Thursday, November 5, 2009

Supply Siders Option
"And as the White House considers a second stimulus package, here's another thought: Go for growth. Reduce tax rates to provide growth incentives (something Team Obama has avoided like the plague). Cut the
top corporate tax rate from 35 percent to 25 percent, and accompany that with a small-business tax cut from 35 percent to 25 percent. And leave the Bush tax cuts alone. Don't let them expire in 2011. That's cap-gains, dividends and the top personal rate. Yes, this is a supply-side solution: Reducing tax rates will ignite growth incentives. And by applying it, Team Obama would be borrowing from George W. Bush, Bill Clinton, Ronald Reagan and John F. Kennedy (and Calvin Coolidge and Andrew Mellon, too). Forget about Keynesian spending multipliers, which Harvard's Robert Barrow writes are less than one. Forget about class
warfare. Forget about income redistribution. Go for growth."

On The Virtue of Competition Vice Coercion
Posted: 27 Sep 2009 01:56 PM PDT
Here's a letter that I sent to someone in Australia who insists on exporting to me - in America - his economic advice free of charge..
Mr. Mark ________
Melbourne, Australia
Dear Mr. ________:
In response to my posts in support of free trade you keep e-mailing me, and posting in the comments section of my blog Market Correction, the following:
"American economics professors - as of tomorrow your lectures will be delivered via videoconferencing screens from Asia for only 10% of your salaries.

*** [original emphasis]
I ignore the innumerable economic fallacies, and your ignorance of the data, that underlie your apparent assumption that imports from lower-wage countries impoverish citizens of higher-wage countries. And I grant that economic change and stiffer competition (including from the opening up of foreign sources of supply) often lower the pay of some domestic workers.
So I take your question at face value. My answer to it is this: I'll find a way to feed my family. I'll get another job (or jobs). I'll cut back on less-essential expenses. If I must, I'll rely on my family and close friends as I hope they would rely on me if they were in dire straits.
But I will not, under any circumstances, use my economic misfortune as an excuse to violate the freedoms of others. What right have I to demand that other people continue to pay me $X when they can get the same service elsewhere at a lower price, whether that lower price be $.99X or $.1X? It is a perverted moral creed that justifies my threatening violence against persons who once paid me handsomely but who now choose to spend their earnings differently. Such a moral creed is fundamentally inhuman, for not only does it make everyone a slave to everyone else, its widespread application would impoverish both our wallets and our character.
Donald J. Boudreaux

The Role Of Government

"The primary focus of Obama's health care reform was initially offering insurance to the uninsured, only about one in ten adults. It did not focus foremost on lower costs, improving quality and offering more security to the working and middle class. Obama repeated an old Democratic mistake. It was during Johnson's Great
Society that Democrats went from pushing federal programs that once reached the broad public, like the G.I. Bill, to programs that increasingly offered benefits to smaller constituencies. And as the Democratic mandate left behind the larger public, that public left behind the Democrats."

My take - the role of govt is to defend the rights of the individual. Rights are easy to define - my rights end where your nose and property begins (with a very few, complicated exceptions).  I believe this is the purpose for which we consent to be govorned.  I believe this is the role the Founders intended for the Federal Govt.  I wish their inspired document had served to contain government as they intended.

What is the Value of a Model That Does Not Predict?

The discussion that follows is interesting.  Scientifically speaking, until a model accurately predicts the temps, it cannot serve as proof of anything.  To date, no models have validated their assumptions through accurate predictions.

"The UK Met Office's Hadley Centre, responsible for future climate predictions, says it incorporates solar variation and ocean cycles into its climate models, and that they are nothing new."
What happened to global warming?
By Paul Hudson
Climate correspondent, BBC News

Average temperatures have not increased for over a decade -
This headline may come as a bit of a surprise, so too might that fact that the warmest year recorded globally was not in 2008 or 2007, but in 1998.  But it is true. For the last 11 years we have not observed any increase in global temperatures.  And our climate models did not forecast it, even though man-made carbon dioxide, the gas thought to be responsible for warming our planet, has continued to rise.
So what on Earth is going on?
Climate change sceptics, who passionately and consistently argue that man's influence on our climate is overstated, say they saw it coming.
They argue that there are natural cycles, over which we have no control, that dictate how warm the planet is. But what is the evidence for this?
During the last few decades of the 20th Century, our planet did warm quickly.

Recent research has ruled out solar influences on temperature increases
Sceptics argue that the warming we observed was down to the energy from the Sun increasing. After all 98% of the Earth's warmth comes from the Sun.  But research conducted two years ago, and published by the Royal Society, seemed to rule out solar influences.  The scientists' main approach was simple: to look at solar output and cosmic ray intensity over the last 30-40 years, and compare those trends with the graph for global average surface temperature. And the results were clear. "Warming in the last 20 to 40 years can't have been caused by solar activity," said Dr Piers Forster from Leeds University, a leading contributor to this year's Intergovernmental Panel on Climate Change (IPCC).
But one solar scientist Piers Corbyn from Weatheraction, a company specialising in long range weather forecasting, disagrees.  He claims that solar charged particles impact us far more than is currently accepted, so much so he says that they are almost entirely responsible for what happens to global temperatures.
He is so excited by what he has discovered that he plans to tell the international scientific community at a conference in London at the end of the month.  If proved correct, this could revolutionise the whole subject.
Ocean cycles.
What is really interesting at the moment is what is happening to our oceans. They are the Earth's great heat stores.
In the last few years [the Pacific Ocean] has been losing its warmth and has recently started to cool down
According to research conducted by Professor Don Easterbrook from Western Washington University last November, the oceans and global temperatures are correlated.  The oceans, he says, have a cycle in which they warm and cool cyclically. The most important one is the Pacific decadal oscillation (PDO).  For much of the 1980s and 1990s, it was in a positive cycle, that means warmer than average. And observations have revealed that global temperatures were warm too.  But in the last few years it has been losing its warmth and has recently started to cool down.  These cycles in the past have lasted for nearly 30 years.
So could global temperatures follow? The global cooling from 1945 to 1977 coincided with one of these cold Pacific cycles.  Professor Easterbrook says: "The PDO cool mode has replaced the warm mode in the Pacific Ocean, virtually assuring us of about 30 years of global cooling."  So what does it all mean? Climate change sceptics argue that this is evidence that they have been right all along.
They say there are so many other natural causes for warming and cooling, that even if man is warming the planet, it is a small part compared with nature.
But those scientists who are equally passionate about man's influence on global warming argue that their science is solid.
The UK Met Office's Hadley Centre, responsible for future climate predictions, says it incorporates solar variation and ocean cycles into its climate models, and that they are nothing new.
In fact, the centre says they are just two of the whole host of known factors that influence global temperatures - all of which are accounted for by its models.  In addition, say Met Office scientists, temperatures have never increased in a straight line, and there will always be periods of slower warming, or even temporary cooling. What is crucial, they say, is the long-term trend in global temperatures. And that, according to the Met office data, is clearly up.
To confuse the issue even further, last month Mojib Latif, a member of the IPCC (Intergovernmental Panel on Climate Change) says that we may indeed be in a period of cooling worldwide temperatures that could last another 10-20 years.

The UK Met Office says that warming is set to resume
Professor Latif is based at the Leibniz Institute of Marine Sciences at Kiel University in Germany and is one of the world's top climate modellers.  But he makes it clear that he has not become a sceptic; he believes that this cooling will be temporary, before the overwhelming force of man-made global warming reasserts itself.
So what can we expect in the next few years?
Both sides have very different forecasts. The Met Office says that warming is set to resume quickly and strongly.  It predicts that from 2010 to 2015 at least half the years will be hotter than the current hottest year on record (1998).
Sceptics disagree. They insist it is unlikely that temperatures will reach the dizzy heights of 1998 until 2030 at the earliest. It is possible, they say, that because of ocean and solar cycles a period of global cooling is more likely.
One thing is for sure. It seems the debate about what is causing global warming is far from over. Indeed some would say it is hotting up.

My Family, My Government
He notes, for instance, that the national health insurance movement rose alongside a larger transfer of responsibility from the family to the state: "Every time the state assumes an additional function such as health insurance, child care or benefits for the aged, the need for close family ties becomes weaker."
But even the state must bond: "It may be that one of the most effective ways of increasing allegiance to the state is through national health insurance." This would have been Bismarck's purpose. "We live at a time when many of the traditional symbols and institutions that held a nation together have been weakened and fallen into disrepute. A more sophisticated public requires more sophisticated symbols, and national health insurance may fit that role particularly well." Updating the public symbols, Mr. Obama says health care is one of the two "pillars" of U.S. prosperity in the 21st century.

"Medicare is our deficit problem"

"President Obama seems to agree. He recently said: "If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close.""

It's good to know the President understands this, but puzzling why he thinks doing more of what got us into this problem in the first place is going to solve the problem.

