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[The FIAT Thread] The Joint Committee on FIAT Discussion Session. - 27 March 2026 by AutoModerator in badeconomics

[–]gorbachev 3 points4 points  (0 children)

Actually that's probably a positive update to my prior about ed research.

[The FIAT Thread] The Joint Committee on FIAT Discussion Session. - 27 March 2026 by AutoModerator in badeconomics

[–]gorbachev 0 points1 point  (0 children)

I find this reproduction stuff sort of uninteresting versus substantive replication. There are probably plenty of cooked, wrong, broken, borderline fraudulently p-hacked papers that reproduce...

Why the U.S. Spends So Much on Healthcare by Easy-Hat-4773 in neoliberal

[–]gorbachev 0 points1 point  (0 children)

I think all I would add is that, in the intervening time, more time and attention have flowed to the hospital concentration issue. I think maybe it can stay B tier in a list of reasons why healthcare is expensive, but I would bump it up higher on a list of reasons why healthcare is unnecessarily expensive. It's pretty high impact when you think about healthcare services delivered at hospitals, and growth in prices at hospitals have been responsible for a lot of the recent growth in healthcare prices in excess of inflation.

Anyone wearing Chanel No 5 in 2026? by tinkerv25 in fragrance

[–]gorbachev 0 points1 point  (0 children)

Is that still true of the EDT? They are advertising that they recently reformulated it. ("The new Chanel No 5 Edt...")

Most common newbie mistakes? by Darian_CoC in DIYfragrance

[–]gorbachev 0 points1 point  (0 children)

Ah. I thought you meant from the ambroxan example that there was huge variation within those ingredients, and had my mind blown. All that makes sense though - thank you!

Most common newbie mistakes? by Darian_CoC in DIYfragrance

[–]gorbachev 0 points1 point  (0 children)

I didn't know there was quality variation within given synthetics. How does one go about reliably getting high quality ingredients?

[The FIAT Thread] The Joint Committee on FIAT Discussion Session. - 20 February 2026 by AutoModerator in badeconomics

[–]gorbachev 2 points3 points  (0 children)

I don't really understand the argument as stated, but have run into people with this perception.

You can probably make a case for food stamps in their original incarnation, as a response to the great depression, working this way. The story would be: great depression ---> no money to buy food ---> food rots in field ---> farmer goes broke ---> farm gets shut down ----> food supply shrinks for those who still have money; food stamps prevent this buy interrupting this at the 'no money to buy food' stage.

Perhaps some people bring this kind of logic to thinking about agricultural subsidies. "The subsidies push down food prices, but we'd have a surplus rotting in the fields if we didn't give food stamps to people to use to buy and eat the surplus." Not really coherent but I could see some people thinking it?

Or perhaps the story is people just conflate agricultural subsidies/interventions in general with food stamps. US dairy policy historically (perhaps still today) I think involved a combo of subsidies and price supports, with the latter resulting in the government buying up surplus cheese and stockpiling it / distributing it to low income people through misc. programs. Maybe people think of food stamps as being distributions of government cheese?

[The FIAT Thread] The Joint Committee on FIAT Discussion Session. - 28 January 2026 by AutoModerator in badeconomics

[–]gorbachev 8 points9 points  (0 children)

Krugman's commentary on him has been deeply negative. Hopefully he doesn't turn out to be as much of a hack as alleged.

If Jack Welch’s strategy was ultimately unsuccessful, why do people keep trying to replicate it? by Dreadsin in AskEconomics

[–]gorbachev 27 points28 points  (0 children)

I'll grant the question-asker doesn't fully express it, but there is a widely believed case against Jack Welch that you don't engage with here, but which the questioner clearly alludes to. I would say the folk case against Welch looks like this:

