Spitzer Bombshell Apparently a Minor Story

Today the huge story about NY Governor Elliot Spitzer and his involvement with a prostitution ring came to light. I was curious how some of the media would cover this. For some reason I was particularly curious to see what Keith Olbermann would do with it on his often-raving-loud one-hour show from 8-9 EST. Well... it was quite interesting... I missed the first two minutes of his show, so likely he did mention it briefly then. However, he then went on and on about relatively minor Hillary vs. Obama drama items... for about 30 minutes! He didn't really cover the Spitzer bomb until after the half-way point in the show. I think it was big-story #3 on his program, and he only spent about 5-7 minutes on it. Doesn't this strike anyone else as strange?

I'll also note that the Atlas Society was quick to send out a brief blurb on this news, noting correctly:

It is ironic that New York Democrat Governor Eliot Spitzer has had his undeserved reputation for high moral standards tarnished by his sexual escapades which, while perhaps sleazy, did not harm any of us. In fact he deserved our moral scorn for his assault on productive individuals and flaunting of the rule of law when he was New York attorney general, done arrogantly in the name of "morality."

I had the exact same thoughts while watching the coverage tonight.

Scary New York Numbers

I regularly read or hear statistics about New York State that indicate it is below average or near the bottom among the 50 states in a wide range of categories. Most of the time, these stats are talking about high taxes or other economic figures.

Columnist Jay Gallagher has done us all a great favor by gathering together many such statistics into one column, New York's Numbers are Numbing. Not all of these numbers are bad for New York -- a few are actually pretty good (low crime), and many are middle-of-the-pack (so not that bad at least relative to other states). But ouch... so many of these numbers place New York at or near the bottom.

An Update on the Government Spending Numbers

Here is a nice column from Jacob Sullum, Entitlement Mentality, that covers all the earmarks in the recent spending bill, and also reminds us of the ridiculous economic crisis that the big three entitlement programs represent.

Government Should Not Promote Home Ownership

Government should not have policies that "promote home ownership". The very idea implies interference in the free market. Yaron Brook wrote a very good piece, Predatory Legislating, for Forbes in December, attacking the ridiculous "Mortgage Reform and Anti-Predatory Lending Act of 2007", legislation passed in the House in response to the "subprime mortgage crisis". The entire commentary is worth reading, but here are the two paragraphs on the fundamental point that is so often missed in the press when folks are talking about how the subprime mess arose:

The government does not need to crack down on lenders. It does need to take responsibility for its role in promoting irresponsible lending and borrowing practices through its myriad interventionist programs to "promote homeownership." The very concept of the government having such a goal means that it facilitates borrowing and lending that would not occur on the free market--i.e., a market in which people are held fully responsible for their decisions.

One example of this is the Community Reinvestment Act, which literally forces banks to lend to people with high credit risk. Another is the Federal Reserve's policy of creating artificially low interest rates, which encouraged financial institutions to lend out more money for mortgages than they otherwise would have--and which helped artificially bid up housing prices and fed the fervor that buying a home at any price is a can't-miss investment that all Americans should make. The government's promotion of home-buying was a recipe for irresponsibility--and that's exactly what it produced.

On Ron Paul

The rise of Ron Paul during this 2008 presidential primary season has been a fascinating phenomenon to watch. As someone who believes in small government, there obviously are moments when I find myself in agreement with his positions and views. He is more of a "Libertarian" than a typical "Republican" -- indeed, a couple of decades ago he ran for president on the Libertarian Party ticket.

That said, I don't support Ron Paul for president. I don't support him for many of the same reasons I don't call myself a "libertarian": that word is both too vague and generally represents a position that starts at the political level --rather than more fundamental philosophical levels. And then not surprisingly, I disagree with the views of "libertarians" on many specific and important issues of the day (while agreeing on a superficial level on some issues).

My friend Shawn Klein has summarized why he doesn't support Ron Paul, on an issue-by-issue basis, drawing on Paul's own campaign website. See also his followup to clarifiy non-interventionism points, I generally agree with Shawn's assessments. Apparently, since he wrote that post, the Paul site has been changed and now lists 16 issues, so I hope that Shawn can offer his views on the new ones sometime. If I find time and inclination, I might take a closer look at the current "isseus" section at Paul's site and comment as well.

For now, as an aside, I'll note that I find it particularly odd that the 16 issues include what I would generally consider "big issues" -- except one of them is "No taxes on tips", which is about exactly what it sounds like, the position that "tips" such as waitressing tips should not be taxed. I agree with Paul on that, but is that really worth mentioning on the same level as "Education" and "Health Care"? Obviously not. I wonder if the webmaster for the Paul campaign works as a waiter/waitress in his/her spare time, and got this issue inserted as part of their pay for work on the site? LOL

Robert Bidinotto has also done some good blogging on the Paul candidacy, focused mostly on the foreign policy area. Check out his post Ron Paul's "non-interventionism" fraud. And then the magazine Robert is the editor of, The New Individualist, has a cover story about Ron Paul (here is Robert's blog post about this issue of the magazine, with provacative cover scan).

The Need for an Organ Market

I meant to blog about this weeks back, but it slipped through the cracks. A great letter to the editor was published in the Chicago Tribune in November about the need for a market for organ donors. It doesn't get much more succinct and powerful than this:

Thousands have died through the years waiting for transplants because the National Organ Transplant Act forbids the sale of human organs. To significantly decrease the shortage of organs, this murderous law must be repealed and the trade in organs decriminalized. If the law recognizes our right to give away an organ, it should also recognize our right to sell an organ. And if the law recognizes our right to pay for a life-saving medical treatment, it should also recognize our right to pay for a life-saving organ for transplant.