Huber's Insight

Combine the insight on this piece with the insight from Lomborg - powerful tools for prosperity.
BLUF: We were screwed, again, as always, by bad government policy, but the potential for natural gas to replace oil in automobiles is high, and with both financial and carbon emissions upsides (if you care about that sort of thing).
I bet the government gets it wrong again and keeps chasing after pointless carbon emission restrictions and fuel efficiency mandates that will be wasteful, expensive, ineffective in reducing carbon emissions, and will make it all the harder for the poor people (of which there will be more, not fewer) all over the world.
One excerpt: "It's often suggested that if America just sets the right carbon example, the rest of the world will follow. But most of the rest of the world is still far more interested in saving money. Most of the planet's grids will be lit mostly by coal for most of this century because coal is so abundant and cheap. More uranium -the example that the rest of the world is setting and we are largely ignoring-is the one proven, cost-competitive way to boot a lot of coal, and thus carbon, off the grid. Using gas to beat oil is the best carbon strategy because it costs less, not more, so the 80 percent of the planet that emits more than half of the greenhouse gas can embrace it, too. The developing world is setting the example here too, wherever it pumps natural gas into its heavy iron. For now, the only American example the world's poor are clearly eager to emulate is the one featuring five cars and two trucks for every ten citizens.
By throttling the gas market for so long, bad policy did much to establish oil's lock on U.S. transportation, and oil might yet lock up much of the rest of the world's, as well. Oil owns our wheels because we got started much earlier, our great-grandparents preferred liquids, the authorities throttled gas when our grandparents and parents were buying cars, and we now have a couple of trillion dollars tied up in liquid wheels. Nobody will deliver gas to gas stations until there are vehicles to buy it, and few will buy the vehicles until there's gas everywhere to buy."

Wednesday, November 4, 2009

Quoting Hayek

"The curious task of economics is to demonstrate to men how little they
really know about what they imagine they can design."
F.A. Hayek, The Fatal Conceit

You say you saw some journalism on TV? Where?
"White House communications director Anita Dunn said that Fox is "opinion journalism masquerading as news." What a joke - the news entertainment business hasn't been something to take serious for a long time, if ever. They report to entertain, to get ratings, to make money. And that's fine, since that's exactly what we want as evidenced by the ratings. Singling out Fox, that's just comic; when I was growing up there was no alternative to the liberal slant of national media, now there is and the old winners don't like the competition.

"Health Care" - What Does It Mean?

"Allen, Actually, the U.S. is a more hostile environment to certain groups, for example young African American males. The death rate from homicide and accidents in the U.S. is quite high, and this is reflected in a lower life expectancy for the U.S. as a whole (younger deaths weigh more heavily on live expectancy). If you look at life expectancy at age 50 (ie. at what age will a 50 year old die on average) the U.S. number is actually higher than every other country, including Japan.

Which is the more accurate measure of the effectiveness of a system in the treatment of disease? How do deaths from accident and homicide reflect on a country's ability to provide health care?

I contend, as I note in the links ( ), that the excellence of disease care in the U.S. contributes to the higher cost of health care here. This is an indictment of our HEALTH, and our empty-scrotum PUBLIC HEALTH policies, not of our medical care. We are simply better at keeping fat, drunk, 3-pack-a-dayers alive than any other country.  Comment #137 - Posted by: bingo at November 3, 2009 2:41 PM"  from

Big Foot Economics

Big-Foot Economics  Posted: 28 Oct 2009 11:06 AM PDT
Here's a letter that I sent today to the Boston Globe:
Jeff Jacoby masterfully exposes as self-serving the American Booksellers Association's complaint about the low prices charged for books by Wal-Mart and Target ("The war against affordable books <> ," October 28).
It's sad but predictable that many business people oppose competition in their own industries. Rather than work harder to earn consumers' dollars, businesses have a long and sordid history of protecting their profits by demanding that government hamstring their more entrepreneurial rivals.
Of course, these demands always are presented as noble quests to protect consumers from "predatory pricing" - price-cutting today that allegedly results in monopoly power for the price-cutters tomorrow. But despite the (also sad but predictable) fact that politicians and academics take concerns about "predatory pricing" seriously, history offers not a single clear example of price-cutting today, by private firms, leading to consumers being harmed by monopoly power tomorrow.
Reported sightings of predatory pricing are as credible as are reported sightings of Big Foot.
Donald J. Boudreaux

A Curious Fatality - from Cafe Hayek

A Curious Fatality
Posted: 28 Oct 2009 06:45 AM PDT
Here's a letter that I sent yesterday to the New York Times:
David Brooks's column today is entitled "The Fatal Conceit <> ." That's the title also of the last book written by the late Nobel laureate economist F.A. Hayek <> . On page 76 of that 1988 book <> , Hayek notes that "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
That so many economists today have abandoned this task is unfortunate. The scholars best able to expose the vanities and delusions of those who believe that fantasy can be engineered into reality if only enough centrally directed coercion is employed are falling down on the job. Let us hope that the result isn't fatal.
Donald J. Boudreaux

"I'll be gone like a cool breeze."
This thing is too cool for words. One of the engineers used to train with me in karate. And to Gregor I say you always were a delight to be around and I wish you continued success with this project!! 


One should never make too much of an article summary, but this one is particularly thin on thought. The correllation verus causation issue is never even discussed. One question every reader should think immediately is "how do they know the high temps are not driving the higher CO2 levels?" That appears to be what in fact happens. CO2 levels rise AFTER temps increase. That also makes sense - as the oceans warm, they off-gas CO2. As they cool, they absorb CO2.
In order to prove this relationship - empirically observed - is incorrect, the 'scientists' would have to prove that CO2 levels drive temps. The 'scientists' are currently trying to do that by modeling - their only option to prove their conjecture - but have failed. I think they will continue to fail because I think their assumptions are incorrect.
As my friend Dr. Jeff Glassman stated ( "Scientific consensus is to science what CO2 levels are to global warming - a trailing indicator."

Dr. Glassman's other potent insight is that the ice core data they are presenting as evidence that current CO2 levels are above historical norms represents a sampling error rate that is very high - the probability the cores they've measured actually capture historical highs is about 3%.
'Scary' climate message from past
By Richard Black
Environment correspondent, BBC News website

Data came from samples brought up by the drilling ship Joides Resolution A new historical record of carbon dioxide levels suggests current political targets on climate may be "playing with fire", scientists say. Researchers used ocean sediments to plot CO2 levels back 20 million years.
Levels similar to those now commonly regarded as adequate to tackle climate change were associated with sea levels 25-40m (80-130 ft) higher than today.
Scientists write in the journal Science that this extends knowledge of the link between CO2 and climate back in time.
The last 800,000 years have been mapped relatively well from ice cores drilled in Antarctica, where historical temperatures and atmospheric content have left a series of chemical clues in the layers of ice.
But looking back further has been more problematic; and the new record contains much more precise estimates of historical records than have been available before for the 20 million year timeframe.
Sustained levels
The new research was able to look back to the Miocene period, which began a little over 20 million years ago.
At the start of the period, carbon dioxide concentrations in the atmosphere stood at about 400 parts per million (ppm) before beginning to decline about 14 million years ago - a trend that eventually led to formation of the Antarctic icecap and perennial sea ice cover in the Arctic.
If anyone still doubts the link between CO2 and climate, they should read this paper
Jonathan Overpeck
University of Arizona
The high concentrations were probably sustained by prolonged volcanic activity in what is now the Columbia River basin of North America, where rock formations called flood basalts relate a history of molten rock flowing routinely onto the planet's surface.
In the intervening millennia, CO2 concentrations have been much lower; in the last few million years they cycled between 180ppm and 280ppm in rhythm with the sequence of ice ages and warmer interglacial periods.
Now, humanity's emissions of greenhouse gases are pushing towards the 400ppm range, which will very likely be reached within a decade.
"What we have shown is that in the last period when CO2 levels were sustained at levels close to where they are today, there was no icecap on Antarctica and sea levels were 25-40m higher," said research leader Aradhna Tripati from the University of California at Los Angeles (UCLA).
"At CO2 levels that are sustained at or near modern day values, you don't need to have a major change in CO2 levels to get major changes in ice sheets," she told BBC News.
The elevated CO2 and sea levels were associated with temperatures about 3-6C (5-11F) higher than today.
No doubting
The data comes from the ratios of boron and calcium in the shells of tiny marine organisms called foraminifera.
The ratio indicates the pH of sea water at the time the organisms grew, which in turn allows scientists to calculate the carbon dioxide content of the atmosphere.
The shell fragments came from cores drilled from the floor of the Pacific Ocean.
According to Jonathan Overpeck, who co-chaired the Intergovernmental Panel on Climate Change (IPCC) work on ancient climates for the organisation's last major report in 2007, this provides a more accurate look at how past CO2 values relate to climate than previous methods.

