Tuesday, August 31, 2004

Regulators, Mount Up 

Exhibit #491,552 that government regulations are mainly captured by special interests, are responsible for economic harm, and usually violate rights:
Anthony Howell flew to Florida last week to help out a friend whose home was badly damaged by Hurricane Charley. Now, he may face a $5,000 fine and a felony charge.

...Howell, a Rockland County licensed contractor who runs Triad Builders in the hamlet, said his friend, Alex Arzoomanian, had called him on Aug. 14, because Arzoomanian's home in Kissimmee had been damaged by the hurricane and subsequent thunderstorms.

Arzoomanian had taken over the home after his mother died in May and had not had time to get homeowners insurance. His 4,000-square-foot shingled roof had taken a beating, and after the numerous Florida contractors he had called said they couldn't help him immediately, Howell offered to take a week off work to help.

So Arzoomanian paid for the $400 plane ticket and picked up his friend of 15 years at the airport on Aug. 16.

They began repairing the roof the next day.

...Three days into the job, Howell was approached by two deputies from the Osceola County Sheriff's Office and two investigators from the state's Department of Business and Professional Regulation, who gave him a cease-and-desist order.

Under Florida law, only contractors licensed by the state may engage in roof repair. It carries up to a $5,000 fine. Not to mention that the practice of unlicensed contracting becomes a third-degree felony when the governor has declared a state of emergency.

This is cross-posted at Galen's Log.

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Single Payer 

Congratulations to Graham for completing his single-payer animation. I'm sure it took a lot of work.

Of course, that doesn't mean I don't criticize it. A few random thoughts (and there are many more where these came from):
  • Check out Galen's objection to the "45 million uninsured" stat. A lot of people have looked into this cliam, and all have come to the same general conclusion (even if the details differ somewhat): 45 million is a cooked number. And I think Graham knows this, it's just that he ignores it so he can light up more states on his map. I have never seen a health socilaist respond to this critique. Not that they couldn't make an argument, I've just never seen them try.

  • It may have finally occurred to me how much of the argument used by these people relies on the "savings from reduced paperwork" deal. It's almost like they implicitly understand that many of their argumetns are invalid; seriously, if this one thing doesn't pan out, the whole ship would go down.

  • If you step back and look at what is being said in these arguments is this: we great socialists have spotted a free lunch. We have devised a way for those people who pay for their health care to get better care for less money. But that's not all! Tell them what else, Bob. In addition we'll give away health insurance to millions of people for free! At no cost to you. Just because we think we have eliminated some paperwork (thank god the government will now foot the bill; all those loggers and papermakers forced out of work will have to get health insurance somehow).

  • If you were born several years before me, and you were paying attention, you know we've been down this road before. I believe it's called Social Security and Medicare. SS was hyped as a great insurance scheme and a wonderful welfare program. Now, it's neither. Both give substandard insurance and trap many elderly into poverty. SS faces a present value deficit of $25 trillion, and Medicare is estimated to be much, much higher (estimated $50-60 trillion). It's the single greatest issue facing us today. Are we doing something about it? Hell, no. Not only are we ignoring the problem, we're falling for the same fraud to make the problem bigger.
Graham had the good sense not to include it in his animation, but Paul Krugman didn't:
In 2001, we spent $4,887 on health care per capita, compared with $2,792 in Canada and $2,561 in France. Yet the U.S. does worse than either country by any measure of health care success you care to name - life expectancy, infant mortality, whatever.
You hear this one quite often, but I think it's misleading and ridiculous. Life expectancy takes exactly zero account for quality of life (among other things). You want to see our health care expenditure go down and life expectancy stay exactly the same: make it illegal to care for or purchase care for the elderly. Don't think that one would fly too well, but it would sure make the back of our bsaeball card look good.

As for infant mortality, this one is a particularly egregious misuse of statistics. For every given gestational age, the US has the best infant mortality rate in the world (I sold my Peds text that said that, so I can't quote the source). Yet overall, we drop down substantially in the rankings. Why? Well for one, we have more premature babies from more teenage pregnancies. Also, we attempt to save neonates at earlier and earlier gestational ages (at ages doctors in other countries find unethical). We are relatively sucessful, but it counts against our stats.

So these statistics tell us absolutely nothing about the state of US health care compared to other countries. Actually they tell us worse than nothing - they tell us things that are not true. I look at it like this: the farthest endpoints (mortality, event, etc) are good to examine in randomize controlled trials. Because you have tried to contain all but one variable, you can tell if that one variable is responsible for the change at the end of the cascade. But in multivariable studies (like examining health care systems nations - about as multivariable as one can get), when you can't adequately control variables, the further down the cascade, the more information you lose. Looking at one measure at the furthest endpoint when so many variables are not controlled is a recipe for incorrect conclusions.

I'll wrap this up by asking everyone to read this article from Arnold Kling dealing with this issue:
Suppose that we wanted to compete in the Health Care Olympics not by cutting health care spending but by finding ways to increase longevity and reduce infant mortality. In that case, we will have to address pregnancy among low-income teens. But there is no medical procedure that can solve the Random Family problem, unless you want to talk about castration.

Overall, I think that it is a mistake to define the health care problem as the need to reduce the ratio of expenditures to life-expectancy gains. I think that the policy implications of such a definition are mostly unacceptable.

This is cross-posted at Galen's Log.

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Monday, August 30, 2004

How Do You Spell That? 


Cross-posted at Galen's Log.

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My Second and Last Thought For the 2004 RNC 

Seeing the uge number of people going to New York City this week for the solepurpose of demonstrating against the Republicna administration, I can't decide which is more pathetic: that one presidential candidate is so spectacularly and thoroughly despised by such a mass of people, or that the other candidate can't cash it in for an easy certain electoral victory. Somebody help me with this one, please?

This is cross-posted at Galen's Log.

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It's Growing 

The esteemed Dr. Bard Parker from To Cut Is To Cure has joined me and the man with his name on the marquee at Galen's Log. With an internist, a surgeon, and a future pathologist in the line-up, we're turning into a veritable Medical Blogger Associates™. It's an honor to be in their company.
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You can't invoke the name of Bill Buckner in a newspapaer article wihtout noting his famous error that might have cost the Red Sox a World Series title, thus overshadowing an otherwise solid, if not spectacular, major league career.

Yet Paul Erlich lets 'em all trickle through his legs, and he still gets to be quoted credibly in the New York Times:
The father of the population bomb, Dr. Ehrlich, a professor of population studies and biology at Stanford, says he was "pleasantly surprised" by global changes that have undermined the book's gloomiest projections. They include China's one-child policy and the rapid adoption of better seeds and fertilizers by Third World farmers, meaning that more mouths can be fed, even if just with corn porridge and rice. (He notes, however, quoting United Nations figures, that about 600 million people go to bed hungry each night.) But Dr. Ehrlich still argues that the earth's "optimal population size" is two billion. That's different from the maximum supportable size, which depends on the consumption of resources.

"I have severe doubts that we can support even two billion if they all live like citizens of the U.S.," he said. "The world can support a lot more vegetarian saints than Hummer-driving idiots."
Actually Dr. Erlich, the optimal world population is three: me, Beyonce, and somebody to pour the wine.

This is cross-posted at Galen's Log.

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A Marginal Post, Revisited 

When I wrote this post last night, I forgot to make the point I was wanting to make from the outset. I am wondering what the issue of marginal value had to say about the "first do no harm" ethic. And I think before I can answer that, I must state what I think it means.

I suppose there are two schools of thought. It could mean that the physician should never do anything that could cause any harm. Or it could mean that the physician should not risk harm without a greater probability of benefit to the patient.

The first one to me is the one I think a lot of people cling to, especially when they want to criticize a physician without actually having to think about the situation. I think this formulation of FDNH is incoherent. There is always risk in every procedure, and thus, to "do no harm" is to nothing at all. But doing nothing, often, is even more harmful. That is why this is incoherent.

The second formulation is much preferable, and is generally understood among physicians to be the correct one. The first doctor in my scenario did a lot more surgeries that didn't cure, thus did a lot more absolute harm. However, he did even more absolute good. And since we assumed the patients accepted the risks with their given probabilities, they were not ever "harmed" in the way that physicians understand the ethic. And the second physician was doing harm by not curing cancers that could have been cured when the patient acepted the risk. This means that FDNH has to mean "not exposing the patient to non-beneficial risks, and not cowering to beneficial, accepted risks."

One of my professors states it best: If something can't possibly harm you, it likely can't possibly help you. This truth forces us to understand "first do no harm" a little more deeply than many do. And, in light of the previous post, it forces us to think it possible that "perfection" in the face of accepted risk is "doing harm."

This is cross-posted at Galen's Log.

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Price Gouging? 

