Production Reform Beats Political "Magic", Hands Down

These days I try to be careful about adding yet more blog labels - too many already! But production reform certainly deserves a spot on the right side of the page, in that for me it is the very heart of supply side possibility. What's that you say, completely unreasonable? Even boring? I feel a bit feisty today, even if some eyes are already glazing over. And, I "get" that one reason people don't always relate to my work is the fact that it doesn't translate easily into political interpretation.

My readers know that thus far, production reform has already covered a fair amount lot of territory in earlier posts, even if it wasn't previously named as such. Not only do I think of it in terms of untapped potential for service offerings, but also environment production capacity to benefit especially those without the resources for today's choices. Some have had to live under the same roofs of others who would prefer autonomy - or even worse - found themselves sleeping under overpasses. Too much innovation in production capacity has been ruled out for all who desire economic access, because of hard market definitions in both services and environment categories.

The health services aspect of production, as reflected in the ongoing problem of Obamacare, needs to be completely rethought for those in the U.S. who would not qualify for the program itself. It was a MR post and also NYT article by Tyler Cowen, which prompted this post. About his proposals (for political "repairs") in the article, Tyler adds, at MR:

I view my proposal as a third- or fourth-best exercise, it is neither first nor second best. It may be the best we can do from where we stand...

What might those first suggestions have been, had Tyler actually voiced them? Oftentimes, first or second choice solutions are missing from negotiation proceedings, in spite of their greater applicability and efficacy. Admittedly, employment by any number of institutions is enough to rule out some dynamic options! There was lots of debate in the comments of the Marginal Revolution post, and a fair amount of agreement centered around Tyler's suggestions to make the states more responsible for the healthcare they wanted.

However, sending healthcare back to the states can only accomplish so much, in that the U.S. and its states adhere to quite similar product definitions, which create outsized costs and requirements across the board. What's more, sending problem solving back to the states in this instance is mostly "magical" shape shifting. Many budget realities likely would not change - unless the result becomes less healthcare overall - just because responsibility changes hands. I am reminded of the old magic trick, in which the magician moves Styrofoam cups around, and asks the participant to guess which cup holds the object. In fact, that "magic" image frequently comes to mind, when I hear political or taxation arguments addressed in what amounts to "just move it around" terms. Here's commenter Rahul at MR:

I think it's a rather sad part of the American healthcare debates that supply-side reforms (more physicians and nurses...) almost always get relegated to a footnote...juggling costs and expenses around or finessing entitlements, premiums or coverage are only stop-gap measures. The only real progress will be through supply side reforms. Unfortunately supply-side reforms don't have any strong lobby behind them and sadly aren't fashionable because those are ideology-agnostic therefore not particularly enticing to neither liberals nor conservatives.

Hmm, production reform sounds like a project for domestic summits, another "obsession" on the part of this blog! Seriously, that could be a way to also keep the agendas of such summits from being hijacked by special interests or political parties for that matter.  What I like about thinking in production reform terms is that this presents a concrete image what people would actually want to accomplish. With the help of domestic summits, people can help themselves and one another by creating new product of all kinds with supporting infrastructural components. Plus, all income categories could readily access these innovations if they desired.

What does this mean in practical terms? For one thing, production innovation would mean greater economic growth and employment, without having to define either with more credit or finance (banks have grown "tired" of lending anyway). Numerous people would seek out the chance to innovate services and (former) hard assets in formations that scarcely resemble present day offerings - just think about the transformation in electronics in recent decades. Plus, direct use of time in the same hourly settings, opens up an entire universe of skills time that is not really available on present institutional terms. That would allow more incremental steps toward progress - instead of the either/or product definitions which say win or lose for consumer options, right out the gate.

If it's that easy - one might logically wonder - then why aren't people trying this kind of approach already? After all, plenty of people are already looking for solutions that have less to do with politics and more to do with results. The real issue here is one of asking people in control of the marketplace, to allow those who have fallen by the wayside in some respect, to be given the right to get back on their feet and help themselves...by their own means rather than the designated means of others which proved inadequate for success.

Herein lies the problem. It's supposed to be possible to do this, i.e. help oneself within the system - hence celebrations and special recognitions when people "beat the odds". And the fact that people have a harder time of succeeding with present constraints, makes people of all political inclinations a bit uneasy. The effect is a subtle "putdown" of the system that people try their utmost to rely on, even if creative and focused efforts to overcome failure are not intended to make someone or something else look "bad". That's the real problem people have with production reform. It's not even the same game board which everyone else is already playing on - let alone the same game.

So it may take a while to convince the political establishment to give the unemployed, the underemployed, and otherwise marginalized a real chance to overcome their difficulties. In the meantime, however, no one can afford to forget them, because the longer they wait to be able to participate in economic life, the harder it becomes for everyone in the process. How many are being left behind, economically? What then, could be done in the meantime?

At least give those who are marginalized the benefit of the doubt, and try to talk to them occasionally even if it's only small talk. Do they appear lazy, stupid, irresponsible, angry, even evil? How do we know for sure? What would it be like for us if circumstances were different, and good fortune of some sort had not been on our side? Do we discern patterns in the complexities of social confusion that can somehow be remedied? Can we tend to those possibilities instead of assigning blame, judgment or simply turning our backs on the whole situation? Talk to people in government, about allowing people to help themselves, which our governments can no longer help. It's worth a try.