Stephen Kershnar
Learn to Love the Obese
Dunkirk-Fredonia Observer
December 1, 2009
Our society is considering a tax on fat-causing food and, perhaps, even on fat people. Daniel Engber writing in www.slate.com summarizes some of the recent movement on this issue. 80% of the states in the U.S. currently tax junk food or soda. In an interview in Men’s Health, President Obama was sympathetic to a federal soda tax. The New York Times and New England Journal of Medicine have recently called for a significant tax on soda. The former calls for a staggering $1.28 per gallon tax in New York. Other writers go further. In the New York Times, David Leonhardt writes sympathetically on the idea of discrimination against the obese. Writing in the Huffington Post, John Ridley calls for a tax on the obese.
The idea behind the soak-the-fat-people campaign is that they are imposing costs on the rest of us. According to New York Times writer Michael Pollan, the U.S. spends $147 billion to treat obesity. 30% of the increase in health-care spending over the past ten years comes from obesity and that it now amounts to roughly a tenth of all health-care spending. According to Ridley, this results in a cost of $1,250 per American household, mostly in taxes and insurance premiums. Obese people shoulder some of these costs. According to a Center for Disease Control study, in 2006 obese people spent 42% more than normal-weight people on medical costs.
Before the U.S. decides to slam fat people, it is worth noting that they already pay a significant price for their weight. Piling on taxes that are aimed directly and indirectly at them adds salt to their wounds.
Consider the economic price they pay. According to a recent paper in the Yale University’s Rudd Center for Food Policy & Obesity, one study found that obese white women (64 lbs. overweight or two standard deviations) suffer a 9% decrease in wages. This is equivalent to the difference of 1.5 years or education or three years of work experience. A second study found that severely obese white women suffer a decrease in wages of 24% when compared to their normal-weight counterparts. Severely obese black women suffered a 14.6% decrease and severely obese white and black men suffered 19.6% and 3.5% respectively.
Consider the social price they pay. According to Engber, obese women are half as likely to attend college as their peers and 20% less likely to get married. Because marriage helps to eliminate poverty, this makes obese women more likely to be poor. Writing in www.slate.com, Steven Landsburg points out that ugly women tend to attract husbands who have less educational achievement and earnings potential than do other women. If ugliness correlates with obesity, and this is not clear, then even when they do get married their choices are worse. Epidemiologist Peter Muennig reports that obese persons report being badly stigmatized. He reports that when one group of formerly obese persons was asked to choose between blindness and obesity, 89% chose blindness. He notes discrimination against them is rampant. There is evidence that parents discriminate against their obese children, doctors against their obese patients, and husbands against their obese wives.
Consider the health price they pay. Engber, citing Muennig, points out the obese are up to twice as likely to die as a normal-weight person. Also, obese women are seven times more likely to suffer significant illness or death and are especially vulnerable to clinical depression.
As a society, the U.S. not only has laws banning discrimination against minorities and women, but also has laws favoring them. Affirmative action laws often result in their being given preferential treatment even when they are less qualified than their competitors. In contrast to women and minorities, fat people get little protection. Only a few cities (for example, San Francisco and Santa Cruz, CA, and Washington, D.C.) and only one state (Michigan) prohibit weight-discrimination. The American Disabilities Act doesn’t protect them because being obese is rarely a disability from a physiological cause.
One response is that being obese is a choice and that being a minority or woman is not. The problem is that genetics plays a significant role in determining someone’s weight. One study in the American Journal of Clinical Nutrition found that weight (specifically, body-mass index) is 77% heritable. This is a little misleading, however, because this measures weight relative to same-generation peers and thus includes some environmental factors. Still, it does indicate that weight is significantly heritable and the magnitude of this effect lessens the degree to which someone’s weight is under his control.
A second response is that obese people are discriminated against because consumers, daters, and spouse-seekers prefer thinner people and society should not try to counteract the preferences of a free people. There is evidence for the former claim. Economist Steven Landsburg points out that beautiful people are more likely to be found in occupations where consumer preference plays a larger role, specifically, retail sales, waitressing, etc. However, the same might be true with regard to consumers and race or gender and if consumer preference does not warrant discrimination against women and minorities than neither does it do so for fat people.
What’s more, Engber and epidemiologist Muennig argue that anti-obesity campaigns increase anti-fat bias and that this bias exacerbates the health and discrimination problems obese people face. If this is correct, then the various taxes and insurance and employment penalties will cause fat people increased discrimination, isolation, illness, and death.
On the other hand, subsidizing something produces more of it, taxing it less. If the U.S. subsidizes food production (see the many agricultural subsidies) or prevents employers and insurers from shifting the costs of fat people onto them, then it subsidizes obesity. This will produce more obesity and spread its costs.
The obese already shoulder significant burdens. Piling on seems mean-spirited. On the other hand, failing to tax them in conjunction with other policies (for example, agricultural subsidies) threatens to subsidize obesity, thereby increasing the problem. Balancing these costs and benefits is a Herculean task. A free society doesn’t concern itself with whom employers hire, what people pay for insurance, and what attitudes people have toward their neighbors. However, because we are well on our way to socialized medicine (nearly half of health spending is done by the government) and have become a country of busybodies, the Herculean task is exactly what we’ll need to do.
Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts
02 December 2009
04 November 2009
Academia: Women, Babies, and Advancement
The Objectivist
Academia and Sex Differences
Dunkirk-Fredonia Observer
November 2, 2009
On average, men and women differ in their preferences with regard to work and family and this leads to workplace differences. An interesting issue is whether the academic workplace should be changed to better accommodate women’s preferences.
In some high-end fields, women have less success at the top of the career ladder. Consider, for example, law and business. Joanne Lipman writing in The New York Times reports that in 2008, women made up almost half of the associate lawyers (those who work for law firms), but only 18.3% of the partners (those who own the firms). Similarly, she reports, only 15 women run Fortune 500 companies.
The same pattern occurs in academia. There women with children or who are likely to have children do worse than their peers. Consider the following research by Mary Ann Mason, Dean of the Graduate Division at the University of California at Berkeley. Women with babies are 28% less likely than women without babies to enter a tenure-track position. A person is on the tenure track when she is on track to have a permanent full-time position in a college or university or has such a position. Married women are 21% less likely than single women to enter a tenure-track position. Women faculty are 27% less likely than men to become an associate professor (mid-level professor) and 20% less likely than men to become a full professor (senior-level professor) within 16 years. A high percentage of mothers end up in second-tier academic positions (specifically, lecturers, part-timers, and adjuncts).
Mason and Marc Goulden (a research analyst at Berkeley) point out that the academia presents family-related problems for women. They point out the following. Only a third of women without children who take a fast-track university job ever become a mother. Tenured women are more than twice as likely as tenured men to be single 12 years out from the Ph.D. If married, tenure-track women faculty are 50% more likely than men to divorce (and twice as likely to divorce as women in second-tier positions).
It is not entirely clear what is going on here. There is no general hindrance to parenting. Mason points out that men who have early babies (babies had less than five years after Ph.D. completion) do better than all other groups, including single men and women.
The problem might be one of spousal selection or timing. Mason and Goulden point out that most women academics are married to people with advanced degrees and most academic men are not. If this results in men being more likely to have a stay-at-home spouse, and I suspect it does, then the differences in academic success might in part reflect this difference. The problem might also be one of timing, specifically having early versus late babies. Mason points out that women with late babies (babies that are not early) do as well as women without children.
The difference in academic success is accompanied by, and probably caused in part by, differences in productivity. Consider Mason’s findings on postdoctorates (Ph.D.s whose job is to do research in a professor’s lab). Married men with children put in 15% more time as a post-doctorate than married women with children and married men without children put in 29% more. Married women with children are 25% less likely to present at a conference in the last year than married men with children and 17% less likely than married men without children. There is some evidence, albeit weak evidence, that this pattern holds for publications. Philosophers Miriam Solomon and John Clarke report that in philosophy, women receive 25-33% of the Ph.D.s, have 21% of the philosophy positions and yet publish only 12.4% of the articles. Note these figures come from different but overlapping periods.
Women professors with children are not lazier than their counterparts. Rather, they put their efforts elsewhere. For example, Mason found that women with children do roughly 16 more hours in housework and caregiving than do men with children and 24 hours more than do men without children.
Proposed explanations for these differences in academic success have included discrimination and genetics. An important factor is probably different preferences. Women attach less weight to their careers and more to family. This can be seen in that male Ph.D.s are more likely to want to be professors at research positions than are women Ph.D.s (32% more likely for University of California Ph.D.s). The latter are also much more likely to shift their career goals away from academia. When they shift their career goals, women are more likely than men to cite as reasons children and spouses. Mason provides an example of this line of thinking is the following quote from a doctoral student, “I feel unwilling to sacrifice a healthy family life and satisfying personal life to succeed in academics, and thus industrial options have become more appealing.”
Women’s preferences are not wrong, bad, or irrational, just different. Professor Michael Argyle of Oxford University points out that marriage is one of the strongest factors to correlate with happiness and the correlation is stronger for women than men. In The Blank Slate, Harvard psychology professor Steven Pinker points out that on average mothers are more attached to their children than are fathers and that this is true in societies all over the world and in our mammal lineage. He notes that on average women are more attentive to their babies’ well-being and place a higher value on spending time with their children. In contrast, Pinker notes, men’s self-esteem is more closely tied to their status, salary, and wealth. He also points out these factors play a larger role in men’s attractiveness as a sexual and marriage partner than it does for women.
One response by some universities such as the prestigious University of California at Berkeley is to excuse parents with substantial caregiving duties for children from having to teach some of their classes. A second response has been to give these parents an extra year or two to earn tenure. Other universities have adopted similar policies. It is not clear, however, whether these policies are justified by either fairness or efficiency.
These policies transfer costs from one person to another. If at a state university, professor Jones get excused from teaching some of her classes, one of three things happens: other professors have to teach her classes, students are offered less classes (or larger classes), or taxpayers have to pay someone to teach a class when they have already paid someone to teach it. By analogy, imagine the Sunshine taxicab business has salaried drivers. If women drivers with babies get excused from their shifts, then consumers pay more money, Sunshine loses money, or other drivers have to work extra shifts. This cost transfer might be good policy, but it is not a requirement of fairness or justice. Furthermore, if the headwind is against people who have early babies and don’t have stay-at-home spouses, then this is arguably a cost of one’s choices.
The efficiency claim is harder to assess. The concern here is whether the policies have positive or negative effects on people other than the professors. Such policies might encourage some of the best and brightest women to go into academia. This is desirable. There might also be eugenics-type reasons that are relevant. On the other hand, if students and others benefit from more productive professors, then there is reason to be weary of these policies. Also, this policy provides an incentive against stay-at-home parenting and if this is bad policy, and I don’t know that it is, this is a reason to avoid it. The effects are speculative and in any case hard to balance against each other. In addition, it is not clear that there is one right answer for every academic sector.
In any case, the issue is an interesting one and one the academic world will have to consider.
Academia and Sex Differences
Dunkirk-Fredonia Observer
November 2, 2009
On average, men and women differ in their preferences with regard to work and family and this leads to workplace differences. An interesting issue is whether the academic workplace should be changed to better accommodate women’s preferences.
In some high-end fields, women have less success at the top of the career ladder. Consider, for example, law and business. Joanne Lipman writing in The New York Times reports that in 2008, women made up almost half of the associate lawyers (those who work for law firms), but only 18.3% of the partners (those who own the firms). Similarly, she reports, only 15 women run Fortune 500 companies.
The same pattern occurs in academia. There women with children or who are likely to have children do worse than their peers. Consider the following research by Mary Ann Mason, Dean of the Graduate Division at the University of California at Berkeley. Women with babies are 28% less likely than women without babies to enter a tenure-track position. A person is on the tenure track when she is on track to have a permanent full-time position in a college or university or has such a position. Married women are 21% less likely than single women to enter a tenure-track position. Women faculty are 27% less likely than men to become an associate professor (mid-level professor) and 20% less likely than men to become a full professor (senior-level professor) within 16 years. A high percentage of mothers end up in second-tier academic positions (specifically, lecturers, part-timers, and adjuncts).
Mason and Marc Goulden (a research analyst at Berkeley) point out that the academia presents family-related problems for women. They point out the following. Only a third of women without children who take a fast-track university job ever become a mother. Tenured women are more than twice as likely as tenured men to be single 12 years out from the Ph.D. If married, tenure-track women faculty are 50% more likely than men to divorce (and twice as likely to divorce as women in second-tier positions).
It is not entirely clear what is going on here. There is no general hindrance to parenting. Mason points out that men who have early babies (babies had less than five years after Ph.D. completion) do better than all other groups, including single men and women.
The problem might be one of spousal selection or timing. Mason and Goulden point out that most women academics are married to people with advanced degrees and most academic men are not. If this results in men being more likely to have a stay-at-home spouse, and I suspect it does, then the differences in academic success might in part reflect this difference. The problem might also be one of timing, specifically having early versus late babies. Mason points out that women with late babies (babies that are not early) do as well as women without children.
The difference in academic success is accompanied by, and probably caused in part by, differences in productivity. Consider Mason’s findings on postdoctorates (Ph.D.s whose job is to do research in a professor’s lab). Married men with children put in 15% more time as a post-doctorate than married women with children and married men without children put in 29% more. Married women with children are 25% less likely to present at a conference in the last year than married men with children and 17% less likely than married men without children. There is some evidence, albeit weak evidence, that this pattern holds for publications. Philosophers Miriam Solomon and John Clarke report that in philosophy, women receive 25-33% of the Ph.D.s, have 21% of the philosophy positions and yet publish only 12.4% of the articles. Note these figures come from different but overlapping periods.
