Thursday, December 22, 2011

The Problem with Democracy

It's why we need to scrupulously limit government to the protection of non-contradictory individual rights.

"If it be admitted that a man, possessing absolute power, may misuse that power by wronging his adversaries, why should a majority not be liable to the same reproach? Men are not apt to change their character by agglomeration; nor does their patience in the presence of obstacles increase with the consciousness of their strength. And for these reasons I can never willingly invest any number of my fellow creatures with that unlimited authority which I should refuse to any one of them."

-- Alexis de Tocqueville (1805-1859) French historian

HT Liberty Quotes

Thursday, September 29, 2011

Talking in Circles

The above graphic is a network analysis of linking patterns of liberal (blue) and conservative (red) blogs.
Discussing issues with people who generally agree with you can help to flesh out the details--but if you don't interact with people who disagree, you may miss a part of the skeleton required for structural stability.

Tuesday, September 27, 2011

Coca-Cola chief criticises US tax rules

Coca-Cola now sees the US becoming a less friendly business environment than China, its chief executive has revealed, citing political gridlock and an antiquated tax structure as reasons its home market has become less competitive...
“In the west, we’re forgetting what really worked 20 years ago. In China and other markets around the world, you see the kind of attention to detail about how business works and how business creates employment.”High quality global journalism requires investment...
Mr Kent said that US tax burdens and political polarisation were creating uncertainty for businesses and hurting investment.

--FT By Alan Rappeport in New York

Wednesday, September 21, 2011

Thursday, September 15, 2011

Welfare and Tyranny

"The welfare of the people in particular has always been
the alibi of tyrants, and it provides the further advantage
of giving the servants of tyranny a good conscience."
-- Albert Camus
(1913-1960) French Algerian author

HT Liberty Quotes

Sunday, September 11, 2011

I will never forget.

                       The Statues of Liberty

Friday, September 9, 2011

American Jobs Bill: Takes money from those who could create wealth and gives it to those who consume it.

The President gave a very effective speech....if you listened only to what he said and ignore what he didn't say. He continues to operate from the erroneous Keynesian perspective that the economic problem to solve is not enough consumption, ignoring the fact that without efficient production of real value, there is nothing to consume. Consumers must first produce value if what we want is wealth-creating, win-win exchanges. Instead, what President Obama offered last night is more wealth redistribution: take money from those who know how to create wealth and give it to people who know how to spend it. It's a recipe for continued economic stagnation.

Our country is in an economic pickle after decades of massive public funding of economic goods such as roads, bridges, education and health care. It is all too easy to see what currently exists and ask for more. It is much more challenging to see what could have existed if government had stuck to its proper limits and allowed the market to supply these goods. What we need is a president with more confidence in freedom, a better understanding of the benevolent benefits of capitalism and a greater appreciation of the destructive effects of central planning.

Thursday, September 8, 2011

When is rationing not rationing?

Healthcare Rationing George Orwell-Style

by yours truly on  9-4-11

When is rationing not rationing, a mandate not a mandate and price-fixing not price fixing?
When the government says so.

Monday, September 5, 2011

Steve Jobs, Philanthropist

There have been a lot of articles recently about Steve Jobs, but so far, this is my favorite.

Steve Jobs, World's Greatest Philanthropist

The word philanthropy comes from the Greek philanthropos which comes from philein for "to love" and anthropos for "human being." Philanthropy means love of humanity. Which brings me to Steve Jobs....What a loss to humanity it would have been if Jobs had dedicated the last 25 years of his life to figuring out how to give his billions away, instead of doing what he does best... 
What's important is how we use our time on this earth, not how conspicuously we give our money away. What's important is the energy and courage we are willing to expend reversing entropy, battling cynicism, suffering and challenging mediocre minds, staring down those who would trample our dreams, taking a stand for magic, and advancing the potential of the human race.
On these scores, the world has no greater philanthropist than Steve Jobs. If ever a man contributed to humanity, here he is.

Be sure to read the whole article and click through on the links which show how Apple's technology is revolutionizing what the rest of us can accomplish. Talk about economic multipliers!!

Then, read this piece by a doctor-turned-patient and how his iPad made a huge difference in how he experienced his recent injury, surgery and hospitalization.

Now, think about all the other heroes of the business world who are currently vilified as the "greedy rich"  who need to be taxed more because they aren't contributing their "fair share."

Ludicrous,  isn't it?


Not just tyranny, Alexis, but also the nanny state

"[Tyrannical] power is absolute, minute, regular, provident and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?"

