Monday, August 31, 2009

High Literacy

According to Withywindle's definition, FLG is not highly literate:
Ability to write a coherent 5 page paper without mistakes of grammar or spelling. Few or none of the students I have taught have been able to do this; only a minority come within hailing distance. If 25% of Americans are now getting BAs, I would estimate that at the most 10% of Americans have this ability. Possibly far fewer.

Morality and Economics

Matt Yglesias argues that cost-benefit analysis isn't really a problem, only that it doesn't include the effects of distribution. He then goes on to explain the issue using an homage to the Socratic Dialogue by Brad DeLong:

Agathon: “That means that the market system, in weighting utilities and adding them up, gives you a much lower utility than it gives Richard Cheney. In fact, if marginal utility of wealth is inversely proportional to the square of lifetime wealth, the market system gives Richard Cheney about 400 times as big a weight as it gives you.”

Glaukon: “That’s sick.”

Agathon: “And it gives Bill Gates a weight about 400,000,000 times as big a weight as it gives you.”

Glaukon: “That’s sicker.”

Agathon: “But it gives you about 40,000 times the weight it gives your average Bengali peasant, who thus has about 1/16,000,000,000,000 the amount of the market system’s concern as Bill Gates has. Will you teach that?”

FLG doesn't really understand where the marginal utility of wealth is inversely proportional to the square of your lifetime wealth comes from, even after reading the original post, and everything subsequent flows from that.

Basically, take a person's lifetime wealth and multiply it times itself, then put that number in the denominator of a fraction, and that's your marginal utility of wealth. So, Bill Gates' really huge wealth multiplied by itself and place in the bottom of a fraction makes the social utility of every extra dollar really small. This makes sense logically, but FLG thinks the numbers above present a misleadingly perception about the accuracy of the measurement of the effects of distribution.

Matt continues:
Now as it happens it’s not 100 percent clear what alternative rule you should use. Which I think is one reason economists remain attracted to the “distribution doesn’t matter” point of view. It’s false to say that distribution doesn’t matter. But if you choose to believe that distribution doesn’t matter, that provides an unequivocal answer to how you ought to build distribution into your analysis. If you decide, accurately, that distribution does matter you’re left with the tough problem of specifying exactly how it matters. Much easier to just pretend it doesn’t matter, and then pretending that the fact that you’re pretending it doesn’t matter doesn’t matter either because it’s a “value-neutral” point-of-view. But it just isn’t.
What's interesting is Prof. Deneen wrote, a while back in a response to my pestering and from the other side of the ideological spectrum, something similar:
Aristotle points to a conception of the good, and thereby "the common good," that necessarily guides and influences all human activity. "Moral" activity cannot be separated to some distinct realm (indeed, if our economic life is not to be guided by morality, what is?). Whether in our political dealings, our economic relations, our family lives, our neighborhoods and communities, a moral conception of the human good ought to serve as a guiding principle. Questions we must ask ourselves in the economic realm cannot be limited to "what is efficient" or "what will result in the most profit," but also "are our actions responsible," "is this an appropriate use of limited resources," "are we living within our means," "are our economic relations and transactions contributing to the good of our community," "does our economy support good families," "are we ensuring for the good lives of our children and future generations?" These are moral questions, yes, but they are also economic questions - the two cannot be divorced.


And I think that's why economist stay away from the question of distribution and try to proceed amorally. It clouds the issue of how to produce the most stuff with the available resources. Whether we want to produce less for whatever reason or redistribute such that production is inhibited or to do or not do something for moral reasons isn't helpful in how to produce the most stuff.

Economics, by proceeding amorally, allows us to say, doing this will produce X stuff. X is the maximum amount possible. What's that? You want to enact this policy for political, social or moral reasons? Okay, that will produce Y, which is less than X. Is that policy worth the loss of X - Y? Some people say yes, some say no. That's where the political process comes in, but economics is about saying what the options are.

Economists certainly put their own personal value stamp on their policy recommendations. So, FLG certainly isn't saying that economics is free of passions, interests, and opinions, but that economics strives to be value free. Does it work? No. Never well as long as human beings are involved, but it's the best we've got.

FLG Needs To Learn More About The Benedictines

Both Berman, in Law and Revolution: The Formation of the Western Legal Tradition, and Noble, in The Religion of Technology: The Divinity of Man and the Spirit of Invention,, argue that the spread of Benedictine monasteries under the Carolingians was a seminal event in the birth of modern law and technology respectively.

FLG admits that he is pretty ignorant of Benedictine beliefs, but he always assumed that monks withdrew from the world because they deemed it too profane. If Berman, Noble, and FLG are all correct, then it is somewhat of a paradox that an order who withdrew from the material world to concentrate on salvation was so influential in the development of the means by which humanity increases its capacity to manipulate the material world, technology, and the means by which we enforce the rules that proscribe what is permitted with that capacity once it has been developed, law. Neither of these is concerned with the hereafter in the least.

The first way that popped into FLG's head to reconcile this apparent paradox was that the monks withdrew themselves from the material world while still holding out hope that it could regain its prelapsarian grace. A hope which the monks worked, perhaps inadvertently, to render manifest.

In any case, if the seeds of modern technology and law trace back to the monasteries, then there's probably still a deep-rooted Benedictine imprint upon them. FLG feels that a failure to recognize and understand this imprint, if it exists, is a massive oversight in his understanding of the world.

There are numerous ways to approach the analysis of the Benedictine order, but FLG always finds it best to take people at face value at the beginning. Therefore, since the monks are motivated by religion, one should analyze their spiritual beliefs first. See what influences they might have and the potential consequences thereof. Then, if that's insufficient, look at the institutional structure, but still keeping the theological basis of the structure in mind. Then, as a last resort, the politics and economics of the monasteries.

Or FLG will just read the Wikipedia page on the Rule of Saint Benedict and call it a day.

An Example Of Our Education Problems

NYTimes:
For years Lorrie McNeill loved teaching “To Kill a Mockingbird,” the Harper Lee classic that many Americans regard as a literary rite of passage.


Great book.

But last fall, for the first time in 15 years, Ms. McNeill, 42, did not assign “Mockingbird” — or any novel. Instead she turned over all the decisions about which books to read to the students in her seventh- and eighth-grade English classes at Jonesboro Middle School in this south Atlanta suburb.


Right. Let the students decide what they should learn. As if reading anything is fine as long as you are reading.

Critics of the approach say that reading as a group generally leads to more meaningful insights, and they question whether teachers can really keep up with a roomful of children reading different books. Even more important, they say, is the loss of a common body of knowledge based on the literary classics — often difficult books that children are unlikely to choose for themselves.


Bingo.

Sunday, August 30, 2009

FLG Knows

...that you were probably thinking to yourself, "Gee, FLG didn't post much this weekend. I wonder if he prepared homemade pasta." And you would be correct. One cup of flour and one egg, kneaded together and run through the pasta machine a gazillion times, along with one sprig of basil from the herb garden and tomato sauce:

Friday, August 28, 2009

Feminists Look Silly

...when they fail to acknowledge obvious biological facts.

Now, FLG understands, and is even sympathetic to, the sensitivity created by a history that perceived women as biologically inferior that in turn led to incorrect assumptions about intelligence, rationality, etc. Moreover, FLG also understands that feminists have, for understandable but nevertheless regrettable reasons, chosen Marxist class struggle rhetoric and ideology upon which to base feminism. This then led to the end goal of feminism being a bastardization of the end goal of Marxism, itself a misunderstanding of Aristotle's leisure. Specifically, Marx wanted to remove all constraints on human action so that all decisions were entirely devoid of the slightest compulsion. Where feminism goes especially wrong is its preoccupation with removing or ignoring biological constraints.

For example, women are, on average, smaller and physically weaker than men. No right-thinking person could deny this obvious fact. Yet, feminists approach these biological obstacles with one of two logical attacks, both of questionable validity. First, they seek to obscure, minimize, or outright ignore biological differences. Second, they offer anecdotal evidence that that disproves the rule. The second is common in sporting. A woman beats a man or a girl beats the boys. Therefore, they argue, women are just as good at sports. Yet, the simple truth is that women will never be as good as men, on average, at sports where superior speed and strength provide an advantage. It's non-negotiable, non-politically correct physics. There simply are non-trivial biological differences between men and women, and the most non-trivial of these revolve around reproduction.

Feministing asks:
Why is there no male birth control on the market yet?


And then answers:

Apparently because scientists think men won't take it. According to an article in Science Progress, outdated ideas of who's responsibility birth control and contraception is, has put the burden on women's shoulders.

Via Broadsheet.

Let's pretend you are a straight couple, in a monogamous long-term relationship, and you don't want a kid. Consider your options: A woman can choose from 11 forms of contraception -- including barrier methods like the diaphragm, permanent sterilization, and that holy grail of the sexual revolution, the pill, and its more recent and even more foolproof sisters in hormonal birth control, the ring and injectibles. A man can choose two: condoms or a vasectomy.

