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You are here: Home / Politics / Politicans / David Brooks Giving A Seminar At The Aspen Institute / By The Way, David Brooks Is Still Always Wrong

By The Way, David Brooks Is Still Always Wrong

by Tom Levenson|  November 13, 20114:15 pm| 53 Comments

This post is in: David Brooks Giving A Seminar At The Aspen Institute, Free Markets Solve Everything, Fuck The Middle-Class, Open Threads, World's Best Healthcare (If You Can Afford It)

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I know this is already long since fishwrap, but amidst the many disembowelings of David Brooks discovery that he has always been at war with Eurasia   always  loved Mittens, I have to rage, rage, at the relentless, endless, fetishization of the deepest, most degrading fantasy of the right.  No, not that one.  Nor that one either.  Nor this.

No it’s the almost touching faith evinced by Mr. Brooks and the entire GOP presidential field in the existence of a free market in health care.  So, just to flagellate a truly dead horse, let’s take a look at one specific passage from Our Lady of Perpetual Broderism’s Romney tongue-bath:

True Medicare reform replaces the fee-for-service system with premium support. Government gives people money, rising slowly over time, to shop around for their own private insurance plans. The system would reward efficiency and quality, not just quantity. Competition between providers would unleash a wave of innovation.

The only problem is that the marketplace for health care that exists in the world real people inhabit bears little or no resemblance to Brooks’ pleasant vision of informed consumers, with full information in hand, shopping around for the perfect combination of benefits and price they need — not just now, but through the life (and death) cycle all of us endure.

 

That is: most evocations of the free market in just about anything call up spherical cows, simplified (and dangerously convincing) models of what actually happens in the world.  But to imagine a genuine Ec. 101 free market in health care — and to praise someone as “serious” for building policy on the assumed reality of such delusion — that takes real effort, a true commitment to avoid knowing inconvenient facts.

At least, so says such a DFH as Daniel McFadden.  That would be the 2000 Nobel laureate in economics who has taught at such dens of raving lefty lunacy as USC, UC Berkeley, and (ahem) MIT.  And that would be the same fellow who has spent quite a bit of time analyzing the notion of consumer driven health care.  Here’s what he had to say in 2008 in a working paper co-authored with Joachim Winter and Florian Heiss:

Most, but not all, consumers are able to make health care choices consistent with their self-interest, even in the face of novel, complex, ambiguous alternatives. However, certain predictable irrationalities appear – excessive discounting of future health risks, and too much concentration on dimensions that allow easy comparisons, such as current cost and immediate net benefit. Some consumers are inattentive, particularly when prior choices or circumstances identify a default “Status quo” alternative.

These behavioral shortcomings imply that some degree of paternalism is essential if Consumer Directed Health Care is to allocate resources satisfactorily. Health care markets need to be regulated to keep out bad, deceptive products, particularly those that offer “teaser” current benefits but poor longer-run benefits. Consumers need good comparative information on products, and they need to have this information brought to their attention. Consumers appear to underestimate the probabilities of future health events, [or] anticipate the resulting disutility, and as a result they systematically underspend on preventative or chronic care. Socially optimality will require that these services be subsidized, or choices regarding them be framed, to induce desired levels of utilization.

[From the second paper listed on McFadden’s website, linked above: “Consumer-Directed Health Care: Can Consumers Look After Themselves?” pp. 19-20]

Note what McFadden et al. do not say.  They don’t say market mechanisms can’t work.

They do say that human beings display predictable behavior that makes it impossible to rely on an unregulated market to deliver health care.  They point out that those irrationalities fall most heavily in the area of guessing what you or I might need some years down the road…i.e. when we are likely to need good care the most.*

Hence, the need for what the authors above call “paternalism,” and what I would term the normal function of the concept of universal insurance — mandated if necessary under a particular policy choice — against risks all members of a society face.

McFadden and his colleagues are hardly the only ones who get this.  This paper is exemplary, not determinative.  And again, it’s not that these writers represent some radical wing of anti-classical economics clinging to the margins of the profession.  In fact, McFadden and his co-authors display some familiar, reflexive thinking.  I’d argue with the Nobel laureate in his offhand dismissal of a different approach, what he terms “a government single payer/single provider program.”

