Tag Archives: reason magazine

Reason Magazine Takes “Clearer Look” at Health Care Reform

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"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?

Stossel to Economic Club: Innovation Will Die as Government Grows

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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.

Sarbanes-Oxley Goes to Court

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The Sarbanes-Oxley Act, the legislation enacted following the Enron meltdown, will now be reconsidered by the Supreme Court. The Washington Post reports:

The Supreme Court yesterday agreed to consider a challenge to the Sarbanes-Oxley Act of 2002, the centerpiece of the government’s response to the watershed accounting scandals at Enron and Worldcom.

The case tests the constitutionality of a nonprofit oversight board created to regulate auditors of public companies. Plaintiffs in the case, including a Nevada accounting firm, allege that the oversight board was endowed with unchecked government powers.

If the court agrees, it could force Congress to reopen the debate over one of the most sweeping pieces of business legislation since the 1930s. Supporters say the Sarbanes-Oxley Act has helped protect investors; critics say it has imposed costly burdens on corporations.

The court accepted the case for consideration in the term that begins in October.

Congress enacted Sarbanes-Oxley after big accounting firms such as the now-defunct Arthur Andersen failed to protect shareholders from a wave of accounting manipulations that made corporations look healthier and more profitable than they really were. Until 2002, the accounting profession was largely responsible for making its own rules and overseeing itself.

Hat tip to Reason Magazine’s blog.

And just so you know: If you’re like most business and are still trying to grasp the complexities of this law, you could probably use our book, The Sarbanes Oxley Act: A Practical Guide for Companies, which is authored by attorneys from Ice Miller.

The Great Teacher Conundrum

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The Los Angeles Times recently reported on the troubling difficulty of firing tenured teachers, even when it would seem warranted. For instance, they cite a teacher who allegedly told a student who had attempted suicide that he needed to "carve deeper next time" and "Look, you can’t even kill yourself."

The Los Angeles school board, citing (the teacher) Polanco’s poor judgment, voted to fire him.

But Polanco, who contended that he had been misunderstood, kept his job. A little-known review commission overruled the board, saying that although the teacher had made the statements, he had meant no harm.

It’s remarkably difficult to fire a tenured public school teacher in California, a Times investigation has found. The path can be laborious and labyrinthine, in some cases involving years of investigation, union grievances, administrative appeals, court challenges and re-hearings.

Not only is the process arduous, but some districts are particularly unsuccessful in navigating its complexities. The Los Angeles Unified School District sees the majority of its appealed dismissals overturned, and its administrators are far less likely even to try firing a tenured teacher than those in other districts.

Obviously, it’s a complicated issue — and I’m the last guy to blast public school teachers on the whole (not only because I had several great ones, but also because my father and step-mother have made careers out of public teaching — and doing it well). But it’s unnerving that, according to an Indianapolis Star story, Indianapolis finds itself disposing of teachers who have actually excelled simply because they haven’t been there long enough.

The district’s youngest and most enthusiastic teachers are on the chopping block, including nine of the 32 recently announced as nominees for IPS teacher of the year. Two of the laid-off teachers were among 10 finalists for the districtwide honor…

"IPS claims it wants to become a world-class school system," Rick Henss, a father of two boys attending Sidener Academy, wrote in an e-mail to School Board members. "Nothing makes that claim ring more hollow than watching world-class teachers emptying their desks."

Henss criticized the district’s planned layoff of fifth-grade teacher Lori Feliciano, a finalist for teacher of the year.

"She has made for my son what school was intended to be: a place of higher learning, where learning for the sake of learning is encouraged and enjoyed," Henss said. "There could be no greater travesty or injustice than for a highly qualified, proven, driven, vibrant and talented teacher like Ms. Feliciano to lose her job to satisfy the ridiculous and ineffective practice of seniority."

Make of these situations what you will, but the findings are not encouraging.

Hat tips to Chamber staffer Jonathan Wales and Reason Magazine’s blog.

UPDATE: Mike O’Brien also has a post on this matter over at the WRTV6 Capitol Watchblog. He makes a terrific point:

Imagine a company that makes a decision to cutback by firing their top salesman because he’s been there for five years instead of the company’s worst employee who has been there for thirty years.  That’s education in Indiana.  It’s the biggest business in Indiana and it’s run on a patronage system.

Out of the ‘Slums’: Economic Lessons from an Oscar Winner

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Did you watch the Oscars last night? Well, if you haven’t heard, the awards confirmed the fact that "Slumdog Millionaire" is not a bad picture. (It also confirmed that "Wolverine" is surprisingly deft at singing show tunes. Take that, Magneto.)

But according to Reason magazine’s blog, "Slumdog" is much more than an interesting tale of gameshow prowess. It also serves as an illumination on the plight of India, begging discussion about the progress the country has made by freeing up its markets and ultimately its people, and the steps it still needs to take to help its poor rise above poverty:

For decades would-be entrepreneurs staggered under the weight of corruption and bureaucracy. Want to import a computer for your business? You’d have to get permission from a bureaucrat. Want to sell food from a small cart? You’d need all kinds of licenses. 

But in the 1990s, India emerged as a high-tech powerhouse. What changed?

"In the 1990s India started liberalizing its economy," says (Shikha Dalmia, Reason Foundation senior analyst), "and it did three things: cut taxes, liberalized trade, and deregulated business." Although they failed to cut the kind of red tape that entangled Slumdog‘s orphans, the reforms did make it easier for more Indians to start businesses and hire employees.