-- Alexis de Tocqueville (1805-1859) French historian

Even when the stated intent is security and protection, the end result of the nanny state is to "spare them all the care of thinking and all the trouble of living."


Friday, September 2, 2011

Market vs. Government Failure

Excellent WSJ editorial by a Nobel laureate in economics----not that that always means anything.

The Great Recession and Government Failure

When comparing the performance of markets to government, 

markets look pretty darn good.

Tuesday, August 30, 2011

Uncertainty = Slow Growth = Unemployment

And the health care low is a significant contributor to all three.

Monday, August 8, 2011

Why the down-grade had to happen

Individualism and Community

As a principled supporter of individual rights, I am frequently accused of not caring about "society" or "community." As this clip points out, I think that people who put community before the individual are getting it backwards. Without putting the lives and rights of autonomous individuals first, there is no community, just gang warfare.

(HT Ideas Matter)

Sunday, July 31, 2011

Francisco D’Anconia published in Ecuador

When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed.

The above quote was published in Ecuador to protest the imprisonment of newspaper publishers and editor for an op-ed critical of the Equadorian president. Freedom of speech and economic statism can not co-exist. In Ecuador, statism is expanding.

What will we tolerate in the U.S.?

If you think it is far fetched, remember Sebelius' threats and Waxman's subpoena to companies who revealed inconvenient truths about the effects of ObamaCare.


Saturday, July 30, 2011

The World is Getting Richer

Developing Economies Fall from 58% to 39% of All Countries in 15 Years

Friday, July 29, 2011

Wednesday, July 27, 2011

The President is Wrong About Taxes.

from Carpe Diem:

During Monday night's national address, President Obama recited the Buffet line that millionaires and billionaires pay lower tax rates than their secretaries. Democrats in Congress routinely cite Mr. Buffett's tax confessions as irrefutable evidence that tax rates on the very rich are too low and the system is unfair.

Except it is not true.

(Data is from the IRS.)

2008 Crash--unfettered government, not unfettered capitalism

Washington and Wall Street: The Revolving Door

The recent report of the Financial Crisis Inquiry Commission blamed all the usual suspects — Wall Street banks, financial regulators, the mortgage giants Fannie Mae and Freddie Mac, and subprime lenders — which is tantamount to blaming no one. “Reckless Endangerment” concentrates on particular individuals who played key roles. --NYT Sunday Book Review

In particular, "when the Clinton administration called for a partnership between the private sector and Fannie and Freddie to encourage home buying...[T]axpayers were unknowingly handing Fannie billions of dollars a year to finance a campaign of self-promotion and self-­protection."

In our mixed economy, statists like to blame capitalism---when it is actually the toxic mixture of free markets and government intervention that is so destructively destabilizing.

For explanations which counter "market failure" theories of our recent financial crash, read the rest of the book review, and then consider reading the book.

Saturday, July 23, 2011

Presidential Ignorance, or Duplicity?

[W]hen the president says that thanks to the debt ceiling "there may simply not be the money in the coffers" to send out the $20 billion in August Social Security checks, he either does not understand the way the system works, or the administration intends to spend the money on something else.

--Thomas Savings, WSJ, Obama's Debt-Ceiling Scare Tactics


Tuesday, July 5, 2011

The Other Important Lesson from 1776

Economist John Taylor reminds us that another very important document was published in 1776: Adam Smith's Wealth of Nations.

Time To Renew the Principles of 1776
What’s the best way forward for American economic policy? On Independence Day it’s natural to look to the country’s founding principles—political freedom and economic freedom—for an answer. 1776 was not only the year when Thomas Jefferson wrote the Declaration of Independence, it was the year when Adam Smith wrote the Wealth of Nations. We can learn what to do by studying the alternating periods in American history when careful attention was paid to these principles and when they were recklessly neglected.

Read the rest here.


Monday, July 4, 2011

Celebrating Individual Rights: The foundation of civilization

Two hundred and thirty five years ago, Americans cast off the bonds of tradition and stood up for liberty based on inalienable individual rights. At the time, we were the only nation of the then-developing world to take this principled stance. What the rest of the world was doing was irrelevant. What was important was acting on what was right.

Thanks to the courage, foresight and principled thinking of those early citizens, a country was created which made the rights and lives of individuals the basis for placing limits on the power of the community. Eventually, a constitution was written limiting the power of government and protecting the wide and grand sphere of individual freedom. America set the standard for respecting human dignity.

