Tuesday, September 29, 2009

Prager University

Dennis Prager defines himself as someone who likes "clarity over agreement." In this case we agree. I listen to Prager when I am in the car. He often has some very interesting guests, and for the most part he is a skilled interviewer. One area where I disagree with him is his constant nattering about the state of American higher education. He has frequently stated that most American universities do not advance learning. He has made numerous negative comments about how universities are organized. He has made, in my opinion, numerous gross generalizations that ignore realities in higher education.

A few months ago he began something called Prager University. It is a short series of video tutorials about issues of passion for him. The ones that I have seen are both clever and informative. But I wonder why he would use the term university to describe his educational activities.

In my mind a university should be a place of dialogue and assessment. He collects fees, that are user based - somewhat like the tuition paid in Adam Smith's time. He establishes a transcript - based on individuals watching the (now 4) different video programs. But the "university" has but one faculty. There is hardly a university commons where the collaborative work of a university takes place. A university should also have some coherence in its offerings. There is also little understanding of whether the viewers (students?) have actually learned something in the presentations. The first four presentations are each interesting but hardly linked into a coherent curriculum. And while the presentations are interesting and informative they could hardly be called rigorous.

I wish Prager would back off of his diatribes about higher education. Every institution in society, including talk radio, could improve. But while his criticisms are often on point, he paints with entirely too broad a brush.

Sunday, September 27, 2009


Many of my daughter's political beliefs and mine are not the same. A few days ago my wife was in the LA area and she and my daughter were shopping. They walked past a person who had a picture of the President with a Hitler mustache. They asked "Would you sign our petition." To which my daughter replied, "I don't agree with anything you stand for."

Whatever her beliefs, she was willing, in a small way, to stand up for them. Comparing this president, or any president to Hitler is silly and inappropriate. I would hope that had she seen a picture of the last president as Hitler (there certainly were many) she would have had the same reaction. But even if she did not, she exercised her right to expression.

Thursday, September 24, 2009

Fraser Institute Student Video Contest

The Fraser Institute has a bunch of interesting programs including an annual contest for student videos - linking classic economic ideas with new technology. It is a great opportunity. This year's topic is particularly timely.

Reflections on Philadelphia's History Venues

I am in Philadelphia for a couple of days and had the opportunity to visit the National Constitution Center and the Pennsylvania State House (what many people call Independence Hall). The picture is of one of the most important rooms in our collective history. The Declaration was signed there. The Constitution was written there. Lincoln lay in state there on his last ride back home. In the building are only two verifiable items that came from the building, The chair in the picture, which Washington used to preside for the Constitutional Convention, is one of them. The guide we had thought it was his duty to point out that the Constitution did not include a lot of 20th century concepts. I am not sure why that commentary was necessary. Indeed, he did not point out that during the key days of the writing of the Constitution that 18th century that the participants observed bathing habits of the time. The latter did not seem necessary and the seeming editorial comment was not necessary either.

We also went to the National Constitution Center. The Center has a multi-media presentation called We the People - which I have now seen twice. The ending line suggests that the Constitution is what we make it. Not to quibble but I think that is lousy constitutional theory. Obviously the Center adheres to the doctrine of a living constitution. But there is another view that I think is more appropriate. We formed the Constitution to establish limits on government. Edmund Burke, in Reflections on the Revolution in France, explained the hazards of having an open ended system where reality was defined by who was in charge.

There are two sets of exhibits in the Center. The first is a recreation of the hall where the Constitution was written. It includes life sized statues of the signers. It is very inspiring. The second is a set of multi-media exhibits that I found almost totally useless. The exhibits seem to be mostly attentive to liberal interpretations of the constitutional history and while balance is important that is not the problem I have with the presentation. The hall needs either sound dampers or a reduction in number of things - the place is a cacophony of sounds so it is almost impossible to concentrate on any single exhibit.

Tuesday, September 22, 2009

Political Cocooning

The President appeared on Letterman last night and over the weekend in one of his media blitzes specifically refused to appear on the Fox network. I realize he is not the only one doing this but I think that attitude is short sighted.

The President is not alone in this proclivity. A lot of conservatives only speak to conservatives. Fox News and Salem Radio are locked into their own worlds. That creates a perception, but not a reality.

Our democratic system is based on the interchange of ideas. But with Letterman and Fox and a whole bunch of other options we do not have that engagement. That is sad.

Playing it safe - be it left or right - is wrong.

