trying to audit the Federal Reserve here because they seem to be printing currency like water with no
approval/oversight from Government and just pumping them out.
Pretty soon it's going to be like Zimbabwe money, completely worthless.
Smart Americans are changing out fiat currency for gold and silver

[huh234]

To Shocktreatment,

I'm less snarky today.

Are you referring to me and my co-workers as the oligopsony? We are the buyers after all. That seems backwards. Perhaps you meant my company was the oligopsony. But there are many thousands of companies like mine that purchase plans. The reference to lack of competition seems more like an oligopoly among insurance providers. Are you saying that because my co-workers only have 3 choices of provider at this time that we are subject to an oligopoly? That may be (in a limited way), but my employer has many choices with which to contract, and my fellow employees have influence with our employer. Also if I don't like my employer's choice I can purchase additional individual private health insurance, find a different employer, or self-employ. I have done this before and there were many choices. I could also choose to self-insure.

[huh234]

Individual choice is the bedrock of the free market. My freedom to exercise my will to enter into an agreement accepting resources for services that I provide, then allocating those resources as I choose to purchase other resources that others freely choose to provide - this freedom is a powerful force. Limitations on the free market are many. Not the least of which is the government (backed by the majority) conscripting my individual resources and consequently reducing my buying power. Government further limits choices through legislative regulation. Where the government defines the context and limits of business, it limits freedom (think mandates). This can be a good thing. We should be no more free to murder one another than we are to violate contracts. That is to say, government has a role in society. But government tends to overreach - acting as rule-maker, umpire, and player. Why do businesses use "Free Markets!" as a rallying cry and then head to Washington with their hand out? Because the rule-maker­/umpire/pl­ayer is giving money away and the companies are going to exercise their freedom to take a handout (it is in the rules that they can). Every player wants the rules to work in their favor.

[huh234]

Another limitation to the free market (individual choice) may be the limited or unequal distribution of knowledge. How can I say I make a free choice if I am unaware of real options? Other forces may/should/do remedy this. Knowledge is available more widely than ever in this digital age. Also, the 4th estate could step up its efforts. Finally, I must also take it upon myself to seek knowledge, an additional exercise of free will.

Oligopolies limit my choices, but they (typically) chose freely to do so in either what was once a very competitive market, or as an innovator. Oligopolies are problematic (especially if Aetna tells Kaiser). We could have a good debate on how oligopolic the health insurance industry is. While I've seen statistics that point out that there are between 1,300 and 1,500 health insurance companies in the U.S., I've also seen studies that show the number rapidly decreasing. I've also heard that the number of providers varies greatly from state to state. I'd be interested to learn the conditions for and the impact of these circumstances. I've said this many times in here, "I am not opposed to reform." If the rules unfairly favor one entity, the rules need changing.

[huh234]

I really don't know what you meant by mentioning the other things I didn't mention.

So do you believe now? I think the original point was that a company cannot First make a profit, Second pay for equipment and doctors, Third provide a service to keep people healthy. You have to admit that is ridiculous. Those are three legs of a stool (if I may limit myself to the alternatives presented to me). If one of those legs were gone, there would be a heaping lot of exercising of choices to not do business with that company. It would disappear. Free market forces (neither a mystical power or a rallying cry) would have their way.

I like it. I am not fundamentally opposed to an additional governmental option. I do not want a single payer system. I wouldn't have the option of opting out.

[113]

krugman layeth the smackdown on conservatives once again...Za­karia's GPS is a great show, I've watched it many times and he has the most substantive discussions on his shows (at least as substantive as corporate news allows) ...if Fareed was on PBS I think the show wouldn't be as constrained and this segment would probabaly of gone on for a whole uninterrupted hour which would of been cool.

[sabredance]

Glad someone else caught that. He's really making some ridiculous claims isn't he?

Also, he's worried about inflation? Perhaps he should look up the latest data on prices in the U.S. and abroad. They're dropping (ie, we have deflation).

But let's give Taylor the benefit of the doubt and grant him the possibility that he's worried about inflation in the future, when the Fed will have to clamp down on the money supply as the economy recovers. That is a real concern, but we'll have to get past A to worry about B.

