Your Korner Pundit

News and Views from Bill Korner, the guy you should listen to WHY?!

Tuesday, April 18, 2006

WSJ M.D.'s OP-ED for Single Payer Health Care

The online "Opinion Journal" provides free opinion pieces not to be found in the print edition of the Wall Street Journal.

Today's OJ features a piece by a M.D. defending Single Payer Health Care.

It's quite persuasive. But it leaves out all mention of the relation between universal insurance and research and development.

What does that mean? People who don't like health care reforms that uncouple access from ability to pay tend to argue that such reforms would spell the end of America's leadership in producing new technologies. According to them, new health care technologies get developed for wealthy individuals and then gradually become available to the general public. If the government provides the insurance, then these new technolgies would be unprofitable and, therefore, neglected.

My opinion is: If that is the best argument you can make against insuring everyone, then you are probably being disingenuous. Surely we could find some other way to support appropriate R&D. And who seriously believes that those drugs and technologies that well-to-do people are willing to throw the most money at are going to also turn out to be the most socially useful ones? Viagra anyone?

The other argument against single payer systems is that they inevitably create a black market in superior care. Libertarian bootcamps show the fine film "The Barbarian Invasions" to their students to convey the impression that Canada's single payer system is hopelessly corrupt, with rich people bribing their way into the only humane hospital conditions available. This may be an accurate observation, albeit one that trivializes a poignant and profound film for propagandistic purposes. Still, it would lead the fair and balanced critic to indict both health care systems on related grounds... rather than view one as unambiguously better than the other. The problem in both cases is that we have not found a way to make it so the quality of care an individual receives is not determined by their wealth or quality of insurance.

I'm not myself a defender of single payer systems. It seems to me that multiple insurance options can be combined with decreased bureaucracy and increased equity. But this is a very interesting and persuasive op-ed.

Tuesday, April 11, 2006

Spirit of 76'

What is up with this drive to save Unocal's "76 Ball"??

Monday's WSJ

If you have not read yesterday's Wall Street Journal, dig it out of the dumpster at 7-11 and check it out. Good stuff:


(1) Terrorist gangs in Nigeria are communicating with major medial outlets such as the WSJ about future attacks on oil infrastructure. They make demands that the government turn oil resources over to the people, but the Journal suggests connections with illegal oil smugglers who benefit from higher prices when Wall Street reacts to the media's hyping their future attacks . The medial relations guy is called Mr. Gbomo. He apparently sends these threatening messages through computers in South Africa, but they originate in internet cafes in the West Delta region of Nigeria.

So, the $20 U.S. million that our government spends on protecting oil supplies may go up with the price of oil futures and the profits of oil stock.

(2) Computer engineers are taking hammers to their new debit cards out of fear that the new transmitter technology in them (for pay-at-the-pump etc.) will be used to commit identity theft or result in accidentally paying for someone elses gas. The companies say that you would have to get the card within 2 inches of the gas pump for such accidents to occur.

Editorial Page:

(1) Paul Newman defends corporate philanthropy.

(2) Arnold Schwartzenegger lauds hard working immigrants and calls for increased federal emphasis on actual border security issues.

Monday, April 10, 2006

Health Care in Taxachusetts

In last Friday's Journal, CATO Institute adjunct scholar Arnold Kling criticized Massachusetts' new law that seeks to guarantee and require health insurance for all residents of means. Kling insinuates that the Massachusetts legislature is naive enough to think that it will raise sufficient revenue by fining delinquent employers ($295/year for each uninsured employee) to subsidize the insurance of those who remain uncovered. But, he sagely hypothesizes, in a state where $6000 is the average annual health care expenditure per individual, no insurer will provide coverage that cheap. Consequently, employers will blithely pay the fines while the Massachusetts treasury is be emptied -- Bay State workers magnanimously dumping their tax dollars into insurance company subsidies.

"The only way to make zero-deductible health insurance available at low cost is with a large subsidy;
how much will depend on negotiations with insurance companies." Here the CATO scholar shows admirable candor. For it sounds as if he is admitting that there is room for negotiating how much profit insurance companies will make. How will the "gains from trade" be split between the Massachusetts taxpayer and the insurance company shareholder? Will the later have to show a little magnanimity themselves, as they are asked to split the difference with the former?