Those able to pay for organs would benefit at no one's expense but their own. Those unable to pay would still rely on charity, as they have done to this day. Moreover, those able to buy organs would drop out of the waiting list, increasing the chances of those remaining to obtain the organs they need.

If the legitimate rights of potential buyers and sellers of organs were protected, many of the 95,000 people waiting for organs would be spared much suffering and escape an early death. How many? Let's find out.

Daniel Boone and the Nanny State

The Orange County Register recently published an interesting satirical piece: Daniel Boone vs. the Nanny State. While I certainly want to live in Daniel Boone's time, this essay makes many great points.

Romney On the United Nations

Since he's a conservative Republican, there are many things that I disagree with Mitt Romney about. But there are some areas of agreement too, and his recent statements about the United Nations seem to be on the right track. See Romney Calls UN an 'Extraordinary Failure'.

I agree that the UN has been a huge failure over the years, on many dimensions. Not that it hasn't done any good for anyone at any time -- surely it has here and there. But overall, I think it has done far more harm than good. And I don't just mean the obvious, direct harms -- such as UN workers raping women in the Congo, or massive corruption schemes like Oil for Food, or the many other items that have grabbed headlines.

I'm also talking about the apparently less obvious harms that arise from actually having a body that is composed half of democratic, relatively rights-respecting nations, and the other half literally populated by criminals. And make no mistake, that is what nations run by dictators, tyrants, monarchs, communists/socialists, and so on are -- they are nations run by criminals. Such statist regimes deny individual rights by their very nature -- some worse than others, but all to such a degree that they are different in kind than the relatively-free nations of the world like the USA, Britain, Canada, and so on.

So I'm glad to hear a Presidential candidate in the US call for "a coalition of 'free nations' as an alternative to the UN." Good for Mitt. Much of the news on this story centered around the UN's Human Rights Council, which the US has boycotted from the perspective of diplomacy and membership, because it insanely allows countries with horrible human rights records to be members.

But the HRC is not the core problem -- the UN as a whole is. I mean, what sense does it make to invite practically all nations of the world to gather to discuss issues, when so many of these nations are ruled by criminals? Do our police sit down a big table with known criminals to discuss issues in our cities? Uh, no. Too simplistic of an analogy? I don't think so.

One other thing to note about the MSNBC article linked above in particular, as it includes the following: "The comments highlighted the deep mistrust of the UN among many US conservatives, who view the organisation as an obstacle to US interests and a constraint on US power." While there might be some "conservatives" who bemoan obstacles and constraints to US interests and power in the world, this is a misunderstanding -- or blatant misrepresentation -- of the complaint that most conservatives, libertarians, Objectivists, and others have about the UN.

The primary complaint about the UN is not because it lessens US interests, but because it is inherently corrupt and does more harm than good -- objectively speaking. The UN is rotten at its core, because it allows nations ruled by criminals -- tyrants, dictators, monarchs, and so on -- to have seats at the table, chairs on the Human Rights Council, and positions from which to negotiate with the relatively free, rights-respecting nations of the world. That is the issue, and that is why the UN should be abandoned, and if any organization is created to replace it (debatable), it should be formed with far higher standards of admission.

FDA: Definitely not "First, Do No Harm"

A vital phrase for those in the medical profession, "First, do no harm", goes back to the ancient Greeks (though, contrary to popular belief, it is not found in the Hippocratic Oath).

The following paragraph from the Wikipedia entry for this phrase (Primum non nocere) does a nice job summarizing its importance:

It is one of the principal precepts all medical students are taught in medical school. It reminds a physician that he or she must consider the possible harm that any intervention might do. It is most often mentioned when debating use of an intervention with an obvious chance of harm but a less certain chance of benefit.

I mention this important precept in relation to the WashingtonPost story, Teen Suicides Up Sharply For First Time In Years. (Thanks to John Enright for the link.) And what is the speculated reason in this news story as to the likely cause (or the biggest reason) for this increase in teen suicides? The actions of the FDA.

How so? Well, remember several years ago when the FDA got wind of studies that indicated that some anti-depressant medications (e.g., SSRIs) could have increased rates of suicides in the young, especially during the first few weeks of taking the medications as the body and mind adjusted to them? Their reaction to this was to further regulate such medications, and do so in scare-tactic fashion, by forcing the companies producing them to put big black box suicide warnings on them, targeted at teenagers specifically.

So what happened? Well, surprise, surprise: use of such medications declined dramatically amongst teens. But it is exactly these medications that are credited with helping to reduce the rate of suicide for many years previous. I mean, the biggest cause of suicide is no doubt severe depression, right? And what do people take for depression? Anti-depressant medications. So scaring people away from the medication that will help them... real bright, FDA, real bright.

Did the FDA factor this inevitable outcome into their decision process? I suspect not, or at least not well enough. The FDA has a pattern of reflexively regulating drugs based on studies (particularly big noise-making ones) that show or suggest (more or less well) negative side-effects from taking those drugs. After all, history in the US has thus far shown that no one will get fired at the FDA, nor will budgets be slashed, when thousands or millions of people die because the latest life-saving drugs are held up by FDA rules, regulations, and bureaucracy. But failing to regulate something when there is a shred of evidence that some people might have a negative side-effect -- they can't let that happen!

And this is not something the FDA can simply tweak and get better at doing. The FDA, or any such regulating body, simply can't do a very good job of weighing the personal benefits of new drugs against the possible personal negative side-effects for those same people or others. The benefits are too personal: each individual would have a different value hierarchy, meaning for one person it might worth the increased risk of heart attack to be rid of some other ailment they have, but for someone else it would not. A drug that could save millions from one killer ailment, is held up because it might increase the risk of some other ailment for those same people or others. Rather than leave it alone, regulation keeps the drug from the people who need it and want it. By what moral right does the FDA do this, by what moral right do they get to make these value decisions?

