After spending time in Argentina, BofA's Marcos Buscaglia is concerned... The perception of many locals is that the risks of an economic/currency crisis before year-end have increased significantly. This compares to a view they had before of a muddle-through till the 2015 presidential elections. Policy decision-making is ever more concentrated, and the administration has radicalized, but the severe economic downturn will change political incentives in 2015, in BofA's view.
A couple of recent news stories and the responses they have generated got me thinking once again about the slippery slope fallacy, whereby an event is presented as the catalyst for a chain of other events, even though there is no evidence to support the thesis. The first slippery slope relates [...]
Dallas Mavericks owner Mark Cuban says he doesn't support the NBA forcing Donald Sterling to sell the Los Angeles Clippers in the wake of his racism scandal. He called it a "slippery slope" that would set a precedent for the league ousting owners because of their personal views in the future.
"If insurance companies know people will be forced to buy policies, why would they lower premium prices?" Asks eegeterman over Twitter. "Why wouldn't they RAISE prices?"
I've been hearing this a bit today, so let's talk it through. In a world of one private insurance company and an individual mandate, it makes perfect sense. In a world of exchanges, with a dozen competing insurance plans, including national nonprofits, it doesn't.
Greg Mankiw has an interesting column on the public plan option; you've already seen related points on his blog and on MR.Today I'm interested in a slightly different question, namely the potential benefits of monopsony. Imagine a benevolent single buyer of health care services. Forget about whether or not it could be a government; let's just focus on the logic of the model. I can think of a few scenarios: