A new report finds that 36% of large employers offered consumer-directed, high-deductible health plans in 2012, up from 14% five years ago. Enrollment in those plans has risen to 16% of all covered employees, compared with 5% in 2007, according to benefits consultant Mercer.Employers are pushing these plans in part because they are about 20% cheaper than the cost of a conventional PPO -- or preferred-provider organization -- plan, Mercer said. The cost of a high-deductible medical plan with a health savings account is $7,833 annually per employee compared with $10,007 for a PPO plan."If we're not already at the tipping point for consumer-directed health plans -- and we may well be -- at this rate of growth it's coming soon," said Laura Baker, a senior health and benefits consultant for Mercer in Los Angeles.
Pigou, a key bridge figure in the history of his field, was one of the earliest classical economists to notice that markets do not always produce the best possible social outcomes. The pollution generated by a factory imposes costs on those who live downstream or in the path of its airborne emissions. The risks assumed by banks leading up to the recent financial crisis imposed costs on just about everybody. Market transactions often generate what economists call "externalities"--side effects, sometimes positive but often negative, that affect people who do not participate in the transaction.Pigou, having recognized the problem, was the first to propose a solution. Society should tax the negative externalities and subsidize the positive ones. This simple notion--if you want less of something, tax it--is why his ideas periodically bubble up in the service of combating a recognizable cost to society, like pollution.
We relational beings are erotically directed the intimate relationship called marriage. As Pope John Paul II explained, in the absence of woman the first man was marked by an "existential loneliness." [...]So existential loneliness, of course, means more than being unable to fulfill your natural purpose as a social animal. Adam quickly realized that by naming the animals that he was alone among the animals he named. He had the freedom of the being with a name who can name, and so he couldn't integrate himself into the rest of creation.Adam's loneliness was being without woman, without a person made in God's image who can know and love him just as he is as a whole being--another being with a name who can name.We require loving relationships with other persons, and usually a spouse and children, to be who we really are as relational beings. That need is not merely physiological or biological, although it is that. It is the need of the being made to love and be loved personally. It is through personal knowing and loving that we live in the image of God. We can't be whole or self-sufficient persons all alone, even as God himself cannot.The remedy for existential loneliness is not the surrender of personal identity--as a Buddhist or Socrates might say--but the loving relationship of one person with another--whole persons shaped by bodies but not determined by bodily necessity the way the other animals are. We need to be loved by a person who complements or completes us, who's not just like us but for us, and each of us is for that other person.So marriage is, for Christians, the primordial sacrament, the sacrament that's most deeply the visible sign of the presence of God or personal logos in the world. It's through marriage, above all, that man participates in this world in the relational life of the person. It's in marriage, above all, that our logos is most properly directed to personal knowing and loving.
The economic statistics tell the horror story best. Japan's nominal GDP in 2011 was 9 percent lower than in 2007 and 2.5 percent lower than in 1992! In 1992, the national debt was only 20 percent of GDP. It is now 230 percent. Essentially, 200 percent of GDP in fiscal stimulus hasn't turned the economy around.The depression dynamic begins with declining incomes. People then spend less to cope. Shops and restaurants become emptier. The weak demand depresses business profitability and investment. The former depresses the stock market, and the latter labor income. Both pressure people to spend even less.Few people pay attention to Japan's problems nowadays. Financial markets pay a lot of attention to the United States' economic problems. But its nominal GDP rose 7 percent between 2007 and 2011 and is likely to rise another 4 percent in 2012. Japan could at best achieve zero growth in nominal GDP in 2012. The performance gap between the United States and Japan is 20 percent in nominal GDP since 2007. America's national debt has doubled since 2007 and reached 100 percent of GDP in 2012. Its trend isn't sustainable either. But Japan's debt problem is more advanced in depth. Its debt crisis should occur before the United States'.Japan's problem doesn't get much attention because it has funded its debt with domestic savings. The home bias in Japan's national savings is very strong. Hence, the thinking goes that if the Japanese government isn't viable in the long run, the country is. One could assume that Japan can reshuffle its balance sheet and ask its savers to take a big haircut in their savings one day to solve the problem.
Another alleviating factor is Japan's egalitarian economic structure. The economic depression hasn't turned into an employment crisis. The unemployment rate is relatively low. It's just that everyone is getting less pay. A recent survey shows that the Japanese salary earner's pocket spending money from their wives has declined to the level three decades ago, showing the severity in income decline. Japan just spreads the pain evenly to avoid wreaking havoc on part of the population. This is why Japan doesn't look like it is in depression on the surface. [...]
The only sensible market argument for strong yen in the past is that Japan could keep all its problems inside. Maybe it's the wrong policy. But Japanese like it and other people can't do anything about it. That argument no longer holds true. Japan's recent trade deficit is the beginning of a trend. Its savings rate has been declining with an aging population. If the fiscal deficit doesn't decline, there isn't enough money at home to fund it. The emergence of a trade deficit now and current account deficit soon reflect a savings shortage in Japan. What foreign investors think of Japan will begin to matter to its bond market. Foreign investors are unlikely to buy into Japan's crazy policy combination.