In the current case of the teen-suicide warnings, did the FDA consider the externalities of this decision? Did they weigh the harm that such a policy would do against the supposed good it could do? At first glance, one might see nothing wrong with informing people about studies on a drug that indicate a greater statistical chance of suicide amongst a population. But in addition to the above points, there is a crucial difference that complicates this case that doesn't complicate other drug studies. Unlike medications that cure one ailment but might lead to increased heart-attack risk, here we are talking about suicide -- so free will comes into play. Even if full free-will is somewhat inhibited when severe depression develops, this greatly complicates any studies in this area (in a way that doesn't arise for studies on the pancreas), making studies and aggregate statistical analysis far more difficult.

All of that said, and while I'm no expert on this, as I have said before (see my posting on this) I am prima facie doubtful of the studies indicating increased suicide as an effect of using SSRIs or other anti-depressants. Often people start taking these medications after their first visit to a doctor for depression, and because they take a while to take effect, the depression can continue to get worse before the medications help the people help themselves and begin to get better. But this is not the fault of the medication! The person was likely going to keep trending downward for a while regardless, and if they had waited until they pretty bad off before seeing the doctor, well, they might be suicidal or nearly so already.

Further, a person might become increasingly depressed when they first start trying an SSRI and don't see immediate results -- especially if their doctor didn't impress on them how the drugs work (the time needed, etc.). They might conclude "This isn't even helping? So nothing will, and I can't bear it!". But again, this is not the fault of the medication!

Do the studies the FDA relied on to require the warning boxes for teens take into account all of these kinds of points? I wonder. I don't know either way, but I wonder.

What is obvious about the track record of SSRIs and other anti-depressants (from what I gather from this article and elsewhere) is that they have been a major factor in decreasing suicide rates. Until, that is, the FDA got involved, scared teens (and their doctors) away from the medications, and the rates apparently went sharply up again. Take away a major weapon in one's battle against depression, and surprise, surprise, more people will become increasingly depressed and commit suicide. That should have been obvious to FDA regulators, but apparently it wasn't.

Btw, I've written a few posts on the FDA here at Philosopher Stone. Check them out!

• August 11, 2007: The FDA Ranges from Annoying to Deadly
• August 11, 2007: A Possible Future: Prescription Drug Disaster
• July 5, 2007: On the Costs and Benefits of Health Care Regulation
• June 3, 2007: Walter Williams on the FDA
• May 3, 2007: Depressed About Anti-Depressant Warnings
• September 26, 2006: FDA Should Retire at Age 100
  

Early Punditry on the Iraq War

This is a nice collection of mostly Republicans early during the Iraq war mess. I think the worst one here is from Fred Barnes, because for our military it was obvious that winning the initial "war" was going to be the easy part, not the hard part. Jeez... (Thanks to Radley Balko for the link.)

More on the Terrorism/Drug War Connection

Jacob Sullum wrote a nice column on the continuing connection between the Taliban and America's drug war policies, America's Taliban-Support Program. Nothing new for me here, except some updated numbers. But this is an important item to read if you are a supporter of the "drug war" policies in the USA.

Revolutionary Guard Not the Real Problem

Here is an interesting posting, The Bush Administration's Latest Deadly Evasion, on the topic of labelling the Iranian Republican Guard as a terrorist organization. The author is critical of this, though not for reasons that others are. The analogy here to the Mafia hitmen and Navy of the Nazis, is one I hadn't heard elsewhere. And then here is a question from a reader and response from the author.

Hillsdale Says No Thanks to State Aid

A few weeks ago I wrote about Hillsdale College, the school that refuses federal aid on principle. Now, as the CHE reports (see also the news item from Hillsdale itself), they are going to cease taking state aid as well. It doesn't seem like their students were using a lot of it anyway, nor was the state of Michigan interfering with the college. But the important point here is one of principle, so again I congratulate Hillsdale for taking this stand.

A Possible Future: Prescription Drug Disaster

I recently blogged about how generic drug prices are soaring in Canada.

The flip-side of this is that brand-name drugs are of course cheaper in other countries like Canada. Here is a great ARI item that explains why that is. The crucial question is "Why?" and the answer is price controls in such countries. But the only reason this doesn't cripple the R&D efforts of drug companies -- and hence their ability to create new, life-improving and life-saving drugs -- is that people in countries like Canada free-ride on the prices paid by Americans. Creating drugs is extremely expensive: not only is the R&D rightly expensive and time-consuming, but it is made much worse because of the onerous regulation of the FDA and other government bodies. Other major costs include advertising/marketing to get the word out about new or improved drugs to doctors and patients.

This ARI item gives voice to a pro-consumer argument that you will hear almost nowhere else, as it ends as follows:

It is only because the American market is free from price controls that drug companies are able to recoup their enormous R&D costs, and thus find it profitable to sell additional units of the drugs at a lower cost in other, price-controlled countries. Should America impose price controls either directly or by proxy, the house of cards will collapse. We should protect the rights of pharmaceutical companies--and the welfare of consumers--and demand an end to price controls, direct and indirect.

The FDA Ranges from Annoying to Deadly

My local Rochester paper yesterday ran a brief AP story titled "FDA Checks 2 Popular Heartburn Drugs". Here is a link to a slightly longer version of the same article at the LA Times, and here is the item on this from the FDA website. The story is that some new data might indicate a connection between using two AstraZeneca heartburn drugs (Nexium and Prilosec) might increase serious heart-related problems. The new data doesn't seem to add up to much, as the FDA's position is "At this time, FDA's preliminary conclusion is that collectively these data do not suggest an increased risk of heart problems," and also "Therefore, FDA does not believe that healthcare providers or patients should change either their prescribing practices or their use of these products at this time."

