Here’s a list of articles that I have been reading lately:
One of the “unintended” consequences of price controls in virtually all markets (including health care) is that shortages of essential goods and services naturally occur; instead of stepping up to the plate and producing the goods and services that are needed, price controls kill off (pardon the pun) incentives for firms to enter the market in response to shortages. Quoting from this article, “The Affordable Care Act could make this already bad situation worse. Under this legislation, if Medicare expenditures exceed a predetermined amount, the Independent Payment Advisory Board is mandated to cut expenses. One of the few areas the board can cut is drug costs. This will move the market for pharmaceuticals further away from market forces—and until market forces are acknowledged, drug shortages will persist.”
Which books should be read by every single intelligent person on the planet?
“A reddit user asks Neil deGrasse Tyson: Which books should be read by every single intelligent person on the planet?” It’s hard to argue with this list, which includes the Bible, The System of the World by Isaac Newton, On the Origin of Species by Charles Darwin, Gulliver’s Travels by Jonathan Swift, The Age of Reason by Thomas Paine, The Wealth of Nations by Adam Smith, The Art of War by Sun Tsu, and The Prince by Machiavelli. Mr. Tyson notes that, ““If you read all of the above works you will glean profound insight into most of what has driven the history of the western world.”
“The Obama administration has asked state officials to decide by November 16 whether their state will create one of Obamacare’s health-insurance “exchanges,” and whether they will implement the law’s massive expansion of Medicaid. According to Cato scholar Michael F. Cannon, the correct answer to both questions remains a resounding no. And if a critical mass of states refuse to cooperate, argues Cannon, it could literally force Congress to repeal this harmful and unpopular law.”
Walter Russell Mead notes that the extent to which public pensions are underfunded “… break down according to the red-blue political divide.” Specifically, the states with the best funded public pensions (e.g., red states such as Idaho, Arizona, West Virginia, Utah, Arkansas, and Indiana) also impose relatively modest tax burdens upon their citizens, whereas states with the most chronically underfunded public pensions (e.g., blue states such as New York, California, and Illinois) also impose the heaviest tax burdens upon their citizens. Quoting from this article, “The states that require the biggest tax hikes (for the purpose of shoring up chronically underfunded public pensions) are those where taxes are already highest. If this isn’t a powerful argument against the blue model, we’re not sure what is.
Fascinating 58 minute interview with Malcolm Gladwell. Gladwell is a staff writer at the New Yorker and the best-selling author of The Tipping Point, Blink, Outliers and What the Dog Saw. The following quote from the interview is extraordinary: “If incompetence is the disease of the novice, overconfidence is the disease of the expert.”
Interesting and informative post-mortem assessment of presidential polling by Nate Silver, the proprietor of the FiveThirtyEight website @ http://fivethirtyeight.blogs.nytimes.com/ and author of the book “The Signal and the Noise: Why So Many Predictions Fail-but Some Don’t” (cf. http://amzn.to/UC5T0u)…
How to Devise Passwords That Drive Hackers Away
Some very good advice from the personal tech section of the New York Times concerning protecting one’s identity and privacy while online…
“New Orleans, a city not famous for good governance, has one of the most generous — and worst funded — pension systems of any city in the country… The cost to a city with atrocious schools, minimal public services, and staggering needs is outrageous: $1 out of every $9 in the city’s general operations spending goes to pay into the firefighters’ pension alone.”
Quoting from this essay by the Washington Post’s Charles Krauthammer, “The answer to Romney’s failure is not retreat, not aping the Democrats’ patchwork pandering. It is to make the case for restrained, rationalized and reformed government in stark contradistinction to Obama’s increasingly unsustainable big-spending, big-government paternalism.”
“In The Wall Street Journal, Business World columnist Holman Jenkins writes that it’s Obama’s second term, but get ready for the Romney-Simpson-Bowles plan.”