Women professors with children are not lazier than their counterparts. Rather, they put their efforts elsewhere. For example, Mason found that women with children do roughly 16 more hours in housework and caregiving than do men with children and 24 hours more than do men without children.
Proposed explanations for these differences in academic success have included discrimination and genetics. An important factor is probably different preferences. Women attach less weight to their careers and more to family. This can be seen in that male Ph.D.s are more likely to want to be professors at research positions than are women Ph.D.s (32% more likely for University of California Ph.D.s). The latter are also much more likely to shift their career goals away from academia. When they shift their career goals, women are more likely than men to cite as reasons children and spouses. Mason provides an example of this line of thinking is the following quote from a doctoral student, “I feel unwilling to sacrifice a healthy family life and satisfying personal life to succeed in academics, and thus industrial options have become more appealing.”
Women’s preferences are not wrong, bad, or irrational, just different. Professor Michael Argyle of Oxford University points out that marriage is one of the strongest factors to correlate with happiness and the correlation is stronger for women than men. In The Blank Slate, Harvard psychology professor Steven Pinker points out that on average mothers are more attached to their children than are fathers and that this is true in societies all over the world and in our mammal lineage. He notes that on average women are more attentive to their babies’ well-being and place a higher value on spending time with their children. In contrast, Pinker notes, men’s self-esteem is more closely tied to their status, salary, and wealth. He also points out these factors play a larger role in men’s attractiveness as a sexual and marriage partner than it does for women.
One response by some universities such as the prestigious University of California at Berkeley is to excuse parents with substantial caregiving duties for children from having to teach some of their classes. A second response has been to give these parents an extra year or two to earn tenure. Other universities have adopted similar policies. It is not clear, however, whether these policies are justified by either fairness or efficiency.
These policies transfer costs from one person to another. If at a state university, professor Jones get excused from teaching some of her classes, one of three things happens: other professors have to teach her classes, students are offered less classes (or larger classes), or taxpayers have to pay someone to teach a class when they have already paid someone to teach it. By analogy, imagine the Sunshine taxicab business has salaried drivers. If women drivers with babies get excused from their shifts, then consumers pay more money, Sunshine loses money, or other drivers have to work extra shifts. This cost transfer might be good policy, but it is not a requirement of fairness or justice. Furthermore, if the headwind is against people who have early babies and don’t have stay-at-home spouses, then this is arguably a cost of one’s choices.
The efficiency claim is harder to assess. The concern here is whether the policies have positive or negative effects on people other than the professors. Such policies might encourage some of the best and brightest women to go into academia. This is desirable. There might also be eugenics-type reasons that are relevant. On the other hand, if students and others benefit from more productive professors, then there is reason to be weary of these policies. Also, this policy provides an incentive against stay-at-home parenting and if this is bad policy, and I don’t know that it is, this is a reason to avoid it. The effects are speculative and in any case hard to balance against each other. In addition, it is not clear that there is one right answer for every academic sector.
In any case, the issue is an interesting one and one the academic world will have to consider.
26 August 2009
Healthcare Reform: The Public Option
The Objectivist
Public Option: Higher Cost, Lower Quality
Dunkirk-Fredonia Observer
August 24, 2009
The Democrats in Congress and the Whitehouse are pushing a public option. It is a centerpiece of the Affordable Health Choices Act. The public option is a Medicare-like, government-run health insurance program.
The White House has signaled that they might be willing to pass a healthcare-reform bill without a public option. This caused many Democrats to get their panties in a twist. As reported in Medical News Today, Sen. Jay Rockefeller (D-WV) asserted that the public option is “a must.” Sen. Russ Feingold (D-WI) stated that “without a public option, I don’t see how we will bring real change to a system that has made good health care a privilege for those who can afford it.” House Speaker Nancy Pelosi (D-CA) said, “There is strong support in the House for a public option.” Rep. Anthony Weiner (D-NY) threatened that without a public option, the legislation could lose up to 100 Democratic votes in the House.
Concerns about cost and quality of care supposedly motivate the attempt to reform healthcare. The U.S. spends more on health care than any other nation. According to the New York Times, this amounts to more than $7,500 per person and roughly $15,000 per household. Using 2004 figures, this is 92.7% more than any other G7 country (France, Germany, Italy, Britain, Japan, and Canada). The U.S. also spends a higher percentage of the economy than all but one other member of the United Nations (in 2007 this was $2.26 trillion or 16% of Gross Domestic Product). These costs wreck havoc on personal finances. One study by David Himmelstein of Harvard University found that medical expenditures caused 60% of all personal bankruptcies in the U.S.
U.S. healthcare gets bad grades. A 2008 report by the Commonwealth Fund found that despite all this spending, the quality of health care in the U.S. was worse than 19 other developed industrial countries with which it was compared. The World Health Organization also ranked the U.S. 37th in overall performance and 72nd in overall health level in comparison to the 191 member organizations it included in its study.
The public option will not fix either problem. Consider cost. A public option is designed to cover many of the uninsured. The U.S. Census Bureau asserts that there are 47 million people who are uninsured at some point in the year. Economist Katherine Baicker and others point out that people who are insured generate more healthcare spending than uninsured individuals. Hence, insuring the 47 million would increase total healthcare costs. If our concern is to lower overall spending, the public option is a loser.
It might be argued that public option would reduce costs (or more specifically, reduce the increase in medical costs) by providing more competition. Some proponents argue that the government can provide services more cheaply. They often cite Medicaid, Medicare, and Veteran’s Health Administration as evidence for their claim. This is wishful thinking.
Medicaid charges less because it pays a fraction of what Medicare, private-insurance companies, and out-of-pocket consumers pay. The latter groups end up subsidizing Medicaid. Merely encouraging more subsidization will not reduce total costs, merely shift them around.
Medicare (or a Medicare-like program) will not reduce costs. First, Medicare is a mess. The program involves 140 million Americans paying 2.9% of their income to pay for healthcare for 42 million mostly elderly Americans. It costs roughly $400 billion a year and is running a massive deficit ($179 billion in 2007). It will go broke roughly 8 years from now. In its shaky status, Medicare resembles Social Security. The latter is another Ponzi scheme that will start running deficits as early as this year. It works via a 12.4.% tax on working Americans (in part via their employers) that is also transferred to the elderly, disabled, and others.
Second, as Steven Pearlstein of the Washington Post points out, if Medicare (or a similar program) offered insurance that competed against private plans, it would have to start doing a number of costly things. It would have to collect premiums, market its programs, maintain a reserve, and manage payouts in way that lowers costs and increases quality. There is no reason to believe that it would do so more efficiently than the private sector. Public sector employees get roughly 44% more in compensation (wages and benefits) than do private sector employees and are usually much harder to fire. Government waste and mismanagement is legendary. Government-protected businesses like Amtrak and the Post Office are forever running deficits and needing protection against competition. History simply provides no reason to think that a government-run insurance company would be more efficient.
Even if the government could run an insurance system more efficiently, massive taxes would be necessary to support the public option. Under the current House plan the public option would be available for individuals making up to 400% of the poverty level (or up to $43,320). The Congressional Budget Office estimates that the latest version of Affordable Health Choices Act at will cost $597 billion over ten years and reduce the number of uninsured by 20 million. This surely underestimates the cost.
Consider the estimate of 47 million uninsured people. Somewhere around 9 million of the uninsured (19%) make more than $75,000 a year and hence choose not to purchase health insurance. Let us subtract them from the number of uninsured, thereby reducing the number to 38 million. If we insured all 38 million, the total cost would be would be $285 billion per year ($7,500/person x 38 million people). If we also screen out immigrants and those currently eligible for employer-sponsored insurance or current government programs, this still leaves 12 million uninsured. Covering them would cost $90 billion per year ($7,500/person x 12 million people). In addition, the public option would suck millions of people out of the private sector because for many employers it would be cheaper for the employer to pay the tax (8%) for not insuring its workers than to pay for private insurance.
The current House plan leaves 27 million uninsured. The program would quickly expand to cover many of these people. To see this, merely consider how Social Security and Medicaid (and the State Children’s Health Insurance Program or S-Chip) were expanded. If President Obama and Congress provide amnesty for the 12-20 million illegal aliens, and they’ll try, even more people will need to be covered. None of this is affordable, especially when we consider that Obama has already run up huge deficits and that Medicare and Social Security will soon be in the red.
There is even less reason to think that the government will increase the quality of healthcare. Is there an area where government-provided services are better and cheaper than the private sector? Like the medical system, the public-school system provides a poor product. The U.S. spends more on education (in per pupil terms) and gets middling to bad results. In the inner cities, the schools are horrible despite being awash in money. The burden here is on the proponents of the public option to establish that the government would provide higher-quality medical services. They can’t carry this burden because there is no area where the government has done so, at least when its costs are competitive with the private sector.
Several states, specifically Maine, Massachusetts, and Tennessee, introduced programs to cover the uninsured. An article in the Wall Street Journal on Maine’s program pointed out that in 2003 Maine attempted to cover all of its uninsured citizens. Its proponents claimed that it would be paid for by savings in the healthcare system. Instead, the program is operating a deficit and had to be supported by a tax on private health insurance. Despite substantial tax subsidies, the Maine’s program produced only a small reduction in the uninsured. Massachusetts’s program did reduce the uninsured. However in doing so, it likely caused healthcare costs to rise faster there than in the rest of the nation. Also, predictably, the cost to Massachusetts taxpayers skyrocketed. Tennessee’s program is another failure. Proponents of the public option might claim that the federal government will do so much better than state governments. Yeah right.
The case for the public option is that it will decrease costs or will increase quality. Neither is plausible. The public option would increase medical costs, jack up taxes, and produce inferior healthcare. Anyone who votes for it should be thrown out of office.
Public Option: Higher Cost, Lower Quality
Dunkirk-Fredonia Observer
August 24, 2009
The Democrats in Congress and the Whitehouse are pushing a public option. It is a centerpiece of the Affordable Health Choices Act. The public option is a Medicare-like, government-run health insurance program.
The White House has signaled that they might be willing to pass a healthcare-reform bill without a public option. This caused many Democrats to get their panties in a twist. As reported in Medical News Today, Sen. Jay Rockefeller (D-WV) asserted that the public option is “a must.” Sen. Russ Feingold (D-WI) stated that “without a public option, I don’t see how we will bring real change to a system that has made good health care a privilege for those who can afford it.” House Speaker Nancy Pelosi (D-CA) said, “There is strong support in the House for a public option.” Rep. Anthony Weiner (D-NY) threatened that without a public option, the legislation could lose up to 100 Democratic votes in the House.
Concerns about cost and quality of care supposedly motivate the attempt to reform healthcare. The U.S. spends more on health care than any other nation. According to the New York Times, this amounts to more than $7,500 per person and roughly $15,000 per household. Using 2004 figures, this is 92.7% more than any other G7 country (France, Germany, Italy, Britain, Japan, and Canada). The U.S. also spends a higher percentage of the economy than all but one other member of the United Nations (in 2007 this was $2.26 trillion or 16% of Gross Domestic Product). These costs wreck havoc on personal finances. One study by David Himmelstein of Harvard University found that medical expenditures caused 60% of all personal bankruptcies in the U.S.
U.S. healthcare gets bad grades. A 2008 report by the Commonwealth Fund found that despite all this spending, the quality of health care in the U.S. was worse than 19 other developed industrial countries with which it was compared. The World Health Organization also ranked the U.S. 37th in overall performance and 72nd in overall health level in comparison to the 191 member organizations it included in its study.
The public option will not fix either problem. Consider cost. A public option is designed to cover many of the uninsured. The U.S. Census Bureau asserts that there are 47 million people who are uninsured at some point in the year. Economist Katherine Baicker and others point out that people who are insured generate more healthcare spending than uninsured individuals. Hence, insuring the 47 million would increase total healthcare costs. If our concern is to lower overall spending, the public option is a loser.
It might be argued that public option would reduce costs (or more specifically, reduce the increase in medical costs) by providing more competition. Some proponents argue that the government can provide services more cheaply. They often cite Medicaid, Medicare, and Veteran’s Health Administration as evidence for their claim. This is wishful thinking.
Medicaid charges less because it pays a fraction of what Medicare, private-insurance companies, and out-of-pocket consumers pay. The latter groups end up subsidizing Medicaid. Merely encouraging more subsidization will not reduce total costs, merely shift them around.
Medicare (or a Medicare-like program) will not reduce costs. First, Medicare is a mess. The program involves 140 million Americans paying 2.9% of their income to pay for healthcare for 42 million mostly elderly Americans. It costs roughly $400 billion a year and is running a massive deficit ($179 billion in 2007). It will go broke roughly 8 years from now. In its shaky status, Medicare resembles Social Security. The latter is another Ponzi scheme that will start running deficits as early as this year. It works via a 12.4.% tax on working Americans (in part via their employers) that is also transferred to the elderly, disabled, and others.
Second, as Steven Pearlstein of the Washington Post points out, if Medicare (or a similar program) offered insurance that competed against private plans, it would have to start doing a number of costly things. It would have to collect premiums, market its programs, maintain a reserve, and manage payouts in way that lowers costs and increases quality. There is no reason to believe that it would do so more efficiently than the private sector. Public sector employees get roughly 44% more in compensation (wages and benefits) than do private sector employees and are usually much harder to fire. Government waste and mismanagement is legendary. Government-protected businesses like Amtrak and the Post Office are forever running deficits and needing protection against competition. History simply provides no reason to think that a government-run insurance company would be more efficient.
Even if the government could run an insurance system more efficiently, massive taxes would be necessary to support the public option. Under the current House plan the public option would be available for individuals making up to 400% of the poverty level (or up to $43,320). The Congressional Budget Office estimates that the latest version of Affordable Health Choices Act at will cost $597 billion over ten years and reduce the number of uninsured by 20 million. This surely underestimates the cost.