So such downplaying makes me wonder a bit why this is a story worthy of being in the newspaper. But then you have to wait till the end of the article for this:

A higher number of patients taking either one of the drugs suffered heart attacks, heart failure or sudden heart-related death, the FDA said. But the studies involved only a few hundred patients, a relatively small number, and larger research studies showed no indication of heart problems.

So why is this news? Sounds like at best it is some counter-evidence to larger studies that indicate no such cause-and-effect problems for heart-attack, etc. for these drugs.

While that was the last paragraph in the article in my Rochester paper, the LA times version adds this final paragraph:

In the study involving Prilosec, 17 patients taking the medication had serious heart problems, compared with eight in the group that had surgery, AstraZeneca said. However, the Prilosec patients appeared to have been in poorer health to begin with. Six of the Prilosec patients had had previous heart attacks, compared with none in the group that had surgery.

Well, that makes it even worse! So the studies in question are not only smaller than the others, but they seem to have rather important problems with how they were conducted, factors that weren't ruled out, and so on.

All of that is bad enough -- a seeming waste of our taxpayer money chasing down unlikely side-effects based on small, poorly conducted studies. But that is merely annoying compared with the truly deadly effects of the FDA's and other federal regulations on drugs and health care. First, see my recent post about two articles from the Economist that explains the often hidden costs of such regulation. Then see the recent ARI press release, The Deadly FDA, which really puts a sting into the FDA. It begins:

The Court of Appeals for the District of Columbia Circuit recently ruled that terminally ill patients do not have a right to take medicines that have not been approved by the FDA.

"Barring individuals from choosing what medicines to take is immoral and destructive," said Dr. Yaron Brook, executive director of the Ayn Rand Institute.

"The decision about what drugs to put in one's body rightfully belongs to each individual, not to FDA bureaucrats. To deny individuals this right is to impose a death sentence on those who, in the face of certain death, would rationally choose to accept the risks of an experimental treatment, but are barred from doing so until the urgently needed drug completes the FDA's onerous, years-long approval process. Indeed, this case was initiated by a group founded by the father of a girl who died after she was denied access to an experimental anti-cancer drug the FDA later approved.

"Individuals, in consultation with their doctors, should be free to assess the evidence of a drug's effectiveness and safety, taking into account their own personal context (such as their unique risk factors, or the fact that they are certain to die without the treatment). Some people may take ineffective or harmful drugs, but FDA approval does not eliminate such risks. The individual always assumes some level of risk when deciding on a course of treatment, and it is capricious--and too often deadly--for the FDA to usurp the individual's right to decide which risks it is in his interest to accept.

The rest of the press release is just as damning of the FDA as the above, and also gives brief responses to objections to this kind of view of drug regulation.

Sowell on Neglected Infrastructure

Thomas Sowell has written a good column, A Bridge Too Far Gone, on some of the neglected infrastructure in the US. This is of course written in the wake of the bridge collapse in Minnesota, and the inevitable questions about similar bridges and other infrastructure issues around the country.

Some people claim that the problem is how much money it would take to properly maintain bridges, highways, dams and other infrastructure. But money is found for other things, including things far less urgent and some things that are even counterproductive.

The real problem is that the political incentives are to spend the taxpayers' money on things that will enhance politicians' chances of getting re-elected.

There may be enough money available to maintain bridges and other infrastructure but that same money can have a bigger political pay-off if spent building something new instead of maintaining and repairing existing structures.

When money is spent building a new community center, a golf course, or anything that will be newsworthy, there will be ribbon-cutting ceremonies and the politicians who cut the ribbons can expect to see their pictures in the newspapers and on TV.

All that keeps their name before the public in a positive role and therefore enhances their prospects of being re-elected.

But there are no ribbon-cutting ceremonies when bridges are being repaired or pot-holes are being filled in. These latter activities may be more valuable than a community center or a golf course, but they are not nearly a photogenic.

He then goes on to note that this incentive problem has existed for centuries, and that the situation will not improve until incentives are changed. He then makes a brief case for doing exactly that -- by privatizing bridges and other aspects of our infrastructure.

A company that has to get the money to build and maintain bridges or other infrastructure through the voluntary actions of people in the financial markets, instead of being able to extract money from the taxpayers, is going to find financiers a lot more finicky about what is being done with their money.

People who are putting their own money on the line are going to want to have their own experts taking a look under the bridges they finance, to see where there are rust, cracks or crumbling supports.

When people know that the lawsuits that are sure to follow after a bridge collapses are going to drain millions of dollars of their own money — not the taxpayers' money — that keeps the mind focussed.

Government as a Cause of Subprime Follies

Thomas Sowell has written a column, Sub-Prime Politicians, that describes the mutliple ways that bad government policies are causes of the subprime mortgage mess. Government restrictions on building in certain times and places have been shown to be a major factor, as has the more obvious and direct government interference of pressuring lenders to give loans to people with risky credit to encourage more home ownership. He concludes his column as follows:

Yet with all the finger-pointing in the media and in government, seldom is a finger pointed at the politicians at local, state and national levels who have played a key role in setting up the conditions that led to financial disasters for individual home buyers and for those who lent to them.

While financial markets are painfully adjusting and both lenders and borrowers are becoming less likely to take on so much risky "creative" financing in the future, politicians show no sign of changing.

Why should they, when they have largely escaped blame for the disasters that their policies fostered?

Repugnance Shouldn't Be a Standard

Over the past several years I've read more and more from bioethicists and others who argue against some regulation, policy, or law based primarily on the grounds of "repugnance". I've read this on the issues of stem cell research, cloning, euthanasia, and others.

