The John Stuart Mill approach to Health Care Reform

October 21, 2009

(Guest Post by Matthew Ladner)

JSM once noted that if government would simply require an education, that it might save itself the trouble of providing one. He could have added trying to provide one at enormous cost, but let’s not quibble over details.

This was the approach to the Romney reform in MA, but that reform ignores the fundamental problem with our system: third party payers create a powerful incentive to ignore costs. The Romney plan did not address this central problem.

If you don’t believe it, give me an unlimited line of credit with your money at a Vegas casino and watch me transform into a gambling fiend.

The New York Times published an important piece suggesting a brilliant compromise: the government should mandate insurance, but only catastrophic insurance.

This would introduce supply and demand back into most of the health care market, which is precisely what is needed in order to curtail costs and thus prevent the continuing loss of coverage (which is a symptom, not the disease).

Government policy (both in the tax code and from Medicare and Medicaid) is directly responsible for the out of control costs we have experienced. Having quasi-socialized the health care system but without gaining monopoly power to dictate terms to health professionals, politicians have created a culture of “anything goes” in health care.

Paul Tsongas said it best “America is the only country that pretends that death is optional.”

The government, in essence, has created a health care culture which rejects the very essence of a government run plan, which is bureaucratically rationed care. Notice the scrambling to pretend that there are “no death panels” in the plan kicking around Congress. This is of course meaningless, as if there are no death panels there soon will be under a new name: Eurocare is all about having bureaucrats make cost/benefit decisions about health care. They withold treatment to 78 year old men with prostrate cancer so they can spend their limited resources on prenatal care.

Forget about arguing the ethics of Canadacare: after decades of anything goes Americans won’t go for it. If the Democrats pass it anyway, they are likely to rue the day. Put in death panels = driving off a cliff. Expanding coverage without rationing and death panels = faster fiscal suicide.

We’re caught in a trap…can’t walk out!

It seems to me then that some sort of catastrophic mandate/increased out of pocket expenses/health savings account approach outlined in the Times article far more profoundly sensible than the fiscal/political suicide pact currently under discussion.

Munchausen by proxy syndrome in health care might have been great fun for the politicians while it lasted, but with a $1.4 trillion dollar deficit this year, we can no longer afford it.

4 Comments | politics | Tagged: , , , | Permalink
Posted by matthewladner

Pass the Popcorn: Anvil and Zombieland

October 16, 2009

finalbigfi7

 

(Guest Post by Matthew Ladner)

I’ve been knocked down by the flu this week, but last week I spent time in Austin Texas visiting my sister and attending some sort of odd male fertility ritual called a “bachelor party” or something like that. I think I may have attended a few more of those when I was younger, but I’m not entirely sure.

Anywhoo, a trip to Austin always means a trip to the Alamo Drafthouse for yours truly to see a flick. The Alamo is an Austin institution that serves a full menu of food and a full bar and goes out of their way to show off beat movies with fun themes.  Hong Kong action movies, spaghetti westerns, blaxploitation, vampire women in prison movies, whatever. Just before I moved to Phoenix they sponsored an all day canoe trip with free beer and free pig sandwiches, and an outdoor screening of Deliverance on the shore. For The Big Lebowski, they served White Russians, stopped the movie midway to have a mock joint-rolling contest, and took everyone bowling after the movie.

You get the idea.

The movies I saw last week- Anvil: The Story of Anvil and Zombieland.

Anvil is a fun little movie, basically Spinaltap meets midlife crisis. The movie is filled with Spinaltap references, even going so far as to have one of the main characters named “Rob Reiner.”

Basically, Anvil were the “demigods of Canadian speed metal” back in the 1980s. Sadly, such a status did little more than to earn them the admiration of some of the metal groups that made piles of money back in the day. Now working class joes, the movie chronicles their attempt at a comeback, which will RAWK!!! if, you know, they can get anyone to remember who they are and get the bar owner to actually pay them for playing.

