Taking Economics Seriously

Dean Baker spoke at Politics & Prose about his new book. I have not dug into it but this book looks like it could be read in a day's commuting, sitting at about 80 pages. The point of the book as Baker explained it was to really use economics in the public sphere to make better policy. Essentially if the collective we talked about the world of economics and actually prioritized issues according to their economic consequence, we would all be better off.

Baker knows his material but is not a naturally gifted public speaker. I generally agree with everything he said but I do not think he is someone that would easily convince the uninitiated, which is too bad, because he has some really good ideas.

The interesting light bulb moment for me was illustrating the causal link between the excessive, patent protected monopoly profits of pharmaceuticals, and their overwhelming incentives to sell more drugs. This has some fairly obvious impacts, which while I had always been aware of them, failed to grasp this causality. Namely, of course drug companies are going to bribe doctos into prescribing their remedies, and of course drug companies are going to try to invent new conditions for which their drugs are needed, and of course, the fact that many drugs barely exceed placebo will be carefully hidden. When you are making hundred of percent if not thousands of percent of profit on a monopoly protected prescription, the cost of all these things (both actual and in goodwill) are all worth it.