Economists Ignoring Economics
A letter to the W&M Committee:
We write to convey our strong conclusion that leaving in place the Patient Protection and Affordable Care Act of 2010 (ACA) will significantly strengthen the economy and promote economic recovery. Repealing the Affordable Care Act would cause needless economic harm, and would set back efforts to create a more disciplined and more effective health care system…
Signed by David Cutler, Harold Pollack, Karen Davenport and 269 others
Lawyers and doctors can lose their license to practice. But what about economists? Is there some procedure for removing a PhD?
Here is Casey Mulligan’s bewilderment:
Proponents of the Affordable Care Act, including a number of economists, have yet to acknowledge that so many provisions of the act have, from a labor economics perspective, so much in common with the employer mandate. But labor-market distortions are a common feature of several significant parts of the act and are an important part of what has happened in our labor market.
Whatever labor market benefits accrue from delaying the employer mandate could be had many times over by delaying the entire Affordable Care Act.
“Economist Casey B. Mulligan argues that many of these changes were reasonable reactions to economic events, with the intention of helping people endure the recession, but they also reduced incentives for people to work and businesses to hire”
This
Yeah, some can get a PhD revoked but usually only for plagiarism. There probably should be a licensing program for economists.
I’m sure economists would have field day with your proposal for a licencing program.
Perhaps not licensing, but what would you suggest for a person getting paid for something and doing what they are paid to do?
and not doing*
Let the market decide, which I think America could do more of
I love those “let the market decide” arguments. You may have economic ideologies of purism, but even economists disagree amongst themselves about these issues because humans are fallible by nature. There is nothing wrong with having some industry-agreed upon standards when people are affecting other people’s lives and those standards can be variable. In Economics, I’m sure it’s a much less nefarious impact, but licensing is necessary in plenty of other industries.
Licencing has positives and negatives. Each instance is different and requires careful consideration. However, I do stand by my statement that america could use more freedom (see my first comment).
Now, look at JD’s comment “I don’t know if we want to get into revoking Ph.D.’s based on non-adherence to the consensus. That’s a dangerous road.” By creating a licence for economists we would be giving some governing body the right to decided what is right, and then censure and punish those that disagree.
Do you want to see a licencing program for economists?
When have economists had field days ever…
I’m imagining all the different stations: “Ride the Utility Curve” and “The Business Cycle Obstacle Course”
I don’t know if we want to get into revoking Ph.D.’s based on non-adherence to the consensus. That’s a dangerous road.
The way Economics is practiced makes it a soft science. Because of this, there will always be disagreements over the interpretation of studies and the effects of policy. We should consider an a priori approach. It is too difficult to disentangle the motivations and actions of people to rely solely on a posteriori research.
A priori research in a complex social science is almost non-existent. Reporting on facts can be a priory but social science research, I’m afraid we’re far from making it a science not based on empiricism and subjectivity behind numbers.
So, how would we define what the a priori approach to econ is?
Economists “assume” everything. Thus, when an assumption is off, the entire prediction is often wrong.
As an economist, I find it hard to fathom how eminent economists can assert the ACA… “will significantly strengthen the economy and promote economic recovery. Repealing the Affordable Care Act would cause needless economic harm…”
From the perspective of labor economics, the employer mandate is a tax on labor to the extend it forces employers to take on a cost of employment they otherwise would not bear. The ACA also discourages firms from growing beyond 49 workers; discourages hiring low-income workers and encourages substituting part-time labor for full time workers.
From a health economics viewpoint, encouraging the use of third-party payment boosts medical prices and encourages a higher level of consumption than would be the case if consumers were paying out of pocket.
From just about any economic viewpoint, the individual mandate inhibits consumer sovereignty by limiting the choices consumers could otherwise make. The health care law also creates huge cross-subsidies, boosts taxes, and redistributes income.
There are those who support the PPACA for political or even moral reasons. But I believe it to be a stretch to assert it will strengthen the economy considering all the above.
I thought that this crowd might enjoy reading a post comparing Swedish and U.S. health care — by someone who has experienced both. IIRC, there was a discussion on this blog about that not too long ago.
http://mises.org/daily/6476/The-Truth-About-SwedenCare