The Boxer-Kerry bill envisages stabilisation at 450ppm "This is yet another paper that makes the future look more scary than previously thought by many," said the University of Arizona scientist.
"If anyone still doubts the link between CO2 and climate, they should read this paper."
The new research does not imply that reaching CO2 levels this high would definitely result in huge sea level changes, or that these would happen quickly, Dr Tripati pointed out - just that sustaining such levels on a long timescale might produce such changes.
"There aren't any perfect analogies in the past for climate change today or in the future," she said.
"We can say that we've identified past tipping points for ice sheet stability; the basic physics governing ice sheets that we've known from ice cores are extended further back, and... I think we should use our knowledge of the physics of climate change in the past to prepare for the future."
Averting danger
At the Rio Earth Summit of 1992, governments pledged to stabilise greenhouse gas concentrations "at a level that would prevent dangerous anthropogenic interference with the climate system".
What that level is has been the subject of intense debate down the years; but one figure currently receiving a lot of support is 450ppm.
On Tuesday, for example, the International Energy Agency (IEA) released its prescription for tackling climate change, which sees concentrations of greenhouse gases peaking at the equivalent of 510ppm of CO2 before stabilising at 450ppm.
The Boxer-Kerry Bill, which has just entered the US Senate, also cites the 450 figure.
"Trouble is, we don't know where the critical CO2 or temperature threshold is beyond which ice sheet collapse is inevitable," said Dr Overpeck.
"It could be below 450ppm, but it is more likely higher - not necessarily a lot higher - than 450ppm.
"But what this new work suggests is that... efforts to stabilise at 450ppm should avoid going up above that level prior to stabilisation - that is, some sort of 'overshoot' above 450ppm on the way to stabilisation could be playing with fire."
Because of concerns about short-term sea level rise, the Association of Small Island States (Aosis), which includes low-lying countries such as The Maldives, Palau and Grenada, is pushing for adoption of the much lower figure of 350ppm.
But with concentrations already substantially higher, political support for that is scanty outside Aosis members.

Tuesday, October 13, 2009

Which Nation's Care is Best?

"The most revealing international comparisons look at cancer survival rates, because of the universally extensive record-keeping for this disease. A European study found that, compared to 18 European countries, the U.S. had strikingly higher five-year survival rates in all 12 cancers studied, except for one: stomach cancer. Even there, the survival rates were close -- and the difference was attributed to the location of the cancer in the stomach. For all types of cancers, European men have only a 47.3 percent five-year survival rate, compared to 66.3 percent survival rate for American men. The greatest disparity was in prostate cancer, which American men are 28 percent more likely to survive than European men.
European women are only 55.8 percent likely to live five years after contracting any kind of cancer, compared to 62.9 percent for American women. In five cancers -- breast, prostate, thyroid, testicular and skin melanoma -- American survival rates are higher than 90 percent. Europeans hit a 90 percent survival rate for only one of those -- testicular cancer. Most disturbingly, many cancers in Europe are discovered only upon the victim's death -- twice as many as in the U.S. Consequently, the European study simply excluded cancers that were first noted on the death certificate, so as not to give the U.S. too great an advantage.  "

Perspective On Euro Statism
"The left loves Scandinavia, but for the wrong reason. Nations such as Denmark and Sweden have much to admire, particularly their open markets, low levels of regulation, sound money, and honest governments [1]. Indeed, if fiscal policy is removed from the equation, both Denmark and Sweden are more laissez-faire than the United States according to Economic Freedom of the World [2](as I noted in this recent video [3]).
But fiscal policy is where the Scandinavians have serious problems. Taxes are confiscatory, punishing people who work, save, and invest. High levels of government spending, meanwhile, reduce economic growth by diverting resources from the productive sector of the economy and funneling them into the stifling welfare state.

Not surprisingly, this is the reason why statists admire Scandinavian nations. Matthew Yglesias, for instance, recently expressed [4]his great admiration for Denmark. And I suppose I would agree with him if asked to pick the world's best welfare state. I've been to the country several times and there is no question that laissez-faire policies in areas other than fiscal policy have helped the nation remain relatively prosperous."

Rational Thought on AGW
We believe, and evidence supports this, that a warmer climate is on the whole beneficial to human health and endeavors, esp. for agriculture and forestry; hence we see no need to attempt climate modification of any kind. In addition, CO2 is a natural fertilizer for plants, and higher CO2 levels are desirable; historic levels have been many times higher than today's. Adaptation to climate changes has been the human norm during ice ages and interglacials and will continue to be the primary mechanism. Finally, we see no need to modify energy policy in response to fears of climate change -- although we do support energy conservation and the development of alternative energy supplies in anticipation of the gradual depletion of readily available fossil fuels.

Paralysis of Governance - If Only

"The cost is compromise. And the outcome is a paralysis of governance."

He says "paralysis of governance." What he means is "paralysis of new legislation." Previously enacted legislation is still there to be governed by the Executive Branch. That does enough harm, no need to add
more of the same.  If this is what it takes to keep the government somewhat in check, I'm all for it, and will in fact hope for more. I wish we could get back to the days of "gridlock" and the "Do nothing Congress." Ahh, the good old days.

Trust Us, We're From the Govt

When they lie about AGW to make their point, what does that mean to you?  Does it make you think twice about the reality of the whole AGW case?  Or do you think the lying is justified because the stakes are so high?  In any event - do you trust the folks we call political leaders to know the truth and do the right thing?  Or do you think they'll use any event to line their pockets via their 'friends'?

This from David D Friedman:
"I am not arguing for or against claims that the greater extent doesn't really count because it is thinner ice or that all the evidence taken together still supports long term shrinking of arctic sea ice. My claim is simply that the quote above, which is still up on the JPL web page, is false. When people lie to me about the evidence for their conclusions, offering other evidence that their conclusions are still true is not an adequate defense."

One Way to Know Our Taxes Are High Enough

There are a lot of telling stats on taxes - E.G.:
"As we come to the end of the Bush administration, the top 1% of American taxpayers already pay 40% of all income taxes -- the highest level in 40 years. The top 10% of income earners pay 71% of the taxes."

But this one makes an unarguable point. If we desire to compete in the world for producers, we should be a place where producers can keep what they make so that we can keep them here producing.

The Feds Are Scary
I had to write my congressional delegation about this one. This is wrong, it's abusive to liberty, it must stop.
"You can't get much meaner than to threaten someone with guns. And that is what a warning letter from HHS is. Think about what would happen if Humana ignored the HHS letter and kept speaking out critically on health care. The next step would be to bring Humana to court. If Humana refused, the next step would be, literally, for the Feds to come in with guns."

Tuesday, October 6, 2009

The Most Powerful Hope and Change We Could Wish For

This guy is brilliant - I hope one day, out of desperation, our political leaders move this way. With this plan cemented into Constitutional Law, and tax reform like the Fair Tax, we could eliminate most of the issues we Amercians fight each other over in the political arena. Politicians would be free to do what they should be doing now, which is taking care of constituent issues and thinking about national defense. No more fighting about entitlements, health care reform, or how this group or that group is going to take some of our money and give it to a small constituency 'for our own good.' No more bickering about how we should surrender to the state 'just a teeny tiny bit of freedom' in order to gain the benefit of them taking the money from us to give it back to us.  Excerpts follow.
"Give the money to the people," Charles Murray argues in his new book, In Our Hands : A Plan To Replace The Welfare State. His plan would give a $10,000 yearly grant to all Americans, once 21, who are not in jail.

Kathryn Jean Lopez: First things first. $10,000? Who's getting and when? And can I use it on my credit-card debt? Charles Murray: If you've reached your 21st birthday, are a United States citizen, are not incarcerated, and have a pulse, you get the grant, electronically deposited in monthly installments in an American bank of your choice with an ABA routing number. If you make more than $25,000, you pay part of it back in graduated amounts. At $50,000, the surtax maxes out at $5,000. I also, reluctantly but with good reason,
specify that $3,000 has to be devoted to health care. Apart from that, you can use the grant for whatever you want. Enjoy.
Lopez: You write that your plan "does not require much in the way of bureaucratic apparatus." Come on, Charles. This is America. Is that realistic? Murray: I said "require." If we start defining "require" as "how the government would prefer to behave," all hope is gone. We start with a high-tech identity card, which these days can be within a fraction of unfakeable, for each U.S. citizen. The citizen approaching age 21 presents it to a bank. The bank opens the account and electronically notifies the government of the account holder and account number (no bank account, no grant). The bureaucratic requirements for distributing the money is a computer with decent software and a lot of capacity, with a couple of minders to dust it occasionally. All right, a few more people than that, but not many. The significant personnel requirement is for a fraud detection and prevention division. But that division is given a pretty easy job: being a citizen of the U.S. is a yes-no proposition with simple definitions. Birth record-keeping systems and naturalization records are already in place, requiring just some tweaking to make them precise enough. The main cheating problem would be the same one the IRS faces, and would involve underpayment of the surtax for people making more than $25,000, but that would be minor in the grand panorama of government waste and fraud.