Good stuff.

Very rarely however do you find a movie as well suited to the Alamo as Zombieland.

I laughed

I cried

It became a part of me.

Leave a Comment » | Pass the Popcorn | Tagged: , , | Permalink
Posted by matthewladner

The Unions Have Lost Nick Kristoff

October 15, 2009

(Guest Post by Matthew Ladner)

Read it and weep K-12 reactionaries.

P.S.

Somewhere, John Rawls is smiling.

3 Comments | charter schools, politics, teacher union | Tagged: , , , | Permalink
Posted by matthewladner

Bean-counting Arizona Tax Credits

October 15, 2009

(Guest Post by Matthew Ladner)

The Arizona Republic ran a complex story with an unfortunately simplistic headline: Tuition tax credits drain state money.

The reporter made a serious effort to bean-count the individual and corporate tax credit programs. The headline is all the more unfortunate given the fact that by the Republic’s own estimation the program results in a $3 million savings to taxpayers.

 I wish someone would “drain” my bank account in a similar fashion.

The corporate tax credit, which makes only those switching from public schools eligible, was designed to generate savings, and obviously does so. The individual credit does not have the same eligibility requirements, and thus is a good deal more complex.

The Republic reporter, Ronald Hansen, made a good faith attempt to estimate the potential costs and/or savings of the individual program by looking at the National Center for Education Statistics figures on private school enrollment from before and after the tax credit passed. Making the assumption that the increase can be attributed to the credit, Hansen then made estimates regarding the number of kids who would not have gone to private school without the credit (savings generators) versus the number benefiting from the program but who would have gone to private school anyway (cost generators from the state’s perspective).

In short, this is an incredibly complex task- an attempt to estimate the price elasticity of demand for private schools. Hansen has made a serious attempt at estimation, but it is fraught with peril.

For starters, there are more than one estimate of private school attendance in Arizona. The estimation technique is highly dependent on this, and the Arizona Private School Directory lists more than 3,000 more private school students than the NCES. It would not shock me if they both underestimate the true number, which would generate larger savings.

Second it is also important to note that several other things happened during the same period of history. Arizona, for instance, is closing in on 500 charter schools being in operation. Ron Zimmer of the RAND Corporation and two colleagues studied the impact of charters in Michigan and that private schools lost one student for every three students gained in the charter schools.

There are over 100,000 students attending Arizona charter schools. In the absence of the tax credit program, there would have been a substantial overall decline in private school enrollment. Whether those kids went to charter or district schools, they would have cost you money. More to the point, they will have led the Republic to seriously underestimate the number of private school children who would otherwise be attending public schools without the tax credit program.

If private choice opponents are scandalized by the thought that the credit might cost the state money, I’d like to call their bluff. Arizona lawmakers can create a personal use tax credit for students switching from public to private school (i.e. my kid switches to a private from a public school, I take a tax credit). We can set the maximum credit at $3,000, and taxpayers will save thousands upon thousands of dollars every time a kid switches. Such a program would help close the state’s yawning structural budget deficit.

Any STO critics willing to cut out the middle man for the next generation of parental choice reform and save big money in the process? Or is generating savings not the real issue? If not, let’s keep our focus on real issues. Email me at mladner@goldwaterinstitute.org and let me know.

2 Comments | tax-credit scholarships | Tagged: , | Permalink
Posted by matthewladner

Debrilla M. Ratchford for Al Copeland Humanitarian of the Year

October 14, 2009

(Guest Post by Matthew Ladner)

Debrilla M. Ratchford, an airline stewardess, received U.S. Patent #4, 094, 391
for her invention of a suitcase with wheels and transporting hook in 1978.

Ratchford must surely stand as the most underrated inventor of the late 20th Century.