Right, so according to science, if you are woman it is your problem if you get pregnant or end up with an STD, so it just makes sense if you take care of the birth control. Doesn't sound very scientific does it. Furthermore, the financial burden, time constraints and side effects of hormonal birth control on women has another implication on not only time, but unfair burden.



If we for a moment take away legal responsibilities and concepts of fairness or justice, and look specifically and narrowly at the biology of reproduction, then it becomes readily apparent that women have more to lose from unwanted pregnancy than men. Women deal with the nine months of pregnancy, then labor, then give birth to the child. Now, it might not be right or fair that women have more to lose then men from unwanted pregnancy, but that doesn't change the fact of the matter. Even if you add perfectly shared legal, monetary and parental responsibility to the mix, the man cannot share in the pregnancy or birth. Nor, FLG'd like to mention, will the man undergo an abortion either. Therefore, women have a much larger incentive to care about birth control and subsequently are the ones who create an economic demand for birth control products.

FLG finds the repeated insistence by feminists that the biological differences between men and women are trivial and can safely be ignored intellectually lazy, dishonest, or just plain stupid. They often then go on to call the arrangement unfair. Alternatively, to provide a counter-example that shows how silly this is, one could argue that it is unfair that men cannot participate in the experience of pregnancy (although most men probably wouldn't want to do the labor part) or breast-feeding, but unfair or not it just is.

There are real and solvable barriers to the equality of women around the world. The zealotry and desire for ideological purity that leads feminists to insist on breaking down barriers that have irreducibly biological roots brings their judgment into question, and very well may undermine their overall endeavor by making themselves look like fools.

Lastly, FLG hates the word fair, and by extension unfair.

SFS-Qatar Student Responds

...to FLG's older post about how he thinks SFS-Q is a huge mistake.

I am currently a student at SFS-Q, and I would just like to point out the many mistakes you have made in your blog post.

Firstly, I would like to address your statement about SFS-Q students having a different experience. That, of course, is true. QF is not trying to recreate Main Campus in EC, instead, we have developed our own unique community. However, the Hoya spirit is definitely going strong. You also talk about how some SFS- Q alumni will "never have set foot on campus". That is completely false. Most students tend to do their semester abroad at Main Campus/ have visited as a part of the Service Learning trips that take place every semester. Also, students have the chance to take classes with Main Campus students and Professors through video conferencing. Ahh ... the miracle of the technological age...


It will be a completely different experience, as you readily admit. Doing a semester abroad on the main campus is not required, and therefore some will, in fact, never set foot on the Hilltop. Furthermore, doing a semester in DC or teleconferencing is completely insufficient to thoroughly experience Georgetown.

Secondly, I would like to discuss your description as "a glorified finishing school for the royalty of Qatar and the surrounding Gulf states". Why don't we take a look at the statistics for the class of 2013 at SFS-Q. There are 45 students. 12 are Qatari, and only 5 are from the Al-Thani (ruling) family. On Main Campus, approximately 12% of students are International. Also, Georgetown does not seem to mind mentioning that various members of European, Saudi, and Jordanian royalty are alumni.


Are you seriously arguing that because only 11% of the students are from the ruling family that this negates my contention? I'd argue it only supports my position that SFS-Q is a glorified finishing school. It couldn't be solely or mostly ruling family for both aesthetic and practical reasons. Aesthetic because they must maintain the illusion that the school isn't simply a glorified finishing school for which the Emir paid a great deal of money to place the Georgetown name on. Practical because a school that enrolled all or most of its students from a small family in a relatively small state wouldn't be very useful in teaching international relations. Basic point is this: 5 is still a very large number to come from the ruling family out of 45.

Oh and a little side note, I greatly disagree with the statement made in The Hoya. I am Qatari, and I was accepted into some top universities in both the US and the UK. I gained A grades in from an international curriculum (exams being externally marked). My combined SAT I Math and Critical Reading score was 1400, and I took 5 SAT Subject tests, all of which I scored significantly above the US average. In my ACT exam I was in the 90th percentile. All of the Qatari students I know who attend the University (and trust me, we are a minority) have attained similar scores. I would also like to point out that most accepted students come from either the IB, British or their national education system. But I know you "don't particularly care".


Point taken, but The Hoya's point was that students like you are in a minority, as you mention. It's not like SFS-Q is in a location with a huge population of students with adequate preparation to whom it will provide an education. It's an expensive import to serve the ruling family and elite.

Shall we move on? You say SFS-Q students do not receive the same "outside of the classroom" education. That is correct. We at SFS-Q have a greater opportunity. 10 students each semester go on Service Learning trips, and the co- curricular "Zones of Conflict/ Zones of Peace" class. For the latter, two trips are planned, one to Israel/Palestine, and another to China. I would also like to reiterate a point I made earlier. We do have our own diverse Hoya community at SFS. We even have our own clubs, student organisations, and sports teams (some are, in fact, planning to attend overseas competitions). We even had a couple of members of our student body win Best Speaker awards at an International MUN conference held in Germany.


That all sounds great. Perhaps SFS-Q should morph into a Qatar University for International Relations. My concern is about conferring degrees upon students who didn't experience an undergraduate Georgetown education on the Hilltop.

And now we come to your ultimate point. You state that Main Campus has "no intention of offering the MSFS anywhere except in Washington". It may not be within the next year or two, but let me tell you... it will come. Actually, VCU-Q just opened up a Masters in Design Studies, it's only logical that the rest will follow suit. SFS-Q are opening up their third major now, International Economics. One of the Deans even mentioned that it may be possible to work out a situation where the International History major could be made available if enough students wish to do it.


I actually think the MSFS makes more sense. The academic and social community surrounding the school is far less important for graduate students.

It should also be noted that Georgetown has many other campuses around the world including ones in Turkey and Italy.

So, I really do not see how you can claim that it is a "mistake".


Students who study in Turkey and Italy do so for a semester or year abroad, not four years. That is entirely different from creating a degree conferring campus in Qatar.

FLG Would Like To Agree With This

Matt Yglesias:
I think it’s great that the newest Pentagon auxiliary structure will be the DOD’s greenest office building yet but if they really wanted to be environmentally conscious they wouldn’t have located it “a mere 7 miles down I-395 at Mark Center,” they would have put it right next to the Pentagon where currently a gigantic open-air parking lot is occupying some extremely valuable land.


FLG would also like to add that the building ruined a nice little piece of green space that the FLGs used to enjoy. Yes, it's a NIMBY complaint, but it's FLG's fucking blog and he is entitled to make them here.

High-Speed Rail

Paul Krugman and especially Matt Yglesias have been writing about High-Speed Rail over the last few days in response to this WaPo Op-Ed.

Krugman and Yglesias are correct that the portions of this country that are clearly dense enough to support high-speed rail. The Boston-NYC-DC corridor certainly can, and the SD-LA-SF corridor most likely could as well, and perhaps all the way up to Seattle, but I don't know. Those lines make economic sense. The problem with Amtrak is largely political.

Leaving aside from the problems of a government monopoly, because Germany shows that this can be overcome in practice, we have institutional problems with our federal government that make high-speed rail pretty much a non-starter at the federal level. For Amtrak to make sense it needs to focus on high-speed rail on the coasts, and pull out of the cross-country business. The Chicago-SF line will never make sense.

Problem is that the Chicago-SF line means jobs in lots of little places. Loss of that line means a loss of jobs in Ottumwa, IA. Plus, the loss of Amtrak service is an expensive perk for the small group of people who travel between Mt. Pleasant, IA and Creston, IA that their representatives and senators will be loathe to lose.

So, all told, high-speed rail does make economic, social, environmental and practical sense in certain regions, but not nationwide. We should drop Amtrak altogether and let the regions deal with their own high-speed rail. There's no good reason why Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Maryland, Delaware, Pennsylvania, Virginia and DC can't get together to build a high-speed rail network. Ditto for California once its current fiscal issues are sorted out.

The other factor, and one I've mentioned before, is that we need to just buy an off-the-shelf technology, like the TGV from France, and not try to develop our own.

FLG Brought You Today's News A Long Time Ago, Again

There's been an on-going discussion about how politicians are status obsessed assholes.

FLG realizes that most people who arrive at this blog dismiss it as the ravings of a profane, immature dumbass...and they're right. Nonetheless, that profane immature asshole is way the fuck ahead of you. He might even have to give up on pointing out how far ahead of y'all he is because 1) it's becoming tedious and 2) he fears it makes both you and him look bad.

Please, do try and keep up.