Common Knowledge says the hookers are arriving in drove to NYC and the RNC:
The NYC sex market is responding to what is expected to be increased demand during the Republican National Convention:
Agencies are flying in extra call girls from around the globe to meet the expected demand during the Aug. 30-Sept. 2 gathering at Madison Square Garden.
"We have girls from London, Seattle, California, all coming in for that week," said a madam at a Manhattan escort service. "It's the week everyone wants to work."
I should suspect these these politicians should want to prohibit price gouging during the natural disaster that are the political conventions.

Or, maybe they understand the Law of Supply when it's polishing their knobs.

This is cross-posted at Galen's Log.

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Loud And Stupid 

I could stand the anxiety pimping by the media much more if they weren't collectively so damn ignorant.

This is cross-posted at Galen's Log.

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Remember Where You Came From 

Drug War Rant is not impressed with Barack Obama:
Illinois Senate candidate Barack Obama has admitted to the youthful indiscretions of using marijuana and cocaine. This should be an inspiring story. Young man from difficult youth, experiments with drugs, but takes a positive route, working his way to being the keynote speaker at the Democratic convention and the new rising political star. Unfortunately, instead it's a tale of political hypocrisy as usual. You see, Obama wasn't caught, so he was able to get to where he is today. If he had been jailed, the tale would be different. Yet he works to imprison and ruin the lives of other young people with youthful indiscretions who happen to be not as lucky as Barack Obama. And he's proud of it.
He follows this with a lengthy list of the bills Obama has supported that perpetuate the War on Drugs.

If drug use is supposed to lead the user into such an abyss of failure with no way out, how come the only thing our powerful, wealthy, and successful politicians have in common is past drug use?

This is cross-posted at Galen's Log.

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Sunday, August 29, 2004

A Marginal Post 

I've been thinking about margins lately, actually even before this post a few days ago. The thing I like about economics the most is how the same principles keep popping up; this, I would say, is much different than medicine, where you have to think about every problem differently and there seem to be more exceptions than rules.

How do business firms know when and how much to produce? As we discussed before, it is simply a matter of producing the quantity where the marginal revenue, the revenue that could come from selling one more unit, is equal to the marginal cost, the cost of producing one more unit. Thus, they produce so that every dollar incurred in costs brings in at least a dollar in revenue. This way, if every dollar brings in a dollar-plus, total profits will be maximized. For this principle applied to pharmaceutical advertising, go back and read this. But to state the principle briefly, the amount the pharmaceuticals spend on advertising (stated as a percentage of revenues) is insignificant if it can be reasonably assumed that every dollar spent brings in a dollar-plus.

This is a very basic principle that can be lost in lot of fancy number games. A firm can have profit margins, return on assets, etc. that are through the roof and still be a less-than-stellar company. Because if they are not producing at the quantity where marginal revenues and marginal costs are equal, they will be leaving profits on the table. Their various profit statistics will be artificially inflated and they will be costing their shareholders money.

What even got me thinking about this in the first place? It's funny, but none other than a baseball game. I was watching a Cubs-Astros game recently when the announcers were going on about the speed of Houston centerfielder Carlos Beltran. Since Beltran has joined the National League earlier in the season, he has stolen twenty-one bases in just as many attempts, and is 35 out of 38 combined this year. In fact, throughout his career, Beltran has stolen bases at a historically high percentage of success - currently hovering at a 90% success rate. To put this in perspective, Beltran is the all-time leader in stolen base percentage with at least 150 stolen bases. Actually the number-two guy is Tim Raines, who was successful 85% of the time. That's a tremendous gap.

Stolen bases are a risky proposition. You risk the cost of an out and a potential scoring baserunner, for the benefit of only moving up one base (albeit, one is in much better position to score on almost any hit or error). The large potential costs and smallish benefit mean that if you are not successful quite often, you actually cost the team runs in the long run. A lot of research has been done by baseball statisticians to find the break-even point, and they have generally found it be somewhere in the vicinity of 67-72%, depending on the era and the general level of run scoring. If a given player is successful in, say, 79% of his steal attempts, he is generally helping the team score runs.

So no doubt, Carlos Beltran is helping his team by running at a perfect success rate. But is success rate the only, or even best, way to measure his value in running the bases. Say, for instance, Carlos attempted five more steals where he otherwise stayed at first base. And say he was successful four of those times. His success rate in those 5 tries is 80%. As we know from above, that means that overall, those five attempts helped the team score more runs on balance. But if you added these to his season numbers, his overall success rate would actually go down. What gives?

The answer lies in marginal value. The extra five attempts yielded the marginal bases (revenue) that were greater than the marginal out (costs), thus yielding more runs (profits). True, before these five attempts were five other attempts where he was perfect, so the second set were less valuable, but they still had positive value, and that is all that matters.

So what does all this crap mean? It means that, in a manner of speaking, that Carlos Beltran, the all-time leader in stolen base percentage, is hurting his team. Not by running too much, which is how most players cost their team runs, but by not running enough! He has failed to reach his potential as a base-stealer, and thus, is costing his team bases that he could have stolen if he had just tried. The cost, not reflected in any of the statistics, lies in the opportunity cost of staying at first base. Indeed, this is a baseball example of the old Wall Street adage, "the greatest risk is not taking one." It is why someone who steals 16 out of 20 bases his contributed more value than someone who has stolen 3 out of 3. The first runner is maximizing his value as a baserunner, while the second is leaving runs (profits) on the table.

Just to be clear, I am not saying that Beltran should steal bases until his percentage is 67%. I am saying he should steal bases until his marginal percentage is 67%. He should seek out base-stealing opportunities until he is successful in two of his last three attempts. Put in another way: right now, the next base Carlos attempts to steal will have about a 90-100% probability of being stolen. I suggest he should steal all the bases that in his estimation have a 67-72% probability of being stolen by him.

What does economics and baseball have to do with medicine, you ask? This is mostly a medical blog, so I should tie it into medicine somehow, right? I think it does apply, and not to the business of medicine, but to the practice of medicine.

Here's how. You might hear of a famous doctor who has never had such-and-such complication treating such-and-such condition in qualified patients. Obviously a physician with exemplary talents. But can the same principle apply? If a doctor has never had a failure of a given treatment (given that such treatment is the treatment of choice in our given hypothetical population), then it is quite possible he is not treating enough patients. If you accept that every single medical procedure/treatment has potential risk, and that every patient in our population will accept that risk for its benefits, then maybe out star doctor is leaving treatment success on the table.

Take this for example - a surgery is indicated for X cancer that has a surgical cure rate of 60% in patients who meet some criteria. Also, let's say that these patients have a uniform risk-benefit ratio, where each one of them would be willing to undergo the procedure if the probability that they're cancer would be cured is 50%, but would rather do other things below this level. Doctor A is very distinguished and experienced, and he loves operating every time he gets the opportunity. He'll help every patient who is willing to go under. In his career he has done thousand of these procedures, with a cure rate just north of 80%. He crunched the numbers, and of the patients who met the commonly accepted criteria just barely, he has a success rate right at 60%.

Doctor B, on the other hand, has much stricter criteria for selecting patients for this procedure than are commonly used. So it happens, he has done several hundred of these procedures, and can count on one hand the number who have not been cured. A truly amazing feat.

It may seem that Doctor B, with his success of essentially 100%, is the better surgeon and has added the most value. But not so fast. Looking at this through the marginal lens, it's not so clear. While B has a much higher success rate, he has failed to help a lot of patients he could have helped at a reasonable risk probability. While A has a lot more failure, he has helped more people by a factor of 10. It isn't only the average success rate that counts, the marginal rate has something to say, too. Doctor A's failures are seen and the costs can be easily accounted for; however, the unseen opportunity cost of Doctor B should be accounted for when evaluating his exploits. For Doctor B, by not operating on patients who wanted and needed his help, was leaving "medical profits" on the (surgical) table, as it were.

Now, this may all seem ridiculous with the numbers I have chosen. Almost any doctor who performs well on thousands of procedures will contribute more value to medicine than a doctor who performs well on hundreds, regardless of their respective success rates. However, you could change the numbers and come up with a better problem. I wanted to make it so the numbers were easily comprehended without having to crunch them. In addition, this analysis is not to say that Doctor B is a better surgeon than Doctor A - the jury would be out on that one. What this says is that Doctor A contributed more total value.

So what's the point of this stream of consciousness. The point is that in some ways, perfection is not to be revered, or even preferred. If Carlos Beltran was successful in one stolen base attempt, or if either doctor cured a cancer in the only operation he ever performed, they all would be incurring serious opportunity costs for taking action, given their considerable talents. One often hears "the perfect should not be the enemy of the good." But, when evaluating value through marginal approaches, it very well might should be. Working under the assumption that everything has risk, then the perfect person is not operating at his highest potential.

This is cross-posted at Galen's Log.

