Category Archives: Economics

Economics, Political Commentary

We Don’t Need No Stinkin’ Health Czar

1 Comment

So sayeth Paul Hsieh:

The Obama administration would control costs by creating a new Federal Coordinating Council for Comparative Effectiveness Research to determine which treatments are deemed most effective and thus eligible to be paid for by government. These decisions would be based on statistical averages that cannot take into account specific facts of individual patients.

Yet good physicians must consider precisely these specifics when treating their patients. If you are suffering from abdominal pain due to gallstones, who should decide whether medication or surgery would be more effective for you?

The doctor who has felt your abdomen, listened to your heartbeat, and knows your drug allergies? Or the bureaucrat who got his job by telling the right joke to the right person at the right Washington cocktail party?

We don’t need czars, “health,” cars,” “drugs” or otherwise, period. Last time I checked, this was America, not Russia.

This recent (in the past couple decades) appetite in the American body politic for czars is just another sign of incipient fascism. As Paul notes, we aren’t (yet) serfs in need of a czar, even if the left is intent on making us that way.

Here are some related thoughts from James Capretta:

Opponents of market-based reform plans like to cite USA Today-type stories to discredit the whole concept of ownership, consumer choice, and competition in health care. But, in reality, the article again points to the need for a systematic reform which would give individually-purchased insurance the same tax advantage as now provided to employer-paid premiums. That change by itself would give the individual market the size and scale it needs for more stability. And then the competition which consumer choice provides would entice lower cost, higher quality products into the market as well. Over time, the financial advantages enjoyed by today’s dominant employer-based plans would give way to the security of owning stable insurance that can be kept even as job circumstances change.

Health insurance is another area in which politicians screw up the market, and then demand more (and more damaging) intervention to fix the problems caused by the screwing up, while blaming an unfettered market that didn’t exist.

Economics, Media Criticism, Political Commentary, Science And Society, Technology and Society

The Democrat War On Science

1 Comment

John Tierney has some useful thoughts on the politicization of science in the new administration:

Most researchers, Dr. Pielke writes, like to think of themselves in one of two roles: as a pure researcher who remains aloof from messy politics, or an impartial arbiter offering expert answers to politicians’ questions. Either way, they believe their research can point the way to correct public policies, and sometimes it does — when the science is clear and people’s values aren’t in conflict.

But climate change, like most political issues, isn’t so simple. While most scientists agree that anthropogenic global warming is a threat, they’re not certain about its scale or its timing or its precise consequences (like the condition of California’s water supply in 2090). And while most members of the public want to avoid future harm from climate change, they have conflicting values about which sacrifices are worthwhile today.

A scientist can enter the fray by becoming an advocate for certain policies, like limits on carbon emissions or subsidies for wind power. That’s a perfectly legitimate role for scientists, as long as they acknowledge that they’re promoting their own agendas.

But too often, Dr. Pielke says, they pose as impartial experts pointing politicians to the only option that makes scientific sense. To bolster their case, they’re prone to exaggerate their expertise (like enumerating the catastrophes that would occur if their policies aren’t adopted), while denigrating their political opponents as “unqualified” or “unscientific.”

“Some scientists want to influence policy in a certain direction and still be able to claim to be above politics,” Dr. Pielke says. “So they engage in what I call ‘stealth issue advocacy’ by smuggling political arguments into putative scientific ones.”

My concern with Chu and Holdren is that they are Club of Rome types who seem to be anti-technology. I’m sure that they would say that they are in favor of “appropriate” technology (yet another leftist theft of an intellectual base, like “progressive”), but it amounts to having no faith in our descendants to come up with technological solutions to today’s burgeoning problems. That inability to account for technological improvement is at the heart of apocalyptic predictions like world-wide famine and California agriculture drying up from lack of water. It’s that same blindness (and ignorance of basic economics) that resulted in Holdren and Ehrlich losing their bet with Julian Simon

Not to say, of course, that famines and droughts can’t occur, but if they do, it will be a result of foolish (or evil) government policies, not an overabundance of carbon in the atmosphere.

Business, Economics, Media Criticism, Political Commentary

The Next Stage Of Wrecking The Economy

8 Comments

Get ready for the cram down:

Now, maybe higher interest rates on home loans would be a good thing. Home ownership is heavily subsidized in this country, and the reason bankruptcy law currently protects banks from losses on principal is so that they can keep mortgage-interest rates low. But is Congress really going to let mortgage-interest rates rise as a result of this new law? Liberal interest groups already think credit-card interest rates are a crime against humanity. Can you imagine the hue and cry whenever mortgage-interest rates start to tick up?

The more likely scenario is that Congress passes some new law that keeps mortgage-interest rates suppressed, even though the new bankruptcy law has exposed banks to greater risk. If your goal is to re-inflate the housing bubble and create another credit catastrophe, well, there you go.

It’s truly infuriating the way politicians muck with the market, then implement more mucking to deal with the unintended consequences of the first muck, and then blame laissez-faire capitalism for the problems. And the media let them get away with it, repeatedly.