Partly, the difficulty I have with the expert here is that single payer is not the same as single provider.  Conflating the two allows one to damn one with the flaws of the other — which is hardly cricket in a serious policy discussion.  And when anyone — even a distinguished fellow like McFadden — says that he “believes” the problems of such a system will be the same as for private plans, then I become an honorary Missourian: “Show me.”

But that’s an aside.  The core point is that even folks with a deep institutional and disciplinary engagement with the idea of markets understand that you can’t run health care on the principle that the customer knows best.  We don’t — we can’t, really.  And that’s why Romney, and Ryan, and all the other GOPsters trying to transfer risk to the American people and profits to American insurers are never, ever “serious.”

Which is just another long way round to repeating the obvious. David Brooks is always wrong.  He kind of has to be, given how he has dedicated his career to the notion that Republicans belong in power, no matter what.

*Brooks — like the GOP candidates — might argue at this point that they never have contemplated an unregulated private market in health care.  Which may be accurate, but not true (to channel my inner Sally Field).  That is — the degree of regulation in the market to which all calls to repeal Obamacare would return us was the one in which a host of problems along the lines McFadden et al. point out, and many more besides.  More broadly — even if you take the GOP as sincere in its stated principles, they oppose “paternalism” in individual decisions.  Which means they oppose exactly what is needed in the delivery of health care.

Images:  Edouard Manet, The Dead Bullfighter, 1864-1865

Pompeo Batoni, Time Orders Old Age to Destroy Beauty, c. 1746

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53Comments

  1. 1.

    ornery

    November 13, 2011 at 4:24 pm

    “the almost touching faith evinced by Mr. Brooks and the entire GOP presidential field in the existence of a free market in health care.”

    No, they don’t “believe” this, they are paid to say it.

    However, after 30-odd years of this, I cannot say that the stupid ones are Mr. Brooks and his merry band of faux-believers.

    Why ‘our side’ keeps looking for honorable motive in Rightwing thought or action is more the question now.

  2. 2.

    atlliberal

    November 13, 2011 at 4:29 pm

    Why does he think they created medicare to begin with? There was no insurance company willing to take on seniors.

    Idiot

  3. 3.

    Tom Levenson

    November 13, 2011 at 4:35 pm

    BTW all — It’ll probably take me most of the week to get to it in this space, but Adam Davidson had an epic fail of a column in the NYT magazine today, explaining why we have to hammer the middle class to close the deficit gap. He does so with many contortions, outright deception, and very funny math — but he also does so with an enormously powerful platform.

    Anyone wanting to whale on him, please do: he needs to be named and shamed to humiliate the Times into choosing not to renew his contract.

  4. 4.

    Cacti

    November 13, 2011 at 4:38 pm

    @atlliberal:

    Why does he think they created medicare to begin with? There was no insurance company willing to take on seniors

    This.

    There is no private insurance market that’s champing at the bit to take on the elderly.

  5. 5.

    Suffern ACE

    November 13, 2011 at 4:43 pm

    @Cacti: Yes, but that was then. Now we have a robust network of public hospitals.

    And all those hospitals names like Good Samaritan, St. Luke’s and whatnot certainly are devoted to serving the poor.

  6. 6.

    Cacti

    November 13, 2011 at 4:44 pm

    Along those same lines…

    Mitt Romney says he’s “open to introducing private sector competition” into Veterans’ healthcare.

    Grab your ankles Vets. Mitt’s friends want a cut of the action.

  7. 7.

    David Koch

    November 13, 2011 at 4:47 pm

    Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

  8. 8.

    Sly

    November 13, 2011 at 4:48 pm

    @atlliberal:

    Why does he think they created medicare to begin with? There was no insurance company willing to take on seniors.

    And the research on why market forces get all discombobulated in health care has been widely disseminated among economists since then (see Ken Arrow’s Uncertainty and the Welfare Economics of Medical Care). Health care cannot be manufactured, marketed, and sold like flatscreen TVs and orange juice. Consumer choice simply cannot exist in an environment where providing services is not in the interest of the seller (insurance company).