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Saturday, August 28, 2004

Hold Your Breath 

Cafe Hayek's Don Boudreaux penned this letter to The New York Times in response to this letter responding to this article:
Reader Robert Lauer calls the U.S. budget deficit and trade deficit “twin 500-pound gorillas” (Letters, August 28th). He’s right to worry about the budget deficit, which reflects the administration’s and Congress’s recklessness. But the trade deficit is no cause for concern. It reflects foreigners’ preference to invest in American assets rather than to cash out all of their dollar holdings immediately for goods and services. This fact means not only that more investment than otherwise takes place in the U.S., but also that more foreigners have real reasons to wish the American economy well.

Your newspaper would help to end this needless fretting by referring not to the "trade deficit" but to the "capital-account surplus." The two are the same thing, except that the former sounds oh so very ominous.
Emphasis mine. It will be a cold day in hell before a newspaper helps "to end this needless fretting."

This is cross-posted at Galen's Log.

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A Hypothetical 

This is a ridiculous, extreme scenario, but instructive I think. A new medical breakthrough is announced (it doesn't matter right now whether it's a procedure, a technology, or a drug) that will guarantee to add ten years of life to it's beneficiary. The only problem: it costs $1 million (and this is the true free equillibrium price; there is no patent involved). Obviously, only very wealthy people will be able to afford such a treatment. Are we as a society (or more precisely, those people who would buy it anyway - since if they are the only ones who can afford it for themselves, they are the only ones who can afford it for someone else) obligated to pay for and provide this treatment for people who can't afford it? In other words, are they allowed to have this treatment available only if they provide it for others, too.

This is cross-posted at Galen's Log.

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Four Thumbs Up 

I have seen two outstanding movies the last two nights: Garden State and Maria Full Of Grace. I recommend them both highly (warning: some spoilers ahead).

Garden State starts and is written/directed by Scrubs start Zach Braff. It's about a twenty-something actor who returns home to attend his mother's funeral. He had been away for several years, and through the movie we learn that 1) his mother became paraplegic in a household accident becasue he, as a young boy, pushed her out of frustration, and 2) his psychiatrist father placed him on numerous medications and sent him to boarding school because they feared him "dangerous." During his short visit he begins a friendship with a carefree girl and tries to struggle with foregiving his father. The ending was the only disappointing thing about the film; but the story is charming and witty, the soundtrack was superb, and Braff gives a very good performance.

The psychiatric issues are generally unrealistic, eventhough they are not over-the-top in the way they are presented in the movie (if that makes any sense). I didn't know what to think about them, but then I read this in the actor/writer/director's Garden State Blog:
On a serious note though: I wanted to address something VERY important. Garden State is not a movie that condemns taking medication for psychiatric reasons. Please do not interpret what I wrote to mean that life is better spent without medicine. I have seen countless friends and loved ones have their lives changed and sometimes saved with the aid of antidepressants and the like. Garden State focuses on a character that was incorrectly prescribed some very serious medication at a young age and never had the opportunity to find a way or reason to come off them. He also quits cold turkey which is something you should NEVER do! I completely support medicine when it's needed. And in total honesty, this is not some paragraph I was asked to write by lawyers, I felt I needed to be totally clear with many of you who've shared some very personal things.

What Garden State's really about is how short life is. And how we get caught up in so many entanglements and insecurities and worries and obsessions and trivial arguments while life races right by us shaking it's head at how seriously we take ourselves. Keep in mind that the sun's gonna burn out in about a million years and truly nothing will have mattered.
I felt better about the point he was making. Boy, you gotta love the blogosphere.

Maria Full Of Grace is a Spanish-language film set in Columbia. Maria is a 17-year-old worker in a flower plantation who has become disillusioned with her life. When she quits her job, becomes pregnant, and breaks up with her boyfriend, she decides to become a mule for a Columnian drug trafficker. The story takes us through her difficult decision to undertake a dangerous job, her dramatic trip into the US and past customs, her fearful experience in the hands of the drug dealers, and her journey throught the streets of New York as a non-English speaking foreigner.

The plot was very realistic, with no ridiculous story elements which plague most American (even though it is set in Columbia and is Spanish-language, the director is American) films. The actress who plays Maria is excellent and very sympathetic. The movie neither glorifies nor shows much contempt for the drug trade. Go see it.

This is cross-posted at Galen's Log.

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Friday, August 27, 2004

It's Hard To Avoid Traffic In the Middle Of the Road 

Perri de Haviland's thoughts on Najaf:
Either conclude that following a policy of using force to confront Islamic extremism is too bloody to stomach, leading inevitably to adopting a policy of withdrawal from wherever Islamic terrorism threatens modern global civilisation...

...or conclude that once a decision to use force is taken, it will be followed through robustly and ruthlessly with the intention of killing fundamentalists leaders like Sadr and ideally as many of his hardcore supporters as is practical as well.

In reality I expect neither clear conclusion will be reached in the corridors of power in Washington DC (and do not get me going about the buffoons who run the Foreign Office) and a middle-way fudge that is already being offered up in the established media will be the perceived wisdom as key elements of the political classes work to keep the world safe for Sharia, legally enforced burquas, clitoridectomy and judicial amputations.

Surely the best way to ensure the survival of a tolerable regime in Iraq is to fill the graveyards with as many Islamic extremists as possible. If that policy is not acceptable, then surely one has no business using force to begin with as it seems perverse to kill people unless you are willing to do so for a damn good reason... either fight a war or do not, the middle way just gets you the worst of both worlds: you are hated for the people you kill and held in contempt for the people you would not kill.
Now I would certainly wish the former tactic; but I tend to agree that as difficult a choice it may be, there are clearly two and only two. I'll entertain arguments to the contrary, but I can't see them myself.

This is cross-posted at Galen's Log.

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Economic Fallacy At The Health Care Blog 

Matthew Holt, who should understand these things, spreads the R&D vs. marketing misinformation I have dealt with before:
Then after I spoke -- and included the share of revenue of pharma companies given to sales and marketing (c. 30%), R&D (11%) and profits (c.18%) in my talk -- Chang went on a long rant about the fact that R&D was really expensive and cost "hundreds of millions of dollars". Actually the real number is tens of billions of dollars, but he never referred to the percentages of revenue pharma spends on what --it was just empty rhetoric.
Well, he forgot any mention of the 41% of renvenues that aren't accounted for there. By his logic, the pharmaceutical companies ought to focus on that - its even larger than the sales budget. Marginal revenue equals marginal costs, marginal reveneue equals marginal costs, marginal revenue equals marginal costs...

This is cross-posted at Galen's Log.

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Vote For Sale 

I was actually planning to do this closer to the election, but it seems someone beat me to it. A man had an EBay auction for his presidential vote taken down because, well, it's illegal:
James Pengov, 36, of Elyria, said he was hoping to land enough money from selling his vote to pay medical bills.

"Up for auction is MY VOTE!," said Pengov's Aug. 19 posting on the online marketplace. The item, advertised as "Presidential Vote for Sale," with a starting bid of $50, was yanked 12 hours after it was posted.

"Simply tell me who to vote for, after paying the auction, and it will be so," his listing said. "If you care, buy my vote and you will have twice the power in the upcoming election!!!!"
Screw the feds, I can sell my vote if I want to. And I'll go one better - I'll sell the whole damn ballot (though, is there anything else going on in either Lexington or Kentucky?) All my many friends and family who think so strongly that I should vote (and you know who you are) can easily become the sole propietor of my "civic duty" by submitting the highest bid. If anyone thinks it makes the slightest difference who wins this election (because I sure don't) step up and have your voice heard - twice!

This is cross-posted at Galen's Log.

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Campaign Finance Reform 

Two articles today at Reason about campaign finance reform (here and here).

When you make campaign finance criminal, only criminals will be able to finance a campaign (wait - how's that any different than what it is now?).

This is cross-posted at Galen's Log.

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Thursday, August 26, 2004

What's Left? 

Scott Woolley discusses the problems of satellite radio:
In waging a crusade to stop satellite radio, the Fritts forces exhorted the nation's radio station managers to contact their congressmen and tell the "truth about satellite radio."

"They got broadcasters across the country to hammer like hell on the Congress and the FCC," says the ex-NABer. The NAB literature's central talking point was straightforward: "There is no need for ‘more' radio service, no need for national radio service and no need for more competition in radio service."

Digital radio promised lower costs, higher quality and more variety. To portray this as a bad thing, the NAB turned the free-market logic of 18th-century economist Adam Smith on its head, stressing the harm satellite radio could do to the listening public.

Satellite's "purported benefits are, in the main, nonexistent, unrealistic or of minimal value," the group assured the FCC in 1995. Left free to compete, the NAB added, satellite radio would offer inferior programming and shove better-quality AM and FM service off the air. Thus competition would leave consumers worse off, the NAB said in an Orwellian conclusion: "Adding a new service would likely decrease the overall service to the public."

