Detailed Abstractions

• I think there is still a health care debate even though the bully pulpit isn’t wanting to increase attention to this, but writer Michael F. Cannon from the Cato Institute diligently continues to shed light on the issue.  As one of the best writers on the subject I recommend everything he has written or papers he has published on the subject.  For now, he has a three part series worth the time for anyone interested in learning more: Questions for Thoughtful Obama Care Supporters (Part I, Part II, Part III)

• It might not matter, the health care bill hated by all might be pushed through with various legal and procedural maneuvering.  here via Cato

• Interesting medical research showing correlation: As girth grows, risk of sudden cardiac death shrinks.  I question their use of BMI to identify normal/underweight as as 6’4” person can weight as little as 160 and still be normal (chart), but hopefully it will help them understand that stats are useful tools, but for things such as medicine…. due to the unique nature of us all, the future is individually built therapies, not government programs to change the BMI of an entire nation.

• John Stossel writing Reform Does Not Mean More Rules in response to Senator Chris Dodd’s proposed overhaul of financial regulation:

The New York Times headline says Dodd’s Bill “Adds Layers of Oversight”.

Just what we need: 1,336 pages of additional “layers.”  Senator Dodd is as ignorant as he is arrogant.

• Lending credence to Mr. Stossel’s position, How the Fed slept through Lehman via Rueters

• Cornell MBA student says bet against Warren Buffett (here via WSJ).  Not saying I agree, but I do agree with WSJ – always nice to see someone attempting to break conventional wisdom.

With high levels of bipartisan anger, not only affecting elections, but affecting polls on the flagship legislation… er, I mean, the monstrous health care bill which no understands as well (here via WaPo):

…A CNN poll last week found that only 25 percent of Americans want Congress to pass a health-care bill similar to the one it has been working on for the past year, while 73 percent say Congress should either start from scratch or not pass health-care legislation at all (other polls show support for the bill in the low 40s). …

The White House is once again, on a media blitz to prove the administrations’ efficacy and job one is selling the idea the simulus worked.  While they have seemed keen enough to not discuss actual housing or job numbers, but instead spend time on nebulous items such as “saved jobs“, they are nonetheless telling us with great frequency what the stimulus did for us.

Vice President Joe Biden (here via ABC News):

Vice President Joe Biden said today that it is “taking a while” for the nation’s economy to “get out of this ditch” but credited the Obama Administration’s stimulus legislation, enacted one year ago, for laying a foundation for long-term economic growth. …

As well as President Obama himself (here via USA Today):

President Obama credits the one-year-old economic stimulus legislation with staving off a second depression …

The President even sent high level officials all over the country to prove the stimulus worked.  In one case, they used construction for residential housing to spotlight the great work the stimulus package has done for Cincinnati (here via Cincinnati.com).

With unemployment numbers continuing to rise (UE Rate for January 2010 10.6%)

& defaults on existing mortgages doing the same (here via Reuters):

…More than 8 percent of homeowners were behind 30 days or more on their mortgage loans, up 4.4 percent from December 2009 and 21 percent from last January…

& just like the last media blitz the White House went on to prove the stimulus was working (here via DA), they have spent approximately 34% of the money they claimed to need originally (here via ProPublica).  Combining the money spent and tax cuts approved listed on Recovery.gov they find:

…the government has now moved at least $272 billion into the economy, or 34 percent of the total amount approved by Congress last February….

So there you have it.  Successful stimulus program is now defined as a jobless, homeless, shaky recovery, for which the majority of the money requested has yet to have been spent.

Sorry for the respite….

• Two great articles in Reason’s February issue:  One by staff science writer, Ron Bailey discussing health care (here), which starts with something everyone should know who’s interested in high price of medical care:

According to the conventional wisdom, the United States faces a massive medical bill thanks to our use of pricey new treatments and equipment. “About half of all growth in health care spending in the past several decades was associated with changes in medical care made possible by advances in technology,” a 2008 Congressional Budget Office report declared….

