Story at Fiscal Times here.
“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes,” Gruber tells the audience with a smile. “If CBO scores the mandate as taxes, the bill dies.”
After the cheerful admission of deceiving Congress’ own fiscal watchdog, Gruber then offers his dismissive take about the saps who bought the arguments. “Lack of transparency is a huge political advantage,” he argued. “Call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass.”
Gruber added that he didn’t care about lies being told -- as long as the bill passed.
In the second video, Gruber tells a different conference audience that the so-called “Cadillac tax” on high-end insurance plans was in effect a tax on policyholders rather than the insurance companies, but that "the American people are too stupid to understand the difference."
In the third video, taken from a speech at the University of Rhode Island in November 2012, Gruber bragged about how the Cadillac tax structure exploited voters’ lack of economic education. “It’s a very clever, you know, basic exploitation of the lack of economic understanding of the American voter,” Gruber gloated.
So much for speaking off the cuff. Gruber has apparently spent quite a bit of time bragging about how much smarter he is than American voters,How ironic that this smug SOB MIT economic tax-then-spend moron thinks the general citizens are "stupid" when HE is the one in the professional (alleged!) economics position who is going all around thinking that "we're out of money!" and that the government has to "get the money!" from taxes before it can spend on healthcare for our citizenry.
Who is the REAL moron in this scenario "Professor"???
Of course this observation is also missed by the morons reporting on the situation this week at Fiscal Times and other media outlets also.
Out with the lot of them.
Update: more skirmishes erupting today over this issue between other morons...
Gruber's comments another step in decline of liberalism into a kind of faculty club Leninism. Or was it always,to a degree,that?cc @JonahNRO
— Bill Kristol (@BillKristol) November 13, 2014
Gruber on Pelosi: "I don't know who she is. Is she one of the stupid ones?" @CQHealthTweet Pelosi on Gruber: "I don't know who he is."
— Bill Kristol (@BillKristol) November 13, 2014
Now the USS Enterprise's Chief Science Officer has weighed in with some sage advice:
Mr. Gruber . To speak before engaging brain is illogical LLAP
— Leonard Nimoy (@TheRealNimoy) November 13, 2014
Governments have to tax. Hasn't this been settled many times before? Pilkington and Wray gave lists of the several reasons why. MMT hasn't discovered the key to a tax-free future.
ReplyDeleteGruber is a turd: a classic example of how the modern anti-Democratic Party is now run by a geek squad of spoiled suburban white boys who have convinced themselves they are smarter than everybody else, and that on account of their big pampered brains they are entitled to run the world.
Yes Dan get your point but it is spend THEN tax.... has to be....
ReplyDeleteIf they are concerned about "inflation" then all they have to do is hold the line on the unit prices at which they reimburse the providers for the individual services ...
Rsp
No wonder people trust the Republicans more than the Democrats.
ReplyDeleteSpeaking of Pilkington, he hasn't posted on his blog for 41 days. Before that, he was posting on a daily basis. Anyone know what he is doing or what happened to him?
ReplyDeleteHere's another take on what Gruber had to say: http://thinkprogress.org/health/2014/11/13/3591850/jonathan-gruber-lying-obamacare/
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ReplyDelete"If they are concerned about "inflation" then all they have to do is hold the line on the unit prices at which they reimburse the providers for the individual services ..."
ReplyDeleteMatt the government doesn't completely control that. They ask for bids and people make them. If they don't get a bid at the price they would like, they can't (practically speaking) command anyone to deliver the products at a lower price.
Plus, the markets for goods and services sold to the government are only some of the markets in this economy. The government can't totally control the prices of goods and services in an economy as a whole simply by virtue of the role they play as one particularly large customer.
"Tax then spend" vs. "spend then tax" is a meaningless distinction as far as policy goes. Dollars are constantly flowing both in and out of the government, including the central bank. Too much of a flow in one direction relative to the other will have either a deflationary or inflationary effect, although there is no exact science of where the turning points are. From a practical point of view it isn't helpful to talk about one of these flows enabling the other.
This legislation was conceived vis a vis on a straight party line vote, which by itself delegitimizes said omnibus bill. Gruber's revelations are a pox on the Democrats house given they voted for the awful legislation in toto, with many certainly being duped or "Grubered". At any rate, by the time the back loaded parts of Obamacare kick in I'm quite certain the legislation will be a shell of its original self.
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ReplyDelete"Matt the government doesn't completely control that. They ask for bids and people make them."
ReplyDeleteNot as I understand it in healthcare Dan... they have a Medicare reimbursement schedule... iow, the providers deliver the service FIRST and then get reimbursed by submitting a claim... the govt reimbursement price schedule is published...
for instance see here:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FeeScheduleGenInfo/
As long as the govt sets a reasonable price, believe me, there will be providers who will sign up for the revenues if they think they can "make money" providing the services at the govt price... this is what they do...
iow if govt says "we will pay $250 for an MRI" then if the non-govt provider can "make money" doing that (how many can you do per day on one of those machines? 1 per hour? run it 10 hours so $2500/day gross? does that work? 300 days per year that is $750k gross? what do those machines cost ? maybe $1M-ish? sounds like $250 per scan would more than work .. you have to pay the tech decent wages and get the square footage covered, other over head, etc... I'm sure there is an industry model..
then the next year, if the govt says "we will now pay $275/scan" then guess what? the price goes up... and the morons think "hey! we have healthcare inflation!"
Then the private insurers dont work in a vacuum either they look at the schedules and they know what the providers are taking for the same service from the govt so they hammer the providers over the head with that and get them down to $250 (or less) also... its a negotiation...
its like Warren says; ALL prices are necessarily a FUNCTION of what the govt pays for things or what they let their banks lend against things....