"Economists just don't take a lot of those arguments seriously," says Stuart Benjamin, a Duke University professor who studies broadcast regulation. "To be blunt, the NAB has power that is not commensurate with the persuasiveness of its arguments."
I don't understand how an intelligent person could ever be persuaded by such anti-competitive arguments. Everyone knows that anti-competitive monopoly power is harmful to consumers. Anti-market types indeed understand this, as they often can be heard arguing that every business and industry under the sun has monopoly power (even though such power is oh so rare). Yet I have heard arguments like this with regard to health care. Competition squeezes out the little guy. Nonsense. If anti-competition is harmful to consumers, and competition is harmful to consumers, then what the hell can help consumers? (Oh yeah, government control. I forgot.)

This is post is cross-linked at Galen's Log.

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Sometimes You Win, Sometimes You Lose, Sometimes It Rains 

Hello, sports fans! The Mergers and Acquisitions Department informs me I've just been traded from The Proximal Tubule to Galen's Log for a player to be named later. I'm informed the deal almost fell through because Galen would have had to part with his star shortstop to fit me in under the salary cap, but a midnight deal was struck by restructuring my contract. I took a huge pay cut in exchange for a no-trade clause that prevents me from being traded to 3md or Gross Anatomy. Anyway, it's good to a part of the team. We gotta play them one day at a time. I'm just happy to be here, hope I can help the ball club. I just wanna give it my best shot, and The Good Lord willing, things will work out.

Just to note, I will still maintian The Proximal Tubule at www.proximaltubule.com.

This is cross-posted at Galen's Log.

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Verb Tenses Can Be A Bitch... 

...and Harper's Lewis Lapham found that out the embarrassingly hard way. A quote from his most recent article in the monthly magazine:
The speeches in Madison Square Garden affirmed the great truths now routinely preached from the pulpits of Fox News and the Wall Street Journal--government the problem, not the solution; the social contract a dead letter; the free market the answer to every maiden's prayer--and while listening to the hollow rattle of the rhetorical brass and tin, I remembered the question that [Richard] Hofstadter didn't stay to answer. How did a set of ideas both archaic and bizarre make its way into the center ring of the American political circus?
The unfortunate thing for Mr. Lapham is that it was hard for these speeches to have "affirmed" anything when they haven't happened yet. A reader responded:
I was most impressed to read of Lewis Lapham's ability to travel in time in "Tentacles of Rage" [Essay, September]. As far as I can tell, on the day I received my copy of Harper's Magazine, the Republican convention had yet to take place, and living in New York, I think I would have noticed. Admittedly, the pablum will be predictable (barring some unforeseen event), but it seems awfully sloppy of Lapham to discuss feelings he had while watching something he has yet to watch, simply in order to put some additional feathers on one of his rhetorical barbs. What is most appalling is that he chose an actual piece of journalism, rather than his accustomed punditry, for this rather silly fillip. This doesn't exactly give me faith in his understanding of what it is reporters actually do.

On the other hand, if he has in fact traveled in time, I would appreciate it if he could let all of us subscribers know the outcome of the forthcoming election.
Mr. Lapham's reply:
As Mr. Ostrowski properly notes, the rhetorical invention was silly. The mistake, however, is a serious one, and if I'd had my wits about me as an editor, I wouldn't have let the author mix up his tenses in manuscript or allowed him in page proof to lapse into poetic license. Both of us regret the injury done to the magazine and apologize, wholeheartedly, to its readers.

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Wednesday, August 25, 2004

VA Care 

There's been a few mentions (here, here, and here) regarding the recent Annals of Internal Medicine study that looked at diabetes care at 5 VA hospitals and regional HMO's.

I have to say I was not impressed with the article. The fact that the two populations were very different and the authors did not investigate costs one bit leads me to question its merits. It's seem pointless, speaking as a health professional and amateur economist, to ever talk about benefits without cotsts (especially in a study like this). Also, while the study looked at only eye care, hemoglobin A1c, blood pressure, and LDL, it would have been nice to see some other measures (since they had their hands on all this data): MI incidence and mortality, amputations, etc.

But the best part was this whopper:
Our results suggest that a federally sponsored national health care organization can provide care that is equivalent to or better than that provided by high-performing commercial managed care plans.
Uh, your results do nothing of the sort. They suggest that in the 5 regions your looked at, the patients at VA centers had better outpatient diabetic care as measured by a handful of intermediate proxies. Geez, thats like saying something like: since Lipitor prevents slightly more heart attacks in high-risk patients than Pravachol, we recommend that all pateints everywhere take Lipitor. Overall, given statements like this, quotes from the authors, and the absence of any self-critical discussion from the authors in the article, I have to believe these guys were bound and determined to strike a blow for national health care.

Setting all that aside, a similar, but better, study looked at treatment of several diseases (lung CA, colon CA, diabetes, cholelithiasis) over several countries with different systems (USA, Germany, UK) and evaluated the costs involved. There findings: the US health care system was more productive:
The United States is more productive in all these diseases except for diabetes in the United Kingdom (ed. note: maybe we need a national health care system just for diabetes). The reasons for this result can be traced directly to the huge differences in the way the health care sector is organized and governed across these three countries. The UK health care system is almost entirely government owned and run...The result has been that the United Kingdom has no invested as quickly in technologies that have dramatically improved the diagnostic capabilities of medicine and significantly reduced recovery time...Germany, on the other hand, has a system more like the United States had twenty years ago. In Germany, medical expenses are paid for on a task-by-task basis for services of doctors and hospitals. As a result, hospitals in Germany have no financial incentive to reduce length of stay.
This study also proves nothing, but it is more powerful than the study above.

Finally, it would be nice to have some of the physician-bloggers out there who work at a VA talk about their experiences. I have to say the one here in Lexington seems pretty substandard, much in stride with what I hear about VA's in general. Can anyone talk a length about the best and worst of the VA from a doctor's (and, if possible, a patient's) perspective? I have a feeling that those who lift up the VA as a shining example of nationalized health care might actually be undermining their case.

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Tuesday, August 24, 2004

Wanna Bet? 

Patri Friedman discusses putting your money where your mouth is:
Voicing an opinion is costless - anyone can argue that socialism is great, or that the government won’t really inflate a fiat currency. Having a false opinion may be costless if it doesn’t affect your life much, and it can produce a benefit of feeling good. So people may choose an opinion based on how it appeals to their hopes, rather on on what they believe is true.

An example of a more incentive compatible system is gambling. While people often gamble irrationally, gambling still tends to draw out more beliefs and less hope than mere discussion. By placing a wager, you tie your opinion to a personal gain or loss, so you care whether you are correct. Hence “Wanna bet?” really means “Do you actually think that, or are you just saying it?", and its a great way to call the windbag’s bluff. People offer absurd opinions much more often than they make idiotic wagers.
I may need to start doing this, thereby combining my two greatest vices: arguing and gambling (if you could somehow throw McDonald's french fries into the mix, I would be powerless).

I'm sure Graham and I could come up with some sort of wager with foreign drug re-importation. What do you say?

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The Third Way 

Katy Delay writes of the third way:
According to its inventor Tony Blair, speaking with Clinton and other heads of state at a 1998 NYU School of Law banquet, "[the Third Way] leaves behind, if you like, the old left that was about big government or state-controlled tax-and-spend, and [here he gets a little vague] it is not the politics of laissez-faire, either . . . it is essentially a belief that we can construct a different type of politics for the 21st century based on the values of what I would call progressive politics, but rigorously, in a really disciplined way, applying those in an entirely fresh perspective for the problems that we face today."

This admittedly lacks specificity, but I think we can safely say that the Third Way is an attempt at compromise between capitalism and socialism, a new-age effort to reestablish free-market roots while preserving and grafting onto them the aforewilting progressive leaf system. Just as I thought.
Given the proper long-run time frame, the third way is impossible. The only stable equilibria are total liberty or total authority. Lugwig von Mises understood why (same article):
Every form of intervention generates an imbalance that seems to call forth a next step toward markets or toward further intervention. The choice determines whether the social system will be pushed toward the economics of prosperity or that of poverty. The Third Way, in short, attempts to combine policies that are internally contradictory. To attempt a pivot between laissez-faire and socialism is to be caught in precisely the imbalance that afflicts the US and Europe today.
Dealy adds (speaking of Bill Clinton):
The self-enamored power-seekers of our species do not seem to be capable of seeing themselves as other than puppeteers of our national welfare, and not only that, but also of international finance, global temperature, and world peace. Where is the humility? Where is the modest, observant curiosity about what really makes a healthy economy go around? Clinton speaks as if that problem has been solved for some time now. I question that assessment.