In the subsequent two centuries, America led the world toward freedom and prosperity. Progress occurred commensurate with our loyalty to those founding principles. Where we strayed, painful lessons were learned at the cost of great suffering. A civil war. A lingering great depression. Where we stayed true, liberty was extended.

We need to reclaim those founding principles. Listening to the ideas of other nations is fine—but when they take us in the direction of increasing government control over our private lives, we must ignore the childish cries, “But Mom, everyone else is doing it.”

In particular, we need to find our own unique solution to the problem of rising health care costs, one that respects the rule of law and the property and liberty rights of individuals. In the long run, abandoning those ideals will not bring us peace, prosperity—or for that matter, affordable health care.

If some future study unquestionably demonstrated that we could achieve universal access to medical care at a sustainable cost--if only we would be willing to reinstate chattel slavery—all men worthy of respect would turn away in horror and disgust. The civilized world understands that slavery is never justified.

So too must we turn away from all solutions which entail coercion in place of persuasion and voluntary exchange—for exactly the same reasons that we reject slavery. The fundamental premise of the new health care law--that a proper function of government is to coerce one man into being another man’s keeper—must be rejected outright. Nobody has a moral claim to another man’s life or honestly earned property—not even to a little of it.

This country has recently seen the revival of the sentiments of the Boston Tea Party. It is time to move on to the next step and once again declare to the world: We will live in freedom. We will honor each individual’s right to life, liberty and pursuit of happiness—and the political solutions we craft will stay within these bounds, even if the rest of the world does not.

Our founders began with what they held to be self-evident moral principles, and then looked for solutions consistent with those principles. Mistakes were made, but by holding to the standard of individual rights, legal protection has been extended to people of all races, to women as well as men—not as members of a class, but as individual human beings.

We must do the same with the challenges we face today—start with what is right. We must be ruthlessly loyal to equality before the law and the respect the rights to life, liberty and property. Any solutions to our sluggish economy or costly health care must be consistent with these fundamental principles of a moral and civil society. An individual mandate to purchase health insurance initiated and enforced by government should not even be in the tool box.

It’s time to recommit to our original oath and once again be leaders of the world in the cause for human dignity.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

Let us live, not just celebrate, the meaning of July 4th.


Wednesday, June 29, 2011

Does Inequality Matter?

"This study argues that, for those of us who care about the
welfare of the poorest and the most vulnerable, income
inequality is not a useful measure. Measures of income
inequality tell us nothing about the living conditions of the
poor, their health and their access to economic opportunity.
Income inequality can easily increase in societies in
which everyone, including the very poorest individuals, is
becoming better off. Conversely, a reduction in inequality
can be associated with deterioration in the living conditions
of the less well-off members of the society"

from "Does Inequality Matter?" Dalibor Rohác, Adam Smith Institute Briefing Paper


Sunday, June 26, 2011

Infinite Resources

"The cavemen had the same natural resources at their disposal as we have today, and the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources and the knowledge used today."

-Thomas Sowell, Knowledge and Decisions 

HT Carpe Diem


Thursday, June 23, 2011

Legal Plunder

I have yet to receive a convincing answer to the following question:

If it is wrong for your neighbor to come to your house and demand you pay for his health care, why is it ok if the whole neighborhood gets together and makes the same demand?

Wednesday, June 22, 2011

Why not use spoons?

Milton Friedman was once taken to see a massive government project somewhere in Asia. Thousands of workers using shovels were building a canal. Friedman was puzzled. Why weren't there any excavators or any mechanized earth-moving equipment? A government official explained that using shovels created more jobs. Friedman's response: "Then why not use spoons instead of shovels?"


Doing more with less is the road to prosperity.

Read the rest of the article:

Obama vs. ATMs: Why Technology Doesn't Destroy Jobs  Russ Roberts, WSJ, 6-22-11

Update: Another good article on this same theme: Obama the Luddite: Friend to Labor Unions, Enemy of Job Creators


Monday, June 13, 2011

Saturday, June 11, 2011

30 years of HIV/AIDS

June 5th, 1981 Morbidity and Mortality Weekly Reports had an article on five cases of Pneumocystis carinii pneumonia (PCP) among previously healthy young men in Los Angeles. This was the beginning of our journey into the puzzle that has been HIV/AIDS. I remember sitting in a series of Grand Rounds in medical school, and then residency, as some of the pieces of the puzzle came together: homosexual males, Kaposi's sarcoma, severe immune deficiency and death from "opportunistic organisms."

The AIDS story has been full of tragedy and fear---and though we still have a long way to go, it is also a story of scientific triumph. In the US it is not quite the same death sentence as before. In Africa, the battles to alter cultures and manage the disease amidst poverty have proved the greater challenge.

