Book Report: Arguing with Zombies

Reading Time: 3 minutes

“One classic example of government doing it better is health insurance.” – Paul Krugman

This is meant to be more of a book report, than a review.  In particular, I want to highlight three lessons from the book, Arguing with Zombies by Paul Krugman, that I found impactful.  This also serves as a way for me to recall influential points in the book.

My mom gave me this book.  Krugman is not an author I have followed closely, although I did read The Return of Depression Economics years ago.  The book is mostly a collection of Krugman articles – organized by topic.  So the chapters are bite size. I think mostly due to timing – the pandemic and election cycle – I found this book a bit depressing.  

However, three topics that did alter my perspective were:

  1. Healthcare Confidential.  

“How does the V.H.A. do it?  The secret of its success is the fact that it’s a universal, integrated system.  Because it covers all veterans, the system doesn’t need to employ legions of administrative staff to check patients’ coverage and demand payment from their insurance companies.  Because it covers all aspects of medical care, it has been able to take the lead in electronic record-keeping and other innovativations that reduce costs, ensure effective treatment, and help prevent medical errors.  Moreover, the V.H.A., as Phillip Longman put it in the Washington Monthly ,”has nearly a lifetime relationship with its patients.”  As a result, it “actually has an incentive to invest in prevention and more effective disease management.”

This just makes so much sense to me – on multiple fronts.  I just do not understand the angst over a universal healthcare insurance coverage option or an integrated, government sponsored healthcare provider.  The incentive system in our current fragmented and disjointed healthcare system which is heavily influenced by private payors is not delivering the results the citizens of this country deserve.  We can better.  I don’t understand the fear around trying to do better.

  1. The Great Center-Right Delusion. 

“What the authors of the piece show is that congressional aides grossly misperceive the views of their bosses’ constituents; this is true in both parties, but more so the Republicans.  What they don’t point out explicitly is that with the exceptoin of the A.C.A. repeal, Democrats err in the same direction as Republican, just less so.  Specifically, both parties believe that the public is to the right of where it really is.”. 

“What I’m suggesting, in other words, is that there’s a shared inside-the-Beltway delusion:  that America is a conservative, or at most center-right nation, a view that isn’t grounded in reality.”

Hey conservatives.  You are in the minority.  Please keep that in mind.  

Should we be surprised that most folks want good healthcare, higher wages, a cleaner environment, better social safety nets, and are not concerned about the taxes on the ultra-wealthy?

The rural bias in the Senate, the electoral college system, and Fox News are distorting the reality of the situation.  And if enough people from California keep moving to Texas, the electoral college won’t matter any longer either.

  1. Transaction Costs and Tethers: Why I’m A Crypto Skeptic. 

“So I thought it might be worth explaining why I’m a cryptocurrency skeptic.  It comes down to two things: transaction costs and the absence of tethers.”

“Set against this history, the enthusiasm for cryptocurrencies seems very odd, because it goes exactly in the opposite of the long-run trend.  Instead of near-frictionless transactions, we have high costs of doing business, because transferring a Bitcoin or other cryptocurrency unit requires providing a complete history of past transactions.”

“Cryptocurrencies, by contrast, have no backstop, no tether to reality.  Their value depends entirely on self-fulfilling expectations – which means that total collapse is real possibility.”

I am not sure why but my interest in cryptocurrencies is zero.  But this was an interesting take on why cryptocurrencies are not about to replace real currencies any time soon.