By: James Freeman – wsj.com – December 6, 2017
Investors have been expressing every way they can that pending federal tax reform is good for economic growth, as each day seems to bring new signs of confidence about future U.S. prosperity. Now comes word of a buying binge happening in a part of the automotive sector. According to the Journal:
Trucking companies are bumping up orders for new big rigs, anticipating that 2018 will be a banner year for shipping demand.
Trucking fleets ordered 32,900 Class 8 trucks, the kind used on long-haul routes, in November, according to ACT Research, which compiles industry statistics. That was up about 70% from a year earlier.
Meanwhile in Washington, tax reform opponents are not simply expressing a less optimistic view of growth in 2018. It seems that some of them are expecting a mass extinction event. This week The Hill reports on an interesting forecast from the House Minority Leader:
Rep. Nancy Pelosi (D-Calif.) hammered the Republicans’ tax-code overhaul Monday evening as a culture-shaking economic “armageddon” that would haunt the working class for years to come.
Flanked by other top Democrats in the Capitol, the minority leader blasted Republicans for championing a tax proposal she equated to “the end of the world.”
Former Obama economic adviser Larry Summers for his part isn’t yet predicting that the result of a House-Senate tax compromise will inspire a wrathful God to annihilate humanity. But he’s more or less sticking with his prediction that at least some of humanity will be annihilated. This week he writes in the Washington Post:
I suggested on Friday when it became clear that the tax bill would pass that “thousands would die.” In light of my sharp criticism of other economists’ claims regarding the legislation, some have asked whether my statement is well grounded. I think it is, but this should be open to debate.
Mr. Summers offers various caveats along with his prediction of a mass-casualty legislative event. But he largely accepts the Congressional Budget Office’s guess that 13 million more people will choose not to enroll in government health plans if insurance is no longer required (Summers rounds the guess down to 10 million), and he basically credits his former colleague Kate Baicker’s research suggesting people are more likely to die if they are not enrolled in a health insurance plan.
Mr. Summers is not alone among ObamaCare defenders in wanting to persuade people that the number of people covered by government insurance is the true measure of health. But the vast expansion of such coverage engineered by his old boss doesn’t seem to have made Americans healthier.
And even Mr. Summers’ former colleague Ms. Baicker would likely acknowledge the limits of the studies he cites, compared with other research she led that Mr. Summers does not mention. A 2013 Journal editorial described the sad news for progressives:
A team of varsity health economists, mostly at Harvard and MIT, is studying the relationship between health outcomes and health insurance delivered by Medicaid. In 2008, Oregon’s Medicaid program conducted a lottery to enroll a limited number of low-income adults, and the economists are comparing over time the winners who gained coverage with those who applied but remain on a waiting list. Such experiments with large randomized trials are rare.
On Wednesday the New England Journal published the results from year two of the Oregon project, which “showed that Medicaid coverage generated no significant improvements in measured physical health outcomes” versus being uninsured. If Medicaid were a new drug, in other words, the FDA would reject it.
The Medicaid group used about 35% more health services, but they showed no clinical differences from the identical uninsured group across basic health measures like blood pressure, blood sugar and cholesterol levels that can be improved with the right treatment. The same was true comparing subgroups such as people with chronic diseases like diabetes. Health spending was higher among the Medicaid group, despite claims that using more preventative care and less emergency room will lower costs.
Is it any wonder that inefficient insurance plans which limit patient choice have trouble demonstrating improvements in health?
Even if one wishes to believe along with Mr. Summers that maximum enrollment in government coverage is the key to longevity, almost nobody outside of CBO believes its guess that repeal of the individual mandate would cause 13 million people to drop coverage. ObamaCare architect Jonathan Gruber himself co-authored a recent study with this finding: “The individual mandate’s exemptions and penalties had little impact on coverage rates.”
All the holes in the Summers argument don’t seem to make it any less fun for Democrats to claim that their political adversaries are trying to kill people. It’s a favorite party pastime, lampooned last summer in a video published by the Reason Foundation after Sen. Elizabeth Warren also claimed that her colleagues across the aisle were about to wreak death upon an unsuspecting public.
Instead of continuing to search for evidence that bureaucracies can make us healthier, Sen. Warren, Leader Pelosi and Mr. Summers should instead consult the voluminous research on the one thing that has been proven to help people live longer, all over the world.
“Wealthier nations are healthier nations,” reported a 1996 study in the Journal of Human Resources. Researchers found that life expectancy sharply increases and infant mortality sharply decreases along with gains in per capita income. Wealth is such a powerful factor in public health that study authors reported that in a single year, more than “half a million child deaths in the developing world” were attributable to the poor economic performance of the previous decade.
Much other research has reached similar conclusions, but Mr. Summers should find this study particularly compelling. After all, he helped write it.
Markets continue to signal that the pending tax reform will make the United States wealthier, which should be very good for our health.
Source: People Will Die! – WSJ