Ep. 7 Obamacare Is a Big Success, Says Krugman

31 October 2015     |     Tom Woods     |     45

Says Krugman this week: poor Mitt Romney. Now he wants to take credit for paving the way for Obamacare, but the rubes in the GOP will rip his head off. But Mitt is right, says Krugman, and in any event the Affordable Care Act has been a great success! None of the terrible things opponents predicted would happen have come to pass.

Your hosts dissent.

Krugman Column

Free Mitt Romney” (Oct 26, 2015)

Columns Mentioned

Sequester of Fools,” by Paul Krugman
Health Care for Everyone? We Found a Way,” by Mitt Romney (subscription required)

Book Mentioned

The Primal Prescription: Surviving the “Sick Care” Sinkhole, by Doug McGuff and Bob Murphy

Special Offers

(1) Read three free issues of the Lara-Murphy Report, Bob Murphy’s co-authored financial publication, by clicking here.

(2) Want to master Austrian economics, U.S. history, and more, in courses taught by Tom Woods and other libertarian professors? Then check out LibertyClassroom.com, and use coupon code SHOW (all caps) for a special listener discount.

Need More Episodes?

Check out the Tom Woods Show, which releases a new episode every weekday. Become a smarter libertarian in just 30 minutes a day!

Share this post:Digg thisShare on FacebookGoogle+Share on LinkedInPin on PinterestShare on StumbleUponTweet about this on Twitter
  • CharlesWT_TX

    We Mapped the Uninsured. You’ll Notice a Pattern.: They tend to live in the South, and they tend to be poor.

    • http://www.waarheiddelen.nl/index.html Intuïtie Trainer

      DwarseJan: “De grill van de Fed en de ECB staat al jaren te sudderen en het moment van de ParadigmaCHANGE naar het systeem ‘Leven en Laten Leven’ komt met de dag dichterbij”.

      http://www.ftm.nl/column/beleggers-worden-geroosterd/

      TweedeKamer-leden mogen niet spreken over de activiteiten van @GuusjA, omdat …?!?!?

      http://www.volkskrant.nl/binnenland/kamer-willen-opheldering-over-vernietigde-correspondentie~a4175521/

      In het systeem ‘Liegen om te Leven’ geldt uiteraard ook het WAARHEID=MACHT-paradigma. Echter alleen de hoogste levels (Pentagon ook ?!?!?) krijgen inzage in alle informatie die over een ANIMAL bekend is.

      http://www.volkskrant.nl/binnenland/politiemol-kopieerde-duizenden-pagina-s-vertrouwelijke-informatie~a4174590/

      Het gerucht in hotel GradjA gaat dat ANIMAL M. werd gerund door de @sME. De AIVD wist dat de 28-jarige ANIMAL in augustus 2011 als tactisch rechercheur toegang kreeg tot het vertrouwelijk politiesysteem. Regeren is vooruitzien en officieel was M. nog niet gescreend door de AIVD. Op die manier kan het ministerie van Binnenlandse Zaken nu nog hun handen wassen in onschuld. Toen de AIVD weigerde een Verklaring van Geen Bezwaar (VGB) af te geven kon worden bezien hoe de PolitieTop M. zou handelen. Uiteraard werd hij overgeplaatst, maar behield zijn inloggegevens. Op die manier kon de CP_sME blijven grasduinen in landelijke politiedossiers om zo te bezien welke leden van netwerk @SuperWil een verdachte of getuige was. Doordat de @CP_sME de code kende wanneer @Secret_SiT werd ingezet wist hij ook wie betrokken was bij de 3e SpinozaGolf.

      http://www.trouw.nl/tr/nl/4492/Nederland/article/detail/4175314/2015/10/31/Ministerie-van-koppijn-en-visaktes.dhtml

      Ook het ministerie van Algemene Zaken maakt gebruik van een code welke informatie mag worden gelekt naar kamerleden en/of media. Dit is al een eeuwenlang gebruik en door het weekelijkse FtoF-gesprek fungeerde de @MinPres als KanariePietje voor de moNARch. De moNARch hoefde alleen maar te weten wat de status was van een bericht of rapport en hij wist wel wie van de @RaadvanState moest worden bijgepraat. Pas toen DonderendePiet de vice-premier werd kwam de 3e SpinozaGolf in een stroomversnelling.