    For someone who styles himself on being in touch with all the latest goings on in the peer reviewed research on subjects upon which he likes to pontificate, Brooks is a massive failure. The fact that health care doesn’t work in a market environment has been known for fifty years and has only gotten stronger since then.

  9. 9.

    Robin G.

    November 13, 2011 at 4:51 pm

    The core point is that even folks with a deep institutional and disciplinary engagement with the idea of markets understand that you can’t run health care on the principle that the customer knows best. We don’t—we can’t, really.

    And never forget that the health insurance companies employ every possible tactic to keep customers as ill-informed as possible. Consumers don’t have to just educate themselves — they have to hack their way through the bullshit. Insurance companies want people to pay the highest possible amount for the lowest possible care, and they play dirty. Somehow, that doesn’t seem to fit into Brooks’ scenario. I wonder why.

  10. 10.

    Bill E Pilgrim

    November 13, 2011 at 4:56 pm

    @Tom Levenson:

    Davidson:

    Taxing corporate activity means less investing, less hiring, fewer jobs and a smaller economy, which hurts the rich, the poor and the middle class alike.

    And I presume he can explain how corporations having more money would induce them to start hiring, when they’re sitting on millions and millions in profits now and not doing so.

    That’s usually where the “See, they’re afraid of future taxes! It’s not lack of demand!” comes in.

    We thought Reagan was voodoo economics; Reagan’s got nothing on these guys.

  11. 11.

    Gin & Tonic

    November 13, 2011 at 4:58 pm

    @Tom Levenson: I thought he just got that gig, so any potential non-renewal would be year(s) away.

    Anyway, what Brooks et. al. consistently refuse to acknowledge is that there *is* no competition in private health insurance. Leaving aside for the moment the HMO-style plans such as Kaiser Permanente, in most states you have a choice between United ot CIGNA and a BC/BS. Period. And there is ample evidence of how well the “competition” in the duopoly that is TV/Internet serves us here in the US.

  12. 12.

    Chuck Butcher

    November 13, 2011 at 4:59 pm

    The point the right misses is that we currently have soshialized health care, a massively stupid and bastardized inefficient soshialization. The costs for the entire system fall on those with private/work health care and more narrowly on the couple govt programs. Repealing “Obamacare” returns to that status quo of disfunctional soshializm. I find it amusing that they never get pinned down for their support of of soshialism as long as big money gets it.

    Yes, Obamacare is bullshit – it just isn’t as entire and complete bullshit as what it purports to replace.

  13. 13.

    Tom Levenson

    November 13, 2011 at 5:01 pm

    @Gin & Tonic: IIRC, he said he’d be doing this column for a limited period. I could well be misremembering, but in the hope that’s true, jumping up and down a lot can at worst do no harm.

  14. 14.

    JPL

    November 13, 2011 at 5:09 pm

    David Brooks’ Friday column was a classic..He discusses inequality and doesn’t seem to understand that having the wealth in a few hands will not only destroy our democracy but will destroy our economy.

    Foreign tourists are coming up to me on the streets and asking, “David, you have so many different kinds of inequality in your country. How can I tell which are socially acceptable and which are not?” ………………………..
    Cupcake inequality is on the way up. People will stand for hours outside of gourmet cupcake stores even though there are other adequate cupcakes on offer with no waiting at nearby Safeways.

    btw..I’m not a cupcake snob but I included that one because it shows David’s ignorance. Fox News will have a follow up claiming the liberals think cupcakes are ruining our society and they will have Martha Stewart debate Paula Dean.
    I don’t live in NYC so is it common for foreign tourists to run up and stop David on the street?

  15. 15.

    gene108

    November 13, 2011 at 5:10 pm

    The U.S. has the most free-market influenced health care system in the industrialized world, which is also the most expensive, most inefficient and just worse on so many levels, why this is a justification to continue more free market is beyond me.

  16. 16.

    Gex

    November 13, 2011 at 5:11 pm

    @Robin G.: I just now learned about Ghost Networks, whereby the catalog of providers is 80% phantom providers who no longer work with that company or never did in order to try to get customers to give up on finding a doctor and getting treatment.

  17. 17.

