5 ms·

"2) Many of the biggest changes in the U.S. since 1970 have been in the direction of deregulation, increased emphasis on markets, and smaller government." I th

by pmorici 13y ago

"2) Many of the biggest changes in the U.S. since 1970 have been in the direction of deregulation, increased emphasis on markets, and smaller government." I think the problem is there is a ton of rhetoric about deregulation and smaller government but in practice if you look very close government is mostly much bigger and a lot of the things that have been "deregulated" aren't subject to the competition that deregulation implies because of the nature of the industries involved. Sure you can deregulate electric rates but you still don't have a choice in who carries that power to your house. On the other hand look at an industry like car dealerships where deregulating would actually improve things and people fight tooth and nail to keep it because they know there is no natural barrier to protect their profits.

angersock 13y ago
I think that's very much it--deregulation for industries where there are high barriers to entry (building roads, running fiber, setting up powerlines) is less useful than for industries without such barriers to industry. Interesting question, though, is if this logic applies to things like medicine: there isn't any barrier to entry other than buying a scalpel and a stethoscope, and yet I'd much rather have some degree of regulation there.
- crusso 13y ago
  Interesting question, though, is if this logic applies to things like medicine: there isn't any barrier to entry other than buying a scalpel and a stethoscope I don't understand your question. I don't think you can put practicing medicine in the "unregulated" column. http://en.wikipedia.org/wiki/Practicing_without_a_license http://en.wikipedia.org/wiki/Practicing_without_a_license
  - angersock 13y ago
    So, to clarify: we seem to have stumbled upon the principle of "If an industry has low barriers to entry, it ought to be deregulated". For medicine, there are low barriers to entry--recall that barbers used to be surgeons. Our heuristic would suggest that medicine shouldn't be regulated--but that's nuts.
    - ZeroGravitas 13y ago
      Don't know about "medicine" but doctors have been holding back progress for decades because they're a powerful union (though strangely that word isn't used).
      - im3w1l 13y ago
        I would appreciate if you elaborated on this.
        pmorici 13y ago
        I have a friend who is finishing up medical school as a radiologist. The way he explained it is that the rates doctors charge for a given procedure are largely dictated by the government Medicare and Medicaid programs since they are the largest "customers" of healthcare services. Every year or so there is an advisory body of doctors that is part of the AMA in each specialty that gets together and makes recommendations that then get approved by the government. The government pretty much rubber stamps what ever they say. So essentially the AMA is a doctors union that dictates prices. http://swampland.time.com/2013/07/29/the-secretive-group-behind-medicare-reimbursements/ http://swampland.time.com/2013/07/29/the-secretive-group-beh...
        dragonwriter 13y ago
        > I have a friend who is finishing up medical school as a radiologist. The way he explained it is that the rates doctors charge for a given procedure are largely dictated by the government Medicare and Medicaid programs since they are the largest "customers" of healthcare services. Every year or so there is an advisory body of doctors that is part of the AMA in each specialty that gets together and makes recommendations that then get approved by the government. Actually, its just Medicare (the confusion may be because the governing entity is the Centers for Medicare and Medicaid Services, but Medicaid is a state-federal partnership program where reimbursement is generally driven by state policy; the committee at issue [1] is related to Medicare specifically.) [1] http://en.wikipedia.org/wiki/Specialty_Society_Relative_Value_Scale_Update_Committee http://en.wikipedia.org/wiki/Specialty_Society_Relative_Valu...
- Zigurd 13y ago
  Generalize just a small bit: Despite (potentially) low barriers to entry, medicine hasn't got elastic demand, or a generally well-functioning market for services. It might be possible to fix/change that, but we'd be talking about something very different than medicine today.
  - angersock 13y ago
    Hmm, I like that--you must look at both elasticity of demand and barrier to entry. Good thinking.
  - marcosdumay 13y ago
    Nope. There is still something quite unique to medicine (or at least much more present it) that makes regulation desirable. It's not because prices would go up or down.
rayiner 13y ago
That's just not true. Deregulation in everything from telecommunications to highways to airlines to labor is real and the impact has been undeniable. For example, airline deregulation in 1977 enabled FedEx and UPS to buy airplanes, enabling the modern era of package delivery and companies like Amazon. People fail to appreciate just how regulated things were in the 1970's. Measures that agencies wouldn't dream of today, like outright rate setting, were commonplace back then. Assertions to the effect of "the government is bigger than ever" are just unsubstantiated hand-waving. Federal spending as a percentage of GDP, excluding interest, social security, and medicare, is down from 15% to 10%. That reflects a real and dramatic shrinking of the scope of government. You can argue that deregulation hasn't had the same impact proponents suggested, but it's all relative. Industries with economics of scale tend towards monopoly or duopoly in the absence of regulation. The fact that deregulated industries still often exhibit oligopolies isn't proof that deregulation was just rhetoric. Search, desktop operating systems, consumer microprocessors, and package delivery have all trended towards having one or two dominant players, yet those industries never had regulated monopoly incumbents.
- ACow_Adonis 13y ago
  "Assertions to the effect of "the government is bigger than ever" are just unsubstantiated hand-waving. Federal spending as a percentage of GDP, excluding interest, social security, and medicare, is down from 15% to 10%. That reflects a real and dramatic shrinking of the scope of government" Excluding my fat, belly, and arse, I've actually lost weight...
  - rayiner 13y ago
    I exclude those things because they're not generally what people think of when they think "government overhead." They're not rooms full of bureaucrats writing pages of regulations nor are they fat-cat contractors. They're transfer payments with very low bureaucratic overhead. Moreover, at least in the case of Social Security, it represents withdrawals of money previously paid into the system. Look at it this way. Say a very small, Milton Friedman-ish society institutes a basic income, funded by a tax. It might have spending as a percentage of GDP of 30%, but would you say it necessarily has a "big government?"

