5 ms·

Nobel economist takes aim at rent-seeking banking and healthcare industries

66 points by 6stringmerc 10y ago

miraj 10y ago
earlier discussion on HN with link to his interview on The Atlantic: https://news.ycombinator.com/item?id=13829793 https://news.ycombinator.com/item?id=13829793
- AnthonyMouse 10y ago
  That isn't the same article, it's just the same economist.
  - miraj 10y ago
    i did not say it is the same article. but if you read it, the Atlantic article/interview is more substantial than the Marketwatch article; and the topics are exactly same. also there already is a good discussion going on the other thread.
    - deleted 10y ago
      [deleted]
deleted 10y ago
[deleted]
frgtpsswrdlame 10y ago
In terms of rent-seeking watch out for Donald Trump's proposal on infrastructure spending. A massive tax break for private building and ownership of toll roads is the epitome of corporate welfare to rent-seekers.
- zhemao 10y ago
  Hasn't he moved away from that plan? I thought the spending plan was now to fund repairs on existing roads.
  - frgtpsswrdlame 10y ago
    Well there hasn't been too much discussion about it as of late because of problems with the republican congress and DJT's notorious ambiguity. I did find this though: >White House spokesman Sean Spicer said "strong public-private partnerships" would be key to rebuilding the nation's roads, bridges and airports. "Infrastructure used to be a point of American pride, but now an overbearing, ineffective regulatory system can keep projects in limbo for years," Spicer said. "The government has wasted too much of the taxpayers' money on inefficient and misguided projects." The White House sees infrastructure as a potential large job creator but officials have said the federal government cannot shoulder the entire burden. The administration is looking at toll roads, tax credits and other ways to spur private investment. Major real estate and private equity executives attended the meeting, including developer Richard LeFrak, Vornado Realty Trust Chief Executive Officer Steve Roth, and Apollo Global Management co-founder Josh Harris, the White House said. http://www.reuters.com/article/us-usa-trump-infrastructure-musk-idUSKBN16F1JI http://www.reuters.com/article/us-usa-trump-infrastructure-m... That would lead me to believe tax breaks for toll roads is still on the table.
FreedomToCreate 10y ago
The idea of rent seeking is becoming very popular and the best place to see it is Silicon Valley. Everything is becoming subscription based and housing is pretty much out of reach for everybody. Only way to afford anything is to rent it. Things my parent owned by the time they were 26 I have no choice to rent, since I couldn't even imagine right now buying them (even though I make 3x what they were making at the same age). For example I rent a house with friends ($5000 a month spilt by 4), a parking sport ($200), and lease a car ($200). I don't own any music or movies (Netflix and Spotify). Its a convenient way to live in terms of flexibility but you never feel like these things are yours and that leaves this sense of detachment. At any time these things could be taken away and you would have nothing. I grew up in the country and have the ultimate goal of buying myself land where I can build a house and workshop.
- conistonwater 10y ago
  That's not rent-seeking as the term is usually used: https://en.wikipedia.org/wiki/Rent-seeking#Description https://en.wikipedia.org/wiki/Rent-seeking#Description It uses the word rent in a somewhat different sense.
- mljoe 10y ago
  Rent seeking is a transaction where the rent seeker accumulates money without contributing to the overall wealth of a society, basically getting paid without labor effort, offering a product or otherwise advancing innovation or the human condition in some way. Land rent is the original example of rent seeking. SV rents would probably qualify, since the cost of rent in SV is more connected to the land and location, as well as the regulations on that land, versus the improvements on the property. Maybe $4000/mo of your rent is based on "rent-seeking" and $1000/mo is based on the property itself.
  - nojvek 10y ago
    I think it would suffice. SV home owners are very much against new properly building. If that happens the supply increases and demand drops. $5000 on rent is absurd. Wow!
  - 10y ago
legitster 10y ago
Why are there no national healthcare brands? Why are there no "budget" healthcare brands? Why does not a single goddamn hospital know how much a glass of orange juice costs? Where are the Walmarts, the Costcos, the Trader Joes of the healthcare industry? Why aren't we complaining about how Big Box hospitals are super inferior and bragging about the extra buck we spend to treat ourselves to an organic mom and pop MRI? Is there any other industry like this? It's 16% of our economy and it doesn't seem like a single flicker of free market is left in it.
- dragonwriter 10y ago
  > Why aren't we complaining about how Big Box hospitals are super inferior and bragging about the extra buck we spend to treat ourselves to an organic mom and pop MRI? There are people that do something very much parallel to this, but they are the people who can afford to hire elite, exclusive, low-client-load physicians who aren't on the short office meeting clock that common insurance reimbursement provides, and do similar things with other medical facilities. It's just that it's not the middle class looking down on the working class over this, but a fairly narrow slice of the upper class looking down at the rest of society.
- akgoel 10y ago
  Here in Houston, with it's vaunted medical center - you can almost always get cheaper services with non-hospital affiliated services. Need an MRI? Bob's House of MRI will be cheaper than the hospital's location. Same for physical therapy, cancer treatment, or anything else. Hell, even all the new 24 hour emergency rooms are cheaper than the hospital. It's really not that hard to price around.
- hkmurakami 10y ago
  There are physicians who bill by items with set costs. They won't take insurance and you typically have to pay a yearly retainer fee.
- BurningFrog 10y ago
  There are small examples of people doing well working outside the system. The Surgery Center of Oklahoma is the biggest one I've heard of. https://thinkprogress.org/how-one-oklahoma-hospital-is-driving-down-the-cost-of-health-care-by-thousands-of-dollars-f507cdf32111 https://thinkprogress.org/how-one-oklahoma-hospital-is-drivi... http://reason.com/reasontv/2012/11/15/the-obamacare-revolt-oklahoma-doctors-fi http://reason.com/reasontv/2012/11/15/the-obamacare-revolt-o...
hoodwink 10y ago
Just a reminder that Nobel Prize in Economics is actually the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel
NoGravitas 10y ago
It's interesting to see a right-libertarian argument in favor of a single-payer healthcare system. Single-payer would also support entrepreneurship by decoupling healthcare from employment.