    FlipYrWhig

    November 13, 2011 at 5:12 pm

    Hey, I wonder if there was a moment in the history of the country during which Republicans could have articulated a version of health-care reform they liked better than what Obama and the Democrats wanted to accomplish through an agonizing process of balancing competing entrenched interests. Had such a thing happened, perhaps they could have elaborated their views and pushed the process in a direction they liked better.

    Nah. David Brooks probably would have heard about that.

  18. 18.

    schrodinger's cat

    November 13, 2011 at 5:12 pm

    @JPL: I think these tourists may be like MoU’s cab drivers, or perhaps he met them at the salad bar at Applebee’s.

  19. 19.

    sven

    November 13, 2011 at 5:13 pm

    I have started to believe that Adam Davidson has mapped out a plan to become his generation’s David Brooks.

    It first occurred to me while reading this piece by him in the NYTimes. (synopsis: we need to tax the middle class, cut Social Security, and can’t close corporate tax loopholes, because we just can’t) He has the same totebag credentials (NPR and The NYTimes) and the same tone of faux authority. He isn’t launching partisan attacks, he is just telling liberals how the world really works. He clearly thinks there is a little more space within this unique ecological niche.

  20. 20.

    Lojasmo

    November 13, 2011 at 5:13 pm

    @David Koch:

    I used to think you had snark. I am becoming more convinced you are just a bag of cocks.

  21. 21.

    schrodinger's cat

    November 13, 2011 at 5:15 pm

    David Brooks is a shill for the Republican Party and his columns serve to bolster the claims made by his Republican masters.

  22. 22.

    piratedan

    November 13, 2011 at 5:15 pm

    i’m currently the default caregiver for my mother (emphysema, COPD and recently under treatment for cancer) she has no stamina and cannot prepare food or obtain it as she is on constant O2 and unable to stand for anything above 5 minutes and her 2nd husband (progressive Parksinsons who needs help with dressing, bathing, ambulation and food preparation) and to help I have contracted with a caregiver organization for three hours a day for five days a week. Both of them had the foresight to purchase and pay for long term care policies. When the claim was filed for each of them with their respective insurance agencies both were denied being informed that the caregiving services being performed were not meeting their requirements for paying on the policy. I’m on the verge of placing both into hospice just because their needs are quickly outpacing my abilities to provide care, neither of them can use the phone and some asshole like Romney would like to throw them into the free marketplace all of this while I’m fighting with each of the insurance agencies for them to honor their policies. I have a helluva lot more faith in Medicare coming to my rescue than I do with each of these private insurance companies.

  23. 23.

    FlipYrWhig

    November 13, 2011 at 5:17 pm

    @Chuck Butcher:

    Yes, Obamacare is bullshit – it just isn’t as entire and complete bullshit as what it purports to replace

    And it was constrained to being bullshit by the need to win votes and subdue opposition by wealthy troublemakers. That’s why the whole discussion tends to be so stupid. Sure, there are many, many ways to design a better health care delivery system. How do you squeeze that tasty sausage out of the legislative meat grinder we’re stuck with, though? And the answer is, you can’t.

  24. 24.

    Ben Cisco (mobile)

    November 13, 2011 at 5:24 pm

    @JPL 14: Only if they’ve read his work, and only then to kick him in the junk.

  25. 25.

    Villago Delenda Est

    November 13, 2011 at 5:24 pm

    The problem is they don’t understand the issue of perfect intelligence, because they are willful perfect idiots.

  26. 26.

    JPL

    November 13, 2011 at 5:25 pm

    @piratedan: When the opportunity arises write a letter to the Editor of your local paper or to the NYTimes. Your story is compelling.

  27. 27.

    MikeBoyScout

    November 13, 2011 at 5:26 pm

    Frankly, it is time to give up on the “Free Market” concept and go to (as Newt would say) a fundamentally new concept – Magical Markets!

    If we utilized Magical Markets there would be no need for either a “fee-for-service system” or “premium support”. With a health care system driven and governed by Magical Markets disease and injury would be cost free as all ailments would be cured by Magic!

    NYT, I wait for your offer to ply your pages with 700 words 2 to 3 times a week. My drivel is superior!