The point of Kling's editorial, of course, is to suggest that $0 deductible policies make people consume more health care than they would or should. But, to his credit, even here he magnanimously acknowldges that patients are deterred, at least to some extent, by "the time and discomfort involved in getting medical care." It is refreshing to hear someone from these quarters admit that well people are not lining up to get into emergency rooms for the fun of it. I think we all know people who have avoided seeking "free" medical care even when they really needed it because of the unpleasantness, stigma, and lost wages of taking the day off to go to the doctors.

This is a fine editorial. I wish more free market pundits were as magnanimous as Kling.

Author' Note: The word "magnanimous" is used three times in this entry (only once correctly) because of a joking bet on that score into which the author entered.

Thursday, April 06, 2006

Civilian Control of the Military/Military Indictment of Civilian Leadrship

Retired generals Anthony Zinni and Paul Eaton say that Secretary of Defense Donald Rumsfeld should resign. Today’s On Point, a public radio program that airs on Boston’s WBUR and other stations (, features an hour-long conversation with Gen. Eaton in which he assesses Rumsfeld’s performance as a dismal failure. A main complaint seems to be that Rumsfeld micromanages tactical issues in the Iraq war that would previously have been left to the discretion of military command. When military brass criticize Pentagon policy, the result is public humiliation and professional retribution. (“In the five years he has presided over the Pentagon, I have seen group-think become dominant.”)

I have no doubt that this Administration is too ignorant and ideologically blinkered to have executed a successful liberation of Iraq. I also have no doubt that the divisions and internal conflicts within the Administration contribute to its practical failures. A need to downplay these failings leads the civilian Administration to unite in blaming the media, which in turn leads military leaders to defend the media against an Administration that has so slighted them.

But we have to be a little wary, do we not, of liberal media programs trumpeting military indictments of our civilian leadership? How do we react, after all, to hawkish military criticisms of Democratic administrations' policy? Normally, liberals’ greater fear is undue military influence on civilian policy. And this is a reasonable fear. I feel that we have to ask ourselves: Are Zinni and Eaton critical of the role of our military industrial complex and its influence on American politics? Or are the On Point crew giving a quick microphone to enemies of the Administration without really thinking about the deeper issues.

Tuesday, April 04, 2006

The History of Shaming Tax Evaders

Yesterday's Wall Street Journal tells the story of how the incomes and tax payments of all American individuals became a matter of public record... and then became private information once again.

In 1934, in the turmoil of the Great Depression, Wisconsin Senator Robert LaFollette reasoned that Congress could encourage wealthy tax evaders to fork over their cash by publishing the incomes of all taxpayers and the amount of taxes they paid. Back then, apparently, the media was ready and willing to raise public ire over the tax inequity that is now explored only in law schools and occasional works of investigative journalism such as David Cay Johnston's Perfectly Legal.

Of course, at this time only 7% of Americans paid even filed a tax return. Nonetheless, the economic duress that the population faced was great enough that tax evasion on the part of the rich provoked widespread outrage. Business Week stoked white collar resentment against the shananigans of the depression-era super rich. Robert LaFollette's ammendment to our tax legislation, thus, allowed the wag-of-the-finger to succeed in extracting tax revenues where the men-with-guns (the tax enforcers libertarians love to hate) dared not tread.

But, then as now, the progressive tax policy was undone only with the help of the working class who were its principal beneficiaries. A public relations campaign was organized to convince the populus that their kids could someday be kidnapped (Charles Lindbergh Jr. style) if they risked letting their future tax information be published. It worked, Congress was apparently convinced that, in the words of an Arkansas House member, "the small taxpayer, even more than the large, strenuously protests having his earning paraded before the busybodies in his neighborhood."