by pmorici 13y ago

angersock 13y ago

I think that's very much it--deregulation for industries where there are high barriers to entry (building roads, running fiber, setting up powerlines) is less useful than for industries without such barriers to industry. Interesting question, though, is if this logic applies to things like medicine: there isn't any barrier to entry other than buying a scalpel and a stethoscope, and yet I'd much rather have some degree of regulation there.

crusso 13y ago
Interesting question, though, is if this logic applies to things like medicine: there isn't any barrier to entry other than buying a scalpel and a stethoscope I don't understand your question. I don't think you can put practicing medicine in the "unregulated" column. http://en.wikipedia.org/wiki/Practicing_without_a_license http://en.wikipedia.org/wiki/Practicing_without_a_license
- angersock 13y ago
  So, to clarify: we seem to have stumbled upon the principle of "If an industry has low barriers to entry, it ought to be deregulated". For medicine, there are low barriers to entry--recall that barbers used to be surgeons. Our heuristic would suggest that medicine shouldn't be regulated--but that's nuts.
  - ZeroGravitas 13y ago
    Don't know about "medicine" but doctors have been holding back progress for decades because they're a powerful union (though strangely that word isn't used).
    - im3w1l 13y ago
      I would appreciate if you elaborated on this.
      - pmorici 13y ago
        I have a friend who is finishing up medical school as a radiologist. The way he explained it is that the rates doctors charge for a given procedure are largely dictated by the government Medicare and Medicaid programs since they are the largest "customers" of healthcare services. Every year or so there is an advisory body of doctors that is part of the AMA in each specialty that gets together and makes recommendations that then get approved by the government. The government pretty much rubber stamps what ever they say. So essentially the AMA is a doctors union that dictates prices. http://swampland.time.com/2013/07/29/the-secretive-group-behind-medicare-reimbursements/ http://swampland.time.com/2013/07/29/the-secretive-group-beh...
        dragonwriter 13y ago
        > I have a friend who is finishing up medical school as a radiologist. The way he explained it is that the rates doctors charge for a given procedure are largely dictated by the government Medicare and Medicaid programs since they are the largest "customers" of healthcare services. Every year or so there is an advisory body of doctors that is part of the AMA in each specialty that gets together and makes recommendations that then get approved by the government. Actually, its just Medicare (the confusion may be because the governing entity is the Centers for Medicare and Medicaid Services, but Medicaid is a state-federal partnership program where reimbursement is generally driven by state policy; the committee at issue [1] is related to Medicare specifically.) [1] http://en.wikipedia.org/wiki/Specialty_Society_Relative_Value_Scale_Update_Committee http://en.wikipedia.org/wiki/Specialty_Society_Relative_Valu...
Zigurd 13y ago
Generalize just a small bit: Despite (potentially) low barriers to entry, medicine hasn't got elastic demand, or a generally well-functioning market for services. It might be possible to fix/change that, but we'd be talking about something very different than medicine today.
- angersock 13y ago
  Hmm, I like that--you must look at both elasticity of demand and barrier to entry. Good thinking.
- marcosdumay 13y ago
  Nope. There is still something quite unique to medicine (or at least much more present it) that makes regulation desirable. It's not because prices would go up or down.

rayiner 13y ago

That's just not true. Deregulation in everything from telecommunications to highways to airlines to labor is real and the impact has been undeniable. For example, airline deregulation in 1977 enabled FedEx and UPS to buy airplanes, enabling the modern era of package delivery and companies like Amazon. People fail to appreciate just how regulated things were in the 1970's. Measures that agencies wouldn't dream of today, like outright rate setting, were commonplace back then. Assertions to the effect of "the government is bigger than ever" are just unsubstantiated hand-waving. Federal spending as a percentage of GDP, excluding interest, social security, and medicare, is down from 15% to 10%. That reflects a real and dramatic shrinking of the scope of government. You can argue that deregulation hasn't had the same impact proponents suggested, but it's all relative. Industries with economics of scale tend towards monopoly or duopoly in the absence of regulation. The fact that deregulated industries still often exhibit oligopolies isn't proof that deregulation was just rhetoric. Search, desktop operating systems, consumer microprocessors, and package delivery have all trended towards having one or two dominant players, yet those industries never had regulated monopoly incumbents.

ACow_Adonis 13y ago
"Assertions to the effect of "the government is bigger than ever" are just unsubstantiated hand-waving. Federal spending as a percentage of GDP, excluding interest, social security, and medicare, is down from 15% to 10%. That reflects a real and dramatic shrinking of the scope of government" Excluding my fat, belly, and arse, I've actually lost weight...
- rayiner 13y ago
  I exclude those things because they're not generally what people think of when they think "government overhead." They're not rooms full of bureaucrats writing pages of regulations nor are they fat-cat contractors. They're transfer payments with very low bureaucratic overhead. Moreover, at least in the case of Social Security, it represents withdrawals of money previously paid into the system. Look at it this way. Say a very small, Milton Friedman-ish society institutes a basic income, funded by a tax. It might have spending as a percentage of GDP of 30%, but would you say it necessarily has a "big government?"