Monthly Archives: August 2014

Callie Gable on Avikcare

Posted on by

She writes,

Roy’s plan changes the structure of Obamacare’s subsidies by benchmarking them to a high-deductible plan with a health-savings account — providing a powerful incentive for people to move into consumer-driven health plans. The HSA would be funded in part (depending on income level) by federal subsidies, which would roll over from year to year, giving consumers incentives to stay healthy and to make cost effective health-care decisions when they do need care.

The difference between subsidizing Singapore-style health insurance and mandating Obama-style health insurance is significant.

This is even more significant:

Medicare eligibility age would increase by four months every year until the program is totally phased out, to be replaced by putting seniors on the reformed exchanges.

Actually, with longevity increasing by 3 months per year, I am not sure that Medicare would phase out as rapidly as they think. And any step-up in anti-aging innovation could mean that longevity increases faster than 4 months per year. Still, better to be raising the age of eligibility gradually than not at all.

Of Interest to Libertarians

Posted on by

1. From George Leef.

Since 2003, the [North Carolina Board of Dental Examiners] has been issuing cease and desist orders to beauty shops or any other business that offered teeth whitening services. The legal basis for such orders is that the “practice of dentistry” is restricted to licensed dentists and the Board decided that teeth whitening falls within that practice. Unless you’re a licensed dentist, you must stop.

2. From Graeme Wood.

Minerva is built to make money, but Nelson insists that its motives will align with student interests. As evidence, Nelson points to the fact that the school will eschew all federal funding, to which he attributes much of the runaway cost of universities. The compliance cost of taking federal financial aid is about $1,000 per student—a tenth of Minerva’s tuition—and the aid wouldn’t be of any use to the majority of Minerva’s students, who will likely come from overseas.

The Pew Quiz on Political Typology

Posted on by

I found it repetitive and unsatisfying. Thanks to Mark Perry for the pointer. I thought that the responses that were supposed to be conservative were left-wing stereotypes of conservative views. Not so much the other way. I thought that sometimes small wording nuances that they probably did not notice affected my answers. The difference between “most” and “every” was significant to me, but my guess is they chose those words more casually.

It called me a Business Conservative.

Business Conservatives generally are traditional small-government Republicans. Overwhelming percentages think that government is almost always wasteful and it does too much better left to businesses and individuals. Business Conservatives differ from Steadfast Conservatives in their positive attitudes toward business and in their strong support for Wall Street in particular. Most think that immigrants strengthen the country and take a positive view of U.S. global involvement. As a group, they are less socially conservative than Steadfast Conservatives.

I wonder if they have a libertarian category and I failed to make it there. Otherwise, what they call business conservative may be the closest thing you can get to libertarian within the confines of the survey.

I think that the three-axis model is better. Some people did not care for the quiz in The Three Languages of Politics, but I think it was actually a better quiz than what the Pew people came up with.

Arthur Brooks on Coercion vs. Charity

Posted on by

He writes,

Consider the present total that Americans give annually to human-service organizations that assist the vulnerable. It comes to about $40 billion, according to Giving USA. Now suppose that we could spread that sum across the 48 million Americans receiving food assistance, with zero overhead and complete effectiveness. It would come to just $847 per person per year.

Or take the incredible donation levels that followed Hurricane Katrina in 2011. The outpouring of contributions exceeded $3 billion, a record-setting figure that topped even the response to the attacks of September 11, 2001. But even this historic episode raised enough to offset only 3 percent of the costs the storm imposed on the devastated areas of Louisiana and Mississippi. Voluntary charity simply cannot get the job done on its own.

This is not fully persuasive. It may be misleading to describe what a charity-only safety net would work like using an extrapolation based on current social arrangements.

1. If we took away today’s safety net and left that income in private hands, people would have more to donate to charity.

2. If we took away today’s safety net, then affluent people who now assume that government is taking care of those in need would instead take the view that donations are needed.

Nick Rowe on Monetary Theory

Posted on by

He writes,

2.1 Home production increases in a recession. People grow their own veggies, cook their own meals, fix their own cars, and go back to school. Because investment in human capital is a form of investment that requires mostly one’s own time, on top of inputs bought for money. Home production of investment goods rises, even as all other forms of investment fall.

2.2 If trade were harder in a recession, we would expect to see trade in all goods falling, and not just trade in newly-produced goods. And, as far as I can tell, that is what we do see. It gets harder to sell old houses, as well as newly-produced houses.

2.3 Barter increases in a recession, as far as I can tell. Barter is usually very difficult, but some barter exchanges are more difficult than others. If recessions were caused by something that made monetary exchange more difficult than normal, we would expect to see abnormally high levels of barter in a recession. I think we do.