Lopez: How can even low-income folks have a "comfortable retirement" under your plan? Is that foolproof?
Murray: Someone turning 21 has about 45 years before retirement. The lowest average real return for the U.S. stock market for any 45-year period since 1801 is 4.3 percent. Round that down to 4 percent and work the magic of compound interest. Just a $2,000 contribution a year amounts to about $253,000 at retirement. A low-income couple that has followed that strategy retires with more than half a million dollars in
the bank plus $20,000 continuing annual income from the grant. Sounds comfortable to me. As for  foolproof," think of it this way: All of the government's guarantees for Social Security depend on the U.S. economy growing at a rate that, at the very least, is associated with an historically worst average return of 4 percent in the stock market (actually, it needs a much stronger economy than that). Absent economic growth, no plan is foolproof. With economic growth, mine is. 

Lopez: At one point you talk about possibly increasing the grant size if you estimate on health-care-cost needs turned out to be off? What's to say that in implementation the grant size doesn't skyrocket? Murray: The passage you're talking about was intended to anticipate critics who present elaborate data to prove that my $3,000 allocated annually to health care is not precisely right. I'm close, but I don't want to spend the next year arguing about whether the right number is $3,300 or $3,500 instead of $3,000. In effect, I'm saying to the reader: "Okay, for purposes of reading the other chapters in the book, assume that the grant size is their number for health care plus $7,000." The debate about the Plan shouldn't get sidetracked over a few hundred dollars, because small dollar differences are irrelevant to the main argument. Suppose, for example, that the right figure for the annual health care allocation is as high as $3,8000 instead of $3,000. All that
means is that the projected costs of the Plan cross those of the current system in 2015 instead of 2011.

Lopez: Under your plan, recent college grads would have incentive to bum around, wouldn't they? The government would give them money to do nothing. Get a couple of bums with some guaranteed income and you've got a government disincentive to be productive, don't you? Murray: I think it would be a great boon to the maturity of our new college grads, and save many innocent people from going to law school, if more of them took a few years after college and did something besides heading straight to grad school or throwing themselves into their careers. I'm not worried about this particular form of work disincentive in the Plan. Playing gets old awfully fast. So does living on $10,000 a year.

Lopez: Not to be stuck on stupid here, but I'm watching the French students rioting now. Is there any danger that under your plan we'd be raising a generation of French kids? People who think they are entitled for money for nothing? Murray: Au contraire. The problem with the French kids isn't that they think they are entitled to money for nothing, but entitled to guaranteed jobs with high salaries and benefits plus all the goodies of the welfare state. People living under the Plan get the $10,000, but they have to make all the decisions about how to run their lives. To put it another way, the Plan provides the raw material for a safety net, but people have to weave it for themselves. The Plan puts responsibility for people's lives back in their hands - precisely what seems to terrify French youth.

Lopez: Under your plan, the government spends more first, but saves money in the long run, right? But is there any guarantee folks in the future abide by the plan? Can't a few pols wanting to restore an entitlement here or there ruin things? Murray: I leave the size of the grant to the political process, but there is a built-in brake. Congress can pass hundreds of billions of dollars in favors for special groups, because no single allocation is large enough to mobilize the opposition of a powerful coalition opposing it. A change in the size of the grant directly effects everyone over the age of 21. Every time Congress talks about changing the size of the grant, it will be the biggest story in the country. The one thing that can't be left to the political process is the requirement that the grant replace all other transfers. That has to be a constitutional requirement, written in language that even Supreme Court justices can't ignore. Assuming such a thing is possible.

Lopez: You expect single motherhood to decline but abortion to increase? Our Ramesh Ponnuru in his review of your book in the latest issue of National Review says, "I'm not sure this would happen, both because illegitimacy and abortion rates have moved in tandem over the last several decades and because Murray's reforms might have a conservatizing effect on voters . If the proportion of the electorate that is married increases - let alone the proportion of one-income marriages - one would expect the country to become more welcoming of new life." Could you see that being true? Murray: I think Ramesh is probably right, and I thought about making a similar argument in the text. But part of writing a book like In Our Hands is to make a conscious effort not to be too Pollyanna-ish. The most direct causal logic says that some women will be more likely to have abortions under the Plan than under the current system, and I feel I have to acknowledge that. 

Lopez: Are you aiming for too much? Why not fix the bureaucracies? Isn't that more practical? Murray: I'm contemplating that sentence, "Why not fix the bureaucracies?" You're asking me to be practical? Bureaucracies are not fixable. They are inescapably, inherently driven by their internal dynamics to maximize their budgets and the size of their staffs, not to accomplish their putative tasks. 

Lopez: What does this statement mean? "The welfare state drains too much of the life from life."
Murray: A meaningful friendship does not consist of sharing backyard  barbecues; a satisfying marriage does not consist of two people living together; a vibrant community is not created by yard sales. All of these
relationships are given weight and consequence by the elemental events of life - birth, death, raising children, paying the rent, comforting the sad, joining together to do things that need getting done and (crucial point here) having responsibility for getting those things done. The welfare state says of too many important functions in life, "We'll take care of that." The natural human response is to say, "Okay, you do it." And in this transfer of responsibility the welfare state has drained too much of the life from life.

Lopez: You say that your plan will transform civil life. Might you be too optimistic about how generous and wise and cooperative Americans are? Murray: I'm just being a student of American history. My projection of
what would happen is a straight extrapolation of behaviors that have emerged whenever Americans were given responsibility for their own lives and the freedom to deal with the problems they faced. I don't think that is a romantic vision of American history, but dead-on accurate.

Lopez: "At some point in this century" the "limited competence of government is inherent" will become "consensus understanding"? This century?! That gives you some cover, doesn't it? Murray: And saying it at age 63 gives me even more cover. It will be up to my children to own up that Daddy was wrong, if I'm wrong. But I'm not.

You Won't Believe It - Government Is Not Efficient

The government geeks that are making bets on how they can force us to be more efficient through their use of the government's monopoly on coercion - wouldn't it set a great example if they cleaned up their own act first?  And anyway, given the so called 'efficiency gap', wouldn't this result in more savings to fund other massive government spending programs? 

It'll never happen.  Government incompetence is so endemic we don't even get angry about it any longer.

"The latest report found that "the Energy Department failed in many cases to use controls on heating, ventilation and air conditioning that are a primary means of conserving energy during non-working hours," as Dow Jones Newswires put it. That could have cost the DOE more than $11 million."

Boudreaux Responds to Posner's Understanding of Keynes, Part II

On Posner the Keynesian (
Posted: 25 Sep 2009 07:20 AM PDT
Here's a letter that I sent yesterday to the New Republic:
Richard Posner courageously opens up shop in the highly competitive seventy-three year-old industry of telling the world what John Maynard Keynes <> meant in his 1936 book The General Theory ("How I Became a Keynesian <> ," Sept. 23). That this industry still thrives and attracts new and prominent suppliers speaks volumes.

Judge Posner, alas, misses some vital points of economic history. For instance, it's untrue that "a general fall in the price level - deflation - imperils economic stability." In the U.S. the price-level fell pretty steadily from 1865 through 1898 - a period of rapid economic growth unmarred by any unusual instability. Deflation is desirable if it is caused by rising productivity <> (as was the case in the late 19th century) and not by contractions of the money supply (as happened in the early 1930s).

Judge Posner also gives undue credit to Keynes for two insights that are not original to Keynes. First, Adam Smith <> beat Keynes to the punch in emphasizing that the ultimate goal of economic activity is not production, but consumption. Second, the importance of uncertainty was brought to economists' attention, not by Keynes, but by Frank Knight <> . In 1921 Knight argued that profit is entrepreneurs' reward for dealing with uncertainty. Unlike Keynes, Knight understood that uncertainty poses no special threat to free markets operating with sound money. Sincerely, Donald J. Boudreaux

Boudreax on Posner on Keynes

Keynesian economics
Posted: 24 Sep 2009 07:15 AM PDT
Richard Posner has read Keynes's General Theory so you don't have to. He does a superb job of summarizing <> (HT: Greg Mankiw <> ) what Keynes actually said. Other than pointing out the opaqueness of the work, Posner says little against it. The title of the piece is "How I Became a Keynesian" so I guess he found the arguments compelling.

Part of Keynes is compelling, the part about animal spirits, the idea that people get worried about the future, that the riskiness of the future is hard to quantify, and that this leads to people reining in plans for consumption and investment, leading to hoarding and reduced demand for all kinds of goods.