Consider the estimate of 47 million uninsured people. Somewhere around 9 million of the uninsured (19%) make more than $75,000 a year and hence choose not to purchase health insurance. Let us subtract them from the number of uninsured, thereby reducing the number to 38 million. If we insured all 38 million, the total cost would be would be $285 billion per year ($7,500/person x 38 million people). If we also screen out immigrants and those currently eligible for employer-sponsored insurance or current government programs, this still leaves 12 million uninsured. Covering them would cost $90 billion per year ($7,500/person x 12 million people). In addition, the public option would suck millions of people out of the private sector because for many employers it would be cheaper for the employer to pay the tax (8%) for not insuring its workers than to pay for private insurance.
The current House plan leaves 27 million uninsured. The program would quickly expand to cover many of these people. To see this, merely consider how Social Security and Medicaid (and the State Children’s Health Insurance Program or S-Chip) were expanded. If President Obama and Congress provide amnesty for the 12-20 million illegal aliens, and they’ll try, even more people will need to be covered. None of this is affordable, especially when we consider that Obama has already run up huge deficits and that Medicare and Social Security will soon be in the red.
There is even less reason to think that the government will increase the quality of healthcare. Is there an area where government-provided services are better and cheaper than the private sector? Like the medical system, the public-school system provides a poor product. The U.S. spends more on education (in per pupil terms) and gets middling to bad results. In the inner cities, the schools are horrible despite being awash in money. The burden here is on the proponents of the public option to establish that the government would provide higher-quality medical services. They can’t carry this burden because there is no area where the government has done so, at least when its costs are competitive with the private sector.
Several states, specifically Maine, Massachusetts, and Tennessee, introduced programs to cover the uninsured. An article in the Wall Street Journal on Maine’s program pointed out that in 2003 Maine attempted to cover all of its uninsured citizens. Its proponents claimed that it would be paid for by savings in the healthcare system. Instead, the program is operating a deficit and had to be supported by a tax on private health insurance. Despite substantial tax subsidies, the Maine’s program produced only a small reduction in the uninsured. Massachusetts’s program did reduce the uninsured. However in doing so, it likely caused healthcare costs to rise faster there than in the rest of the nation. Also, predictably, the cost to Massachusetts taxpayers skyrocketed. Tennessee’s program is another failure. Proponents of the public option might claim that the federal government will do so much better than state governments. Yeah right.
The case for the public option is that it will decrease costs or will increase quality. Neither is plausible. The public option would increase medical costs, jack up taxes, and produce inferior healthcare. Anyone who votes for it should be thrown out of office.
12 August 2009
Environmentalism: Cash for Clunkers
The Objectivist
Cash for Clunkers: Kindergarten Legislators
Dunkirk-Fredonia Observer
August 10, 2009
The Cash for Clunkers program (Car Allowance Rebate System) is incredibly stupid. It is economically inefficient and an incredibly wasteful way to help the environment, if it helps it at all. The program speaks volumes that our President and Congress would spit out such a childlike program.
The Cash for Clunkers program initially set aside $1 billion for U.S. residents to trade in less fuel efficient vehicles for new, more fuel efficient ones. Congress and President Obama then later spent another $2 billion to keep the program going. Purchasers were given either $3,500 or $4,500 depending on the trade-in. The program was designed to stimulate the economy by boosting auto production and sales and help the environment by replacing gas-guzzlers. After the first week of the program, the Department of Transportation asserted that 250,000 vehicles were sold under this program in less than a week. In addition, the clunkers were less fuel efficient (average 15.8 miles per gallon) compared with the newly purchased vehicles (average 25.4 mpg), thereby producing a 61% increase in fuel efficiency. Oddly, the car experts at Edmunds.com noted that a Ford SUV was the most widely purchased new vehicle.
Consider the economic effects. First, Edmunds.com points out that in any given month 60,000-70,000 clunker-like-deals happen without any government program in place. Because the program was to last for 4 months (July 1st to November 1st), 240,000 such trade-ins would have occurred anyway. The superfluous nature of this program can be seen in that, as Edmunds.com reported, 100,000 buyers put their purchases on hold waiting for the program to begin. Using a low-end estimate that 150,000 such trade-ins would have occurred anyway, and this surely underestimates the number, the government spent $1 billion to cause an additional 100,000 cars to be traded in. That is, the government spent $10,000 per additional car sale. It could have used to this same amount of money to give Kias to 90-100,000 people. Clearly, this would have better for the American people.
Second, the program required that dealers destroy the power train components (engine and parts by which power is sent to the axles). This is unbelievably wasteful. Consider the following variant on an example from 19th Century economist Frederic Bastiat and more recently from the Cato Institute’s Richard Rahn and journalist Adam Maji. Town thugs decide they want to promote economic growth by creating business for people in the window business. They smash other people’s windows, thereby creating more business for window-makers and –installers. This diverts money from where it would otherwise have been spent (for example, new houses and clothes) to windows. This makes the people poorer because it diverts money from more preferred to less preferred goods. Nothing in this example changes if the thugs use government money to pay people to smash their own windows. The destruction of cars with significant economic value makes us poorer just as would the destruction of windows.
Third, the program is a money loser. The average American car travels 12,000 miles per year. The increase in fuel efficiency means that because of the trade-in the owner will buy 287 less gallons of gas per year, thereby saving him $861 per year (287 gallons x $3 per gallon). Even if the program on average gets owners to trade in their car two years early, the government will be spending at least $3,500 to save roughly $1,700. This is idiotic.
Consider next the effects on the environment. Assume that there is a problem with global warming from CO2 emissions.
First, the 61% increase in fuel efficiency does not mean that we will burn that much less gas. This will occur only if drivers with more efficient cars won’t drive more. However, Declan McCullagh from CBSNews.com and others argue that with more efficient cars people drive more. This also is in line with common sense. You’re less likely to drive to see a friend in another state if you are driving a large gas-guzzling truck than if you are driving a Prius. If this is correct, then the trade-ins will produce less saving in gas than the mpg difference suggests.
Second, it takes a significant amount of energy to build a new car. It takes an average of 6.7 tons of CO2 to build a new car. Assuming you save around 2.8 tons of CO2 per year by burning less fuel (287 gallons x 19.4 lbs. CO2/gallon). Hence, if on average the program only gets people to trade in their car two years early, the program actually increases CO2 and is thus bad for the environment.
The government disagrees and estimates the program will save 365,000 metric tons of CO2. Even if this is correct, and I doubt it, this is a tiny sum. It is .05% of how much China increases its CO2 emissions each year. It is .006% of the total U.S. CO2 output. That is, it is a drop in an ocean of emissions.
Third, even if the program does save CO2, the estimate by Nina Rastogi of www.slate.com is that it will cost the government$175.53 per ton of CO2. This is incredibly wasteful in that a ton of CO2 currently sells for $17.50 on the European Climate Exchange. Note Rastogi is using data from William Chameides, dean of Duke University’s Nicholas School for the Environment.
Why would Congress and the President adopt a program which is bad for the economy and probably bad for the environment? One reason is that the program is very popular. How could it not be? If a program gave me $4,500 of other people’s money to do what I was going to do anyway, I would like that program too. A cash-for-furniture program and cash-for-clothes program would be popular for the same reason. A second reason these guys adopted the program is that the government is promoting its own business and that of a benefactor, the United Auto Workers. The government owns 61% of GM and the UAW owns 18% of it and the latter also owns 55% of Chrysler. They are helping themselves out using taxpayer-funded inducements. A third reason is that with the government now borrowing $1 out of every $2 that it spends ($1.8 trillion out of $3.9 trillion), all spending discipline has been lost. When the bill comes due, the current Congressional delegation will be long gone.
The Cash-for-Clunkers program provides clear evidence that the President and Congress have a childlike view of the world.
Cash for Clunkers: Kindergarten Legislators
Dunkirk-Fredonia Observer
August 10, 2009
The Cash for Clunkers program (Car Allowance Rebate System) is incredibly stupid. It is economically inefficient and an incredibly wasteful way to help the environment, if it helps it at all. The program speaks volumes that our President and Congress would spit out such a childlike program.
The Cash for Clunkers program initially set aside $1 billion for U.S. residents to trade in less fuel efficient vehicles for new, more fuel efficient ones. Congress and President Obama then later spent another $2 billion to keep the program going. Purchasers were given either $3,500 or $4,500 depending on the trade-in. The program was designed to stimulate the economy by boosting auto production and sales and help the environment by replacing gas-guzzlers. After the first week of the program, the Department of Transportation asserted that 250,000 vehicles were sold under this program in less than a week. In addition, the clunkers were less fuel efficient (average 15.8 miles per gallon) compared with the newly purchased vehicles (average 25.4 mpg), thereby producing a 61% increase in fuel efficiency. Oddly, the car experts at Edmunds.com noted that a Ford SUV was the most widely purchased new vehicle.
Consider the economic effects. First, Edmunds.com points out that in any given month 60,000-70,000 clunker-like-deals happen without any government program in place. Because the program was to last for 4 months (July 1st to November 1st), 240,000 such trade-ins would have occurred anyway. The superfluous nature of this program can be seen in that, as Edmunds.com reported, 100,000 buyers put their purchases on hold waiting for the program to begin. Using a low-end estimate that 150,000 such trade-ins would have occurred anyway, and this surely underestimates the number, the government spent $1 billion to cause an additional 100,000 cars to be traded in. That is, the government spent $10,000 per additional car sale. It could have used to this same amount of money to give Kias to 90-100,000 people. Clearly, this would have better for the American people.
Second, the program required that dealers destroy the power train components (engine and parts by which power is sent to the axles). This is unbelievably wasteful. Consider the following variant on an example from 19th Century economist Frederic Bastiat and more recently from the Cato Institute’s Richard Rahn and journalist Adam Maji. Town thugs decide they want to promote economic growth by creating business for people in the window business. They smash other people’s windows, thereby creating more business for window-makers and –installers. This diverts money from where it would otherwise have been spent (for example, new houses and clothes) to windows. This makes the people poorer because it diverts money from more preferred to less preferred goods. Nothing in this example changes if the thugs use government money to pay people to smash their own windows. The destruction of cars with significant economic value makes us poorer just as would the destruction of windows.
Third, the program is a money loser. The average American car travels 12,000 miles per year. The increase in fuel efficiency means that because of the trade-in the owner will buy 287 less gallons of gas per year, thereby saving him $861 per year (287 gallons x $3 per gallon). Even if the program on average gets owners to trade in their car two years early, the government will be spending at least $3,500 to save roughly $1,700. This is idiotic.
Consider next the effects on the environment. Assume that there is a problem with global warming from CO2 emissions.
First, the 61% increase in fuel efficiency does not mean that we will burn that much less gas. This will occur only if drivers with more efficient cars won’t drive more. However, Declan McCullagh from CBSNews.com and others argue that with more efficient cars people drive more. This also is in line with common sense. You’re less likely to drive to see a friend in another state if you are driving a large gas-guzzling truck than if you are driving a Prius. If this is correct, then the trade-ins will produce less saving in gas than the mpg difference suggests.
Second, it takes a significant amount of energy to build a new car. It takes an average of 6.7 tons of CO2 to build a new car. Assuming you save around 2.8 tons of CO2 per year by burning less fuel (287 gallons x 19.4 lbs. CO2/gallon). Hence, if on average the program only gets people to trade in their car two years early, the program actually increases CO2 and is thus bad for the environment.
The government disagrees and estimates the program will save 365,000 metric tons of CO2. Even if this is correct, and I doubt it, this is a tiny sum. It is .05% of how much China increases its CO2 emissions each year. It is .006% of the total U.S. CO2 output. That is, it is a drop in an ocean of emissions.
Third, even if the program does save CO2, the estimate by Nina Rastogi of www.slate.com is that it will cost the government$175.53 per ton of CO2. This is incredibly wasteful in that a ton of CO2 currently sells for $17.50 on the European Climate Exchange. Note Rastogi is using data from William Chameides, dean of Duke University’s Nicholas School for the Environment.
Why would Congress and the President adopt a program which is bad for the economy and probably bad for the environment? One reason is that the program is very popular. How could it not be? If a program gave me $4,500 of other people’s money to do what I was going to do anyway, I would like that program too. A cash-for-furniture program and cash-for-clothes program would be popular for the same reason. A second reason these guys adopted the program is that the government is promoting its own business and that of a benefactor, the United Auto Workers. The government owns 61% of GM and the UAW owns 18% of it and the latter also owns 55% of Chrysler. They are helping themselves out using taxpayer-funded inducements. A third reason is that with the government now borrowing $1 out of every $2 that it spends ($1.8 trillion out of $3.9 trillion), all spending discipline has been lost. When the bill comes due, the current Congressional delegation will be long gone.
The Cash-for-Clunkers program provides clear evidence that the President and Congress have a childlike view of the world.
29 July 2009
Healthcare Reform: Rationing
The Objectivist
Rationing Healthcare
Dunkirk-Fredonia Observer
July 27, 2009
President Obama and Democrats in Congress are trying to reform health care. They claim doing so will drive down costs and increase quality.
Their concern over costs is a powerful one. They note that the United States spends more on health care than any other nation ($7,439 in 2007). Using 2004 figures, this is 92.7% more than any other G7 country (France, Germany, Italy, Britain, Japan, and Canada). The U.S. also spends a higher percentage of the economy (Gross Domestic Product or GDP) than all but one other member of the United Nations (in 2007 this was $2.26 trillion or 16% of GDP).
