Tag: Paul Krugman

“Comparisons Are Toxic.” True or False?

Jan 3, 2025

by MIKE MAGEE

THCB is back from its end of year break, but we are starting with a little catchup from December from Mike Magee.

As my wife often reminds me, “Comparisons are toxic.” And, in general, I agree and try to respect this cardinal rule. But these are extraordinary times. So grant me this exception.

On December 9, 2024, in my early morning survey of the news, two articles demanded my attention. The first was an editorial in the New York Times with the self-explanatory title, “My Last Column: Finding Hope in an Age of Resentment” by Paul Krugman. The second was an article published that morning in Nature titled “Quantum error correction below the surface code threshold” authored by “Google Quantum AI and Collaborators,” a blanket label for a team of 300+ engineers led by Founder and Leader, Hartmut Neven. More on him in a moment.

As a loyal reader of Krugman, I read his “last column” carefully – twice. Over 25 years I’ve admired this specialist’s (global economics) willingness and interest to wander often into generalist, cross-sector, liberal arts territory. No match for his Nobel winning intellect or pure-bred education at MIT, Yale and Princeton, I do share a history of common geography (upstate New York in our early years, and the New York metropolitan area later on); an upbringing in religious households (Jewish and Catholic); and more than two uninterrupted decades of weekly published columns.

Though I have not always agreed with his take on every issue, I count myself as an admirer. The issues that have interested him, both pro and con, over the years, are more often than not the same issues that have troubled or encouraged me. So I was not surprised that he chose, in his “last column,” to reflect on the recent election, and the current levels of anger, violence and resentment in our society. And while I agree with the findings in his examination of the body politic, we arrived at a different diagnosis.

Krugman writes, “What strikes me, looking back, is how optimistic many people, both here and in much of the Western world, were back then (25 years ago) and the extent to which that optimism has been replaced by anger and resentment. . . some of the angriest, most resentful people in America right now . . . are billionaires who don’t feel sufficiently admired.”

As for the diagnosis, in response to the question he himself raises (“Why did this optimism curdle?”), he answers, “As I see it, we’ve had a collapse of trust in elites.” And the treatment for this disease? “if we stand up to the kakistocracy — rule by the worst — that’s emerging as we speak, we may eventually find our way back to a better world.”

Now that sent me back to Hartmut and the Nature article for a reality check. Were American oligarchs and technocrats, with wild wealth and even wilder ideas, the cause of every day people jumping aboard the Trump cult train?

Nevin is 9 years younger than Krugman. He is a German-trained PhD physicist who came to the University of Southern California as an entrepreneurial research professor in computer science in 1998. His several start-ups which were focused on “face recognition technology and real-time facial feature analysis for avatar animation” helped make him famous and rich when they were purchased by Google in 2006. But his fantastical dream was to create a “quantum chip” that would outperform anything that currently existed.

Six years later, he launched the Quantum Artificial Intelligence Laboratory, and by 2016, he had come up with an experiment (still ongoing) to prove “quantum supremacy.” Starting his own chip fabrication factory in Santa Barbara, his dream became concrete. He took a world view in 2020, stating: “It’s not one company versus another, but rather, humankind versus nature — or humankind with nature.”

Nevin believes he is in the right place at the right time. The AI Arms Race is full on and relies on ever increasing data consumption to support generative self-learning. That demands enormous consuming power. In his words, “Both (quantum computing and AI) will prove to be the most transformational technologies of our time, but advanced AI will significantly benefit from access to quantum computing. This is why I named our lab Quantum AI.”

Quantum computing is measured in “qubits” (which are the size of a single atom) versus the binary digit measure of standard computers, called the “bit.” As the New York Times explained, “Quantum bits, or ‘qubits,’ behave very differently from normal bits. A single object can behave like two separate objects at the same time when it is either extremely small or extremely cold.” The test using exotic metals cooled to 460 degrees below zero, reported out on October 9th that Hartmut’s quantum chip “performed a computation in under 5 minutes that would take one of today’s fastest supercomputers 10,000,000,000,000,000,000,000,000 (10 septillion) years to compute.”

But that’s not the amazing part. In past experiments, the device was error prone, and the more qubits, the less reliable the computations. But now, for the first time, this group was able to demonstrate the more qubits in play, the more accurate the outcome. As Nevin explained, “This historic accomplishment is known in the field as ‘below threshold’ — being able to drive errors down while scaling up the number of qubits.” How big was that? According to Javad Shaman, director of the Center for Quantum Information Physics at NYU, “one of the highlights of the recent decade.”

Nevin doesn’t seem to “worry about being admired.” In his blog this week he tied his qubit “below threshold” accomplishment to “helping us discover new medicines, designing more efficient batteries for electric cars, and accelerating progress in fusion and new energy alternatives.” That seems a far cry from Paul Krugman’s highlighting of “the pettiness of plutocrats who used to bask in public approval and are now discovering that all the money in the world can’t buy you love.”

