In Which Gred Mankiw Displays Alarming Ignorance about that Giant Glowing Red Triangle Across the River

Robert WaldmannSuggests that serious readers go read Brad Delong's comment on Greg Mankiw's comment on Paul Krugman's declaration that George Will and Gred Mankiw are "either extraordinarily ignorant or simply disingenuous." Totally asking for it, Mankiw also commented on Krugman's post referring to DeLong and Krugman as a tag team.I just want to note that Greg Mankiw chooses a very strange example to exemplify his lack of knowledge of basic economic theory.He wrote [Obama's] economic reason regarding the public alternative is hard to follow. Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don’t need government-run grocery stores or government-run chat stations to make sure that Americans can buy foodstuff and fuel at reasonable prices..."Mankiw chose to talk about the market for fuel ! reasonable prof Mankiw I have a proposal. This evening get out of Your office, get on Mass Ave and drive South. You will see a river. Across that stream you will see a huge crimson glowing triangle. Do you know what that triangle advertises ? Yes it's the Citgo sign. It avertises a publicly owned lubricate company and chain of chat stations.So if you have negative problem with a public supplier of gasoline, why are you opposite to a public supplier of physical condition care ? Somewhat additional importantly, the idea that the market for fuel shows that we can trust the private sector to give us "Consumer choice and honest competition" is further than bizarre. Ever heard of Standard Oil professor Mankiw ? The fact is that it requires constant struggle to preserve competition and a market based approach of contribution a public plan has advantages compared to a court case based approach. It just consequently happens that the physical condition cover market is not at all competitive in a lot of regions, that profits of large physical condition cover companies have exploded and that the fraction of money waged to physical condition cover companies which they send on to physical condition care providers have plummeted. Sort of like the market for fuel that the private sector gave us before massive public intervention.America's physical condition cover companies had better decide if they favour a public alternative or real enforcement of the Sherman antitrust act. Splitting up physical condition cover companies (what was complete to achieve competition in the market for gasoline) would be rather additional troublesome to policy holders (and executives) than allowing the medicare administration to compete with them. I'd say Mankiw has a point. Health cover is like fuel in the sense that the market has failed -- that profit seeking corporations have managed to reduce competition to levels such that their profits explode. The major differences are that it's the 21st century and the President is using a market based rather than a punitive approach to the problem. Claiming that there is currently a competitive market for physical condition cover in the USA is like claiming that they sky is green.
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