8 ms·

It's amazing how people just accept that it takes 6 months or more to see a specialist and don't realize that it is de facto rationing caused by intentional sup

It's amazing how people just accept that it takes 6 months or more to see a specialist and don't realize that it is de facto rationing caused by intentional supply restriction.

klipt 2y ago
People prefer to argue endlessly about private vs state funded healthcare without realizing that issue is completely orthogonal to the massive doctor shortage. Same thing with the housing debate really. People prefer to argue snot rent control instead of just building more housing.
- Tade0 2y ago
  You can't outpace investment demand - especially not in the phase when housing is used as collateral to borrow in order to invest in more housing. China reportedly has currently enough housing stock to house their population twice over. Did that make housing cheap? Hardly. We're only seeing sustained price decreases now that the bubble is bursting, but it's not going to make real estate more affordable, as it comes with a heavy economic downturn.
  - seanmcdirmid 2y ago
    Houses built in the wrong place aren’t useful. Also, allowing hoarding of housing (viable since no property tax) can also restrict supply. There are plenty of reasons why more housing doesn’t necessarily lead to cheaper housing. Even inside 4th ring in East Beijing, we estimated that the block we were living in was only 60% or so occupied (by counting lights on nightly walks), much of the rest of the 40% were probably not even renovated.
    - eru 2y ago
      > Also, allowing hoarding of housing (viable since no property tax) can also restrict supply. I don't see how property tax makes any difference here? The opportunity cost in terms of lost rent (if you are hoarding vacant property instead of renting it out) should be the same no matter what the property tax is? > There are plenty of reasons why more housing doesn’t necessarily lead to cheaper housing. If you can find a market that you can keep adding supply into, and prices don't react, you found yourself an infinite money machine! (It's the same mechanism as when people complained that printing money (whether by the Bank of Japan in the 1990s or the Fed in the 2010) can't raise inflation: Instead of complaining, you should keep printing money and gradually buy up the whole world in return for some ink and paper / database entries.)
      - seanmcdirmid 2y ago
        That was China’s thinking, but it turns out there is a limit, it’s just not a gradual slope downward but a huge crash.
        eru 2y ago
        What makes you think so? The Chinese problems come from different sources. For example, there's lots of corruption, they are not keeping their nominal GDP on a stable growth target, and if I remember right, they have a lot of government intervention in the real estate and credit markets. See https://www.econlib.org/the-confusing-china-debate/ https://www.econlib.org/the-confusing-china-debate/ for an assessment more qualified than mine. And https://scottsumner.substack.com/p/chinas-mysterious-deflation https://scottsumner.substack.com/p/chinas-mysterious-deflati... for something more recent.
  - ChadNauseam 2y ago
    is this housing stock in places where people want to live? I find it hard to believe that half the units in hong kong or shanghai are vacant
  - kelnos 2y ago
    > China reportedly has currently enough housing stock to house their population twice over. Did that make housing cheap? Hardly. If you build housing where people don't care to live, it doesn't matter how much you build. Housing will be more expensive in desirable areas unless you build more housing in those desirable areas.
  - AnthonyMouse 2y ago
    > You can't outpace investment demand - especially not in the phase when housing is used as collateral to borrow in order to invest in more housing. Suppose housing prices are high. A construction company exists and has a million dollars, so they buy a $500,000 home, knock it down and spend $500,000 to build half a dozen condo units the size of the original house on the same lot, then sell them each for $500,000. That takes six months to a year. Now the construction company has three million dollars and buys three lots and makes nine million dollars, do you see where this is going? The thing that prevents this is when either a) they're not allowed to knock down the house and build condos there, or b) you pass laws that make it cost $3,000,000 to build a six-unit condo instead of $500,000, and then the unit is never going to cost less than $500,000 because it costs that much to build. > China reportedly has currently enough housing stock to house their population twice over. Did that make housing cheap? China is hardly an example of markets. But it's a good demonstration of why you need to allow housing to be built anywhere that it's needed instead of having bureaucrats decide where it should go. > We're only seeing sustained price decreases now that the bubble is bursting, but it's not going to make real estate more affordable, as it comes with a heavy economic downturn. We made a mistake with the last housing crisis, which was to reinflate the bubble with low interest rates. What you really want in that circumstance is to increase take home pay, e.g. by lowering taxes on the middle class.
    - eru 2y ago
      The commenter you replied to makes the mistake of mistaking the price of houses as a capital good with the monthly rent you pay for housing services. If you want lots of new houses being built, high house prices are good. That incentivises developers to jump through all the hoops, build some houses, and sell them. (In the wake of the Great Recession, we had and have the opposite problem: tightening of credit dropped house prices, thus house construction was choked off, and thus rents rose. The ratio of rents to house prices went up, and rents also went up in absolute terms.)
      - Tade0 2y ago
        > That incentivises developers to jump through all the hoops, build some houses, and sell them. That doesn't help with affordability, as when house prices are high they're... unaffordable anyway, so they get bought out by investors, who can produce any amount of cash as long as the investment pays off. For this reason a huge chunk of new housing is not even built to be affordable - both the margins and ROI on a "premium" apartment are just better. A win for investors and developers alike while at the same time regular people are thrown under the bus.
  - eru 2y ago