The Kaiser Family Foundation  has put together an interactive Global HIV/AIDS Timeline in which you can scan the milestones  from 3 decades of effort.

Just another example of how where there is wealth, the possibilities are so much greater and how poverty is the biggest killer of all.


How to Grow an Economy

Since the recession began Texas...has produced 37% of all new jobs in the United States. Richard Fisher, president of the Federal Reserve Bank in Dallas, says this remarkable job growth is due to these pragmatic factors: a business friendly environment, flexible economic policies, small government, no state income tax, no right to work laws, a 30.5% health care growth, and systematic tort reform (editorial, “The Lone Star Jobs Surge" Wall Street Journal, June 10, 2010).

from Dr. Richard Reece at Medinnovation

Thursday, June 9, 2011

The Changing Character of Medicine: Are We Headed in the Right Direction?

A recent article in the New York Times relates how the shift from small business owner to employee affects a physician’s politics. But that is far from the most important change that will occur because of this shift. What we really need to pay attention to is how it will affect the practice of medicine itself.

Full post is up at PJ Media.


Friday, June 3, 2011

Planned Parenthood Controversy: The Law vs. the Law

There's a very interesting discussion over at The Incidental Economist on what is actually at stake in the controversy over Planned Parenthood funding in Indiana.

Turns out that Medicaid patients were not getting abortions paid for by Medicaid. That is against Federal law.

What the Indiana law is attempting to do is prohibit Medicaid patients from receiving any type of care from a facility which performs abortions. But that prohibition also appears to be against Federal  law.

Read the rest over there:

Medicaid, Planned Parenthood and the law


Thursday, June 2, 2011

Medicare Reform: Paying for the Cake You Want to Eat

Today's post is up on PJ Media.  Check it out, and be sure to leave a comment.

Since Medicare and Medicaid became law in 1965, people have been told: “You can have your cake and eat it too.” You can have the medical care you need and not have to pay for it. (You may think you are paying for Medicare with your payroll taxes, but in fact those taxes cover less than 1/3 of your projected health care costs.) 

For decades, Medicare and Medicaid have been paying for health care with no one facing the difficult question: “Is what we are purchasing worth the cost?” Not the doctors, nor the “beneficiaries” — and especially not the politicians. Doctors get income; patients get health care; politicians get votes — all with the carefree ease of paying for it with other people’s money.


Sunday, May 22, 2011

Philosophical Referee

“Created by Landon Schurtz"

Randy Barnett on the Individual Mandate

I recently attended a symposium in San Fransisco where legal scholar and law professor Randy Barnett spoke on the legal challenges to the individual mandate. You can read my review of his presentation at the Black Ribbon Project blog.


Saturday, May 21, 2011

Price fixing is not Cost Control

Health insurance premiums have risen even faster since the PPACA became law. How does the government respond? With price controls. But price controls do not address costs and will lead to shortages. Economics 101. Unless you are a politician--then it leads to votes.

Insurers Told to Justify Rate Increases Over 10 Percent

In some states like New Hampshire, groups of more than 20 workers have experienced premium increases of around 20 percent this year, while smaller groups have seen increases of 40 percent or more. At the same time, insurance agents say, coverage is shrinking as deductibles have increased and insurers limit the choice of hospitals.

To ensure that “consumers get value for their dollars,” the new health care law required annual reviews of “unreasonable increases in premiums...”

Under the new rule, federal and state officials will review rates in the individual and small-group insurance markets...

Federal officials acknowledged that they did not have the authority to block rates that were found to be unjustified. But they said many states had such authority, and the federal government is providing $250 million to states to strengthen their capacity.

Friday, May 20, 2011

Just think what Free Market Medicine could bring

From this to this

Electrode Experiment Shows Promise as a Paralyzed Man Stands
Published: May 19, 2011

A young man paralyzed by an injury to his spinal cord has regained the ability to stand for short periods, take steps with help and move his legs and feet at will, with the help of an electrical stimulator implanted in his lower back. The device is experimental and not available to other patients, and because it has been studied in only one person it is not known whether it would work as well in other people with different types of spinal injury.

You can bet there would be a market for this devise, and that at first only the very wealthy would be able to afford it. But, then like computers, and cars, and refrigerators, and cell phones, with time the cost would come down and more and more people would be able to afford it, then the truly needy could be helped by private charity.

All we have to do is let go of the idea of instant equality and the coercive wealth redistribution which follows from that ideal, and then let innovators, profit and value seekers do the rest.