That's why they call him a spokesperson

Ted Costa, the spokesperson for People's Advocate a supposedly conservative organization is quoted in the Bee this morning as saying that Jerry Brown was "tightfisted" as governor.

I guess Mr. Costa does not remember all the bizarre policies enacted during Brown's administration. Many of those policies were penny wise and pound foolish. For example, Brown's administration can be marked as the beginning in the decline in California infrastructure. The absurd levels of public employee pensions and growth in the influence of public employee unions can be dated to his eight years.

If you are an opponent of Proposition 13, Brown's hoarding of General Fund money during the first couple of years of his terms can be cited as a reason for its adoption. Even if you are a supporter of the Proposition, one can date the dysfunction in the workings of local governments to the passage of that Proposition.

Tightfisted? Nonsense

Monday, September 21, 2009

Getting at the Truth

In Yesterday's Bee a Freelance journalist from Washington wrote an article on the Tea Party Protest held in Washington recently. The headline was "Taxpayer March - it looked like Fox's America" - in the article he made the following claims. The crowd was about 70,000. It was predominantly white. It was corporate funded. The crowd was delusional in thinking they had 2 million there. Here are three pictures of the event. They seem to contradict the writer's claims. Compared to a protest led by the left the crowd does look a bit older. But in my experience (with the Vietnam mobilizations a few decades ago) the crowds at these events are "overwhelmingly" white.

I was not particularly interested in the march. I heard bits about it before it happened and almost no news coverage of it when it did happen. But the Freelancer seemed particularly interested in reinforcing a view that opposition to the President's plans is only coming from a narrow fringe group. Carter's comments last week claiming that opposition to the president came from racists seems to be in the same vein.

My own perception is that there is a significant part of the American people who disagree with the President's plans - not based on his race but on his proposals. Indeed, parts of it are on the fringe. But a good deal of it begins with a thought about what is the appropriate role for government. It is too bad our local paper cannot present a "fair and balanced" view of this event so we can judge it more clearly.

Sunday, September 20, 2009

Greedy (and Stupid) Bastards

Apple Insider has an article today that the some in the music industry want Congress to pass a law which would pay them for sampling music. To wit "Anyone who sells music, movies or TV shows online would be required to pay a performance fee with that transaction." Some idiot named David Israelite, who is president and CEO of the National Music Publishers Association, claims that the preview feature of iTunes constitutes a performance. What absolute crap. Does this nimrod not understand that previews are not downloaded by the person looking for music, or movies or TV shows? Does he not understand that the preview feature is similar to the feature offered in Borders or other retail stores?

Mr Isrealite recently released a study which claimed that Copyrights were responsible for economic growth. They "Accounted for nearly 23 percent of the U.S. economy’s growth in 2006-2007; Grew at a rate more than twice that of the U.S. economy as a whole in each of the years 2004-2007; Added $889 billion to the U.S. economy in 2007 – approximately 6.4 percent of GDP;
Exceeded $126 billion in foreign sales in 2007; Employed 5.6 million workers in 2007, more than 4 percent of the U.S. workforce. " What his trumped up study does not account for is what the numbers would have been had not the rent seeking burden of the Digital Millennium Copyright Act (DCMA) did to inhibit economic growth. Is there no cost to inhibiting the kind of creativity that Steamboat Willie's (the Disney classic which does not go out of copyright until a couple of decades from now even though it was a derivative work) extended copyrights had on American innovation? Of course not. Let's hope Mr. Isrealite is unsuccessful.

Three Losses and Calm

On Friday night, the Rivercats lost the third game of the PCL championships to the Memphis Redbirds by a convincing score, they were swept. That ended our quest for a three-peat of the PCL championship at two and a half-peat. During the regular season we played them four times - in August - and won three out of four of the games. One would have expected that we would sweep through the series, but we did not. I was on a boat in the San Juan Islands during the game and so was forced to endure this rather painful loss via internet updates with only the slowest internet connection on my iPhone.

Then came Saturday. The Trojans were playing Washington. SC always seems to have a problem in the Pacific Northwest. This year it was Washington - who just last week ended a 15 game losing streak. Washington happened to choose to continue their now two game winning streak against USC. They won in the last few minutes of the game 16-13. True, the new coach of Washington is Steve Sarkasian, who just last year moved from SC to a head coaching job. I am glad for Sarkasian, he is a class guy.

Saturday night after we had gotten back to Sacramento, we stopped by our son's team (The Christo Rey Saints) game (our son is an assistant coach) and they were playing horribly against an opponent that won the league last year.