This is absurd. One's subjective emotional responses -- whether discomfort, repugnance, apprehension, joy, elation -- are not a proper grounding for moral evaluation of an action, or a prospective regulation, policy, or law.

And yet this charge of "repugnance" surfaces time and again, perhaps most commonly in connection with the dire situation with the lack of kidneys available for transplant. There are no where near enough donors relative to the number of those who need a kidney -- people are suffering for years for lack of a kidney, and many die waiting for one.

And yet this problem could be solved in a relatively short time if a market for kidneys were allowed to develop and flourish. In such a market, individuals could be given cash payments for one of their healthy kidneys, or their beneficiaries could be given cash payment in exchange for kidney donation after death. The former is what would really fix the shortage, but even the latter (which seems like a no-brainer) would help. But neither of these are allowed today in the US. Although regulation of a market, generally speaking, interferes with that market and creates a suboptimal result, even a regulated market is better than no legal market at all. So in this case, as with many other non-violent acts that are currently prohibited, I definitely support a move from prohibition to a regulated market for kidneys.

The BBC recently did a special on this subject. This summary, after mentioning the "repugnance" or "disgust" viewpoint (I won't even call it an argument), quotes a Bishop whose position is that cash payment for a kidney negates the act's moral worth. His position apparently is that simply donating a kidney to a stranger or loved one is a good thing, but not if you are paid for doing so. This is, in part, the common ethical bias against money, commercial exchange, and best put -- the trading of a value for a value. This is a basic -- and common -- ethical error the Bishop is making here.

Here is a great clip from this article:

Yet others argue that what really counts here is not the motive, but the results.

American writer Virginia Postrel has been campaigning for it to be legal in the US to pay cash for a kidney from a live donor.

She said: "People want to keep it as a heroic, uncompensated act because it makes them feel good.

"Never mind that tens of thousands of people are dying for your right to feel good about other people's heroic acts."

Postrel's criticism sounds cynical, but she isn't the cynic she appears to be. She donated a kidney to a sick friend, became interested in the idea of a market for kidneys because of her experience with donation.

"The reaction is completely disproportionate to the actual risks involved. People do act like you're completely nuts."

Italics mine... what a great line!

Hillsdale College: Flourishing Without Government Funds

A recent issue of Imprimis, a monthly one-article publication from Hillsdale College with a wide distribution and readership, gave a very readable history of the college. As an atheist I really have no interest in the school's religious aspects (it was formed by Freewill Baptists in 1844, though has been "non-denominational" since its inception). But what I find praiseworthy and remarkable about the school is its refusal to accept government funding -- neither direct federal aid or even indirect aid in the form of student aid from the government. As a result, it remains free of government interference as well. This proves that it is possible to do: always has been possible and remains possible today. This article in Imprimis tells their tale nicely... keep up this principled stand Hillsdale!

John Stossel Responds to Michael Moore

Several recent columns by John Stossel refer to an interview he had with Michael Moore for an upcoming 20/20 piece on health care. In these columns Stossel responds to several of Moore's claims and views, and as always he makes some great points and does so in an enlightening way. The three columns are: Live and Let Live, Freedom and Benevolence Go Together, and Michael and Me. All three are good reads. I'll quote a just a few bits here:

Michael Moore may not have thought about it, but there are only two ways to get people to do things: force or persuasion. Government is all about force. Government has nothing it hasn't first expropriated from some productive person.

In contrast, the private sector -- whether nonprofit or a greedy business -- must work through persuasion and consent. No matter how rich Bill Gates gets, he cannot force us to buy his software. Outside government, actions are voluntary, and voluntary is better because it reflects the free judgment of creative, productive people.

The italics there are mine... what a great line that is! This was from the first column linked above, which doesn't actually spend much time responding to Moore. This is from the second column linked above:

Moore added, "I watch your show and I know where you are coming from. ..."

He knows I defend limited government, so he tried to explain why I was wrong. He began in a revealing way: "I gotta believe that, even though I know you're very much for the individual determining his own destiny, you also have a heart."

Notice his smuggled premise in the words "even though." In Moore's mind, someone who favors individual freedom doesn't care about his fellow human beings. If I have a heart, it's in spite of my belief in freedom and autonomy for everyone.

Doesn't it stand to reason that someone who wants everyone to be free of tyranny does so partly because he cares about others? Wishing freedom to one's fellow human beings strikes me as a sign of benevolence. But Moore and the left don't see it that way.

Moore thinks respecting others' freedom means refusing to help the less fortunate. But where's the connection? All it means is that the [advocate of capitalism] refuses to sanction the use of physical force (which is what government is) to help others. Peaceful methods -- like voluntary charity -- are the only morally consistent methods. I give about a quarter of my income to charities because I've seen that private charity helps the needy far better than government does

That was a good catch by Stossel... the smuggling use of "even though". Stossel continues on, and catches Moore with another smuggled premise:

Surprisingly, he did show an understanding of the importance of the libertarian philosophy to America. "John, your way of thinking actually was great for this country. I mean it; it helped to found the country. It helped build us into one of the greatest nations, perhaps the greatest nation, that the earth has ever seen. Limited government, pull yourself up by your bootstraps, every man for himself, forward movement, pioneer spirit. That's why a lot of people in these other countries really admire us, because there's this American get up and go."

I interrupt here to point out another smuggled premise. Did you catch that "every man for himself" line? America was never about every man for himself. A free society is about voluntary communities cooperating through the division of labor. [A free society] is far from "every man for himself."

After acknowledging that limited government helped make America great, Moore went on to say, "But I don't think that what you believe is what's going to allow us to survive."

