Occupational Hazards of Working on Wall Street

By Michael Lewis
Bloomberg View
Originally posted on September 24, 2014

Here is an excerpt:

Here’s a few that seem, just now, particularly relevant:

-- Anyone who works in finance will sense, at least at first, the pressure to pretend to know more than he does.

It’s not just that people who pick stocks, or predict the future price of oil and gold, or select targets for corporate acquisitions, or persuade happy, well-run private companies to go public don’t know what they are talking about: what they pretend to know is unknowable. Much of what Wall Street sells is less like engineering than like a forecasting service for a coin-flipping contest -- except that no one mistakes a coin-flipping contest for a game of skill. To succeed in this environment you must believe, or at least pretend to believe, that you are an expert in matters where no expertise is possible. I’m not sure it’s any easier to be a total fraud on Wall Street than in any other occupation, but on Wall Street you will be paid a lot more to forget your uneasy feelings.

The entire article is here.

Healthy behavior matters. So are we responsible if we get sick?

By Bill Gardner
The Incidental Economist
Originally published May 30, 2014

I have been warned my whole life that I shouldn’t smoke. The evidence that smoking affects health is overwhelming. Suppose I understand all this, but I smoke anyway. And then I get lung cancer. Am I responsible for what happened to me, given that I was aware of the consequences yet behaved recklessly anyway?

Whether we are responsible for our health affects how we think about health policy. The ACA subsidizes insurance, and thus the cost of health care, for millions of Americans. Many people feel that it is right to care for those who are ill through no fault of own, but they do not understand why they should be responsible when someone becomes sick through reckless behaviour or self-indulgence. Our intuition is that such people are (to some degree) morally responsible for their fate.

The entire article is here.

The cheapest form of health care is to let sick people die

By John F. Hunt
KevinMD Blog
Originally posted December 21, 2013

If you learn nothing else today, I would ask you to learn that moral hazard is the cause of medical price hyperinflation.

Moral hazard is not just two words that don’t seem to go together. Moral hazard is when the person who bears the economic burden of a decision is not the decision maker. In the health care setting, moral hazard is when the third party payer (insurance/government) bears the economic consequences of a patient’s decision.

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The cheapest form of health care is to let sick people die. And the government will always need to save money on health care so they can afford to send soldiers to foreign lands that have oil, subsidize big agribusiness to grow corn to make ethanol to destroy our engines, give huge grants to bankrupt companies whose executives support Obama, double the size of the NSA’s Utah data center, or bail out a few more Wall Street looters.

Remember that health insurance  – because of its inherent moral hazard — is the problem, not the solution.

The entire article is here.

Thanks to Ed Zuckerman for this blog post.