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Peter

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The economy is made up of real people [Mar. 23rd, 2009|05:16 pm]
Peter
It turns out that unemployment is not funemployment for most people. For every percent increase in unemployment, 47,000 people die [1]. This is very very bad. This means that the increase from the 2006 low of 4.6 percent[2] to the current rate of 8.1 percent [3] our economy has killed more than 150,000 people. And the most optimistic economists are hopeful that the high water mark for unemployment will be "only" 10 percent, bringing the eventual total to just under 250,000 in the best case scenario.

Also way up? Domestic abuse![4] "Creative destruction" is easy to say and easy to advocate for ("just do nothing! the economy will balance itself!"), but let's be clear that we need a much better safety net if we want to avoid just sitting by while 100,000+ more of our fellow citizens die. Which brings me back to a deal that I think should be made more explicit:
They get a bailout, we get health care.
In exchange for bailouts and regulatory capture, we all get single-payer health care and high quality social services (including, but not limited to battered women's shelters). Seems fair to me. Also, if we could throw in massive infrastructure investment, I would appreciate it. Health care and healthy infrastructure would do a lot towards bringing us into the 21st century as a first-world nation. Also, as mentioned, it would save tens of thousands of American lives.

I'd also like to point out that 100,000 is not a small number of people. It's 10% of the Rwandan genocide, it's two years worth of American car fatalities, it's thirty 9/11 attacks, and it's the entire population of Berkeley, CA. It is not outside the realm of possibility that AIG has killed more people than Osama Bin Laden.


[1] http://www.huffingtonpost.com/peter-dreier/this-economy-is-a-real-ki_b_173515.html
[2] ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt
[3] http://www.bls.gov/news.release/empsit.nr0.htm
[4] http://www.pbs.org/moyers/journal/03202009/transcript4.html


Just so this post is not a total downer, I'd like to point out a funny socialist surprise that I got from David Brin, which is that, thanks to pension funds and health care obligations, the workers already own the means of production. I wonder if anything will change?
LinkReply

Comments:
From: mlissner
2009-03-23 10:31 pm (UTC)

Berkeley

Hey! I'll thank you to leave Berkeley out of this.
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From: auranja
2009-03-23 11:09 pm (UTC)

Re: Berkeley

Woah. It's a small world on the internet. You know PMB? You and I were previously employed by the same county, although I was disgruntled, and you seemed not to be. I was the one who always invited you to see strange performance art.
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[User Picture]From: clipdude
2009-03-23 10:34 pm (UTC)
I totally agree. But I think we should also demand another provision: regulatory barriers to prevent any company from ever again becoming “too big to fail”. Allow me to quote at length Rep. John Campbell (R-California):
AIG made some dumb decisions, and in a normal thing, they fail. They fail, the stockholders lose their money, everybody loses their job, nobody gets their bonuses. Same thing with Lehman and the rest of these. But because of this interconnectivity part, [. . .] because if AIG goes down, probably many other banks—not just in the United States, but worldwide, big ones, big people—go down as well, which starts to bring down some others, and that’s what this “too big” or “too interconnected to fail” [means].

And I think what we want to get to [. . .] is, well, we don’t want anything that’s too big to fail. Because then, by definition, we can’t let it fail, which means the people running that company will make decisions knowing they can’t fail, and if you know you can’t fail, you’ll make a lot of bad decisions.
No company should be allowed to be “too big to fail” for the same reason that we don’t let individuals own nuclear bombs.
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From: boojum
2009-03-23 11:33 pm (UTC)
It's becoming increasingly common knowledge in industry that if you have someone who is absolutely indispensible, then you should fire them immediately. (Or, for the timid, send them on a series of vacations so the company can gain competence without fear of losing them entirely. Phone- and email-less vacations.)

A friend of mine pointed out that the difference between "too big to fail" and "too important for us to allow any monopoly-breaking competition" is pretty slim.
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From: auranja
2009-03-23 11:10 pm (UTC)
For every percent increase in unemployment, 47,000 people die [1]

We never think of it this way, do we?
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[User Picture]From: pmb
2009-03-23 11:21 pm (UTC)
I hadn't before, but I will now...
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[User Picture]From: bonboard
2009-03-24 01:25 am (UTC)
I appreciate the point, and it's sobering.

But manufacturing steel kills people. Manufacturing leather, rubber, paper, mining coltan, distilling spirits, and burning coal kill people too.

Without data, I would wager that a 1% decrease in unemployment kills at least 20,000 people; so AT&T, IBM, Intel, and Google would face similar liabilities to AIG.