He means that if government does not assure people health care and food, our society will disintegrate.

But why would a philosophy that was good enough to build a successful society be unsuited to sustaining that society? Individual freedom, with minimal government, made it possible for masses of people to cooperate for mutual advantage. As a result, society could be rich and peaceful. As the great economist Ludwig von Mises wrote, "What makes friendly relations between human beings possible is the higher productivity of the division of labor. . . . A preeminent common interest, the preservation and further intensification of social cooperation, becomes paramount and obliterates all essential collisions."

Freedom and benevolence go hand in hand.

And then the third column includes this excellent bit of Moore-refutation as well:

America's medical system has problems, but profit is the least of it. Government mandates, overregulation and a tax code that pushes employer-paid health insurance prevent the free market from performing its efficient miracles. Six out of seven health-care dollars are spent by third parties. That kills the market. Patients rarely shop around, and doctors rarely compete on price or service.

Moore told me, "Government can do things right. ... My dad gets his Social Security check every month. Comes not only every month, it comes on the same day through the so-called 'dilapidated' U.S. mail. ... [A]sk your grandparents what they think of Medicare. Although it has its flaws, although it may be underfunded, it's a much better program than the HMO that somebody has."

Underfunded? Medicare has a 75-year $34 trillion unfunded liability! Its costs are growing faster than inflation.

Social Security has a 75-year $5 trillion unfunded liability. These are Ponzi schemes that will be bankrupt before Moore reaches retirement age. The U.S. mail manages to deliver his dad's checks, but compare its performance to FedEx or UPS. The Post Office said it wasn't possible to deliver packages overnight.

I want FedEx health care: innovation, new cancer treatments, hip replacements and pain relief. We get that from private-sector competition, not government lethargy.

Moore said, "You don't introduce profit into your city water department."

He's wrong about that, too. As I wrote in "Give Me a Break", Jersey City, New Jersey's water tasted foul and failed safety tests. City workers said there wasn't much they could do. In fact, water prices would have to be raised ... just to maintain the lousy service they had.

So Jersey City turned its water system over to a for-profit company. Within months it had fixed the pipes government workers said couldn't be fixed, and for the first time in years, Jersey City's water met the highest cleanliness standard. Taxpayers saved $35 million.

The private company could do it better and cheaper because their skills were honed by constant competition.

Private competitors innovate or die. Government workers do what they did last year. That's why I want the private sector to provide my health care. Pursuit of profit will give us our best medicines and medical devices.

I love the very specific New Jersey water example here, as that is a direct response to Moore's rhetorical jab. And then the comparison between the private sector and government employees, which I've marked with italics, is a nice line too.

RIP: JFK Assassination Conspiracy Theories

The Q&A piece in the June 11 issue of US News and World Report is titled "The Final Verdict" and is a brief interview with Vincent Bugliosi, author of a new and massive book about the Kennedy assassination titled Reclaiming History. This interview summarizes his views on the matter, and really does seem convincing. Assuming the 1,696 pages of his book fully backup his views, it seems there can really be no question here. Not that this will silence all the conspiracy theorists (since likely nothing will!).

On the Costs and Benefits of Health Care Regulation

The latest issue of The Economist has both an editorial and then a one-page article on America's health-care system, and the costs and benefits of the tangled maze of regulations we have. The editorial begins by noting that Milton Friedman argued that the FDA was unreformable and hence should be abolished. While I agree with that, those at the Economist do not. But their editorial does go on to make some interesting and sensible reform suggestions:

The starting point is that the FDA and its counterparts across the world need to move from a risk-obsessed, "one size fits all" approach to a more flexible system that considers the risks and benefits of new therapies. Rather than asking drugs to undergo many years of costly trials in the vain pursuit of medicines that are safe for all in all circumstances, regulators should allow speedier conditional approvals. This is especially true for the growing number of targeted therapies, such as several excellent new cancer treatments, made possible by advances in genomics--a science that identifies which genetic groups will benefit from a drug.

If initial tests and sophisticated computer modelling show promise, innovative new drugs should proceed to small human trials. Ultimately, the drug could be approved for use by a wider part of the general population deemed (through genetic testing and other screening methods) to be at relatively low risk or more likely to benefit from the therapy.

Safeguards can counterbalance this relaxation. Faster approval of new drugs in humans should be matched by more rigorous post-launch testing and surveillance. At the moment, the FDA does not have the money or authority to do this properly. Scores of post-launch studies of drugs safety have been requested by regulators, but remain undone or ignored by firms. And yet there is reason to think such post-launch surveillance, if bolstered by the use of electronic records and "data mining" techniques, could save many lives. When Vioxx, a blockbuster pain remedy made by Merck, turned out to be dangerous for some patients, private health-management organisations with excellent electronic patient records spotted the problem months before the FDA did. The second safeguard is for all drugs trials done anywhere in the world--failed or successful--to be made public and the data published online. Consumers would have the information they need to choose whether to take a drug, weighing benefit against risk. Companies would benefit from a cheaper and faster approvals process, and a lower risk of litigation.

By cutting the costs of approval, lighter regulation should help move the industry away from blockbusters towards niche products. A reformed FDA might thus speed the arrival of the long-promised age of personalised medicine. Even if it survived, Friedman would surely approve.

The article in this issue then discusses three recent studies that give real evidence that Friedman's view of the FDA is correct: namely that it does far more harm than good. And we are talking about real physical harm here folks: people's lives would be saved if the FDA didn't do the things it did. See the graph in this article that indicates the total costs and benefits for five major areas of regulation of the US health care system: medical torts, the FDA, insurance regulation, and the certification of health professionals, and health facilities. It even indicates the components of the costs that come from State vs. Federal regulations. In all five of these areas, the costs outweigh the benefits. While medical tort and insurance regulation have greater total costs, this graph indicates that the relative costs vs. benefits are worst for the FDA.

