Monday, September 20, 2010

The Irony of Keynesianism

It's ironic, isn't it, that of the developed world the Germans have come through the Great Recession the best? The Germans laid plans for the next downturn well in advance. The policies and procedures were created well in advance of the crisis, so when it came to implementation, it was a relative cakewalk--there was no need for a slapdash TARP, or a bailout, our any of the many things America has tried. And there is also not the loss of faith in a government which appears to be out of control as it practices Keynesianism.

So here is the irony of Keynesiasm: those who plan for it, don't need it; those who need it, can't do it.

14 Comments:

OpenID bruce-church said...

The Chinese, Germans and Japanese consistently run a trade surplus, meaning they are flush with "foreign currency reserves." Just as the rich are relatively unaffected by recessions and depressions, rich nations are in the same boat.

The German auto workers unions established a fund to be used in the event of a recession to keep them employed. The fund subsidized their own employment.

Since Germany has universal healthcare and weathered the recession well, does your adulation of German policy now mean you're for universal healthcare?

11:47 PM  
Blogger Octavo Dia said...

Whenever somebody points out that so-and-so does this and it is working phenomenally well, I point out that the results don't apply in every circumstance. Most recently, during the healthcare debate, people advocated doing what Canada was doing. Canada, through no special action of its own, happened to be selling what the world was buying, so it was easy to fund universal healthcare.

Right now, the world, by which I mean China and India, are buying capital goods, which Germany produces. Germany's long-running trade surpluses are China's trade surpluses once removed. Because it's economy is doing so well in this circumstance, doesn't mean it's the best solution.

The one policy of Germany's that seems good prima facie, is their version of unemployment benefits. When a layoff is necessary, Germany unemployment instead cuts hours for all workers, and subsidizes the reduced wages. It allows people to stay at work and maintain their skills (and thus allows the economy to ramp up quickly when good times return). It's far less destructive of human capital than the American approach (and doesn't create the moral hazard of generous benefits).

10:02 AM  
Anonymous Roger Kovaciny said...

Germany doesn't have open borders. You can't have a welfare state, let alone universal health care, unless you control your borders, otherwise the world will come calling. This is keeping Ukraine, for example, out of the European Union because the minute the borders open most of our Gypsies--or at least that fraction who are social parasites--will head West.

10:57 AM  
OpenID bruce-church said...

I think that universal healthcare IS the answer to the OpenBorders problem. Right now employers like illegal immigrants because they are cheap because they don't pay taxes generally (cash-only economy), they don't have health and disability insurance costs to pay, and they don't have access to the courts and they avoid the police. However, if employers knew that if a person is in the country he automatically gets healthcare, all of a sudden the employers lobby would be looking to deport the illegal aliens to lower taxes.

Likewise, if teachers were paid based on their students' test scores, their unions would be against OpenBorders, since ELS students aren't the best students. Now teachers unions are for OpenBorders since it means more jobs for teachers.

Just this week Colin Powell boasted he hired illegal immigrants for yard work, nannying, carpentry, etc., since they were eager to work for less pay than Americans. He partly retracted that to avoid prosecution. He was a former Sec of State, so one can see exactly why we have the Open Borders problem.

Colin Powell brags: "I can see illegal aliens inside my house":

http://michellemalkin.com/2010/09/19/colin-powell-brags-i-can-see-illegal-aliens-inside-my-house/

Germany, BTW, taxes imports much more than the US taxes imports:

http://www.wnd.com/news/article.asp?ARTICLE_ID=54076

8:03 PM  
Blogger Octavo Dia said...

This is keeping Ukraine, for example, out of the European Union because the minute the borders open most of our Gypsies--or at least that fraction who are social parasites--will head West.

That is one aspect of the European Union that we failed to consider with NAFTA. To enter the E.U. you have to have a comparable level of economic development (80% of the mean, I believe), and even so there was a temporary surge of "Polish plumbers" until the comparative labor costs change enough that leaving your home and family behind isn't worth it.