With both parties positioning for difficult negotiations to avert a fiscal crisis as Congress returns for its lame-duck session, Democrats are latching on to an idea floated by Mitt Romney to raise taxes on the rich through a hard cap on income tax deductions.The proposal by Mr. Romney, the Republican presidential nominee, was envisioned to help pay for an across-the-board income tax cut, a move ridiculed by President Obama as window dressing to a "sketchy deal." But many Democrats now see it as an important element of a potential deficit reduction agreement -- and one they can claim to be bipartisan.The cap -- never fully detailed by Mr. Romney -- is similar to a longstanding proposal by Mr. Obama to limit income tax deductions to 28 percent, even for affluent households that pay a 35 percent rate. But a firm cap of around $35,000 would hit the affluent even harder than Mr. Obama's proposal, which has previously gotten nowhere in Congress.
Clinton won the White House because of the recession of the early 1990s, of course, but also because the end of the Cold War took foreign policy off the table, badly weakening Republicans, and because he systematically addressed Democratic liabilities on welfare, crime, and other values-laden issues. During the presidential debates of 2004, Bush did well on social-issue questions while being defensive on economic issues. In 2006, when Democrats took Congress, they racked up their biggest margin against a Senate incumbent in Pennsylvania, where they ran a candidate who opposed abortion and same-sex marriage.For the last 50 years, voters have been alarmed by rapid expansions of government (which goes a long way toward explaining the good Republican years of 1966, 1978, 1980, 1994, and 2010) but also by the prospect of major cuts to government (which goes some way toward explaining 1996 and 2012). In other years, they have held vaguely government-skeptical sentiments while approving most proposals for gradual increases in government assistance (for families paying for college, seniors trying to get prescription drugs, and so on).After the 2006 and 2008 Democratic blowouts, liberals started to view their victory as the new normal in American politics, the result of inexorable demographic forces. After the 2010 Republican victories, some conservatives began to think that was the new normal. Republicans, they thought, had lost in '06 and '08 because of the Iraq War, the financial crisis, Hurricane Katrina, Bush's big spending, and congressional scandals. Given a straight-up choice between conservatism and liberalism, though, the people would choose the former. The 2012 results give credibility to the liberal interpretation and subtract it from the conservative one. It's the 2010 election, not the 2008 one, that is starting to look aberrant.The Iraq War, the financial crisis, and other issues specific to the late Bush years obviously did play a huge role in the 2006 and 2008 defeats. But it's also true that Republicans weren't even arguing that they had a domestic agenda that would yield any direct benefits for most voters, and that has to have hurt them. Taxes had been the most powerful economic issue for Republicans for a generation, but Republicans misunderstood why. In the '80s and '90s, Republicans ran five presidential campaigns promising to make or keep middle-class taxes lower than they would be under Democrats, and won four of them. In 2008 they made no such promise but did say they would lower the corporate tax rate.In the exit polls in 2008, 60 percent of voters said that McCain was not "in touch with people like them." McCain lost 79 percent of the voters who said that. To get a majority of the popular vote, he would have had to win 96 percent of the 39 percent of voters who were willing to say he passed the threshold test of understanding their concerns. It's amazing he came as close as he did. (Fifty-seven percent of voters said Obama was in touch, and he had to win only 81 percent of them; he got 86 percent.)In 2012, the exit pollsters asked a different version of the question: "Who is more in touch with people like you?" Obama beat Romney by ten points, even while losing the "better handle the economy" question by one. Romney, unlike McCain, did offer middle-class voters a tax cut, although it's not clear that this fact made its way through the din of the campaign to register with the voters. His campaign made efforts -- sporadic rather than sustained -- to make the case that his agenda would deliver stronger growth and higher wages. He rarely suggested it would make health care more affordable.On only one issue did the campaign consistently make the case that Romney would take specific actions that would yield tangible benefits for most Americans: He would allow energy exploration, which would reduce the cost of living for everyone. He devoted time to that theme in his convention speech, which did not touch on affordable health care, higher wages, or the middle class. The energy argument was sufficiently effective that Obama had to steal some of its rhetoric.The absence of a middle-class message was the biggest failure of the Romney campaign, and it was not its failure alone. Down-ticket Republican candidates weren't offering anything more -- not the established Republicans, not the tea-partiers, not the social conservatives. Conservative activists weren't demanding that Romney or any of these other Republicans do anything more. Some of them were complaining that Romney wasn't "taking the fight to Obama"; few of them were urging him to outline a health-care plan that would reassure voters that replacing Obamacare wouldn't mean taking health insurance away from millions of people.Romney's infamous "47 percent" gaffe -- by which he characterized voters who do not pay income taxes as freeloaders and sure Democratic voters, which they aren't -- made for a week of bad media coverage and some devastatingly effective Democratic ads. It was not, however, a line of thinking unique to Romney. It was an exaggerated version of a claim that had become party orthodoxy.A different Republican presidential nominee might not have made exactly that gaffe, or had a financial-industry background that lent itself to attacks on outsourcing. He would almost certainly have had a similar weakness on economic policy, however, and might have had additional weaknesses too. (Romney at least won independent voters, which it's hard to imagine Newt Gingrich, Rick Perry, or Rick Santorum having done.) To put it differently: The problem isn't so much that Romney was vulnerable to a set of attacks that appear to have discouraged working-class whites from voting; it's that he didn't have anything positive with which to counter those attacks.The Republican story about how societies prosper -- not just the Romney story -- dwelt on the heroic entrepreneur stifled by taxes and regulations: an important story with which most people do not identify. The ordinary person does not see himself as a great innovator. He, or she, is trying to make a living and support or maybe start a family. A conservative reform of our health-care system and tax code, among other institutions, might help with these goals. About this person, however, Republicans have had little to say.