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Monday, August 23, 2004

Profile This 

There has been a lot of interesting stuff about racial profiling the last few weeks. Most of it stems from the Michelle Malkin's new book "In Defense of Internment." The publisher's description (from Amazon):
Everything you've been taught about the World War II "internment camps" in America is wrong: - They were not created primarily because of racism or wartime hysteria
- They did not target only those of Japanese descent
- They were not Nazi-style death camps In her latest investigative tour-de-force, New York Times best-selling author Michelle Malkin sets the historical record straight-and debunks radical ethnic alarmists who distort history to undermine common-sense, national security profiling. The need for this myth-shattering book is vital. President Bush's opponents have attacked every homeland defense policy as tantamount to the "racist" and "unjustified" World War II internment. Bush's own transportation secretary, Norm Mineta, continues to milk his childhood experience at a relocation camp as an excuse to ban profiling at airports. Misguided guilt about the past continues to hamper our ability to prevent future terrorist attacks. In Defense of Internment shows that the detention of enemy aliens, and the mass evacuation and relocation of ethnic Japanese from the West Coast were not the result of irrational hatred or conspiratorial bigotry. This document-packed book highlights the vast amount of intelligence, including top-secret "MAGIC" messages, which revealed the Japanese espionage threat on the West Coast. Malkin also tells the truth about:
- who resided in enemy alien internment camps (nearly half were of European ancestry)
- what the West Coast relocation centers were really like (tens of thousands of ethnic Japanese were allowed to leave; hundreds voluntarily chose to move in)
- why the $1.65 billion federal reparations law for Japanese internees and evacuees
was a bipartisan disaster
- and how both Japanese American and Arab/Muslim American leaders have united to undermine America's safety. With trademark fearlessness, Malkin adds desperately needed perspective to the ongoing debate about the balance between civil liberties and national security. In Defense of Internment will outrage, enlighten, and radically change the way you view the past-and the present.
Expert historian and UNC professor Eric Muller recently guest-blogged at Volokh.com and was highly critical of Malkin's scholarship and the book itself. You can go back and read parts 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11.It's quite a lot of stuff, but is highly entertaining, thoughtful, and informative. Well worth the read.

Recently, the Boston Globe's Cathy Young shared her thoughts:
EVER SINCE the Sept. 11 attack on America by radical Islamic terrorists, the use of ethnic and religious profiling in assessing security risks has been a subject of controversy. In this debate, the mass internment of Japanese-Americans during World War II has been often cited as a cautionary tale. Now, a conservative author and columnist, Michelle Malkin, has come out with a book provocatively titled "In Defense of Internment: The Case for `Racial Profiling' in World War II and the War on Terror."

In Malkin's view, a misguided guilt complex about the Japanese internment is keeping us from taking necessary homeland security measures based on ethnic profiling. And so she sets out to debunk "politically correct myths" -- such as the notion that the relocation and internment of about 112,000 ethnic Japanese, two-thirds of them American citizens, was a product of wartime hysteria and racism rather than a reasonable response to a clear and present danger.

"In Defense of Internment" does make a convincing case that some Japanese aliens and even Japanese-Americans had pro-Japan sympathies, and that the Japanese military was working to recruit agents in their ranks. But does this amount to a case for internment?

...Ironically, the profiling measures Malkin advocates today, such as selective monitoring of aliens and visitors from countries with terrorist links, are moderate and fairly sensible. She is right that it's ludicrous to invoke Japanese internment as a parallel. But surely, defending something as extreme as mass internment can only undermine her case. The people Malkin dubs "profiling alarmists" argue that if you accept any ethnic profiling, you're on a slippery slope to defending internment camps. And Malkin does her best to prove it for them.
Finally, in a very slight change of pace, Steve Landsburg discusses the economics of such present-day profiling:
But there are two points those on both sides seem to have missed. First, detaining 14 Middle Eastern men is neither more nor less an infringement of civil liberties than detaining 14 passengers chosen at random. Either way, 14 people have their liberty infringed.

Is it worth detaining 14 people (or an entire planeload of people) on every flight to see what's in their McDonald's bags or to question them closely about their reasons for traveling? I honestly don't know. But this I'm sure of: If you're going to detain 14 people, they should at least be the 14 people who are statistically most likely to be worth detaining.

Second, just because you detain particular people, it doesn't follow that you've got to treat them unfairly. Being detained and questioned is a burden; it's inconvenient and it's demeaning. But there's no reason that burden has to be borne entirely by the detainees. To spread the burden, all the airlines have to do is give each detainee a $100 bill for his trouble. If Northwest had had a policy like that on Annie Jacobsen's flight, it would have paid out $1,400 to the 14 Syrians. Assuming there were another 200 passengers on that board, they could have covered that cost with a $7 hike in ticket prices.

I am guessing that Annie Jacobsen would have been thrilled to pay a $7 surcharge for the comfort of knowing that her Syrian co-passengers had been thoroughly vetted before takeoff. The Syrian musicians, in turn, would have picked up a hundred bucks apiece in exchange for, oh, 15 minutes or so of answering questions. How many musicians do you know who would turn down a gig at that hourly rate?
Read the whole thing.

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Common Sense 

Kevin MD links to this article by a CEO of a Massachusettes HMO:
FOR THE SIXTH year in a row, health care costs are rising at rates that far exceed the rate of general inflation. Studies continue to suggest that health care delivery is uneven at best, and in some cases, harmful, and everybody's got a financing scheme or a policy proposal to shift the cost and quality burden onto someone else.

But most of these ideas won't solve the problem.

The real problem is about much more than high drug prices or corporate profiteering. It rests with the lack of credible, publicly available -- and understandable -- information around the cost and quality of health care. If the whole thing is just a big black box, why should we be surprised if it isn't as effective or efficient as we might like it to be?

When someone buys any other product or service, he or she knows the price of that product, and has some ability to determine if its quality is worth the cost. In recent years, the Internet has made consumers even better purchasers than they were before, driving down prices, improving knowledge and enhancing value.

But not in health care. As consumers, we don't know the price of any common medical procedure. We don't know the price of an appendectomy at South Shore Hospital, knee surgery at the New England Baptist, or having a baby at Brigham and Women's. We don't know if it costs more or less to have an MRI at UMass Memorial or Worcester Medical Center, or if bypass surgery at the Beth Israel Deaconess costs less than bypass surgery at Massachusetts General Hospital. We also have no clue about how much it actually costs at either institution: $5,000? $15,000? $25,000? $50,000?
Kevin agrees that this is a good idea. I don't think it's a good idea so much as I think it is so common sensical that we should ask why things are the way they are. Easily obtainable pricing and quality information is one of the fundamnetal qualities of a functioning free market. It is one free-market reform that I am confident even Graham and Cameron can (and do) buy into.

However, it is only one side of a two-sided coin. Consumers only want and seek the information if the benefits of such information exceed the costs of finding it. Part of the reason things stand as they do is that patients do not save from finding this pricing information. This is the fundamental problem with third-party payers, whether they be HMOs in a employer-based insurance structure or governments in a national health care system. Why would anyone ever have the incentive to seek price information, and more importantly, to act on that information, if the benefits acrue to a third party?

The author in the above article wants patients to shop for best prices because he will see better profits. The government wants patients to shop for best prices so it can spend tax money on other things. But consumers don't care because, for the most part, higher prices only come from their pockets indirectly (higher taxes and premiums). Such information is useless without the incentive to use it.

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Regulatory Overkill 

In stark contrast to my post below, here is an example of people not profiting from delivering others from misery, but profiting by creating misery. The Reason Public Policy Institute blog notes:
In 2005, the number of federal regulators is expected to exceed 2000's mark by 40 percent. The total number of regulators will be 242,500—a new record. So says a new study by the Mercatus Center.

That means our nation will have more regulators than pharmacists, and way more than aerospace engineers. More than dentists and biologists combined.

And that’s just counting federal regulators.
These people, for the most part, lay down fines, throw people in jail, make things more expensive, abuse power, and otherwise destroy lives - certainly not producing anything but misery.

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A Call To Reason 

Graham points to the first-person account of a man on the kidney-donor list who turned down a kidney:
I thought it would be more difficult, or maybe more complicated, but it was neither. A transplant surgeon called from the University of Minnesota this morning to tell me they had a cadaver kidney for me (I’ve been on the transplant list for four-and-a-half years). “I’ll pass,” I said in a quiet but steady voice. “Call the next person on the list.” The physician wanted a reason. “I’m still working out some ethical issues with the whole transplant business.” There. It was out before I had a chance to even think about censoring myself.
Michael Fraase believes he'd be a hypocrite to do otherwise:
That was pretty much a lie. I mostly worked out transplant ethics for myself within six months of my diagnosis. But it’s easier than telling the whole story. Or maybe more convenient. The short version of the whole story is that I feel very strongly that corporations should not profit from the misfortune of the chronically ill. It would be hypocritical for me to hold that position and then turn around and benefit from someone else’s misfortune. In order for me to receive a cadaveric kidney transplant, there has to be a cadaver. Get it?
Mr. Fraase has fallen prey to dangerous rhetoric.