And you wonder how I can be so calm? Look at what we saw in Canada and in the San Juans.

Wednesday, September 16, 2009

Quick Thoughts on Former President Carter's TIrade

Jimmy Carter mouthed off again - this time saying that a good part of the opposition to the president was based on race.

Carter has never been very good at accuracy or deep thought but here are my responses.

#1 - If the opposition to Obama is racially based then Carter must also believe that the outburst of Kanye West was also "racist." In both cases of the congressman and the performer, I believe the outbursts were based on bad manners not on race.
#2 - A good part of the opposition to the president's policies are based on objection to proposed fundamental change in the role of the federal government. That opposition would be there regardless of the President's race.
#3 - I guess he would also assume that the opposition to ACORN is racially based. (Although recent developments have shown that ACORN's programs skirt the law in a number of areas.)

Following Carter's logic then must also assume that we cannot disagree with policy proposals of people from different races. That is both silly and sad.

Obviously, like many of Carter's recent comments this one was done for narrow political motives. For someone who claims to be driven by moral beliefs, this belittles what shreds are left of his dignity.

Monday, September 14, 2009

"To tax (from the latin taxare: to estimate, which in turn is from tangere: to touch) is to impose a financial charge or other levy upon a taxpayer ..."

We are going to Seattle in the next few days and we need a car while there. The charge for the rental car will be $190.62 or slightly less than $50 per day. But wait there are some additional charges.

They include the following mandatory taxes, surcharges and fees. 1. Customer Facility Chg 5.00/day; 2. a Concession Recovery Fee at 11.10%, 3. a vehicle license recovery fee (in essence the car rental agency makes you pay for their license) of 31¢ per day, 4. a Rental Car Tax (9.70%), and finally 5. a Sales Tax (9.50%) = total of all these hidden charges are $83.06 or an addition to the quoted rate for the car of 44%.

The similar charges in California would include a slightly higher Airport Recovery Fee and sales tax that amounts to 9.75%. The fee in Bozeman, where I fished from last week was about 16%. The price in my home city of Sacramento is about $50-60 cheaper than any of the other cities above but with a 24% surcharge.

If you tax something, less of it will be produced. My inclination to visit Seattle again soon will be diminished by this kind of extortion. I wonder if the hotels and restaurants that we would have frequented will miss us. Certainly the hotels are burdened with a TOT (transit occupancy tax) and the restaurants have a sales tax. When we look at places to go on vacations we actually do look at this kind of exploitation of tourists. If the people in Seattle were smart, so would they.

Mike Duvall and the Legislature

In a column this morning George Skelton, the LA Times veteran columnist argues that a) sex scandals are not new in politics and b) that the recently concluded session was actually pretty good. I think he is partially right on both counts, and really right on the first. Duvall is just another member who got caught with his pants down. As Skelton reminds us, one of WIllie Brown's better lines was "politics is the ultimate an aphrodisiac"

But there is another point of view. Indeed, as Skelton points out the legislature was able to work through a very tough budget problem for this fiscal year. What concerns me is that some of the fundamental issues facing the state are nowhere closer to resolution. I would list a few.

#1 - Our revenue system is broken - Every expert on our revenue system argues that our revenue system is uneven (in an economist's terms too elastic). The Governor and the Speaker created a commission to look at alternatives and the majority came up with some interesting alternatives. But those efforts were frustrated by two leftists who cared more about ideology than practicality.
#2 - We still have not fixed the governance issue - Proposition 13, and many of its successors (both on the left and the right) separated revenue raising and decision making authority. School boards and local government look to Sacramento for their dough. Sacramento is never very good at understanding the nuances of local issues.
#3 - The state's educational system is not producing what it needs to - We've made some progress on improving performance and preparation for college but not enough. The Public Policy Institute estimated that we will be about a million degrees short over the next decade and a half to fill the needs of the state's information based economy. That should be job one.
#4 - The partisan bickering is still too high - In the sixties and early seventies, the legislature was seen as one of the best in the country. It now enjoys an 11% approval rating. (Which is probably too high.) There is too much nonsense. Some would attribute that problem to term limits (Proposition 140) - Skelton would be one of those. That is just nonsense. The level of bickering in the political class is higher than in previous years in all types of legislatures regardless of whether they have term limits. That might be attributed to the 24/7 news cycle or the ability of this generation of legislators to seek rents and perks. But it needs to be turned around.

