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Google Mugged By Reality?

Tuesday, July 22nd, 2014

Google says health care is unhealthy.

Venture capitalist Vinod Khosla has conducted what he calls a “fireside chat” with Google founders Larry Page and Sergey Brin. In one much-cited passage, Brin observes that although he is excited about making gadgets like glucose-measuring contact lenses, health care, because “so heavily regulated,” is “just a painful business to be in. It’s not necessarily how I want to spend my time. . . . [T]he regulatory burden in the U.S. is so high that I think it would dissuade a lot of entrepreneurs.” Page echoes his colleague.

A blunt, and fair, observation. But it makes one wonder why these super-entrepreneurs have not been more critical (at least so far as their search engine can tell me) of Obamacare, which multiplies mandates and prohibitions in the medical industry by an order of magnitude.

Top Google executives are known to be liberal in their politics, and presumably have been sincere. It seems, though, that reality is not cooperating with any ideological tilt they may yet harbor in favor of government paternalism.

It’s in fields with which a businessman is best acquainted that he is most likely to recognize the value of freedom — at least his own, if not always that of competitors. So perhaps we should hope that Brin, Page and other Google principals try to achieve something great in every industry there is. That way, they can come around to consistent, principled support for freeing markets.

This is Common Sense. I’m Paul Jacob.

Greek Recipe for Disaster

Thursday, July 10th, 2014

Several years ago, Despina Antypa and her husband worked at a leading newspaper in Athens.

Then came the economic crisis.

The bad news was “just a whisper” at first. But when friends began losing work, she had the foresight and discipline to plan a new career. One unrestricted by language or country — just in case they ever had to leave Greece. She chose pastry, taking classes every weekday for two years, practicing techniques on weekends.

Sure enough, in 2011 the couple lost their own jobs. Despina threw herself into the task of confecting a signature delicacy good enough to sell; some 3,000 trials and errors (“mostly errors”) later, she was satisfied.

Then came the work of developing a website, packaging, selling.

Orders poured in. The labors were paying off. Except that—

The business was killed in its crib by bureaucrats.

The Greek government demanded a lot, including

  • advance taxes equal to “50 percent of estimated profit in the first two years” (money never to be returned were the business to fail);
  • minimum square footage for her shop much greater than necessary; and
  • a separate toilet for walk-in customers (although there would be no walk-in customers).

The arbitrary burdens proved too great. In 2013, her husband got a job offer that meant moving to Brussels. They jumped at the chance. There they forged the new life they could have forged in Greece — had they been allowed to.

It seems that the road to recovery is not helped by hobbling the runners.

This is Common Sense. I’m Paul Jacob.

P2P Jitneys

Tuesday, June 10th, 2014

Virginia state government has banned Web-based/app-based car-ride services Uber and Lyft from operating in the state. After applying heavy fines. After demanding the services follow rules originally devised for taxis and limo and bus services.

It seems tantamount to banning the automobile a century ago because the horse-and-buggy regulations on the books didn’t fit.

Uber and Lyft call what they provide “ride-sharing” services, allowing people with smart-phone and tablet apps to “hail” rides they need, from almost anywhere to almost anywhere. The folks providing the rides have signed up and even taken classes, and both parties rate each other after the transaction. Riders can “steer clear” of low-rated drivers if they want. And drivers can not offer rides to low-rated riders, as well.

It’s quite a service.

I first heard about this idea from economist David Friedman, a generation ago. He called it a “jitney” system, and offered it as an alternative to mass transit systems that are just too capital intensive to make a profit while still servicing diverse needs.

Now, the idea is off to a good start with two excellent services. Technology has allowed for safe, low-transaction-cost contracting between strangers. This sort of person-to-person (P2P) revolution could change everything.

Including government patronage. Or the need for much government regulation. Taxicab services are heavily regulated in most places. The excuse is usually safety and traffic considerations, but let’s be frank: it’s mostly a government power grab. Horning in on territory. Collecting a fee.

Uber and Lyft leverage the capital car-owners invest, and such P2P services are probably the most efficient contracting systems possible. If free market principles should apply to anything, it is jitney services.

So, Virginia, lay off. Free the P2P.

This is Common Sense. I’m Paul Jacob.

Senator for the VA

Tuesday, May 27th, 2014

Sen. Bernie Sanders, the Vermont socialist, has been all over the media discussing the VA scandal.

However, I can’t find Mr. Sanders reflecting on his own role in the fiasco.

Last September, Sanders argued, “The VA is making progress in reducing the disability claims backlog. I meet very often with General Shinseki, (and) with (VA Under Secretary) Allison Hickey to see the progress that they are making.”

Apparently Sanders, chairman of the Senate Committee on Veterans’ Affairs, needs new glasses.

As the public and the president were discovering the depth and breadth of the scandal, the Vermont senator moved quickly to defend the VA: “The Veterans Administration provides very high-quality healthcare, period. It’s not perfect.”

“Not perfect” indeed.

Sanders also warned of “a rush to judgment,” noting emphatically, “We don’t know how many veterans died.”

As the scandal spread nationwide, the good senator . . . freaked out. “There is right now as we speak a concerted effort to undermine the VA,” he told MSNBC’s Chris Hayes.