    > You can't outpace investment demand - especially not in the phase when housing is used as collateral to borrow in order to invest in more housing. Huh? What kind of weird statement is this? It seems there's a lot of confusion. I think it mostly stems from owner-occupiers. For our analysis, let's separate them into two: some people own houses and rent them out, and everyone (but the homeless) rent houses. It's just that sometimes people rent from themselves. What matters for discussions about affordability of housing is how much of your income you have to spend each month on housing every month. Let's call that 'housing services'. That is pretty much a function of available supply every month vs demand every month. Who owns them doesn't make a difference. If an investor buys a house, but rents it out, that's fine. Neither supply of housing services nor demand for housing services has changed. If an investor buys a house, but doesn't rent it out (eg because it's intentionally empty, or because the investor lives there herself), then she counts as a consumer of that unit for that month. That's an indirect change in supply and demand for housing services, but doesn't directly have anything to do with the investor as a owner. Now to come to your scenario: If investors use houses as collateral to invest in more housing, that's great! Ideally that will drive up the prices of housing as a capital god. The more expensive houses are as a capital good, the more it makes sense for developers to jump through all the hoops and build more houses to sell them into the market. That means more houses available for renting out, which drives down rents. (In the wake of the Great Recession, we had and have the opposite problem: tightening of credit dropped house prices, thus house construction was choked off, and thus rents rose. The ratio of rents to house prices went up, and rents also went up in absolute terms.)
  - IG_Semmelweiss 2y ago
    When your housing inventory is located on no mans land, and your economic policy is largely built on top of assumptions that housing should be an infinitely-appreciating asset (instead of a depreciating asset, like any other hars asset) , then you end up with china prices. And I'm not even mentioning the fact that the Chinese birthrate decline is so precipitous that their current population is expected to half by 2100. The chinese market of housing does not reflect real supply or prices. It instead reflects bad incentives and an economic bubble propped by the centralized state
- sidewndr46 2y ago
  What is snot rent control?
  - klipt 2y ago
    Swipe typo! I meant "about"
tivert 2y ago
Some level of supply restriction is probably warranted, though less than what we have now. It would be bad policy to have talented people train intensely for 8+ years, only to have them emerge on the other side with a "sorry, oversupply, no job for you." I think availability of lengthy and highly-specialized training programs needs to be carefully calibrated to avoid other kinds of rackets (like have been seen with law schools and certain kinds PhD programs).
- throwup238 2y ago
  We do it all the time with lawyers and PhD scientists of all stripes. Why should doctors receive special treatment? (Wrote this before your edit introducing the second paragraph)
  - tivert 2y ago
    > We do it all the time with lawyers and PhD scientists of all stripes. Why should doctors receive special treatment? We shouldn't do that with lawyers and PhDs either. Why must everything be a race to the bottom?
    - OutOfHere 2y ago
      The free market philosophy dictates that we absolutely should do it, and it's a good philosophy to follow.
      - tivert 2y ago
        > The free market philosophy dictates that we absolutely should do it, and it's a good philosophy to follow. Sorry, it's never a good idea to base real life policy on ideological dogma. The "free market philosophy" has some good ideas, as well as a lot of bad ones. We shouldn't blindly follow its "dictates." In my experience, the people who dogmatically preach the free market frequently have an oversimplified understanding or use circular logic to conclude the free market is good by redefining good as whatever the free market does.
eru 2y ago
The rationing is 'caused' by price caps (whether by law or informally observed). Supply restrictions just restrict available supply, they don't cause long waits by themselves. (Of course, this assumes that you don't want to re-interpret prices themselves as a form of rationing. That's a decent approach to take in some contexts, but eg doesn't gel with the common usage like 'food was rationed during the war', where we use 'rationing' in contrast to the usual price mechanism.)
- cameldrv 2y ago
  There are no price caps. If you're rich, you have concierge medicine, and you'll see a great specialist whenever you want. The supply restrictions (and other things that reduce doctor productivity) cause a lack of supply relative to the amount of medical care that would be medically useful for the population. For people of normal income with normal medical insurance, that means that their care has to be rationed, or it would be unaffordable.
  - eru 2y ago
    If there's such a long queue, why don't doctors raise prices until the queue goes away? Do doctors not like money? > If you're rich, you have concierge medicine, and you'll see a great specialist whenever you want. You don't need to be that rich to go see a doctor privately in eg the UK. And, yes, they have crazy queues for the NHS, while the same doctor can be had for a bit of money quickly when seen privately. In that case, the price restriction comes from what the NHS is willing to pay. And because patient don't directly pay for the NHS, at least not proportional to the usage, instead of rationing via price the system rations via wait times. > [...] the amount of medical care that would be medically useful for the population. I'm not sure there's such a thing. There's no clearly defined amount that is 'medically useful'. There are just gradually diminishing returns to more medicine (in a statistical sense).
    - Snow_Falls 2y ago
      > If there's such a long queue, why don't doctors raise prices until the queue goes away? Do doctors not like money? You do understand the 'queue' are sick people who need treatment? If the 'queue' goes away then they're just untreated and potentially die. Doctors like money but, at least where I come from, you don't go into medicine for cash. You do it for ideals or respect or to have a job that means something. > I'm not sure there's such a thing. There's no clearly defined amount that is 'medically useful'. There are just gradually diminishing returns to more medicine (in a statistical sense). there is actually such a thing as overtreatment. There's this really interesting statistical point where too much testing can actually cause harm, even if the test it self is harmless, because it discovers things that wouldn't have really been a problem ('incidentalomas'). And, unfortunately, there does come a point at times where a patient cannot be helped and it is better to just let them enjoy what time they have left rather than subject them to more treatment and recovery time and all that.
silisili 2y ago
When I lived in Florida it was about like that. I couldn't accept that so just asked for the soonest appointment anywhere, and was assigned a new Haitian lady about an hour away who wasn't booked up yet. Given the circumstances I expected the worst, but I was so amazed with her. She was tall, pretty, and extremely well spoken. Not that this matters a ton, just recalling my first impression shattering expectations. And she's the first doctor I've met that realized that my main problem was more with health anxiety than health itself and just kinda bro'd it out with me for a half hour. All of that is to say, if this is what to expect from foreign doctors vs the purposely supply constrained 'elites' I'm accustomed to, consider me 100% on board.

