Why are Costs so High?

An excellent post by Mankiw on Healthcare costs and the salaries of doctors.

More on ‘Buy America’

The ‘Buy America’ provision is another form of protectionism. This argument is advanced by Temple economist Dr. Dunkelberg in the following link.

Biased Healthcare Debate

Want more on the current health care debate? Here it is from the left.

Here it is from the right.

Let the mud slinging begin. BTW, the intrade contract for the deal to be made by the end of the year is the chart. Losing popularity?

Update: A link to Friedman's take (HT Mankiw)

Healthcare Debate Simplified

Do you want an unbiased explanation to the current healthcare debate? Try it here, or here, under the left column headed ‘Healthcare for Dummies 6-18-09’ (each are podcasts).

Buy American

The ‘Buy American’ provision is a type of protectionist policy that economists warn about. The theory is that the stimulus money should be spent on American products… which seems good at first. But one of the major problems with such policy (aside from subsidizing inefficient production) is that they often are followed by retaliatory trade barriers. Such is the case in the following links. The first discusses the ‘Buy American’ provisions, and the second discusses retaliation.

The bottom line is that trade is NOT a zero sum game. Everyone wins by trading, and in this instance it appears as if everyone will lose.

GM and Bankruptcy II

Here is another excellent opinion piece by David Brooks from the New York Times. The punch line:

The end result is that G.M. will not become more like successful car companies.
It will become less like them. The federal merger will not accelerate the
company’s viability. It will impede it. We’ve seen this before, albeit in
different context: An overconfident government throws itself into a
dysfunctional culture it doesn’t really understand. The result is quagmire. The
costs escalate. There is no exit strategy.

GM and Bankruptcy

The ‘Old GM’ is being reborn into the ‘New GM’, and it’s looking quite different. Some interesting details from the link:

“The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.”

Talk about controlling the means of production… (Would Marx be proud?).

A couple of points:
First, why did the government decide to bail out GM in the first place if they knew (and it appears as if it was inevitable, at least according to intrade) that they would end up in bankruptcy court. In essence the original 20 billion was lost in the ‘Old GM’ inefficient waste.

Secondly, the talk is that the government does not want to control the company. Thus the talking points are that they want to get ASAP. I am skeptical of the Government relinquishing control of anything let alone something that gets so much press.

Ultimately this brings to mind a quote by Ronald Reagan:

"The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"