The segment aired before MIT's Jonathan Gruber became a household word for spinning public policy badly. But a full-on welfare-theoretic analysis of a health insurance reform isn't going to be easy. The reform had no hope of being a Pareto improvement. (Pareto improvements are simple enough to act upon that markets do so routinely, and state action to exploit a Pareto improvement generally isn't controversial.) The professor had to engage in those wisecracks about exploiting ignorance to get the bill passed, because no way could the people doing well under the existing institutional arrangements for health insurance bribe the beneficiaries of the new law from not making the change, nor could the beneficiaries compensate those who preferred the status quo for the change.
That's way too wonkish for a cable talk show, even one that few people watch, and as one might expect, it deteriorated quickly.
How did it break down?
First, Mr Schultz wanted to exploit a Congressional Budget Office study that suggested more people now have insurance. That's a misleading aggregate, as that population includes both people who now have insurance who previously didn't, as well as people who have less insurance than they used to, and people who had to buy more insurance than they once did.
The received wisdom, according to a player coached by Don Morton who is 0-3 against Scott Walker, is that it's OK for some people to lose their plan, either because they were participating in "junk" insurance, or because their physicians withdrew from the network their carrier paid for.
Try this: a few people who didn't have cars now have basic Fords, but some people who had Smart Cars had to give them up for a Corolla complete with a child-restraint seat in the back, and some owners of crew-cab pickups discovered they couldn't drive them on some streets. Improvement in net economic welfare?
Then his guest, Dr. Hebert, committed the "if only one person" fallacy, arguing it is fine that some people are pushed out of coverage (per corollary, is it desirable that some hospitals close?) because a few people that didn't have coverage now do.
But in the weird world that is the Ed Show, moral preening is more important than, oh, increasing economic welfare.
Doing good is often harder than do-gooders realize, but doing good is also more about the doing and the doer than it is about the good. Too often, as a result, liberals are content to treat gestures as the functional equivalent of deeds, and intentions as adequate substitutes for achievements.That is, if there even is a hint of this increased participation in insurance.
It turns out [insurance reform] did neither. It created more uninsured people than it gave insurance to. And it promises to create even more.Ed Schultz, if you believe that extending coverage to a few people while more people lost the coverage they preferred is a social gain, you can just keep on pretending.