In the middle of his column Skelton offers some gratuitous response to the movement by some in the state to go back to a part time legislature. He writes "Some say that the latest sex scandal is more evidence that the current Legislature should be demoted to part-time status. But Samish reigned as the self-proclaimed "Secret Boss of California" back in the era of a part-time Legislature. And, compared to now, there was more women-chasing back in 1963 when the Legislature still was ostensibly part-time -- it met until late June -- and virtually no legislators brought their wives to Sacramento." From my perspective Skelton has a series of non-sequitiurs strung together.

Job one on #3 above is to reduce the possibility that members will be able to choose their constituents. The first step was taken when we altered redistricting on the ballot. But more may need to be done. The proponents of a part time legislature suggest that by making the job less lucrative that two things might happen. First, you might well get people who are satisfied with working on the state's problems not because they want a career but in a sense of civic duty. If that it true it would improve the situation quickly. Second, by limiting the amount of time that legislators can spend they might become more acquainted with their own areas and also might have less opportunity to be silly. Times have changed. In the 1960s one of the reasons that members did not bring their wives to Sacramento was that most of them drove to the Capitol. A lot of the hijinks that were present when I first started working in California (the Torch Club and Fat's, the Derby Club) are gone. People generally drink less than they did and Proposition 9 limited the ability of lobbyists to finance legislator's life styles. The part time legislature might be something which could help improve our situation in California.

Sunday, September 13, 2009

Tribute to an academic who lived his life in reality

In 1968 Paul Ehrlich was the rage with his book called the Population Bomb. It was a Malthusian rant that argued that "the battle to feed humanity is over." He yammered and babbled that India for example would not be able to feed its own people by 1980. He was so fashionable. He was so au courant. He was so wrong. One of his little ditties (near the end of the book) argued that "(We need) compulsory birth regulation... (through) the addition of temporary sterilants to water supplies or staple food. Doses of the antidote would be carefully rationed by the government to produce the desired family size." Gee what a wonderful vision. Ehrlich, by the way, was qualified to write about population because his academic training was studying butterflies.

When Thomas Malthus wrote his Second Treatise around the time of Adam Smith, he had many of the same arguments - albeit they were some 200 years earlier. Malthus' thesis was that our ability as humans to procreate was superior to our ability to innovate. He did, for the time, a statistical analysis of population trends (one source says he got the data from Benjamin Franklin although Franklin died in 1790 and Malthus did not publish the first edition until several years later) which was fairly sophisticated. Unfortunately for Malthus, he missed two key issues - first his statistical model (which was based in part on US census data) did not control for immigration. The population growth issues were artificially inflated. But second, he did not anticipate the development of the steel plow which came along a couple of decades after Malthus published his book and increased the amount of land that one person could plow in a day.

Ehrlich evidently did not think about the history on Malthus. He also did not account for the work of a real scientist named Norman Bourlaug. Bourlaug is credited as being the father of the green revolution. He started his work in Mexico almost sixty years ago. The chart in this post gives you one idea about how effective he was in helping farmers around the world to increase their crop yield. He did write a lot of books and articles. But none of them were written for the common rube like Ehrlich's stuff. I once heard him interviewed and he seemed to be a very matter of fact guy. Here was a set of problems that he wanted to solve and he went about it, during his long career, to solve them. A lot of the political class were drug in by Ehrlich's apocalyptic vision but many more human lives were made better by Bourlaug's work. Oh, Dr. Bourlaug did warn about the potential dangers of over-population but he also worked on conscientious ways to mitigate the problem by producing more food.

Bourlaug died over the weekend at age 95. We could use a lot more academics who stick to the kind of professional dedication that he did over a long and distinguished career.

On to the PCL

The Cats victory against the Tacoma Raniers had a lot of elements of this season rolled up into nine innings. With this win they clinched the Pacific Division and advance to play the Memphis Redbirds for the PCL Championship. They led off with six in the first and one in the second and then took a four inning Catnap. But then in the seventh added six more. They did those thirteen runs on twelve hits. Remember that during the regular season the Rivercats ended twenty nine games over .500 while the Raniers ended just four games over.

The Cats pitching left a lot to be desired. Shawn Chacon went five innings, gave up eight hits. He was followed by Patterson, Meloan and Benaka, none of whom was on top of their game. In the ninth Henry Rodriguez, who has had some impressive outings this year, came in for what amounted to a third of an inning and could not get anything across the plate. Rodriguez had but seven strikes in twenty one pitches. Sam Demel came in and was able to close it out. In all the Rivercats gave up 11 walks. In contrast the Raniers gave up but six. One of the things that kept us in the game was the bullpen for the Cats which secured eight strikeouts to the Raniers three.