Business, Economics, Media Criticism, Political Commentary

The Man Who Talked Back

Jimmy Pethokoukis:

In 1937, there was a radio debate between Wendell Willkie— later to become the 1940 Republican presidential nominee—and Franklin Roosevelt administration official Robert Jackson—later a Supreme Court justice—about the proper economic role of government. (The event and its fallout are wonderfully described in the outstanding book “The Forgotten Man” by Amity Shlaes.)

By all accounts, Willkie won easily by arguing that FDR’s efforts at nationalizing the utilities industry, his dramatic tax increases, and his administration’s push for prosecutions of businessmen had frozen the private sector with fear and prevented the country from returning to prosperity. The Saturday Evening Post would later dub Willkie “The Man Who Talked Back” against the New Deal and Big Government. I would love to see a debate between Santelli and Obama spokesperson Robert Gibbs.

Yeah, I’d pay to see that, but they’d have to institute a mercy rule, I think, after the first ten minutes.

I hope that Santelli is ready for his upcoming IRS audit.

Business, Economics, Political Commentary, Space

Space Billiards

5 Comments

There is an excellent and comprehensive discussion of the recent satellite collision over at The Space Review today. There is plenty of blame to go around, from perverse incentives in the military, to government policies that are long on rhetoric and short on funding and priority, and corporate risk taking:

It also appears that either Iridium or the JSpOC terminated the collision screening for the Iridium constellation at some point between July 2007 and the collision in February 2009, as Iridium has made repeated public statements that they did not receive any warning. Likewise, the US military has stated that they did not have any warning. The following additional comment by Campbell at the same event may shed some light as why this happened:

That said, this isn’t aviation; the Big Sky theory works [emphasis added]. We figure that the risk of a collision on any individual conjunction is about one in 50 million. However if we have 400 a week for ten years, you can do the math; clearly that risk is something bigger than zero. As I said, our coordination with JSpOC is great.

Basing the protection of the largest low Earth orbit constellation of satellites on such a theory, even when there is a significant amount of data showing that it could be false, leads one to question the decision-making process involved. Perhaps Iridium decided that they could not afford the resources to deal with the decision-making and maneuver planning to properly operate their satellites in a safe manner. If that is indeed true—and there is no known hard evidence either way—then they placed the short-term financial well being of one company over the long-term welfare of all.

Clearly, the entire international system in place for dealing with this kind of problem (to the degree that it exists at all) needs to be overhauled.

Business, Economics, Education, Media Criticism, Political Commentary

What Ended The Depression

5 Comments

Megan McArdle says (correctly) that no one knows, and anyone who tells you that they do is lying or fooling themselves, but that what you were taught in school is almost certainly wrong. She also notes (again correctly) that there was a lot more to the New Deal than simply government spending (which likely didn’t have much stimulative effect), some of it good, much of it disastrous (particularly the artificial propping up of wages and prices by fiat).

One can’t run controlled experiments in economics, so we can never know for sure, but I’m inclined to at least go with economic theories that make sense and for which there is useful empirical evidence. Someone has to tell me what Hayek and von Mises got wrong to persuade me that Keynes is right. And most people who think that Keynes is right haven’t even read them.

[Update a few minutes later]

“Mr. Obama, give back my wallet.”

[Update a while later]

OK, so I’m not as impressed with David Brooks as the intelligentsia want me to be, but he does have some good thoughts occasionally:

The correct position is the one held by self-loathing intellectuals, like Isaiah Berlin, Edmund Burke, James Madison, Michael Oakeshott and others. These were pointy heads who understood the limits of what pointy heads can know. The phrase for this outlook is epistemological modesty, which would make a fine vanity license plate.

The idea is that the world is too complex for us to know, and therefore policies should be designed that take account of our ignorance.

What the world needs now is not love sweet love, but epistemological modesty. Particularly inside the Beltway. Unfortunately, the perverse nature of humanity is that often the less one knows about something, the more certain one is in his knowledge. They have never learned from the ancient Greeks that to admit the limits of your knowledge is the beginning of wisdom.

[Via Manzi, who reads David Brooks so I don’t have to]

[Late morning update]

Are we going to emulate Japan’s lost decade? It seems to be what they want to do, unfortunately.

[Bumped]

[Update a couple minutes later]

Renters are angry. They should be. They’ll probably join the tea party, too.

And here’s a novel concept: let housing prices find their clearing price. Can’t do that — it makes too much sense.

Business, Economics, Media Criticism, Political Commentary

Shameless

Here’s a good round up of the corruption and collusion between Congress and the financial industry:

While Americans were asked to foot the bill—for generations—to bail out Wall Street executives from their sub-prime, mortgage-mad, derivatives driven, un-regulated market—politicians from all parties lined up to feed at the trough—knowing full well that it was these same companies’ bad business practices that placed our financial system at systemic risk.

Sen. Christopher Dodd, who is being paid by taxpayers to oversee these institutions, should return the money on principle or resign from the committee.

Don’t hold your breath.