Gallup has been conducting an annual survey of “Americans Satisfaction With The Way Things Are Going In The U.S.” for roughly a half century. Currently only 22% say they are satisfied. Back in 1986, that number peaked at 70%. That was the year that Robert Fulcrum wrote a little book that remained on the New York Times Best Seller list for nearly two years. Some criticized the book as “trite and saccharine,” but 17 million copies of his books remain in circulation.

The 1986 book was titled, “All I Really Need To Know I Learned in Kindergarten.” Here are his top ten learnings:

Share everything.
Play fair.
Don’t hit people.
Put things back where you found them.
Clean up your own mess.
Don’t take things that aren’t yours.
Say you’re sorry when you hurt somebody.
Wash your hands before you eat.
Flush.
Warm cookies and cold milk are good for you.

I was trying to figure how members of my own family could vote for a man to lead our nation who routinely and deliberately breaks most of these rules. I’ve come up with two reasons:

Greed. They simply don’t want to share any of their wealth or good fortune with others.
Religious certainty. They do not believe in separation of Church and State, and do not respect individual self-determination and free will. And yet values can not be enforced on human beings. They must be freely embraced to become permanently embedded.

Comparisons may be toxic, but Hartmut and Paul point us toward the truth. We (not our leaders regardless of their human deficits) are responsible. And we as citizens of America need to get our act together. As Nevin the information scientist teaches, optimism flows from purpose and the promise of service. And Krugman, the Nobel economist, teaches that money alone can not buy you love – or peace, or lasting joy, or contentment.

Mike Magee MD is a Medical Historian and regular contributor to THCB. He is the author of CODE BLUE: Inside America’s Health Industrial Complex. (Grove/2020)

Will Artificial Intelligence (AI) Trigger Universal Health Care in America? What do expert Academics say?

Apr 18, 2024

By MIKE MAGEE

In his book, “The Age of Diminished Expectations” (MIT Press/1994), Nobel Prize winner, Paul Krugman, famously wrote, “Productivity isn’t everything, but in the long run it is almost everything.”

A year earlier, psychologist Karl E. Weich from the University of Michigan penned the term “sensemaking” based on his belief that the human mind was in fact the engine of productivity, and functioned like a biological computer which “receives input, processes the information, and delivers an output.”

But comparing the human brain to a computer was not exactly a complement back then. For example, 1n 1994, Krugman’s MIT colleague, economist Erik Brynjolfsson coined the term “Productivity Paradox” stating “An important question that has been debated for almost a decade is whether computers contribute to productivity growth.”

Now three decades later, both Krugman (via MIT to Princeton to CCNY) and Brynjolfsson (via Harvard to MIT to Stanford Institute for Human-Centered AI) remain in the center of the generative AI debate, as they serve together as research associates at the National Bureau of Economic Research (NBER) and attempt to “make sense” of our most recent scientific and technologic breakthroughs.

Not surprisingly, Medical AI (mAI), has been front and center. In November, 2023, Brynjolfsson teamed up with fellow West Coaster, Robert M. Wachter, on a JAMA Opinion piece titled “Will Generative Artificial Intelligence Deliver on Its Promise in Health Care?”

Dr. Wachter, the Chair of Medicine at UC San Francisco, coined his own ground-breaking term in 1996 – “hospitalist.” Considered the father of the field, he has long had an interest in the interface between computers and institutions of health care.

In his 2014 New York Times bestseller, “The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age” he wrote, “We need to recognize that computers in healthcare don’t simply replace my doctor’s scrawl with Helvetica 12. Instead, they transform the work, the people who do it, and their relationships with each other and with patients.”

What Brynjolfsson and Wachter share in common is a sense of humility and realism when it comes to the history of systemic underperformance at the intersection of technology and health care.

They begin their 2023 JAMA commentary this way, “History has shown that general purpose technologies often fail to deliver their promised benefits for many years (‘the productivity paradox of information technology’). Health care has several attributes that make the successful deployment of new technologies even more difficult than in other industries; these have challenged prior efforts to implement AI and electronic health records.”

And yet, they are optimistic this time around.

Could Wasteful Healthcare Spending Be Good for the Economy?

Jan 31, 2013• 25

By John Goodman

Suppose I throw a rock through a store owner’s window. You admonish me for this act of vandalism. But I reply that I have actually done a good deed.

The store owner will now have to employ someone to haul the broken glass away and someone else, perhaps, to clean up afterward. Then, the order of a new glass pane will create work and wages for the glassmaker. Plus, someone will have to install it. In short, my act of vandalism created jobs and income for others.

The French economist, Frédéric Bastiat called this type of reasoning the “fallacy of the broken window.” All the resources employed to remove the broken glass and install a new pane, he said, could have been employed to produce something else. Now they will not be. So society is not better off from my act of vandalism. It is worse off — by one pane of glass.