What is not so compelling is the conclusion that this can be rectified and improved on by the government taking up the slack, regardless of the reason. What is not so compelling is the idea that consumption creates growth. Consumption might create production (it depends) but consumption is not growth except in the very immediate term. (I almost said the short run, but you say the short run in a piece on Keynes and you can hear the mocking chorus that in the long run we're all dead. If the long-run is five years, it's not true. If it's 50, our children are alive and we care about them).

Also missing from the Keynesian story is the role of money creation and where the animal spirits of caution come from. They aren't spontaneous, certainly not in today's world, a world where Posner want to apply Keynes's insights. People are cautious right now in reaction to past recklessness. The Fed and the policy-makers are trying to keep the party going with massive increases in money reserves, cash-for-clunkers, home owner subsidies to people whose mortgages are underwater, and the so-called stimulus package which is stimulating the incomes of some people, financed out of future taxes on the rest of us.

But as Hayek would point out, the party needs to stop. We need to clean up the mess. It's not an easy mess to clean up but to pretend that we can clean it up by pretending it didn't happen seems to me to be a form of free lunch fantasy.

Mark Steyn, Liberty Hero from the Comic Justice Team
If you don't laugh at Mark Steyn, you must not drink enough.

""Personal responsibility" is racial code language? Phew, thank goodness America is belatedly joining Canada... and Europe in all but abolishing the concept. "Code language" is code language for "total bollocks."  "Code word" is a code word for "I'm inventing what you really meant to say because the actual quote doesn't quite do the job for me."  "Small government"? Racist code words! "Non-confiscatory taxes"? Likewise. "Individual liberty"? Don't even go there!"

Doctors Speak Up On "Reform"

"In short, doctors fear "health reform" because it's not really about health care; it's about catering to the prejudices of the politicians and the lawyers who've already made such a mess of our health-care system."

Will California Survive Good Intentions

Did anyone really think that California's plan to massively increase welfare benefits would work to the benefit of the populace?  If you make it easy to be unemployed, will more or less people find a way to be 'employed?'  What if you make it hard to start/own/run a business, and (relatively) easy to be unemployed - would you predict that you would have more or less investors and entrepreneurs, or less?  Would your actions produce a harvest of more 'unemployed' people or fewer?  It reminds me of a line from a Jimmie Buffet song, "It was so simple, like the Jitterbug, but it plumb evaded me."  Apparently, it 'evaded' a bunch of California do-gooders, too.

"The website Pension Tsunami recently noted several articles of interest related to union pension funds. "Hidden Pension Fiasco May Foment Another $1 Trillion Bailout" summarizes how public employee pension funds have cooked their books for years. This has gotten worse in recent years, as public sector employee unions have, "consolidated their power in state and local governments by controlling elections [and] demanded unsustainable increases to the benefit packages of their members - often retroactively - from politicians whose survival depended on their obedience.""

"The facts are indisputable: Blue States are melting down. California is an ominous preview into America's future. Perhaps an enterprising progressive (or is that an oxymoron?) could explain why we should follow
the Obama-Pelosi-Reid brain-trust into certain oblivion."

This Is Inequality I Oppose - State Sponsored Inequality

"There is our inefficient and inequitable system of tax-advantaged, employer-based health insurance. While the federal tax code promotes overspending by making the majority unaware of the true cost of their insurance and care, the code is grossly unfair to the self-employed, small businesses, workers who stick with a bad job because they need the coverage, and workers who lose their jobs after getting sick."

Are You Up To Date on AGW?

"Yet last week in Geneva, at the UN's World Climate Conference--an
annual gathering of the so-called "scientific consensus" on man-made
climate change --Latif conceded the Earth has not warmed for nearly a
decade and that we are likely entering "one or even two decades during
which temperatures cool.""

Which Crimes Are Criminal?

BLUF:  Having allowed the government more power and responsibility than we should have, we should not be surprised to find that those more powerful than ourselves found out how to use the system to their benefit.  The solution isn't more regulation - the solution is less.  The less power government holds, they lower the incentive to manipulate the government in order to be successful.  How does one gain success in a playing field undistorted by govt?  Bring to the market products that others are willing to pay for - voluntarily.

"Violent crime is down. Imagine that. The experts are scratching their heads. Statistics from major cities across the country show homicides dropping to 30- and 40-year lows.
Which gets us to an important point: The surveys only look at crime that's against the law. There's nothing about the conduct of those who used their economic and political power as weapons to make sure what they did was not illegal fraud, not illegal larceny.

Sure as can be, they used deception to improperly take billions from the unsuspecting. At the same time, they connived with their public servants to make sure their world of finance was largely a lawless frontier.

Even though the walls came tumbling down, they are still fighting in the rubble to make sure no one regulates their ability to keep their hands in our pockets. There's an interesting article in Monday's Washington Post that describes how regulators at the New York Federal Reserve were hand-in-glove with those they were supposed to oversee: "At N.Y. Fed, Blending In Is Part of the Job.''

Regulators too cozy with regulatees. Really? No kidding."

The Deniers
Of the eight insurers listed, Medicare is most likely to reject a claim, sending away 6.85% of requests. This is more than any private insurer and double that of the private insurers’ average!

In short, the AMA is endorsing a plan whose closest existing example is the most frequent denier of claims. How the public option exemplifies “delivering care to patients” is unclear.

Buchanan hits and misses

I like Buchanan's criticisms of the practice of science - people forget that while science has given much to humanity, it is no more pure an endeavor than any other human endeavor.  Nor are scientists any more pure that 'regular' humans.  The first rule of science make sense in that context - don't trust the scientist, trust the scientific method.  Given that government is run by politics, I completely agree with his assertions and the implications that science by government is a disaster.

Of course, being Buchanan, he doesn't stop there and proceeds to some BFOs (blinding flashes of the obvious) that, no, Darwinism does not explain the origin of life.  Thanks Pat.  Big help there.

A Friend's Astute Commentary on AGW Science - or Lack of Science

Madoff - Asking the Unaskable

"So let us ask the unaskable: Just how unusually evil were Madoff's actions? Not that unusual. In fact, the whole notion of paying off past investors with the funds of present investors is at the very core of the Social Security system. At least Madoff sought the consent of his investors who let him care for their money based on their own volition. And at least he didn't attempt to defend himself with the claim that he was conducting wise public policy. 

Comments anyone?

Tuesday, September 29, 2009

Fitness blog

Careful about the conclusions, these are not interventions studies they are observational studies only.  Causality therefore is not proved - but the information is consistent with a large amount of theory.  I take fish oil every day, and given the prediliction for polyunsaturated (vegetable oils) to oxidize, eat them only when I have to.
"A diet rich in fish, omega-3 oils, fruits and vegetables may lower your risk of dementia and Alzheimer’s disease, whereas consuming omega-6 rich oils could increase chances of developing memory problems, according to a new study.

Isn’t it ironic that the very oils we’re told to consume, omega-6 rich polyunsaturated vegetable oils (peanut, corn, soy, etc), are contributors to mental decline? It’s not incredibly surprising if you put the consumption of such oils into the context of evolution. Polyunsaturated vegetable oils have only been possible in the last century or so when we could press huge quantities of grains like corn to get the extremely small amount of oil. Our ancestors never ate corn oil. They weren’t eating olive oil either, but an olive is a naturally oily, fatty fruit. As Ray Peat discusses here, polyunsaturated fats are immunosuppressive."

Understanding the Pragmatic Value of Liberty

In another magnificent bit, Don Boudreaux paints a picture of why liberty works better than centralization and political control of economies. Intuitively, if asked, most of us would rather the world work via cooperation than coercion. Most of us have been taught to think of democratic government interventions as at least "well
intentioned." Often ignored is the fact that any and every government intervention is based on coercive force - and not cooperation; at best, the citizens comply with the government's force. I hope you enjoy this as much as I did.