9:35 PM  
Blogger Octavo Dia said...

I think that universal healthcare IS the answer to the OpenBorders problem.

This is not in accord with reality.

Right now employers like illegal immigrants because they are cheap because they don't pay taxes generally (cash-only economy),

Providing healthcare will not cause illegal immigrants to pay taxes.


they don't have health and disability insurance costs to pay,

Illegal immigrants use emergency room services, which are already provided regardless of ability or willingness to pay.


and they don't have access to the courts and they avoid the police.

This would not change by providing healthcare.


However, if employers knew that if a person is in the country he automatically gets healthcare, all of a sudden the employers lobby would be looking to deport the illegal aliens to lower taxes.

This is incorrect due to externalities. The cost of healthcare is distributed among all tax-paying entities, whereas the benefits of lower wages accrue solely to those hiring the illegals. If anything, increased healthcare costs would cause more illegal hiring to compensate for the lost revenue.


He was a former Sec of State, so one can see exactly why we have the Open Borders problem.

As I said concerning Arizona, if the Federal government was doing its job, Arizona would not have felt the need.

9:45 PM  
OpenID bruce-church said...

You wrote, "This is not in accord with reality." Huh? Europe has a miniscule problem with illegals compared to the US since they work hard to keep illegals out, and the cost of providing them universal health coverage is a main reason given for keeping illegals out. Just Google this to see: europe illegal immigrants healthcare

Also, you misconstrued my argument. It was about changing the "employers lobby," "teachers unions" and politicians from being pro-Open Borders proponents to a more restrictive policy. If the border is patrolled properly, most employers would not have any opportunity to hire illegals despite their motivations to do so, making your counter-arguments a mute issue.

You wrote "The cost of healthcare is distributed among all tax-paying entities." That's partly true, but under the progressive tax system, the rich are burdened more for any expense that the govt covers, including healthcare for illegal immigrants. So if the border was patrolled properly, only a few of the rich would be able to benefit off of illegals, meaning the majority of rich would want to put an end to a practice that they all can't cash in on--as they can now.

Most of the tab for healthcare for illegals is picked up, not by the govt, but by the insured. Mostly employers only partly fund the health insurance they provide, but if businesses and the rich had to pay the entire tab, they'd be more interested in reducing the roles any way they could.

12:38 PM  
Blogger Octavo Dia said...

That's an interesting perspective. Create a large welfare state with oppressive taxes in order to create an influential constituency in favor of border security. There has to be an easier way.

With regards to Europe, it helps their case that they have the Mediterranean sea separating them from the truly poor, and the middle-income countries of Eastern Europe tend to be well-educated and assimilate more easily.

7:27 PM  
OpenID bruce-church said...

Everyone would like a system that worked, but what we have now is intolerably expensive and gives spotty service.

Under universal healthcare, the cost is shifted more to the rich and businesses, and the poor are given some measure of relief. Even if the cost burden was not redistributed from what it is now, the poor would be better off under universal care because: 1) the US healthcare quality is bottom rung when broadly compared to other other industrialized countries, and if all citizens are factored in, and 2) Americans pay 40% percent more for their healthcare overall.
I say "broadly compared" because there are some indices where the American system outdoes other systems, but that's only because much money has been poured into that particular problem.

With universal healthcare you eliminate a lot of paperwork, and that's 30% of the healthcare costs in the US. Also, when someone calls for an ambulance, you don't get an ambulance, a police cruiser and firefighters on a ladder truck for one call as often is the case in the US when that's entirely unnecessary. All the health records are kept electronically in one format so their no rekeying required, and keying errors. Also, evaluating medications and treatments and staff effectiveness is much easier when everything is computerized, and the US regulators wouldn't have to rely on, say, 40 bogus studies funded by drug companies. They just do a few queries and they have the unvarnished facts. So medicine would be better. Now it's just a Wild West and drug companies get away with a lot, and defraud US citizens.

8:14 PM  
Blogger Octavo Dia said...

Everyone argues that universal healthcare provides enormous economies of scale, yet no one argues (a) that healthcare is a natural monopoly or (b) why private industry isn't absorbing these economies of scale ala Google. ::cough::regulations::cough::

3:28 PM  
OpenID bruce-church said...

I think only in Canada was healthcare a monopoly for a few years. They had a short-lived rule that no one could go for healthcare "outside the system." In no country is there a monopoly on healthcare. In the US, under most proposals the govt would not own most of the hospitals or health infrastructure. The US govt would be the largest single payer, but there would be other payers, so there would be some competition. Right now there is no true competition in the US. It's always been a sellers' market, meaning they are competing to see who can charge the most, not the least, for healthcare. Race to the top!

The US has as little regulation as is possible in a modern society. Already its "it's deemed safe unless proven otherwise" attitude has caused many problems, and we ingest many chemicals every day. Perhaps this is partly why people are obese, and men have a greatly reduced sperm count in the US, and therefore must allow massive immigration to take up the slack in reproduction. Even if men still had it, they're often fat, and their mate is too.

11:25 PM  
Blogger Octavo Dia said...

You have to look for the dog that didn't bark too. Any market failure, whether a surplus or a shortage, deserves investigation. The U.S. has an outsized pharmaceutical industry only partly because it is under-regulated. It also has a such a large industry because funds were diverted from other sectors due to the ersatz price controls of Medicare.

With regards to sperm count, and backing this with no research whatsoever, perhaps it is an adaptation to an environment with birth control. One need not invest so much energy in extraneous sperm, when the decision to have a child is largely controlled/controllable. Cads v. Dads coming down on the dad's side.

7:00 AM  
OpenID bruce-church said...

There is "limited animal studies" on endocrine disrupters and other chemicals that reduce sperm count. The reason for this is most studies are paid for by someone with a financial stake in the findings. Only after a competing safer chemical is found will there be studies showing how dangerous certain chemicals are.

The burden of proof of safety by law should fall on the chemical industry, but now the govt gives chemicals the same rights as citizens--the assumption of innocence till proven guilty--and spends little money to verify safety claims. Recently, the supreme court said that corporations have the same free speech rights as citizens when it came to elections, so get set for the citizenry and environment to really abused by corporations. People will give off a low glow at night after the corporations are through with them.

By law Medicare, Medicaid and the VA are not allowed to negotiate drug prices down like every other country with universal healthcare can. The HMOs have this power, and still they can't keep drug prices reasonable in the US. Meanwhile, Americans buy cheaper drugs online from Canadian pharmacies. So perhaps you meant that drug companies are so large here because Medicare does NOT have any price controls, or ersatz price controls.

So the human species underwent speciation due to birth control? I believe that's true for women. It's been found that women with larger breasts and narrow mid-sections are three times more fertile than other body-type women. The 1pc failure rate in contraceptives means they have more children than other women, and earlier, too, which means the next generation will reach childbearing age years before less fertile groups do. Studies show the bra size keeps going up noticeably even when the body-fat ratio is factored out.

Speciation on the male side of the equation would occur similarly. 50pc of newborns are unplanned, often the result of contraceptive failure. Having more sperm would mean that cads' sperm would be able to take advantage of the 1pc failure rate more often than dads' sperm. The pc of cads and more-fertile females in the population would go up, while the less fertile and "dad" and "mom" population would go down. So, what this means is that if it weren't for speciation, the sperm count would have been reduced 75pc due to chemicals in the environment, and we'd need more immigrants than ever.

4:44 PM  
OpenID bruce-church said...

Speciation in humans:
http://www.spiegel.de/international/zeitgeist/0,1518,723310-3,00.html

As a result of "accelerated evolution," says Burger, lactose tolerance was selected for on a large scale within the population in the space of about 100 generations. Europe became the land of the eternal infant as people began drinking milk their whole lives.

4:00 PM  

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