Some JPGB readers must be old enough to remember the bad old days when going to the airport meant lugging around a heavy bag. I remember a trip I made to England in the early 1990s, and my suitcase was just killing me. I happened across a store in London that sold a primitive add on device merely to emulate a modern suitcase with wheels and a telescoping handle (with elastic bands to bind the case).

I happily shelled out whatever it took to buy that contraption. My life as a tourist instantly improved. Mind you, it was terrible compared to a modern bag, but it beat the living daylights out of suffering as a human pack animal.

Strangely enough, America had sent a man to the Moon before inventing a decent roller bag. I’m all for guys jumping around in low gravity and planting flags, but to me, the roller bag is much more important advance in human civilization.

I can scarcely imagine modern business travel without the carry-on roller bag. Hop on the plane, stow your bag, land and hit the ground running. For you strange people still checking bags, **ahem**, catch a clue. You’ll be suprised how much you can stuff into a carry-on with a suiter for hanging clothes.

Sometimes it is the little improvements that make a big difference in life. Companies guided by the invisible hand of the market popularized and improved upon the Ratchford design, and now I don’t have to sit around bored out of my mind waiting for luggage. Better yet, luggage can now be renamed “rollage.”

If someone can name a Nobel Peace Prize winner that has had a more beneficial impact on my life than Debrilla Ratchford, I’d love to hear who and how. I’m sure there are some wonderful people on that list but amidst all those grandees, they will have had to have done something very special for me to appreciate them more than Ratchford.

I’m talking about something on the order of inventing Tex-Mex or College Football to even get in the neighborhood.

7 Comments | Al Copeland Humanitarian Award | Tagged: , , | Permalink
Posted by matthewladner

Showdown to go nuclear

October 6, 2009

(Guest Post by Matthew Ladner)

Fascinating analysis from Stratfor.com (you can sign up for free content) makes the case that it is almost showtime on the issue of Iranian nuclear weapons. 

The Israelis have presented evidence to the Russians of Russian scientists being deeply involved in the Iranian bomb development program. It looks like what is being set up here is a red pill/blue pill scenario where the Russians will either have to support crippling sanctions or Israel and/or USA will take action on their own. You take the red pill, and we try sanctions. You take the blue pill, and we’ll see how much bombing the Iranians can take.

Given that much of the Iranian people already hate their regime with a well-deserved purple passion, why not try an intermediate approach? The U.S. Navy could blockade the Persian Gulf for Iranian oil shipments, and announce that the Iranian people have a set amount of time to accept U.N. weapons inspectors before a catastrophic bombing campaign begins aimed at not only destroying any nuclear capacity but also the Iranian military.

The President could tap the Strategic Oil Reserve here in the United States to ease the pain. The Iranian economy and body politic would be thrown into chaos, and there would be a chance that the Iranian military would make a rational decision regarding self-preservation.

If we had to bomb anyway, no one could say that President Obama failed to go the extra mile to avoid war.

For those of you who are instinctive multilateralists, don’t forget that Iran signed the Nuclear Nonproliferation Treaty. If such treaties are to have any meaning, they must be enforced.

14 Comments | politics | Tagged: , | Permalink
Posted by matthewladner

Arne Duncan’s Doubleplusgood Doublespeak

September 30, 2009

(Guest Post by Matthew Ladner)

ABC quoted Arne Duncan yesterday on DC vouchers:

“The children who were in school, we fought hard to keep them in their schools. Congress has made it clear they are not accepting any additional students,” Duncan told ABC News last month. “So, kids that were in schools, we wanted them to go. Kids who weren’t yet in when the program ended, according to Congress, it didn’t make sense. … I encourage them to come in and look at what’s going on with the public schools here in D.C. It’s pretty exciting.”

Duncan strongly opposes vouchers and has made clear his belief that the money is better spent investing in lasting reforms.

“Vouchers usually serve 1 to 2 percent of the children in the community. And I think we, as the federal government, we as local governments or we as school districts, we have to be more ambitious than that,” Duncan said in a speech before the National Press club last May.

