Reason.TV recently sat down with Cal State University – Northridge economist Glen Whitman, coauthor of the Cato Institute’s policy analysis paper, "Bending the Productivity Curve: Why America Leads the World in Innovation." Take a few minutes to hear his take on why the United States still sets the standard on medical research, even though health care in the country is far from ideal.
"We have this insane system now where you need health care, you’re the buyer, I’m the doctor, I’m the seller of health care — and somebody else pays the bill. Who the heck is gonna shop for price when somebody else is paying the bill? … I think Lasik (eye surgery) can act as a model for health care reform." – Dr. Robert Maloney
In the video at the bottom of this post, Reason Magazine also makes an interesting case about how, traditionally, the length of time the average worker has had to work to afford certain things in America, from food to jeans to electricity, has dramatically decreased based on competition-induced price drops. They contend, like many, that applying these free market principles to health care would have the same impact.
In contrast, I’ve also heard detractors claim the free market can’t truly work in health care because the seller is the agent for the buyer (meaning the doctor has incentives to peddle certain products to patients for his/her benefit, not necessarily theirs).
At any rate, here’s the video. Where do YOU fall in this debate?
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John Stossel, former ABC journalist and soon-to-be host on Fox Business Network, has won 19 Emmys for making viewers think. He did just that today as well, addressing nearly 950 attendees of the Economic Club of Indiana luncheon.
The key focus of today’s discussion was health care reform. Stossel notes his hesitation at referring to "Obamacare" as reform due to his contention that it won’t really improve anything. Prior to the speech, a video was shown in which he points out that Lasik eye surgery costs have dropped significantly over time in the free market, and tied that to the fact that the surgery is not covered by insurance (adding that costs of procedures that are covered have climbed over the same span).
"Obama says the current (health care) system is unsustainable, and he’s right," Stossel offered. "Medicare is $36 trillion in the hole."
Stossel referred to the program as a Ponzi scheme, adding, "We locked Bernie Madoff up for this."
He contended that though some may claim Europe has been successful with its government-oriented health care, the continent is reaping benefits of American innovation when it comes to procedures and technology.
"If you ask doctors what have been the most significant developments in the past 20 years… most are from the United States," Stossel said. "Europe is freeloading on American innovation. If the government gets more involved, the innovation will stop."
Additionally, he offered an indictment of community rating, quipping, "If they did that for car insurance, you’d be paying the same as Lindsay Lohan."
Possible solutions from Stossel included allowing insurance companies to offer different types of plans for different people, allowing those plans to cross state lines, and to promote tort reform (touting a "loser pays" system, something he claims the rest of the world already does).
When asked how he developed his "brand" as a libertarian and contrarian in the media, he claimed, "I think it comes from not going to journalism school. I just thought about what I would want to watch."
For more from Stossel on these and other matters, see his July op-ed from Reason magazine and check your local listings for his new show.
Will President Obama’s goal of signing landmark health care reform legislation by October be realized? Cam Carter, the Indiana Chamber’s federal relations authority, says no. Mike Ripley, health care policy expert, offers that if it closely resembles what is currently being debated in Washington, he hopes not.
Carter and Ripley shared their perspective and answered questions from listeners during today’s Policy Issue Conference Call. If you want all the inside scoop and you’re a Chamber member, you need to listen (next up is K-12 education — charter schools, virtual charters and state scholarship tax credits, among other topics, on August 21). From today’s event, a few tidbits:
A Chamber member may have summed it up best when he questioned whether the proposals being bandied about are going to do anything to solve the problems with the health care system. That, of course, should be the bottom line litmus test of any plan.
The details and the dynamics are changing on an everyday basis. Stay tuned for more.
The U.S. Chamber blog recently highlighted a piece by Joel Kotkin of NewGeography.com (and contributor to Forbes) in which the writer attempts to come to terms with just who is to blame for the epic fiscal spiral that is California. He makes some interesting observations, some of which will hopefully serve as red flags for the Hoosier State. Here are his five suspects:
1. Arnold Schwarzenegger
…Arnold quickly discovered his feminine side, becoming a kinder, ultra-green terminator…Yet over the past few years there’s been more destruction than creation. Employment in high-tech fields has stagnated…while there have been huge setbacks in the construction, manufacturing, warehousing and agricultural sectors. Driven away by strict regulations, businesses take their jobs outside California even in relatively good times. Indeed, according to a recent Milken Institute report, between 2000 and 2007 California lost nearly 400,000 manufacturing jobs. All that time, industrial employment was growing in major competitive rivals like Texas and Arizona….