The deaths are maybe a little less depressing than suicides and homicides, but not that much less.
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[User Picture]From: pmb
2009-03-24 02:10 am (UTC)
Most of our employment is service-sector based and not manufacturing based, so I doubt your back-of-the-envelope calculations. But as you said, we are arguing without data.

And deaths at work are far less depressing than partner-related homicide and suicide.
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[User Picture]From: zudini
2009-03-24 05:35 pm (UTC)
According to the BLS, there were only 5,488 workplace fatalaties in 2007. But this does not count people who died earlier than normal because of stress or other factors which cannot be pinpointed to a workplace trauma.

I completely disagree about which is more depressing. An active, productive member of society being cut down in the middle of creating wealth is much sadder to me than an unemployed suicide or partner-related homicide.
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[User Picture]From: zudini
2009-03-24 05:45 pm (UTC)
Also, that article [1] is setting off my BS alarm. I found Brenner's publication page and he seems to be looking around for this indication (unemployment increases mortality) anywhere he can find it -- rather than finding a surprising number and publishing it once. Unfortunately none of the articles are free to read online so I can't examine his methods directly. Many of the articles seem to be based on historical analysis of particular conutries, and I question how well they translate to the American society and the modern state of medical technology.
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[User Picture]From: bonboard
2009-03-25 02:15 am (UTC)
I have reason to doubt the "unemployment causes increases in crime" claim. The "unemployment is correlated to increased serious health issues" I find easier to swallow, but Brenner himself noted that that the causation isn't clear.

As far as deaths due to decreasing unemployment, I wasn't confining my thought experiment to workplace accidents. I meant that, for example, until we are powering our economy by burning unicorn dung that produces no combustion by-products, an increase in the rates of production necessarily increases rates of cancers, heart disease, silicosis, more people being killed on roads and in trains and on planes, potential acceleration of global warming booking God-knows-how-many fatalities, whatever -- all of which intuitively ought to be on the same order as increased deaths due to these health effects due to economic downturn.

The deaths might occur in Pakistani tanneries or Brazilian grain fields far from the prying eye instead, and granted the increased deaths at least "get" you something (economic progress, GDP growth, and improved longevity for some, maybe?), but deaths are deaths, and lots of things have killed more people than Osama bin Laden, as the article likes to phrase it.

Anyway, I hope this isn't taken as criticism of pmb's original point, which I think is a good one. There are bad actors being compensated by the public for having made imprudent decisions, and the public should be entitled to some upside.
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[User Picture]From: punkrockgrrrl
2009-03-23 11:14 pm (UTC)
Funemployment is generally a sarcastic term. I might enjoy getting to finally prioritize various projects that'll lead to better jobs, but that doesn't mean I dig the poverty and the fact that I have only had half of the two surgeries I need for Evil Uterus.

That being said, I think we are already troughed out. I think we are now cramponning up, as opposed to continuing to shit and dig.
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[User Picture]From: pmb
2009-03-23 11:23 pm (UTC)
I hope you are right about the through, but I kind of doubt it.
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[User Picture]From: pmb
2009-03-24 03:03 am (UTC)
Hrm. Except for how single-payer health care with mild copays actually seems to be the cheapest system going as a whole, I suppose you are right. But surely you must acknowledge that this is an instance where your libertarianism/ancapitude is advocating for what is actually a *less* efficient system for allocation of health care? All the evidence points that way... We seem to get less bang for our medical buck than any other nation in the world.

For what I pay for other peoples' medicare in taxes, I would also get single-payer health care for myself in every other OECD country except Turkey and Mexico, and Mexico was about to start it up until they collapsed into an almost-narco-state.
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[User Picture]From: snailprincess
2009-03-24 02:56 pm (UTC)
I actually don't think the evidence is so strong for single payer being the most efficient way to allocate health care. Also, even if it ends up being the most efficient system in the short term, I feel like there is a huge risk of drift off of efficiency once you start it. If you have no open market system to tell you how much things should cost you will likely drift off of efficiency over time, even if you started out efficiently. But you'll have no way to know.

Also, there's a risk of the social services you're talking about actually increasing structural unemployment. Europe with it's rigid labor markets tends to have an unemployment rate several percentage points higher than our own. By your calculation you might end up killing 100k extra people a year.
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[User Picture]From: pmb
2009-03-24 03:40 pm (UTC)
The evidence is universally in favor of single-payer health care. You can worry about drift and theory all you want, but we've been conducting a massive real-world experiment here with our system and Canada's system and the various European systems, and while we can argue about how *exactly* single payer should be implemented, it is impossible to argue that our system is better overall.