Here comes the G-20
By Donald J. Boudreaux, Sunday, September 20, 2009
The Group of 20 that travels to Pittsburgh this week for another economic summit proclaims on its Web site the goal of laying "the foundations to move beyond the crisis to a sustainable recovery." Good idea.
The difficult question, though, is "How?" One school of thought -- call them the "decentralists" -- advocates
greatly expanding the role of markets. As markets expand, so too does diversity, competition and creativity.
Entrepreneurs experiment with different types of financial instruments, manufacturing processes, retail-distribution methods and other ways of earning profits. Because markets are open, a wide variety of these
experiments in earning profits arises. Some of these ways prove to be less profitable than others. Entrepreneurs abandon the less-profitable ways and mimic the more-profitable ones. As this process goes along, some business products and practices establish themselves as being generally reliable -- "sustainable," to use the G-20's jargon -- while others disappear. Nobel economist F.A. Hayek described this ongoing competition as "a discovery procedure." No one can figure out in the abstract just what are the best ways of
doing business: What are best ways of balancing the returns on financial instruments against their risks?
What is the optimal size of a steel plant? How much reserves should banks hold? What is the optimal ratio of mortgage debt to household income? Whatever knowledge we have about these and countless other such matters is discovered through experience. And the experience that produces the most trustworthy knowledge is the experience that includes the widest feasible range of trials and, hence, of errors. For the decentralists, the ideal economy is always in a state of becoming -- becoming better, in fits and starts, as evermore useful
knowledge is uncovered by the vigorous winds of competition. And so this economy is never free of errors, failures or disappointments. But because in this economy not all financial eggs are in the same basket, if Jones Co.'s newfangled hyper-indexed-and-derivative-backed financial instrument goes bust, there's a good chance that Smith Inc.'s rival financial instrument remains strong. Mistakes are offset by successful moves. And bad luck is offset by good. The other side The second school of thought views the economy in a radically different

Members of this second school -- call them the "controllers" -- advocate more detailed government management of the economy. Controllers don't trust the inherently messy process of trial-and-error competition. They are motivated by two abiding faiths: The first is in man's abilities to figure things out through abstract reason. The second is in the general trustworthiness of smart people to apply the findings of abstract reason dispassionately for the general welfare. Whenever the controllers see evidence that the world isn't perfect, they assume that the imperfection can be corrected by government applying genius to the problem.

This "controllers" approach is dangerous. First, not all imperfections should be corrected. Many are the
unavoidable byproducts of productive trial-and-error competition. "Correcting" these imperfections too often means shutting down trial-and-error competition. Second, because controllers can exercise economy-wide control only through "Big Plans," these plans are necessarily formulated in aggregate lumps. They are plans for "workers," for "banks," for "mortgagees" and so on. All nuance and individuality are lost, for these Big Plans cannot possibly be customized to account for the different tastes, talents and hunches of each of hundreds of millions of people. The differences among workers, among banks, among consumers are ignored. Third, because Big Plans are premised on the notion that the planners have figured out just how the different sectors of the economy should operate, these plans crowd out the individual, decentralized  experiments that are the hallmark of a market economy. A plan isn't really much of a plan if individuals are permitted to ignore it. Fourth, unlike in decentralized markets, if the Big Plans are flawed -- either in design or in execution -- there's no offsetting, competitive alternative. Everyone is along for the dangerous ride. All eggs are in the same big basket. The problem with associations such as the G-20 is that they are by nature prone to formulate Big Plans -- and, in the case of the G-20, Really Big Plans -- plans that span not just one country but 19 countries plus the European Union.

Government leaders do not meet to agree to do nothing. Being the ultimate "controllers," they must propose to "do something." Harmony's danger "Harmonizing" regulatory rules is among the efforts they'll undertake. Sounds good. (Who opposes more harmony?) But this harmony is especially harmful. One of the most important types of competition is competition among governments. For example, a government that raises taxes to too high a level will lose investors to governments that tax more moderately. "Harmonization" eliminates this competition. But "harmonization" is a weasel word for governments conspiring not to compete against each other for capital. "We won't cut our taxes if you don't cut yours" is the kind of agreement that harmonization brings. The G-20 meeting will end with all manner of happy talk about cooperation. Some cooperation, of course, is desirable. But be on the lookout for cooperation that throttles competition, swapping the creative initiative of decentralists for the centralized power of controllers.

Natural Gas ... Glut?

BLUF:  Government messed this one up too.

"But the real big consumer is, of course, the power-generation industry. And those guys are still tepid, having lived through the gas booms and busts before. So, will gas get really cheap until there is widespread carnage in the domestic exploration and production business? Or will power companies - or Congress - blink and take steps to use more gas to keep the lights on. Something has to give and it should be interesting. Stay tuned."

Lies, Damned Lies, and Health Care Statistics

On Life Expectancy in America
This letter in today's Washington Post <> gives some perspective on life expectancy in the U.S.:  The Sept. 23 front-page article <> "For French, U.S. Health Debate Hard to imagine" cited the longer life expectancy of the French compared with Americans as an indicator of superior health-care quality.  Broad population metrics, such as life expectancy, are affected by behavior. Our lower life expectancy is not attributable to poor U.S. health care. It stems from the higher U.S. rate of homicides and the death rate from transportation accidents. In their book "The Business of Health," Robert Ohsfeldt and John Schneider explain that the U.S. homicide rate of 7.3 per 100,000 population is eight times the rate in France. The U.S. death rate from transportation accidents is also higher than in other countries. When life expectancy data are adjusted for differences in homicide and transportation death rates, U.S. life expectancy is slightly higher than for all other countries.  U.S. health-care expenditures per capita are much higher than in France, but that spending results in access to high-quality care and the latest medical advances. In terms of quality indicators, such as five-year age-adjusted survival rates for almost all cancers, the United States has significantly higher survival rates than France.  KEN McLENNAN,Williamsburg

The 45 Million Dead - Or Not?

Statistical deaths - should we also include how many were statistically killed by the fraud, waste and abuse of an over-reaching over-bearing government?
"One study "found that every year in America, lack of health coverage leads to 45,000 deaths," he told the committee. "No one should die because they cannot afford health care. This bill would fix that."
There was more. "These reforms would give Americans real savings," Baucus said. The Congressional Budget Office "tells us that the (insurance) rating reforms and exchanges in our proposal would significantly lower premiums in the individual market." As well, the bill wouldn't increase the budget deficit and "starts reducing the deficit within 10 years."
If only all this were irrefutable. But Baucus' claims are shaky. It's questionable whether more insurance would save 45,000 lives a year. Unfortunately, just having insurance doesn't automatically improve people's health. Sometimes more medical care doesn't really help. Sometimes people don't go to doctors when they should or follow instructions (take medicine, alter lifestyles). Indeed, many people don't even sign up for insurance to which they're entitled. An Urban Institute study estimated that 10.9 million people eligible for Medicaid or CHIP in 2007 didn't enroll.
The 45,000 figure cited by Baucus is itself an unreliable statistical construct built on many assumptions. It's based on a study of 9,004 people aged 17 to 64 who were examined between 1988 and 1994. By 2000, 351 had died; of these, 60 were uninsured. The crude death rates among the insured (3 percent of whom died) and uninsured (3.3 percent) were within the statistical margin of error. After adjustments for age, income and other factors, the authors concluded that being uninsured raises the risk of death by 40 percent. They then extrapolated this to the entire population by two techniques, one producing an estimate of 35,327 premature deaths and another of 44,789.
This whole elaborate statistical edifice rests on a flimsy factual foundation. The point is not to deny that the uninsured are more vulnerable (they are) or that extra insurance wouldn't help (it would). The point is that estimating how much is extremely difficult. Advocates exaggerate the benefits. Remember: Today's uninsured do receive care."

Lomborg on Climate Cost Benefit Analysis
"The rhetoric did little to disguise an awful truth: If we continue on our current path, we are likely to harm the world's poorest much more than we help them."
"In other words: In our eagerness to avoid about $1 trillion worth of climate damage, we are being asked to spend at least 50 times as much -- and, if we hinder free trade, we are likely to heap at least an additional $50 trillion loss on the global economy.
Today, coal accounts for almost half of the planet's electricity supply, including half the power consumed in the United States. It keeps hospitals and core infrastructure running, provides warmth and light in winter, and makes lifesaving air conditioning available in summer. In China and India, where coal accounts for more than 80 percent of power generation, it has helped to lift hundreds of millions of people out of poverty.
There is no doubt that coal is causing environmental damage that we need to stop. But a clumsy, radical halt to our coal use -- which is what promises of drastic carbon cuts actually require -- would mean depriving billions of people of a path to prosperity.
To put it bluntly: Despite their good intentions, the activists, lobbyists and politicians making a last-ditch push for hugely expensive carbon-cut promises could easily end up doing hundreds of times more damage to the planet than coal ever could."

Wednesday, September 23, 2009

Hayek! Simply Brilliant

"All political theories assume, of course, that most individuals are very ignorant. Those who plead for liberty differ from the rest in that they include among the ignorant themselves as well as the wisest.  Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that the most ignorant individual can deliberately employ is comparatively insignificant." F. A. Hayek, The Constitution of Liberty

Would You Be More Free in the US or Chile?
Nobel Laureate Friedrich Hayek proved, again, to have been a visionary when he stated in 1981: "Chile is now a great success. The world shall come to regard the recovery of Chile as one of the great economic miracles of our time."

What Is Freedom? Who Has Freedom?

Economic Freedom of the World
The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through markets, modern living standards would be impossible.
Potentially advantageous exchanges do not always occur. Their realization is dependent on the presence of sound money, rule of law, and security of property rights, among other factors. Economic Freedom of the World seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom. The report is copublished by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.