Now that most people pay income taxes, I guess the fear that our neighbors will find out our incomes is less irrational. But just because its worth fearing does not mean that we should not care to know, and be able to know, who among us are evading taxes. Admittedly, the Journal article doesn't present any evidence as to just how much more revenue was collected as a result of the law (such evidence would be hard to come by). And it seems entirely possible that people would take more interest in the their neighbors modestly higher incomes, rather than in the tax mechanations of distant elites whose wealth is too mammoth to even be comprehended. Oh, how curious the contours of envy!

Monday, April 03, 2006

Partisanism Muddles the Health Care Debate

Republicans and Democrats fight over the goals of health care policy, when both parties have legitimate goals that the other should acknowledge. Republicans want to encourage individual control over their health care. Democrats want to make sure that everyone is covered. Why do we have to choose between these two goals, especially when both sides agree that costs are out of control?

True, the two parties generally disagree on certain matters of fact and have somewhat different priorities. Republicans blame regulation for high costs, while at least some Democrats blame high costs on unnecessarily high profits. Democrats are often willing to sacrifice supposed innovation in order to lower costs and equalize access to care, while Republicans tend to justify high costs (those not attributable to regulation) as necessary to insure the optimal development of new technologies that keep American health care moving forward.

There are some factual issues that separate the parties, albeit factual issues that contain major evaluative components. Nonetheless, there is no good reason why we cannot acknowledge that (a) greater individual responsibility and a better informed medical consumer can lower costs, while also acknowledging that (b) drug companies and insurers can afford to take less profits, and (c) that covering everyone even the chronically ill should be a priority for which everyone, especially the most well off, should be ready to pay.

The discussion in today's Journal illustrates the sad state of partisan debate on health care. The Bush administration and its National Economic Counselor Allan Hubbard are pushing hospitals to be more forthcoming to patients about the prices of treatment. They repeat the standard Republican line: Consumers aren't taking responsiblity for their care and you can see this in the fact that they don't put any pressure on hospitals (and insureres) to disclose what patients (and insurers) are paying for care. We think of health care as free, therefore we take no responsiblity... blah, blah, blah.

Against all of which Ira Magaziner says that health care will never be like other markets: "the younger and healthy are the ones who benefit. That's not the way to run a society."

So Mr. Magaziner knows what age group votes. Good for him. But what would be wrong with the Democrats saying: "Sure, we want more informed consumers who can choose covererage wisely and to some extent evaluate what degree of treatment is necessary. BUT, we also want those who could not afford insurance to get coverage and that is going to have to come from the profits of drug companies and the taxes of the well-to-do."

And what can't the Republicans say: "Yeah, we were right when we said that the government should not control what kinds of health insurance you can have. But we admit that the insurance market on its own could never provide cheap and good enough covereage to everyone... even if it would provide a more attractive and efficient menu of plans in the absence of regulation. After all, some employees' services simply are worth much more money than others and, therefore, their employers are willing to pay more for their care."

That would be nice!

Instead our President is limiting his advisors to considering what changes can be accomplished "without legislation." According to his advisor Allan Hubbard, Bush said that he'd "rather not use the crude tool of federal law" to make hospitals and insureres disclose pricing information. But even if federal law is a "crude tool", the Administration's response does not address the question of question of how far making price information available would go toward using health care resources more efficiently.

The Journal does, however, quote an executive from (insurer) Aetna saying that price disclosures would not do much to reduce costs accross the board. But that very executive suggests that some insurers are paying health care providers widely varying amounts for the same services. The industry itself is acknowledging that there is considerable price discrimination in the current market.

It seems that industry is willing to acknowledge market failures and our executive is willing to cast aspersions upon Congressional legislative competence. Perhaps its time to rethink the roles of government and industry in the provision of health care

Friday, March 31, 2006

Blogging the Business Press Pay Sites

Your Korner Pundit thinks that business media are undercovered in the blogospere. The political side of business news is covered very well in The Wall Street Journal and other media. But these sources are often unavailable online to those without paid subscriptions.
(The Wall Street Journal has started to make more content available for free online. See: AND (reporting on this change in WSJ policy).

In our continued attempt to get the business politics blogosphere out of the red, we will resume our opinionated commentary on important developments in business news that are not available for free elsewhere.