I see three principle advantages to online education, 1) leverage, especially of the best teachers; 2) time savings; 3) individualized teaching and new technologies.LeverageThe importance of leverage was brought home to me by a personal anecdote. In 2009, I gave a TED talk on the economics of growth. Since then my 15 minute talk has been watched nearly 700,000 times. That is far fewer views than the most-watched TED talk, Ken Robinson's 2006 talk on how schools kill creativity, which has been watched some 26 million times. Nonetheless, the 15 minutes of teaching I did at TED dominates my entire teaching career: 700,000 views at 15 minutes each is equivalent to 175,000 student-hours of teaching, more than I have taught in my entire offline career. Moreover, the ratio is likely to grow because my online views are increasing at a faster rate than my offline students.Teaching students 30 at a time is expensive and becoming relatively more expensive. Teaching is becoming relatively more expensive for the same reason that butlers have become relatively more expensive-butler productivity increased more slowly than productivity in other fields, so wages for butlers rose even as their output stagnated; as a result, the opportunity cost of butlers increased. The productivity of teaching, measured in, say, kilobytes transmitted from teacher to student per unit of time, hasn't increased much. As a result, the opportunity cost of teaching has increased, an example of what's known as Baumol's cost disease. Teaching has remained economic only because the value of each kilobyte transmitted has increased due to discoveries in (some) other fields. Online education, however, dramatically increases the productivity of teaching. As my experience with TED indicates, it's now possible for a single professor to teach more students in an afternoon than was previously possible in a lifetime. [...]Time SavingsTyler Cowen and I have created a new online education platform, MRUniversity.com, short for Marginal Revolution University, after our blog of that name. In putting together our first course, Development Economics, we were surprised to discover that we could teach a full course in less than half the lecture time of an offline course. A large part of the difference is that online lectures need not be repetitive.Dale Carnegie's advice to "tell the audience what you're going to say, say it; then tell them what you've said" makes sense for a live audience. If 20% of your students aren't following the lecture, it's natural to repeat some of the material so that you keep the whole audience involved and following your flow. But if you repeat whenever 20% of the audience doesn't understand something, that means that 80% of the audience hear something twice that they only needed to hear once. Highly inefficient.Carnegie's advice is dead wrong for an online audience. Different medium, different messaging. In an online lecture it pays to be concise. Online, the student is in control and can choose when and what to repeat. The result is a big time-savings as students proceed as fast as their capabilities can take them, repeating only what they need to further their individual understanding.We get even more savings by eliminating the fixed time-costs of attending class. Before I even begin my lecture, many of my students will have driven half an hour just to attend the class, followed by another half an hour to get home. And with online lectures there is no looking for parking! Combining these savings with more concise lectures and we get big time savings.Time ShiftingAs with a play, offline teaching requires that every customer consumes at the exact moment that the supplier produces. As with a movie, online education is consumed and produced more flexibly. In the online world, consumers need not each consume at the same time, and suppliers need not produce at the moment of consumption.It's costly to coordinate consumers and suppliers, and the increase in cost reduces the amount of education consumed. I teach a class at George Mason University, 7:20-10 pm on Tuesday nights. I suspect that this is not the preferred time to learn for any of my students, and it's certainly not the preferred time for me to teach; it's merely the best time to coordinate me and as many students as possible.The inflexibility of offline teaching also reduces the quality of teaching and of learning. Despite caffeination, by 9:30 pm fatigue sets in, and my teaching quality begins to fall. I am not as sharp at 9:30 pm as at 7:30 pm, and neither are my students. As the quality of both sender and receiver declines, less is communicated. As a result, it makes little sense for me to try to teach complex ideas after 9:30 pm. I try to structure my class to accommodate, but sometimes it's not possible and I end up either teaching less or teaching less well.