Citing a second reference (a forthcoming paper by Michael Cannon of the Cato Institute), the article notes the important problem with the FDA:

Citing the best evidence to date on the costs and benefits of FDA regulation, Mr Cannon argues that the agency "is too slow and demands too much testing", ultimately harming consumers. He points out that drugs regulators can make two broad types of errors. First, they might approve a drug too quickly, only to find out after its launch that it is dangerous or even deadly. Second, they could delay the launch of a highly innovative drug by demanding onerous or unnecessary trials and thereby deny many needy patients a new therapy.

Proper regulation requires balancing these two risks, but the pitch may be queered by bureaucratic self-interest. If the regulator allows even one drug to slip through the approval process that later proves harmful to some people some of the time, a hue and cry is sure to follow. Look no further than the recent public backlash against the FDA after several deaths were linked to Vioxx, a blockbuster pain remedy made by Merck.

And yet the second (and probably bigger) risk of leaving people untreated because of restrictions on drugs rarely gets the regulators into trouble. As Mr Cannon puts it, "no FDA official has ever been fired or faced a congressional inquiry for delaying the approval of a promising new drug, however unjustified the delay." What is more, he speculates, big drug firms may quietly acquiesce to this burdensome red tape because it acts as a barrier to entry against newcomers without the cash or lobbying power to navigate the FDA.

That is a key point. I'd love to see FDA officials grilled by members in Congress with questions like "Because you took five years to approve drug XYZ, it is estimated that 10,000 people died that would have otherwise lived. How can you defend your slow bureaucracy?" That would be precious... but I'm not holding my breath.

I hope that the FDA will be reformed for the better, though I fear it won't be or that changes will only make the situation worse.

Gas Taxes vs. Gas Profits

On June 6 John Stossel provided another great item, "Why is Profit a Dirty Word?" (thanks to Shawn Klein for this link). He begins as follows:

At a recent press conference Sen. John Kerry was upset as he snarled, "Oil companies in America are reporting record profits. Record profits."

When did profit become a dirty word?

I wish the oil executives would face the media.

They could say something like:
"What are you complaining about? What do you think we do with our profits? Buy fancy cars and homes? Well, we do, actually, but nearly all the money goes to looking for more oil and following environmental rules that you want us to follow. You should want us to make more profit. Anyway, we make less profit per gallon than your beloved government takes in taxes."

This is something I have thought about often: the lack of proper argumentation from those in business when they are attacked by the press or by politicians. And the point Stossel makes here is so ripe for use in response to the likes of John Kerry! "Can you explain your record profits?"... countered by "Sure I can. But if I do will you explain why you feel it necessary to take more in oil and gas taxes than we do in profits?" LOL... the look on the politician's face at that moment would be priceless.

From a Former Fanatic

Here is an interesting piece in The Daily Mail titled "I was a fanatic...I know their thinking, says former radical Islamist" (thanks to Shawn Klein for the link). Written by a former member of what he calls the "British Jihadi Network", the author argues that the primary reason for Islamic terrorism is not the foreign policy of the USA/Western countries, but rather Islamic theology (or at least their interpretation of it). This is of course a vital perspective, and runs counter to what so many on the left argue (and sadly, a great many libertartians, like Ron Paul in the Republican debates a while back). So often we hear that "they hate us because of our foreign policy". Well, the US and other Western countries have certainly made many foreign policy mistakes over the years, and the current Bush administration obviously has too. But people like this author make the point quite clear that these actions are not the primary engine of their violent ways -- their ideology is. The primary issue is cultural/philosophical, not foreign policy.

It'll Function Fine Until the Next Storm

In the May 14 issue of BusinessWeek there was an article titled "Hurricane Ahead, But Lower Insurance", subtitled "Why the price of property coverage is going down in the face of dire predictions". The article notes that even after Katrina and other recent, costly storms:

In most of the country, property insurance rates for homeowners and businesses are actually lower than they were before Katrina. And amazingly, insurance rates have been falling recently in many parts of Florida and the Gulf Coast that stand to suffer severe losses from hurricanes, encouraging continued construction in low-lying areas.

There are some financial reasons given for this, but the other big one is government interference in the market:

Regulators and the insurance industry are only beginning to grapple with the problems of pricing coverage in an era of potentially big storms. By some calculations, actuarially correct premiums would be so high as to freeze economic development in places such as Miami and New Orleans.

But of course that isn't happening, because actual risk calculations are not determining the market. Government regulators are capping rate increases and in some cases "broadening the availability of state-subsidized insurance for highly exposed property owners who can't get coverage from the private market". Consider this:

Under Governor Charlie Crist, Florida has gone the furthest in challenging market forces. In January, the state legislature massively increased government involvement in the insurance business in hopes of rolling back homeowners' rates. It blocked rate hikes by the state-controlled Citizens Property Insurance Corp., which insures people who can't get coverage in the private market. That allowed Citizens to undercut private insurers. To keep private companies from bailing out of Florida, it intends to make available an additional $16 billion in highly subsidized reinsurance from a state fund.

Trouble is, if a series of big hurricanes empties out the Citizens reserve fund and the reinsurance fund, the state will have to raise the money to pay claims via a special assessment of thousands of dollars apiece on all policyholders in the state. "It'll function just fine until the next storm. Then we'll see," says Joshua D. Shanker, an equity analyst at Citigroup Investment Research.

Well, duh. That is a classic line: "It'll function just fine until the next storm. Then we'll see."