Thursday, August 27, 2009

Nice Try

Poulos writes:
Progressives, not conservatives, are the ones most apt to think that the power of social science to help us all comes from its ability to generate valid predictions based on large-n data inputs — data in which each individual is reduced to their minimal statistical significance, and made mutually interchangeable accordingly.


This statement is compelling, prima facie, but FLG's not sure that he agrees with the conclusion. Yes, social science is based on large-n sample sizes. Yes, progressives have more faith in social science to ameliorate the human condition than conservatives. But FLG can't leap to the logic of: Therefore, each individual possesses some infinitesimally small significance for progressives.

Take actuarial tables. We can't predict the lifespan of one particular individual very well, but we can predict the average of a large group of people. This is the entire technical basis for life insurance and used extensively in the predictions of the cost of government programs over the long-term. FLG doesn't see how having faith in the accuracy of actuarial tables is mutually exclusive to believing in human dignity.

Quote of the day II

Lexington:
the Lyndon LaRouche fans had a poster showing Barack Obama's face with a Hitler moustache. "He's changed," went the slogan.

No he hasn't, I thought. You've just drawn a small moustache on his photo.

The Air Force's Central Problem

Matt Yglesias:
A service that consists of guys sitting in cubicles playing video games is going to have trouble holding its head high amidst a warrior ethos. And consequently, the Air Force is tending to resist the technological imperative to go more remote. Ultimately, however, that resistance is doomed and it’s not really clear what will come of it.


Completely agree. Been talkin' 'bout this for months.

The Wrong Guy Might Be At The Head Of Britain's Financial Services Authority

Daily Mail:
[Lord Turner, head of the Financial Services Authority,] said he was prepared to consider a so-called 'Tobin tax' - a levy on stock transactions and currency trades.


The Tobin tax is a terrible idea that even Prof. Tobin somewhat downplayed later.

In a searing attack on the industry, he agreed the City had grown too big and was largely engaged in 'socially useless' activities that brought no widespread benefit.


Much of the problem with the financial sector is that its benefit is, in fact, too widespread to easily see. In economic terms, it facilitates the transition of capital and creative destruction that in turn brings the economic benefits in the long-term faster. It makes the long run arrive faster, if that makes sense. That's hard to measure or see. And as a self-described technocrat, Lord Turner, is in all likelihood also a materialist. Therefore, the inability to measure something means it might as well not exist.

'If you want to stop excessive pay in a swollen financial sector you have to reduce the size of that sector or apply special taxes to its pre-remuneration profit,' he says.


I'd like a further explanation of how he determined pay was excessive and the financial sector swollen. Much of this, I believe, relies on his questionable conclusion that the financial sector is "socially useless."

He cautions against those who say restoring London's position as a world centre for finance is the overriding priority.


This would be the scariest part of the entire thing, if I were a Brit. The benefits of hosting an international financial center as important as London is cannot be overstated. Those evil, overpaid bankers donate money to the arts and universities. Patronize restaurants, stores and hotels.

Now, there is a question of whether the UK's economy is too dependent upon The City, but the solution is not to constrict the size of The City, thereby destroying wealth and economic growth. It is to encourage the growth other sectors.

A Conversation

A coworker, a huge Obama supporter and economic illiterate, walks up to FLG.

Coworker: Hey, FLG. Bob and I were just discussing the Cash for Clunkers program.

FLG: What about it?

Coworker: How it was a unmitigated success.

FLG: Really? What are you coming to me for?

Coworker: Because you seem to question a lot of Obama's economic policies and, well it's petty, but I came to gloat.

FLG: You don't really have much to gloat about.

Coworker: But you can't find anything bad to say about it...can you?

FLG: Well, like almost all liberal economic policies it values the present over the future. It is entirely possible that the government simply bribed people who would buy a car 6-12 months from now to buy one now instead. Since the car industry was in so much trouble, I'm not sure that's entirely a bad thing.

Coworker: See...

FLG: But overall I'm not sure the benefit will outweigh the cost. I mean we're paying people thousands of dollars to buy cars now instead of next year. This has two costs. First, the outlay of government dollars. Second, the car that won't be bought next year. That second one isn't really a cost per se. It's transferred from the future to the present, but the program will certainly depress future demand for cars. All told, I'm not really sure that the $3 billion or whatever it cost to induce people to buy now rather than later will result in enough benefit to justify the program.

Coworker: Sometimes I hate talking to you.

FLG: That's because I shatter your ideological bubble.

Coworker: Something like that.

Quote of the day

Megan McArdle:
I suggest that you reread the reports, and then go read some history of the Gestapo. Afterwards, tell me that you would be indifferent to being a captive of Nazi Germany or the US. Tell me whether you'd rather be a citizen of Iraq or Nazi-era Poland. That we even have to discuss this is ridiculous.

Wednesday, August 26, 2009

Deus Ex Nusquam



FLG was watching True Blood this weekend, and felt as if the Dionysus plot came out of nowhere. Sure, there's been bacchanalia after bacchanalia, but FLG has largely ignored that storyline. Now that it's front and center, he feels confused.

Plus, this is as good an excuse as any to post a Caravaggio.

FLG is currently listening to

This is probably a repeat, but nevertheless it is what I am currently listening to:

FLG is currently listening to



Quote of the day II

Buttonwood:
Perhaps the real puzzle is that, after 20 years in which private equity has dominated the takeover landscape, we still don't have enough evidence to determine whether the industry delivers any economic benefits.

Quote of the day

Mark Thompson:
It is now clear that supposedly free market leadership types really don’t give a damn about free markets or about the ways government intervention already distorts health care. No, it is instead clear that they’ve decided that the American health care system as it exists is already a paragon of free market economics in action and that what is important is continuing to drum up fear amongst seniors.

Sorry For The Confusion. It Was The Lego Giraffe's Tail

...not his dick.

Marxist Leisure Heresy

A few months back, there was debate here at Fear and Loathing in Georgetown and over at Athens & Jerusalem about the end goal of Marxism. FLG's contention was the end goal was a wrongly understood version of Aristotle's Leisure. Withywindle objected, but then added to the analysis.

To recap: Basically, the goal of Marxism is Leisure, which is the removal of all constraints (traditional, social, cultural, economic, political, technological, and perhaps even biological) to maximize the available experiences that can be consumed and, well, experienced. It's a goal that one might call libertine or hedonistic.

But then what to make of Tracy Clark-Flory's call for mandatory condom use in porn?

Matt Zeitlin responds with a fascinating quotation from Slavoj Žižek, whom I wasn't familiar with until now:
Is this not the attitude of the hedonistic Last Man? Everything is permitted, you can enjoy everything, BUT deprived of its substance which makes it dangerous. (This is also Last Man’s revolution — “revolution without revolution.”) Is this not one of the two versions of Lacan’s anti-Dostoyevski motto “If God doesn’t exist, everything is prohibited”? (1) God is dead, we live in a permissive universe, you should strive for pleasures and happiness — but, in order to have a life full of happiness and pleasures, you should avoid dangerous excesses, so everything is prohibited if it is not deprived of its substance; (2) If God is dead, superego enjoins you to enjoy, but every determinate enjoyment is already a betrayal of the unconditional one, so it should be prohibited. The nutritive version of this is to enjoy directly the Thing Itself: why bother with coffee? Inject caffeine directly into your blood! Why bother with sensual perceptions and excitations by external reality? Take drugs which directly affect your brain! – And if there is God, then everything is permitted — to those who claim to act directly on behalf of God, as the instruments of His will; clearly, a direct link to God justifies our violation of any “merely human” constraints and considerations (as in Stalinism, where the reference to the big Other of historical Necessity justifies absolute ruthlessness).

Today’s hedonism combines pleasure with constraint — it is no longer the old notion of the “right measure” between pleasure and constraint, but a kind of pseudo-Hegelian immediate coincidence of the opposites: action and reaction should coincide, the very thing which causes damage should already be the medicine. The ultimate example of it is arguably a chocolate laxative, available in the US, with the paradoxical injunction “Do you have constipation? Eat more of this chocolate!”, i.e., of the very thing which causes constipation. Do we not find here a weird version of Wagner’s famous “Only the spear which caused the wound can heal it” from Parsifal? And is not a negative proof of the hegemony of this stance the fact that true unconstrained consumption (in all its main forms: drugs, free sex, smoking…) is emerging as the main danger? The fight against these dangers is one of the main investments of today’s “biopolitics.” Solutions are here desperately sought which would reproduce the paradox of the chocolate laxative. The main contender is “safe sex” — a term which makes one appreciative of the truth of the old saying “Is having sex with a condom not like taking a shower with a raincoat on?”. The ultimate goal would be here, along the lines of decaf coffee, to invent “opium without opium”: no wonder marijuana is so popular among liberals who want to legalize it — it already IS a kind of “opium without opium.”