2.4 Some goods are easy to sell for money even in a recession. Which goods are those? It is those that are traded in organised central markets, where problems due to asymmetric information are small, and where prices are very flexible. It is precisely those goods that are more like money, where if all goods were like that we wouldn’t need money as much to help economic coordination. It is those goods that are traded in markets that approximate the market of the Walrasian auctioneer. If all goods were like that, and if all markets were like that, we wouldn’t observe recessions. And we wouldn’t need money.

But we don’t see increased use of foreign currency in a recession. We don’t see increased use of buying on credit–we see the opposite. And as for point 2.3, as far as I can tell, the use of barter in the 2008-present episode has been minimal.

Later, he writes,

Lots of things can cause coordination failures. Not all coordination failures are monetary coordination failures. There are many coordination failures that monetary policy cannot cure.

I don’t think that the last six years represents an example of the latter.

Health Care and Education in the U.S.

Posted on by

In a post on his new blog, Neerav Kingsland writes,

Ultimately, charter school districts are simply single payer education systems.

The theme of the post is that using charter schools still leaves education less privatized than health care under Obamacare. So why is the left disturbed by charter schools? Some comments:

1. As Kingsland hints, one may ask conversely, why is the right so disturbed by Obamacare? In fact, many on the left have complained about this.

2. Many on the left are not happy with Obamacare. They prefer something like Britain’s NHS.

3. Starting points matter. We started from a health care system that was less centrally managed than Obamacare, so Obamacare represents a move to the left. We started from an education system that was more government-run than charter schools, so charter schools represent a move to the right.

4. There are many on the right who doubt the efficacy of charter schools for precisely the reason that Kingsland says that the left should like them. That is, they can be thought of as government outsourcing education, but still controlling it.

Ferguson

Posted on by

A reader writes,

I think Ferguson is a great illustration of your 3 axis model. Would love to read a post of your’s discussing that.

I have been on vacation with only sporadic skimming of news. All I know is that a black resident was shot by a white policeman, and some rioting has ensued. The three-axis model would predict:

–progressives would view the black resident as representing an oppressed class. They would be critical of society’s unjust inequality and racism.

–conservatives would view rioters as representing barbarism. They would be critical of anyone they think encourages rioting.

–libertarians would view the police as representing coercion. They would be critical of police who act as if the unlimited use of force is their prerogative.

Again, I have only been skimming the news. Is that actually how views have been falling out?

Another Alternative to the FDA Process

Posted on by

Alex Tabarrok writes,

MelaFind was submitted for marketing approval in Europe in May 2011. It was approved just five months later. One key reason for Europe’s efficient approval process is that European governments don’t review medical devices directly. Instead they certify independent “notified bodies” that specialize and compete to review new products. The European system works more quickly than the U.S. system, and there is no evidence that it results in reduced patient safety. Rather than tweak the current system, why doesn’t the U.S. just adopt the European model and call it a day? Our health and our economy would be better off for it.

Reihan Salam points to a review by Daniel Klein from 2001 of a book by Henry I. Miller.

Miller develops a reform proposal that would attempt to institutionalize the cooperative virtues of the European systems. Drug development and application would be overseen by nongovernmental “drug certifying bodies.” They would compete with one another for hire by companies developing a new drug. The hired drug-certifying body would oversee investigation, help develop the new drug application, and then make an initial decision on the application—that is, decide whether to certify the drug. The European agencies would also be permitted to serve as drug-certifying bodies. The company and its certifying body would then go together to the FDA for final approval of the new drug. The FDA, therefore, would retain final authority, but would rely on a set of trusted drug-certifying bodies, which would compete to get it right, do it quickly, and keep fees low. Under such a regime, says Miller, the FDA “becomes primarily a certifier of certifiers, rather than a certifier of products.”

Speaking of the FDA, apparently, as soon as someone writes an app for a mobile phone that does something like monitor glucose levels, this threatens to make turn the phone into a medical device, inviting the FDA to regulate.Scott Gottlieb and Colleen Klasmeier write,

The ambiguity created by the guidance and the agency’s premarket review processes forces innovators to seek the FDA’s nod for every new launch and every small advance. This slows progress to a crawl. Worse, the lag may be almost entirely unnecessary, as most of these products are not properly regarded as a medical device in the first place.

Probably Not Due to AD

Posted on by

The Wall Street Journal reports,

The employment rate of Italians under 40 fell nine percentage points since 2007, while it rose the same amount for those between 55 and 64 years, according to Eurostat.

The article points to high fixed costs of hiring works, which holds down employment of young people and leaves them only with short-term, temporary jobs. Read the whole thing. One more excerpt:

Employers in many countries are reluctant to hire on permanent contracts because of rigid labor rules and sky-high payroll taxes that go to funding the huge pension bill of their parents.

Don’t think it couldn’t happen here.