But there is a new type of Keynesian (to be distinguished from Keynes himself) that rejects the economist’s answer. Wasteful spending can actually be good, they argue. If so, they will love what happens in health care.

By some estimates one of every three dollars spent on health care is unnecessary and therefore wasteful. ObamaCare’s “wellness exams” for Medicare enrollees — so touted during the last election — is an example. Millions of taxpayer dollars will be spent on this service, yet there is no known medical benefit. Similarly, ObamaCare is encouraging all manner of preventive care — by requiring no deductibles or copayments — which is not cost effective.

Socialism Kills

Nov 7, 2012• 23

By John Goodman

In a recent Health Alert I evaluated Paul Krugman’s claim that ObamaCare is going to save “tens of thousands of lives” and the repeal of ObamaCare will lead to the death of “tens of thousands” of uninsured people.

Krugman’s bottom line: Mitt Romney wants to let people die. The economics profession on this same subject: Krugman’s claims are hogwash.

But there is something that does cause people to die: socialism. More precisely, the suppression of free markets (the kinds of interventions Krugman routinely apologizes for) lowers life expectancy and does so substantially.

Economists associated with the Fraser Institute and the Cato Institute have found a way to measure “economic freedom” and they have investigated what difference it makes in 141 countries around the world. This work has been in progress for several decades now and the evidence is stark. Economies that rely on private property, free markets and free trade, and avoid high taxes, regulation and inflation, grow more rapidly than those with less economic freedom. Higher growth leads to higher incomes. Among the nations in the top fifth of the economic freedom index in 2011, average income was almost 7 times as great as for those countries in the bottom 20 percent (per capita gross domestic product of $31,501versus $4,545).

What difference does this make for health? Virtually, every study of the subject finds that wealthier is healthier. People with higher incomes live longer. The Fraser/Cato economists arrive at the same conclusion. Comparing the bottom fifth to the top fifth, more economic freedom adds about 20 years to life expectancy and lowers infant mortality to just over one-tenth of its level in the least free countries.

Setting the Record Straight on Medicaid’s “Success”

Nov 5, 2012• 23

By David Dranove

In last Sunday’s New York Times, Paul Krugman extolled the virtues of Medicaid. Here are some excerpts from this astonishing column:

“Medicaid has been more successful at controlling costs than any other major part of the nation’s health care system.”

“How does Medicaid achieve these lower costs? Partly by having much lower administrative costs than private insurers.”

“Medicaid is much more effective at bargaining with the medical-industrial complex.”

“Consider, for example, drug prices. Last year a government study compared the prices that Medicaid paid for brand-name drugs with those paid by Medicare Part D — also a government program, but one run through private insurance companies, and explicitly forbidden from using its power in the market to bargain for lower prices. The conclusion: Medicaid pays almost a third less on average?”

In the days since this column was published, I have spoken with many experts on Medicaid who are uniformly appalled by it. While I may not reach the same audience as the New York Times (at least not yet!), I feel compelled to set the record straight on Medicaid’s “successes.”

How Health Care Changed While You Were Watching the Election

Nov 1, 2012• 3

By Dan Diamond

After a seemingly endless presidential campaign, we’re just days away from the Nov. 6 election. And to be sure, health care issues remain at the forefront.

Both Barack Obama and Mitt Romney have tried to claim the high ground as Medicare’s number one defender. In his latest column, the New York Times’ Paul Krugman argues that next week’s vote “is, to an important degree, really about Medicaid.” And writing on Bloomberg View, columnist Ezra Klein takes an even broader stance, concluding that “this election is all about health care.”

But health care isn’t all about the election, despite politics’ seeming ability to draw every sector into its gravitational pull.

In fact, many of the most significant stories in health care from the past two months haven’t come from the campaign trail — where candidates have mostly rehashed their existing policies — but from the private sector, as employers and providers have made aggressive, and sometimes unexpected, deals and changes. Reforms that will continue regardless of who’s sitting in the Oval Office next year.

Here are some of those stories.

Top Employers Move to Defined Contribution

As previously discussed in “Road to Reform,” Sears Holdings and Darden Restaurants have made plans to shift away from their current “defined benefits” — where they choose a set of health insurance benefits on behalf of their workers — and roll out “defined contribution” instead.

Under that model, firms pay a fixed amount for employees’ health benefits and allow workers to choose their coverage from an online marketplace, such as the Affordable Care Act’s health insurance exchanges or the emerging number of privately run exchanges.

In theory, the model would slow employers’ health costs while allowing employees to have more control over their own health care spending. And Sears and Darden’s announcements aren’t wholly unexpected, given that many employers have signaled their interest in making a similar shift.

But given the long-entrenched employer-sponsored health coverage model, some employers needed to be the first movers before the rest would be ready to follow.

Will they? That will be a major industry issue to watch across the next months.

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