  28. 28.

    Anne Laurie

    November 13, 2011 at 5:26 pm

    @Tom Levenson: Tom, if you haven’t already read Doghouse Riley on this, you should:

    It’s plain, it’s simple, and it’s unequivocal: over the past thirty years or more, unequal access to government policy has further enriched the wealthiest Americans at the expense of all other Americans, and has permitted increased protection of huge corporations with fewer and fewer controls on their behavior. The argument is not what math gets us out of the stink this shit created. The argument is how much further do you fucks think you can push it? Paying for today, and paying for the future, is something all Americans should do, including our “corporate” brothers. Paying for the past is the ethical answer to the question of government debt, and that should be done–in addition to what’s fair–by those who helped themselves while everyone else sank.

  29. 29.

    Bex

    November 13, 2011 at 5:30 pm

    @JPL: I don’t live in New York either, but I doubt that hordes of foreign tourists express their opinions to him on the street. Also too, let the one percenters eat overpriced cupcakes.

  30. 30.

    inkadu

    November 13, 2011 at 5:32 pm

    Unfortunately, there is a grain of truth to the “free market” nut jobs. It is very difficult to ascertain what procedures will cost and if medicare (in my situation) will cover it. I have to call medicare, and they’ll have someone read me the script regarding that procedure but can’t elaborate on any terms. So, short of hiring a medicare lawyer, I can never really be sure if anything is going to be covered. So then I have to call the business office of the provider; the best they can say is, “we haven’t had problems with people in your situation in the past.” But they could be wrong. And it’s not really their job — they don’t even know for sure. Medicare will only tell you what it will pay *after* they are billed. I think a lot of insurance companies work the same way. When free marketeers see that, they obviously have a case to be annoyed.

    So far, elective surgeries that aren’t covered by insurance (vasectomy) are very upfront about the cost, so I could price shop comparatively easily…

    The worst has been a sleep study place that called me; they said the sleep study costs $5,000 and the woman on the phone said, “she *thought* medicare covered it and hadn’t heard anything different.” That’s a little thin. Plus it doesn’t take a $5,000 sleep study to tell me I stop breathing when I sleep. When I wake up 5-10 times a night on my back with a snort, and when my girlfriend records it on my cell phone, I don’t really see what’s added by a $5k procedure telling me I need a cpap machine.

    Anyway, I’m a liberal and think just about everything should be covered by state-sponsored (if not state-run) insurance. But as long as people are *forced* onto the free market for health care (sad but true), I don’t see anything wrong with tinkering on the margins and at least taking away idiotic conservative talking points.

  31. 31.

    Tom Levenson

    November 13, 2011 at 5:34 pm

    @Anne Laurie: Awesome. Hadn’t read it. Just skimmed it. Will read with more care after our guests leave (mushroom, pepper and bok choi soup, Thai smoked and broiled chicken; black and brown rice with cumin and caramelized onions and a bucket of wine and or beer), and see if there is anything anyone needs to add. (I’ll probably weigh in, if only to increase the volume of scorn — but on quick read, DR seems to have pulverized the odious Davidson.)

  32. 32.

    Special Patrol Group

    November 13, 2011 at 5:37 pm

    In Elitist Fuckhead David Brooks’ defense, he’s just doing his job, which is so soft pedal Right Wing Talking Points.

  33. 33.

    JCT

    November 13, 2011 at 5:51 pm

    @piratedan, have your mother or her husband received care at a local hospital lately? If so it might be worthwhile to contact social work there, they might be able to help.

  34. 34.

    piratedan

    November 13, 2011 at 5:58 pm

    @JCT: aye, I have irons in the fire, looking at increasing caregiver hours from three to six and I have the local physician on board for hospice. The issue is that no one wants to accept that they don’t have long to live and all the resultant arguments of acting without patient approval in attempts to be ahead of the curve. Mom is in the hospital with pneumonia as we speak…. heavy sigh….

  35. 35.

    Jebediah

    November 13, 2011 at 5:58 pm

    @JPL:

    I don’t live in NYC so is it common for foreign tourists to run up and stop David on the street?