I get the feeling that as soon as a politician says anything, it ceases to be true (Part II)

With apologies to T Bone Burnett, who's song lyric was "I get the feeling that as soon as anything is published in the paper it ceases to be true."
Such fudges reveal a politician who, for whatever reason, feels like he can't be honest about the real-world costs of expanding health care. "Add it all up, and the plan I'm proposing will cost around $900 billion over ten years," he said, trying hard to sound like those numbers weren't pulled out of Joe Biden's pants, and won't be dwarfed by actual costs within a year or two. "We've estimated that most of this plan can be paid for by finding savings within the existing health care system-a system that is currently full of waste and abuse," he said, making him at least the eighth consecutive president to vaguely promise cutting Medicare "waste" (a promise, it should be added, that could theoretically be fulfilled without drastically overhauling the health care system). Any government-run "public option," he claimed, somehow "won't be" subsidized by taxpayers, but instead would "be self-sufficient and rely on the premiums it collects."

"And in a critical, tic-riddled passage that many of even his most ardent supporters probably don't believe, Obama said: "Here's what you need to know. First, I will not sign a plan that adds one dime to our deficits-either now or in the future. Period." In case you couldn't quite read his lips, the president repeated the line for emphasis. Then: "And to prove that I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize."

Uncompensated Care Another Straw Man to Justify Government Intervention

This is consistent with other information I've seen on the topic. IOW - uncompensated care is not such a massive problem that it would justify using the coercive power of the state to force the purchase of insurance by all.  Would you be willing to pay $200 a year to help those who's care is not covered?  That's what you are paying now.  Seems fair to me.

"I get the feeling that as soon as a politician says anything, it ceases to be true"

With apologies to T Bone Burnett, who's song lyric was "I get the feeling that as soon as anything is published in the paper it ceases to be true."
"Again and again last night, the president's numbers didn't add up. "There may be those-particularly the young and healthy-who still want to take the risk and go without coverage," he warned, in a passage defending compulsory insurance. "The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don't sign up for health insurance, it means we pay for those people's expensive emergency room visits." No, it means that, on balance, the healthy young don't pay for the unhealthy old. The whole point of forcing vigorous youth to buy insurance is using their cash and good actuarials to bring down the costs of covering the less fortunate."

The Aussie Brings a Useful Perspective
Posted by Sallie James
"Mainly, though, I am surprised that questioning of power is not more valued in America. To be sure, the President of the United States is not answerable to Congress in the same way that Ministers (including Prime Ministers) are to a Westminster-system parliament, but I would have thought that questioning the president would be well within the bounds of a nation conceived in liberty and on the understanding that all men are created equal. You got rid of infallible kings in 1776, remember?"

I have wondered this too. It has become the common perception that govt actions are both necessary and good for the People, despite the fact that govt has but one tool to wield to make things better: coercion backed by people with guns. That the leftists - characterized by the ACLU and pacifist tendencies - view the coercive force wielded by govt as a 'good' has always seemed contradictory to me.

"I get why the Democrats are making political hay out of Representative Wilson's outburst, even if I think they are hypocrites for suddenly finding religion on civility, given their own history. And I thoroughly reject, by the way, the notion that much of the criticism directed towards Obama is based on racism, even if this sort of talk gives unfortunate credence to the claims. But those same Dems who are shocked (shocked!) by Joe Wilson's behavior are right now allowing a tax cheat to pull the nation's purse strings."
My comment - given the last two presidents - Clinton and Bush - and the more or less continuous stream of charges that one or the other had lied about something (to which the Dems had to add "and people died" to make the unspoken point "of course our President lied on tape and it's verifiable but it doesn't matter because it was just about a sexual dalliance"). It is a curious human phenomenon that humans identify with those in power if it is perceived that the one in power 'represents' them somehow. "He is me!"
"Meanwhile, the Dems are keeping "internal" investigations of Charlie Rangel's ethical violations very quiet indeed. Quite frankly, I'm far more interested in those than I am in Joe Wilson's rudeness."
The absurdity, the hypocrisy, the double speak, in politics is beyond comprehension. I think the current system in effect filters out 95% of those who feel compelled to tell the truth, the whole truth and nothing but the truth. 

The Missing Element from Reform - Choice
"MY guiding principle is, and always has been, that consumers do better when there is choice and competition," President Obama said last week in an address to Congress on health care reform. It's a good principle, one that may determine the ultimate success or failure of reform, but unfortunately it's not really guiding the Senate bill unveiled on Wednesday or any of the other health reform legislation now under consideration in Congress.  Under the nation's current employer-based system, most people have little if any choice about where they get their insurance. They just have to accept the plan that comes with their job. That insurance company, in turn, is provided a captive group of customers, so it has no incentive to earn their loyalty.  Empowering Americans to choose from a broad selection of health plans would turn the tables. Those insurers that charged affordable rates and provided good coverage would attract more customers, while those that treated customers badly would be forced to change their ways or go out of business. To stay competitive, insurers would need to follow the example of places like the Mayo Clinic and offer good, low-cost coverage."

That health care 'insurance' (really more often a pre-paid service plan) comes through our employers is a result of govt interventions in the market place through tax policy. The fact that the current systems is perversely incentivized to drive prices higher while removing choice and consumer power is becoming the justification for additional government intervention. The 'intervention begets future intervention' pattern is so pervasive, we would be wise to assume it will happen with every govt intervention.

The Biggest Health Care Lie
"If you are going to repeatedly refer to "my plan" or "this plan" or "the plan I'm proposing," then unless you have a plan you are lying. The only question is whether it is a little lie or a big one. Obviously, most people think it is only a small lie, or the President would have been called out on it. However, I think that health care policy is an area where there is too much temptation to promise results that are economically impossible to achieve. In that context, my opinion is that giving a speech in favor of a nonexistent plan is a really big lie."

Master Jaques

You don't want to ever be Number 8.

Master Jacques appeared at a martial arts tournament as a demonstrator. If you’ve been around the MA world, especially before MMA arrived on the scene, you know the atmosphere. Blindfolded, holding "nunchuks" (aka two pieces of wood on a string), you can imagine him standing in a circle of his students (selected for courage and/or devotion, but intelligence ... questionable). Eight students, forming an octagon - as Master Jacques prepared himself for the task of deftly but powerfully whacking the apples from their mouths (yes, they're standing there with apples in their teeth).

This would be an impressive feat – striking the apples but leaving the students unscathed – even with open eyes. But with a blind fold? The crowd was riveted.

Master Jacques completed his intense meditation, and swinging his nunchucks in a flash of motion, popped Number 1 squarely on the jaw. Dropped him like he was hit by lightening. Then ... he hit Number 2, Number 3, Number 4, Number 5, Number 6 and Number 7 ... they flopped to the ground like a grenade went off. Something - perhaps the hollow sound of a skull bouncing from the floor - keyed Master Jacques in to the fact that all was not going as planned. Maybe it wasn't the heads hitting the floor, perhaps it was his refined situational awareness or ninja like intuition. Whatever the reason, Master Jacques raised his blindfold to peek at number 8, as if to clarify the correct range and bearing for the final impressive blindfolded strike. Perhaps that is what gave Number 8 the confidence to do what I don't think I could have ... hope I wouldn’t have …. to stand there so that Master Jacques could knock his stupid ass out too. Which Master Jaques did.

So please, my CF brethren and sisteren, should you be in position to do so, remind me NOT to be a figurative Number 8 and will do my best to perform a similar service for you.

This story brought to you courtesy of my beloved instructor, mentor and friend, the man who introduced me to my bride of the last 9+ years, Mr. Alan S. Gardner, of Bath, Maine. He died the night I started my trip home from Iraq in 2006 for R&R. I was in the group phone booth in Kuwait, on the way home after 8 months, crying like a baby. It still feels like I lost him yesterday, probably for all of us who knew him. 800 people converged on Bath, Maine for his funeral, but I was back in the desert by then (that was within two weeks of my discovery of CrossFit. He would have said "the old saying goes that when the student is ready, the teacher will be there"). He could tell this and the other two episodes of Master Jacques’ tournament appearance and keep a crowd of 50 crippled from laughter. The legacy he left was a very small version of CrossFit; people who loved to sweat and learn together, people who worked hard to excel, people who found a teacher with no end of knowledge, people of passion and at least some courage who formed a community around a man we loved.

Forgive the indulgence – but having started the tale of Master Jaques, I found the rest of the story too compelling to leave out and I offer it as an altogether inadequate thank you and tribute to my friend.

Master Jacques part II. After an few more events at the tournament, the announcer returned to announce, with a somewhat ambiguous tone, that Master Jacques was to return for a second demonstration. The crowd quieted - how could even a Master follow up such a knock out first performance? His students brought out a box, a sledge, and some glass bottles, and a another carried boards - clearly, there was to be a board breaking demo. The purpose of the glass was revealed when the audience watched and heard the students breaking the glass bottles, then they poured the contents into a circle drawn on the stadium floor.