“What are the problems?” Sanders asked himself. “The problems is . . . you have folks out there now — Koch brothers and others — who want to radically change the nature of society, and either make major cuts in all of these institutions, or maybe do away with them entirely.”

How possible future cuts might prevent the VA from getting the job done at present remains unclear.

On Thursday, Sanders blocked Senate consideration of HR 4031, which had passed the House by a whopping bi-partisan 390–33 vote. The bill would have given the VA Secretary the power to replace managers who weren’t producing for patients.

Senator, let our vets go . . . let them escape the bureaucracy to seek the care they deserve.

This is Common Sense. I’m Paul Jacob.

Administrative Error

Friday, May 23rd, 2014

It was merely an “administrative error.”

Phoenix Veterans Affairs Health Care System Director Sharon Helman was awarded an $8,500 bonus, even while her operation was under investigation for falsifying patient wait times and possibly causing the deaths of 40 veterans.

The bonus has now, after much publicity, been rescinded.Rep. Andy Harris

Sadly, the veterans who died in a fraudulently inefficient system cannot be brought back to life.

The hefty bonus money adds cruel insult on top of a much more serious injury — one we now know extends far beyond Phoenix. The investigation has spread to 26 facilities.

Major veterans organizations demand that Veterans Affairs Secretary Shinseki resign, or that the president (who once again discovered the crisis from media reports) replace him. That’d be a logical first step, signaling in deeds, not just words, that folks will be held accountable.

The personnel changes shouldn’t stop there. And those guilty of fraud should also face criminal charges.

Still, some gloss over this scandal. Montana Senator Jon Tester says Shinseki should stay and that the VA has done a “remarkable” and “a pretty darn good job.”

A Washington Post editorial played down the scandal, noting that “Delayed treatment has been an issue for decades.”

The Post is half-right. The problem of this federal healthcare bureaucracy shortchanging vets is certainly not new.

But Rep. Andy Harris (R-Md.) is 100 percent right. The Navy vet and doctor, with years of VA experience, wants to offer vets a choice between the VA or a voucher to pay for their private care.

It’s a solution aimed at protecting the vets who need care, rather than the VA bureaucracy.

This is Common Sense. I’m Paul Jacob.

Preparing for a Bailout

Tuesday, May 20th, 2014

In his 2012 State of the Union speech, President Obama declared, “It’s time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs.”

Yes. He said that. But in reality, the handouts and cop-outs have kept on coming, like the solar wind.bucket for bailout

A Washington Examiner editorial notes that while “Obama blasted the influence of insurance lobbyists and vowed to take on the industry … as president, he passed a health care law that funnels more than $1 trillion in subsidies to insurers, and fines Americans who do not purchase their products.”

Go ahead: call that a handout.

But what about bailouts?

While newspapers like The Washington Post insist that Obamacare is exempt from such an eventuality, there remains the part of the Affordable Care Act known as the risk corridor programs. These reimburse “insurance plans for claims that cost significantly more than premiums that new subscribers paid in,” according to The Post’s Wonkblog. The goal is to protect health insurance companies from the risks they face in the new Obamacare exchange.

Companies that make money will pay into a fund that will be used to bail out companies that lose money. But, after obvious complaints about limits, the Centers for Medicare and Medicaid Services (CMS) pushed a mandate that the program be revenue neutral, that the money paid out not exceed that paid in.

Last Friday, in 435 pages of regulations, CMS abandoned this call for budget neutrality. Instead, the regulation states, “In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers.”

A taxpayer bailout: fully in place.

This is Common Sense. I’m Paul Jacob.

FDA Chief Gets It Right

Thursday, May 8th, 2014

We want safe foods and drugs. But should we want the Food and Drug Administration? Or more regulation from it?

We can use third-party investigations of the nature and effects of pharmaceuticals; but a government agency doing the investigating sure has its drawbacks. The bureaucracy’s coercive regulations and costly mandates should certainly not trump individual judgments about whether one may use a drug.

The FDA exists, however, and its massive presence in modern medicine isn’t going away any time soon. Luckily, some of its decisions are better than others. And now that it has authorized sale of the painkiller Zohydro ER, we can say it made the right call here.

The rightness of the decision is highlighted rather than contradicted by mounting political pressure to reverse it.

U.S. Senator Joe Manchin, a Democrat, and U.S. Senator Mitch McConnell, a Republican, are among those demanding that Zohydro be outlawed. Their main complaint seems to be that the drug’s very effectiveness makes it more addictive, and more prone to abuse, than other painkillers. Officeholders from 29 states have chimed in to demand a ban.

I don’t know the ratio of benefits to risks in taking this drug. I know that if I’m writhing in pain, and other painkillers can’t do much to alleviate it, but Zohydro ER can, I want the freedom to decide for myself whether the benefits are worth the risks.

We have the right to make such decisions about our own lives.

In the meantime, FDA Commissioner Margaret Hamburg deserves credit for resisting political demands that the agency rescind its approval.

My prescription for her? Don’t back down.

This is Common Sense. I’m Paul Jacob.