“In The Wall Street Journal’s Cross Country column, retired Major Marc ‘Vino’ Weintraub writes that Lieutenant Colonel Chris ‘Otis’ Raible took care of his Marines, whether at home in the States or at Camp Bastion, Afghanistan.” RIP, Lt. Col. Raible, and God bless his grieving family…
“As Republicans reckon with a post-Reagan era, they might best rebuild by first listening to those who have come to this land with the very hopes conservatives should want to affirm.”
“A major rationale — perhaps the major rationale — touted by supporters of mass transit is that by reducing our output of greenhouse gases and other pollutants, transit can help save the environment… Might studies that demonstrate transit is greener be wrong?” A compelling and informative article on the economics and unintended consequences of mass transit from our friends at Freakonomics.com…
“To avoid the next drug-safety debacle, raise Medicare price caps.” Hat tip to my Baylor colleague Dave VanHoose for sharing this article out to me. The article points out that the reason why so many hospitals and clinics had purchased the steroids from the Massachusetts pharmacy which was the source of the tainted medication (a drug called Methylprednisolone) was because two large firms had halted production. Why? Because the federal government apparently set up rules back in 2005 that “prevent reimbursement to providers for injectibles and other drugs health-care workers administer from rising more than 6 percent about the average sales price”. In other words, this was the classic response to an effective price ceiling: Reductions in the quantity of constant-quality units and the use of lower-quality substitutes.
Election Results from A to Z
Interesting assessment of the relative impacts of demographics and attitudes toward policy issues in shaping voting patterns in last week’s election…
Quoting from the intro to this podcast, “Joshua Rauh, Professor of Finance at Stanford University’s Graduate School of Business and a senior fellow at Stanford University’s Hoover Institution, talks with EconTalk host Russ Roberts about the unfunded liabilities from state employee pensions. The publicly stated shortfall in revenue relative to promised pensions is about $1 trillion. Rauh estimates the number to be over $4 trillion. Rauh explains why that number is more realistic, how the problem grew in recent years, and how the fiscal situation might be fixed moving forward. He also discusses some of the political and legal choices that we are likely to face going forward as states face strained budgets from promises made in the past to retired workers.”
“In The Wall Street Journal, Global View columnist Bret Stephens asks: How long can the laws of fiscal—and political—gravity be suspended?”
Quoting from Stephen Moore’s review of University of Chicago economist Casey Mulligan’s book “The Redistribution Recession” (http://amzn.to/UcMGrK), “Mr. Mulligan doesn’t challenge the claim that a surge in unemployment benefits, food stamps and other subsidies may have been desirable to prevent hunger or severe poverty for out-of-luck families or unemployable people traumatized by the recession. He simply and inconveniently notes that, though increasing subsidies may be compassionate in the short term, it comes with costs in the long term that eventually cause more hardship rather than less.”
“WSJ columnist Gordon Crovitz writes that politicians threaten to regulate Internet invasions of privacy while BarackObama.com drops 87 different ‘cookies’ on unsuspecting visitors to track their online habits.”
“WSJ columnist Mary O’Grady writes that the regime in Havana would rather watch the Cuban people annihilated than risk losing its lock on power.”
“Barack Obama bet his Presidency on expanding government because that’s what he believes. A second term will be no different.”
“Edward Niedermeyer writes that the Obama administration’s version of the 2008-09 auto-industry rescue is a triumph of spin over facts.”
Life without FEMA?
“Elaborate networks of for-profit and nonprofit entities would plan ahead, mitigate damage, and provide assistance.”
Economists React: ‘Naive’ to Think of Sandy as Stimulus
“Estimates for the storm’s influence on fourth-quarter economic growth range from a noticeable negative (as much as a 0.6 percentage point hit to annualized growth in the quarter) to mostly negligible once rebuilding efforts are taken into account.” Frédéric Bastiat (cf. http://en.wikipedia.org/wiki/Fr%C3%A9d%C3%A9ric_Bastiat) would be pleased by these economists’ findings…