2. The Public Sector
Who needs an economy when you have fat pensions and almost unlimited political power? That’s the mentality of California’s 356,000 workers and their unions, who make up the best-organized, best-funded and most powerful interest group in the state. State government continued to expand in size even when anyone with a room-temperature IQ knew California was headed for a massive financial meltdown. Scattered layoffs and the short-term salary givebacks now being considered won’t cure the core problem: an overgenerous retirement system. The unfunded liabilities for these employees’ generous pensions are now estimated at over $200 billion.
3. The Environment
Obama holds up California’s environmental policy as a model for the nation. May God protect the rest of the country. California’s environmental activists once did an enviable job protecting our coasts and mountains, expanding public lands and working to improve water and air resources. But now, like sailors who have taken possession of a distillery, they have gotten drunk on power and now rampage through every part of the economy.
In California today, everyone who makes a buck in the private sector–from developers and manufacturers to energy producers and farmers–cringes in fear of draconian regulations in the name of protecting the environment. The activists don’t much care, since they get their money from trust-funders and their nonprofits. The losers are California’s middle and working classes, the people who drive trucks, who work in factories and warehouses or who have white-collar jobs tied to these industries.
4. The Business Community
This insanity has been enabled by a lack of strong opposition to it. One potential source–California’s business leadership–has become progressively more feeble over the past generation…"The business community is so afraid they are keeping their heads down," observes Ross DeVol, director of regional economics at the Milken Institute. "I feel they if they keep this up much longer, they won’t have heads."
5. Californians
At some point Californians–the ones paying the bills and getting little in return–need to rouse themselves. The problem could be demographic. Over the past few years much of our middle class has fled the state, including a growing number to "dust bowl" states like Oklahoma, Texas and Arkansas from which so many Californians trace their roots…The last hope lies with those of us still enamored with California. We have allowed ourselves to be ruled by a motley alliance of self-righteous zealots, fools and cowards; now we must do something….We should, however, be very cautious about handing more power to the state’s leaders. With our acquiescence, they have led this most blessed state toward utter ruin…
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If I were you, I’d go ahead and book my tickets now for the Economic Club of Indiana luncheon on October 6 at the Indianapolis Convention Center. The lunch will feature the musings of libertarian journalist/malcontent and winner of 19 Emmys John Stossel of ABC’s "20/20." Stossel, known these days as a champion of free markets (and owner of my second favorite TV mustache, next to that of PGA analyst Gary McCord), actually got his start as a consumer reporter.
Love him or hate him, he’ll probably make you think.
Here’s an excerpt from his blog today as he discusses ABC pulling his piece on health care reform in favor of more Michael Jackson coverage:
Here’s one blog comment, after I reported that ABC will hold my health care report in favor of more Michael Jackson coverage:
"Free market in action. See there Stossel? What’s not to like about that?
Posted by: jan | Jun 26, 2009 5:12:12 PMp.s. Stossel. You’ve been hoisted on your own petard. Cheerio."
Jan is right. It’s the free market in action.
Of course, maybe my bosses made the wrong choice. Maybe more viewers would have tuned in for my health care report. But the beauty of the market is that if they regularly choose wrong, they will go bankrupt. Networks better at giving the public what we want will take their business. I’d rather have viewers vote with their remotes than have elites govern our choices, making sure we watch “serious” programming.
Yes, I am sick of the coverage of Michael Jackson. I hate it that ABC didn’t run my piece. Free markets sometimes encourage pandering to the masses. I still say, bless the market. The good outweighs the bad.
Free speech means rude obscenity and hate speech. I treasure free speech too.
The Wall Street Journal takes a look at the proposed cap and trade legislation, which could get a vote as early as Friday. Many are still worried that if this measure does stop global warming, it may do so by freezing the wallets of American businesses and consumers in the process:
Despite House Energy and Commerce Chairman Henry Waxman’s many payoffs to Members, rural and Blue Dog Democrats remain wary of voting for a bill that will impose crushing costs on their home-district businesses and consumers. The leadership’s solution to this problem is to simply claim the bill defies the laws of economics.
Their gambit got a boost this week, when the Congressional Budget Office did an analysis of what has come to be known as the Waxman-Markey bill. According to the CBO, the climate legislation would cost the average household only $175 a year by 2020. Edward Markey, Mr. Waxman’s co-author, instantly set to crowing that the cost of upending the entire energy economy would be no more than a postage stamp a day for the average household. Amazing. A closer look at the CBO analysis finds that it contains so many caveats as to render it useless.
