Saturday, December 31, 2011

Keynes, Krugman, and Common Sense

"Keynes Was Right" argues Paul Krugman in his NY Times Op-Ed column of Dec 30. "The boom, not the slump, is the right time for austerity at the Treasury" said Keynes in 1937. His pro-Keynes argument goes on for four half-page columns without once citing any historical or present-day evidence that this concept has ever actually been shown to work! He chides FDR for cutting spending too soon thereby prolonging the recession of the 1930s at a time when the economy was showing signs of improvement. Obama has made the same mistake, Krugman maintains. Now is the time to spend more, buy more debt, etc. to get the economy to improve even more quickly.

Let's assume Krugman and Keynes are correct. Does one just keep buying debt (printing money) as the economy continues to slump? Surely there must be a point at which economists would agree that it may be time to consider the alternative - namely a limit on spending. How does Krugman (or Keynes) know when that point has been reached? He does not inform us. How can one be certain that continued government spending in the 30s would have speeded a recovery? Where are the data that show continued spending is the answer to our current economic issues?

It's all theory. Common sense may teach otherwise. To paraphrase Ecclesiastes: "For everything there is a season - a time to be born and a time to die, a a time to sow and a time to reap, etc." Well perhaps during periods of recession there may be a time to spend and a time to stop spending. I think Moody's agrees.

Tuesday, December 20, 2011

Medical Expenditures - Life v. Death

In a recent essay in the New York Times, Dr. Peter Bach discusses the "worth" of medical care, even if the end result is death.  He cites an example from his medical background of a "middle-aged man" with no reported chronic medical history who appeared in the emergency room with a life-threatening acute illness.  Though close to death, with a grave prognosis, proper treatment was instituted and three weeks later the man left the hospital in apparent good health.  Bach speculates that, had the patient in fact died, many "policy analysts" would have called the expense of those three weeks a "waste of health care dollars."

Bach confuses terminal patients with non-terminal patients is this discussion of costly treatments.  This "middle-aged" man is hardly the same as a very elderly man with a known terminal disease who happens to come to the emergency room with a similar clinical picture.  We all accept the fact that caring for the sick many mean caring for people who may die, but such patients represent a very broad and varying landscape.  The distinguishing factor should not be "people who may die," but "people who may live!"

I have heard no arguments regarding expenditure for saving a life.  The ongoing valid argument concerns expenditure in situations where this probability is, in fact, virtually non-existant.

Wednesday, December 7, 2011

Musings on Today and Tomorrow

How important is it to worry about tomorrow's world?  What are we really trying to accomplish?  Are we trying to preserve the planet as it exists for us?  Have we decided that preserving an environment that pleases us, a way of life that is comfortable and satisfying for us, should continue for eternity?  Since we have developed methods to actually affect how the future planet may evolve, we seem to have declared that the existence we know today is the existence to be preserved forever.

This "preservation complex" seems to be a natural one.  After all, who doesn't want to maintain the planet as a place of comfort for "those who come after us."

Though we seem to be morally committed to creating a "better world" for those who follow us, can the "happiness" of the world we exist in truly predict the "happiness" of the future world?  Larger evolutionary and ecological factors may evoke a different response and the happiness of succeeding generations may differ from our concepts of happiness today.  Future beings will evolve in one form or another irrespective of our attempts at conservation.  Though global warming, for example, may be an unwanted circumstance for extant homo sapiens, it may devolve into the initiation of another way of life  -a way of life quite alien to what exists today.  Maybe a happier life.  Our global warming problem my become their nurturing environment!

The philosopher Derek Parfit has expressed his concern about our "bias toward the future."  He conjectures that the time of human presence on this planet is just be a beginning, with a future that is significantly longer than its past.  We fret, he says, about the probability of future pain without remembering the pain of the distant past.  The pain of the past, he believes, was probably outweighed by the happiness of the past - and so, in all likelihood,  will the pain of the future.