Don’t be fooled however, some of our more interesting intellectuals think this is reason enough to retard medical advance:

…This is familiar territory for [bio-ethicist Daniel] Callahan, who for decades has advocated reining in medical innovation to reduce health care costs. He also favors limiting the life-extending treatments that older people receive, on the grounds that most of them will “have lived a full and fruitful biographical life prior to age 70.”….

Who like most people that wish to control every thing in your life, including how you’ll die – refuses to take his own medicine:

…Interestingly, Callahan, age 79, underwent a life-saving seven-hour heart procedure in August that cost upward of $100,000….

So out “bio-ethicist” wants to tell your grandmother tough crap, while he does as he pleases.  I’m guessing his title was self-anointed as this is a one-way trip to genocide…. all genocidal societies started with this premise – the young, but very sick & the old, they are burdens on us… what a disgrace as a human being.

But going forward… the second article, written by staff writer Radley Balko… generally disliked because all his articles contain bad news about law enforcement abuses angering most readers and this case is no different.   Read about LE & justice system abuses when they are allowed to seize assets they believe were used in a crime or bought with criminal proceeds (here).  One more thing the state is actively doing to subvert true freedom.

• PysBlog has a good post on reasons we desire and try for conformity (here).

• The IRS, one of the most hated government agencies, is now allowed to bring armed guards into your home if they find you a possible threat (here).  The Christian Science Monitor seems to think this is warranted due to anti-government violence, but tries to prove it with numbers that are likely on par with the rest of society:

…The Treasury Inspector General for Tax Administration (TIGTA), which oversees the IRS, handles an average of 918 threats made against IRS employees every year, according to the agency. Between 2001 and 2008, court cases resulting from those threats have resulted in 195 convictions, according to TIGTA….

Even if out of all the hundreds of thousands of people who worked for the IRS between those 7 years, it seems like this is overkill.  Having said that, I also have no faith in their numbers at all.  Months ago we were told to stay away from 10% unemployment, we have to spend money.  We spent, we’re at 10% (here).

Additionally, organizations like MADD routinely exaggerate their findings.  For instance, in their version of “alcohol related accidents” – if you had too much to drink and just want to sleep it off and someone, completely sober, runs into your parked car – that’s an alcohol related accident.

I’m not saying he’s lying, I’m just saying that in my personal experience while studying, believing a government agency is telling the full and accurate truth, especially when that truth gets them extra funding, is highly unlikely.

• Lastly, an oldy but a goody.  My 13 year old daughter heard this on an economics talk I was watching, told one of her friends parents about it & they refused to believe.  You might refuse as well…. but remember, we are all entitled to our opinions, but not our facts (here).  Basic thesis:  Seat belt laws did not reduce driver fatalities significantly, because it increased the number of overall accidents and worse still, it has resulted in more deaths of pedestrians.  Proving once again, that almost all governments laws intending to prevent some result, do more harm than good.

Brown & Coakley election in MA:

Exit polling with race showing high turnout @ Boston.com

Does a loss affect Obama or is it just Coakley’s problem? @ LA Times

Or is “all politics local” still true? @ US News

Healthcare Reform:

Reason Foundation: Beware Of The ObamaCare Revolution

TCS Daily: Medicare Rationing Begins in 2011

Taliban Attacks in Afghanistan – what does the coordinated attack show?

Rueters via Yahoo News: Taliban attack shows tactical skill, military limits

Stratfor: The Kabul Attack: A Postmortem

AFL-CIO & Democrats – a revolving door of money – Unions give to Dems, Dems give to Unions:

Detailed Abstractions: Unions – Unionized Against Freedom

Cato:  No Taxes, Please, We’re Democrats

Will we continue to try to fix government caused crises with more government (re: Finance Reform)?

