Mike Hanlon

A little love from the WSJ

2009-08-17T23:27:00.001-07:00

It was brought to my attention that The Wall Street Journal's "Best of the Web" feature for August 17th referred to my "referee" post

I would have posted to this blog more than once per year if I thought somebody was actually reading my rants. I also would have double-checked for grammatical and typographic errors had I foreseen the WSJ throwing (sic) in my face. Room for improvement on both counts, for sure.

I want my referee

2009-08-14T14:52:00.000-07:00

Currently, consumers enter into a health-care contract with an insurance company. This contract has an asymmetric payoff, in that the insurance company gains when a consumer stays healthy, and the consumer gains if they fall ill. If a consumer falls ill, the insurance company would like to renege on its obligation. Yet it cannot, because the contract is enforced by an unbiased referee. That referee is the United States government.

The fundamental problem with the Democrat's health care proposal is that it will cause the the government to abandon its "referee" role in order to become my "contractual opponent." Democrats suggest that government can play the role of both opponent and referee. Maybe I'm too competitive, but I prefer when my opponent and my referee are not the same person.

Opposition to "health care reform" is not so much philosophical as it is practical. Sarah Palin learned something at the University of Idaho that a lot of folks didn't learn at Harvard: when contractual payoffs are asymmetric, you need a referee to ensure compliance. I want my referee, and the Democrats are trying to take it away from me. Doesn't that justify a little anger?

To clarify, this debate is one of degrees. The government has been involved in providing health care for decades, and from that perspective, perhaps current proposals may not seem so radical. Yet at some point, the government's engagement as a contractual opponent will cause it to abandon the role of referee. My concern is that the current proposals before Congress would push us well past that point.

I'm not much interested in defending the current system we use to provide and finance health care in the United States. However, the "right way" to do it (whatever that may be) is going to incorporate the role of an unbiased referee. Health insurance contracts are designed such that the insurer (regardless of whether it's an insurance company or the federal government) always has an incentive to shirk on their end of the bargain. The referee's job is to make sure they don't.

Harry P. Thompson Jr.

2008-12-19T10:57:00.000-08:00

Pop's obituary is available online.

Macroeconomic textbooks

2008-04-20T14:10:00.000-07:00

From Brad DeLong

There is an apocryphal rule about new textbooks: they can only have 15% new material. A successful new textbook must be different enough from the old standards to give professors an incentive to switch, but must to similar enough to the old standards to keep the process of switching from requiring professors to throw away all their old lecture notes and completely redesign their courses.
This is a neat trick. It makes intellectual progress--at least intellectual progress in undergraduate instruction--nearly impossible.

Here comes another bubble

2008-02-17T09:40:00.000-08:00

Here comes another bubble, by the Richter Scales.

Deciphering Bernanke

2007-08-31T22:32:00.000-07:00

In a speech to an audience of academics, central bankers and Wall Street economists at the Fed's annual Jackson Hole shindig, Ben Bernanke said the following:

"It is not the responsibility of the Federal Reserve, nor would it be appropriate, to protect lenders and investors from the consequences of their financial decisions. But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy."

The most important word in that quotation is but. It means you should ignore the sentence that came before it.

Bumper stickers

2007-08-29T17:41:00.000-07:00

The Dori Monson Show on 710 KIRO posed the following question: Why is it that every car in the Puget Sound region with more than two bumper stickers belongs to a Democrat? (Dori later refined "every" to "98%")

He devoted two segments for Democrats to call in and explain this phenomenon, and then one segment for conservatives or Republicans to call in and offer their theories. I called in during the "Republican" segment and offered my thoughts. It's a bit of a hassle, but you can download the podcast to hear my "theory":

http://sea.bonnint.net/0828dorihour2.mp3

This topic starts around the 10 minute mark, and my call occurs about 35 minutes into the recording (I was the penultimate caller). It's helpful to know about the "Larry Craig bathroom stall foot tap" story.