"One IT company doesn’t just employ computer professionals," says Dalmia. "It also needs landscaping services, cleaning services, and restaurants. There was this tremendous spillover effect that allowed people to lift themselves out of poverty."

Since the early 1990s, India has cut its poverty rate in half. About 300 million Indians—equivalent to the population of the entire United States—escaped the hunger and deprivation of extreme poverty thanks to pro-market reforms that increased economic activity.

Yet here in America we’re turning away from market reform. Says Dalmia, "It’s just this great conundrum that at the same time that deregulation and markets have produced such dramatic results in India, they are falling into suspicion in America." Dalmia’s prescription for India is at odds with what politicians have chosen to "stimulate" the United States. "What India needs to do is continue apace with its liberalization effort, but expand it to include the poor. Release them from the shackles of government corruption and government bureaucracy."

Stossel: Stop Hating the Business Community

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Reason Magazine, which is just about my favorite publication going today, recently sat down with "20/20" taxpayer/consumer advocate John Stossel. During the interview, Stossel — and his awe-inspiring mustache — aptly articulate his confusion about why people in some circles find it necessary to constantly bash businesses:

This hatred of business — I’m not sure what that’s about. I used to think it was envy, that the college professor is angry that his slightly stupider roommate is making more money than he is because he’s in business. Then you think about the kings and queens of Europe. People didn’t hate them for all their wealth, and their wealth proportionately was vastly greater than now, but they hated the bourgeoisie. They gave them that nasty name. They hated the very people who sold them the things that they needed to make their lives better. What’s that about?

My best guess is that it’s the intuitive reaction that the world is a zero-sum game, that if he makes profit off you, you must’ve lost something. If you don’t study economics, that is how people think. I see why politicians think that way, because that’s how their world works. One wins. Somebody else has to lose. We have a lot of work to do to explain that free commerce doesn’t work that way, that everybody gains.

He also discusses his fondness for free market medicine and school choice, even promoting his web site, stosselintheclassroom.org. Though you may not agree with everything he says (and it’s not entirely G-rated), you can read the transcript of the Reason interview here. At the very least, it should make you think.

Gridiron Economics: Does College Football Resemble the Economy?

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Steve Chapman of Reason Magazine waxes analytical about a perceived decline of college football, claiming its lack of defense (poor product) and gluttony of bowl games (celebration of mediocrity) has a distinct resemblance to current economic woes. His final conclusion is noteworthy as he surmises, "As the folks at Lehman Brothers and Citigroup can attest, unbridled excess can be a recipe for regret." Also, he references Purdue’s Joe Tiller in the full story, which will be fun for some of you:

Barack Obama has weighed in against the existing Bowl Championship Series as a way of determining the national title among college football’s top-tier teams. What he has failed to address are two far more grievous afflictions plaguing the game: a gross surplus of scoring and a mortifying multiplicity of bowls.

In the golden days, the game consisted of a lot of blocking and a lot of tackling. Teams marched laboriously down the field, if they moved at all. Occasionally they scored. More often they didn’t.

In those days, defense was not a dirty word. In the 1969 "game of the century" between No. 1 Texas and No. 2 Arkansas, both unbeaten, the Longhorns prevailed by 15-14, which was considered perfectly normal. In 1966, when No. 1 Notre Dame and No. 2 Michigan State battled to a 10-10 tie, the stands were not littered afterward with the corpses of fans who died of boredom…

Our forebears would have recognized this impersonation of football as a symptom of moral decline, reflecting an unwillingness to accept deprivation and a demand for instant and frequent gratification. The same phenomenon accounts for the mad proliferation of postseason bowl games.

This year, 34 of these will be played (more than double the number in 1980), creating the biggest glut this side of the housing sector. They include the EagleBank in Washington, D.C., the R+L Carriers New Orleans, the San Diego County Credit Union Poinsettia and the Gaylord Hotels Music City.

Think of it: Half a century hence, an elderly man will dandle his grandson on his knee and regale him with stirring tales of the 2008 San Diego County Credit Union Poinsettia Bowl.

Ouch. Some interesting points though, although I tend to favor the higher scoring version of the game.

Moreover, since I’m an IU grad, I’d sort of tuned out on college football pretty early this year in order to focus on basketball (oooooh riiiiiight — thanks Kelvin).

Are SAT and ACT Tests Too “Old School?”

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According to Inside Higher Ed, the National Association for College Admission Counseling has launched a panel asking colleges to consider dropping SAT and ACT results as admission guidelines:

The panel, in a report to be formally released this week (PDF file), calls on all colleges to consider more systematically whether they really need testing to admit their students. If there is not clear evidence of the need for testing, the commission urges the colleges to drop the requirement and it expresses the view that there are likely more colleges and universities that could make such a change …

Colleges that have conducted in-depth analyses of the value of standardized tests have frequently ended up questioning the tests’ use. For example, the University of California recently studied whether SAT subject tests helped admissions decisions and found — generally — that they do not. Hamilton College, prior to abandoning an SAT requirement in 2006, conducted a five-year experiment being SAT-optional. During that time, the 40 percent of students who didn’t submit SAT scores performed slightly better at Hamilton — a highly competitive liberal arts college — than did those who did submit scores. And in a finding consistent with studies at other colleges, Hamilton found that when it went test-optional, it received more applications from students at the top of their high school classes and many more applications from minority students.

Pretty interesting stuff.

Hat tip to Reason Magazine’s blog.