“I don’t want to save 1 or 2 percent of children and let 98 to 99 percent drown. We have to be much more ambitious than that. And we have to expect more,” he added. “This is why I would argue … rather than taking three kids out of there and putting them in a better school and feeling good and sleeping well at night, I want to turn that school around now and do that for those 400, 500, 800, 1,200 kids in that school, and give every child in that school, in that community, something better and do it with a real sense of urgency.”

Oi vey…

Duncan’s logical flaws smell so overwhelming that there isn’t really any need for me to point them out.  Duncan’s absurd claptrap does however remind me of a joke:

So one day a great flood came, and the sheriff went to the house of a man to tell him that he needed to evacuate to higher ground. “No, God will save me” replied the man.

So the storm raged on. The man’s house flooded, forcing him to flee to his roof. Rescue workers came in a canoe to save him, but the man again refused, saying “No, God will save me.”

Finally, the man stood desperately atop of his chimney. A rescue helicopter flew by and threw him a rope ladder, which he refused. “God will save me!” he screamed to the helicopter crew.

So the water rose and the man drowned.

After entering the Pearly Gates, the man asked “God why didn’t you save me from the flood?”

God replied “What do you mean? I sent you a police car, a canoe and a helicopter.”

If Duncan thinks DC schools are “exciting” then why doesn’t he enroll his own children in them? Strangely enough, they are off in the suburban Virginia schools. Admittedly, checkbook school choice does serve way more than “1 or 2 percent” of students.

“I don’t want to save 1 or 2 percent of children and let 98 to 99 percent drown. I am however willing to let 30-40 percent buy their way out and let the other 60 to 70 percent drown, so long as my kids are among those safely sequestered in the leafy suburbs.”

What’s that?  He didn’t say that?

You forget: actions speak louder than words.

3 Comments | vouchers | Tagged: , , | Permalink
Posted by matthewladner

The Price of Things to Come: Free

September 24, 2009

(Guest Post by Matthew Ladner)

I am half way through Chris Andersen’s new book Free: The Future of a Radical Price and I can already recommend the book.

Andersen’s treatment of disruptive technologies and firms is simply fascinating. Craig’s List, for example, has from one perspective “destroyed” far more profits for newspapers than it creates for itself. The entire firm runs on a few dozen employees, but has played a large role in reducing a huge revenue stream for the entire American newspaper industry.

Craig’s List actually hasn’t destroyed profits, but in fact has redistributed them to the general public. Craig’s List provides a superior service to a want ad, and it is almost always free.

Likewise, Britannica and others used to make large profits going door to door selling $1,000 encyclopedia sets. Then Microsoft came out with a $99 dvd encyclopedia, and profits withered. Then Wikipedia came along and Microsoft abandoned their dvd project, and Britannica and company will be required to reinvent themselves if they are to survive.

Technology is driving all of these changes-exponential increases in computing power, storage capacity, are driving changes that are fundamentally disrupting several industries: music, newspapers, and perhaps banking.

The question I have half way through this book: who will become the Google of higher education?

Google has a core business of showing you online ads that is very, very profitable. Most of what they do, however, is throwing out products for free. Google has over 100 free software applications online- maps, Earth, documents, etc. and develops new ones all the time.

Highly successful American universities seem to have a core mission of educating students. This however is questionable at best. Some of these universities have endowments so large that if they simply followed the rules for non-profits and spent 5% of their endowment per year, they could eliminate tuition for their students entirely.

What these universities are really about, of course, is getting research grants and adding to their endowments. What if, however, one or more of them were to go down the road of truly seeking to educate the world by putting up entire degree programs online for free.

A Harvard, Princeton or Notre Dame is likely to always have more applicants than spaces, and in any case, these places could survive without students, not that they will ever need to do so. Why not put up entire rigorous degree programs online, and invite anyone and everyone in the world to complete them for free?