66 points by 6stringmerc 10y ago

miraj 10y ago

earlier discussion on HN with link to his interview on The Atlantic: https://news.ycombinator.com/item?id=13829793 https://news.ycombinator.com/item?id=13829793

AnthonyMouse 10y ago
That isn't the same article, it's just the same economist.
- miraj 10y ago
  i did not say it is the same article. but if you read it, the Atlantic article/interview is more substantial than the Marketwatch article; and the topics are exactly same. also there already is a good discussion going on the other thread.
  - deleted 10y ago
    [deleted]

deleted 10y ago

[deleted]

frgtpsswrdlame 10y ago

In terms of rent-seeking watch out for Donald Trump's proposal on infrastructure spending. A massive tax break for private building and ownership of toll roads is the epitome of corporate welfare to rent-seekers.

zhemao 10y ago
Hasn't he moved away from that plan? I thought the spending plan was now to fund repairs on existing roads.
- frgtpsswrdlame 10y ago
  Well there hasn't been too much discussion about it as of late because of problems with the republican congress and DJT's notorious ambiguity. I did find this though: >White House spokesman Sean Spicer said "strong public-private partnerships" would be key to rebuilding the nation's roads, bridges and airports. "Infrastructure used to be a point of American pride, but now an overbearing, ineffective regulatory system can keep projects in limbo for years," Spicer said. "The government has wasted too much of the taxpayers' money on inefficient and misguided projects." The White House sees infrastructure as a potential large job creator but officials have said the federal government cannot shoulder the entire burden. The administration is looking at toll roads, tax credits and other ways to spur private investment. Major real estate and private equity executives attended the meeting, including developer Richard LeFrak, Vornado Realty Trust Chief Executive Officer Steve Roth, and Apollo Global Management co-founder Josh Harris, the White House said. http://www.reuters.com/article/us-usa-trump-infrastructure-musk-idUSKBN16F1JI http://www.reuters.com/article/us-usa-trump-infrastructure-m... That would lead me to believe tax breaks for toll roads is still on the table.

