Thursday, July 27, 2017

Non explanation explanations

So I hear the stock market moves because risk premiums move. How do we know risk premiums move? Because the stock market moves? If there is no measurement of risk premium other than stock prices, this is circular reasoning or merely a redefinition of stock prices. Is it worth introducing an amorphous concept in place of a measurable one? Only if you have some reason to do so, or only if it differs in some measurable way. It shouldn't be done simply because it sounds nice or lead us to believe we are explaining something we are not.

Wednesday, July 26, 2017

When supply and demand fail

When supply and demand are not independent. When supply affects demand and demand affects supply treating them as independent in partial equilibrium is circular reasoning. It may be true under some conditions and false under others, and only empirics can say. This can be the case for employment and lead to virtuous and vicious cycles.

Friday, July 21, 2017

(Not so) new brilliant ideas

Periodically, I read of some new brilliant idea for solving some large outstanding problem by some illustrious internet intellectual who has given this as much thought as went into breakfast. They couldn't be bothered to look into the details to it is how it currently works or was tried and failed in the past. No, that is for the less talented to concern themselves with. After all, they are so bursting with endless new brilliant ideas, that getting them down is all they have time for. As long as some sycophants are there to echo them and laud them on their perspicuity rather than critically examine them and the details they don't rest on.

Wednesday, July 19, 2017

Torturing english

The abose of political euphemisms really needs to end. Instead of coded meaning, it leads to confusion and misapprehension on both sides. Politicians will select something that polls well and use it to mean something entirely different. They will then poll its support, thinking this justifies their action. The public will answer according to the clear sense of it, unless they are knowledgeable as to their intended meaning, and then won't know what to answer. If the meaning isn't clear, only confusion results, as much or more to the insider as the outsider. This has led to a reality gap among those who believe their own press.

Other people's problems

So often I read of problems defined so narrowly the proposed solution becomes making it someone else's. Not my problem. Federal spending too high? Make it a states problem. Costs out of control? Freeze spending and leave it to others to cover the costs. Problems identified are one dimensional and usually not even about what they purport to be. They are always the obsession of the author. Government? A spending problem. Healthcare? A spending problem. Earned benefits? A spending problem. Deficits? A spending problem. Cutting spending solves everything. The spending that is cut, that's someone else's problem. Problems aren't to be solved; they are to be made someone else's. Who ever said life was complicated? So simple, it's stupid. There is only one acceptable objective and it is theirs. It isn't like they even realize there might be others, or even more important ones. Those are Other People's Problems, OPP. The problem is everyone else following his lead is making theirs his.

Tuesday, July 18, 2017

What is believable?

It is believable that the young and healthy, less so the old and healthy, the invincibles, think they are too busy to be bothered or health insurance is unneeded, especially when they can sign up when they need it, even if it may not be right away. It is believable that they find the cost very expensive for something they don't expect to use. It is believable they would ignore it until they need it. On the basis of these, a penalty can be motivating, at least if the penalty is significant enough relative to the cost as it would be for the highly subsidized. Even if the penalty isn't significant, it can still promote rational decision making.

Health insurance is a transfer from the healthy to unhealthy. It is never a good buy for the healthy who can only thank not needing it, while it is beyond value for the unhealthy who can only thank the healthy for making their treatment possible. Not only are subsidies subsidies, and insurances are subsidies, but prices themselves are subsidies, priced to collect enough from those who can pay to cover those who cannot as well as fund research and return profits. Those in serious need will never be able to pay for it themselves but always must rely on others, whether through pricing, insurance, subsidies, or direct provision by government. Direct provision can be the most efficient as long as prices are negotiated between monopolies but suppliers don't want negotiation while government doesn't want to pay. This leads to the variety of indirect schemes.

Monday, July 17, 2017

Does anyone really believe this?

That if anyone doesn't have something, it is because they don't want it. That people would rather not pay for health insurance because they can get it for free or don't want it. Yet I read if they really wanted insurance they would buy it, like that is an option everyone has. Don't live in a mansion? Must not want one. Don't drive a Ferrari? Must not like to. Don't dine out? Must not want to. Don't buy something you can't afford to use? Must not have really wanted it in the first place. Money? Who concerns themselves about that. That people will spend much more on health insurance to avoid a much smaller penalty. Yes, that must be why so many more are now insured. Who would want to save money when they can spend it on something they don't want. Not sure who is dimmer, someone that would do this or someone that would believe this.