Category Archives: Economics

Business, Economics, Media Criticism, Political Commentary

The Problem With First-Dollar Coverage

19 Comments

Thoughts from Megan McArdle. One of the big problems with health care is that people have come to see every-day costs as an entitlement that someone else should pay, instead of the old days (and not that old — within my lifetime) when you paid for doctor’s visits (and they would even make house calls) out of pocket, with insurance reserved for catastrophe. We’ll take our car to the shop, our pet to the vet, but the current mess has accustomed many of us to thinking that we somehow shouldn’t have to pay for a doctor visit. As Megan notes, when you’re not spending your own money, you’re going to use the service a lot more, and you won’t care about the price. This is the key point of how screwed up the market is as a result of employer-provided insurance:

With all the layers in between consumers and the providers in the ordinary market, the natural battle between consumers seeking better value and producers seeking higher prices is terribly distorted in ways that don’t make us healthier.

That market disconnect is what we need to fix, rather than finding some other peoples’ money to keep doing the same crazy things. And the way to fix it is to end the preferential tax treatment of employer-provided insurance versus personally purchased policies, and to allow purchase across state lines for real competition. If I hear one more moron saying that the way to provide competition for private insurers is with a government option, I’m going to plotz. Just make them compete with each other.

Business, Economics, Political Commentary

It’s The Economic Uncertainty

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…Stupid:

He…proceeded to relay a conversation he had with a local chemical company regarding their 2010 capital expenditure budget. When asked what the company intended to invest in 2010, the response was ‘nothing,’ not due to a paucity of good opportunities, but because it was impossible for the company to calculate a rate of return given all the uncertainty over cost of labor, energy prices, regulatory mandates and the like.

These people are completely clueless about how an economy works.

Business, Economics, Media Criticism, Political Commentary, Science And Society

The Need For Humility

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Acknowledging doubt about climate change:

A former head of the IPCC, the British scientist Robert Watson, notes, “The mistakes all appear to have gone in the direction of making it seem like climate change is more serious by overstating the impact.”

Too many of the creators and guardians of the “consensus” desperately wanted to believe in it. As self-proclaimed defenders of science, they should have brushed up on their Enlightenment. “Doubt is not a pleasant mental state,” said Voltaire, “but certainty is a ridiculous one.” The latest revelations don’t disprove the warming of the 20th century or mean that carbon emissions played no role. But by highlighting the uncertainty of the paleoclimatic data and the models on which alarmism has been built, they constitute a shattering blow to the case for radical, immediate action.

And not a moment too soon, though fortunately, it coincided with an appropriate collapse of confidence in Washington wisdom in general. Unfortunately, it’s clear that many still desperately want to believe. That’s how religions work.

Business, Economics, Political Commentary

After Climaquiddick

61 Comments

Glenn Reynolds has some thoughts on what we should do in the wake of the collapse of the Warm Mongers:

…what should we do?

Nothing. At least, in my opinion, we should continue to try to minimize the use of fossil fuels regardless. Burning coal and oil is filthy, and they’re more valuable as chemical feedstocks anyway. We should be building nuclear plants and pursuing efficiencies in the shorter term, while working on better solar (including orbital solar), wind, etc. power supplies for the longer term. That doesn’t mean “hairshirt” environmentalism, where the goal is for neo-puritans to denounce people for immorality and trumpet their own superiority. It just means good sense.

I think some elaboration is required. Starting with (to use a politically incorrect phrase from the old Lone Ranger joke), what do you mean “we,” white man?

That is, who should decide?

I have a weird concept. How about letting the market do it?

For example, overhaul Price-Anderson to deindemnify the nuclear industry to make them more responsible for plant safety, in exchange for removing many of the design restrictions imposed by an anti-innovation Nuclear Regulatory Commission. Eliminate the bans on drilling, both on and off shore, to reduce energy costs in the near term (and cut the income of those making war on us and the West in general) and provide wealth to invest in the technologies that will eventually replace fossil fuels. Stop trying to pick technological winners (something government is notoriously bad at) and distorting the market with tax credits. Put some federal money into R&D, but eliminate government mandates (such as ethanol) whose purpose is more for political payoffs than environmentalism, and let the market sort out what makes sense.

This should be one of the planks of any new Contract With America — let the energy market work.

[Update late morning]

Three major corporations have pulled out of Climate Action Partnership:

Oil giants BP PLC and ConocoPhillips along with Caterpillar, Inc., the Peoria, Ill., heavy-equipment maker, have decided against renewing their membership in the organization, according to a statement released by the group Tuesday.

Red Cavaney, ConocoPhillips senior vice president for government affairs, said USCAP was focused on getting a climate-change bill passed, whereas Conoco is increasingly concerned with what the details of such a bill would be.

“USCAP was starting to do more and more on trying to get a bill out without trying to work as much on the substance of it,” Mr. Cavaney said.

Gee, sounds like health care. I expect this to be the beginning of a corporate stampede that will finally put a wooden stake through the heart of this monster. Business is starting to sense the blood of the ecofascists in the water. I’m still wondering if the Audi ad was part of that.

