Friday, November 29, 2013

Dean Baker On How To Play In The Big Leagues

By, Chris Rossini

So I wake up after a very nice Thanksgiving Day, take care of stuff around the house, pour my morning coffee, and sit down to read.

Such a simple life.

At least it appears to be a simple life, because the first thing that I read is a piece from Dean Baker. And it turns out that he's concerned with a lot more than I am. His headline reads: "Why Aren't We Rushing to Import More Doctors and Why Isn't the NYT Asking?"

My big decision right now is what to have for breakfast. Meanwhile, in The Big Leagues, people like Baker are deciding whether or not "we" should be "importing more doctors".

I have to plead ignorance here. I was not aware that doctors were available for import or export. After I'm finished writing here, I'll hop over to the commodities exchange to see if it's true: Corn, Cocoa, Pork Bellies, Doctors.

I doubt that I'll find a "Doctors contract". Surely I would've heard through the grapevine about it. But, in any case, let's jump into Dean Baker's world of The Big Leagues, and see where it takes us:
Roughly one third of all doctors are in the top one percent of the income distribution and the vast majority are in the top two percent. This likely explains both the reason as to why the government is not looking for ways to bring more doctors into the country...
Wow! So the government does actually contemplate whether or not to "bring more doctors into the country". And based on Baker's assumptions, the current number of doctors is alright with the government because of something called "income distribution".

Again...I have to expose my ignorance. I don't know about all that fancy stuff. But I do have some common sense life experience that may apply here.

Several years ago, in a conversation with a real estate broker, he said that he wished that the barriers to entry were even higher than they were to become an agent. It already cost many hundreds per year. First for your "license", and then to pay some "Real Estate Board" every single year. If you didn't do these things, forget about being a real estate agent.

Well, this broker wanted the artificial fees to be even higher, so as to cut out (even more) new people from coming in and competing with him. He was very blunt about it.

I wonder if doctors have that kind of stuff?....Nah! If there are doctor "shortages", it must be "the free market's" fault. The government is merely coming in to rescue us (from the stupid free market) by having to import/export doctors for us.
We have deliberately changed immigration rules and standards to make it easier for foreign computer engineers, nurses, and even teachers to enter the country and meet demand in these occupations.There is no economic reason why we would not do the same for doctors.
Again, my life seems so simple. I take care of my surroundings, and that of my family. Not a care in the world for what the people around me are earning, and where it lands on some "income distribution" scale. (By the way, who's doing the distributing? Santa Clause?). Yet there are people out there, who are not only concerned with the importation of doctors, but also about the numbers of computer engineers, nurses, and teachers!

Ludwig Von Mises, in his beautiful work "Planned Chaos" (download FREE here) wrote:
There are two different patterns for the realization of socialism. The one pattern—we may call it the Marxian or Russian pattern—is purely bureaucratic. All economic enterprises are departments of the government just as the administration of the army and the navy or the postal system.
Fortunately, that doesn't sound like the U.S. ("land of the free").

Unfortunately, Mises was not finished. There is still the second pattern:
The second pattern—we may call it the German or Zwangswirtschaft system—differs from the first one in that it, seemingly and nominally, maintains private ownership of the means of production, entrepreneurship, and market exchange. So-called entrepreneurs do the buying and selling, pay the workers, contract debts and pay interest and amortization. But they are no longer entrepreneurs. In Nazi Germany they were called shop managers or Betriebsf├╝hrer. The government tells these seeming entrepreneurs what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. The government decrees at what wages labourers should work, and to whom and under what terms the capitalists should entrust their funds. Market exchange is but a sham.
Now....while not completely there yet in every technical sense, that sounds a lot like the United States ("land of the free") today.

So, while Dean Baker worries about how many Chiropodists exist, and what their earnings are, I'll ask you to please excuse me: I'm going to make my breakfast, and leave you to your own business.

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  1. Brilliant as usual, Chris! I too lack the sophistication to know from whence these doctors will be imported, but I have faith Baker can research it and let us know. After all, WHO estimates the current global physician shortage is only a little over 4 million, so I have no doubt he can find them somewhere (as long as he's not looking to Germany, the UK, Canada, Australia, or India.

    Or maybe we in the US should just finally succumb to the perennially rent seeking AMA's suggestion that federal funds be used to get would-be med students into our classrooms here at home.

    And then of course there's the brain trust at CMS (yes, the same crew that managed the successful rollout). They gazed deep into their palantir and saw a glut of various specialties, such as cardiologists, neurologists, radiologists, and pathologists--but a shortage of family physicians, geriatricians, allergists and mid-level (the latter long the holy grail for planners trying to address physician shortages). So they tinkered with the Medicare fee schedules for 2013, and no doubt everything will be hunky dory soon.

    I'm so thankful we have Big Folks who can expertly solve via edict all these way too complex problems for us.

  2. I consider the German Nazi/Italian Mussolini systems to be fascism, a transitional state between capitalism and socialism. It covers a wide spectrum so there are degrees of interventionism (what Mises called this form in "Liberalism (in the Classical Sense)". My diagram of this is found here:

    My ECON 1301 students consistently put the US at 6 on this scale and headed toward 10.

  3. Man, Chris Rossini is on fire!

  4. With rewards like being in the top 1 or 2% of income, you'd think foreign doctors would be FLOCKING to America! It's almost as if there was some force blocking their entry. Oh, wait...

  5. Take a look at the H1B visa and how it has been used with regards to the profession of engineering. The government and corporations treat engineers as fungible human resources. It got that way for a number of factors, but most importantly the ability to import engineers. If wages increase, they import more and export work. It's been done for decades.

    Importing labor is how costs are managed. Government and the insurance companies need to bring down/control medical costs and make doctors into mere employees. The meaning of importing doctors is becoming clear. It's what was already done to engineers. To treat doctors as fungible human resources and control their wages. Control wages on the supply side by increasing or decreasing imports.

    Plus it's good to discourage professions for american teenagers. Why do all that work for low wages and even more work? The more foreigners who will work for the less and obey government the better. Americans with their ideas of freedom and such can be difficult to control with an education and enough wealth. Sure the government says it wants more kids to go into engineering but at the same time it makes sure that the profession isn't as rewarding as many others that require less work. A government job at the water treatment plant will pay more after enough years on the job and it doesn't require spending four years or more in college.

    We're all just resources to the owners of this country. Resources to be managed. Like a forest or farm land or cattle or oil or anything else. Too bad most americans can't figure this out.

  6. If you were more informed about Baker's position, you'd realize he constantly makes the same point you do about protectionism for doctors.

    He writes about this topic what seems like twice a week on his blog, has papers on it, and a free e-book that talks about it.

    This kind of sarcastic snark reminds me of the feminists at Jezebel.