You don't have to look long or hard to find somebody decrying corporations that "prey on the misery of others." I find such rhetoric personally offensive. You see, in less than a year's time I will be a pathology resident. Therefore, it will be correct to say that my whole life will be dedicated to "profiting from the misery of others." To most, cancer is pain and misery and death. To a pathologist cancer is job security. People get sick, and they come to us (through their agent primary physicians) to hire our talents for proper diagnosis of their misery. We profit from their chronic illness.

But we pathologists are not the sole group reveling in misery. You can take it further - all doctors profit from the misery of others. If people never got sick, no physician would exist. Yet it goes further than that. Every person alive, save for the theoretical totally self-sufficient man, profits from others' misery. The farmer and grocer profit from others' miserable hunger. The retailer and the seamstress profit from others' miserable cold nakedness. The entertainer profits from others' miserable boredom. Educators profit from other's miserable ignorance.

The human being in a state of nature is miserable and is misery defined. But, on second thought, maybe I have characterized it incorrectly. There is another way of looking at this. Mr. Fraase might see it as profiting from others' misery. I see it as profiting from delivering another from misery. Certainly it's possible to deliver someone from miserable conditions charitably without profiting; however, the number of beneficiaries would be substantially lower if noone attempted to seek profits from such misery. Presumably, Mr. Fraase, and others who agree with his point-of-view want to live in a world where people didn't profit from the misery of others; I, however, much prefer to live in a world where they did.

(I think the "corporations" qualifications is a little silly - corporations are simply groups of people acting in concert to profit by delivering others from misery. That corporations benefit from certain government favors is, in my eyes, a problem with government, not with corporations.)

I give Mr. Fraase the benefit of the doubt that I give all human beings (until priven otherwise) - namely that he is filled with love and goodness and is capable of making the world a better place. I know nothing of Mr. Fraase other than that which he wrote in a single blog entry. I know that he is a conscientious person who adheres strongly to his beleifs. That beneficial prejudice and limited knowledge of his character leads me to say this: I hope you reconsider your position, Mr. Fraase, and I hope you get a new kidney. I think you have been led astray by those (some well-intentioned and some not) who come to their point-of-view by looking at this the wrong way. The cadaver donor is dead and there is nothing to change that. The doctor that would perform the transplant would profit by delivering you from the misery of end-stage renal failure. There is no hypocrisy if you were to reconsider your point-of-view to the way I see things. That you may have to admit you were wrong about this one thing is, I think, a small price to pay for your life.

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Quick Links 

James Surowiecki, author of "The Wisdom of Crowds," and guest-blogging at Marginal Revolution, has an interesting post about election fraud in Venezuela:
This is a classic example of what Nassim Taleb calls being "fooled by randomness," in his intriguing book of the same name. We think that randomness means there will be no clusters or sequences of similar behavior, and therefore when we see them we assume they're evidence of some hidden pattern. (You can see this in the way people interpret everything from clusters of cancer cases to hitting streaks in baseball.) But they're really just evidence of the numbers working themselves out.
He also has this informative post regarding the Google IPO:
But the offering was also a success for another reason, which is that it forced institutional investors to compete, for once, on a level playing field. The problem with the current IPO system isn't just that companies end up leaving billions of dollars on the table when they go public, but that select mutual-fund and hedge-fund managers (as well as well-connected individuals) are handed what amounts to free money. In a traditional IPO, the investment bank underwriting the offering controls the allocation of shares. In the late 1990s in particular, that allocation process became a way of doling out favors and securing future business. For instance, if you were a mutual-fund manager who funneled a lot of trades through an investment bank -- or who agreed to do so -- then you were more likely to get a hefty allocation of IPO shares.
All the Google-bashing confused and disappointed me to no end. To me it seemed like a wonderful instance of the free-market offering a superior good due to competition. To the Wall Street establishment and to stupid reporters, there was always something that "broke the rules." Which, to me, is prima facie evidence that the whole thing was positive.

Finally, Baylen Linniken at D'Alliance is amused by how easy it is to get government help when doing research that will fall in lock-step with the message of the War on Drugs:
Want to, say, cook up a batch of pink anhydrous ammonia, a key ingredient in creating methamphetamine? It's no problem when you have a congressman working on your behalf, a $10 million grant from a farm-supply company, university professors at your beckon call, and the DEA willing to help you with your research.
He contrasts this by noting how difficult it is in general to be permitted to research drugs and drug use.

As it stands now, taking all of the data and research as a given, I think the relavent costs and benefits favor the complete legalization of all illegal drugs. Tomorrow. But when you factor in the fact that all said "research" that the feds rely upon to support their case is tainted by the bias of their policies and power, it makes the case that much stronger

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Teleportation Is Coming 

It seems we're one step closer to teleportation.

I have argued that temportation would be more desirable, but, hell, I'm not picky.

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Friday, August 20, 2004

Dr. Feelbad, Revisited 

Jacob Sullum expands his thoughts regarding the new DEA pain guidelines that I posted about below:
Announcing the publication of the pain medication pamphlet, which was prepared in consultation with leading pain experts, the DEA's Patricia Good said the government's goal is "ensuring both the ready access to prescription opioids and the elimination of their abuse and diversion." Since pain cannot be objectively verified—as the pamphlet notes, "self-report is the 'gold standard' for pain measurement"—this mission is plainly impossible, and insisting on it is a mark of delusion or bad faith.

...During the same press briefing in which the DEA's Patricia Good denied that drug law enforcement has a chilling effect on pain treatment, David Joranson, one of the experts who helped produce the pamphlet, noted that "the medical and regulatory environment for pain management seems to be worsening," with physicians increasingly fearful of investigation and reluctant to prescribe opioids. "In some ways," he said, "the use of pain medications has become a crime story when it really should be a health care story."
Coincidentally, yesterday Reason released this article on its website, where Maia Szalavitz documents a few doctors' nightmarish brushes with drug control regulators. These stories fly in the face of the DEA rhetoric that such measures "need not conflict" with efforts towrd pain control:
On February 1, 2002, Cecil Knox was seeing patients in his Roanoke, Virginia, clinic when more than a dozen federal agents burst through the doors with guns drawn. Helmeted, shielded, and wearing bullet-proof vests, they terrified waiting patients and employees. One worker later told the Pain Relief Network, a patient advocacy group, she thought she and her husband, who was helping her in the office that day, would be shot. She looked on in horror as an agent put a gun to his head and ordered, "Get off the phone! Now!"

Knox, a pain management specialist who had been practicing medicine in Roanoke for seven years, was dragged out in handcuffs and leg irons. The local U.S. attorney’s wife, a TV reporter, was among the journalists tipped about the raid in advance. She stood outside with a gaggle of other media people to announce her husband’s triumph. Knox’s assets were frozen and bond set at $200,000. He and several employees soon faced a 313-count indictment, including charges of drug distribution resulting in death or serious bodily injury, prescription of drugs without a medical purpose, conspiracy, mail fraud, and health care fraud. Prosecutors said Knox had illegally distributed millions of dollars’ worth of OxyContin, a timed-release version of the narcotic painkiller oxycodone.

William Hurwitz, a McLean, Virginia, internist and prominent pain specialist, received similarly heavy-handed treatment when he was arrested last fall. Hurwitz, who is Jewish, was visiting his children on Rosh Hashanah eve when federal agents descended upon his ex-wife’s house in McLean and took him away in handcuffs. As with Knox, the government froze Hurwitz’s assets; his bail was set at $2 million. He was charged with 49 felony counts, including drug trafficking resulting in death or serious injury, conspiracy, and running a criminal enterprise.

Like Knox, Hurwitz attracted attention largely because of his OxyContin prescriptions. Attorney General John Ashcroft said "the indictment and arrests in Virginia demonstrate our commitment to bring to justice all those who traffic in this very dangerous drug." Prosecutors said Hurwitz was "no better than a street corner crack dealer" who "dispenses misery and death." Assistant U.S. Attorney Gene Rossi had earlier declared that the feds would "root out" such doctors "like the Taliban."

Knox and Hurwitz are just two recent targets of an aggressive push by the Drug Enforcement Administration (DEA) and the Department of Justice (DOJ) to impose their judgments about the proper use of opioid painkillers (drugs derived from opium and synthetics that resemble them) on doctors throughout the country. In their attempt to prevent prescription drug abuse, the DEA and the DOJ in effect have taken upon themselves the authority to regulate the practice of medicine, traditionally the province of the states. Worse, they have transformed disagreements about treatment decisions into criminal prosecutions, scaring physicians away from opioids and compounding the suffering of patients who have trouble getting the drugs they need to relieve their pain.
Read the whole thing.

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Cold Fusion 

Kenneth Siber at TCS argues that conservatives and libertarians are philisophically similar and could lead to a political successful "fusion":
Like the man who's surprised to learn he's been speaking prose all his life, the fusionist is a political category whose members may operate without much awareness of their label. Fusionism is the idea, named and developed decades ago by Frank Meyer of National Review, that conservatism and libertarianism share a common agenda. Thus, the fusionist believes that conservatives and libertarians ought to be allies -- and indeed that their respective philosophies are largely or essentially combinable into a coherent body of thought.
Uh, no.