    Well, of course! he is a bigger international celebrity than M. Jackson was. Tourists come specifically to New York for the chance to bask in his glorious Serious Reasonableness.

  36. 36.

    Chuck Butcher

    November 13, 2011 at 6:00 pm

    Tax policy isn’t just about financing govt – see cigarette taxes. If I get to keep $.85 of every billion or $.65 of every million it is worth going for it; if I get to keep a whole $.20 of a billion it just isn’t worth the effort and that billion stays back downstream.

    This is an economic/sociological goal, it isn’t about the fucking deficit or debt for the simple reason that it won’t get PAID IN at that rate but rather at the worker rate…

    Argue from the wrong fucking terms and you WILL lose – you WILL get into fairness and job creators bullshit. It isn’t income redistribution by govt it is income redistribution by economic facts. Yes it is a commie-istic statement of there is a limit of just how hard you get to rape the system…

    Of course it is a fringe leftist sentiment (like Eisenhower) that can’t be expressed or the vast stupid middle will revolt.

  37. 37.

    I'mNotSureWhoIWantToBeYet

    November 13, 2011 at 6:12 pm

    @Tom Levenson: Dean Baker at CEPR frequently comments on the fact that the US pays 2x per capita what the rest of the industrialized world does for health care. He points out that there are a couple of market-based ways to reduce costs. The one that gets little discussion involves things like paying for patients to get treatment over-seas, and increased immigration of qualified physicians, and reform of the US patent system. But, naturally, the AMA and other powerful interests are against such things.

    He covered Adam Davidson’s column today.

    Baker should be on the daily must-read list of those who like seeing public economic issues distilled to their essence, IMHO. He’s very good.

    Cheers,
    Scott.

  38. 38.

    gbear

    November 13, 2011 at 6:30 pm

    @Jebediah: More likely that the only places David Brooks knows about it New York are the places where tourists hang out. I would imagine he finds it distressing to have to mix with the locals (and no one will tell him where the cool kids hang out anyway).

    …and my reaction to the first painting was The Suburbs ‘Love is the Law’.

  39. 39.

    sven

    November 13, 2011 at 6:30 pm

    @I’mNotSureWhoIWantToBeYet:

    He also has a new book out mostly focusing on the ways government is used to the advantage of the wealthy. Baker was nice enough to publish it free online so anyone can just download the pdf or Kindle versions from his page.

  40. 40.

    JCT

    November 13, 2011 at 6:32 pm

    @piratedan: Health care at the end-of-life is a clusterfuck in this country.

    Be very aggressive with her social worker, the “hand-off” when she is discharged is a crucial screw-up point. Make it clear to her you don’t want your mom to “bounce-back”.

    Good thoughts your way and good luck to your mom.

  41. 41.

    Mike G

    November 13, 2011 at 6:33 pm

    …to shop around for their own private insurance plans. The system would reward efficiency and quality, not just quantity. Competition between providers would unleash a wave of innovation.

    Hahahahahahahaha
    Yes, because this perfectly describes the health care system for everyone in America on private insurance. Not.

  42. 42.

    RSA

    November 13, 2011 at 6:36 pm

    There’s another interesting current I saw in the Brooks column:

    Then he argued that over the decades government has become bloated and lethargic. In World War II, the Navy commissioned 1,000 ships a year and had 1,000 employees in the purchasing department. Today, Romney said, we commission nine ships a year but have 24,000 employees in the department.

    Remember also that Romney has promised to boost defense spending, specifically in the Navy. What’s the underlying message? “I’m going to fire a lot of people.” This, at least, is completely consistent with Romney’s history as a businessman.

  43. 43.

    Egg Berry

    November 13, 2011 at 6:52 pm

    I think you misspelled “Berkeley”

  44. 44.

    jl

    November 13, 2011 at 7:20 pm

    New Commonwealth Fund international health system survey out. What between 1000 and 2000 sicker adults report about their recent care experiences in 11 countries.

    http://www.commonwealthfund.org/Surveys/View-All.aspx?topic=International+Health+Policy

    The link to the new 2011 survey is at the top of the page.

    In some ways, US seems to have managed to combine the bad parts of private and public health care systems.

