Paul Tullis's Grim Tidings

Bitter musings on politics and policy

More dishonesty from the WSJ editorial page

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In its never-ending quest to attack any changes to the health care system– you’d think a group of people that likes to think of itself as fiscally responsible would be more amenable to ameliorating a situation threatening to bankrupt our country, but that’s hypocrisy for ya–the Wall Street Journal editorialized on Monday against the way the Senate Finance Committee plan scales its insurance subsidies.

Calling it a “tax on work,” the editorial makes a fundamental mistake which destroys its argument. The gist of it is, if the income of a family earning, say, $42000 rises to $54,000, it will lose a third of its insurance subsidy–and will therefore be motivated not to earn the extra money.

So put yourself in that situation. You are going to turn down a $9000 raise because it’s not a $12000 raise? This is insane.

The editorial also assumes that people consider only economic factors when making economic decisions, which, as anyone who has had a job can tell you, is not the case. And that’s assuming the decision is yours to make: If you get a promotion, you don’t always have a choice whether or not to take it. The alternative could be a $42000 reduction in pay, if you catch my meaning. Moreover, people work more or less or at different jobs for all kinds of reasons having nothing to do with money: status, convenience, getting the hell out of the house, to name just a few.

The egregious thing is that the Journal knows this. Behavioral economics is at the cutting edge of research in the field, as academics are trying to figure out why people don’t always act–and markets don’t always behave–“rationally.” To write so dishonestly otherwise reveals the true motive behind so many opponents of health care reform and President Obama’s generally: self-interest and sour grapes.

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Written by ptullis

October 22, 2009 at 12:23 pm

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