Adverse-Selection Death Spiral

Paul Krugman a couple of weeks ago ("One health care reform, indivisible") on why, if you prohibit insurance companies from denying coverage on pre-existing conditions, you need to institute other reforms as well:

Why not just impose community rating — no discrimination based on medical history?

Well, the answer, backed up by lots of real-world experience, is that this leads to an adverse-selection death spiral: healthy people choose to go uninsured until they get sick, leading to a poor risk pool, leading to high premiums, leading [to] even more healthy people dropping out.

So you have to back community rating up with an individual mandate: people must be required to purchase insurance even if they don't currently think they need it.

But what if they can't afford insurance? Well, you have to have subsidies that cover part of premiums for lower-income Americans.

In short, you end up with the health care bill that's about to get enacted. There's hardly anything arbitrary about the structure: once the decision was made to rely on private insurers rather than a single-payer system — and look, single-payer wasn't going to happen — it had to be more or less what we're getting. It wasn't about ideology, or greediness, it was about making the thing work.

If Krugman is right, where can Obama and the congressional Dems retreat to if they want a health reform that will actually work, and actually be a reform? (One argument, I suppose, is that even if you pass a reform that makes things worse, you've opened the door to making it better over time, whereas if you don't pass anything you've killed health reform and hurt the economy.)

Krugman, btw, made his post before it was clear that Coakley could lose in Massachusetts.

Consensus is the new postmodernism

Lotsa convos on Tumblr today somewhat inspired by Xhuxk's P&J essay, e.g., this one and this one and this one and this one. The problem that I'm having with them, and that Tom recognizes better than the other posters, is that the words "consensus" and "populist" and "contrarian" don't take care of themselves without elaboration. [EDIT: Chuck didn't write the headline that used that word, by the way.] One gripe I have in particular is the degradation of the word "consensus," which didn't used to mean "taste cluster" or "gets a plurality of votes" but rather "general agreement" or, more strongly (as in "the decision was reached by consensus"), "virtually everybody in the room signs off on it." So, there was no consensus in 2002 2000 that George W. Bush was the best man to be president or even that he won the election, but there was consensus that we should abide by the Supreme Court's decision as to who was to be president.

One reason I dislike the word's degradation is that if you're standing against a "consensus" that a whole bunch of other people don't actually consent to either, you're not being particularly contrarian. So if you communicate with a lot of rock critics you're not going to find consensus either that Animal Collective and ilk are good or that Taylor Swift et al. deserve to be dismissed out of hand, so in opposing those positions you're not really contrarian. In certain offline situations your ideas might put you genuinely alone among your friends, but still, you carry the rockcrit world in your mind so you're not alone in that world.

As for "populist," what's populist? Are you populist if you're for the cheer captain, who is popular, after all? Or do you have to be for the girl on the bleachers, or for the kid who snuck across the street to cop a cigarette?

But what interests me most is that people, despite trying to simultaneously stand with The People and stand against the crowd (good trick if you can pull it off; I'll give some examples in the comments), don't love and vote for particular songs for such reasons but rather vote for what they consider good music. "Sounds good" or "I like the way the music makes me feel" or "I like the mood" or "it's got a killer beat and I like dancing to it" or "I'm taken intellectually and emotionally by what's going on in the lyrics" or "I'm impressed by the philosophical and political questions the lyrics raise" or "I'm fascinated by the music's form" and so forth will trump "liking this makes me a populist" or "liking this makes me a contrarian" every time. So the fact that people's tastes do tend to cluster by social group and social class has to be explained, as does the fact that through their taste people get to differentiate themselves personally and socially from their fellows. I raised this issue in my very first Rules Of The Game column in mid 2007 and kept working at it in all the columns and followups through Rules Of The Game #9 (see links for all of them here) and then returned to the question throughout the series especially at nos. 12, 13, and 18. My point there was that social solidarity and social differentiation and personal differentiation all have an effect, but the effect is neither direct nor some mystical social pull but rather comes out of one's daily music listening and one's interaction with friends and acquaintances and with the broader culture that one gets through the media and participates in online. The words "consensus" and "populist" and "contrarian" wave vaguely at the world of such interaction without bringing us to it.