L.A. Liberty

A Libertarian in Leftywood

This Is Why It’s So Hard To Cut Medicare →

There are never cuts.

Occupational Licensing: Helping Entrenched Industry at Our Expense →

"How Do We Stop Rising Healthcare Costs?" | Peter G. Klein


EconPop: The Economics of Dallas Buyers Club


EconPop is the YouTube series that sifts through the haystack of popular culture to find the needle of economics within . . . and then stabs you with it!

Starring comedian Andrew Heaton, EconPop takes a surprisingly deep look at the economic themes running through classic films, new releases, tv shows and more from the best of pop culture and entertainment. Heaton brings a unique mix of dry wit and whimsy to bear on the dismal science of economics and the result is always entertaining, educational and irreverent. It’s Econ 101 meets At The Movies, with a dash of Monty Python.

In this premiere episode of EconPop, Andrew discusses the economics of Academy Award winner Dallas Buyers Club. Subjects include public health and safety regulations, crony capitalism and the role of regulatory capture, the emergence of black and grey markets, and commercial exchange as a means for increased social tolerance.

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Today’s column:

Obamacare’s conservative critics sure know how to make themselves look out of touch. From Sarah Palin’s 2009 warning about “death panels” to last week’s headlines that a new CBO report said the Affordable Care Act would kill more than 2 million jobs, the law’s critics keep telling whoppers.

Say this much for the critics, though: At least they’re just bungling the facts.

Facts are easy. You can check facts. What supporters of the law are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.

Christina and Timothy Sandefur offer a perfect example in the latest issue of Regulation magazine. The fine levied for failing to purchase insurance, they note, is a “penalty that’s a tax but doesn’t raise revenue.”

Cast your mind back to those halcyon days of yore, when the law was first being debated. Democrats were keen to insist, as President Obama did in an interview with George Stephanopoulous, that the penalty was “absolutely not a tax increase.” On the other hand, the law’s proponents worried the Supreme Court would not buy the line that Congress had the power to impose the levy under the Commerce Clause. (They were right about that.)

So they came up with the bright idea of calling the penalty an “excise tax on individuals without essential health benefits coverage.” That was pretty sketchy, since an excise tax applies to the purchase of goods, not to individuals who haven’t bought a good. But it worked: In 2012 the Supreme Court’s majority rescued Obamacare by agreeing to call the penalty a tax.

At the same time, the Court also insisted that the penalty was not a tax. This was the only way to get around the Anti-Injunction Act, which generally requires someone to pay a tax before he can challenge the collection of it. Since the mandate penalties originally did not kick in until 2014, that would have prevented the Court from ruling on the law’s merits until much later.

But wait, there’s more!

The Constitution says “all bills for raising revenue” must originate in the House of Representatives. But the ACA originated in the Senate, when Majority Leader Harry Reid took a House-passed measure, deleted its text, and substituted what became the Patient Protection and Affordable Care Act for the original bill.

The Pacific Legal Foundation is challenging the constitutionality of Obamacare on Origination-Clause grounds. In response, the Obama administration claims the ACA not only originated in the House, but also that it is — wait for it! — “not a ‘Bill for raising Revenue.’ ”

So is the penalty a tax or not? Answer: Pick a color between one and 10.

And this is only the beginning. Consider the ACA’s other controversial mandate — the contraception mandate, now being challenged by (among others) Hobby Lobby, a company called Conestoga Woods, and Little Sisters of the Poor, a Catholic charity. They do not want to be forced to provide or arrange for contraception, which violates their religious beliefs.

In response, Obamacare defenders could simply say that life is full of trade-offs, and ensuring access to free contraception is more important than religious liberty. Instead, they want to claim both sides of the argument by insisting that those who object to the mandate are the ones violating religious freedom. Not buying your employees contraception, their argument goes, violates the employees’ freedom of religion. How? Because, um … hey, look, a squirrel!

The other day The New York Times took this absurdity another step further. The paper argued — you might want to grab a chair — that not forcing companies to furnish contraceptives for their employees violates the Establishment Clause of the First Amendment.

Moving on: The Affordable Care Act says people who qualify can obtain subsidies to buy insurance through an exchange “established by the state.” Thirty-four states have no exchange of their own; they have exchanges established by Washington. This means the people of those states are ineligible for subsidies. According to the law’s defenders, though, the language of the law does not say what it says, because we all know what Congress really meant. Or something like that.

Which brings us to last week, and the CBO’s projection that Obamacare will induce more than 2 million people to quit working or cut back their hours to take advantage of the law’s subsidies. Conservatives initially misread this as saying the law would destroy 2 million jobs, which was wrong of them; employers will not lay off 2 million people.

But if conservatives were too quick on the trigger, what excuse do liberals have? Not content to point out the truth, they have tried to spin the news as good: Isn’t it wonderful that those who could work will choose not to so they can reap benefits from the shrinking cohort of the employed? Obamacare is liberating people from the tyranny of gainful employment! What could be better?