And Matt also points out this little tidbit:
I should note that it’s particularly interesting that Clark-Flory who wrote a piece entitled “In Defense of Casual Sex


FLG is gonna have to think about the Žižek quotation.

Tuesday, August 25, 2009

FLG is currently listening to

Wow

FLG has to say that this is pretty fucking shocking. WTF?

French Socialists

FLG just caught the tail end of an interview with Alain Badiou on the BBC. (Parts I, II, and III) And FLG realized that even the smart French Socialists, and M Badiou is smart, are fucking nuts and also suffer from the undying illusion that a return to pure Communism not only possible, but is the solution.

FLG's Faith In The Free Market

In a very real sense, the choice between government versus market solutions is an act of faith. Faith that one is better than the other. Many of the issues involved in public policy are so complicated that even the experts in the field don't understand all the answers. Health care is most certainly one of those.

FLG, as is blatantly obvious to anybody who reads this blogs, prefers free market solutions to government ones. He has faith, but not blind faith, in the free market. Why?, you may ask.

One of the first conclusions taught in an intro economics class is that perfect competition reaches the same end result as a social planner. Perfect competition is a market where there are some large number of small firms, all of whom are selling identical products. A social planner is a theoretical person or organization who tries to maximize the best results for all parties involved.

Neither of these is a particularly realistic construct. Most markets only have a few firms and those firms often don't sell identical products. The government, who fulfills the social planner role, often lacks the amount of information required to maximize the outcomes, not to mention potential ulterior motives and other problems, such as political roadblocks, corruption, outside lobbying influence, personal power, bureaucratic inefficiencies, etc.

So, the question FLG asks himself, is which is more realistic? Is it more likely that the government can overcome its weaknesses and inefficiencies? Or are a few competitor firms enough to keep each other honest? By and large, if there is more than one firm, meaning not a monopoly, the outcome is generally pretty close to the result of perfect competition. As the number of firms increases, it gets closer and closer, which means better and better, but overall as long as the market isn't a monopoly things aren't too bad. Again, this is just a generalization. Some markets may be more problematic than others, but pretty much true.

On the other hand, FLG doesn't see government getting over its problems. It will probably forever lack the ability to gather and process the required information for maximizing outcomes. It will always be susceptible to corruption, special interests, etc. And the social planner role requires efficient, uncorrupted decisions to work correctly.

If this were all, that FLG says 2 firms are more likely to be closer to perfect competition and by extension maximizing outcomes than the government will ever get near the social planner, then it would be questionable. But it's not just that I'm simply asserting these things. We have proof. Communism failed. Its apologists say, well, pure Socialism or Communism hasn't been tried. They might work. But that's the whole point. They won't work because pure Socialism or Communism will never be instituted among men. Won't happen.

Now, this isn't quite fair. FLG is talking about all or nothing. Command economy versus free market as if either exists in its pure form. They don't. All economies are along a spectrum. And each successive political battle, health care reform for example, is about where we will be on that spectrum, either toward command or market. In each case, FLG's default position is free market unless there is some compelling reason why free market doesn't work. And in the health care debate FLG has written at length that he doesn't see why it wouldn't.

A final note: The most insidious problem with the free market versus government involvement debates, as FLG sees it, is that often the supporters of the government program can point to exactly who the program is going to help. It will help these children or that group. They will get this exact amount of help. But any government imposed change, as opposed to free market transactions, helps some people at the cost of others. Those others may pay more in taxes or suffer in some other way. But the costs are often spread out in a way that makes them difficult to detect or describe or measure even if the sum of the cost is much larger than the benefit. So, perhaps we hurt our grandchildren by twice or three times the cost of the program. Or we help this group of farmers with a tariff while hurting all consumers. You get the idea. It belies the impact and obfuscates the truth.

FLG Feels Nauseous

Quote of the day

Robbo:
Doesn’t the very title “Home Office’s Design and Technology Alliance Against Crime” just give you the screaming heebie-jeebies?


Come on, Robbo. Freedom is Slavery; Ignorance is Strength.

You are getting a little too close to thoughtcrime for my taste; and thoughtcrime is death.

CIA Investigations

The creation of a new High-Value Detainee Interrogation Group under FBI supervision confirms FLG's suspicions that, despite rhetoric to the contrary, the Left in this country considers al-Qaeda a bunch of criminals that should be pursued using largely law enforcement techniques. This is a huge mistake. These bastards are criminals, but must be pursued with more vigor than police investigations. Also, while FLG is somewhat sympathetic to the idea that there is a PR war and building up al-Qaeda as more than criminals only reinforces their stance or alternatively that trying them in a court of law would be a far bigger PR coup than killing them, in the end FLG just doesn't buy it. We can and in fact should kill the bastards faster than the bad PR creates them. Losing sides tend to have trouble getting new recruits.

On a related note, the BBC interviewed Michael Scheuer, former head of the Bin Laden desk at the CIA and current Georgetown professor. FLG has never listened to an interview where the interviewer had more self-righteous contempt for the interviewee than this one. Here's the MP3. FLG strongly suggests listening to it.

Lastly, FLG couldn't possibly care less if somebody from the CIA told Khalid Sheikh Mohammed that they'd kill his children if there was another terrorist attack in the US. First, he's not an American citizen. If he were, then FLG'd be concerned. Second, he's a bloodthirsty murderer. Third, the CIA wasn't actually going to kill his children. If they want to bluff him to get info, then fine by FLG.

Monday, August 24, 2009

A Conversation

FLG and his coworker are in Whole Foods.

FLG: Look, Brazilian superfruits. Waddayathink is so special about them?

Coworker: Unlike a peach or kiwi, they're hairless.

On Mandates

Each politician who wins office wins a mandate. Jamelle over at The League of Ordinary Gentleman, which will forever be shortened on this blog to LOG, makes the case that Democrats have one and it includes health care:
Rep. Cassidy may not have noticed this, but Barack Obama was elected president, which means – as far as modern presidents are concerned – that he was elected with either a majority or a plurality of the popular vote. In last year’s case, Barack Obama beat his Republican opponent with a solid 52.9 percent of the vote. What’s more, if Rep. Cassidy were to look at the results of last year’s congressional elections, he would notice that Democrats represent an even more solid 53.04 percent of the population. Far from going “alone,” Democrats are accurately representing the stated preferences of a majority of the population, many of whom voted for Democrats so that there would be health care reform.


It is true that Obama has a mandate. One of every politician's most crucial jobs, and one very relevant to their re-election, is to interpret that mandate. A strong case can be made that the mandate includes health care reform because it was such a large part of the campaign. However, I think that Democrats overestimate the size of the health care mandate because health care was an even bigger part of the Democratic primary process. It was definitely talked about in the general election debates, but less so. So, I'd argue the mandate is definitely there, but Obama needs to tread carefully. The Clintons thought they had a mandate to reform health care and it bit them in the ass in 1994.

I would point out that both sides overestimate the size and scope of their mandates, and presidents in particular push it and their branch of government's power as far as they will go toward their goals. It's pretty much expected, but, as the Clintons found out, it can hurt you. Bush, I think, made the mistake of misreading his mandate with Social Security reform.

Quote of the day II

Mary Beard writing about A level myths:
It is better for the country if more kids take Science and Maths at A levels (according to Schools Minister Iain Wright). No -- not necessarily. Or only if they want to, and that is where their talents lie. In the long term (and even in the short term I suspect) kids well educated in any subject are good for the country's success and economy. Forcing them to science only produces unwilling and bad scientists.


Emphasis mine.

Quote of the day

James Poulos:
the trouble with geeks is that a fair number of them are likely to be so geeked out about the vast possibilities of scientific fantasy that their ability to recognize an uncanny valley when they see one is ruthlessly repressed. The trouble with geeks is that for them, a human love story isn’t cool enough — is simply boring.


Finally, I understand what the fuck Poulos is talking about.

French Socialists Are Funny

FLG finds French Socialists so funny. Case in point from an article in Le Monde about the need to reform socialism:
Ces mutations exigent une troisième refondation de la social-démocratie en même temps qu'elles en indiquent le contenu. Face à la mondialisation des marchés et des entreprises, les partis socialistes doivent agir eux-mêmes comme une force internationale (et d'abord européenne), capable d'élaborer et de conduire une stratégie politique transnationale. Ils doivent inventer un nouvel internationalisme, car aucun des grands défis auxquels l'humanité est confrontée n'a désormais de solution nationale. L'indispensable réponse socialiste à la crise économique, écologique, morale du capitalisme, en particulier, ne peut être mise en oeuvre qu'au niveau européen et mondial.


Translation:
These changes simultaneously indicate the need for a third reformation of social democracy and indicate the content. In the face of globalization of the markets and companies, the socialist parties must act like an international force (and firstly European), able to work out and to lead a transnational government scheme. They must invent a new internationalism, because none of the big challenges with which humanity is confronted from now on has national solution. The essential socialist answer the to economic crisis, ecological crisis, and the crisis of morals in capitalism, in particular, can only be implemented at the European and world level.


