from The New Yorker, a review on the book America’s Bitter Pill by Steven Brill.  The review is by Malcolm Gladwell.

excerpt:

Goldhill takes a far more radical position than the economic team at the White House does. He believes that most of our interactions concerning health care are actually no different from our transactions concerning anything else: if we trust people to buy cars and houses and food and clothing on their own, he doesn’t see why they can’t be trusted to do the same with checkups, tonsillectomies, deliveries, flu shots, and the management of their diabetes. He thinks that the insurance function—inserting a third party between patients and providers—distorts incentives and raises prices, and has such an adverse impact on quality that health insurance should be limited to unexpected, high-cost occurrences the way auto insurance and home insurance are. These ideas are unlikely to make their way into policy anytime soon. But, in elaborating the market critique of the health-care status quo, Goldhill helps us understand what the argument we’re having right now is about. It is not just a political battle over Obama. It’s a battle over whether health care deserves its privileged status within American economic life.

How Can The Middle Class Be Saved? It’s Not An Easy Job- by Robert Samuelson in Investor’s Business Daily

Excerpt:

History teaches us that we have less control over our economic destiny than is often assumed. At every juncture in the chronology, people, including “experts,” did not foresee the next major change. In the early 1960s, they didn’t anticipate high inflation; in the late 1970s, they didn’t expect its demise. In this respect, the surprise 2008-09 financial crisis was typical.

The same ignorance inhibits what we can do for the middle class. Government — aka politicians — can address some middle-class wants by redistributing income from the rich through tax breaks and subsidies. But this approach has limits, and not merely because the rich will resist.

Recall, as the CEA found, that inequality isn’t the main cause of sluggish middle-class incomes. It’s poor productivity. There are always rhetorical solutions: more infrastructure spending, better schools, simpler taxes, more research. Some policies may be desirable, but there’s no guarantee they will improve productivity.

We just don’t know how to arrange predictable productivity increases. Saving the middle class, while popular, is qualified by economic reality. Our ambitions often exceed our powers.

Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-on-the-left/022415-740683-middle-class-squeeze-caused-by-weak-slow-productivity-growth.htm#ixzz3Skrqj2qd
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

from The TribLive The disease that is government by Antony Davies & James R. Harrigan

Getting the causality backward again, government acts as if a college degree causes, rather than results from, success. As it did in the housing market, the government requires banks to lend to high-risk borrowers (via Stafford and Perkins loans), provides tax breaks for college loans (the Taxpayer Relief Act), and forces taxpayers to subsidize student loans (via the Department of Education).

Last year, President Obama expanded his student loan forgiveness program, wherein taxpayers pay for college loans that students can no longer afford. In January, the president proposed that taxpayers underwrite students to attend community college.

But here’s the catch: Since more talented and harder working students have less trouble getting into college, encouraging more borrowing for college largely means encouraging less talented students to take out college loans. As with the housing market, this will simply alter the pool of borrowers. The influx of college students will drive up tuition in the same way that the influx of home buyers drove up housing prices.

Less talented students who drop out or graduate with degrees for which there are no jobs will find themselves saddled with debt that they cannot repay. Many will default on their loans, as did the high-risk homeowners.

Taxpayers will be forced to pay for the bad college loans, just as they were forced to pay for bad home loans. Demand for college will plummet, as did demand for housing. Some colleges will go bankrupt and others will seek bailouts, as did the banks.

Like the bank presidents, university presidents will be vilified for accepting students’ tuition dollars without concern for whether those students could succeed.

Politicians will beat their breasts and point fingers at the “free market” and call for more regulation of lending markets and oversight of universities. And, as today, politicians will have missed the lesson entirely and so be doomed to repeat it yet again. In the housing market, in the college loan market and in whatever market comes next, government isn’t the cure.

It is the disease.

Read more: http://triblive.com/opinion/featuredcommentary/7789951-74/college-loans-government#ixzz3SiQ38eOO
Follow us: @triblive on Twitter | triblive on Facebook

tips to Carpe Diem

“Capitalism succeeds 90% of the time. Central economic planning fails 90% of the time. The arduous task of our leaders is to get that 10% where central planning improves our lot in sync with the 10% failure rate of capitalism.”  HKO

from 15 Statistics That Destroy Liberal Narratives by John Hawkins in Townhall:

Sentier Research, a firm led by former census officials, used census data to tabulate an estimate of the median household income — how much is earned by families at the exact middle of the nation’s income distribution. In June 2014, it found in a report issued Wednesday, the median household income was $53,891, down from $55,589 in inflation-adjusted dollars when the economic expansion began in June 2009. The economic paradox isn’t much of a paradox at all in this light: The purchasing power of the typical American family is 3.1 percent lower now than it was five years ago. No wonder people are unhappy about the economy! The benefits of rising levels of economic activity have simply not accrued to middle-income wage earners. – Neil Irwin