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Wednesday, September 17, 2008

Economics and politics

I am working on re-arranging my Principles class in order to discuss certain topics before November 4th. One of the big topics that I'm moving up is asymmetric information (of course, with the chaos of this week, I almost want to chuck my entire syllabus and just get straight to moral hazard this week, but since my stress level is already way higher than is healthy, I'll settle for getting to it in a couple weeks). My plan is to spend an entire day talking about health care and a new study of McCain's health care plan gives me plenty to talk about. To quote the abstract:
Senator John McCain's (R-AZ) health plan would eliminate the current tax exclusion of employer payments for health coverage, replace the exclusion with a refundable tax credit for those who purchase coverage, and encourage Americans to move to a national market for nongroup insurance. Middle-range estimates suggest that initially this change will have little impact on the number of uninsured people, although within five years this number will likely grow as the value of the tax credit falls relative to rising health care costs. Moving toward a relatively unregulated nongroup market will tend to raise costs, reduce the generosity of benefits, and leave people with fewer consumer protections.
On a not-unrelated-note, Scott Adams (yes, of Dilbert fame) has released his survey of economists. Adams, an econ major himself, wanted to know which candidate economists believe would be better for the economy. He couldn't find the answer anywhere so he personally paid for the survey to be done. The answer: Obama.

I talk to my students a lot about positive and normative analysis and I've always been proud of the fact that they rarely can figure out what political party I belong to. But given how messed up McCain's policies are, from an economics standpoint, I am now worrying that my students will think I'm not being objective, even if I am.

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