Reuters: Watchdog’s fate in Senate key to financial reform

Cato: Reforming Previous Reforms, ad Infinitum

In a great piece over @ The Christian Science Monitor, Arnold Kling & Nick Schultz argue well that Markets fail. That’s why we need markets:

…This seemingly paradoxical view is based on several overlapping strands of research in economics as it pertains to development, history, technology, business expansion, and new-firm formation. According to this view, entrepreneurs at work in the economy – in finance, high tech, manufacturing, services, and beyond – are constantly experimenting, creating new business models, techniques, and technologies that upend the established order of things.

Some new technologies and innovations are genuine improvements and are long-lasting welfare enhancers. But others are the basketball equivalent of pump fakes – they look like the real deal and prompt market actors to leap hastily into action, only to realize later that their bets were wrong.

Given this dynamic, markets are unpredictable, prone to booms and busts, characterized by bouts of exuberance that are rational or irrational only in hindsight.  But markets are also the only reliable mechanism for sorting out this messy process quickly. In spite of the booms and busts, markets drive genuine long-run innovation and wealth creation.

Not as eloquently as they did, I wrote about this earlier in the year (here):

…the dynamic system of the United States might have felt more pain that other countries during this crisis, but due to the mostly decentralized economic model, we will recover more quickly than most…

It then seems for most people to become a question of risk adversity.  Do we allow for individual freedom and understand that sometimes failure is a part of the process?  Or do we constantly attempt to control individual behavior for fear of potential negative consequences?

Only if we first believe in the premise that by trading freedom for stability, we actually get stability.  The CSMonitor article continues:

…When governments attempt to impose order on this chaotic and inherently risky process, they immediately run up against two serious dangers.

The first is that they strangle new innovations before they can emerge. Thus proposals for a Consumer Financial Protection Agency, a systemic risk regulator, a public health insurance plan, a green jobs policy, or any attempt at top-down planning may do more harm than good.

The second danger has to do with the nature of political economy. Politics creates its own kind of innovators who can be as destabilizing to markets as market actors themselves – but in far more pernicious ways.

Economists call these political entrepreneurs “rent-seekers.”…

…This gets to the key difference between markets and governments. When innovation-driven excesses and imbalances are recognized in the marketplace, the system can correct itself quickly. This is less the case when government policy failure occurs.

Because political failure is less publicly tolerable than market failure, the temptation becomes for policymakers to avoid acknowledging their role in creating or perpetuating problems.  Or they double down on bad bets. So rather than recognize the government’s central role in the housing boom and bust and quickly changing its ways, we see the federal policy apparatus continuing to throw good money after bad in the mortgage market and on Wall Street….

I wrote about this “doubling down”  (here):

…For those playing the home game, this means we are taking a problem caused by excessive credit and government incentives and trying to fix it by:

1. Preventing the normal contraction that needs to happen by artificially propping up failed business and bad home purchasing decisions.
2. Keep money cheap by keeping interest rates very low.
3. Then, repeat the same process that got you to the recession in the first place by incentivizing the market to buy a commodity (housing) which is still overvalued in some places….

…I’m not really into prediction making as it’s obviously fraught with so many problems, but I’ll never understand how the solution to cheap money and an over investment of housing, is to keep money cheap and incentivize home buying…

As historically known, the vast majority of centralized government intrusions into free markets and free people has led to disastrous consequences.  NBER research suggests that two of the reasons for the current global economic crisis are due to unfree markets:

…The inability of emerging economies to absorb savings through domestic investment and consumption due to inadequate national financial markets and difficulties in enforcing financial contracts; the currency controls motivated by immediate national objectives;…

Everywhere we look objectively, freedom gives us more of everything.  Do you want to fix healthcare?  Using the government will likely lead to higher rates and more control, using individual freedom however doesn’t cost much as has been proven in other avenues such as food.  Something I think is just as important as healthcare, but been left to the market unlike health care.

& the market has responded.  Food costs as a percentage of disposable income has decreased from 23.4% in 1929, to just 9.6% in 2009 (here).

Meanwhile health care costs continue to increase with government regulation.  In just the past 5 years spending on health care as a percentage of GDP has continue to go up and is projected on that trend still.  In 2005 spending was 15.9% of GDP whereas in 2009 is it 16.9% and projected to be 19.5% in 2017  (here).