Business, Economics, Political Commentary

Small Business

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…strikes back. I suspect they’re going to strike back a lot harder in November.

In this new war against the kulaks, I think that the kulaks are going to win. At least they won’t be starved out without a fight.

[Update a few minutes later]

And then there’s this:

“Welcome to Obamaville: Our business is no business, like no business you know.”

Intermixed with the song and dance, I suggest tea partiers call on Howdy Doody, a.k.a., Robert Gibbs, to explain why one signal effect of the President’s intervention into the economy has been to drastically increase the government payroll. Why is it that Washington, D.C., is boomtown while Main Street is bust?

This is a question that should be repeated early and often.

The President talks about stimulating the economy. But why does he not employ the one elixir that time and experience has shown really does stimulate the economy: i.e., tax cuts? Why is he planning to raise taxes, and drastically, on nearly every productive citizen and every successful business? Why?

It’s what socialists do.

The first usage of Hooverville in the press was in 1930, less than a year after the Crash. We’re overdue to start talking about Obamavilles.

Economics, Political Commentary, Space, War Commentary

Space Policy Thoughts

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…from the head of the Space Policy Institute (who I should disclose is a good and long-time friend and former colleague):

Scott Pace: I am disappointed that they chose not to fund the Constellation program or add the additional funds that the Augustine committee said would be necessary for a robust human spaceflight program. I think the NASA [budget] increase is good, and there is some good science and technology spending in the program, but it really did not restore a lot of the reductions that had been made in the fiscal year 2010 budget, so it continues a pattern of reductions to exploration, even though the NASA top line did go up somewhat.

TR: Are these reductions going to have a significant effect on the U.S. space program?

SP: The real issue is the future of human spaceflight and the question is, what [is NASA] doing after the space station? Because that is not very clear. [The administration] has made a commitment to the space station through 2020, which really gives us an opportunity to use it as a research facility, but it’s not clear what, if anything, is to come after the space station. Right now, with the canceling [sic — rs] of the Constellation program, there are no announced plans for going beyond low Earth orbit. The deeper question is what NASA will be doing. What is it going to do when we rely on commercial rockets, and how is it going to maintain its skills as a good customer and overseer?

The new effort does not have an overall architecture yet; it may get one, but right now [the plan] has a heavy technology development effort, and there is a lot of new technology that one could do, but without an architecture, how efficient is that technology development going to be?

The question of how it’s going to maintain its skills as a good customer and overseer presupposes that it has now, or ever had such skills. NASA is a terrible customer, always has been, and is likely doomed to always be, but one step toward improving it is forcing it to buy services instead of labor by the yard.

As for the lack of architecture, it’s too early to expect that. They didn’t even know what their proposed budget was until a couple of weeks ago. I imagine that there will be studies over the next few months to come up with one, but the agency could do a lot worse than to dust off the CE&R results that Steidle commissioned, and Mike Griffin ignored, at least as a starting point. And there are some technologies that are fundamental, and independent of architecture (e.g., on-orbit propellant storage and transfer). I don’t see how the “efficiency” of their development will be impaired by a lack of one. As Charles Miller reportedly said today at the FAA event, NASA is going to do something that it’s needed to do since it absorbed NACA and became an operational agency half a century ago — get back to basics of supporting technology development that industry needs to thrive.

[Update a few minutes later]

I’m afraid that Scott has fallen into the trap of thinking only of SpaceX when he talks about the “risk” of commercial not being able to step up to the plate. Regretting the loss of Orion is one thing, but there was no risk reduction with Ares, at least none worth the cost. There would be much less risk in modifying an existing vehicle (e.g., Atlas) to carry the NASA capsule, and it’s not like ULA knows nothing about rockets. And of course, there is always a tradeoff of risk versus cost. The cost ratio between commercial and NASA-centric (at least an order of magnitude) justifies the “risk,” at least in my mind. Of course, I don’t think it’s very high.

[Update early evening]

I think that it’s a mischaracterization to say that there are no plans to go beyond LEO. The administrator has been quite vociferous in saying that the goal is Mars. I don’t necessarily agree with that, and he hasn’t laid out a timetable and goals to achieve it, but to say that there are no plans is to imply that we will be in LEO ad infinitum, which I’m quite sure is not what the administration intends. At least not the NASA administration.

Economics, Political Commentary, Space

Still Waiting

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In my PM piece (and in my piece for The New Atlantis), I continue to make this point:

Beyond that, a single-vehicle architecture is as fragile as the Shuttle was: What if something happens to the heavy lifter that shuts it down for months or years (as happened twice with the Shuttle)? We are out of business until it comes back on line. And suppose that we build such a vehicle for the moon, and then decide to go to Mars? Do we need yet a bigger vehicle? Where does this fetish for heavy lift end?

I never get a response to it from the heavy-lift fetishists. So I throw it out, once again, this time on its own, to make it more difficult to ignore.