The third article, continues the downward spiral. There, Alexander Dyck, Adair Morse, and Luigi Zingales in "Who Blows the Whistle on Corporate Fraud?" suggest that government regulators are not very effective in rooting out corporate fraud, and, what is worse, rational expectations of investors are not very active either. The authors recommend giving more incentives to whistleblowers. This recommendation certainly must be wrong. What corporation needs such meddling? The decline in the standards of economics generally upheld by the National Bureau of Economic Research must be reversed.
http://www.nber.org/digest/aug07/w12885.html
href="http://farm1.static.flickr.com/119/294168009_b25decaddf.jpg"> Oh snap.
ReplyDeletePerhaps the key line in the Digest article is " Given that states are beginning substantial new experiments in public coverage, the authors conclude that it is important to understand the extent to which the people targeted by the expansions view publicly subsidized insurance programs as substitutes for private insurance."
ReplyDeleteTo the extent that it's cheaper for them and provides better coverage, well duh. Why shouldn't they? They're acting utterly rationally. (And so are the states, as long as they believe the cost of subsidizing insurance is less than the cost of subsidizing emergency care plus the cost of people being uninsured.)
Oddly, or perhaps not oddly, the digest version seems unaware that the answer to the original question, "Are the programs a) unable to handle the volume of uninsured or b) swamped by crowd-out" is still ultimately a). According to what's reported, only 40% of the people taking advantage of the subsidy programs are formerly uninsured people, but that just means that (if the programs were working full blast) the number of uninsured would fall more slowly than if no one were switching from private insurance. No amount of "crowd-out" less than 100% can account for a rise in the number of uninsured.