      Vooral toen PvdA-leider Diederik Samsom in oktober 2012 Wilma Mansveld opbelde. Hij had een ‘onbekende voor politiek Den Haag’ nodig om de cultuur van het psychosegeloof op te blazen. Dus betrad Mansveld een voor haar betrekkelijk onbekende wereld en had als opdracht om het advies van de Top-Ambtenaren ten alle tijden te volgen. Bij problemen zou het bewindslieden-overleg van de PvdA wel een uitweg brengen. De PvdA-ToP wist dat het spoordossier zou ontploffen en dan zou een daadkrachtige PvdA-Staatssecretaris wel eens meer stemmen kunnen opleveren.

      @CP_sME: “De PvdA-T0P wilde dat Mansveld de geschiedenisboeken in zou gaan als de bewindspersoon die er wél in slaagde dit problematische miljardenproject tot een goed einde te brengen. Op 9 december 2012 vertrok de eerste Fyra met passagiers richting België. Slechts veertig dagen later werd de trein, nadat talloze technische defecten aan het licht waren gekomen, weer uit de dienstregeling gehaald. Het PsychoseGeloof had gewonnen.”

      Minister Schultz: “Wacht even, ik deed eerder als staatssecretaris óók luchtvaart en spoor. Dus ik vind de discussie dat ik de moeilijke portefeuilleonderdelen heb overgedaan, een beetje vreemd. Dat er kennelijk niet heel veel politieke spanning zit op mijn portefeuille, vind ik wel prettig. Dit is een vrij fysiek ministerie. We leggen dijken en wegen aan. Ik wil niet beweren dat er weinig gebeurt.”

      @CP_sME: “Vooral nu een cultuur van waarheiddelen wordt gepromoot”.

      Pier Eringa, topman ProRail: “We moeten stoppen met meebuigen als het ministerie wil dat slecht nieuws wordt uitgesteld.”

      Dit tezamen vormde voor het (collectief) geweten van Mansveld een te giftige cocktail. De PvdA selecteert immers niet op ‘creatief bewustzijn’, maar of je de psychosegelovige richtlijnen van het systeem ‘Liegen om te Leven’ goed beheerst. Doordat netwerk @MinPres niet heeft ingezet om als eerste land van de eurozone het systeem ‘Leven en Laten Leven’ in te voeren werd netwerk @MinPres geconfronteerd met toenemende spanningen tussen de verschillende ministeries en de leden van de StatenGeneraal. Bewindslieden bezwijken niet zozeer onder de werkdruk, maar dat ze de waarheid van de toekomst niet kennen. Over een maand begint de belangrijke VN-klimaatconferentie in Parijs en het slimste wat netwerk @MinPres kan doen is om daar een @CP_SiT naar toe te sturen. De VVD heeft namelijk geen ‘principiële bezwaren’ voor de invoering van het systeem ‘Leven en Laten Leven’ maar wil wel dat de koning de sparringpartner van de @MinPres blijft.

      http://www.ftm.nl/column/beps-de-koning-en-de-ethiek-van-belastingen-volg-beps-deel-1/

      Het Fyra-rapport ‘De reiziger in de kou’ laat zien dat de cultuur van ‘zwijgen is goud’ in Den Haag de reden is dat het volk stelselmatig verkeerd en onvolledig wordt geïnformeerd over de 3e SpinozaGolf.