These costs wreck havoc on personal finances. One study by David Himmelstein of Harvard University found that medical expenditures caused 60% of all personal bankruptcies in the U.S. Prescription drugs are also more expensive than in almost any other country. Professor Peter Singer of Princeton University notes that there are still other troubles. He notes that the cost of health insurance is skyrocketing. It has doubled in the past decade, rising more than four times faster than wages. He also notes that in eight years Medicare will be in the red.
Despite all this spending, on some accounts, the U.S. healthcare gets bad grades. A 2008 report by the Commonwealth Fund found that despite all this money, the quality of health care in the U.S. was worse than 19 other developed industrial countries with which it was compared. The World Health Organization also ranked the U.S. 37th in overall performance and 72nd in overall health level in comparison to the 191 member organizations it included in its study. The U.S. does worse than other wealthy nations when it comes to life expectancy and infant mortality, although it is not clear whether this is the result of differences in the health-care systems.
The President and Congress have proposed a number of reforms. They propose to expand Medicaid (medical services for the poor), a credit to subsidize the purchase of medical insurance, a public health-insurance option to compete against the private ones, a new tax on individuals who don’t purchase insurance (2.5%) and on employers who don’t provide it (8%), a cap on out-of-pocket spending, and increased use of the collection and use of health-information technology. These reforms (specifically the Affordable Health Choices Act and companion measures) are estimated to cost anywhere from $600 billion to $1.6 trillion. For a government that already faces a staggering $1.85 trillion deficit (13% of the GDP), massive deficit next year (10% of GDP), and reeling economy, the new spending and taxes pose a real threat.
One interesting argument for these proposals is by Peter Singer. He argues that these reforms will involve intelligent rationing rather than the haphazard rationing that occurs today. Singer argues that health care is a scarce resource and like all resources it is rationed. In the U.S., he argues this is done by price. That is, you get what you or your employer can afford to pay for. He argues that in the public sector, specifically Medicare, Medicaid, and hospital emergency rooms, rationing is done by long waits, high copayment requirements, and low payments to doctors and hospitals, which discourage some of them from serving public patients. Singer argues that this haphazard way of rationing is too expensive and lowers the overall quality of health care by concentrating too much spending on less important cases.
Government rationing involves the government refusing to pay for inefficient treatments. Singer notes that last year in Great Britain for example, the National Institute for Health and Clinical Excellence (NICE) set a limit of $49,000 on the cost of extending life for a year. This prevents it from spending money on drugs that cost too much. He uses the example of Sutent, a drug that extends life for those with advanced kidney cancer for six months and costs $54,000.
Singer argues that the government already is engaged in trading off lives for other values and that this is no different. For example, he notes, in the U.S. the Department of Transportation does not recommend safety measures that cost more than $5.8 million per life. Similarly, the Consumer Product Safety Commission uses a $5 million per life figure in deciding what consumer protections to require. Others argue that because there a multiple good things in life and we can’t escape the need to make trade-offs. Life is one of those good things. For example, lowering the speed limit to 50 mph or keeping the blood-alcohol content level to the (current) 0.08% might save lives, but it does so at the expense of pleasure, liberty, and wealth. For example, the speed limit would increase driving time and decrease the efficient movement of goods. The alcohol-content law increases incarceration and police intrusion.
Singer argues that rationing need not prevent someone from spending their own money on inefficient treatment. Some countries (for example, Australia) permit people to purchase private insurance to supplement public plans.
One problem with government rationing is that some countries do not allow for private options. A single-payer system requires all healthcare to be paid for by the government and does not allow a private option. Under such a system, for most people, government rationing would be the final word on who lives, dies, or gets what treatment. Thus, the system could deny lifesaving surgery to the elderly or surgery to those who suffer from an array of health problems. The idea of government bureaucrats or our crass Congress making these life-and-death decisions is troubling. Singer would likely respond that such rationing occurs anyway and at least this way it would be done in a rational manner.
A second problem with government rationing is that in general the government tends to make things worse. It seems clear that if the government produced and distributed food, computers, and cars, prices would go up and quality would go down. It is not clear why we should think that healthcare is different. Singer might respond here by citing the international comparisons mentioned above.
He might also argue that healthcare is a different sort of good and hence less appropriate for market forces. Following Princeton economist Paul Krugman, he might note two differences between healthcare and consumer goods. First, unlike consumer goods, healthcare involves extreme costs (for example, bypass surgery is very expensive) and must be done via insurance. Second, unlike consumer goods, healthcare purchases do not allow for experience or comparison shopping (for example, it is not clear how one compares doctors). I find the Krugman responses unconvincing, but many would disagree.
A third problem with government rationing is that there is a strong concern about liberty. The government already pays just less than half of all healthcare costs. Once it begins to pay a much larger figure, the costs can be used to justify a wide range of restrictions. The government might restrict what people eat, drink, and smoke, how often they drive, what recreational activities they engage in, etc. It might also involve the government collecting sensitive information on all of us in order to drive down costs. Singer would likely respond that if we are worried about liberty, then we should act to protect it rather than letting concerns about liberty bleed over into other areas.
I’m skeptical of government healthcare. Still, it is an interesting issue how government rationing stacks up against market rationing and whether the current hybrid system (roughly 50% government and 50% private) is serving us well.
Rationing Healthcare
Dunkirk-Fredonia Observer
July 27, 2009
President Obama and Democrats in Congress are trying to reform health care. They claim doing so will drive down costs and increase quality.
Their concern over costs is a powerful one. They note that the United States spends more on health care than any other nation ($7,439 in 2007). Using 2004 figures, this is 92.7% more than any other G7 country (France, Germany, Italy, Britain, Japan, and Canada). The U.S. also spends a higher percentage of the economy (Gross Domestic Product or GDP) than all but one other member of the United Nations (in 2007 this was $2.26 trillion or 16% of GDP).
These costs wreck havoc on personal finances. One study by David Himmelstein of Harvard University found that medical expenditures caused 60% of all personal bankruptcies in the U.S. Prescription drugs are also more expensive than in almost any other country. Professor Peter Singer of Princeton University notes that there are still other troubles. He notes that the cost of health insurance is skyrocketing. It has doubled in the past decade, rising more than four times faster than wages. He also notes that in eight years Medicare will be in the red.
Despite all this spending, on some accounts, the U.S. healthcare gets bad grades. A 2008 report by the Commonwealth Fund found that despite all this money, the quality of health care in the U.S. was worse than 19 other developed industrial countries with which it was compared. The World Health Organization also ranked the U.S. 37th in overall performance and 72nd in overall health level in comparison to the 191 member organizations it included in its study. The U.S. does worse than other wealthy nations when it comes to life expectancy and infant mortality, although it is not clear whether this is the result of differences in the health-care systems.
The President and Congress have proposed a number of reforms. They propose to expand Medicaid (medical services for the poor), a credit to subsidize the purchase of medical insurance, a public health-insurance option to compete against the private ones, a new tax on individuals who don’t purchase insurance (2.5%) and on employers who don’t provide it (8%), a cap on out-of-pocket spending, and increased use of the collection and use of health-information technology. These reforms (specifically the Affordable Health Choices Act and companion measures) are estimated to cost anywhere from $600 billion to $1.6 trillion. For a government that already faces a staggering $1.85 trillion deficit (13% of the GDP), massive deficit next year (10% of GDP), and reeling economy, the new spending and taxes pose a real threat.
One interesting argument for these proposals is by Peter Singer. He argues that these reforms will involve intelligent rationing rather than the haphazard rationing that occurs today. Singer argues that health care is a scarce resource and like all resources it is rationed. In the U.S., he argues this is done by price. That is, you get what you or your employer can afford to pay for. He argues that in the public sector, specifically Medicare, Medicaid, and hospital emergency rooms, rationing is done by long waits, high copayment requirements, and low payments to doctors and hospitals, which discourage some of them from serving public patients. Singer argues that this haphazard way of rationing is too expensive and lowers the overall quality of health care by concentrating too much spending on less important cases.
Government rationing involves the government refusing to pay for inefficient treatments. Singer notes that last year in Great Britain for example, the National Institute for Health and Clinical Excellence (NICE) set a limit of $49,000 on the cost of extending life for a year. This prevents it from spending money on drugs that cost too much. He uses the example of Sutent, a drug that extends life for those with advanced kidney cancer for six months and costs $54,000.
Singer argues that the government already is engaged in trading off lives for other values and that this is no different. For example, he notes, in the U.S. the Department of Transportation does not recommend safety measures that cost more than $5.8 million per life. Similarly, the Consumer Product Safety Commission uses a $5 million per life figure in deciding what consumer protections to require. Others argue that because there a multiple good things in life and we can’t escape the need to make trade-offs. Life is one of those good things. For example, lowering the speed limit to 50 mph or keeping the blood-alcohol content level to the (current) 0.08% might save lives, but it does so at the expense of pleasure, liberty, and wealth. For example, the speed limit would increase driving time and decrease the efficient movement of goods. The alcohol-content law increases incarceration and police intrusion.
Singer argues that rationing need not prevent someone from spending their own money on inefficient treatment. Some countries (for example, Australia) permit people to purchase private insurance to supplement public plans.
One problem with government rationing is that some countries do not allow for private options. A single-payer system requires all healthcare to be paid for by the government and does not allow a private option. Under such a system, for most people, government rationing would be the final word on who lives, dies, or gets what treatment. Thus, the system could deny lifesaving surgery to the elderly or surgery to those who suffer from an array of health problems. The idea of government bureaucrats or our crass Congress making these life-and-death decisions is troubling. Singer would likely respond that such rationing occurs anyway and at least this way it would be done in a rational manner.
A second problem with government rationing is that in general the government tends to make things worse. It seems clear that if the government produced and distributed food, computers, and cars, prices would go up and quality would go down. It is not clear why we should think that healthcare is different. Singer might respond here by citing the international comparisons mentioned above.
He might also argue that healthcare is a different sort of good and hence less appropriate for market forces. Following Princeton economist Paul Krugman, he might note two differences between healthcare and consumer goods. First, unlike consumer goods, healthcare involves extreme costs (for example, bypass surgery is very expensive) and must be done via insurance. Second, unlike consumer goods, healthcare purchases do not allow for experience or comparison shopping (for example, it is not clear how one compares doctors). I find the Krugman responses unconvincing, but many would disagree.
A third problem with government rationing is that there is a strong concern about liberty. The government already pays just less than half of all healthcare costs. Once it begins to pay a much larger figure, the costs can be used to justify a wide range of restrictions. The government might restrict what people eat, drink, and smoke, how often they drive, what recreational activities they engage in, etc. It might also involve the government collecting sensitive information on all of us in order to drive down costs. Singer would likely respond that if we are worried about liberty, then we should act to protect it rather than letting concerns about liberty bleed over into other areas.
I’m skeptical of government healthcare. Still, it is an interesting issue how government rationing stacks up against market rationing and whether the current hybrid system (roughly 50% government and 50% private) is serving us well.
25 June 2009
New York Politics: Damn Entertaining
The Objectivist
New York Legislature: More Entertainment, Less Performance
Dunkirk-Fredonia Observer
June 22, 2009
The New York State Legislature is both more entertaining and worse than ever.
It is worth following the procedure in the recent coup because it is a window into how control of the New York Senate rests on a legal morass and a wild cast of characters. On June 8, 2009, as set out in the Wikipedia.com, New York Times, and the Albany Times Union, Republican Senator Thomas Libous made a motion to elect a new Senate leader. All thirty Republicans and two turncoat Democrats (Pedro Espada and Hiram Monserrate) voted for the motion. After the motion was passed, Democratic Senator, Jeffrey Klein, moved for adjournment. Officiating senator, Democrat Neil Breslin granted Klein’s motion and thus did not recognize the vote. Republicans quickly objected noting that a majority of senators didn’t vote to adjourn as required by the Senate’s rule. Nevertheless, Klein declared the meeting adjourned and all but four Democrats walked out.
The remaining senators then voted to replace the current majority leader and Senate President, Malcolm Smith, with two people. Former minority leader, Dean Skelos became majority leader and one of the Democratic turncoats, Espada, became Senate President. Because there is no lieutenant governor, Espada as Senate President would become Acting Governor if Governor David Paterson died, resigned, was removed from office, or left the state.
Hiram Monserrate later decided that he would rejoin the Democrats leaving the Senate divided 31-31. Usually in the event of a tie, the Lieutenant Governor of New York would break the tie but because the position is vacant, there is no one to fill this role. The position is vacant because the person elected to the office (David Paterson) became Governor when Eliot Spitzer left office as a result of a prostitution scandal.
The Republicans claimed that the transfer of power took place on the basis of two arguments. First, New York Senate’s rules (Robert’s Rules of Order) prevented the adjournment because a body cannot adjourn when there is a motion on the floor. Second, there was never a vote on adjournment. Malcolm Smith responded that the Republican attempt to gain control is illegal because he was elected to a two-year term and that term was not yet over.
The people involved in the case are wild and wooly. The former governor left after being found to have patronized a prostitute. Upon assuming office, Paterson promptly admitted to having an affair with a state employee. There was also some evidence that state funds were misused in connection to the affair. Apparently, having an affair with a state employee is not a removable offense, but having one with a hot prostitute is. Paterson later admitted that when he was younger he used cocaine and marijuana. No word on which he enjoyed more.
Senator Monserrate has been indicted for felony assault. In March 2009, he allegedly cut his girlfriend’s face with broken glass. If convicted, he’ll have to leave office. Senator Espada is accused of a wide number of campaign violations and other conflicts of interest. He owes $13,000 in fines for campaign-related violations for a 2008 race and $60,000 for a 2001 race in which he ran to be Bronx Borough President. He is also under investigation for siphoning money designed for a health clinic to his campaigns and for living outside of the Bronx despite claiming residency there. Former Senate Leader Malcolm Smith, 49, who is married, was recently slapped with a paternity suit by an unidentified woman. He promised that if the child is his, he will do the right thing. Clearly, these guys could hang with the Kennedy family.