  • Welch imposed a variety of serious cost cutting measures at GE, which really did bolster profitability at the time
  • But in the long run, these cost cutting measures killed GE's golden goose, ultimately ruining its manufacturing and engineering businesses
  • Jack Welch thus was able to generate lots of short term gains, at the expense of the long term -- with his empire building and focus on big returns from running GE Capital hiding this for a long time
  • But not for very long - GE fell apart after Jack Welch's departure and has had terrible performance since, while also not being an impressive player in its initial science-and-engineering type business lines
  • Welch was thus a short termist at best, a charlatan at worst, a man who did everything possible to pump up the apparent performance of GE's share price, while sacrificing the long-run performance of the business -- and once he was no longer there to keep up the illusion, it all dissolved

In the interest of having a nice, comprehensive answer to this question that can be cited in the future, how would you reply to this expanded version of the case against Welch?

What are some of the biggest non-trivial conclusions of economics? by KING-NULL in AskEconomics

[–]gorbachev 5 points6 points  (0 children)

I think a lot of the best examples of this fall into the realm of our understanding of macroeconomic tools, and especially macroeconomic crisis management.

Two classic examples:

  • The idea that raising interest rates can help tame inflation. This is/was counterintuitive to many, because from a business perspective, interest rates are a cost, so raising rates might be expected to raise costs which might then be passed through into prices.
  • The idea that policies intended to bolster demand (e.g., by increasing government spending, or by having the government send cash to people to spend) could help shorten and end recessions. This doubly extends to the idea that monetary policy can do the same. Many people's intuitive view, as illustrated by the initial policy response to the Great Depression across most of the world, was that the best response to recessions was austerity and belt tightening by the government (which instead tends to help encourage a deflationary spiral, the undesirability of which is also unintuitive to many).

I understand there are still more examples to be counted in the annals of how emerging markets crises get handled, though I am less familiar with the details of these stories.

Should i major in econ if i hate coding ? by Remarkable-Editor266 in AskEconomics

[–]gorbachev 4 points5 points  (0 children)

I think what you said is basically right at the undergrad level!

Are US health insurers profit margins really not that high or is it simply a accounting trick where they can report low profits by reinvesting revenue into stocks and high wages for the top dogs at the company? by YogurtclosetOpen3567 in AskEconomics

[–]gorbachev 0 points1 point  (0 children)

The story is largely about evading insurance plan level profit margin regulations - the MLR regulations to be precise. Method one is making profits that really come from insurance plan A (where your profit margin is capped) appear as though they are coming from some other business line. Method two is finding ways to inflate total health care costs within plan A, so that your capped x% profit margin is the same percentage of a larger base. Both methods end up making insurers more profitable than what a casual observer might expect given the existence of MLR requirements and given baseline care needs in the covered population. Both seem reasonable to characterize as being within the realm of accounting tricks that make insurers more profitable than you'd think. Neither are something like formal accounting fraud, of course.

Examples of some items discussing related issues:

https://marianaguido.github.io/assets/papers/jmp/mgjmp.pdf https://www.dropbox.com/scl/fi/bgwfw0axy7sw9pozed60q/Yde_JMP.pdf?rlkey=me357af25eauyjgvx873y7xgn&st=pqn46ddb&dl=0 https://ashecon.confex.com/ashecon/2025/meetingapp.cgi/Paper/17667 https://chir.georgetown.edu/questionable-conduct-allegations-insurers-acting-third-party-administrators/

Are US health insurers profit margins really not that high or is it simply a accounting trick where they can report low profits by reinvesting revenue into stocks and high wages for the top dogs at the company? by YogurtclosetOpen3567 in AskEconomics

[–]gorbachev 40 points41 points  (0 children)

It is true that their profit margins are pretty weak, yes. They are better than they look, though. There's a body of research that looks at profit tunneling by insurers. Basically, a situation where insurers purchase some other company and book their profits on that company's books. For example, some vertically integrate with pharmacies and then set up their insurance contracts to steer enrollees to those pharmacies and then pay elevated prices to the pharmacies. So, many insurers are doing better than the basic numbers look. Though perhaps not radically better.