  • http://www.waarheiddelen.nl/index.html Intuïtie Trainer

    === Dat is… voor zover ik weet… is dat meteen, per direct ===

    http://nos.nl/artikel/2066401-boodschapper-van-de-val-van-de-muur-overleden.html

    Netwerk WitteGejT: “De discussie spitst zich toe op de vraag hoe de toeloop van vluchtelingen gecontroleerd kan worden en hoe kansrijke asielzoekers over het land moeten worden verdeeld”.

    http://nos.nl/artikel/2066400-nog-geen-akkoord-in-duitse-coalitie-over-asielbeleid.html

    Carl0: “Dat kan heel simpel. Gewoon de selectiemethode toepassen die ook in hotel GradjA wordt gehanteerd.”

    http://www.nu.nl/binnenland/4156383/roemer-wil-eerlijker-belasting-heffen.html

    Bij @BuitenhofTV betoogde SP-leider Emile Roemer al dat hij op een andere manier belasting op vermogen wil gaan heffen. Volgens netwerk @SuperWil doelde hij op het RENTE=BELASTING-plan van Stichting Met Elkaar, maar dit wordt door netwerk @MinPres betwijfeld. De details zijn duidelijk niet bij de SP-T0P bekend, dus had RoemendeEmiele het over psychosegeloof zoals dat de allerrijksten boven het miljoen 1 procent belasting betalen en voor het deel boven de 2 miljoen euro 2 procent. En door de huidige lage rente zouden spaarders bovendien niet meer vanaf 20.000 euro spaargeld belasting hoeven te betalen, maar pas vanaf 62.000 euro. Het is duidelijk dat je voor detail-kennis over het systeem ‘Leven en Laten Leven’ niet bij de SP moet zijn.

    • http://myindigolives.wordpress.com/ Ellie Kesselman

      Stop spamming!!!

    • Commentizer

      How do you say “off his meds” in Dutch?

  • Dale Holmgren

    At the end Murphy says that having a cap on medical insurance is “not insurance”. Well, perhaps so, but that’s how car insurance works; you don’t get unlimited coverage, in order to keep the premiums down. If insurance companies did not have an overall cap, and a bunch of their members plowed a crowd like what happened last week, the insurance companies would not be able to pay the damages and would go bankrupt. In order to calculate how much premiums to charge, the companies must have a cap in damages they are required to pay out; otherwise you’re just calculating for infinity.

    • Ken Kelly

      the insurance companies would not be able to pay the damages and would go bankrupt.

      Hardly – at least, not if the state regulators are doing their jobs. That’s what reinsurance is for. It’s true that premiums would be higher, but in the case of Obamacare, the effect is quite small. By far the biggest impact on premiums in the individual market stems from guaranteed issue/community rating, i.e. the extra cost of covering high-risk individuals, averaged over all people in a given risk pool.

    • Luke Perkins

      That’s not quite what I got from what he said. I took him to mean it would be odd if car insurance would pay for oil changes but would not cover the full value of your car in case of accident. I don’t know of any insurance policies on cars which cap the payout below the full value of the vehicle, though the situation might vary depending on where you live.

      Just about the only insurance offered which has a cap (outside the medical world), to my knowledge is personal liability, just as you say, but that whole area is a little weird. We are going to “insure” you against the “risk” of you being negligent? In other words, we are going to insure you against what is completely within your control. Where I would think such a system would encourage more reckless behavior, no wonder there is a cap. But I digress.

      Anyway, where one of us must be misunderstanding Murphy, there is a 50% probability tis me, so you would have to ask Murphy himself, but with my interpretation his analogy makes sense, so I would be inclined to give him the benefit of the doubt.

      • http://quest4three.blogspot.com daniel

        Insurance is definitely a little weird; probably from the fact that both parties are entering a contract in which neither one really wants to ever have to invoke the details of the contract.

        I think of it as protection from the unknown. An investor is willing to offer someone else financial protection from the unknown because the person has proven to be a forthright, strong, and reliable person but this person still knows that no person can possibly be so omniscient to foresee all future events.

        It is probably the best case of the situation “damned if you do, damned if you don’t”, if applied rightly!

        • Luke Perkins

          Insurance is not too weird in the free market.