The Cats opponent for the Championship beat the Albuquerque Isotopes who had the second best record in the league with sixteen games over .500. The matchup between the Redbirds and the Cats could prove interesting. Both were sort of middle of the pack in batting. But Memphis is near the bottom in team pitching. That is why the performance of our pitchers last night could be of some concern. We are about the same in numbers of strikeouts (1083 to 1036) and gave up about the same number of hits (1280 to 1264). They were a bit more prone to give up homers during the season (125 to our 116).

But what should give Cats fans sustenance is one other factor - heart. This team has it.

The series starts in Memphis on Tuesday and Wednesday, proceeding to Sacramento for a Friday game. If needed it would conclude on Saturday or Sunday. I am not sure, if the Cats win, when the traditional Brickyard shootout (between the International and the PCL) would take place.

Friday, September 11, 2009

35 fish later

This week was spent in Wyoming on a friend's ranch. This is a gathering of five guys who fish, I am the newest to the sport; a great cook and four guides (that means in six fishing sessions (am/pm three days) you get a lot of fishing in. So it was a lot of fun. The colors in these wild fish are magnificent. The two photos are of different fish.

A couple of things happened this week. First, I think I got a chance to learn a lot more about all the things you need to know. On one of the fishing sessions I guided myself. It now takes me about 20 minutes to change a fly. A good guide can do it in about a minute. But I gained a lot of confidence in that session. I netted three fish that afternoon after I figured out what they were looking for. I started out with a small hook on the dropper and popped off three fish. When I went to the same nymph in a larger size - I was able to get three fish very quickly. There are a lot of details to keep track of - including what should be on your line, where to try to place the cast and then when to react. I brought two poles - one that I have used a lot since I started fishing and one I bought about two months ago - an Orvis Frequent Flyer. It comes in seven pieces. I was able to get it on sale (bought at 8 at the same time) and really like the feel of that rod. It is also very easily packable. That is a real good feature - performance and portability.

Second, each of the guides - which are some of the best guides in Idaho or Wyoming - has a slightly different way of teaching. One of the four is not the most patient guy in the world but each got me a bit closer to figuring out the mechanics of casting. Ultimately there are some similarities of style - everyone says a cast is between 10 and 2 on a clock face. But keeping your back cast from going too far back is tough - and that determines how far your forward cast will actually go. This week had some wind and that is always troubling. When I get it right I have now begun to feel it. That is a good sign. I just wish all the elements coming together was a bit more consistent.

Third, I got variety of types of trout including a couple of small brook trout - and then a couple of big browns and rainbows. My largest was about 21". I was able to fish under a number of different conditions and that was interesting.

Thursday, September 10, 2009

Thoughts about health care after the president's speech

When I started this post I thought about listing the problems with the current system. They should include:

#1 - Consumers have no idea about costs
#2 - Tort cost in the system is high - 4% but the losses are not the only things - the threat of litigation has two collateral effects - increased cost of malpractice insurance and over reliance on tests over judgment to reduce the possibility of litigation.
#3 - Some insurance companies have acted inappropriately toward people who use their products. According to most independent analysis, the actual number of people who get cut from insurance from pre-existing conditions is small. But there is enough evidence that the system could be improved.
#4 - The cost of our public option components is increasing exponentially. Medicare and Medicaid will grow by 3X GDP for as far as we can project - why would anyone think about extending a model like this to even more people?
#5 - The process for the recognition of new drugs needs work. According to one estimate about 80% of the cost of developing new drugs is caused by our FDA process. We need to think creatively about ways to assure protection without driving costs through the roof.
#6 - Scarce resources are utilized inefficiently - as noted in an earlier post my experience with a friend in an ER gave me a new look at people who use this very expensive delivery system as their primary care option.

In my mind there are also a number of things where common understanding is mostly wrong. For example, the oft cited statistic about our system versus others in the world (Among the developed nations we have the worst life expectancy) is bunk when you control for things that are not present in those other systems (Americans live in a country where more people die from firearms, we drive more and our immigrants do not effectively use the system.) The public option places all have complaints about lines in the system. John Stossel did an excellent report about the Canadian system.

But then came the President's speech, which I thought was both rhetorically well done and full of a couple of holes (I find it bizarre that he could claim it is possible to simultaneously say no current benefits will be cut, everyone will be covered and there will be no increase in costs. One cannot square that circle.)

