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.