          You are right, insurance, in its natural form, is protection; though from both the known and unknown at the same time. We “know” some people are going to experience adverse events (the class probability), but we don’t know which people they will be (the case probability). Insurance evens out this spread between class and case probabilities with insurance companies standing in between the two sets of probabilities and arbitraging the difference by acting as a clearing house between those who want to share risk. Banks act much the same way between those who want to lend and those who want to borrow.

          Insurance only gets convoluted when the state starts screwing with the rules to favor their cronies.

  • JimD

    Come on guys. Krugman’s main point is that Obamacare is a success. You all spend 49 minutes talking but never address that point.

    • Commentizer

      I have to agree with JimD. The Contra Krugman podcast does not have the sharpness and focus that it should. There is a rambling quality.

      • https://www.facebook.com/david.rogers.hunt David_Rogers_Hunt

        That tends to be what happens when presenting the prior historical context. Time and time again, pragmatic, practical people express how frustrated they get when having to listen to a history lesson (remember Bill O’Reilly’s reaction when Ron Paul would try to talk about the 1953 Iranian Coup). It seems only ‘RT’ Rationals understand that unless one understands how one got into the present mess,… it may not be possible to get out of it ever again. What one most do, when trapped, is to avoid useless struggling and further ensnaring oneself in a trap.

        It is true that if I were from Mars, and I knew nothing previously about the subject matter, I would likely be somewhat confused by this episode. Trying to tell people about things they believe they understand, but of which they are still mainly rationally ignorant of,… is almost certainly going to be difficult.

    • http://www.TomWoods.com Tom Woods

      We’re not perfect, and we’re happy for constructive criticism — and we’ve had some really helpful comments in that regard so far. But this comment I genuinely don’t understand. Every single point Krugman raised is addressed. If you’re still left with, “But isn’t Obamacare a success?” then I’m not entirely sure what to do. If you define “success” as “We did after all manage to rope people into this system,” then yes it was, as Bob notes. As Bob notes, if you set up a system like this and force people into it, you can then shout “success!” while pointing at all the people you roped in, if that impresses you. But this, as we note throughout this episode, is a very short-sighted way of looking at the whole picture.

      • Commentizer

        I am a major fan of the Tom Woods Show, and am also becoming a fan of Contra Krugman. (So now I feel guilty making a blanket critical comment.) To rephrase my statement below in more positive terms, I would say that a “focus” on the podcast can or should be to clearly state:
        (a) What is the point Krugman made that is being refuted?
        (b) What is the refutation?

        The casual non-Libertarian listener (identified by Tom in the recent Texas talk as a key part of the audience) wants to get these two elements quickly. A discussion covering numerous aspects of the Krugman column and numerous ways to look at those aspects and numerous aspects of Austrian economics and numerous aspects of history . . . will lose the casual listener. At the end it will all blur together in his mind.

        • maninthewilderness

          I think that’s a fair comment. I enjoy Contra Krugman the way it is, but I agree that there are many listeners (and potential listeners) who would like a clearer focus.
          But I also think that the nature of Krugman’s columns – at least this one – makes that difficult. And for me, the best part of this podcast was not so much the parts that engaged with Krugman’s column, as the part that gave the historical background about the growing involvement of the insurance industry and the state in healthcare finance over the past hundred years.

          • KenD

            I’d love to keep destroying you libertardians, but the cowardly Tom Woods banned my from commenting!

            2

          • Sovereign Mary

            KenD – No doubt for good reason with your juvenile and terribly inept use of slurs.

          • KenD

            no, becuz i dropped too many truth-bombs on you losers

          • Luke Perkins

            I know, right… that’s why none of us can see your comment right now =D

            Hey, thanks for being our pet troll. I really like how adorable your comments can be.

          • KenD

            I didn’t post this at TW’s site genius…

          • Luke Perkins

            Yeah, Woods has nothing to do with this site at all.

            And your comment here http://tomwoods.com/podcast/ep-527-is-austrian-economics-unscientific-because-it-doesnt-conduct-experiments/ is totally invisible.