How many times have you seen people's homes or businesses destroyed, not by freak occurrences that are hard to predict like a tornado, but by regular occurrences that one should expect in certain areas, like damage from being too close to a river or an ocean? And how often do those people then say, on camera, "Well, it is a tough loss. But we'll rebuild." The many times I've seen and heard this I've always thought two things. First, I'm glad you are picking yourselves up and are eager to rebuild your lives and rebound from disaster. But second, why are you going to rebuild in the same location?!?! How could you afford to do that given the massive increase in insurance that will no doubt hit you... oh wait, it won't, because the government will subsidize you and encourage you to rebuild in that high-risk location. And this will be a cycle that will continue and continue, with billions of dollars wasted time and again.

The article continues:

The political fix temporarily alleviates the financial pain, but it worsens the underlying problem. Developers continue to erect condos in vulnerable parts of Florida in part because of the availability of state-subsidized insurance. Florida already has $2 trillion in coastal exposure and remains one of the fastest-growing states. That will raise the cost of the next Big One. "People have the expectation that insurance is a commodity and should be flatly priced," says Robert Muir-Wood, chief research officer of Risk Management Solutions Inc. But in an actuarially ideal world, he says, the rate for the South Florida beachfront should be perhaps 50 times higher than the rate for an elevated property in northern Florida. "The wealthiest people tend to benefit the most from this aberration," Muir-Wood says.

Meanwhile, the Florida state government's decision to fight the market and absorb more hurricane risk is benefiting other parts of the country. As private insurers and reinsurers are being driven out of Florida, they are writing more policies elsewhere, which is helping to lower rates in other places, like Mississippi.

The dip in rates is not likely to survive another year like 2005. Insurers are being more rigorous in setting rates and paying closer attention to their risk models than in the past, says Timothy R. Gardner, global head of the property specialty practice of Guy Carpenter and Co. The influx of capital could ebb. And if another Katrina-type hurricane hits, regulators and politicians will find it harder to defy nature and enforce unrealistically low rates for coastal property.

Harder, perhaps. But I don't think one more Katrina-level disaster will lead to change in this system. A change in thinking is what is needed, not just more financial disaster and hardship -- and I don't think just one more massive-damage event will get the relevant parties' thinking to change. Government needs to get out of the insurance-subsidizing business, and individuals and businesses need to stop building and re-building in such high-risk areas. If you are wealthy and can and want to take the risk -- either by not having insurance or by buying expensive insurance that is priced according to the actual risks involved -- then fine. But anything other than that is an evasion of reality. I mean, do people expect the government to subsidize the insurance for their new home or business that they want to build on the side of an active volcano? I'd like to think that the obvious answer there is "of course not", and the essence of the situation in Florida and other high-risk areas is relevantly similar. Live there without an insurance safety net, pay the price for your insurance safety net, or don't live there at all.

HR 2046 and Poker

I heard recently that there was a new bill up in the House to try and save or protect online poker. So I went to the Poker Players Allliance website to get some info, and at this page they provide the following info about HR-2046 "The Internet Gambling Regulation and Enforcement Act of 2007":

HR 2046 protects poker players. Applicants for a gaming license would be required to provide comprehensive financial statements and corporate structure documents, and to agree to be subject to U.S. jurisdiction and all applicable laws related to Internet gambling. No license would be granted to any applicant convicted of a criminal violation of any law relating to gambling, money laundering, fraud or other financial laws.

HR 2046 protects consumers. The framework set forth in the bill would for the first time effectively regulate Internet gambling, thus making it possible to address underage and compulsive gambling, neither of which are prevented under prohibition regimes. Regulation combined with proven technology would establish a system of effective controls to block children and compulsive gamblers from gambling.

If HR 2046 becomes law, online poker will be safe, secure and regulated. The bill would create stringent licensing to ensure that poker operators are legitimate. HR 2046 protects poker players, and it protects consumers.

This might not be exactly what I'd like to see happen, and I'm against government regulating the economy and the actions of consenting adults. But passing this into law would be better than the current situation, because last year's legislation -- slipped into other legislation and passed under the cover darkness -- has made it far more difficult for Americans to play the great game of poker online. So given the choices of only regulation or prohibition, I'll of course go with regulation.

The PPA continues to provide great info on the issue of poker and the law, and I really wish them success in the fight with congress. Their homepage provides the following "Important Facts Congress Should Hear", with links to supporting info and argumentation:

• Poker is one of the great American pastimes. The game has been enjoyed by presidents, generals, Supreme Court Justices, Members of Congress and average Americans for more than 150 years.
• Poker is a game with a predominance of skill. Like chess, poker is a "thinking man's" game which relies on mathematics, psychology and money management.
• Poker is a source of charity. In 2006, millions of dollars were raised for local and national charities through poker tournaments. One event in D.C. featuring 15 Members of Congress raised more than $288,000 to fight cancer.
• Billions of tax revenue is being lost. According to an economic analysis, 3.3 billion in federal tax revenue and addition 1 billion in state tax revenue could be raised if the federal government were to regulate Internet poker.
• 75 percent of Americans oppose banning online poker. According to national polling, a vast majority of Americans oppose federal efforts to ban online poker.
• Supporting an online poker ban can cost you an election. Exit polling has shown and the national media has noted that a leading advocate to ban Internet poker in the 109th Congress was negatively impacted by his leadership on the issue.

Those are all fine points to make for the purposes of trying to win votes in Congress. Different legislators might be swayed by some or all of the above. I think the second point is particularly important, because it is relevant to the total hypocrisy in last year's legislation, and in the politician's attitudes towards gambling in general: they allow horse-racing and state-run lotteries, but not games like poker. And yet, the lottery is completely a game of chance, while poker is a game where skill plays a major role. So how is the lottery OK -- not just OK, but s