Concerned that it would lessen a regular degree? Pshaw-distinguish it from a regular degree, and require an exit exam, say the GRE, that indicates the student knows quite a bit. Random half-baked idea alert, but if a score on the GRE high enough to admit the student in the upper half of graduate programs were required, we’d know far more about the online student than the traditional ones.

Worried about quality? You should be, but don’t forget the recent U.S. Department of Education study showing that technology based learning is substantially more effective than the old fashioned way.

Imagine if students in Bangladesh could earn a Princeton math degree, or a theology degree from Notre Dame for free, or more accurately for the time, computer and internet cost. The marginal players of the American academy would squeal as they are forced to reinvent themselves from making buggy whips, but this is a small price to pay for bringing opportunity to the world.

The only question in my mind is how long it will be until an elite player has the necessary vision to defect from the comfortable cartel. Several universities have the means to do this, and could receive philanthropic help to do so. Attention Oxford and Cambridge: it wouldn’t require an American university to pull this off. A British university could put out a low-cost version of this, and unlike their American counterparts, they aren’t swimming in resources.

14 Comments | economics, higher education | Tagged: , , | Permalink
Posted by matthewladner

Oklahoma Civics Continued

September 23, 2009

(Guest Post by Matthew Ladner)

3 Comments | civic values | Permalink
Posted by matthewladner

Mourning Constitutional- OK kids score even worse than AZ

September 17, 2009

(Guest Post by Matthew Ladner)

Regular JPGB readers will recall that the Goldwater Institute gave a version of the United States Citizenship Test to Arizona high school students, only to learn that they were profoundly ignorant regarding American government, history and geography. Only 3.5% of Arizona public school students got six or more questions correct, the passing threshold for immigrants.

The Oklahoma Council of Public Affairs wanted to know how Oklahoma high school students would fare on the exam- so we surveyed them and gave them precisely the same set of questions we asked Arizona students.

Perhaps I ought not to have been so hard on Arizona students. After all, they passed at a rate that was 25% higher than their peers in Oklahoma!

That’s right: the passing rate for Oklahoma high school students was 2.8%. They somehow underperformed Arizona’s already abysmally pathetic performance.

My favorite part of writing this paper was poking around in the Oklahoma state standards for civics. Here’s a quote:

Oklahoma schools teach social studies in Kindergarten through Grade 12. … However it is presented, social studies as a field of study incorporates many disciplines in an integrated fashion, and is designed to promote civic competence. Civic competence is the knowledge, skills, and attitudes required of students to be able to assume ‘the office of citizen,’ as Thomas Jefferson called it.

A social studies education encourages and enables each student to acquire a core of basic knowledge, an arsenal of useful skills, and a way of thinking drawn from many academic disciplines. Thus equipped, students are prepared to become informed, contributing, and participating citizens in this democratic republic, the United States of America.

That all sounds swell, except for the part where despite being taught social studies from K-12, Oklahoma high school students come out knowing about as much about American history and government as they know about Quantum Physics or ancient Sanskrit.

These kids wouldn’t do much worse if the pollster asked them questions in Sanskrit instead of English. The pollster would say “I am going to ask you some questions about American civics in Sanskrit. Answer as best you can.  Question 1: संस्कृता वाक् संस्कृता वाक् संस्कृता वाक् संस्कृता वाक् ?”

There is some small chance they would answer “George Washington” after all.

I have an empty metal coffee pot in my office marked “Sweden Civics Survey Fund.” Please drop by a give what you can afford. Once it gets to a couple of thousand bucks, I’ll retain the pollster to give this exact same survey on AMERICAN civics to high school students in Sweden.

They couldn’t do much worse than the kids in Arizona and Oklahoma. Sadly, I suspect they would do much better.

(Edited for Clarity)

14 Comments | civic values | Tagged: , , | Permalink
Posted by matthewladner

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