Now this state government has long been stupid and destructive. In one study by the Tax Foundation in October 2008, New York had the second highest state and local taxes and the second worst business tax climate in the U.S. Sadly, for New Yorkers, a burst of effort by New Jersey has displaced New York’s traditional top ranking. Across the U.S. in 2008, people paid 9.7% of their income to state and local governments, but overachiever New York took 21% more (11.7%) of its residents’ income. Sadly, New Jersey beat us because it takes 11.8%. Along with Connecticut, these were the only states taking more than 11%. In dollars, the average New Yorker pays $7,206 in taxes to the states and localities. This is roughly $3,000 more than the average U.S. resident pays. As of January 1, 2009, New York was the leader in both gas taxes ($.413/gallon), cigarette taxes ($2.75/pack), and a number of its counties have some of the highest property taxes in the country.
Next consider the recent budget. In April 2009, New York passed a budget. Despite an estimated $17 billion deficit and the fact that it is hemorrhaging jobs (150,000 jobs lost between summer ’08 and April ’09), New York increased its spending by roughly $11 billion (approximately 9%). This ramped up total spending to $132 billion. In justifying this spending, state leaders noted that the federal government gave them an additional $6.2 billion as part of the federal stimulus, so there was really no reason to stop spending. This budget contained the usual pork, in this case $170 million. This included spending on such important groups as the Urban Yoga Foundation, Brooklyn Cricket League, Utica Curling Club, and the Harlem Honeys and Bears senior citizen swim club. The budget also contained $350 million in tax credits for the television and film industry, which were big contributors to Democrats.
New York is incredibly dependent on the rich and the securities industry (i.e., Wall Street). In the past, Wall Street generated 20% of the state’s tax revenues, which is more than Michigan takes from the auto industry and Texas takes from gas and oil. E. J. McMahon of the Manhattan Institute points out that in 2010, the top 1% of income earners are expected to pay 36% of the income taxes. In gratitude for the rich carrying so much weight, New York punished them by raising taxes on those earning up to $500,000 by 15% (6.85% to 7.85%) and on those making more than that by 31% (6.85% to 8.97%). Economists Arthur Laffer and Stephen Moore argue that when states soak the rich, the rich leave those states, report less income on their tax returns, and choose not to locate in them. For example, a study by McMahon indicated that when states jacked up taxes on the rich, they got the slowest increase in wealthy taxpayers.
Laffer and Moore also found that that from 1998 to 2007, large numbers of people, both rich and not rich, moved from the highest income-tax states (e.g., New Jersey, New York, and California) to no-income-tax states (e.g., Florida, Nevada, and Texas). They also found that the latter states created 89% more jobs and had 32% faster income-tax growth than the former.
One solution is to vote out all incumbent, both in the primaries and in the general election. This might be an agreement that to which Democrats and Republicans can agree. If there is a push is to vote out only those legislators who voted for the recent budget, and Gov. Paterson as well, too many Democrats might balk. Instead there can be an agreement that the current legislature while awfully entertaining, is too dysfunctional and destructive to remain in place.
New York Legislature: More Entertainment, Less Performance
Dunkirk-Fredonia Observer
June 22, 2009
The New York State Legislature is both more entertaining and worse than ever.
It is worth following the procedure in the recent coup because it is a window into how control of the New York Senate rests on a legal morass and a wild cast of characters. On June 8, 2009, as set out in the Wikipedia.com, New York Times, and the Albany Times Union, Republican Senator Thomas Libous made a motion to elect a new Senate leader. All thirty Republicans and two turncoat Democrats (Pedro Espada and Hiram Monserrate) voted for the motion. After the motion was passed, Democratic Senator, Jeffrey Klein, moved for adjournment. Officiating senator, Democrat Neil Breslin granted Klein’s motion and thus did not recognize the vote. Republicans quickly objected noting that a majority of senators didn’t vote to adjourn as required by the Senate’s rule. Nevertheless, Klein declared the meeting adjourned and all but four Democrats walked out.
The remaining senators then voted to replace the current majority leader and Senate President, Malcolm Smith, with two people. Former minority leader, Dean Skelos became majority leader and one of the Democratic turncoats, Espada, became Senate President. Because there is no lieutenant governor, Espada as Senate President would become Acting Governor if Governor David Paterson died, resigned, was removed from office, or left the state.
Hiram Monserrate later decided that he would rejoin the Democrats leaving the Senate divided 31-31. Usually in the event of a tie, the Lieutenant Governor of New York would break the tie but because the position is vacant, there is no one to fill this role. The position is vacant because the person elected to the office (David Paterson) became Governor when Eliot Spitzer left office as a result of a prostitution scandal.
The Republicans claimed that the transfer of power took place on the basis of two arguments. First, New York Senate’s rules (Robert’s Rules of Order) prevented the adjournment because a body cannot adjourn when there is a motion on the floor. Second, there was never a vote on adjournment. Malcolm Smith responded that the Republican attempt to gain control is illegal because he was elected to a two-year term and that term was not yet over.
The people involved in the case are wild and wooly. The former governor left after being found to have patronized a prostitute. Upon assuming office, Paterson promptly admitted to having an affair with a state employee. There was also some evidence that state funds were misused in connection to the affair. Apparently, having an affair with a state employee is not a removable offense, but having one with a hot prostitute is. Paterson later admitted that when he was younger he used cocaine and marijuana. No word on which he enjoyed more.
Senator Monserrate has been indicted for felony assault. In March 2009, he allegedly cut his girlfriend’s face with broken glass. If convicted, he’ll have to leave office. Senator Espada is accused of a wide number of campaign violations and other conflicts of interest. He owes $13,000 in fines for campaign-related violations for a 2008 race and $60,000 for a 2001 race in which he ran to be Bronx Borough President. He is also under investigation for siphoning money designed for a health clinic to his campaigns and for living outside of the Bronx despite claiming residency there. Former Senate Leader Malcolm Smith, 49, who is married, was recently slapped with a paternity suit by an unidentified woman. He promised that if the child is his, he will do the right thing. Clearly, these guys could hang with the Kennedy family.
Now this state government has long been stupid and destructive. In one study by the Tax Foundation in October 2008, New York had the second highest state and local taxes and the second worst business tax climate in the U.S. Sadly, for New Yorkers, a burst of effort by New Jersey has displaced New York’s traditional top ranking. Across the U.S. in 2008, people paid 9.7% of their income to state and local governments, but overachiever New York took 21% more (11.7%) of its residents’ income. Sadly, New Jersey beat us because it takes 11.8%. Along with Connecticut, these were the only states taking more than 11%. In dollars, the average New Yorker pays $7,206 in taxes to the states and localities. This is roughly $3,000 more than the average U.S. resident pays. As of January 1, 2009, New York was the leader in both gas taxes ($.413/gallon), cigarette taxes ($2.75/pack), and a number of its counties have some of the highest property taxes in the country.
Next consider the recent budget. In April 2009, New York passed a budget. Despite an estimated $17 billion deficit and the fact that it is hemorrhaging jobs (150,000 jobs lost between summer ’08 and April ’09), New York increased its spending by roughly $11 billion (approximately 9%). This ramped up total spending to $132 billion. In justifying this spending, state leaders noted that the federal government gave them an additional $6.2 billion as part of the federal stimulus, so there was really no reason to stop spending. This budget contained the usual pork, in this case $170 million. This included spending on such important groups as the Urban Yoga Foundation, Brooklyn Cricket League, Utica Curling Club, and the Harlem Honeys and Bears senior citizen swim club. The budget also contained $350 million in tax credits for the television and film industry, which were big contributors to Democrats.
New York is incredibly dependent on the rich and the securities industry (i.e., Wall Street). In the past, Wall Street generated 20% of the state’s tax revenues, which is more than Michigan takes from the auto industry and Texas takes from gas and oil. E. J. McMahon of the Manhattan Institute points out that in 2010, the top 1% of income earners are expected to pay 36% of the income taxes. In gratitude for the rich carrying so much weight, New York punished them by raising taxes on those earning up to $500,000 by 15% (6.85% to 7.85%) and on those making more than that by 31% (6.85% to 8.97%). Economists Arthur Laffer and Stephen Moore argue that when states soak the rich, the rich leave those states, report less income on their tax returns, and choose not to locate in them. For example, a study by McMahon indicated that when states jacked up taxes on the rich, they got the slowest increase in wealthy taxpayers.
Laffer and Moore also found that that from 1998 to 2007, large numbers of people, both rich and not rich, moved from the highest income-tax states (e.g., New Jersey, New York, and California) to no-income-tax states (e.g., Florida, Nevada, and Texas). They also found that the latter states created 89% more jobs and had 32% faster income-tax growth than the former.
One solution is to vote out all incumbent, both in the primaries and in the general election. This might be an agreement that to which Democrats and Republicans can agree. If there is a push is to vote out only those legislators who voted for the recent budget, and Gov. Paterson as well, too many Democrats might balk. Instead there can be an agreement that the current legislature while awfully entertaining, is too dysfunctional and destructive to remain in place.
29 April 2009
Democracy & The University
The Objectivist
A Democratic University
Dunkirk-Fredonia Observer
April 28, 2009
An interesting issue is shaping up at SUNY-Fredonia and this has to do with the way in which the campus is run. On a business model, the university is a business and the faculty and staff have no more say in how things are run than employees do at any other business. On the democratic model, a university is a democracy in which faculty, and perhaps staff, are stakeholders who have a say, if not a vote, on how things are run. A moderate view that lies between the above views is also possible. Some of the recent disagreements on campus reflect differences in these models.
One example that highlights the difference between the two models had to with the creation of a college of business. The University Senate is the body that represents the faculty and staff at Fredonia and makes reports to the President. Its role is merely advisory, but at many colleges administrators are hesitant to run roughshod over it. Last year, the Senate voted against creating a college of business. That is, they voted against creating a new semi-autonomous wing of the college that focuses on business. President Dennis Hefner promptly overrode the Senate’s decision in part because of a desire to have the business program receive accreditation. The faculty and staff’s opposition was in part financial. The position required a new dean and a new dean probably costs around $151,000 ($126,000 in salary plus 20% benefits) and an upgraded secretary (around $10,000 more). The opposition also claimed that there was a greater need for a college of art. Now the opposition seemed odd to me, given that the university budget is roughly $89 million, the money is an insignificant portion of that, especially if this is a requirement for accreditation and this is a valuable thing to get. Nevertheless, the decision to summarily override the Senate seems to indicate a view that the Senate was not a serious center of power.
A second example concerned the role of teaching assistants. Last summer, the administration used an ad hoc committee to put forth a proposal that banned undergraduate teaching assistants from grading other undergraduates. The proposal ruffled feathers because it was unclear whether such academic questions should be ruled by ad hoc committees rather than by the Senate. The result was confusion because it was unclear whether the proposal was a rule that bound departments or whether it was merely a suggestion. Later, the Senate referred the issue to one of its committees to study the issue. When asked, neither the committee nor anyone else seemed to know whether the proposal was a rule. In a surprising vote, the Senate decided to prohibit undergraduate grading.
A third example has to do with the administration’s claim to a more central role in hiring. It asserts that academic departments have a merely advisory role in deciding who is hired. While this was always the case, most departments operate on the assumption that they have the dominant role in hiring. In making its role explicit, the administration appears to be gearing up to take a larger role in hiring and this seems to involve a policy shift. The administration also asserts that when considering affirmative-action candidates, departments should downplay the prestige of the institution a candidate attended, the caliber of the journals in which she published, and the strength of her recommendations. Because current hiring is done largely on these grounds, this could lead to conflict.
A fourth example has to do with cuts. Fredonia State has budgetary problems and part of the administration’s solution to the problem is to cut three faculty lines, nine staff lines, and some programs. The Senate was not told what lines or programs are going to be cut and didn’t vote on it. Again, this is consistent with a business model of the university. When corporations decide what employees to let go or what products to discontinue, they need not consult, let alone seek the vote of, rank-and-file employees.
A fifth example concerns a recent draft of personnel policies that the Fredonia State administration recently put forth. The draft concerns tenure and promotion of faculty and professional staff. Tenure is given to a professor, usually after a six-year probationary period, and it reflects the fact that his position or employment is permanent. The administration’s proposal differed markedly from an earlier set of suggestions from a committee of faculty and staff.
The administration’s proposal called for a new committee to review a department’s promotion decisions and all but one of its members are to be chosen by the Vice-President for Academic Affairs for an unspecified length of time. The proposal also put forth a new criterion for research. It proposed that research credit be given for the scholarship of engagement. While it is not clear what exactly this consists of, it appears to be a sharp break from the traditional view of research as including only grants, peer-reviewed books, book chapters, articles, artistic performances, etc. The proposal also includes language suggesting to some that promotion would rest in part on collegiality (that is, how well a professor works with and gets along with his colleagues). These and other changes have produced a firestorm. Several departments (philosophy, history, and psychology) released sharply worded criticisms. The matter got even stickier when the faculty union (United University Professions) chimed in. It claimed that a number of the changes concerned the terms and conditions of employment and thus the university had to negotiate with it before the changes could be implemented.
The different models of a university are interesting. The business model sees the university as a firm in which decisions are made from the top and the faculty are mere employees. As such, the administration might seek their input but doing so is optional and faculty have no real complaint if they are shut out of campus governance. The democratic model sees the university as a democracy in which the faculty have significant decision-making powers with regard to how things are run and their input is essential to campus governance. The latter appears to lack support from either law or morality. Legally, faculty have at most an advisory role and the final decision as to what programs to have and who to hire, fire, and promote is within the administration’s purview. Morally, the faculty do not own the university or even their position and hence do not have rights that extend beyond those set out in their contract.