I find it humorous that many people equate the two - libertarians and conservatives. We share many views on well-known subjects, and a majority of registered Libertarians vote Republican, so I suppose it's not that surprising. I theorize that this is because libertarians see the economic freedoms opposed by many modern liberals as more difficult to secure, whereas the social libeties opposed by conservatives are more likely to secure themselves over time. For instance, I believe in 20 years gay marriage will be a non-issue. National health care, on the other hand, I have no idea.

It is worth noting, however, 1) there is about the same amount of common ground overall on the issues with liberals, and 2) Libertarian is not the same thing as libertarian. These are not trivial points. How could someone who is against the war, supports abortion and gay marriage, and believes all drugs should be completely legalized cavalierly "fuse" with someone who doesn't. Indeed, the more success we would have on the agreeable issues, the more unstable the "fusion" would become.

I hear a lot of people claim to fall under the umbrella of libertarian philosophy, mush to the dismay of true libertarians. I guess people support social security privatization and think that's enough to earn their stripes. Well, it's not. Libertarianism is a philosohpy, and a little common political ground does not adequately fuse our philosophies. Because there is no getting around the most basic point:

Libertarianism is a liberal philosophy!

It is a little ironic that two philosophies - modern liberalism and libertarianism (AKA classic liberalism) - with common philisophical roots could today be considered as political opposites. But that is a case study in 20th century politics and the success of left-wing, socialist extremism (the success of modern conservatives in my short lifetime notwithstanding), not a reason to join up with the modern liberals' sworn enemy. The fact that modern liberals have gotten off the liberal track and routinely contradict themselves is no reason to go running to conservatives who were never on track and who contradict themselves.

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Thursday, August 19, 2004

Gotta Love Those Crazy Catholics 

Celiac sprue has to be a bitch of a disease. For thise who don't know, you have to stick to a gliadin-free diet for relief of abdomianl cramps, diarrhea, and sometimes anemia. And gliadin is in everything, especially grains.

Take wheat crackers, for instance. The ones Catholics use for communion - can't have 'em. So read this story of an 8-year-old sprue patient who had her first communion declared invalid becuase it was not a wheat cracker.

C'mon let this one slide for Christ's sake (literally). Those guys are no fun at all.

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Tuesday, August 17, 2004

Media As Government Mouthpiece 

Jeff Taylor scratches were itch:
Greg Mitchell notes that contrary to WaPo executive editor Leonard Downie Jr.'s assertion, doubts about the Bush administration's Iraq policy were not just found among the lunatic fringe. Downie and company simply decided contrary views were on the fringe and refused to cover them.

But Iraq and the Post is just an example of the way media outlets often define news as that which fits their world view. As belief in the pro-active power of government is the closest thing to an official religion of newsrooms, questioning government officials who insist they have perfect knowledge of a foreign land and infinite ability to organize and direct men and machines across thousands of miles is heresy.

The bloody business of war just makes the cost of such rigid orthodoxy stand out. The same thing takes places everyday with dozens of other issues. Land use, taxes, mass transit, telecom -- you name it and solid stories are spiked and buried because they do not fit what "everyone knows."

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Monday, August 16, 2004

A Common Sense Move By Our Government? 

Via Samizdata, Bush has recalled many troops stationed in Europe and Asia:
President Bush on Monday announced plans to bring home up to 70,000 troops from Europe and Asia within a decade in a major realignment that Democrats said was politically motivated in an election year.

"The world has changed a great deal and our posture must change with it," Bush said of his plan for one of the biggest shifts of U.S. forces at many of 5,458 military facilities worldwide since the Cold War.
What a brilliant idea: remove thousands of troops stationed in wealthy, stable countries perfectly capable (and, on might say, obligated) to defend themselves. A cynic might ask why the hell these troops were still there in the first place, but I'm no cynic so I won't ask.

Of course, it is important to point out that this is good thing only if these troops come home, and aren't subsequetly deployed to wherever these guys think they should go next. Let's just say my optimism is somewhat tempered.

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Price Control On Organs 

This price control stuff has been popping up all over the place lately in many different arenas. The good Dr. Rangel is up in arms because a man with liver cancer spent a pretty penny advertising his need for a liver transplant, and subsequently got one a week later:
Todd Krampitz essentially bought his liver and screwed who knows which patient likely to be far sicker than Todd out of a chance for a cure of their liver disease and the addition of many years of life. Organ donations that specify the recipient are rare (only about 50 out of thousands of transplants each year) because cadaver organ donation is almost always an anonymous process. Unlike most transplant patients and their families, Todd Krampitz (who owns his own digital photography company) had enough money to pay thousands of dollars for billboard and other ads.

Because transplantable organs represent a very finite commodity, rationing is mandatory and the UNOS was supposed to impart as much fairness to the system as possible. Diagnosis, medical condition, and age are the criteria that are supposed to determine who gets to the head of a transplant list. Todd's media campaign for a new liver sets a very disturbing precedent. What happens if more and more patients begin their own ad campaigns? Will the organ go to that patient who spent the most and advertised the most? How will this be functionally and ethically different from allowing organs to go to the highest bidder?
Nick Genes sees the problem with Dr. Rangels reasoning (and points out that the donation was made by someone who would not have donated otherwise - thus, no "stealing"), but adds this curious quote:
Good news? Bad news? I think we can all agree that loved ones should be able to donate kidneys or liver tissue. We can also agree that selling organs is distasteful, at least to armchair philosophers and op-ed columnists.
I hate to break up the consensus here, but I am going to have to disagree. I don't particularly find selling organs distasteful. Distasteful, when applied to something, only has meaning relative to something else. Reagrdless of what I think of selling organs in an absolute sense, I certainly find it better taste than having people die on waiting lists.

And this is definitely what happens with our present organ distribution system. There is currently a price control of $0. Not surprisingly, there is a terrible and well-documented shortage of donated organs. Unfortunately, many have lent their moral outrage to the wrong thing. I'll have more on this down the road in an essay I have been working on. Stay tuned.

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Dr. Feelbad 

Kevin MD points to the recently released DEA guidelines for pain control.

Jacob Sullum quotes from the document:
Society has a compelling interest in ensuring both the ready access to controlled prescription drugs when medically needed and ongoing efforts to minimize their abuse and diversion," the DEA pamphlet says. "These two goals are not in conflict."
I'm sorry, DEA, but they necessarily do conflict. You see, they teach us very early on in medical school about medical lab tests. Say for instance, the tests for pulmonary embolus. There are values in the different tests that point to "normal" or "definitely PE." Unfortunately, inherent in all tests, is error between those values. It represents the gray zone where you have to treat based on instinct. It is impossible to totally remove this error, in this or any other test.

So what do you do? Here you have conflict in that gray zone where uncertainty necessarily lies. Thus the conflict is necessary. You have two choices to resolve this: 1) treat the patient for a PE, knowing you will cause harm by treating some healthy patients, or 2) do not treat, knowing a few will die from inaction. This question is resolved between the patients and doctors in a way to maximize overall health. In reality, there is likely a strong bias in favor of treating.

This same conflict rears its ugly head with regard to pain treatment. There is (has to be) a conflict between patients with pain who will not get treatment, and drug-seeking patients who will. This conflict is inherent and can't be completely resolved - error is assured. Actually there is inherently greater error when talking about a disease (pain) that relies on subjective self-reporting. The question: how do you want the bias to lean? Ideally doctors would work with patients to maximaize health and welfare, with a bias toward treating pain. Well presently, the DEA is forced to release a document to doctors instructing them how to prescribe patients pain medication without fear of being arrested. I'll give you two guesses to how the bias will present. You shouldn't need the second guess. Personally, I favor making it possible for every last true pain patient easy and convenient access to pain medication, drug-seekers be damned.

I suppose there is reasonable disagreement with that statement. However, it is not debatable that the DEA is criminally disengenuous by suggesting that this conflict "need not exist." And they are substituting their "medical" guidance for that of trained physicians to cover up their dishonesty on the matter. As a Reason commenter responded to Sullum's post:
An indirect solution to the rising health care costs have been found. Start suing the DEA for malpractice! Should be easy since I am sure none of the agents and Asscrack have a medical license allowing them to practice medicine.

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A "Moment Of Blogging Legitimization" 

Matt Welch discusses his experience as a credentialed blogger at the DNC. Money quote:
What was truly different this time around was that the Democratic National Committee consciously handed out around 35 of its 15,000 press credentials to independent webloggers not tethered to any traditional news organization. While statistically on the insignificant side (being outnumbered 430 to 1 and all), the novelty of indie bloggers was an irresistible hook not just to the scrum of reporters on the scene, but to the tenured scolds in America's august learning institutions.