From my perspective, the final issue is whether we can even speak in the same language about the issue. There is so much chatter around that it is hard to discover the real set of issues we should be talking about. Without clarity about the sense of the problem it will be impossible to get to a solution.

Friday, September 04, 2009

The Little Red Book on Health Care

In Orwell's 1984 the animals begin to mouth a phrase "four legs good, two legs bad." Orwell was parodying the attention to political correctness of the day in places like Nazi Germany and Russia. In one period in China the leaders published a set of phrases of Chairman Mao meant to be memorized and shown in public places. Ditto for the little green book in Libya. In each instance the phrase or the book is meant to be read, memorized and repeated. The real idea is to try to establish a moral high ground and then to quell legitimate debate and discussion.

Yesterday on Facebook a lot of people began to publish the following phrase "No one should die because they cannot afford health care, and no one should go broke because they get sick. If you agree, please post this as your status for the rest of the day." When I saw it appear I was reminded of the little red book. Of course we don't want people to die because they cannot afford health care but does that really have anything to do with the current debate about health care? In any system of care, there will be rationing. And indeed, in the worst examples the decisions will either be made by a government bureaucrat or an insurance one.

Luckily at least some of our population is not attracted to the little red book syndrome. Soon after the first phrase appeared two others did first was this one "No one should dye if they are too old to retain their natural hair color. No one should go broke because they get gray hairs and hair coloring is really expensive. If you agree, please hug the nearest grey-haired or bald person and say, "I am sorry for your loss."

Then someone brought up P.J. O'Rourke who said - "You think health care is expensive now? Just wait til it's free."

What bothers me most about the first phrase is the moral certitude of it. Public policy is about choices and tradeoffs and any policy will involve both. What we should be seeking is not 100% but improvement from the current system. But a lot of the discussion in this debate, especially by those who support the public option, fails to recognize that verity.

Thursday, September 03, 2009

How to sell something

Commentators have begun to question whether the very impressive amount of dough that Microsoft has spent to regain market share has been worth it. For the last couple of years Apple has used the "I'm a Mac, I'm a PC" add campaign - which takes not especially subtle digs at the PC platform. They're funny. You can see them at Mac Ads Site. Microsoft committed several hundred million dollars to a set of campaigns that a) started out with the bizarre Seinfeld and Gates stream of consciousness ads and then b) have evolved into a set of ads comparing PCs to Macs. Trouble is the comparisons are not accurate. In addition, the ads are not funny. No memorable taglines - except "I'm a PC"

The graph shows relative market share of each platform and Mac has been inching up in recent years. Most analysts suggest that neither ad campaign has been dispositive for buyers but that in the Mac corner three factors have allowed them to grow. #1 - The ads are funny. #2 - Apple has benefitted from the iPod effect - people tried out the music player, liked the simplicity and then moved up to a computer. #3 - the iPhone effect - same idea based on the ease of use of the iPhone.

As I have argued before, choice of computers is a matter of personal preference. Every computer has some neat features and some bugs. Indeed, as I upgraded to Snow Leopard, I have had a problem in getting our Xerox printers to work properly. But an ad campaign or a product strategy that is based on imitation is bound to fail.

Wednesday, September 02, 2009

We're creating deficits for this?

So this is what "stimulus" means - from the Sacramento Bee Capitol Alert - California Inspector General Laura Chick is in Fresno this morning to discuss the possibility that fraud could siphon off 7 percent to 10 percent of federal stimulus money.

Tuesday, September 01, 2009

Two Approaches to Health Care

Dr. Paul Hseih this morning offered an interesting insight on the health care debate. Hseih argues that people should not accept the premise that the market is just another form of rationing.

Nobel Laureate James Buchanan taught us that there are two ways to begin a discussion about economics. The first looks at scarcity. Naturally, one immediately goes into a discussion of how does one allocate that scarcity. So a lot of the discussion begins with all the discussion of supply-demand curves. But as Buchanan argued the alternative is to begin with a discussion of the benefits of exchange - in essence to go back to the notions of Ricardo and other classic economists and think about comparative advantage. Government solutions for the most part begin with the idea of rationing and allocating scarcity. Thus, any public option health care system begins with a premise of rationing - of limiting options for the greater good.

But if we were to start with the idea of looking for the benefits of exchange we might well come to some more creative responses. There are some things in the economy, as Chris Anderson has taught us in his new book Free some things are too cheap to monitor. We should be seeking out those things in the medical system and trying to figure out how to maximize them.