The democratic model has a certain romantic appeal to it, one that views the faculty as not merely experts on academic matters, but as stakeholders who have a say in the university in the same way that a partner in a law firm has a say on what his firm does. However, governing a university involves trading off various goals and it is not clear that the faculty are an expert on this. For example, the university has more full-time staff (441) than full-time faculty (244) and this involves a decision to weigh some goals (for example, police, counseling, and student activities) over others (for example, having professors rather than graduate students teach writing). In addition, faculty are not partners because they do not own any part of the university. In any case, Fredonia appears to be moving unequivocally in the direction of the business model.
A Democratic University
Dunkirk-Fredonia Observer
April 28, 2009
An interesting issue is shaping up at SUNY-Fredonia and this has to do with the way in which the campus is run. On a business model, the university is a business and the faculty and staff have no more say in how things are run than employees do at any other business. On the democratic model, a university is a democracy in which faculty, and perhaps staff, are stakeholders who have a say, if not a vote, on how things are run. A moderate view that lies between the above views is also possible. Some of the recent disagreements on campus reflect differences in these models.
One example that highlights the difference between the two models had to with the creation of a college of business. The University Senate is the body that represents the faculty and staff at Fredonia and makes reports to the President. Its role is merely advisory, but at many colleges administrators are hesitant to run roughshod over it. Last year, the Senate voted against creating a college of business. That is, they voted against creating a new semi-autonomous wing of the college that focuses on business. President Dennis Hefner promptly overrode the Senate’s decision in part because of a desire to have the business program receive accreditation. The faculty and staff’s opposition was in part financial. The position required a new dean and a new dean probably costs around $151,000 ($126,000 in salary plus 20% benefits) and an upgraded secretary (around $10,000 more). The opposition also claimed that there was a greater need for a college of art. Now the opposition seemed odd to me, given that the university budget is roughly $89 million, the money is an insignificant portion of that, especially if this is a requirement for accreditation and this is a valuable thing to get. Nevertheless, the decision to summarily override the Senate seems to indicate a view that the Senate was not a serious center of power.
A second example concerned the role of teaching assistants. Last summer, the administration used an ad hoc committee to put forth a proposal that banned undergraduate teaching assistants from grading other undergraduates. The proposal ruffled feathers because it was unclear whether such academic questions should be ruled by ad hoc committees rather than by the Senate. The result was confusion because it was unclear whether the proposal was a rule that bound departments or whether it was merely a suggestion. Later, the Senate referred the issue to one of its committees to study the issue. When asked, neither the committee nor anyone else seemed to know whether the proposal was a rule. In a surprising vote, the Senate decided to prohibit undergraduate grading.
A third example has to do with the administration’s claim to a more central role in hiring. It asserts that academic departments have a merely advisory role in deciding who is hired. While this was always the case, most departments operate on the assumption that they have the dominant role in hiring. In making its role explicit, the administration appears to be gearing up to take a larger role in hiring and this seems to involve a policy shift. The administration also asserts that when considering affirmative-action candidates, departments should downplay the prestige of the institution a candidate attended, the caliber of the journals in which she published, and the strength of her recommendations. Because current hiring is done largely on these grounds, this could lead to conflict.
A fourth example has to do with cuts. Fredonia State has budgetary problems and part of the administration’s solution to the problem is to cut three faculty lines, nine staff lines, and some programs. The Senate was not told what lines or programs are going to be cut and didn’t vote on it. Again, this is consistent with a business model of the university. When corporations decide what employees to let go or what products to discontinue, they need not consult, let alone seek the vote of, rank-and-file employees.
A fifth example concerns a recent draft of personnel policies that the Fredonia State administration recently put forth. The draft concerns tenure and promotion of faculty and professional staff. Tenure is given to a professor, usually after a six-year probationary period, and it reflects the fact that his position or employment is permanent. The administration’s proposal differed markedly from an earlier set of suggestions from a committee of faculty and staff.
The administration’s proposal called for a new committee to review a department’s promotion decisions and all but one of its members are to be chosen by the Vice-President for Academic Affairs for an unspecified length of time. The proposal also put forth a new criterion for research. It proposed that research credit be given for the scholarship of engagement. While it is not clear what exactly this consists of, it appears to be a sharp break from the traditional view of research as including only grants, peer-reviewed books, book chapters, articles, artistic performances, etc. The proposal also includes language suggesting to some that promotion would rest in part on collegiality (that is, how well a professor works with and gets along with his colleagues). These and other changes have produced a firestorm. Several departments (philosophy, history, and psychology) released sharply worded criticisms. The matter got even stickier when the faculty union (United University Professions) chimed in. It claimed that a number of the changes concerned the terms and conditions of employment and thus the university had to negotiate with it before the changes could be implemented.
The different models of a university are interesting. The business model sees the university as a firm in which decisions are made from the top and the faculty are mere employees. As such, the administration might seek their input but doing so is optional and faculty have no real complaint if they are shut out of campus governance. The democratic model sees the university as a democracy in which the faculty have significant decision-making powers with regard to how things are run and their input is essential to campus governance. The latter appears to lack support from either law or morality. Legally, faculty have at most an advisory role and the final decision as to what programs to have and who to hire, fire, and promote is within the administration’s purview. Morally, the faculty do not own the university or even their position and hence do not have rights that extend beyond those set out in their contract.
The democratic model has a certain romantic appeal to it, one that views the faculty as not merely experts on academic matters, but as stakeholders who have a say in the university in the same way that a partner in a law firm has a say on what his firm does. However, governing a university involves trading off various goals and it is not clear that the faculty are an expert on this. For example, the university has more full-time staff (441) than full-time faculty (244) and this involves a decision to weigh some goals (for example, police, counseling, and student activities) over others (for example, having professors rather than graduate students teach writing). In addition, faculty are not partners because they do not own any part of the university. In any case, Fredonia appears to be moving unequivocally in the direction of the business model.
08 April 2009
Eugenics
The Objectivist
Eugenics: Improving the Gene Pool
Dunkirk-Fredonia Observer
April 7, 2009
Eugenics is the idea that we can make the world a better place by improving human beings’ gene pool. It receives little press these days because it was abused by the Nazi and United States governments in the first half of the twentieth century. Despite this history, it is still worth pursuing.
The idea behind eugenics is that there are some inheritable traits that are good for society and some that are bad for it. High intelligence is good for society. Richard Lynn, a professor of psychology at the University at Ulster, has pointed out that it correlates with educational achievement, job performance, high income, and occupational status. In contrast, low intelligence correlates with low educational achievement (for example, dropping out of school), poor job performance, low income, and low occupational status. He notes that criminals have an average IQ that is significantly lower than the average person (92 versus 100). Intelligence is in large part inherited from one’s parents. Richard Herrnstein and Charles Murray, authors of The Bell Curve (1994), estimate that around 40% to 80% of one’s intelligence is inherited. Others such as University of California at Berkeley psychologist Arthur Jensen estimate that roughly 70% of one’s intelligence level is inherited.
Roughly, 2.7% of the population is developmentally disabled (mentally retarded). About 2.2% of the population is mildly retarded. Some studies indicate that only 20% to 30% of the retarded have full-time employment. One older study indicated that they constitute about 10% of the prison population, about four times their percentage of the overall population. In addition, of the ones who have children, a significant number are unfit parents. Developmental disability also has a significant genetic feature. One study indicated that if one parent is developmentally disabled, then 17% of their children will be so as well; if both are, then 48% will be so. As a group, they impose significant costs in terms of unemployment, welfare, and prison.
In addition, some destructive personality characteristics have a significant genetic component. People with psychopathic personalities have a tendency toward antisocial behavior. Many lack a conscience or the ability to control their behavior. The late Harvard psychologist Richard Herrnstein and Lynn both note that while people with this disorder are around 6% of the population, they constitute 60% of male prisoners, an even higher percentage of recidivist criminals, and a significant portion of drug addicts.
The argument for eugenics is that if we can make our country a better place by changing the gene pool and if doing so does not infringe on anyone’s rights, then we may, and probably should, do so. Among the means by which eugenic goals might be accomplished are through carefully controlling who gets to immigrate to America and by providing incentives for people with desirable genetic traits to reproduce. In the United States, Chinese, Japanese, and Korean immigrants have higher than average IQs and are vastly overrepresented in the professions and scientists. Similarly Jews constitute about 2% of the population and are overrepresented in the professions and intellectual elite. For example, at one point in time they constituted 27% of the Nobel Prize winners. Favoring them in immigration would likely have desirable eugenic effects. One country, Singapore, in the late 1980’s gave economic incentives, such as tax benefits, to better educated women and high earners to have children. This did increase the percentage of children born to more educated women (specifically, women who graduated from high school). State and federal governments might consider such a program.
If one is a libertarian, then the state should not pursue this goal. However, in a country in which the government has run amuck (for example, government at all levels will take 40% of all income produced this year), this concern is beside the point. Eugenic programs should be weighed against other social programs.
One way to see the desirability of eugenics is to consider programs that have eugenic-like effects. Some infertile couples pay women to donate their eggs. They pay a premium ($5,000 to $50,000) for the eggs of women from Ivy League and other elite colleges and often specify that the donors have high SAT scores and good college grades. This is obviously an attempt to get smarter children. Other couples have their fetuses tested for genetic problems such as Down’s syndrome, Tay-Sachs disease, Huntington disease, cystic fibrosis, and spina bifada and abort fetuses with these defects. On one study around 80% of Canadian women who found out that their fetuses had a serious genetic disorder aborted them. For couples that use in vitro fertilization, it is increasingly possible to screen embryos for genetic defects like Down’s syndrome and to implant ones without them. There are also advances made in inserting new genes into animals (gene therapy). It is hoped that the insertions can be used to treat those with genetic diseases and this has been done in some cases with humans. Many of the same reasons that make couples want to use this technology also make it a good idea for both charities and the state to encourage such practices for eugenic purposes.
The usual objection to eugenics is that it has been misused in the past. The United States forcibly sterilized over 64,000 people between 1907 and 1963. The Supreme Court in Buck vs. Bell (1927) permitted the forcible sterilization of the unfit and leftist Presidents Theodore Roosevelt and Woodrow Wilson supported it. In Nazi Germany, the government slaughtered millions of Jews, Gypsies, gays, and others as part of a eugenic campaign. However, the use of atrocious means to achieve a goal does not make the goal bad, nor does it rule out rights-respecting means of accomplishing that goal. Harvard psychologist Steven Pinker notes that what is wrong with these past programs is coercion, not eugenics. In addition, Richard Lynn points out that many other goals have been subject to misuse. Christianity led to the Crusades, the Inquisition, and countless other misuses and this alone does not show that it is false or bad. Just about every government that pursued large-scale genocide also had strong gun-control policies and many do not consider this history a good reason to get rid of gun control.
Eugenics is a policy that could help the United States by increasing the number of talented people and decreasing the people who place a burden on all of us through welfare, crime, and other destructive behavior. It is important that note that while eugenics is a goal worth pursuing, because many of the people with low-levels of intelligence and tendency toward criminality have genetic disadvantages they should be neither blamed nor considered unworthy of care and respect.
Eugenics: Improving the Gene Pool
Dunkirk-Fredonia Observer
April 7, 2009
Eugenics is the idea that we can make the world a better place by improving human beings’ gene pool. It receives little press these days because it was abused by the Nazi and United States governments in the first half of the twentieth century. Despite this history, it is still worth pursuing.
The idea behind eugenics is that there are some inheritable traits that are good for society and some that are bad for it. High intelligence is good for society. Richard Lynn, a professor of psychology at the University at Ulster, has pointed out that it correlates with educational achievement, job performance, high income, and occupational status. In contrast, low intelligence correlates with low educational achievement (for example, dropping out of school), poor job performance, low income, and low occupational status. He notes that criminals have an average IQ that is significantly lower than the average person (92 versus 100). Intelligence is in large part inherited from one’s parents. Richard Herrnstein and Charles Murray, authors of The Bell Curve (1994), estimate that around 40% to 80% of one’s intelligence is inherited. Others such as University of California at Berkeley psychologist Arthur Jensen estimate that roughly 70% of one’s intelligence level is inherited.
Roughly, 2.7% of the population is developmentally disabled (mentally retarded). About 2.2% of the population is mildly retarded. Some studies indicate that only 20% to 30% of the retarded have full-time employment. One older study indicated that they constitute about 10% of the prison population, about four times their percentage of the overall population. In addition, of the ones who have children, a significant number are unfit parents. Developmental disability also has a significant genetic feature. One study indicated that if one parent is developmentally disabled, then 17% of their children will be so as well; if both are, then 48% will be so. As a group, they impose significant costs in terms of unemployment, welfare, and prison.
In addition, some destructive personality characteristics have a significant genetic component. People with psychopathic personalities have a tendency toward antisocial behavior. Many lack a conscience or the ability to control their behavior. The late Harvard psychologist Richard Herrnstein and Lynn both note that while people with this disorder are around 6% of the population, they constitute 60% of male prisoners, an even higher percentage of recidivist criminals, and a significant portion of drug addicts.
The argument for eugenics is that if we can make our country a better place by changing the gene pool and if doing so does not infringe on anyone’s rights, then we may, and probably should, do so. Among the means by which eugenic goals might be accomplished are through carefully controlling who gets to immigrate to America and by providing incentives for people with desirable genetic traits to reproduce. In the United States, Chinese, Japanese, and Korean immigrants have higher than average IQs and are vastly overrepresented in the professions and scientists. Similarly Jews constitute about 2% of the population and are overrepresented in the professions and intellectual elite. For example, at one point in time they constituted 27% of the Nobel Prize winners. Favoring them in immigration would likely have desirable eugenic effects. One country, Singapore, in the late 1980’s gave economic incentives, such as tax benefits, to better educated women and high earners to have children. This did increase the percentage of children born to more educated women (specifically, women who graduated from high school). State and federal governments might consider such a program.