This logic makes sense, but socialist have always argued that they need to possess global power and control for their plan to ultimately work. Thank goodness for two things. First, most people want to see some evidence that a plan will work before implementing it. Call it a test run. In this case, the national level. But, and happily for FLG and the world, socialist policies often completely fuck things up in the countries they are tried and have to be reversed. See the Mitterrand Government. The un-nationalization of the Mitterrand era was a huge plate of humble pie for many of the mandarins involved, including the current head of the IMF, Dominique Strauss-Kahn. Second, the idea that socialists need to reform now toward more international focus demonstrates conclusively the large ignorance of history of the Left. Failing to learn from previous mistakes is the fundamental weakness of socialism. Oddly, it is also what makes it so enduring. Each successive generation has to learn that it is fundamentally flawed.

Nevertheless, FLG found the article hilarious.

Movie Reviews

This weekend, the FLGs watched Gran Torino:

Which was good.

And Bottle Shock:


Which wasn't.

French Pop

FLG pretty much hates Europop, including much of the French variety, but thought this was worth posting:



HT: Prettier than Napoleon

Public Option

Matt Zeitlin writes:
What’s interesting about the [public] plan is how it was originally conceived as a piece of honest wonkery by Jacob Hacker, as a way to give Americans the benefits of government sponsored health care and to increase competition with private insurers, especially in places where one or two insurance companies dominated the market.


Matt's an informed, intelligent liberal, which I why I read his blog. However, I still can't get my head around how people think the second justification makes sense.

Food is important. Arguably more important than health care because without food medical care ain't all that important. Yet, nobody's talking about creating public grocery stores to compete with private ones. Instead we have food stamps, which are vouchers for food.

It makes far more send to me to use antitrust laws to break up the dominated markets and then offer vouchers, a la food stamps, to deal with inability to pay. Now, I recognize that there are differences between the market incentives in food production and distribution and medical insurance and care, but I don't see these as precluding a market solution.

As for the first justification above, I think that is at least logical. The public option is a way to give Americans access to government care. And, I'd add, a way to stealth single payer in, which was the entire point as far as I can tell, and as Matt mentions:
Basically, the very same interest groups and constituencies that made single payer a political impossibility weren’t going to be fooled by the public plan, especially when it’s promoters were openly telling liberals that the public plan would eventually lead to something like single payer.
Where I think Matt, and much of the Left, goes wrong here, I think, is that it's not just that the insurance companies, medical device companies, pharma, hospitals are dumping money toward fighting the problem, but there is a real skepticism of government that runs through the center, both geographic and political, of this country. I put this thinking in the same category as Matt Ygelsias' repeated insistence that the public's antagonism toward taxation is the result of Republican propaganda over the last few decades rather than something goes back to the Whiskey Rebellion and the Revolution itself.

I've seen the polls, and when asked if they want a 'public option' or 'more choice' people say, "yes." But once the details emerge the people balk. Now, I'll admit there's a lot of misinformation out there about the health care debate. Crazy shit. And the LaRouche supporters aren't helping any. BUT...liberals might want to consider the possibility that the American public is not at liberal as they are.

Maybe I'm wrong. Maybe the American people want a public option. Shit. Maybe they want a single payer plan. But before the Left attributes the backlash to their policies to evil big pharma and insurance companies they ought to consider that maybe what plays in Manhattan, Boston and SF isn't an accurate measure of the pulse of American political landscape.* It's much easier to blame those you resent for your troubles than to recognize that the people whom you are trying to help might not want it.

++++++++++++++++++++++++++++++++++++++

* I would note, alternatively, that what plays in Texas isn't either.

About 401k

FLG thinks some concern over in this NYTimes editorial about 401k-s is overstated and some on point. The amount of workers who cash-out instead of rolling over their account is troubling. FLG isn't sure that we should make it illegal, but like making opting-in to retirement savings the default selection for new employees perhaps we can make rolling the balance into an IRA the default for employees who are leaving.

Then there's this:
A thornier problem is that even someone who steadily contributes to a 401(k) and makes sensible investments can end up with too little — depending on whether the markets are up or down as retirement nears.


Some variation is necessary, but FLG always thinks these fears are overstated. First, the person who is near retirement should have a more conservative portfolio that is less volatile than the median worker's 401k portfolio. Second, too many of these types of analysis assume that the second a worker hits 65, they immediately switch to retirement mode and buy an annuity. Some workers may choose to work an extra year or two to increase their accounts. These things aren't as rigid as the analysts often make it.

And then we get to this:
The only way to avoid wide variations in outcomes would be to develop a savings plan in which the government shared the risk — say, by providing a guarantee that returns would not fall below a certain level. The issue is complex and deserves further study and debate.


Pardon FLG, but isn't this what Social Security was initially sold as? Government sharing the risk with workers? FLG does not think this issue deserves further study. It's called Social Security Reform and we've studied the shit out of it.

FLG likes his 401k because he can control it. He choose how much to save. What to invest in. When to cash out. He wants the government the fuck out of it. As he said before, we already have Social Security.

FLG does recognize the problem that many people in the United States are financial nincompoops, but again that's why we have Social Security -- so that the idiots, morons, and terribly unlucky won't starve in retirement. Not to guarantee that everybody receives a return sufficient to finance yearly Caribbean cruises for the silver set.

Liberal Bias?

I saw David Gregory interview on the Today Show last week. I think it was Friday. Anyway, he and Matt Lauer were talking about how Meet The Press was going to focus on the health care debate. Matt asked something about whether it was dying on the vine. David said that Obama learned from the Clintons' attempts in the 1990s.

FLG thought to himself, "Really? What did they learn from that?"

David continues, "Obama learned that the Democrats were punished in the midterm elections of 1994 for not getting health care reform through."

FLG yells at the TV, "You fucking moron! The problem was their ambitious, sweeping health care reform agenda, which freaked out the American people. This resulted in it failing and the midterm election problem. Not that it didn't get through."

FLG thought to himself. Is David Gregory really this stupid? And thought, possibly, but probably not. So, he needed another explanation. And it was -- liberal bias. He must really believe that people in 1992 or now will punish Obama and the Dems for not getting their agenda. He must assume that the electorate is strongly pro these reforms, when the poll numbers indicate the opposite. Or at the very least a strong split.

Sunday, August 23, 2009

Thomas Friedman May Be Correct On The Merits

...but this'll never work:
We’re trying to deal with a whole array of integrated problems — climate change, energy, biodiversity loss, poverty alleviation and the need to grow enough food to feed the planet — separately. The poverty fighters resent the climate-change folks; climate folks hold summits without reference to biodiversity; the food advocates resist the biodiversity protectors.

They all need to go on safari together.


These issues are already complicated and complication leads to confusion. Furthermore, expanding the focus of a movement saps its focus and renders it ineffective.

In an ideal world, perhaps these should be tackled together, but most human minds can conceive of how each of these things affect each other. Also, at some point, you have to draw a line because you could say X affects Y which effects Z forever. But yes, the zealots in these movements, do work at cross purposes to one another unnecessarily.

Friday, August 21, 2009

The Right To Health Care

Much of my recent writing on health care has been about the economics of the various means of providing health care. I haven't really focused on the more macro, theoretical.

It is easy to state that it is immoral to deny medical care to a person who needs it. I'm willing to bet it's very difficult to find anybody who would disagree. Shit, FLG agrees. And, with a simple use of logic, it is easy to reach the conclusion that people have a right to medical care, but that's a bit more problematic than that.

For many, especially on the Left, it is that simple -- People have a right to health care and the government has the duty to provide it. In fact, many regard health care as a purely moral issue and it angers them that politics and economics are even playing a role in the debate. Even for those who accept the reality that politics and economics will always play a role in government action, they want to press forward and figure out how to pay of it later. But it really isn't so simple.

For example, how do we define need? This is a crucial definition. Some things are easy. A person severely injured in a car accident needs surgery. No brainer. Alternatively, nobody needs cosmetic surgery. But then what about reconstructive surgery. Often it's not need for survival. So, is it needed? Does a 90 year-old need a hip replacement? Presumably, these are the decisions we would cede to the government bureaucracy.

My point here is that our compassion for other human beings is a noble and good aspect of human nature. When we hear that somebody has cancer we don't want to hear about bills, we want them fixed up to the best that is available. Furthermore, our compassion informs our morality. But morality, good feelings, and compassion don't translate into policy as cleanly as we want, and it's not a function of politics being ugly or economics being heartless. It's a function of our material world is not ideal and doesn't always conform to our desires.

So, to return back to the statement above that it is immoral to deny medical care to somebody who needs it. The definition of need is important. We cannot afford to give everybody every medical procedure they want. This isn't heartless economics or accounting, but the irreducible dilemma that we have infinite wants and finite resources.