It's amazing how people just accept that it takes 6 months or more to see a specialist and don't realize that it is de facto rationing caused by intentional supply restriction.

klipt 2y ago

People prefer to argue endlessly about private vs state funded healthcare without realizing that issue is completely orthogonal to the massive doctor shortage. Same thing with the housing debate really. People prefer to argue snot rent control instead of just building more housing.

Tade0 2y ago
You can't outpace investment demand - especially not in the phase when housing is used as collateral to borrow in order to invest in more housing. China reportedly has currently enough housing stock to house their population twice over. Did that make housing cheap? Hardly. We're only seeing sustained price decreases now that the bubble is bursting, but it's not going to make real estate more affordable, as it comes with a heavy economic downturn.
- seanmcdirmid 2y ago
  Houses built in the wrong place aren’t useful. Also, allowing hoarding of housing (viable since no property tax) can also restrict supply. There are plenty of reasons why more housing doesn’t necessarily lead to cheaper housing. Even inside 4th ring in East Beijing, we estimated that the block we were living in was only 60% or so occupied (by counting lights on nightly walks), much of the rest of the 40% were probably not even renovated.
  - eru 2y ago
    > Also, allowing hoarding of housing (viable since no property tax) can also restrict supply. I don't see how property tax makes any difference here? The opportunity cost in terms of lost rent (if you are hoarding vacant property instead of renting it out) should be the same no matter what the property tax is? > There are plenty of reasons why more housing doesn’t necessarily lead to cheaper housing. If you can find a market that you can keep adding supply into, and prices don't react, you found yourself an infinite money machine! (It's the same mechanism as when people complained that printing money (whether by the Bank of Japan in the 1990s or the Fed in the 2010) can't raise inflation: Instead of complaining, you should keep printing money and gradually buy up the whole world in return for some ink and paper / database entries.)
    - seanmcdirmid 2y ago
      That was China’s thinking, but it turns out there is a limit, it’s just not a gradual slope downward but a huge crash.
      - eru 2y ago
        What makes you think so? The Chinese problems come from different sources. For example, there's lots of corruption, they are not keeping their nominal GDP on a stable growth target, and if I remember right, they have a lot of government intervention in the real estate and credit markets. See https://www.econlib.org/the-confusing-china-debate/ https://www.econlib.org/the-confusing-china-debate/ for an assessment more qualified than mine. And https://scottsumner.substack.com/p/chinas-mysterious-deflation https://scottsumner.substack.com/p/chinas-mysterious-deflati... for something more recent.
- ChadNauseam 2y ago
  is this housing stock in places where people want to live? I find it hard to believe that half the units in hong kong or shanghai are vacant
- kelnos 2y ago
  > China reportedly has currently enough housing stock to house their population twice over. Did that make housing cheap? Hardly. If you build housing where people don't care to live, it doesn't matter how much you build. Housing will be more expensive in desirable areas unless you build more housing in those desirable areas.
- AnthonyMouse 2y ago
  > You can't outpace investment demand - especially not in the phase when housing is used as collateral to borrow in order to invest in more housing. Suppose housing prices are high. A construction company exists and has a million dollars, so they buy a $500,000 home, knock it down and spend $500,000 to build half a dozen condo units the size of the original house on the same lot, then sell them each for $500,000. That takes six months to a year. Now the construction company has three million dollars and buys three lots and makes nine million dollars, do you see where this is going? The thing that prevents this is when either a) they're not allowed to knock down the house and build condos there, or b) you pass laws that make it cost $3,000,000 to build a six-unit condo instead of $500,000, and then the unit is never going to cost less than $500,000 because it costs that much to build. > China reportedly has currently enough housing stock to house their population twice over. Did that make housing cheap? China is hardly an example of markets. But it's a good demonstration of why you need to allow housing to be built anywhere that it's needed instead of having bureaucrats decide where it should go. > We're only seeing sustained price decreases now that the bubble is bursting, but it's not going to make real estate more affordable, as it comes with a heavy economic downturn. We made a mistake with the last housing crisis, which was to reinflate the bubble with low interest rates. What you really want in that circumstance is to increase take home pay, e.g. by lowering taxes on the middle class.