            I love when you come out from under your bridge to visit us =D

      • JimD

        Tom, thanks for commenting on my comment.

        I would define success by answering the question “Are ‘we’ better off with Obamacare then ‘we’ were before”? Krugman says yes. If the libertarian view is that anything that increases the government role in anything is bad policy then we have the answer and frankly really no need to spend more than 30 seconds in discussion. As I said I don’t think you guys ever addressed that head on.

        The podcast raises some important issues but almost more descriptively than analytically, and I think maybe because of time limitations does not fully discuss them. My sense is that there is a relationship between compulsory enrollment and covering pre-existing conditions. Also there is a reference to Obamacare providing incentives to move employees to exchanges with health insurance no longer tied to an employer – which I would think might be a direction a libertarian would favor.

    • maninthewilderness

      I’m not sure that Krugman’s main is that Obamacare is a success.

      And if that was his main point, he certainly was not very effective in putting it across. Krugman claims that it has been “a remarkable success”, and he argues that it has not been a total disaster, and that some of the the dire predictions made about it have not come true.

      But Krugman’s only arguments that Obamacare was a remarkable success are 1) that a lot of people have health insurance today who otherwise wouldn’t; and 2) that most people seem to be satisfied with their coverage. To be honest, I don’t think either of those things are a big surprise.

      Hence I’m not really convinced that Krugman really made a very good case for saying that Obamacare is a success. It would be closer to the mark to say that it hasn’t (yet) been a complete disaster. And the same could be said for Medicaid and Medicare. Whether they have been a “success” is questionable, but it is certainly true that some people have benefited from them, and those who are entitled to them are generally satisfied with them.

    • Jonathan Schattke

      wait… same number of uninsured, uninsured people paying a fine, millions moved to part-time instead of full-time work to avoid the mandate, about 3x the expense for insurance and you call this a “success?”

      • jacksays

        sources for these claims?

        • Jonathan Schattke

          Libtard.
          ACA specifically noted as a reason employers are hiring part-time.
          http://www.wsj.com/articles/post-recession-legacy-elevated-level-of-part-time-employment-1415808672
          ” In 2014, premiums in the non-group market grew by 24.4% compared to what they would have been without Obamacare.”
          But – this is only for “compliant” plans, that would have been extreme before Obummercare. And they are set to raise by another 50% this year, as new provisions kick in.
          http://www.forbes.com/sites/theapothecary/2014/10/23/now-there-can-be-no-doubt-obamacare-will-increase-non-group-premiums-in-nearly-all-states/

          As for the number of uninsured, I was unaware of the recent drop, as the penalties kicked in and the marginal make their choices:
          http://www.gallup.com/poll/182348/uninsured-rate-dips-first-quarter.aspx
          still, 11.9% of the current population is 38.2 million.
          and 15.4% of the 306.8m in 2009 is 47.2 million, so all this pain has insured 11 million people for tens of billions of cost; it would have been cheaper to just buy the uninsured a cheap HMO in 2009!

          • Ken Kelly

            The author of your WSJ piece mentions the ACA in passing as a possible contributor to the current higher than normal ratio of part-time to full-time employment, but cites no data, because there isn’t any. Whatever effect the ACA is having is so small as to be in the statistical noise.

            Ratio of Part-Time Employed Remains Higher Than the Pre-Recession Levels
            The Affordable Care Act (ACA) Impact on Part-Time Employment: Not Much

            As for Chris Conover’s column from 2014, I suggest you read it again. Nowhere does he claim that premiums for plans of equal value increased by 24% – he refers exclusively to average premiums with and without the ACA. That means that the pre-ACA average includes a tranche of plans with very limited benefits.

            The actual drop in the uninsured due to the ACA is more like 16M than 11M, but I will address that subject in its own response (provided you don’t call me a “libtard” in the interim).