If one is a libertarian, then the state should not pursue this goal. However, in a country in which the government has run amuck (for example, government at all levels will take 40% of all income produced this year), this concern is beside the point. Eugenic programs should be weighed against other social programs.
One way to see the desirability of eugenics is to consider programs that have eugenic-like effects. Some infertile couples pay women to donate their eggs. They pay a premium ($5,000 to $50,000) for the eggs of women from Ivy League and other elite colleges and often specify that the donors have high SAT scores and good college grades. This is obviously an attempt to get smarter children. Other couples have their fetuses tested for genetic problems such as Down’s syndrome, Tay-Sachs disease, Huntington disease, cystic fibrosis, and spina bifada and abort fetuses with these defects. On one study around 80% of Canadian women who found out that their fetuses had a serious genetic disorder aborted them. For couples that use in vitro fertilization, it is increasingly possible to screen embryos for genetic defects like Down’s syndrome and to implant ones without them. There are also advances made in inserting new genes into animals (gene therapy). It is hoped that the insertions can be used to treat those with genetic diseases and this has been done in some cases with humans. Many of the same reasons that make couples want to use this technology also make it a good idea for both charities and the state to encourage such practices for eugenic purposes.
The usual objection to eugenics is that it has been misused in the past. The United States forcibly sterilized over 64,000 people between 1907 and 1963. The Supreme Court in Buck vs. Bell (1927) permitted the forcible sterilization of the unfit and leftist Presidents Theodore Roosevelt and Woodrow Wilson supported it. In Nazi Germany, the government slaughtered millions of Jews, Gypsies, gays, and others as part of a eugenic campaign. However, the use of atrocious means to achieve a goal does not make the goal bad, nor does it rule out rights-respecting means of accomplishing that goal. Harvard psychologist Steven Pinker notes that what is wrong with these past programs is coercion, not eugenics. In addition, Richard Lynn points out that many other goals have been subject to misuse. Christianity led to the Crusades, the Inquisition, and countless other misuses and this alone does not show that it is false or bad. Just about every government that pursued large-scale genocide also had strong gun-control policies and many do not consider this history a good reason to get rid of gun control.
Eugenics is a policy that could help the United States by increasing the number of talented people and decreasing the people who place a burden on all of us through welfare, crime, and other destructive behavior. It is important that note that while eugenics is a goal worth pursuing, because many of the people with low-levels of intelligence and tendency toward criminality have genetic disadvantages they should be neither blamed nor considered unworthy of care and respect.
04 March 2009
Obama #3: Out-of-Control Spending
The Objectivist
Democrats Gone Wild: Obama and the Democrats Have a Spending Orgy
Dunkirk-Fredonia Observer
March 2, 2009
Critics of President Obama and the Democrats in Congress made three predictions: they would push government spending through the roof, jack up taxes, and damage the economy in the process. The critics were right about the first and the second is clearly in the works. The jury is still out on the third, although things do not look good.
President Obama and the Congress are engaged in a spending orgy. On the heels of its $787B stimulus bill (actually around $1.2 trillion once interest costs are added), the House passed a $410B omnibus spending bill that covered 9 of the 12 federal categories. When the two are combined, the spending increases per department are astounding. According to the Wall Street Journal, here are a few of the increases when compared to 2008. The first number is the additional dollars and the second the percentage increase: Energy & Water ($46.7 billion, 151%), Transportation/Housing and Urban Development ($68 billion, 139%), Labor/Health and Human Services ($131.8 billion, 91%), Interior ($11.9 billion, 45%), and Agriculture ($8 billion, 45%). The percentage of federal spending as a share of the GDP is heading up to 28% from 21% at the end of the Bush administration.
Obama and company are gearing up to spend a lot more. The spending plan authorizes but does not yet spend $634 billion over the next ten years to extend health coverage to the 46 million who are uninsured and to subsidize the premiums of others who already have insurance. This figure probably underestimates how much this will cost. USA Today points out that one firm estimated that Obama’s plan would cost around $1 trillion. It also authorizes but does not spend another $750 billion for further bailouts. Clearly, this is just the beginning. Even on defense, where one would expect the Democrats to cut, they propose to increase spending by 4%.
This spending is the height of irresponsibility. The deficit in 2009 will be 12.3% of the Gross Domestic Product ($1.8 trillion), nearly four times larger than in the last year of the spendthrift Bush administration (3.2% of GDP and $460 billion). Nor is this a one-time shot. The Obama administration predicts that in 2010 the deficit will be $1.2 trillion (8% of the GDP). Given that this is based on economic models that are more optimistic than those of private economists, the 2010 figure likely underestimates it. The added spending will become the baseline for spending in years to come, thereby ensuring that the government will siphon out more and more of our wealth.
As one would expect of the professional politicians, the budget includes massive pork-barrel spending. The taxpayer watchdog group, Taxpayers for Common Sense, asserts that the omnibus bill includes around 8,600 earmarks costing $7.7 billion. When he signs this, President Obama will break yet another campaign promise, this time his promise not to sign bills loaded up with earmarks.
Obama and his merry band of spenders plan to pay in part for the spending by soaking the rich. Obama’s proposal slams the top 5% of taxpayers, specifically individuals making more than $200,000 and couples making more than $250,000. Their tax rates will rise roughly from 35% to 39.6% (a 13% increase). They would also be assaulted with limits on itemized deductions and a massive rise in capital gains and dividend taxes. The Wall Street Journal estimates that the increase will raise their effective rate to 42% (a 20% increase). Nor will this soak-the-rich approach stop the bleeding. The Journal points out that using 2006 figures, even if the government confiscated 100% of all income above $500,000 this would only yield $1.3 trillion. This figure ignores the recent loss in stock-market wealth and in any case barely covers the 2010 deficit.
As a side note, the golden-goose rich already pay far more than their share. Using 2006 IRS data, the most recent available, the richest 1% made 22% of U.S. income and paid 39.9% of income-tax revenue. The top 5% paid 60% of personal income tax and the top 10% paid 71%. I defy anyone to explain why this is just or fair.
Before you smile at the thought of the rich being squeezed, note that you too are on the menu. According to the Tax Foundation, reverting back to the higher Clinton-era rates on the two highest-income-tax brackets will hit 45-55% of small businesses. Obama also plans higher fees for companies drilling on federal land and $600 billion in carbon taxes. These taxes will be passed on to consumers, thereby acting as a silent tax. They’ll swamp the tax rebate ($400 for an individual, $800 for a couple). Worse yet, because the rebate is not accompanied by a decrease in income-tax rates, the rebates will be taxed as income. That is, the government will claw back part of checks. In addition, the looming problems with Social Security and Medicare will exacerbate all of the debt- and tax-related problems.
It is not yet clear how the economy will respond to massive growth in debt-fueled government spending. The initial response is not good. The stock market (S&P 500) has dropped over 30% since the day that Obama was elected. To the extent that this reflects disinvestment in American corporations, trouble is on the horizon.
President Obama is well on his way to producing a seismic shift in the United States. Specifically, his attempt to vastly expand government, run up the debt to do so, and jack up taxes to pay for some of the expansion is indeed real change. Whether this will harm the economy has yet to be seen, but the initial indication is scary.
Democrats Gone Wild: Obama and the Democrats Have a Spending Orgy
Dunkirk-Fredonia Observer
March 2, 2009
Critics of President Obama and the Democrats in Congress made three predictions: they would push government spending through the roof, jack up taxes, and damage the economy in the process. The critics were right about the first and the second is clearly in the works. The jury is still out on the third, although things do not look good.
President Obama and the Congress are engaged in a spending orgy. On the heels of its $787B stimulus bill (actually around $1.2 trillion once interest costs are added), the House passed a $410B omnibus spending bill that covered 9 of the 12 federal categories. When the two are combined, the spending increases per department are astounding. According to the Wall Street Journal, here are a few of the increases when compared to 2008. The first number is the additional dollars and the second the percentage increase: Energy & Water ($46.7 billion, 151%), Transportation/Housing and Urban Development ($68 billion, 139%), Labor/Health and Human Services ($131.8 billion, 91%), Interior ($11.9 billion, 45%), and Agriculture ($8 billion, 45%). The percentage of federal spending as a share of the GDP is heading up to 28% from 21% at the end of the Bush administration.
Obama and company are gearing up to spend a lot more. The spending plan authorizes but does not yet spend $634 billion over the next ten years to extend health coverage to the 46 million who are uninsured and to subsidize the premiums of others who already have insurance. This figure probably underestimates how much this will cost. USA Today points out that one firm estimated that Obama’s plan would cost around $1 trillion. It also authorizes but does not spend another $750 billion for further bailouts. Clearly, this is just the beginning. Even on defense, where one would expect the Democrats to cut, they propose to increase spending by 4%.
This spending is the height of irresponsibility. The deficit in 2009 will be 12.3% of the Gross Domestic Product ($1.8 trillion), nearly four times larger than in the last year of the spendthrift Bush administration (3.2% of GDP and $460 billion). Nor is this a one-time shot. The Obama administration predicts that in 2010 the deficit will be $1.2 trillion (8% of the GDP). Given that this is based on economic models that are more optimistic than those of private economists, the 2010 figure likely underestimates it. The added spending will become the baseline for spending in years to come, thereby ensuring that the government will siphon out more and more of our wealth.
As one would expect of the professional politicians, the budget includes massive pork-barrel spending. The taxpayer watchdog group, Taxpayers for Common Sense, asserts that the omnibus bill includes around 8,600 earmarks costing $7.7 billion. When he signs this, President Obama will break yet another campaign promise, this time his promise not to sign bills loaded up with earmarks.
Obama and his merry band of spenders plan to pay in part for the spending by soaking the rich. Obama’s proposal slams the top 5% of taxpayers, specifically individuals making more than $200,000 and couples making more than $250,000. Their tax rates will rise roughly from 35% to 39.6% (a 13% increase). They would also be assaulted with limits on itemized deductions and a massive rise in capital gains and dividend taxes. The Wall Street Journal estimates that the increase will raise their effective rate to 42% (a 20% increase). Nor will this soak-the-rich approach stop the bleeding. The Journal points out that using 2006 figures, even if the government confiscated 100% of all income above $500,000 this would only yield $1.3 trillion. This figure ignores the recent loss in stock-market wealth and in any case barely covers the 2010 deficit.
As a side note, the golden-goose rich already pay far more than their share. Using 2006 IRS data, the most recent available, the richest 1% made 22% of U.S. income and paid 39.9% of income-tax revenue. The top 5% paid 60% of personal income tax and the top 10% paid 71%. I defy anyone to explain why this is just or fair.
Before you smile at the thought of the rich being squeezed, note that you too are on the menu. According to the Tax Foundation, reverting back to the higher Clinton-era rates on the two highest-income-tax brackets will hit 45-55% of small businesses. Obama also plans higher fees for companies drilling on federal land and $600 billion in carbon taxes. These taxes will be passed on to consumers, thereby acting as a silent tax. They’ll swamp the tax rebate ($400 for an individual, $800 for a couple). Worse yet, because the rebate is not accompanied by a decrease in income-tax rates, the rebates will be taxed as income. That is, the government will claw back part of checks. In addition, the looming problems with Social Security and Medicare will exacerbate all of the debt- and tax-related problems.
It is not yet clear how the economy will respond to massive growth in debt-fueled government spending. The initial response is not good. The stock market (S&P 500) has dropped over 30% since the day that Obama was elected. To the extent that this reflects disinvestment in American corporations, trouble is on the horizon.
President Obama is well on his way to producing a seismic shift in the United States. Specifically, his attempt to vastly expand government, run up the debt to do so, and jack up taxes to pay for some of the expansion is indeed real change. Whether this will harm the economy has yet to be seen, but the initial indication is scary.
19 February 2009
The Suleman Octuplets
The Objectivist
Unfair Criticism of Nadya Suleman and her Octuplets
Dunkirk-Fredonia Observer
February 16, 2009
On January 26, 2009, 33-year-old Nadya Suleman gave birth to octuplets. She already had six children and so the eight gave her fourteen. There was widespread criticism of her decision and her physician’s (Michael Kamrava’s) decision to help her by the use of in vitro fertilization (IVF). There were six embryos implanted in her and two embryos split, thereby producing eight fetuses. After one month, five fetuses were evident. She was given the option to abort some and decided against it. Medical guidelines recommend the implantation of two for people who fit her profile. Suleman justified the multiple implantations on the basis that it prevented the frozen embryos from being destroyed.
Suleman is divorced and does not currently have a job. She injured her back at work and between 2002 and 2008 received $167,908 in disability payments. She currently lives with her parents and children. Her maternal grandmother claims that she has contributed nothing toward housing or food costs. Her parents filed for bankruptcy in 2008. They abandoned a house in 2007 and admit to having nearly $1 million dollars in liabilities.
The government gives her $490 a month in food stamps along with disability payments for three of her initial six children. One of her sons is autistic, a second suffers from attention deficit hyperactivity disorder, and a third has delayed speech and some autistic symptoms. The Associated Press reports that in California, a low-income family can receive Social Security payments of up to $793 a month for each disabled child. Three children would amount to $2,379. When the food stamps and disability payments are combined, she still receives up to $34,428 a year. It’s worth noting that this is less than parents in New York receive if they have two or more children in New York’s public schools.