    Main problems seems to be that it just costs too damn much. Also, some aspects of US medicine has become markedly sloppier than other countries.

    I also think that McFadden has a point about unregulated private providers have an incentive to provide services that make patient feel good in short run, but then not provide long term care and treatment settings that are needed to improve health.

    US scores very well, though not consistently the best, in friendly doctors who explain things and include patient in health care decisions, hospital discharge planning, making treatment plans, and quick communication with patients. But people have a hard time seeing primary care doctors, don’t have a regular provider, and find it difficult to get follow up care because of lack of availability and it costs too damn much.

  45. 45.

    Arundel

    November 13, 2011 at 7:26 pm

    Just want to express my best thoughts to @piratedan and his family. Sympathy to your tough situation, and frustrated on your behalf that the system has made it so difficult. What a country, indeed.

    (And, fantastic painting by Batoni, Tom. )

  46. 46.

    Ecks

    November 13, 2011 at 7:58 pm

    Great week to be a show-me Missourian vs. a GoodHairian, given the latest footbaw results (woo mizzou!).

    Anyway, health care suffers from about every problem that markets can run into.

    -It’s a credence good (did you really need that Kidney operation? Just take the word of the guy billing you for it, you’re not a doctor, how would you know different?).

    -There are huge externalities (if you save money by not treating sick people, they become less productive, putting a drag not just on themselves, but also the economy, hurting everyone else).

    -There are perverse incentives (for overtreatment on the expensive big operations, and to undersell preventative care that might lead to less health care billing later).

    -There’s enormous myopia (see all the points above about people not appreciating future risks).

    -There’s a moral dimension of importance (failing to receive health care inflicts terrible human suffering in a way that failure to receive a really good TV does).

    -There are huge issues with concentrated power (and I don’t even mean insurance markets being concentrated, if anything that holds costs DOWN. I’m talking about in the hands of doctors. Factor in that we need their service and will pay nearly anything for it, and all the above stuff about it being a credence good with enormous information symmetries… so we believe the doctors and get really scared if they say a proposed bill will hurt our health care (oh, and also their billing, shhhhh).

    Free markets are often wonderful things, but they have certain known flaws, and health care checks almost all of them.

  47. 47.

    PhoenixRising

    November 13, 2011 at 8:16 pm

    @Gex: Good to know that there is a code phrase for networks that have no doctors.

    What’s the code for this situation: Rare diagnosis. Left untreated, 80% of patients die within a short period. The network has no provider who will treat the disease. Falls between specialties. Both specialties referred “customer” out of network for treatment because their malpractice insurance doesn’t cover this diagnosis.

    I can’t be the only informed consumer to ever have this problem. Yet my state-regulated health plan employs an army of drones to repeat the phrase, That provider is not part of our network.

    So what’s the code phrase for that?

  48. 48.

    jake the snake

    November 13, 2011 at 9:38 pm

    @JPL:
    Bobo’s tourists are in the same plane of existence
    as Moustache’s taxi drivers.

  49. 49.

    Tom Levenson

    November 13, 2011 at 9:51 pm

    @Egg Berry: You are right. Which is the more embarassing, given that I graduated (in the Jurassic) from Berkeley High School, and my father taught at UC Berkley Berkeley.

    Oy. Now fixt.

    Go Yellow Jackets!

  50. 50.

    Kerry Reid

    November 14, 2011 at 12:22 am

    Yeah, the “free market” is just wonderful for people with life-threatening conditions.

  51. 51.

    Fred Fnord

    November 14, 2011 at 12:56 am

    @JPL:

    I don’t live in NYC so is it common for foreign tourists to run up and stop David on the street?

    It doesn’t seem that unlikely. If I saw him on the street, I’d run up and stop him. Well, if I happened to be carrying a blunt instrument at the time, anyway.

  52. 52.

    e

    November 14, 2011 at 2:23 am

    David Brooks doesn’t live in New York. He gets his cupcakes in Bethesda, Maryland.

  53. 53.

    Deb T

    November 14, 2011 at 1:17 pm

    I haven’t met a cupcake that I’d wait 5 minutes for let alone an hour.

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