14 November 2013

Obambi, Meet Gresham

Gresham's Law is long and widely known in econ circles, though not mentioned often enough among the punditocracy. Obambi faces it now, and once again, he's blinked (as of the time I'm typing).

In essence, in the absence of symmetric true information, bad goods drive out good goods (hard to say, and it's not just coinage). There was a reason that the scam health insurance policies, almost all aimed at uninsured individuals, weren't grandfathered into the AHA: stupid poor-ish people are easily duped into buying same. They look only at the monthly premium, not at the expected value vs. the premium. Such policies will drive those most in need of real insurance into faux insurance.

As I type, the news states only existing (and those canceled, allegedly, due to AHA) policies will be allowed to continue. New buying is not permitted. We'll see the Right Wingnuts crying: "let the market decide!!!" once again. As if health is a market good. Ayn Rand would be proud.

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