Or perhaps he's concerned about the Chinese and Japanese bailing out of US Treasuries, ie, the $ losing its reserve currency status. That would be a concern, except that every other central bank in the world is busy printing currency and the debt/government receipts, debt/GDP ratios are worse in most other countries, in fact, much worse in many cases. In other words, the US $ may be the giant of the midgets, a fact which makes loss of reserve status an unlikely scenario..­.

[shocktreatment]

Well, the citizens of every other industrialized nation on earth were presented with that same alternative, and here we are.
Clearly, US companies are losing capital and competitiveness providing insurance coverage to employees and their dependents.
Clearly, few employees of ANY companies could afford medical care, without insurance.

Just as "laissez faire" capitalism proved itself impossible, the current US private insurance model is proving itself unsustainable. Private insurance as sole option is doomed.
How hard do you want to land?

If the 'market forces' ideologues, Austrian school economists and their ilk were even remotely connected to reality, there would be no contention. Private insurance would rule the market, the land, and the world.

It has already failed, how long do you propose we wait to before trying to mitigate this disaster?

[shocktreatment]

This was supposed to have posted as a reply to a post by huh234, doesn't make much sense, on its own. Sorry--

[huh234]

Someone asked the question - I think it was on another thread.

Why aren't corporations jumping on a public option if it is going to save them so much money? Nobody answered. I think it is a good question. If a single-payer plan would save the corporations trying to compete in an international market so much money, you think they'd be lobbying for it.

Here is what the congressional budget office said:

“Replacing employment-based health care with a government-run system could reduce employers’ payments for their workers’ insurance, but the amount that they would have to pay in overall compensation would remain essentially unchanged,” the CBO says. “Cash wages and other forms of compensation would have to rise by roughly the amount of the reduction in health benefits for firms to be able to attract the same number and types of workers.”
[Source: CBO, "Key Issues in Analyzing Major Health Insurance Proposals," December 18, 2008, http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf]

[marxmarv]

For some employers, health insurance is a retention incentive (otherwise known as golden handcuffs).

[svejkist]

No, they would have to rise by the market cost of the insurance, which goes down considerably with a public plan in place. Look at it this way, if the cost of their plan goes up, as it does all the time, they simply pay it. They have to because the workers selling their labor see the coverage, not the premium as their price component. Moving to a public insurer lowers the cost of insurance, so the wage equivalent of the coverage goes down.

You'll find that large unionized employers are generally enthusiastic supporters of public health insurance.

[ProfessorGeorge]

You have to go all the way down to the bottom of the Huffington Post home page today to find anything on Health care. Meanwhile, during the most critical week of the debate in congress, insurance and pharmaceutical companies are going all out to push their lobbyists to pressure our elected officials to do everything they can to stop or heavily water down any public government option plan. Wake up America!! Don't buy into the 'socialism' and 'long waits' and 'you won't be able to choose your own doctor' scare tactics. Do you know anyone on medicare? Do they get the treatment they need in a prompt manner with their choice of physicians? Of course they do. Write or call your congressmen and senators. Tell them not to back down on a public option, the very same one over 70% of Americans polled say they want, and while you're at it, contact Obama too. We have to keep the pressure on. We can do it America!!

[ATLiberal]

The proof is in the pudding. Here we are in the USA with a huge group of special interests pushing against the idea of a public option for health care. All we hear is how bad all the other systems that manage to provide universal health care are.

Here is what you DON'T hear: The countries that have universal care of any form debating going back to an all private sector free market system. Doesn't that really tell us all we need to know in answer to this ridiculous "government is bad" meme on health care?

[huh234]

A couple of cultural points. I'll grant these are anecdotes but it explains (in part) why I am resistant to expanding entitlements.

I mentioned elsewhere that my brother-in-law is French living in America. (ATLiveral - It is not so strange that we talk about healthcare. We talk about all kinds of cultural differences! But healthcare especially when people tout the greatness of French healthcare, I go to the only Frenchman I know).

My brother-in-law is a very hard worker. I think it is one of the reasons he loves America. The rest of his family are not. His brother works 6 months and then collects unemployment 6 months as a pattern for living. His step-father collects disability and works on the side. My brother-in-law tells me this is typical - they are middle class. I spent two weeks staying with this family. They were incredibly warm and generous to me. But they get riled up and angry about the Arabs and the Gypsies coming into France and doing the exact same thing they do. I was amazed at their sense of entitlement.

