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The Baseline Scenario

Too Big To Fail, Politically
Posted: 18 Jun 2009 05:21 AM PDT

What is the essence of the problem with our financial system – what brought us into deep crisis, what scared us most in September/October of last year, and what was the toughest problem in the early days of the Obama administration? Read more…

When Market Incentives Lead to Bad Outcomes, Continued
Posted: 18 Jun 2009 04:30 AM PDT

A couple of weeks ago, I wrote a post about Atul Gawande’s New Yorker article about health care spending and outcomes. I didn’t claim to have any particular insight about health care economics; I just thought that people should read his article – which, to summarize greatly, argues that there is no correlation between high spending and good outcomes, because the current system does not motivate doctors to seek good outcomes. (Apparently Barack Obama agreed, since the Times reported that “the article became required reading in the White House.”) Read more…

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