"Make no mistake," sniffed Harvard's Alex S. Jones, director of the Kennedy School of Government's Shorenstein Center on the Press, Politics and Public Policy, on the opinion page of the Los Angeles Times. "This moment of blogging legitimization -- and temporary press credentials -- doesn't turn bloggers into journalists."

It's instructive to reflect that my profession's top educators confer the power of journalistic "legitimization" onto political parties, while desperately trying to claim that questionable role for themselves (even though there is nothing in the U.S. Constitution or American law that establishes anything like a credentialing process for reporters).
He concludes:
"Blogger" may be one of the English-language's most unfortunate words -- my Boston friends were already refusing to pronounce the thing before the convention even started, and I tried whenever possible to substitute the word "booger" -- but there's something to be said for spitting out 15,000 words in real-time while the Journalism School professors fret and The New Yorker uses a small army to pinch off two Talk of the Town snippets. By the time the circus moves to New York, we may even get the hang of it.

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Ownership Society, Continued 

Some anonymous coward who posts on my comments has a problem with my social security post, and he simply regurgitates the same illogical argument I was disposing of. So since I am obviously not eloquent enough to persuade, allow Arnold Kling:
Bush-hating economist Brad DeLong has praise for the following argument against Social Security privatization, from Mark A.R. Kleiman:
"privatization proposals actually add hundreds of billions of
dollars in extra expenses to the federal budget per year. Which means, of course, hundreds of billions of dollars in additional taxes or national debt. Far from being a free ride, privatization will cost taxpayers dearly."
This is known as the "transition cost" argument, and it is completely bogus. Below is a table that explains why. It shows how Social Security obligations would be paid for, both under the present system and under transition to a system where today's workers are given private accounts instead of paying Social Security taxes.

Social Security ObligationsSource Under Current SystemTransition to Privatized System
Obligations to current retireesToday's TaxpayersFuture Taxpayers
Obligations to today's workersFuture TaxpayersToday's Taxpayers

Under the current system, the payroll taxes collected today go to pay benefits to people who are currently retired. So where is Social Security going to get the money to pay benefits to today's workers? From future taxpayers, just as today's taxpayers fund the retirement of yesterday's workers.

Under 100 percent privatization, or under any transition from today's "pay as you go" system to a fully-funded system, today's payroll taxes would not go to pay current benefits, but instead would be used to fund the retirement benefits of today's workers. As a result, the government would have to find another source of revenue to pay current retirees. In practice, this means that the government would issue debt, putting the burden of repaying that debt onto future taxpayers.

A complete privatization plan is a swap: instead of having future taxpayers fund the obligation to pay today's workers when they retire, future taxpayers would fund current retirees. Conversely, instead of requiring today's workers to pay for today's retirees, today's workers would take care of their own retirement.

This swap adds no economic cost to Social Security. Essentially, today's taxpayers and future taxpayers are no better off and no worse off than before.

The "transition cost" argument is generated by ignoring the second row of the table above. What the left-wing demagogues do is look at the first row of the table, and point to the borrowing that will be necessary, with the consequent liability for future taxpayers. What they overlook is the second row of the table, which shows a huge liability for future taxpayers being lifted. That liability is the obligation to pay retirement benefits to today's workers.

In accounting terms, it is true that the government debt liability in the first row appears on the government's balance sheet, while the obligation to pay Social Security in the second row does not. However, no one, particularly on the left, would suggest that future Social Security payments are not obligatory. The fact that the government balance sheet counts debt as a liability but does not count future Social Security payments as a liability is an accounting charade. The "transition cost" argument is derived from that charade. It has no basis in economic reality.
This just goes to debunk the faulty reasoning inherent in the "transition costs" argument. There is not even faulty reasoning to fall back on when the argument turns to the subject of growth rates, property rights, etc. This is why dishonest academics like DeLong, et al. keep hammering on this same thing over end over.

Some try to argue that Social Security is a good insurance program. The question we should all be asking ourselves: if it such a good program, why does need the force of law to install and maintain it?

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Sunday, August 15, 2004

Politics Gouging 

Of course, Jeb Bush and others have been seen on TV strongly stating that "we will not allow price gouging." Roderick Long at L&P explains just how cruel and stupid this is:
Following up a natural disaster with the artificial disaster of anti-gouging laws simply compounds the problem; first people get hit by a hurricane, which causes the shortage, and then they get hit by the government, which fights tooth and nail the market"s attempts to fix the shortage. The best analogy to anti-gouging laws would be a doctor who keeps ripping the scabs off his patients' wounds as fast as they form.

Price controls cause and maintain shortages. Always and everywhere. This is one of the simplest and most basic economic laws there is. It's known to anyone who knows even the rudiments of economic reasoning (a description which apparently does not apply to our elected officials). Nor do the laws of economics suddenly go into abeyance because there's been an emergency; those are not among the laws that rulers have the power to suspend.
I give politicians a hard time here, but to an extent, part of the blame has to be placed at the feet of the people who support politicians who do such ignorant things. Indeed, if Jeb spoke the truth, there would be a public cry for his head.

Either way, if you don't understand and recognize the value and function of prices in instances of disaster, you don't think prices should exist at all.

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Wednesday, August 11, 2004

Ownership Society 

George Bush has released a vague outline of his more specific economic proposal yet to come. In it, he alludes to a plan to partially private social security (among other things):
President Bush plans shortly to ratchet up his campaign rhetoric on economic issues by announcing expanded individual investment plans - including for education, healthcare and retirement - under the rubric of building an "ownership society."

Such ideas, including the partial privatization of Social Security, have traditionally been considered a dangerous "third rail" in electoral politics.

But amid discontent among some economic conservatives over Bush's spending policies, senior Bush administration officials and campaign strategists have sought to reassure conservative leaders that free-market reforms will be pushed aggressively.
Well, certainly I'm for this. But Berkeley's Brad DeLong is not:
You cannot--not given current projections--"support" all three of (a) diverting Social Security revenue to young workers' private accounts, (b) maintaining benefits at their current levels, and (c) keeping payroll taxes from rising. One of the three must crack. Does Bush not know this? Or does he know this all too well?
His point is that we won't have the money in hand to pay current benefits if we can't collect current taxes - the dreaded "transaction costs."

But I have a question for the good professor: You are so worried about the present deficit that would arise, are you not worried about the $25 trillion that is the present value of the future liabilities minus tax revenues? His little scenario is misleading, and can be reformulated such: You cannot support all three of (a)not diverting Social Security revenue to young workers' private accounts, (b) maintaining benefits at their current levels, and (c) keeping payroll taxes from rising. What do you do, Brad, when leaving the status quo behind has costs, but staying there is worse? If it's a cash flow problem, you can either (a) divert spending from other programs, or (b) borrow against the future and raise taxes then after privatization has created wealth. But without privatization, you have the exact same choices: divert, tax, borrow. The only question is do you want to create wealth, or just transfer less of it?

Other Democratic responses:
While Bush has prevailed in some free-market reforms - such as inserting medical savings accounts into last fall's Medicare legislation and offering vouchers for D.C. students - the initiatives brought on bitter legislative battles. And although these and further privatization reforms are near and dear to most Republicans on the Hill, they have traditionally been viewed as anathema on the campaign trail, where Democrats have effectively cast them as elitist and inherently risky schemes.
Yes, too risky. There is an old cliche in investing that is all too true: the biggest risk is not taking any. Democrats oppose social security privatization because they want a zero-risk plan. Well, there is no such thing. By just transferring money around through taxes and benefits, you face real risks: political instability, demographic change, inflation, no growth. Just saying there is no risk in SS doesn't mean there is no risk in SS.

Actually, as evidenced by the $25 trillion dollar deficit, there is more risk in these than in private investment. To state otherwise is a fraud.

No, the problem with Bush's plan is I don't believe it. I certainly don't believe he or the Republicans are principled:
But amid discontent among some economic conservatives over Bush's spending policies, senior Bush administration officials and campaign strategists have sought to reassure conservative leaders that free-market reforms will be pushed aggressively.

These officials have now calculated that the received campaign wisdom is wrong and that private ownership of such core responsibilities as education, healthcare and retirement can help Bush win re-election.
So even though they were on the side of truth, they eschewed their "principles" because they weren't a political winner. Now that they are, hello privatization.

Actually hello (something other than) privatization. According to a previous quote, the Bush administration was successful in passing minor reforms to health care privatization, only attached to a huge drug spending bill. Thanks, but no thanks.

Finally, the Bush plan apparently will have the government actually doing the investment. This would be disastrous. Some privatization supporters see this as a compromise to those who think of ignorant investors throwing their saving into bad vehicles. Instead, such compromise would doom privatization to failure. There would be a huge conflict of interest if government agents were picking stocks. It's a backdoor to communism. Can anyone imagine what would happen if the US government had interest in every publicly traded company?

Until George Bush supports the only kind of privatization - that with no corporate welfare, that with no huge handouts, that with no strings attached - in my eyes he will be nothing more than a gay-bashing theocratic Democrat.

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