Prof. Zhang Weiying on Wealth and Power

NC: Do you think that egalitarianism has lost some of its appeal after more than 30 years of reform?

ZW: The situation has changed a lot over the years. A planned economy produces a society entirely based on an official hierarchy. Reform and Opening-up gave legitimacy to the private possession of wealth, and material capital began to gain social power.

The shift of power from the bureaucracy to capital is a form of progress. There is no such thing as a perfect system for a society. In a “capital centered” society, you can enjoy anything you can afford, while in an “official centered” society you have to hold a bureaucratic position to access anything at all. I agree with [economist] Friedrich August Hayek, who argued that a society in which wealth is the way to social status is better than a society in which social status is the way to wealth. Wealth should not be created either in the process of attaining power, or once one has obtained power. But this is what happens in China.

Bill Gates

Bill Gates has loudly and incessantly talked about his decision to donate most of his fortune to charity. In 2000, Forbes listed him as the richest man in the world with a net worth of $60 Billion. The 2014 Forbes list has him at number 2 with $79 Billion.

Gosh Bill, how hard is it to give your money away? Can't you just write a check for the whole amount to the US Treasury? After all, thats what you want the rest of us to do.

How about taking some time out of your busy reading schedule and writing the check? I think that is a better use of your time than dreaming up new taxes for the rest of us.

For those who think this is an ad hominem attack, my response: Getting Bill to empty his bank account is a pretty big first step to reducing inequality. So think of my proposal as a sober policy prescription. The Bill Gates expropriation bill of 2014.

Side benefit of my proposal: We will not have to read his annoying essays anymore. No one will pay any attention to him when he is just another guy wearing ill fitting Dockers and a bad hair cut.

Regulatory Capture 101

The journalists have also found evidence in Ms. Segarra’s recordings that even after the financial crisis and the supposed reforms of the Dodd-Frank law, the New York Fed remained a bureaucratic agency resistant to new ideas and hostile to strong-willed, independent-minded employees. In government?

…..

Enter George Stigler, who published his famous essay “The Theory of Economic Regulation” in the spring 1971 issue of the Bell Journal of Economics and Management Science. The University of Chicago economist reported empirical data from various markets and concluded that “as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.”

— Wall Street Journal

Obamacare

How is ObamaCare doing?

How does one evaluate ObamaCare?
In my mind, there is only one relevant question:

Have health outcomes improved, and at what cost?

This question is harder to answer than one might think. Some problems:

  1. Which Americans? What happens if some Americans are better off and others worse off?
  2. What does it mean to be better off? Which of these two is a "better outcome":
    1. A 80 year old extends his life by 5 years, but experiences a low quality of life.
    2. A 80 year old extends his life by 1 year, but experiences a high quality of life.
  3. At what cost? One 80 year old may decide that spending $100,000 to extend your life by one year is worth it. But another may prefer to spend that $100,000 on his grandchild's college tuition.
  4. To what extent are any observed changes in health outcomes attributable to ObamaCare? One can hardly blame ObamaCare if an Ebola outbreak kills many Americans. Of course, any improvements must be immediately and loudly attributed to ObamaCare.

I have zero interest in statistics that tell me that "more Americans are insured". Whatever being insured means. Have you ever tried using Medicaid?

We may never have precise answers to the questions I raise above, but we must at least ask the right questions if we are to get anywhere.

Of course, I have my own answers to many of the questions I have raised. Since the answer is clearly subjective, I want the decision to be made individually. Not by ObamaCare bureaucrat 244567.

In the meanwhile, I leave you with the following startling revelation: Bloomberg News informs me that the cost of the ObamaCare website so far is $2.1 Billion! One hopes that this is a one time set up expense, but anyone with a modicum of experience of Government and Software projects will know how misplaced such hopes are.

Think about it. $2.1 Billion. Just to set up the frickin' website. Not to run it. Not for the enormous subsidies being doled out by ObamaCare. Not for fixing the inevitable problems we will soon be hearing about. (You heard it here first). Not for the inevitable rewrite of the system in 2016 when President Hillary decides that we need to start afresh.

How much is $2.1 Billion? I have a hard time keeping all these numbers straight. So here is some help: thats about 0.1% of total US healthcare expenditure in 2012. So you could argue that it is not much. Lets wait till the final bill is here.