Somebody has to decide what are medical needs and what are medical wants. If that's decided in large part by the government, which is what Obama is trying to do when he is talking about cost cutting and ineffective care, then that's going to increase the power of government. Increasing government power isn't in and of itself necessarily a bad thing, but FLG distrusts it.

What's most interesting to FLG about the current health care debate is that Obama pretty much conceded his strongest point in support of his plan from the get go. While the argument that it is immoral to deny medical care to somebody who needs it is problematic because it all hinges on the definition of need, it remains a compelling moral statement. If Obama had pressed forward with a moral justification, then it would've been harder to argue against.

Ah, but he had to include cost control. At that point it is no longer a seemingly simple moral case. It's no longer about health care being a right. It's about what the word need actually means. It's about the limits of the right to health care. It's about budgets and policy, not morality.

Some say, and I'm apt to agree, that the current system is problematic in its incarnation. We acknowledge the immorality of denying care, but alternatively don't recognize the right to it either. Therefore, we don't provide care until the last minute, when the patient is in the emergency room. And some argue that this care is more expensive than preventive care and consequently a more rational approach would be to recognize the right to medical care in the first place rather than simply acknowledging the immorality of denying care. But, surprising even to FLG, increasing preventative care requires increasing coverage, which rather than saving money will cost more.

I'm feel like I'm going round in circles, but even if we all agree with the statement that it is immoral to deny needed medical care, that still doesn't help us decide exactly what needed care is. One could say, well, let's let the doctors decide, but then there aren't any controls on cost and we can't pay for everything everybody wants. Finite resources versus infinite wants thing again. So, in the end, somebody must decide what is a want and what is a need. Some would prefer to leave that to the government because they believe the distribution would be more equal and therefore more moral. Some, like FLG, would prefer to have a variety of private plans that offer varying levels of coverage at various levels of cost. You know, market forces determine what will be delivered while acknowledging that health care has positive externalities and therefore the market will provide care below what is socially optimal.

And again I am back to where I always am with positive rights -- too often they seem like very simple issues, but upon closer examination they are very complicated. It's easy to say that everybody has a right to a great and equal education, but great and equal are in conflict. It's easy to say that people have a right to health care that they need, but somebody will have the power to define what "need" means. And that's a lot of power. Also, positive rights, like all provision of goods and services, run into the fundamental dilemma that we have finite resources and infinite wants.

All this is not to say that we cannot reach some sort of generally acceptable understanding of what is needed care and what isn't that can then be used as the guiding principle for health reform. But I will say this -- if your argument for more coverage is simply that human beings have a moral right to health care, then you may be correct, but you are dangerously oversimplifying the issue involved.

One Last Time Because Alan Just Isn't Fucking Getting This

He wrote a long response in the comments that is so off-base to what I am saying it just doesn't fucking make any sense at all to me. He seems to be assuming government involvement as a function of these definitions, but still doesn't make sense. Alan, please read this carefully.

Again, from an economic perspective, public goods are non-excludable by their nature, not by political or legal decisions. I will address politics and legality later, so please stay with me.

The examples I have used are national defense and flood protection, and you offer counter-examples to try and disprove them that have nothing to do with it.

"we can, say, provide flood protection for some areas along the Mississippi River and not others"

This is not the issue. If we limit it to my discussion of a single valley, then you have a better idea of the factors at play. Farmers in the same valley all have an incentive to build a dam. However, they all know that the others have the same incentive to build the same dam. So, they wait for somebody else to build it, i.e. free ride. The next valley is irrelevant to them. Their farms aren't in the next valley. The farmers in the next valley have the same factors amongst themselves.

It's similar for the Mississippi. The City of St. Louis probably has the same factors in flood protection, assuming a geographic similarity throughout the city, but whether New Orleans builds it is isn't really relevant to citizens of St. Louis. And people in New York could care less about the whole thing.

I realize that New Yorkers might have to pay to help clean up after floods through tax dollars, so they should or could care. Or that they should care for moral reasons, but again let's leave those aside for now. Strictly speaking, absent government involvement, New Yorkers don't give a shit and St. Louis cares about it's own flood protection, but not New Orleans'. This is the fundamental nature of the problem absent moral or political considerations or national flood policy.

"we can leave parts of our coast unguarded"

This is, quite frankly, a stupid rebuttal. Modern national defense is not about the equal geographic distribution of military forces. We learned that from the Maginot Line. We leave our border with Canada largely unguarded not because we won't defend it, but because we don't have to. But this is getting off the point.

The point here is that when the US Navy buys another aircraft carrier or the Air Force another jet or the Army trains another soldier every citizen benefits, and furthermore each benefits more or less equally from that protection. But most importantly, we can't exclude people from benefiting.

Health care and education, which many people call public goods, are not public goods in the economic sense. You can not educate a specific child or not treat a specific person. Granted, society benefits when people are educated and healthy. Therefore, it is a private good with positive externalities.

Alan contended that health care ought not be excludable, presumably for moral reasons, and therefore it should be considered a public good. This is a common mistake.

Even if we decide through the political process that health care is a right and that nobody should be denied, that doesn't change the fundamental nature of health care as a private good with positive externalities.

First, the person who gets a triple bipass benefits far more than anybody else. Yes, we all benefit from that person returning to work and being part of society rather than dying, but nobody can deny that the recipient benefits far more.

Second, paying for that one triple bipass doesn't give us all a triple bipass.

Same thing applies to vaccinations, an example Alan mentioned, if the vaccination is safe and effective, then the person receiving it benefits the most because they are immune to the disease. We as society benefit because they won't pass it along, but that is a positive externality, not a public good.

This is in stark contrast to the purchase of an aircraft carrier or dam for a valley prone to flooding. The benefits go to everybody more or less equally and it is physically, not just morally or legally, impossible to exclude anybody.

So, let's say that we make it morally or legally impossible to exclude people from health care, as Alan argues, then does health care become public good in the economic sense? No. If it did, then there would be zero concern about rationing.

Even if we say that health care is a right, both politically and legally, it is still possible that the government refuses to pay for a pacemaker for somebody in their 100s or 90s because of the cost. It is still possible to exclude people because politics and laws can change and nobody, even the Democrats, is arguing that we are going to offer all the health care everybody wants to consume regardless of cost. Some procedures will be excluded.

Now, there's a whole thing about how the populace can protect their right to health care through lobbying and activism or whatever, but a political or legal guarantee does not change the fundamental nature of health care as a good or service.

One does not just buy "health care" and it magically applies to the whole relevant populace equally. Specific procedures are provided to specific individuals, and it is entirely possible that those procedures be denied to specific individuals for certain reasons. This is impossible with a public good. Again, I'm talking about the economic definition.

"although my reading last night noted that air is not a good example as it is not sold--fireworks displays were offered)"

Clean air is what I should have written. Or fighting global warming would be another one. If I want to fight global warming or clean up the air, and pay for it I cannot exclude you from the benefits.

It is common that people refer to private goods with positive externalities, again like health care and education, as public goods. But this is not the case in an economic sense. It is possible to exclude people from the good. No amount of political or legal protections change the fundamental nature of the underlying good.

Just because something isn't a public good in the economic sense does not mean it isn't good for the public.

Thursday, August 20, 2009

DC Government

FLG was just listening to the radio and a spokeswoman for the DC government was asked why the district only has 35 recycling cans when it has something like 3,500 garbage cans. The answer was that the existing cans were underutilized until they realized that they should co-locate them with regular litter cans.

FLG eagerly awaits the day that the DC government announces its brilliant findings that water is wet, the sky is blue, and shit stinks.

Since everybody knows the DC government is filled with morons and crackheads, the reporter followed up by asking why the DC government didn't ask other cities what their best practices for recycling cans were? Apparently, the geniuses in the DC government couldn't get their fingers out of their noses long enough to think of that.

And these yahoos want to become a state?

Excoriation of the day

Gerald Warner:
So, President Pantywaist is in full retreat; but he is desperate for some face-saving measure to pretend he has achieved revolutionary reform...There will be many more U-turns as reality overtakes Obama. His economic recovery plan, which cost nearly $1 trillion dollars and masked 9,000 pork barrels, has removed his halo for even quite gullible voters. This will be a one-term presidency.


Warner does go to far when he writes:
Obama has no notion of cautious, consensual reform: he wants a Union of Soviet States of America and he wants it now.


But the piece did make me laugh.

One Thing FLG Has Meant To Do

Is to see a film at the AFI Theatre in Silver Spring. They've always got so cool shit going on over there.

For instance:
A Truffaut Series
A Spielberg Retrospective
80's Movies
Escape from New York, Robocop and Who Framed Roger Rabbit are also playing this month.