Wednesday, May 18, 2011

The Morality of Profit

Trading value for value voluntarily is moral---even if you make a million bucks while doing it. Its gains made through the violation of property rights, like theft and government wealth transfers which are not moral--and it's critical to understand the difference.

Tuesday, May 17, 2011

ARRA: The seen and the unseen

American Recovery and Reinvestment Act

What is seen:

450,000 government sector jobs "created or saved"

What is unseen:

1,000,000 private sector jobs forestalled

Read more in this Ohio State Study:

Monday, May 16, 2011

A Dent in the Debt

A picture is worth 1000 words.

Too bad its not worth $1000 billion so we could start making a dent in the debt.

Saturday, May 14, 2011

What do Medicare, the Housing Bubble and the Chinese High Speed Rail have in Common?

Megan McArdle, writing about the Chinese high speed rail and its parallel to the 2008 U.S. housing bubble-and-crash had this to say:

Prices are really useful. But in whole large sectors of the Chinese economy, particularly the banking sector, the government sets those prices. This means huge information loss, and the concomitant possibility that there is a vast misallocation of resources.

Don't those things happen in markets? Hell yes: witness the housing bubble. On the other hand, witness East Germany. To get a really catastrophic misallocation of resources, it seems to take a government; corporations can only screw things up on an artisinal scale. For that matter, it's worth noting that our government has spent the last seven decades trying to keep the price of housing low, and that much of that intervention, such as the creation of mortgage securitization, ultimately significantly contributed to the crisis.

It's worth remembering that at the time they were built, all those useless houses looked like prosperity.

The same argument can be made for the current mess we are in with health care prices. With the government as the single largest payer for medical care in the U.S., the administratively-set prices for Medicare and Medicaid wreak havoc with supply, demand and resource allocation.

Also -it's worth remembering that at the time they are consumed, all those unfunded Medicare benefits look like a wonderful health care program--until you pay attention to the effect they have on rising health care costs and government insolvency.


Friday, April 29, 2011

Keynes vs. Hayek--Round Two

The only rap music I have found worth listening to.

Round One: Fear the Boom and Bust

(HT Patrick Peterson)

Thursday, April 28, 2011

The poor are getting richer.

Mark Perry of Carpe Diem reports on new research showing that the poor are not getting poorer, but richer.

“By leaving out additional sources of income – like fringe benefits or employer-provided health insurance – past studies have dramatically understated American households’ access to after-tax resources.” said Dr. Burkhauser. “What we found is that the rich did get richer over the last 30 years, but so did the middle class, the working class and the poorest...
This isn’t a zero sum game, where one group wins at the expense of others. The growth in productivity of Americans in the top twenty percent of tax units increased the size of the economic pie sufficiently to register major gains across the entire distribution of after-tax income.”

Read more here and here.


Wednesday, April 27, 2011

American Dependence on Government Assistance Highest Ever

From the National Center for Policy Analysis Daily Policy Digest:

Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA Today analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly two years old.

  • A record 18.3 percent of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010.
  • Wages accounted for the lowest share of income -- 51.0 percent -- since the government began keeping track in 1929.

The wage decline has continued this year.

  • Wages slipped to another historic low of 50.5 percent of personal income in February.
  • Another government effort -- the Social Security payroll tax cut -- has lifted income in 2011.
  • The temporary tax cut puts more money in workers' pockets and counts as an income boost, even when wages stay the same.

From 1980 to 2000, government aid was roughly constant at 12.5 percent. The sharp increase since then reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems.

  • Total benefit payments are holding steady so far this year at a $2.3 trillion annual rate.
  • A drop in unemployment benefits has been offset by rises in retirement and health care programs.
  • Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990.
  • The federal government pays about 90 percent of the benefits.

Source: Dennis Cauchon, "Americans Depend More on Federal Aid than Ever," USA Today, April 26, 2011.

For text:

For more on Tax and Spending Issues:

For an excellent commentary and further elaboration see TANSTAAFL at Small Thoughts.


Monday, April 25, 2011

Poverty is Easy to Explain

by Walter Williams

There is very little either complicated or interesting about poverty. Poverty has been man’s condition throughout his history...The true mystery is why there is any affluence at all.

Read the rest here.


Friday, April 22, 2011

WINTP goes Hollywood

Last December I wrote a post "519 Reasons Why California is Broke." Turns out, California Americans for Prosperity have turned my post into a movie.