Cool! Man stands on glass and punches through wood - that's a gutsy demo, especially for small town Maine. Perhaps Master Jacques has game after all?! Master Jacques takes his position in the center of the glass, his students line up, four of them, one on each side of the Master.
After a dramatic, deep breathing warm up, Master Jacques signaled his request to the students to present his four targets, which they did. However, the student facing him presented the board at an angle (edge of the board towards the Master) that could only mean the Master's intention was to execute a spinning technique. Every karateka in the room immediately winced - spinning kicks on glass? Are you kidding me?

Master Jacques began his demo with a ferocious kiaa/yell, which finished in a sort of a wailing wimper as he quarter spun on one foot and froze in place. He hobbled out of the ring and left bloody foot prints across the floor as he beat a hasty-as-possible retreat. At this point, a few in the audience clapped as Master Jacques devoted acolytes cleaned up the glass ... and blood.
The tournament spun back up, and the buzz about Master Jacques' memorable performances was growing. Later in the tournament when the announcer returned and trumpeted the news that Master Jacques would be presenting another impressive demonstration, the crowd went wild!

Master Jacques returned to the floor to enthusiastic cheers. His students, who trailed behind the Master, brought two chairs and some boards for a breaking demo. The set up was quick and no one could figure out how this would top his previous attempts - anticipation was keen. Master J set up the first board on the chairs. They were folding metal chairs. And they were facing away from each other - a soon to be delicious oversight. After a suitable warm up and kiai/yell, he dropped a wicked and obviously well polished sword hand chop directly on the middle of the timber suspended on the back edge of the seat of the two chairs. The chairs folded up in a spectacular fashion, and the momentum of the event resulted in the chairs arriving on opposite sides of Master J's head in more less simultaneous impacts. Master Jacques succeeded in knocking himself out in perhaps a one and only version of the act. He departed the stage - carried by his dismayed students - to a standing ovation.

I heard this story many times and met one other martial artist at a tournament who confirmed it.

Tuesday, September 22, 2009

Will On the Looming Power of the State

"The automobile industry and much of the financial sector have been broken to the saddle of the state. Ninety percent of new mortgages and 80 percent of student loans -- the average family's two most important financial transactions -- are financed or guaranteed by the federal government. Now the Obama administration is tightening the cinch on subsidized artists, conscripting them into the crusade to further politicize the 17 percent of the economy that is health care."


"It is a profitable thing, if one is wise, to seem foolish."
- Aeschylus
"After two years in Washington, I often long for the realism and sincerity of Hollywood."
- Fred Thompson
"When I am abroad, I always make it a rule never to criticize or attack the government of my own country. I make up for lost time when I come home."
- Sir Winston Churchill

Lomborg on Climate Cost Benefit Calculations

Suppose you can ignore the dishonesty, the fear mongering and the
political manipulation on the topic of anthropogenic climate change.
Suppose you think they really can sort out whether weather changes on
it's own or is also influenced by humanity. Suppose, even knowing how
dicey the 'science' of AGW is, you think the risks are so high we have
to act as if the science proved the conjecture that man's activity is
driving temps higher.
How could you sort out what might be done that is:
-affordable at all
-won't hurt more than it harms
-doesn't simply require all undeveloped nations to remain that way
-doesn't solve the problem by removing those who cause it; which is
theoretically, us
Lomborg's thoughts on the matter are persuasive, and do not reek of the
political manipulation that seems part and parcel of this topic.
"Evidence is growing that relatively cheap policies like climate
engineering and non-carbon energy research could effectively prevent
suffering from global warming, both in the short and long term."
"To sustainably reduce temperature rises, though, we need better
non-carbon-based technology options. Research by economist Chris Green
from McGill University shows that non-fossil sources like nuclear, wind,
solar and geothermal energy will--based on today's availability--get us
less than halfway toward a path of stable carbon emissions by 2050, and
only a tiny fraction of the way towards stabilization by 2100.
Policy makers should abandon carbon-reduction negotiations and make
agreements to seriously invest in research and development. About $100
billion spent annually on non-carbon-based energy research could
essentially stabilize our emissions and get temperature reductions under
control within a century or so. Green conservatively concludes that the
benefits of such an investment--from reduced warming and greater
prosperity--would bring about $11 worth of climate damage prevention for
every $1 invested.
Because research spending would be much cheaper than carbon-emission
cuts, there would be a much higher chance of political agreement, and a
much higher probability of the promises being enacted.
Many of us fear inaction on global warming. But we should equally fear
continuing down the perilous path of promising costly action that will
either fail to be enacted, or be more harmful than global warming
itself. "

Sunday, September 20, 2009

Does Fraud Count as Administrative Cost?

Could your business survive a 10% fraud rate? d_98308.html "We believe that fraud constitutes at least ten percent ($100 billion) of the nearly one trillion in taxpayer dollars that Medicare and Medicaid will spend this year. That is likely a conservative estimate. Harvard's Dr. Malcolm Sparrow, author of the seminal book "License to Steal," estimates that the losses could easily be in the 20 percent or 30 percent range, even as high as 35 percent, but he insists that we ought not to have to guess. He believes the government should measure the losses and report them accurately."

"The story of convicted murderer Guillermo Denis Gonzalez illustrates the vulnerability of government run health programs to fraud. Gonzalez was released from prison in 2004 after serving a twelve year sentence for a murder conviction. Two years later he bought a Medicare-licensed equipment supply company and duly notified Medicare authorities that he was the new owner. In 2007 he submitted $586,953 in false claims to Medicare and got paid for some of them. In 2008 he is alleged to have killed and dismembered a man.

The fact that a convicted murderer with a seventh grade education could so easily become a supplier to our largest health program and begin defrauding it illustrates how pervasive fraud is in America's government-run health care programs. If only the Gonzalez case were an isolated incident. Miami Dade Country is notorious for health care fraud. There are more licensed home health agencies in Miami Dade County than the entire state of California. In 2005, billing submissions from Miami Dade to Medicare for HIV infusion therapy were 22 times higher than the rest of the country combined. New York also has a serious problem with fraud. A private study of New York's Medicaid in 2006 found that one-quarter of that then-$44 billion program cannot be explained."
This is the first of several posts on this blog on the same topic:
Medicare’s top officials said in 2006 that they had reduced the number of fraudulent and improper claims paid by the agency, keeping billions of dollars out of the hands of people trying to game the system. But according to a confidential draft of a federal inspector general’s report, those claims of success, which earned Medicare wide praise from lawmakers, were misleading.
In calculating the agency’s rate of improper payments, Medicare officials told outside auditors to ignore government policies that would have accurately measured fraud, according to the report. For example, auditors were told not to compare invoices from salespeople against doctors’ records, as required by law, to make sure that medical equipment went to actual patients.
As a result, Medicare did not detect that more than one-third of spending for wheelchairs, oxygen supplies and other medical equipment in its 2006 fiscal year was improper, according to the report. Based on data in other Medicare reports, that would be about $2.8 billion in improper spending. That same year, Medicare officials told Congress that they had succeeded in driving down the cost of fraud in medical equipment to $700 million. Some lawmakers and Congressional staff members say the irregularities that the inspector general found were tantamount to corruption and raise broader questions about the credibility of other Medicare figures.

Thursday, September 17, 2009

Michael Pollan Op-Ed

Interesting piece.

Pollan's assumptions:

-Grain is fit for human consumption, and there's an alternative to raising grain that is sustainable without oil based fertilizers

-Health Insurance companies, unlike other insurance companies, will not play fair unless bullied into it by the govt

-Health ins companies and/or the govt has any idea what people should eat to avoid the diseases of civilization that he references

What I agree with - grass fed beef is much healthier for human consumption, creates much less impact to the environment and throws into question all the calculations about whether grain or beef makes better, more sustainable human food. Correllate-all the global warming concerns for beef change considerably if we stop talking about grain fed beef. If you have any time to read, "The Vegetarian Myth" is a fantastic book about food, sustainability, and health - rolls most of what I've learned about nutrition into one book and a very concise one. It's a must read book in my opinion.

The goal should be sustainable, non-grain based food production - annual monocrops (grains) are poor quality food and not sustainable.

Health insurance companies will respond to market incentives to take care of customers just like most businesses do if they are not allowed to circumvent competition through govt intervention. As is well delineated here (, current govt interventions create the excessive cost and compromised quality so easily observable in our US health care systems. I consider myself somewhat well read on the topic - books by Porter, Herzlinger, Kling and Gratzer. More govt control will do nothing to deal with these root causes.

Unfortunately for Pollan, if we continue to eat what the govt and its proxies tell us, we're going to get more sick, not less so. Zone/Paleo/Atkins/Eades protein power and even south beach to some extent - carbs regulate body fat accumulation. If you eat a bunch of high density carbs, you get fat and sick.

My two cents - not that you asked!