Bacon Cupcakes

Mrs. FLG sent this recipe along.

UPDATE: FLG fixed the link and ate one of the cupcakes. Verdict? Good, but I wouldn't eat one everyday.

A Bit On Public Goods

I mentioned in one of my previous posts about how public goods are usually provided by the government because of the free-rider problem. Specifically, I mentioned national defense as an example.

Alan mentioned in the comments:
Don't let private industry's wailing fool you. They are prepared to compete with government in all arenas, including space and national defense, as our experience in Iraq and Afghanistan proves.


And he's correct that Blackwater, a private company, did provide lots of troops in Iraq and Afghanistan. But that's not really what I meant.

A public good is something where the benefits of purchase cannot be controlled. National defense is a common example, but there's a more illustrative example -- flood control.

Imagine a bunch of farmers live in a valley that floods. It would be in all of their interest to build a dam to protect the valley. They all know that it's in everybody else's interest, so each of them has an incentive to wait for the others to pay for it, i.e. free ride. In these situations it often makes sense to use to coercive power of taxation to build the dam. Whether government or private employees actually pour the concrete is not really part of the fundamental economic problem.

The same thing goes for national defense. We all benefit when our nation is secure. You can't not protect certain people who don't want to pay. And again, whether the people are government employees or private isn't really part of the underlying economic dilemma.

Now, in the case of national defense specifically, there are non-economic reasons for wanting government employees instead of mercenaries -- loyalty chief among them. Also, soldiers are cheaper because their patriotism serves as a motivating factor in place of some of the monetary reward. Nevertheless, mercenaries are an effective means of protection. I mean they've been around for millennia.

Just to clarify that the issue with public goods is not that the government has to provide the service or good in the end, but that the coercive power of taxation may be required to accomplish the goal. However, health care is not a public good in an economic sense. It is a private good with positive externalities.

Great Moments In Film: The Cantina Gun Fight In Desperado

FLG knows this is a controversial call, but it grows on you the more you watch it. In fact, FLG always laughs when he says, "Yes, it's me," but FLG's not quite sure why.

FLG is currently listening to

Current Reading Update

Adding:
The Religion of Technology: The Divinity of Man and the Spirit of Invention

Update On The Person At Whom Barney Frank Yelled

She was a LaRouche supporter.

Wednesday, August 19, 2009

More On Public Option

I tried to post in the comments, but it was too long, so here goes:
Alan, you are mixing up words and confusing issues.

"A system that leaves millions unprotected is not efficient; it is a failure."

The delivery of care is an efficiency issue. The millions of uninsured is an availability issue, not efficiency. They are different.

"What real public good is answered by limiting competition and thereby leaving people uninsured? If the private firms in our private-public system will not fill the gap, and if filling the gap is a public good (it is), why should the public not expand its share to secure that good?"

Because again, if the public option undermines competition with subsidies, which will be inevitable. Then it will lower medical outcomes in the future.

Basically, what I am saying is this:

If your goal is to cover as many people as possible with some acceptable level of care, acceptable to be determined through the political process, then a government run program fulfils that role as fast as possible. In fact, a single payer, government run health care system would make it happen for everybody right now.

The problem is the long-term. Government run health care will inhibit innovation, lead to rationing, and introduce a whole host of inefficiencies into the system. Medical fraud is one thing I think will definitely increase. That's not even to mention how to find revenue for it.

"If that results in a system better described as a public-private system, it will be because the private firms have declined to mine that gap for profits. We should not forgo a public good because private firms think it is unprofitable or inefficient."

It's not a matter of private firms believing it is. It's not a matter of ME believing it is. It is a matter of simple fact that government is almost always more inefficient than private companies competing with each other.

We have government provide certain things because only the government can, national defence for example. It is a public good. And I use public good in the economic meaning, which is that the benefits of national defence go to everybody even if people choose not to pay for it. So, you have to tax. Now, health care is not a public good. It is a private good because an individual, not the whole society gets the treatment or care. I agree with you that health care has positive externalities, meaning that I and society benefit from you being healthy. But health care is not a public good, in economic terms, like national defence.

"Imagine if we ran our transportation system this way. It would be as broken as our health care."

Transportation is actually a different economic problem. Transportation, like the electricity grid and other utilities, has a network layout. Meaning there is a high cost to establish the network initially, but then almost zero marginal cost, ie to add another person to the electric grid or to allow one more rider. This leads to government run or regulated company monopoly as a good choice to fulfil the need. So, from an economic perspective, they are vastly different animals and I don't like the comparison.

"Last night I contemplated the furthering of the Republican position. Since, the Democratic plans are often compared to simply expanding Medicare coverage to more people, and this is found to be objectionable, is the answer to our unaffordable medical system to raise the eligibility age for Medicare to 70? Or, are we arguing that the current extent of public insurance is perfect (to include the recent S-CHIP expansion) and that any further expansion is "socialism"?"

There are two questions here.

First, is the uninsured entirely a question of affordability? As a young person I intentionally went without coverage for a little under a year before I bought catastrophic coverage only. It was risky, but not entirely irrational. The odds that I would need care were limited mostly to an accident of some sort, since most 20-somethings don't really need that much care for disease. So, young people may in fact opt out intentionally, and it may be rational. If we force them to buy more than catastrophic coverage it probably will make them worse off than they should be.

Second, raising the Medicare age isn't something that I would be entirely against, but I'm sure it would be tremendously unpopular. The justification for Medicare, in my mind, is that at some point the odds a policy holder needing medical care go up and the years free of medical care to pay back in go so low that the market does in fact fail. Since we are healthier as a society, the point at which Medicare becomes economically necessary may have increased to 70. But that's not a huge thing for me. The government might save money in accounting, but we as a nation wouldn't be that much better off from the shift.

This is the thing, Alan. Maybe you're right. Maybe we need to expand government medical care to cover more people. I honestly don't know enough about the issue to say definitely that we absolutely do not. BUT, what proponents of expanding government provided insurance are largely blind to is the long-term effects. They want to expand existing medical coverage and care to as many people as they can right now, but don't realize that might hurt us in the long-run.

It's not just the government budget. That's just accounting. Complicated accounting with big numbers, but accounting nonetheless.

Government run operations are more inefficient, which is why most economists want to see some compelling reason why the private market cannot perform the function. In some cases, national defense again, the incentives produce a free-rider problem. In some cases, such as network effects of transportation, a monopoly may be more efficient than multiple providers.

Health care doesn't seem to be that way in most cases. Sure, there are problems. There are some misaligned incentives. The positive externalities indicate that the private market may produce less health care than social optimal. When people reach a certain age, the private market may stop making sense. I'll grant that there are a whole host of issues. But a public run plan isn't the correct way to solve most of them. We need new regulation and maybe some incentives or subsidies here or there, but a government run plan is a mess that we shouldn't get into. It will lead to single payer, which again, as I keep repeating, is the best way to cover everybody right now, but hurts the long-run outcomes.

How does it hurt long-run outcomes?

The negotiating power on buying medicines etc are considered benefits of a single payer by its proponents, but this leverage to lower costs in the short-run discourages innovation because it signals innovators will make less money. Furthermore, a single payer plan that offers everybody the same level of care needs to put limits on what type of procedures they cover. This discourages the development of new procedures. Right now, we have a private insurance market where lots, but obviously not all, people can get the newest care pretty much regardless of the cost. This creates incentives to create new procedures, and then perfect them even if they are costly with mediocre benefit at first.

The big issue is that the US market is the incentive for medical innovation. We pay more than everybody else because we bear the R&D costs while the other developed nations free-ride on the innovation we paid for. If reform leads to more government controlled care, which leads to cost controls that stifle innovation, then future generations will be worse off than they otherwise would be.

So, to proponents of single payer, or expanding government coverage generally far short of single payer, I say it's not just about how to find funds to pay for your program, which may be tricky in and of itself, but also to what that would do to inefficiency in the market and possible discouragement of medical innovation.

Is That Really Their Position?

FLG was perusing this paper from Chatham House when he came across this:
[The Russians] claim there is no threat from Iranian nuclear development. In the words of Sergei Ryabkov, Russia’s Deputy Foreign Minister, ‘we, as before, think that at present there are no indications that this [Iran’s] programme is directed towards military goals’.


Really? I mean, really? Sure, besides the rather tiny point that Iran has plenty of oil and therefore doesn't need nuclear power, what indications are there?

Correspondence

A friend just emailed FLG with a passing mention that the video for Kanye West's Flashing Lights is his favorite of all time. FLG'd never seen it until just now. While he considers his friend's position overzealous, the video has obvious appeal.

