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Home Publications Blogs Beat the Press David Brooks Was Traumatized by the Health Care Bill

David Brooks Was Traumatized by the Health Care Bill

Friday, 07 January 2011 01:12

Yes, David Brooks devotes a column to the health care bill in which he refers to the "trauma of the past two years." Wow, things must have been bad at the NYT's oped pages. Did Mr. Brooks have nightmares about death panels?

Mr. Brooks' trauma may explain why the column is so out of touch with reality. Brooks warns that:

"The number of people in those exchanges could thus skyrocket, especially as startup companies undermine their competitors with uninsured employees and lower costs."

What does Brooks think he is saying here? As it stands, start-ups already do not have any obligation to pay for their workers' health care. Furthermore, the absolute orthodoxy in economics (i.e. you are an idiot if you don't accept it) is that health care payments come out of wages, so the savings to employers from not providing health care should simply end up as higher wages, so how will the start-ups benefit in this picture?

More importantly, if President Obama's health care plan allows start-ups to be much more competitive domestically, won't they also be much more competitive internationally? And, this is a big problem?

Maybe the NYT should let Mr. Brooks go on leave until he recovers from his trauma.

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written by Afthought, January 07, 2011 1:38
When it comes to David Brooks, sarcasm fails to reach the degree of meanness exhibited by Mr. Brooks' own self-parody.
written by joe, January 07, 2011 3:45
He also refers to a forecast on cost by Douglas Holtz-Eakin who voted to remove the phrase "wall street" from the Financial Crisis Inquiry Commission's study on the financial meltdown. Hardly an objective economist. Capretta, the other economist is also an ideologue who works for the heritage foundation.

On top of that he claims "Right now about 53 percent of Americans oppose the health care law and 43 percent support it, according to an average of the recent polls."

He fails to mention that some of the 53% who oppose the law oppose it because it is not liberal enough.

Another ignorant comment is "The law bans doctors from starting up hospitals to increase competition." Competition in health care actually increases the amount of money spent on health care. This is a basic principle of health care economics. Doctors open up a hospital and they want to fill it up. Health care costs are highest in the cities with the most competition.
Free Marketeers of Health Care: Arsonists Posing as Firefighters
written by izzatzo, January 07, 2011 5:30
From the NYT article, this quote:
Companies and unions across America are running the numbers and discovering they would be better off if, after 2014, they induced poorer and sicker employees to move to public insurance exchanges, where subsidies are much higher.

Brooks and many others make the serious error noted by Baker, claiming employer funded health care - or anything else funded by employers - is a 'subsidy', then compound the error by claiming if employees instead funded it with higher wages, it's somehow still a (higher) 'subsidy'.

Remarkably this error is perpetuated by the same ones claiming for example, that because free market forces discipline wage rates, things like FICA taxes act to lower wage rates, which would increase absent the taxes if only the corresponding services were privatized.

Further, the outcry about too many moving away from employers to independent insurance exchanges is heavily driven by the threatened erosion of economic rent that will occur in the health care sector with the added competition.

Some will get insurance cheaper and some who never had insurance will get it, whether through an employer or not. Some, the most poor and sick, will get access to true subsidized insurance, but this part is grossly overstated by miscounting reduced prices as a 'subsidy' instead of effective competition.

To use a recent phrase by Paul Krugman, once again it's the arsonists posing as firefighters. Every time the free market actually starts to work in the health care sector and introduce competition that threatens the huge component of economic rent income, free marketeers go apoplectic with shills parading 'evidence' that the economic sky is falling.

If markets work as claimed, then: Wages should increase as employers fund less. Health care costs - including subsidized care - should fall with insurance exchanges and more competition. All companies should become more competitive as health care costs decline, regardless of whether they fund health care to employees. Employed and unemployed should see large increases in benefits from lower prices.

But instead this is interpreted as Communist Competition raising its ugly head and must be stopped at all costs - the cost of forcing onto consumers in the USA, the most overpriced health care in the world.

Stupid liberals.
written by skeptonomist, January 07, 2011 8:24
I doubt it is economic orthodoxy that allowing employers to omit health care always leads to increase of wages, or more specifically that employers will be forced to increase wages if they do not provide health insurance. Maybe this is something that theoretically applies under conditions of full employment. People without a job who are no longer getting unemployment compensation will take what they can get, with or without health insurance.

Brooks' doomsday picture is probably partisan-inspired, but he does bring up some likely flaws in the overly-optimistic cost projections of the Bill's supporters.
written by Ron Alley, January 07, 2011 9:33
If Brooks truly is traumatized, it is about the prospect that the Supreme Court might determine that the individual mandate is unconstitutional. That would require consideration about whether the insurance industry should be the primary beneficiary of the health care bill. As Brooks points out:

Liberals could logically say that the mistake was trying to create a hybrid system, rather than moving straight to a single-payer one.

That prospect truly frightens the Republican leadership. That probably their reason for pushing this silly repeal legislation. There is an exceedingly shrill mainstream media blitz supporting the repeal. It has been a while since I have seen such an apparently well-coordinated, uncritical trumpeting of Republican talking points.
“Inequality is corrosive. It rots societies from within.”
written by Scott ffolliott, January 07, 2011 12:10
Re: Mr. Brooks' trauma

“Inequality is corrosive. It rots societies from within.”

When the NYT speaks to the issue of inequality in the U S of A perhaps then we will begin to address the utter failure of its society to see to it that all people have timely health care.
written by diesel, January 07, 2011 2:31
Could we ask for a better demonstration that a myriad of players, each acting out a script devised to further their peculiar self interest, becomes a baroque, self-defeating man-throttling-his-own-flesh-Daliesque recursive nightmare?

A centralized, comprehensive plan need not be the inflexible straitjacket that Milton Friedman, von Hayek and Karl Popper feared. For example, if, when you are handed the tiller you are told to "keep the boat pointed into the wind" you are expected to adapt to changing conditions. Your are not constrained by an end justifying any means as when you aim at a specific object on the horizon nor are you bound by a sacred dogma that commands you to hold to a particular point of the compass. Instead you are credited with the ability to perceive current conditions accurately, exercise judgement and act accordingly.

Maybe this example is a little far fetched or a bit of a reach (sorry), but I'm just saying that when we say that someone doesn't know the score, we may mean this in the profane sense i.e. he doesn't know who is winning or losing, or we may mean that they don't understand the larger picture, as in an orchestral score. Research indicates that we differ in our ability to perceive the Whole, the Nous, Gestalt, Logos, whatever you wish to call it.
written by S.D. Jeffries, January 08, 2011 8:28
From the Brooks article:
"Under this approach, Republicans would say that the federal government has a role in subsidizing health insurance — a generous role, but not unlimited. The government would provide needy citizens with a predefined amount of money to spend on insurance and allow them to shop in a transparent, regulated, but not micromanaged marketplace."

Oh yeah, that will work. As soon as the government decides to send me a voucher for $5000 to buy a year's worth of health insurance, watch how fast the price of a decent insurance package rises to $10,000 or more. Unless the Republicans are willing to enforce a "regulated but not micromanaged" insurance rate cap, this idea will only shovel federal money into private for-profit insurance companies to pay for junk policies - exactly what Paul Ryan's plan proposes for Medicare recipients.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.