Answer: “a comprehensive national health care system and a guaranteed basic income,” according to Alex Pareene of Salon, because “people should be free from [lousy] jobs.” If they were, then they could “spend more time with their families,” enrich themselves, get educated, “and even just … [fool] around a little more.” (No word on who, exactly, will be left to provide the income in this non-worker’s paradise.)

A world in which nobody has to do unpleasant work is a world in which you ride to the park on a unicorn. But that is a world many of Obamacare’s supporters inhabit: a place where the individual mandate is both a tax and not a tax; where the First Amendment’s Establishment Clause requires religious people to violate their faith; where “the state” means “the federal government”; where taking a job is wage slavery, but taking a handout is freedom.

Makes you wonder what color the sun is there, doesn’t it?

Pick a color between one and 10.

Great column.

Policymakers and anti-addiction advocates now want to suppress opioid use, and to impose even greater restrictions on people who live with chronic pain. This isn’t going to address the addiction and overdose problem. Studies are now showing that when opioids aren’t as available and prices go up, addicts just switch back to street heroin. Pain patients, however, simply suffer. Their plight shouldn’t be an afterthought and shouldn’t be relegated to comments sections to stories that failed to consider their perspective. They are a crucial part of this story.

— Maia Szalavitz

The Market is Taking Over Sweden’s Health Care →

Related: Dr. G. Keith Smith, “Swedes Privatizing Health Care”

HealthCare.gov's Cloud Computer System Cost Five Times as Much as Expected →

Egads! I can scarcely contain my utter shock and surprise!

What You Were Never Told About Obamacare →

[R]emoving us as the real consumer in health care and putting someone between us and providers-whether it’s insurers, whether it’s Medicare or Medicaid-has completely turned the incentives in the system on their head. What we see now is that the best way to make money in health care is to price high; provide excess service; be sloppy about safety; underinvest in service, which includes information technology; and lack the type of accountability we see in anything else. …

It’s extraordinary how removing the consumer from health care has caused us to buy everything. And because we’ve taken ourselves out, we’ve taken out the major incentive for keeping prices down. Health care should be unbelievably cheap, right? It’s a capital-intensive, almost zero-marginal-cost business. Instead we’ve done everything we can to keep their prices high.


David Goodhill, “Consumers Should Drive Medicine”

Unfortunately, he later advocates for solutions that run counter to the great insights he offers above. Nevertheless, he rightly understands where the problem lies:

The other day I was at a speech in which a politician said that if we could figure out a way to integrate care, we can reduce the number of MRIs performed, and that will bring costs down. He and I were sitting next to each other afterward, and I said, “That doesn’t bring costs down. The marginal cost of doing MRIs is zero. You already have the machine; you already have the technician. You’re confusing price and cost.”

In health care, we never talk about prices. We like to believe that somehow there’s some force that actually determines what something costs that is independent of economics. That has been devastating to prices in health care.

There was a terrific piece in The New York Times about asthma drugs. Way into the story, toward the back, the reporter did a terrific job at looking at high prices in health care, and she recognized that these are prices, not costs. One thing the asthma drug companies are determined to do is to avoid their drugs ever being sold over the counter. They want them sold on prescription, where the prices are high. …

Preventative care is an example of where the Affordable Care Act confused cost and price and visible cost. Preventative care was developing as a very competitive sector, because under most people’s high-deductible plans they were paying for most of their preventative care. You saw minute clinics growing all over the country-the drug stores in Walmarts and what have you. The reality is that the cost of performing most tests is almost zero. There are a lot of technologies out there that will bring it down close to zero and, more important, let you do it at home. Why? Well, they had a chance to succeed because you were paying for it.

The supporters of the Affordable Care Act think preventative care should be free. The problem with that is all that incentive to price preventative care cheaply went out the window the minute you said anybody who’s insured should never have to pay a penny for preventative care. The incentive to keep prices down was gone.

It’s an interesting example of what’s happened in all of health care. Look at Medicare. In 1965 the average senior spent 10 percent of his or her income on health care and was paying for all of it. Fast forward almost 50 years. The average senior pays only 5 percent of their total health care costs; 95 percent is paid through Medicare. That 5 percent is now almost 20 percent of their income. They’re no better off financially. The extremes are less; fewer people have extreme examples. But all you’ve done is you’ve enabled my disguise, my not knowing what something costs me, my crazy belief that someone else is really paying for it to allow the providers to push up prices.

Only a bioethicist could prefer a world in which we have 1,000 altruists per annum and over 6,500 excess deaths over one in which we have no altruists and no excess deaths.


Richard Epstein on allowing for the sale of one’s organs.

Related: The Case for For-Profit Bone Marrow Transplants

Dump the Contraception Mandate and All the Rest →

Emergency Visits Seen Increasing With Health Law →

Here’s a total shocker absolutely no one could have ever seen coming…

[Modern] Liberalism by Gesture →


Presented with a devilish grin:
Obamacare: Worse than Walmart?


Presented with a devilish grin:

Obamacare: Worse than Walmart?

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