Take A Seat. FLG Agrees With Barney Frank

FLG agrees with everything Barney Frank said here:


However, he disagrees with this assessment by Matt Yglesias:
Voters don’t have a great deal of knowledge about the issues, or a great deal of interest in acquiring knowledge about the issues. But they are human beings, equipped with our species’ excellent ability to read the emotional states of other human beings. If they see a politician acting defensive about his “side” in an argument, they conclude that this critics are probably on to something. If they see a politicians acting outraged and hitting back fearlessly, they’re likely to conclude that he has nothing to apologize for.


Most voters don't have day jobs blogging about public policy. So, they' always have less knowledge than Matt. Furthermore, FLG agrees that voters rely on emotional, intellectual, and ideological shortcuts. Put simply they don't have the time or skill to analyze every single policy that comes into public debate. So, in some sense, FLG agrees with Matt. What FLG disagrees with is the tone of condescension toward the unwashed masses. FLG has faith in the American people to analyze policy using their intellect even with these shortcuts.

Now, perhaps FLG has a vested interest in trusting these shortcuts. As FLG has said before, the nuance and sophistication that Liberals so often pride themselves on regard policy is largely based upon large amounts of detailed complexity. Complexity is the enemy when it comes to voter support. A thousand page bill, once it's under attack, will remain under attack simply because it's too complicated and long. Complexity is inversely related to trust. Nobody likes legalese or slick, fast-talking lawyers. That's what a 1,000 page bill is to the public. So, the complexity of liberal policy lends itself to public distrust.

If you look at successful liberal policy, or at least what most people consider successful, it's pretty simple. Social security was sold as retirement security. You pay in now to get money when you retire. Simple. Easy to understand. Whether it works exactly that way in reality is another question entirely, but I digress.

This health care reform with its medical exchanges and cost boards and government regulation of private insurers and mandates and public options and whatever other technocratic things congress, lobbyists and wonks have thought up is just too complex. That complexity is what is distrusted.

Furthermore, the complexity allows everybody to project whatever they want onto it. We have half a dozen different bills with thousands of pages. If I say it's socialist and won't work because of fifty clauses in this bill, nobody fucking knows if that's true. Nobody in the public can read the fucking thing. Shit. Congresspeople can't and won't read the fucking thing.

It's not so much that the people don't have an interest understanding policy. It's that liberals' technocratic tendency obfuscates the policy and allows the right to attack it.

Plus, as Radley Balko points out, the legislative language prevents anybody from knowing what the fuck is going on anyway:
"SEC. 1233. ADVANCE CARE PLANNING CONSULTATION. (a) Medicare. — (1) IN GENERAL. — Section 1861 of the Social Security Act (42 U.S.C. 1395x) is amended — (A) in subsection (s)(2) — (i) by striking 'and' at the end of subparagraph (DD); (ii) by adding 'and' at the end of subparagraph (EE); and (iii) adding at the end the following new subparagraph: '(FF) advance care planning consultation (as defined in subsection (hhh)(1) … "


This is true of all bills, but especially problematic with something this complex.

Interesting

I found this article interesting, and maybe I'll translate it if I have time.

Comments On The Public Option

In response to my post about the public option, alan_howe said...
Does the public school system keep private schools honest?



FLG said...
No.



Withywindle said...
In the broadest sense, I'd be tempted say yes. It's not impossible, after all, for a private school to be even worse than the public schools; I rather think the private schools do have to provide something better than public school quality to attract consumers. But the true wretchedness of the public schools - and different but in some ways worse problems in much of Europe - don't make public education an alluring model for public health care.


First, public schools do not truly compete with the top private schools in a city or the nationally known boarding schools. Public schools have little influence on Choate, Horace Mann, St. Alban's, Sidwell Friends, Exeter, Andover, Dalton, etc. Different categories.

You might be able to make the case that Catholic parochial schools compete with public schools. The tuition is often relatively affordable, but I still question whether public schools specifically keep them honest. I'll get to that part.

Second, I object to Withywindle's contention that private schools can be worse than public schools. If so, then why would anybody pay for a worse education? No private school will stay in business for very long charging for a worse education than the public schools.

I can see how Alan might argue that this is precisely his point. That private schools have to offer a superior product, and therefore public schools keep them honest. But that's not really the issue.

Let's say I grant Alan's point and say that public schools keep private schools honest. It's not relevant. Public school education and private school education will always be substitutes in some sense. But it is not the public schools keep the honest, but that competition keeps them honest. If public schools disappeared overnight and replaced with all private schools, private schools would still have to offer a compelling product to compete with the others.

To the extent that public schools have a monopoly of the education in their district, they inhibit the increase in quality of education. Few people can afford to pay the taxes associated with supporting a public school system, that provides on average provides an inadequate education, and tuition for private school as well. Thus the market for education is distorted, but again in the absence of public schools the market would not only be kept honest by competition but would be kept more honest because competition would be increased.

Now, there are a lot of problems with competition within the health care marketplace. I'll be the first to grant that. But adding a public option doesn't make much sense from a competition stand point.

I understand the logic. Health care insurance company profits pull money out of the system. That money would be better used toward social, health and equality goals. The best way to wring that money toward those goal is to introduce a non-profit competitor in the health insurance market, then health insurance companies would have to reduce their profit margins to compete. It's compelling, but ultimately wrong.

Profits are a motivation for efficiency. A government run plan will never be as efficient as a private plan in determining prices, controlling waste, and other activities. (Note: I realize people like to point out the lower administrative costs of medicare as evidence that it is more efficient and that therefore a government plan could be more efficient than private insurance. This is a misleading statistic. Medicare fraud is higher than private fraud, so the decreased administrative costs are more than outweighed by the fraud costs that the lower administration is not catching.)

The issue with the public plan is the huge opportunity for government to subsidize that plan with taxpayer dollars to undercut the private insurers. Now, in this may sound like a good idea to some. If the government can offer cheap health care, then all the better. But eventually it will run out all of the private plans and we are left with a monopoly. Also, I realize that the proposals don't really talk about subsidizing the public plan, but I'm certain that would change in the very near future. It really is a road to single payer. Not, as the critics charge, a means of keeping private insurers "honest."

Again, keeping companies honest is about competition, not specifically competition from government run plans. Supermarkets are kept honest by other supermarkets. Car companies by other car companies. Schools by other schools, whether they are government run or not. There is no reason for a public option to keep other companies honest. It's a stupid reason that makes no sense for an economic perspective.

Economists, and I'd say most Americans, agree that the best solution in most cases for providing goods and services is the private market. It's the most efficient and effective solution. The problem arises when the market fails from some reason. People on the Left generally see market failure more often than people on the Right.

More specifically, in the health care debate the quality of care is not really the issue. Americans with good health insurance have access to the best care in the world.

The issue is availability and equality. Most people believe that everybody should have access to life-saving health care if they need it. This is a moral and social problem, not an economic problem.

Many on the Left believe that the availability problem is really an affordability problem. People want to buy health insurance, but can't afford it. How do we get everybody access to care we want them to have at a cost we can afford as a society and individually? So, we are back to an economic question and face the fundamental economic dilemma of infinite wants and finite resources. We all want to be infinitely healthy at both the national and familial and individual levels, but we don't have infinite resources to realize those dreams.

The Democrats want to increase the finite resources available to each person for health care through redistribution. However, since we all have infinite wants their plan will face ever increasing pressure to increase the amount of resources redistributed. This pressure will be especially acute if a large number of people have access generous private insurance packages. Thus, the focus on taxing so-called "gold-plated" plans.

The Democrats are trying to increase access. They therefore will increase costs. Therefore, they want to find more funds through taxes and reallocation. However, it will be impossible both politically and fiscally to offer the highest levels of existing care and coverage to everybody. Thus, they are trying to cap the infinite wants through taxation, persuasion, and fiat. Taxation on generous plans necessarily threatens those plans' existence. Persuasion via the end-of-life consultation to forgo costly treatments later in life. Fiat through the Comparative Effectiveness Research advisory council who will determine whether government authorized plans to fulfill the mandate of universal insurance can offer certain treatments. These changes will make some people worse off in terms of health care coverage and everybody worse off as medical care is limited and innovation inhibited, even if some people are better off in the short to medium run.

But let's leave that aside. The question at hand really is whether the increased competition from a public plan to keep private insurers "honest" will increase availability. The outlook, as far as I can tell, is doubtful. Competition itself, not competition from government specifically, keeps companies honest. Unless, of course, the government subsidizes the public plan to increase availability. And in that case we don't have true competition, but a politically skewed market.

It makes far more sense to take a look at how the market in different states operate and see where competition can be increased among private insurers. The recently floated idea of cooperatives that the government sets up and leaves alone without additional funding is probably acceptable to me, but I still don't think they'll be effective. They're more a visceral reaction by the Left against profits. And especially profits made by companies from people who are sick.

Again, do things to increase competition among private insurers. Creating a public option will inevitably cause trouble and won't increase competition in any meaningful way without subsidies.
 
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