It seems that the overwhelming majority of evidence suggests to honestly help the most needy, freedom is not only a moral good, but a requirement for anything approaching success…. yet what seems to be an irrational fear of “economic crisis” many people can’t see the forest for the trees.

Over @ The Economist, they have recently begun a new debate in which two primary debaters are taking pro and con positions for the premise (here):

This house believes that governments should play a stronger role in guiding food and nutrition choices.

Which is certainly a question fraught with with many intertwined issues dealing with not only personal individual responsibility, but also questions about governmental responsibility in these areas as well as government-provided health care benefits.

Kelly Brownell is Professor in the Department of Psychology at Yale University, arguing for the pro side of the premise, discusses each of these areas, though ends up asserting problems which aren’t there and using faulty assumptions to do so.  In his opening remarks, he starts by identifying “problems” which he believes supports the premise  (here):

Problem 1: Imagine the day when obesity rivals hunger as the world’s chief nutrition concern. That day has arrived….Approximately 1 billion people worldwide are overweight or obese.  Human biology was simply not designed to cope with an environment that promotes a diet high in sugar, fat, calories and salt….

Mr. Brownell notes with alarm that not only do we have 1 billion obese people, but also 1 billion hungry people:

Problem 2: Another 1 billion people are hungry….

Which oddly enough, he contributes this issue to the correct cause:

…But problems such as war, political oppression, genocide and global warming create great numbers of refugees, populations cut off from food and vast numbers of people who cannot feed themselves. There is now enough food to feed the world, but political and economic barriers prevent its distribution….

I say oddly enough here, because in the countries with lots of political and economic barriers to all kinds of industries, they have a problem with feeding people enough to survive.   Therefore, creating new regulations to make food production & distribution more costly seems a bad idea, but he continues:

Problem 3: Modern food production has grave environmental impact.

Which even if completely true, is completely irrelevant.   This “problem” is not a problem that is specific to the food industry, but to all energy intensive industries and therefore has nothing to do with potentially adding government control only to the food industry.

For scorekeepers – so far, Mr. Brownell has defined three problems, two which have contradictory solutions, and one irrelevant to the question at hand.  Like all those resting on beliefs however, he uses these as a jumping off point and goes forward to discuss “responsibility”:

Ascribing responsibility
These problems are conceptualised in two primary ways.  One is to focus on individual misbehaviour as the cause and increased personal responsibility as the solution. The second emphasises the social, political and economic drivers of the problem and underscores public policies that make healthy behaviour a more likely default….

Which reworded reads, it’s either the individual’s responsibility for purchasing the food they purchase and eating it, or it’s a societal problem which requires government intervention.

To prove personal responsibility isn’t the way to go, Mr. Brownell explains:

…The personal irresponsibility approach is wrong, and is contradicted by a wealth of scientific evidence. Obesity rates around the world have been rising each year, suggesting a worldwide decline in responsibility. Precisely the opposite is true. Data show people behaving more responsibly in many areas of health….

Which certainly seems like an argument, but in reality is not.  He infers that obesity isn’t due to declining responsibility, since studies show an increased responsibility in other areas of health concerns, but the information he gives us does not support his assertion.

It’s completely possible for instance to have an individual say, start working out, thereby being more responsible for their health, but at the same time being ok with their known choice of bad food.  Another individual might quit smoking, but still eat fast food every day for lunch… & knowingly do  so.

His assertion includes an  assumption that there is a one-size fits all answer.  As if certain foods shouldn’t be allowed in certain portions or that by doing so, the company selling the value priced food is some how responsible for the end users’ gluttony.

Quick score check – our esteemed professor has given us three problems, only one of which discusses the actual problem, uses faulty assumptions to gloss over personal responsibility, then moves into what I believe the true crux of his problem is:

Changing defaults to correct market failures
It is generally agreed that government intervention is justified when market failures cause sub-optimal production and consumption patterns.