[huh234]

My sister lived in France for 3 years. She tells the story of meeting a 30-something woman and her 60-something mother. In the course of the conversation my sister found out the younger woman was unemployed and asked about how that worked. It surprised my sister how good the unemployment benefit was. When asked by the younger woman how unemployment worked in America, my sister answered honestly that she didn't know because she never knew anyone on unemployment (not because we were rich - we grew up blue collar). At that point the older woman furrowed her brow and smacker her daughter on the back of the head exclaiming, "You see, You see! This is why America is the richest and most powerful country in the world and France is stuck!"

[huh234]

I postulate that America is populated (in recent history) by risk-takers and rugged self-reliant types. I saw it in my Great-Grandfather, who immigrated from Finland, worked as a miner, then as a bus driver in; he saved and invested, and was a millionaire when he died. It could be guessed that many Americans are genetically predisposed to working hard, wanting to keep what they earn, and despising the handout. I really believe these things have made America great. I loathe the idea of the French entitled mentality sneaking into our country. And if it comes with great risk, I say fine. I'm built for risk. Let the Europeans be the stay-at-homes and we'll lead the way forward with our competative nature. Generally speaking.

[TomFox]

Finally, some actual content on things economic. However, I would have preferred more time on HealthCare versus the Stimulus.

[Hopster1]

UNLVGOP, I believe that the Military appears to work quite well and that is run by the government. And at the local level we have Police and Fire Departments that work quite well.

The question that really needs answering is whether the U.S. population sees Healthcare as a right or as a privilege? Most Americans feel it should be a right and since we are the greatest country in the world I can't see why we can't show the rest of the world that we can create the greatest healthcare system known to man. One that works for ALL Americans.

[UNLVGOP]

Healthcare is a priviledge, there is nothing stating it as a right. Everyone can have access to healthcare right now. That's a fact. Through education, getting a job.

What you point out is true, but those are very focused and local, the exact opposite of what healthcare would be. I think if state did it on a state by state basis that would be fine. As it is very local and beurocracy would be decreased. But on the federal level there would just be too many layers.

In a way, wouldn't single payer healthcare be unconsitutional for the same basis as Roe v. Wade, eliminating individual privacy/choice. There would be no alternative.

[UNLVGOP]

Something I fear about a private option is that it won't be based on health risk, but rather race, income, that kind of stuff. Gov't will play politics with our health insurance.

Just like they did w/ the financial industry. Wanted to make housing more affordable for everyone and look what happend, we created a bubble.

You'll say I'm heartless or whatever, but I don't wanna pay higher taxes so a high school dropout, a pot head, an acoholic, etc, can get health insurance. I have no problem providing temporary assitance to people...b­ut it's not a right. I want to make sure that my taxes are actually an "investment" I don't want to just pour money into an endless hole. Nobody does.

[hereinmiami]

A national health care system does not have to mean that there is no private health care available; look at the uk, there's both there. But every citizen is guaranteed health care, whether they are born into prosperity or not, whether they have good luck or bad.

[nowThenzen]

wrong, so very very wrong; I was laid off in 2/2008 - and while I have found more and more work as an independant contractor I am uninsured. I am reluctant to take private ins 'cause I am looking for FTE and am daunted by the cost (if I hit I dry spell can I pay Ins premiums?) -- so many 'merican's are in my boat; you are so, very, very wrong.

[ATLiberal]

What layers are you talking about? The private insurance plans have nothing but layers of people figuring out hopw to deny claims now. Medicare runs on 3% overhead. 5 times less than private insurers. Please, tell me specifically of all these layers you speak of.

[bluevase]

Only Americans believe health care is a privilege. The rest of the world believes health care is a right -- and that Americans are uncivilized. You assume that everyone who has a job has health insurance. That is not the case. You also assume that private health insurance covers all medical expenses. Not true. USA is the only country in the world where peole go bankrupt, lose their homes, because of medical expenses. USA has the worst rate of survival from cancer than any other industrialized country. If you have cancer, and you do not have health insurance, you will die in the USA -- not anywhere else. Americans don't seem to mind living in a country where children die -- for lack of health care. And don't dare say it doesn't happen here. It does happen here -- just ask anyone in the health profession. I'm very glad my family is living outside the USA -- and will always have health care. Always.