This statement: "Too much of a flow in one direction relative to the other will have either a deflationary or inflationary effect,"
is FLAT OUT NOT TRUE... it is monetarist...
it is always 'about price not quantity...'
When we say "too much flow" we are talking about a 'quantity'... and this is false....
Prices are set by human beings who have authority to do so in the context of power relationships, etc... it doesnt have anything to do with 'the deficit' or any other "quantity of money" measure...
rsp,
Sorry Matt, I don't agree with your analysis of prices. As you say, people will accept the government price offer only if they think they make money at that price.. Therefore the government is constrained to offer such a price. The level at which suppliers can begin to make money is not purely a matter of government policy.
ReplyDeleteAs far as I know, MMT has never denied the correctness of the equation of exchange MV = PQ. What they and many others have correctly pointed out is that V/Q is not a constant, and so the price level is not a constant function of the quantity of money. But V/Q is not infinitely elastic, if you pour money into an economy, eventually you are going to get higher inflation. And if you drain money continuously out of an economy, eventually you are going to get deflation.
And Matt, I'm not saying anything that should be controversial from an MMT perspective. This is Randy Wray back in May of this year:
ReplyDeleteSome who hear this for the first time jump to the question: “Well, why not just eliminate taxes altogether?” There are several reasons. First—as we said last time–it is the tax that “drives” the currency. If we eliminated the tax, people probably would not immediately abandon use of the currency, but the main driver for its use would be gone.
Further, the second reason to have taxes is to reduce aggregate demand. If we look at the United States today, the federal government spending is somewhat over 20% of GDP, while tax revenue is somewhat less—say 17%. The net injection coming from the federal government is thus about 3% of GDP. If we eliminated taxes (and held all else constant) the net injection might rise toward 20% of GDP. That is a huge increase of aggregate demand, and could cause inflation.
"if you pour money into an economy, "
ReplyDeleteDan this is metaphorical speech here...
ok, lets say we increase xfer payments to the non-govt citizens generally... ok, maybe we can use the metaphor that this is "pouring money", but this metaphor has to stop right there...
iow we cant let this metaphor advance to the point where we start thinking in physical/materialist terms of 'dilution', 'inflation', 'pouring', etc.... in our technical analysis...
I agree that if the govt went out an just gave everyone $1M that we would see most prices go up short term.... but that would be due to a probable short term demand "shock" and those with inventories of then "demanded" goods/services would be in a power position to raise unit prices...
when people raise their prices to their customers they dont first look at the UST's Daily Treasury Statement and see if we are running a big deficit....
rsp,
"And Matt, I'm not saying anything that should be controversial from an MMT perspective."
ReplyDeleteI know Dan, and its a problem imo.... rsp,
Just another cherry on top of the turd-sandwich that is the ACA. Some of my Dem friends are still trying to defend the thing, saying that premiums are lower for some people, etc. I just hope future generations of policymakers look back at the ACA and learn from the endless series of mistakes emanating from it.
ReplyDeleteThe govt cannot cap price of goods (this is when there is inflation), and cannot put floors in fx rates (prices of imports).
ReplyDeleteThe govt can cap the fx rate (prices of exports) and can put floors on goods (demand/assets acquisition).
Price dynamics are far more complex anyway, and quantity matters because there is clearing at a given price depending on the quanity and then you have to check the market depth. Even the govt has to compete with private sectors at a given price depending on the output capacity and existing capital.
The govt has stronger pricing power for certain categories of goods ofc (like military, healthcare). But it's pricing power is as good as the ability of corporations to service at those prices w/o loses (downwards), and the output gap (upwards).
If you want to know how much could the govt squeeze the prices, just look at how much it could squeeze the margins on providers spare capacity after private sector demand. But that would at the same time have other effects over the system (feedback loops) in the form of redistribution of surplus so it's hard to know how it would/wouldn't affect OVERALL prices.
So no one can really control the prices to that level, but there is spare pricing power in some sectors.
"and quantity matters "
ReplyDeleteWell right but not of the "money" correct?
Its the quantity of the real goods and services right?
What does "the deficit" have to do with what price the govt agrees to pay for something? I say nothing they are not functionally related...
rsp,
Ok so the government does not have monetary constraints, so deficits don't matter for the govt when they decide to buy or not buy goods at a given price - they have certain pricing power with those constraints above. Functionally not related, as you say.
ReplyDeleteBut bigger deficits provide the non-govt with a bigger surplus, which may affect prices indirectly - if you take in mind the constraints above. So I think deficits matter, but not in the way they think they matter. To what extent they matter? Depends both on both the current flows of the private sector (existing demand, quanity of money matters for the private sector) and on the current profit margins (supply above production costs) there is more or less pricing power (I would say, in the case of healthcare in USA, there is A LOT of margin lol)
"But bigger deficits provide..."
ReplyDeleteI think we are getting into 'post hoc ergo propter hoc' fallacy here...
'the deficit' is an ex post accounting measurement... it cannot "provide" anything... it represents a form of financial 'savings' over some previous time period...
rsp,
Right Matt, the deficit is the accounting at t(x) of the flows since t(0). But those savings are facilitated by the government over that period of time.
ReplyDeleteDetroit Dan-- "I have an article up on Al Jazeera this week. It may be the last journalistic article I write for some time as I start a new job next week." Philip Pilkington, Fixing the Economists, Oct 2.
ReplyDeleteThanks for the update Phil/Butch. Good luck in the new job! Glad to hear that you are well, and I'll miss your journalistic contributions...
ReplyDelete