FreedomToCreate 10y ago

The idea of rent seeking is becoming very popular and the best place to see it is Silicon Valley. Everything is becoming subscription based and housing is pretty much out of reach for everybody. Only way to afford anything is to rent it. Things my parent owned by the time they were 26 I have no choice to rent, since I couldn't even imagine right now buying them (even though I make 3x what they were making at the same age). For example I rent a house with friends ($5000 a month spilt by 4), a parking sport ($200), and lease a car ($200). I don't own any music or movies (Netflix and Spotify). Its a convenient way to live in terms of flexibility but you never feel like these things are yours and that leaves this sense of detachment. At any time these things could be taken away and you would have nothing. I grew up in the country and have the ultimate goal of buying myself land where I can build a house and workshop.

conistonwater 10y ago
That's not rent-seeking as the term is usually used: https://en.wikipedia.org/wiki/Rent-seeking#Description https://en.wikipedia.org/wiki/Rent-seeking#Description It uses the word rent in a somewhat different sense.
mljoe 10y ago
Rent seeking is a transaction where the rent seeker accumulates money without contributing to the overall wealth of a society, basically getting paid without labor effort, offering a product or otherwise advancing innovation or the human condition in some way. Land rent is the original example of rent seeking. SV rents would probably qualify, since the cost of rent in SV is more connected to the land and location, as well as the regulations on that land, versus the improvements on the property. Maybe $4000/mo of your rent is based on "rent-seeking" and $1000/mo is based on the property itself.
- nojvek 10y ago
  I think it would suffice. SV home owners are very much against new properly building. If that happens the supply increases and demand drops. $5000 on rent is absurd. Wow!
- 10y ago

legitster 10y ago

Why are there no national healthcare brands? Why are there no "budget" healthcare brands? Why does not a single goddamn hospital know how much a glass of orange juice costs? Where are the Walmarts, the Costcos, the Trader Joes of the healthcare industry? Why aren't we complaining about how Big Box hospitals are super inferior and bragging about the extra buck we spend to treat ourselves to an organic mom and pop MRI? Is there any other industry like this? It's 16% of our economy and it doesn't seem like a single flicker of free market is left in it.

dragonwriter 10y ago
> Why aren't we complaining about how Big Box hospitals are super inferior and bragging about the extra buck we spend to treat ourselves to an organic mom and pop MRI? There are people that do something very much parallel to this, but they are the people who can afford to hire elite, exclusive, low-client-load physicians who aren't on the short office meeting clock that common insurance reimbursement provides, and do similar things with other medical facilities. It's just that it's not the middle class looking down on the working class over this, but a fairly narrow slice of the upper class looking down at the rest of society.
akgoel 10y ago
Here in Houston, with it's vaunted medical center - you can almost always get cheaper services with non-hospital affiliated services. Need an MRI? Bob's House of MRI will be cheaper than the hospital's location. Same for physical therapy, cancer treatment, or anything else. Hell, even all the new 24 hour emergency rooms are cheaper than the hospital. It's really not that hard to price around.
hkmurakami 10y ago
There are physicians who bill by items with set costs. They won't take insurance and you typically have to pay a yearly retainer fee.
BurningFrog 10y ago
There are small examples of people doing well working outside the system. The Surgery Center of Oklahoma is the biggest one I've heard of. https://thinkprogress.org/how-one-oklahoma-hospital-is-driving-down-the-cost-of-health-care-by-thousands-of-dollars-f507cdf32111 https://thinkprogress.org/how-one-oklahoma-hospital-is-drivi... http://reason.com/reasontv/2012/11/15/the-obamacare-revolt-oklahoma-doctors-fi http://reason.com/reasontv/2012/11/15/the-obamacare-revolt-o...

hoodwink 10y ago

Just a reminder that Nobel Prize in Economics is actually the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel

NoGravitas 10y ago

It's interesting to see a right-libertarian argument in favor of a single-payer healthcare system. Single-payer would also support entrepreneurship by decoupling healthcare from employment.