          • Jonathan Schattke

            Now you are just quibbling over details. You have agreed with my points, and honestly it does not matter if you do or do not.
            A priori, we know that penalizing employers for having full-time workers will lead to fewer; exact numbers in experience is a red herring.
            A priori, we know that raising demand artificially will raise the equilibrium price; exact numbers are a red herring
            A priori, we know that the methods used to “insure” the “uninsured” will lead to a significant number of people STILL uninsured, but that it will shift the “window” of uninsured up, off the floor where the fully subsidized healthcare is and into the middle class where raised premiums and fewer employer plans is. Actual numbers is a red herring.

          • ejminer123 .

            I can tell you that my Wife, working for a large corporation, was able to work 39 a week as a part timer, now, she is not to go over 30 hours. A rather large impact on us. The reason given? ACA.

          • jacksays

            it certainly did give employers something to blame (whether truthfully or not).

          • jacksays

            seriously, is name-calling really necessary? i haven’t been in third grade in some years now. i asked a simple request (which you honored after name-calling).

            gimme a break.

  • Matthew

    Is it true that the Romneycare “finding a way” involved about $500 million in federal subsidies? If so, how can that possibly translate to a federal program? Who would subsidize the US? The United Nations? (not)

    • Luke Perkins

      “Who would subsidize the US? The United Nations? (not)”

      China actually.

  • http://quest4three.blogspot.com daniel

    Why do we allow ourselves lose sight of basic *linguistic* differences between health insurance and health care? Why have we allowed the industry of insurance develop such a bad reputation?

    • Luke Perkins

      Rothbard actually mentioned this in some of his work.

      When the insurance industry was cartelized by the government, it moved from being a system where people could pool risk to a system where shysters could hustle old people out of their money (“whole” life insurance for example).

      The ACA is now just another step in the dance of giving the insurance companies more for nothing. Of course, people are getting wise to the game, so we need to like “health insurance” to “health care” and pretend the two are one.

      • http://quest4three.blogspot.com daniel

        Yeah. I think I read that too; Ethics of Liberty or something like that.

        Remember the vast majority of us that come to mises.org are already believers. When we talk to non-believers we can’t tell them they are wrong, we have to engage them on their own level. Often the best means of doing that is leaving them with an open question.

        Good luck!

        • Luke Perkins

          Sorry, we’re not at Mises.org, and I didn’t recognize you.

  • RayAlanHarvey

    The podcast was aces.

    The decision to not use Amazon’s “Look Inside” feature (for Primal Prescription) was foolish.

    You might want to rethink that — particularly if you’re charging just over $15.00(!) for the Kindle version. I can tell you for certain that it’s cost you 2 sales in the last 12 hours alone.

    • http://www.TomWoods.com Tom Woods

      That is always a publisher’s decision and never an author’s decision, though Bob can certainly run it by his publisher. Thanks for noting it.

  • Sovereign Mary

    Koolaide Krugman!

  • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

    Actually, the proportion working full-time went way up after the ACA:
    https://research.stlouisfed.org/fred2/graph/?g=2rVc

    • jhoop

      The problem with such claims is the Bastiat seen and unseen.

      • http://againstjebelallawz.wordpress.com/ Enopoletus Harding

        Yeah; I know, but Bob said the opposite happened.

        • jhoop

          What you have to do, is determine those that would be working full time if it were not for Ocare and see if they had been reduced to part time.
          I will note, that in my shop we are actively working to find people that we can make part time. I can also note that their are real additional costs for compliance such as for the 1094s and 1095s. For some, I know this will cost several thousand more a year. So, paying more for the same or less productivity, means decreasing competitiveness.
          All this goes into the cost of labor for our society. As you make your markets more and more uncompetitive, the jobs that this affects go elsewhere, or just disappear altogether.
          I remember reading once that the Code du Travil in France requires a whole new level of regulatory compliance at 50 or more employees. The result is France has more companies with 49 or more employees than other economies without such regulations, and that if a company does need to go over 50, they move to Belgium.
          As Bastiat also noted, you have to pass laws that are in keeping with physics.