Rethinking the Economy

Stumbling towards a new model for creating growth, opportunity, and justice

Rethinking the Economy header image 4

Entries Tagged as 'Assumptions'

Skeleton of the Framework v0.6

November 2nd, 2009 · Comments Off

Now that I’ve used Getting Green Done to flesh out part of my argument, here’s the latest version of my framework.
The conventional economic framework, a.k.a. Econ 101, says the economy can be broken into 3 layers:

People are calculators: they rationally pursue their self-interest given near perfect information about the world
Organizations are calculators
[...]

[Read more →]

Tags: Framework · Model · Movement Perspective · Organizations Aren't Calculators · People Aren't Calculators · Practitioner's Perspective

When the Crowd Isn’t so Wise

October 7th, 2009 · Comments Off

A great piece by John Cassidy in the New Yorker on one major reason why Wall Street crashed.
According to a common narrative, we have lived through a textbook instance of the madness of crowds. If this were all there was to it, we could rest more comfortably: greed can be controlled, with some [...]

[Read more →]

Tags: Finance · People Aren't Calculators

Propaganda’s B Team: Kelloggs’ “Smart Choice” Froot Loops

September 9th, 2009 · Comments Off

As we’ve seen, Big Pharma’s very sophisticated in how they pollute the info doctors and patients have take decisions about drugs. Food manufacturers? Not so much.
A new food-labeling campaign called Smart Choices, backed by most of the nation’s largest food manufacturers, is “designed to help shoppers easily identify smarter [...]

[Read more →]

Tags: Health care · People Aren't Calculators

Drug Companies v Moral Hazard Geeks: Why Traditional Econ Models Don’t Cut It

September 7th, 2009 · Comments Off

Aside from being truly appalling, the subject of last week’s post is a great example of how traditional economic models don’t work. To recap via the New York Times:
A growing body of evidence suggests that doctors at some of the nation’s top medical schools have been attaching their names and lending their [...]

[Read more →]

Tags: Assumptions · Health care · Model

Healthcare: the Hazards of the Moral Hazard Argument

August 31st, 2009 · Comments Off

In a post on the economic issues around health insurance, Professor Dan Saviro makes the standard “moral hazard” argument:
Consumer demand drives the market, but it is largely the demand of subsidized consumers who are not actually paying at the margin for what they get. Suppose that in the market for groceries or cars we [...]

[Read more →]

Tags: Health care · People Aren't Calculators

Richard Thaler Wimps out (or, the Limits of Behavioral Economists)

August 17th, 2009 · 1 Comment

Richard Thaler is a very smart guy. He’s one of the founders of Behavioral Economics — the folks who argue that people aren’t calculators. So when he jumped into the healthcare debate over the public option, I was eager to see his take on the debate.
Unfortunately, he turned off his behavioral economist brain and [...]

[Read more →]

Tags: Health care · People Aren't Calculators

The Complicated Emotional Map of a Good Economic Model

July 17th, 2009 · Comments Off

In my last post, I complained Robert Kuttner didn’t really capture the government’s role in the market. Ironically, he also didn’t capture what I love about the market.
Kuttner, Dean Baker, Jamie Galbraith, they’ll all write that “markets accomplishments much superbly,” “the market is an incredibly powerful force,” etc. But they sound like a little [...]

[Read more →]

Tags: Assumptions · Model

Why Understanding the Actors & Their Ecosystem Matters

June 17th, 2009 · Comments Off

Recently NPR ran a piece about the impact behavioral economists — the folks who argue that people aren’t calculators — are having on the Obama administration. NPR gave a sample of the dizzying amount of hard empirical research backing up behavioral economics, then asked, “So why would economists assume that human beings are so hyper-rational?” [...]

[Read more →]

Tags: Model · Organizations Aren't Calculators · People Aren't Calculators

User-Centered Policy Design

June 1st, 2009 · Comments Off

As we saw in the last post, one reason computerizing healthcare records can be a disaster is that the people designing the software don’t pay attention to how people will actually use it.
Some software designers argue that the way to avoid this mistake is to use “user-centered design.” Don’t assume that nurses in a hectic [...]

[Read more →]

Tags: Assumptions · Health care · Model · Smart Growth

Computers Won’t Save Healthcare (RTE Assumptions in Action)

May 25th, 2009 · Comments Off

There’s one thing Democrats and Republican politicians agree on when it comes to healthcare reform: digitizing healthcare records could be a godsend. When it works, it can improve patient care, reduce medical errors, and save billions of dollars a year — a crucial consideration given the threat that skyrocketing healthcare costs pose to our economic [...]

[Read more →]

Tags: Checks and Balances · Health care · Organizational Development · Organizations Aren't Calculators · People Aren't Calculators