Related to this topic is the $1.7 trillion ball-and-chain that government regulation places on the economy. From the Competitive Enterprise Institute:

On Tax Day, CEI released this year's edition of Ten Thousand Commandments, an annual report by CEI Vice President Wayne Crews. Every year, Crews tallies up the compliance costs of federal regulations and explains how these costs constitute a huge hidden tax imposed on American consumers. In 2011, according to Crews, regulations costs American taxpayers $1.75 trillion. Read the full report here.


Thursday, April 21, 2011

How was 2008 like 1936?

People received more from the government (on average) than they sent in.

This is NOT a sustainable trend.

Read more here. (Third article down)

(HT Warren Gibson)

Wednesday, April 20, 2011

"Quality Bonuses"--Grease for the Squeaky Wheels

One hand giveth while the other taketh away–and both hands live in the White House.

— Millions of seniors in popular private insurance plans offered through Medicare will get a reprieve from some of the most controversial cuts in President Obama's healthcare law.--LA Times 4-20-11

More on this posted at The Black Ribbon Project.


Tuesday, April 19, 2011

Why Science and Politics Should Not Mix, Part 2

"We have long known that some places...offer high-quality care at costs below average."
--Barak Obama, 09-09-2010, Joint Session of Congress

“[O]ne of the biggest signals of inefficiency in American health care is the massive regional variation in cost and health outcomes…yet the higher cost areas and hospitals don’t generate better outcomes than the lower-cost ones. The result is an estimated $700 billion a year spent on health care that does nothing to improve patient health.”
-- Peter Orszag, OMB blog post, 05-28-2009

It ain't so much the things we don't know that get us into trouble. It's the things we know that just ain't so.
--Josh Billings, and several others

Just over a year ago, I wrote a post on why we need the separation of state and science. The case in point was the use of the research from the Dartmouth Atlas study on regional variation in Medicare costs to claim a 30% reduction in Medicare spending could be achieved if only medical care was centrally controlled to produce more uniform practices. Those conclusions have recently been over-turned.

Dartmouth researchers have associated the unexplained portion of geographic variation with the supply of specialist physicians or hospitals, potentially leading to incorrect inferences about the causes of geographic variation—so-called supplier-induced demand. However, recent studies indicate that health sta­tus is a more important factor driving variation in spending than previously believed and that demographic and economic factors, as well as the structure of local health care markets, shape patient preferences and provider practice styles in far more complex ways than early analyses suggested. High spending might reflect inadequately measured health status or some other factor, such as poverty.

This is a point that Buz Cooper has been making all along. These arguments may seem a tad wonky--and I suppose they are--but the crucial issue is that the original findings of the Dartmouth Atlas study were very prominent in justifying the new health care control law--and now it's announced those results were unreliable at best, and more likely just plain wrong.

Read Cooper's whole post for more detail.


Monday, April 18, 2011

So what exactly CAN I call the new health care control law?

Supporters of the law object to the term "ObamaCare." Somehow it is insulting to refer to the law by the name of the President who worked so intensely to have it passed.

Am I really expected to call it the "Affordable Care Act" or the "Patient Protection and Affordable Care Act" when I think it is neither affordable nor protective of patients? I find that insulting to my intelligence!

If supporters want us to refer to a law by its formal title, how about naming it something that's more descriptive and less propaganda.

"Explosive Regulatory Control of Health Care" ERCHC
"Massive Arbitrary Power to the Department of Health and Human Services Law" MAPDHHS
"Health Insurance as Public Utilities Law." (That one at least comes out with a pronounceable acronym: HIPUL.

Or if you prefer something neutral: The 2010 Health Care Reform Law.

Until politicians stop insulting us by titling their laws with such ludicrous names, they best be prepared to be insulted right back.


Sunday, April 17, 2011

Frictionless Competion

Austin Frakt over at The Incidental economist states:

Traditional Medicare, being immune from market forces (though not political forces) can counter that provider market power, essentially setting “below market” prices by fiat. (Don’t go thinking this is an affront to a perfectly competitive market. High provider market power is itself a deviation from a perfect market.)

I don't understand the fascination some economists have for the "perfectly competitive market."

In physics, I can see the advantage to improving our understanding of force and inertia by experimenting and theorizing in a frictionless system. But when it comes time to build machines in the real world, we'd be in big trouble not to account for friction.

Seems to me like the same thing goes for economics. Simplification has its advantages to understanding the economic principles and how they function, but when you get into the messy world of voluntary exchange between free individuals, with its innovators, early adapters, laggards and the rest, perfect competition does not and can exist. We can identify and account for the differences between the idealized system and reality, but any attempt to "correct" for the "failure" is try and substitute what someone thinks the world should be for what the world actually is ---and that is courting disaster.