  - eru 2y ago
    The commenter you replied to makes the mistake of mistaking the price of houses as a capital good with the monthly rent you pay for housing services. If you want lots of new houses being built, high house prices are good. That incentivises developers to jump through all the hoops, build some houses, and sell them. (In the wake of the Great Recession, we had and have the opposite problem: tightening of credit dropped house prices, thus house construction was choked off, and thus rents rose. The ratio of rents to house prices went up, and rents also went up in absolute terms.)
    - Tade0 2y ago
      > That incentivises developers to jump through all the hoops, build some houses, and sell them. That doesn't help with affordability, as when house prices are high they're... unaffordable anyway, so they get bought out by investors, who can produce any amount of cash as long as the investment pays off. For this reason a huge chunk of new housing is not even built to be affordable - both the margins and ROI on a "premium" apartment are just better. A win for investors and developers alike while at the same time regular people are thrown under the bus.
- eru 2y ago
  > You can't outpace investment demand - especially not in the phase when housing is used as collateral to borrow in order to invest in more housing. Huh? What kind of weird statement is this? It seems there's a lot of confusion. I think it mostly stems from owner-occupiers. For our analysis, let's separate them into two: some people own houses and rent them out, and everyone (but the homeless) rent houses. It's just that sometimes people rent from themselves. What matters for discussions about affordability of housing is how much of your income you have to spend each month on housing every month. Let's call that 'housing services'. That is pretty much a function of available supply every month vs demand every month. Who owns them doesn't make a difference. If an investor buys a house, but rents it out, that's fine. Neither supply of housing services nor demand for housing services has changed. If an investor buys a house, but doesn't rent it out (eg because it's intentionally empty, or because the investor lives there herself), then she counts as a consumer of that unit for that month. That's an indirect change in supply and demand for housing services, but doesn't directly have anything to do with the investor as a owner. Now to come to your scenario: If investors use houses as collateral to invest in more housing, that's great! Ideally that will drive up the prices of housing as a capital god. The more expensive houses are as a capital good, the more it makes sense for developers to jump through all the hoops and build more houses to sell them into the market. That means more houses available for renting out, which drives down rents. (In the wake of the Great Recession, we had and have the opposite problem: tightening of credit dropped house prices, thus house construction was choked off, and thus rents rose. The ratio of rents to house prices went up, and rents also went up in absolute terms.)
- IG_Semmelweiss 2y ago
  When your housing inventory is located on no mans land, and your economic policy is largely built on top of assumptions that housing should be an infinitely-appreciating asset (instead of a depreciating asset, like any other hars asset) , then you end up with china prices. And I'm not even mentioning the fact that the Chinese birthrate decline is so precipitous that their current population is expected to half by 2100. The chinese market of housing does not reflect real supply or prices. It instead reflects bad incentives and an economic bubble propped by the centralized state
sidewndr46 2y ago
What is snot rent control?
- klipt 2y ago
  Swipe typo! I meant "about"

tivert 2y ago

Some level of supply restriction is probably warranted, though less than what we have now. It would be bad policy to have talented people train intensely for 8+ years, only to have them emerge on the other side with a "sorry, oversupply, no job for you." I think availability of lengthy and highly-specialized training programs needs to be carefully calibrated to avoid other kinds of rackets (like have been seen with law schools and certain kinds PhD programs).