Single payer has been working for multiple decades in many countries and is strongly correlated with increased health and long life of the citizens of those countries as well as radical decreases in infant mortality.

On another note, wrt unemployment, countries in Europe report a different number for their "percentage unemployed". We remove people from the job pool if they've been out of work for 6+ months on the assumption that these people could have found a job if only they wanted one bad enough. After 6 months people may be jobless in the USA, but they cannot be unemployed according to the BLS. There are also a few other , as well as a few other wrinkles involving gender and age - e.g. when one of two working parents in a two-parent household loses their job, are they unemployed, or have they opted out? If we reported unemployment the same way the French do (and they have some of the worst unemployment in Western Europe), then our rates and theirs would be within a percent or two --- which is still 100,000 people --- but the hope is that we can eliminate those needless deaths in the US by providing a strong social safety net. That way, we can provide a population with better overall health (single payer health care) AND reduce the deaths-per-percent-unemployed (better social services as well as the unemployed still getting health care).

That way more people live when the situation is okay, and also fewer people die when the business cycle goes south. The best of both worlds! Right now we have people dying preventable deaths on the street in the boom times, job-tied health care that retards entrepreneurship, medical costs that are 2 to 10 times that of the rest of the developed world, and no system in place to prevent things from turning to total shit when the economy goes south. More than half of bankruptcies in the US occur due to medical costs. This is not the mark of a healthy system --- and this is true even when the economy is not in a tailspin.

Please try not to let the perfect be the enemy of the good here. There's lots of theoretical arguments one way or the other, but the actual data is pretty irrefutably in favor of single payer. Almost any single-payer system would be better than our current system. Indeed, so far EVERY single-payer system in EVERY country we've measured actually IS better than our system.
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[User Picture]From: snailprincess
2009-03-24 11:36 pm (UTC)
Single payer systems have also nearly bankrupted countries. Englands is near collapse and I recall some of the netherland countries having to back off of their systems about a decade ago after it nearly caused their countries to collapse financially.

Also, there is some indication that biotech companies have moved away from Europe and it's single payer systems. There is some risk that while single payer systems may efficiently distribute exsisting resources, they may not provide good incentives for new developements.

I'm not saying a single payer system couldn't or wouldn't do better. But I think the situations is far more complex than you are making it out to be. For starters in terms of real functional systems of any kind in the developed world were only taking about a dozen different systems or so and there are no real proper experimental controls, it's hard to draw real conclusions. Is there a European country without a single payer system we can compare to? There's also long term effects to consider. Even if a free-market system was inherently less efficient it might be the better system if it was spurring faster development in medical research. A single payer system can include those incentives but it easier for them to get distorted so that development money is not spent efficiently. This can and certainly does happen in our current system. My real point is quite honestly, I don't think anyone knows as much about what would be the ideal system as they think they do.






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[User Picture]From: pmb
2009-03-25 12:56 am (UTC)
We don't know what the ideal system would be. But we do know that single-payer has worked better than ours and is cheaper than ours in every single country that has tried it. Every single one.

England's system is near collapse, but if they invested as much per-capita as, say, we do in ours (i.e. doubled its funding), it would be pretty easy to dig it out of that hole. They pay less to get a system that has measurably better outcomes in terms of citizen lifespan and infant mortality. They could do it better, but I would take their crumbling system over ours.

Let's find the country whose system works the best and steal it. Because I *know* it's not our system. You're worrying about the second order effects of changing our messed up system --- which is an important and good thing to do --- but the first order effects of "more death vs less death" totally swamp these second order concerns. Fix the large first-order problems first and then fix the smaller second-order problems that result second. Try to fix the first order problem in such a way that minimizes generated problems! But let's also not pretend that these secondary problems are anywhere near as big as the problem being solved.
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[User Picture]From: snailprincess
2009-03-24 11:29 pm (UTC)
I actually just heard a talk from an experimental economist about the 'split the bill' thing you mentioned. The performed an experiment where people went to dinner and either were going to pay for what they bought or split the bill evenly. When they were going to split the bill evenly, the total bill was like 2 or 3 times more on average. And they found most people weren't even consciously intending to buy more.

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[User Picture]From: clipdude
2009-03-24 04:52 am (UTC)
You’re already paying for uninsured people’s medical care. You do it when they get so sick that they have to go to the emergency room, where they cannot be denied care because of inability to pay.
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