Am I missing something here?


Friday, April 15, 2011

Where do your federal tax dollars go?

April 15.

Tax Day, and my in-laws wedding anniversary. (This year it's their 60th!!)

Today I received an email from David Plouffe, Senior Advisor to the President. (Bet you didn't know I had such powerful friends.)

Here it is:

Good afternoon,

Have you ever wondered how much of your own tax dollars actually go to support foreign aid? To support education? Well, now you can find out – and you might be surprised.

In his State of the Union Address, President Obama promised that this year, for the first time, American taxpayers would be able to go online and see exactly how their federal tax dollars are spent.

So today, we’re announcing the first-ever federal taxpayer receipt. Check it out:

Just enter a few pieces of information about your taxes, and the taxpayer receipt will give you a breakdown of how your tax dollars are spent on priorities like education, veteran’s benefits, or health care.


David Plouffe
Senior Advisor to the President

I decided to give it a try. Plugged in my Social Security tax, Medicare tax and Federal Income tax. Then I calculated how much of my tax is spent on the military, the courts and the police---the only three legitimate areas of government action.


If government was reduced to its proper function of protecting our inalienable individual rights to life, liberty and property, I could pay 60% less tax. More importantly, I would have 60% less my property expropriated by the very institution designed to protect my property.

Something to think about.

Government needn't be so large and our liberty so diminished.


Friday, March 25, 2011

Wednesday, March 23, 2011

One Year Later: The ACA is still wrong and must be repealed

One year ago, the PPACA was signed into law. The problems with this law continue to multiply: continued rising health care costs, soaring national debt, replacement of Rule by Law with arbitrary Rule by Regulatory Rules and Waivers--just to name a few.

The Independent Women's Voice held a video contest to help alert people to the destructive effects of the law. My entry is below. Though not as professionally done as the winners, the message is crucial to the fight for our health care freedom.

Sunday, March 20, 2011

Vilifying Dr. Berwick — for the Wrong Reasons

My op-ed was published on today's PJ Media:

If you don’t like ObamaCare, you probably really don’t like Donald Berwick, the current administrative head of Medicare and Medicaid.

You know him. He’s the one who’s “in love” with the Britain’s National Health Service, the guy who insists that we “must — must — redistribute wealth,” and tells us that, since rationing is unavoidable, we’d best do it “with our eyes open.”

But in regards to government-funded health care — including Medicare and Medicaid — Dr. Berwick is right, so it does no good to shoot the messenger.

Medicare, Medicaid, and all collectivized medical care require rationing for the simple reason that allscarce resources must be rationed.

You can read the rest here.


Saturday, March 19, 2011

Public Choice made Entertaining

An economics student at San Jose State University makes economics understandable and entertaining.

If you like this one, be sure to check out his earlier productions here.

Shorthand Politics on Public Choice

Wednesday, March 16, 2011

Free Market: not just the most effective, but also the most moral solution to poverty

Milton Friedman is right as far as he takes it. The free market is the most effective system the world has known for producing wealth and reducing poverty. What he doesn't say in this video clip is that the free market, because it is limited to voluntary exchange, is also the most moral system for reducing poverty. A system which employs the initiation of force will not be as effective--it can only redistribute wealth not create it--but even more importantly, it entails in its methods the destruction of civil society.

(HT Ideas Matter)

Thursday, March 10, 2011

The Perverse Incentives of the PPACA

Health policy analyst, Dr. John Goodman, testified yesterday before the House Energy and Commerce Subcommittee on Health. Below is is 5 minute opening statement. He quickly goes through several o fteh perverse incentives written into the structure of the law which will make health care more expensive and still fail to solve the problem of access. You can read the written statement here.

Wednesday, March 9, 2011

Entrepreneurs Could Solve the HeathCare Crisis....if we would let them get rich

In any other field, Jeffrey Brenner would be a millionaire. But because he’s in health care, he doesn’t know how he’s going to make ends meet. Like entrepreneurs in every market, Brenner thought outside the box. He discovered an ingenious way of lowering health care costs: focus on the “hot spots” of medicine — the high-utilizing, high spending patients — and solve their problems with unconventional care...So how much does Medicare reward Dr. Brenner for all the savings he creates for our nation’s largest health plan? Zip. Zero. Nada. How much does Medicaid pay for all the savings it realizes? Zilch. Zippo. Not a penny...