throwup238 2y ago
We do it all the time with lawyers and PhD scientists of all stripes. Why should doctors receive special treatment? (Wrote this before your edit introducing the second paragraph)
- tivert 2y ago
  > We do it all the time with lawyers and PhD scientists of all stripes. Why should doctors receive special treatment? We shouldn't do that with lawyers and PhDs either. Why must everything be a race to the bottom?
  - OutOfHere 2y ago
    The free market philosophy dictates that we absolutely should do it, and it's a good philosophy to follow.
    - tivert 2y ago
      > The free market philosophy dictates that we absolutely should do it, and it's a good philosophy to follow. Sorry, it's never a good idea to base real life policy on ideological dogma. The "free market philosophy" has some good ideas, as well as a lot of bad ones. We shouldn't blindly follow its "dictates." In my experience, the people who dogmatically preach the free market frequently have an oversimplified understanding or use circular logic to conclude the free market is good by redefining good as whatever the free market does.

eru 2y ago

The rationing is 'caused' by price caps (whether by law or informally observed). Supply restrictions just restrict available supply, they don't cause long waits by themselves. (Of course, this assumes that you don't want to re-interpret prices themselves as a form of rationing. That's a decent approach to take in some contexts, but eg doesn't gel with the common usage like 'food was rationed during the war', where we use 'rationing' in contrast to the usual price mechanism.)

cameldrv 2y ago
There are no price caps. If you're rich, you have concierge medicine, and you'll see a great specialist whenever you want. The supply restrictions (and other things that reduce doctor productivity) cause a lack of supply relative to the amount of medical care that would be medically useful for the population. For people of normal income with normal medical insurance, that means that their care has to be rationed, or it would be unaffordable.
- eru 2y ago
  If there's such a long queue, why don't doctors raise prices until the queue goes away? Do doctors not like money? > If you're rich, you have concierge medicine, and you'll see a great specialist whenever you want. You don't need to be that rich to go see a doctor privately in eg the UK. And, yes, they have crazy queues for the NHS, while the same doctor can be had for a bit of money quickly when seen privately. In that case, the price restriction comes from what the NHS is willing to pay. And because patient don't directly pay for the NHS, at least not proportional to the usage, instead of rationing via price the system rations via wait times. > [...] the amount of medical care that would be medically useful for the population. I'm not sure there's such a thing. There's no clearly defined amount that is 'medically useful'. There are just gradually diminishing returns to more medicine (in a statistical sense).
  - Snow_Falls 2y ago
    > If there's such a long queue, why don't doctors raise prices until the queue goes away? Do doctors not like money? You do understand the 'queue' are sick people who need treatment? If the 'queue' goes away then they're just untreated and potentially die. Doctors like money but, at least where I come from, you don't go into medicine for cash. You do it for ideals or respect or to have a job that means something. > I'm not sure there's such a thing. There's no clearly defined amount that is 'medically useful'. There are just gradually diminishing returns to more medicine (in a statistical sense). there is actually such a thing as overtreatment. There's this really interesting statistical point where too much testing can actually cause harm, even if the test it self is harmless, because it discovers things that wouldn't have really been a problem ('incidentalomas'). And, unfortunately, there does come a point at times where a patient cannot be helped and it is better to just let them enjoy what time they have left rather than subject them to more treatment and recovery time and all that.

silisili 2y ago

When I lived in Florida it was about like that. I couldn't accept that so just asked for the soonest appointment anywhere, and was assigned a new Haitian lady about an hour away who wasn't booked up yet. Given the circumstances I expected the worst, but I was so amazed with her. She was tall, pretty, and extremely well spoken. Not that this matters a ton, just recalling my first impression shattering expectations. And she's the first doctor I've met that realized that my main problem was more with health anxiety than health itself and just kinda bro'd it out with me for a half hour. All of that is to say, if this is what to expect from foreign doctors vs the purposely supply constrained 'elites' I'm accustomed to, consider me 100% on board.