& here we are, with assumptions galore.

First, he’s assuming it’s a market failure.  For those humans still on the planet going hungry, I think hearing about cheap high caloric food would be seen as a feature of rich countries, not a bug.

Second, even if it’s generally agreed that government intervention is justified, that doesn’t mean that it should be.  Appeals to the majority doesn’t invalidate a premise, but it certainly isn’t proof.  Majorities throughout history have generally agreed to all kinds of things, like slavery or the world being flat.

Third, even if I agree with the first two assumptions, there is yet one more there – the idea that even if someone can identify this as a market failure and we assume that government intervention is justified, we should then only seek government intervention if we believe that centralized control would ultimately return better results than the current market process.

I think a brief reading of controlled societies throughout history would let Mr. Brownell see the folly that is Philosopher Kings, but no such luck.  Without fear and without proof, our esteemed professor let’s us know the costs we’re incurring:

…Another example of externalities is the health-care costs of obesity. Obesity costs $147 billion per year in the United States today (9% of total health-care expenditures). Half comes from public funds through Medicare and Medicaid….

& herein lies his final and most dangerous assumption – that taxpayers should be forced to pay for societal solutions whose costs were borne from individual choices.

So long as that assumption is allowed to go unchallenged the “debate” hasn’t really begun.

In an effort to score political points, while diminishing real atrocities, Senator Harry Reid today compared opponents to his version of health care reform to those who actively opposed the woman’s suffrage and the Civil Rights Act .  From USA Today:

Instead of joining us on the right side of history, all Republicans have come up with is this slow down, stop everything, let’s start over.

You think you’ve heard these same excuses before, you’re right. When this country belatedly recognized the wrongs of slavery, there were those who dug in their heels and said, slow down, it’s too early. Let’s wait. Things aren’t bad enough. When women spoke up for the right to speak up, they wanted to vote, some insisted slow down, there will be a better day to do that. The day isn’t quite right.When this body was on the verge of guaranteeing equal civil rights to everyone, regardless of the color of their skin, some senators resorted to the same filibuster threats that we hear today.

& herein lie’s one the most basic problems with politics today.  The willingness to diminish real accomplishments in the progression of human rights, by bringing down to the level of party politics.

I’m not saying that I’m surprised of that he went further out of line that politicians in the past, but this kind of sound bit “tit for tat” strategy works with voters.  Basically, his downside isn’t all that great.  He’s facing a tough re-election with or without stupid comments like this, but for the most part the people angry never liked him and the people defending him always will.

The odd thing is that additional inspection leads one to understand that even if you think that these comparisons are fair game in politics, the analogies themselves are flawed.  Even if we ignore the difference in degree, it should be obvious that protecting people against active discrimination is not the same thing as redistributing wealth through healthcare.

Regardless, so long as voters continue to elect Mr. Reid, they can expect him to continue down this path.  No matter how illogical the statement is or whether it diminishes true problems resolved, re-election will only strengthen his resolve through that simple act of positive reinforcement.

If people truly want real debates, on the issues, they will have to first stand up and use the main weapon at their disposal – their vote.

Late last week, Michael F. Cannon @ Cato released a study entitled, Yes, Mr. President A Free Market Can Fix Health Care in response to a challenge made by President Obama in March 2009:

“If there is a way of getting this done where we’re driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way.”

This is very much a presumption based question, like “When did you stop beating your wife?”  It holds within an assumption the only plausible answer is one which uses the power of the government to control the market, and by extension individual citizens, with complete skepticism about any power of the free market.

While this seems to be the default assumption of many of my fellow citizens these days, I don’t know that I’ll ever understand how an objective look at market success versus an objective look at governmental success would lead one to believe the government is capable of much more than simple, repetitive tasks.

Having said that and even knowing the Democratic leadership and the White House is likely to ignore the answer, Mr. Cannon presents a pretty convincing case about a market solution (@Cato).  He explains:

how Congress can remove the impediments that currently prevent markets from doing so:

Whole thing here.