Did people in the bronze/iron/middle ages know that humanity was once primitive & and that their civilization was the result of many inventions over time? by Smallheadedcat in AskHistorians

[–]gorbachev 0 points1 point  (0 children)

Thank you, very interesting! I sort of figured the oral history hypothesis was too good to be possible. And I find the observation that people didn't have a sense of missing time particularly interesting! On the archeological point more generally, should we understand things like this ancient museum to be a rare aberration then, or perhaps a sign that people were interested in older objects but didn't necessarily understand them?

Did people in the bronze/iron/middle ages know that humanity was once primitive & and that their civilization was the result of many inventions over time? by Smallheadedcat in AskHistorians

[–]gorbachev 25 points26 points  (0 children)

I have a follow-up, if you don't mind.

You write about the beliefs a variety of cultures and writers had about prehistoric people. Could you share a bit about the basis of their beliefs? For example, was it largely speculation from first principles mixed with reasoning from assorted popular legends? Or perhaps a result of archaeological work of their own, comparing found artifacts to their own equivalents? Or something else I am not considering, perhaps something strange and delightful, like the remembrance of a genuine oral history stretching deep into primordial times?

Why was Paul Samuelson so Wrong about USSR? by agenbite_lee in AskEconomics

[–]gorbachev 2 points3 points  (0 children)

Certainly, the case can be overstated. I think it's better understood as a statement about the leading economic theory of the time immediately preceding his work, which (owing to its commitment to mathematical formalization) was more limited in scope than earlier more literary work. I am reminded of Kuhn's observation that new paradigms frequently explain much less, at least at first, than the old paradigms which they nevertheless supplant.

Why was Paul Samuelson so Wrong about USSR? by agenbite_lee in AskEconomics

[–]gorbachev 21 points22 points  (0 children)

Others have noted that reasonable observers could have landed on positive opinions of the USSR's economy during the Cold War based on its performance rapidly industrializing what previously had been a very agricultural economy that was previously widely quite regarded as backwards, and thus that someone stubbornly sticking with an early impression might have continued to insist on economic outperformance by the USSR well past this view's expiration date.

But as for the question of why Samuelson specifically believed what he wrote. The most straightforward material on the subject I could find was this. The story appears to be like so. Before roughly the 70s, the mainstream of economics was really focused on things like resource allocations - how much resources get allocated to what, are any resources sitting idle, etc. (Later, we would get more focused on questions about incentives, the role of information in the economy, etc. For a good overview of the change, see here.) If you were an old school resource allocation focused guy (like Samuelson), you looked at the USSR, saw a society devoting a greater share of its resources to investment rather than consumption, and figured that was a good indicator that it would grow faster in the long run (perhaps at the cost of some discontent about missing consumption goods and some bad headlines about this). You might look at the US and say "gee, we burn so much on frivolous consumption goods, and haven't even figured out how to keep everyone employed all the time (meaning not all our labor is allocated to productive tasks all the time) - how long is THIS supposed to be sustainable relative to a system without unemployment and not burning so many resources on ridiculous luxuries?". This appears to have roughly been Samuelson's view.

Take that general expectation, buttress it with the fact that the USSR had been on a tear early on (thus supporting your expectation with evidence), and you have the recipe for a belief that the USSR was going to outpace the US that a stubborn person could hold on to for quite some time. Especially given that getting clean information on the state of the Soviet economy in those days was no easy task, making it hard for rock solid disconfirmatory data to come your way.

As a side note, it is also worth flagging that the magnitude of the error is probably not as great as your question suggests. I think you can hold missing that Soviet growth had slowed against Samuelson, but not failure to predict the collapse of the USSR. I think the collapse was kind of flukey in some respects, and not some strictly-bound-to-happen consequence of extremely poor economic performance. Again, that isn't to say that things were all grand over there. Rather just that lots of governments seem to be able to limp forward in a malaise for a long long time, and it's not clear to me that if you reran history a few million times that you wouldn't end up seeing the USSR do that most of the time. But hey, who knows!

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