[smchp]

Exactly! If the Dems wanted to play GOPs little games they could say that because the Repugs oppose socialism they effectively oppose the military, public schools, public libraries, fire departments, police departments, medicare, medicaid. All socialist programs by definition.

[marxmarv]

Except for the military and the police departments, I don't see factual deficiencies in your statement.

[Hopster1]

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
John Kenneth Galbraith

[Chernynkaya]

Good one!

[huh234]

So, if you are other than conservative, does that mean you are not selfish, or that you don't try to justify selfishness?

[marxmarv]

I think we recognize excessive self-centeredness as a fault rather than an aspiration.

[HST]

To stabilize markets, credit and the whole financial industry regulation needs to occur. Our problems stem from the repealing market regulation laws since 1930s. Essentially we have made the same mistakes that lead to the great depression.

[been2there]

There is a difference between health insurance and health care. My family has a non-profit HMO and it works very well for us-- largely because we live healthy and know enough science to discuss our medical care. People who don't know enough to ask the right questions and give the critical information often have a problem. When I taught middle school science I tried very hard to get students to realize that they needed to know these concepts for their own sakes, not the test.

[Chernynkaya]

Perhaps I am being generous to conservatives in this, but the difference between conservatives and liberals seems to be that conservatives naively believe that people ( and by extension, companies) will do the right thing if left to their own devices. People will do the right thing because it is ultimately in their best interests. By offering the best product at the best price, they will succeed. And thus the free market is best for all. Government interference only prevents people from behaving in ways that are ultimately for the best.

Liberals see the world much more realistically. We know that people and companies will NOT do the right thing if left alone. We know that companies are amoral at best, and will do everything for profit and nothing for the common good. They must be regulated. Liberals believe that people often act in ways at odds with their own best interests.

While I am simplifying here, I think the debate between Krugman and that other guy exemplify this difference.

[UNLVGOP]

So regulating people with people eliminates this problem you claim exists? That to me just seems to make it worse. People on top, with extreme power that are always looking for their best interest.

[UNLVGOP]

Just because companies don't give handouts doesn't mean they don't do anything for the common good....

Just imagine if they weren't kind enough to lend you money....h­ow would you buy a car? Imagine the credit card companies weren't nice enough to let you borrow THEIR money. so they charge you some interest..­.you wouldn't? Imagine buying a car or a house if there wasn't a person there ot be nice enough to lend you the money.

there are a lot of good things companies do..some may not be free (I know you liberals hate having to pay for things). What about Habitat for Humanity, where do they get their materials? Where does ABC's Extreme Makeover Home Edition get their supplies, and who builds the homes in just 7 days....CO­MPANIES!!!­!

[Jason Harding]

"If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?"— Frédéric Bastiat from The Law

[huh234]

*** crickets chirping. A challenging quote.

[ATLiberal]

Private Health Insurance is a pretty simple business model, really. It is actually insurance for healthy people in case of an unforeseen catastrophe. Seriously, the only affordable insurance is offered to people who don't need it, who buy it "just in case". As soon as you move into a category deemed as high (even moderate) risk to actually NEED health care, you are no longer insurable.

For example, if you get even a somewhat serious disease (let's say Hep-C as an example), you can never leave your company, because you are now officially uninsurable forever. Meanwhile, rest assured that your company's insurer is working 24x7 to figure out how to kick you off their books.

This is what we let pass as health care in our country. Very sad.

[PumaJ]

That exchange on CNN certainly demonstrates why it is that Krugman was the Noble Prize winner and Taylor is still just a professor.

Taylor just seemed to parrot the current Conservative talking points without giving anything solid to back up his statements. Whereas, Krugman could give solid examples and explanations to back up his statements.
Me thinks that Taylor really is quite clueless about the true and complex ins and outs of the economy.

[PainTrain614]

Hmmm....I wonder if Paul Krugman was issuing these same words when he was an advisor to Enron.

I'll bet not.

[Philip Combs]

You'd lose that bet.