No one knows if Brenner’s techniques can be replicated (any more than we know if the medical practices of the Mayo Clinic or the Cleveland Clinic can be replicated). But there’s one way to find out: let Brenner become rich. Rich? Yes, rich...

[Gawande] actually believes that ObamaCare is going to liberate Brenner and people like him.

When is the last time you heard Barack Obama say he wants entrepreneurs to get rich solving the nation’s most pressing health care problems? When is the last time you heard him say he wants anyone to get rich doing anything? When is the last time you heard him say even a kind word about people who get rich?

No? Never? Not even once? Case closed.

Read the rest of the story from John Goodman. It's both inspiring, and infuriating.


Thursday, March 3, 2011

Message to The Forgotten Man

I am receiving feeds through a blog I have been following called The Forgotten Man which now takes me to a page titled "I'm Just left behind."
To the author of the recent posts:
Just want to let you know I am reading your posts, but there is no way for me to respond.

Judge Vinson Rules! (again)

Today, Judge Vinson released his response to the Government's request for a "clarification" of his ruling in Florida v. HHS. If you have been closely following the court cases for the constitutionality of the individual mandate, this order reads like the rise to the climax of a great suspense drama. In it, the government lawyers are thoroughly spanked for misbehaving---and then, in the interests of moving things forward as quickly as possible towards a Supreme Court ruling, Judge Vinson grants the government a stay it did not officially request.

What does all this mean?

At the end of January, Judge Vinson ruled that the individual mandate was unconstitutional, and the because the mandate is an integral part of the legislation, it can not be severed without fatally undermining the greater regulatory intent of the law. For these reasons, the entire law was struck down. Judge Vinson granted declaratory relief, but not injunctive relief, to the plaintiff because "the "declaratory judgement was expected to be treated as the "practical" and "functional equivalent of an injunction"--based on a "long standing presumption that the defendants [i.e. the government] themselves identified and agreed to be bound by." (see today's order, page 14.) Judge Vinson explained today that he expected the government to promptly respond to his ruling with a request for a stay pending appeal--not for the government to completely ignore his ruling, and then file a belated request for a "clarification" of a ruling which was perfectly clear. Vinson indicated that the game-playing delay tactics by the government lawyers are recognized for what they are and will NOT be tolerated.

So after having previously ruled that implementation of the PPACA should halt, why the apparent turn-around by granting a stay of execution of his previous ruling?

Judge Vinson recognizes the complexity of the case, and that it will not be resolved until the Supreme Court finalizes its interpretation. Although the plaintiffs are suffering injury under continuation of the law, given the mixed current rulings (see below) and the uncertainty of the final ruling, the disruption will be greater if the law is halted while under appeal.

The 20 page "Order" is interesting and fun to read--even if you haven't had time to read the eloquent legal discussion in Vinson's original ruling.

The stakes are high here. Nothing less than the nature of our government: is it all-powerful, or limited? If limited, what are the boundaries?

I strongly recommend reading Vinson's original ruling. He provides a well written synopsis of the evolution of Commerce Clause interpretation. For an interesting alternative analysis, read Randy Barnett's amicus curiae, or his longer article "Commandeering the People: Why the individual Mandate is Unconstitutional." If you really get into it, there are the rest of the current court rulings and a few of the relevant landmark Supreme court cases listed below.

(If you want just a few choice quotes from today's order, you'll find some here.)

Happy reading.

Current Individual Mandate law suit rulings

Case #1 – individual mandate ruled constitutional

Thomas Moore Law Center v. Obama 10-07-10

Randy Barnett amicus curiae – very worthwhile reading.

Case #2 – individual mandate ruled constitutional

Liberty University v. Geithner 11-30-10

Case #3 – individual mandate ruled unconstitutional, and severable

Virginia v. Sebelius 12-13-10

Case #4 – individual mandate ruled unconstitutional and nonseverable, declaratory relief granted; injunctive relief denied as unnecessary because declartory relief is sufficient

Florida v. HHS 01-31-11

Case #5 – individual mandate ruled constitutional

Mead v. Holder 02-22-11

Case #4 – Order 03-03-11

Judge Vinson “clarifies” that he had clearly ruled the PPACA unconstitutional and expected the Government to either quickly file appeal or cease implementing the law.

A stay of his declaratory injunction is granted provided the Government files a notice for an expedited appeal within seven days.

Key Landmark Supreme Court Cases on the Commerce Clause

Wickard v. Filburn (1942)

U.S. v. Lopez (1995)

U.S. v. Morrison (2000)

Gonzales v. Raich (2004)