For starters, the CBO estimate is a one-year snapshot of taxes that will extend to infinity. Under a cap-and-trade system, government sets a cap on the total amount of carbon that can be emitted nationally; companies then buy or sell permits to emit CO2. The cap gets cranked down over time to reduce total carbon emissions.
To get support for his bill, Mr. Waxman was forced to water down the cap in early years to please rural Democrats, and then severely ratchet it up in later years to please liberal Democrats. The CBO’s analysis looks solely at the year 2020, before most of the tough restrictions kick in. As the cap is tightened and companies are stripped of initial opportunities to "offset" their emissions, the price of permits will skyrocket beyond the CBO estimate of $28 per ton of carbon. The corporate costs of buying these expensive permits will be passed to consumers.
The biggest doozy in the CBO analysis was its extraordinary decision to look only at the day-to-day costs of operating a trading program, rather than the wider consequences energy restriction would have on the economy. The CBO acknowledges this in a footnote: "The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap."
The hit to GDP is the real threat in this bill. The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created or higher unemployment. Some companies will instead move their operations overseas, with the same result.
The Chicago Tribune also chimed in today, noting the bill has grown from 900 to over 1,200 pages in a matter of a couple days. Due to the added girth, do you think legislators actually know what they’re voting on at this point? Probably should considering the magnitude and implications this would impose. (Hat tip to our federal legislative guru Cam Carter for passing this story along.)
When the Indiana General Assembly passed legislation to increase unemployment insurance (UI) taxes by more than $700 million over the next two years, Senate Republican leadership claimed it was an effort to protect small businesses from paying the way for larger companies.
Too bad the size of a company has nothing to do with its UI taxes. The determining factor is a company’s unemployment history.
The Small Business & Entrepreneurship Council recently pitted rhetoric against facts when it comes to big government health care reform. Sadly, it seems it’s the taxpayers and businesses who are losing in that fight. Read on:
Let’s consider the cost issue. Government programs like Medicaid and Medicare, for example, have run far ahead of what the original cost projections were. That’s not surprising. When the taxpayer is the funder, no one involved in the actual transaction – consumer, provider, politician, and bureaucrat – has any reason to care about prices or utilization. If cost concerns do come up – when politicians initially set up the program, or down the road when facing huge shortfalls and/or an inevitable taxpayer backlash – the usual action is a combination of price controls and rationing of care.
So, the results of more government in health care are both increased costs and diminished quality of care.
That’s all in the mix in the current debate over health care reform. But let’s just take a look at what politicians are talking about initially to fund more government care.
President Obama floats the figure of $630 billion over 10 years. But the Obama budget makes clear that the "$630 billion is not sufficient to fully fund comprehensive reform." In fact, estimates for the coming decade for the President’s plan range up to more than three times higher.
What possible tax increases are in the mix?
First, the President plans on limiting tax deductions for higher income earners, many who happen to be investors and entrepreneurs. President Obama also proposes a variety of other costs largely focused on business, including jacked up tax enforcement, repealing the LIFO accounting method, and higher death taxes.
On May 20, the Senate Finance Committee came up with a long list of possible tax hikes to pay for health care "reform." One would limit the tax deduction for employer-provided health care plans. That, of course, would increase costs for employers and/or workers.
The Heartland Institute’s "Lawsuit Abuse Fortnightly" newsletter was recently released. You should read the whole thing, but we’ll feature this gem about some serious Green Bay Packers fans. Also, lawsuit aside, kudos to the Packers for a lifetime of some serious branding success. A waiting list of nearly 75,000? Is this Lambeau Field or Heaven?
Forget the issue of who gets the family jewels when dear old Dad kicks the bucket. In Wisconsin, the more important question is who gets the Green Bay Packers tickets.
Two brothers are currently embroiled in a court battle over 13 midfield Packers season tickets. Their father left the tickets to one brother but stipulated the brothers were to share any proceeds from scalping them, allegedly worth about $250 to $300 per game per ticket. The brother without possession of the football tickets claims in court the tickets really belong to both of them.
The Packers are among some NFL franchise teams designating season tickets as family property. The tickets rarely go on the market, and there is a multi-millennium-long waiting list. “For instance, if you put your name on the waiting list today, you would be number 74,659,” Sports Illustrated noted a few years ago. “An average of 70 people give up their tickets every year, which means you’ll have your tickets by the 3074 season. Luckily you’ll still catch Brett Favre’s last year.”