The Associated Press also reports that the octuplets' medical costs have not been disclosed, but according to the U.S. Department of Health and Human Services, in 2006 in California, the average cost for a premature baby's hospital stay in California was $164,273. Eight times that is $1.3 million. According to the U.S. Department of Agriculture, the cost of raising 14 children through age 17 ranges from $1.3 million to $2.7 million.
The criticism of Suleman has been intense, but hard to follow. One criticism is that the desire to have such a large family reflects mental illness. I see little evidence for such a claim and in any case it isn’t a reason to be angry with her. If this criticism were correct, then other large families would be subject to such criticisms and no one seems to want to make this claim.
A second criticism is that she acted wrongly toward the octuplets. However, if she had not implanted them, they would have died. Assuming that their lives are worth living, she benefitted them. Even if one thinks that embryos are not individuals with interests, it is hard see how they would have been better off not existing.
A third criticism is that she acted wrongly toward her first six children. Perhaps, but I’m not sure that a parent has a duty to have more children only if it will benefit the previous ones. This is particularly true if one adopts a pro-life position (for example, an embryo has the same status as a seven-year-old child) and the way to benefit previous children is to allow other ones to die, albeit in embryonic form.
The real criticism seems to be that she harmed the taxpayers, by forcing them to pay for her children. If we add up the cost of the premature babies’ stay ($1.3 million) and the cost to raise them ($2.7 million), we end up with a total of $4 million. This criticism is hard to follow. Pork-barrel Congressmen like the recently indicted Ted Stevens (R-AK), former Klansman Robert Byrd (D-WV), and tax cheat Charles Rangel (D-NY) waste this in five minutes of committee work and we don’t see the same outpouring of hatred toward them. In addition, the average low-skill household sucks hard at the government teat. According to the Heritage Foundation, over the life of the household the poor take $1.3 million more in benefits than they pay out. Nary a word. On one estimate by philosopher Michael Levin, as a group, black households receive $75 billion more in welfare benefits than they pay in (using figures from the 1990’s). Again, silence. In New York, parents who have three special-education children can expect to receive more than $60,000 a year in education benefits from the taxpayer, not counting the bag of goodies that all parents get ($1,000 per child child-tax credit, child-care deductions, etc.) receive. More silence. But Suleman has a lot of children and out come the long knives.
Even if it was wrong to waste taxpayer money, it depends on what you get for it and it would be an interesting argument to hear Suleman’s critics explain whether they think the education and well-being of 14 children has less worth than $4 million dollars. Using President Obama’s arguments for the bank bailout, car company bailout, and stimulus package ($1.5 trillion), we could view this as part of the stimulus.
There has also been widespread criticism of the physician. Recently, the Medical Board of California announced that it was going to investigate the physician on the question of whether his treatment of Suleman violated its standard of care. The Los Angeles Times reports that this doctor is also involved in another controversy. He is alleged to have given fertility treatment to a 49-year-old woman who is uninsured, five months pregnant with quadruplets, and hospitalized. Apparently, at least seven embryos were used when the woman only wanted was one child. One can understand the criticism if he endangered Suleman’s life or those of the embryos. However, this does little to explain the massive venom directed at Suleman. In addition, if the physician made Suleman aware of these risks and she still wanted to continue, the criticism of him fades because she assumed the risk. Again, the real criticism seems directed at the cost.
This case brings up an interesting proposal that has been bouncing around academic circles for a few decades. In different proposals, philosopher Hugh LaFollette, psychiatry professor John Westman, and psychology professor David Lykken have proposed requiring parental licensing. Consider LaFollette’s argument. He points out that some parents neglect their children, physically abuse them, or kill them. In addition, children born to incompetent parents impose costs on society via their offspring’s criminality, welfare usage, out-of-wedlock births, etc. LaFollette proposes that couples should be required to obtain a license indicating that they are competent in child rearing before they are permitted to have children. In defense of his claim, LaFollette points out that we often require that people get licenses to be a physician, lawyer, or pharmacist. We don’t even let people drive without one. He notes that the state evaluates parents who want to adopt and is therefore already in the business of screening out those who are unfit to be parents. LaFollette argues that unlicensed parents might have their newborns taken away and given up for adoption or to a foster home. It is an interesting question whether Suleman would have received her license. My guess is that she would.
Many of us hate the spendthrift government officials that dole out our money like manna from heaven. However, the hatred and venom directed at Suleman is harder to understand. She didn’t make the rules or victimize anyone. She just wanted to have a large family.
Unfair Criticism of Nadya Suleman and her Octuplets
Dunkirk-Fredonia Observer
February 16, 2009
On January 26, 2009, 33-year-old Nadya Suleman gave birth to octuplets. She already had six children and so the eight gave her fourteen. There was widespread criticism of her decision and her physician’s (Michael Kamrava’s) decision to help her by the use of in vitro fertilization (IVF). There were six embryos implanted in her and two embryos split, thereby producing eight fetuses. After one month, five fetuses were evident. She was given the option to abort some and decided against it. Medical guidelines recommend the implantation of two for people who fit her profile. Suleman justified the multiple implantations on the basis that it prevented the frozen embryos from being destroyed.
Suleman is divorced and does not currently have a job. She injured her back at work and between 2002 and 2008 received $167,908 in disability payments. She currently lives with her parents and children. Her maternal grandmother claims that she has contributed nothing toward housing or food costs. Her parents filed for bankruptcy in 2008. They abandoned a house in 2007 and admit to having nearly $1 million dollars in liabilities.
The government gives her $490 a month in food stamps along with disability payments for three of her initial six children. One of her sons is autistic, a second suffers from attention deficit hyperactivity disorder, and a third has delayed speech and some autistic symptoms. The Associated Press reports that in California, a low-income family can receive Social Security payments of up to $793 a month for each disabled child. Three children would amount to $2,379. When the food stamps and disability payments are combined, she still receives up to $34,428 a year. It’s worth noting that this is less than parents in New York receive if they have two or more children in New York’s public schools.
The Associated Press also reports that the octuplets' medical costs have not been disclosed, but according to the U.S. Department of Health and Human Services, in 2006 in California, the average cost for a premature baby's hospital stay in California was $164,273. Eight times that is $1.3 million. According to the U.S. Department of Agriculture, the cost of raising 14 children through age 17 ranges from $1.3 million to $2.7 million.
The criticism of Suleman has been intense, but hard to follow. One criticism is that the desire to have such a large family reflects mental illness. I see little evidence for such a claim and in any case it isn’t a reason to be angry with her. If this criticism were correct, then other large families would be subject to such criticisms and no one seems to want to make this claim.
A second criticism is that she acted wrongly toward the octuplets. However, if she had not implanted them, they would have died. Assuming that their lives are worth living, she benefitted them. Even if one thinks that embryos are not individuals with interests, it is hard see how they would have been better off not existing.
A third criticism is that she acted wrongly toward her first six children. Perhaps, but I’m not sure that a parent has a duty to have more children only if it will benefit the previous ones. This is particularly true if one adopts a pro-life position (for example, an embryo has the same status as a seven-year-old child) and the way to benefit previous children is to allow other ones to die, albeit in embryonic form.
The real criticism seems to be that she harmed the taxpayers, by forcing them to pay for her children. If we add up the cost of the premature babies’ stay ($1.3 million) and the cost to raise them ($2.7 million), we end up with a total of $4 million. This criticism is hard to follow. Pork-barrel Congressmen like the recently indicted Ted Stevens (R-AK), former Klansman Robert Byrd (D-WV), and tax cheat Charles Rangel (D-NY) waste this in five minutes of committee work and we don’t see the same outpouring of hatred toward them. In addition, the average low-skill household sucks hard at the government teat. According to the Heritage Foundation, over the life of the household the poor take $1.3 million more in benefits than they pay out. Nary a word. On one estimate by philosopher Michael Levin, as a group, black households receive $75 billion more in welfare benefits than they pay in (using figures from the 1990’s). Again, silence. In New York, parents who have three special-education children can expect to receive more than $60,000 a year in education benefits from the taxpayer, not counting the bag of goodies that all parents get ($1,000 per child child-tax credit, child-care deductions, etc.) receive. More silence. But Suleman has a lot of children and out come the long knives.
Even if it was wrong to waste taxpayer money, it depends on what you get for it and it would be an interesting argument to hear Suleman’s critics explain whether they think the education and well-being of 14 children has less worth than $4 million dollars. Using President Obama’s arguments for the bank bailout, car company bailout, and stimulus package ($1.5 trillion), we could view this as part of the stimulus.
There has also been widespread criticism of the physician. Recently, the Medical Board of California announced that it was going to investigate the physician on the question of whether his treatment of Suleman violated its standard of care. The Los Angeles Times reports that this doctor is also involved in another controversy. He is alleged to have given fertility treatment to a 49-year-old woman who is uninsured, five months pregnant with quadruplets, and hospitalized. Apparently, at least seven embryos were used when the woman only wanted was one child. One can understand the criticism if he endangered Suleman’s life or those of the embryos. However, this does little to explain the massive venom directed at Suleman. In addition, if the physician made Suleman aware of these risks and she still wanted to continue, the criticism of him fades because she assumed the risk. Again, the real criticism seems directed at the cost.
This case brings up an interesting proposal that has been bouncing around academic circles for a few decades. In different proposals, philosopher Hugh LaFollette, psychiatry professor John Westman, and psychology professor David Lykken have proposed requiring parental licensing. Consider LaFollette’s argument. He points out that some parents neglect their children, physically abuse them, or kill them. In addition, children born to incompetent parents impose costs on society via their offspring’s criminality, welfare usage, out-of-wedlock births, etc. LaFollette proposes that couples should be required to obtain a license indicating that they are competent in child rearing before they are permitted to have children. In defense of his claim, LaFollette points out that we often require that people get licenses to be a physician, lawyer, or pharmacist. We don’t even let people drive without one. He notes that the state evaluates parents who want to adopt and is therefore already in the business of screening out those who are unfit to be parents. LaFollette argues that unlicensed parents might have their newborns taken away and given up for adoption or to a foster home. It is an interesting question whether Suleman would have received her license. My guess is that she would.
Many of us hate the spendthrift government officials that dole out our money like manna from heaven. However, the hatred and venom directed at Suleman is harder to understand. She didn’t make the rules or victimize anyone. She just wanted to have a large family.
04 February 2009
Bailout #2: The Stimulus Package and Incentives
The Objectivist
Stimulus Package: Adding Fuel to the Irresponsibility-Fire
Dunkirk-Fredonia Observer
February 2, 2009
There is no evidence that the House stimulus bill will work. Even if it did work in the short term, it will have horrendous long-term effects because it transfers assets from the private to the public sector and because it ratchets up the national debt. However, I’d like to focus on another problem. The bill promotes the worst habits of state and local government.
The House passed a bill providing for $819 billion to stimulate the economy. This actually amounts to $1.17 trillion once the $347 billion in interest costs are taken into consideration. The arrogant Senate is currently considering an even more generous bill worth $888 billion, not counting interest. This is in addition to the $700 billion that has already been authorized to bail out the banks. A billion here and a billion there and soon we are talking real money.
My favorite bartender, quoting comedian John Stewart, pointed out that when one adds the Senate’s stimulus bill to the bank-bailout bill, the total is $1.59 trillion. If we divide this amount by the number of adults (230 million), the government could have given each individual $6,900 per adult ($13,800 per couple). In the short term, this is as likely as the stimulus plan to bring the foreclosure crisis to a screeching halt and eliminate the troubled asset problem that endangers many banks. Ask yourself whether you would prefer to receive a check for $13,800 or have Senators Schumer, Kennedy, and Dodd shovel out the money to their campaign donors and other favored groups.
The stimulus package contains $200 billion for the states. One of the main problems with it is the perverse incentives this will provide. As the Wall Street Journal pointed out, state spending has exploded in the last five years. State spending has increased roughly 7% per year from 2003-2007. That is, it increased at 34% compared to 19% inflation during that period. The states also went heavily into debt. Their debt load doubled to $2.23 trillion in 2008 from $1.14 trillion a decade earlier. The $2.23 trillion does not even include the nearly $1.5 trillion in unfunded health and pension liabilities they’ve allowed to pile up. The last thing such profligate spenders need is to have their drunken spending sprees covered by taxpayers from responsible states. Yet this is precisely what the bill does.
As usual, New York is especially worthy of contempt. It faces an estimated $12 billion deficit. But, as the Wall Street Journal points out, New York's government spent more than $1,000 a year more per family than in the average state. New York would have a $5 billion surplus if it had limited its spending to the average for the 50 states. New York has the second highest taxes in the country, having only recently, and probably temporarily, been passed by New Jersey. The legislature still hasn’t passed the budget for this year and its process by which it does so is largely closed to public scrutiny.
As if the effects on the states weren’t bad enough, the effects on education spending are just as bad. The bill contains $159 billion in additional education spending. The stimulus bill grants $39 billion for school districts and public colleges and another $25 billion for high-priority state needs, which may include education. Outside of New York City, New York education costs constitute 62% of the property taxes. When you control for home value, New York has 9 of the 10 highest taxed counties in the country. The driving force is spending. In 2008-2009, New York spent $18,768 per pupil. This is more than any other state and involves a 7.9% annual rate of increase from 2000 to 2006. Why would anyone think it is wise to subsidize school boards that spent their way into oblivion? Worse, why should a country already up to its neck in debt further mortgage its future to bail out these big spenders?
The same concern applies to higher education spending. From 1982 to 2007, college tuition and fees rose 439%. Compare this to medical-care costs which rose 251% over that period and inflation (consumer price index) which rose 106%. Colleges and universities have devolved away from a focus on education and now contain politically correct multicultural affairs, affirmative action, and equal opportunity offices as well as a host of bureaucracies only distantly related to education. These include counseling centers, overstaffed police forces, sports teams, and armies of staff and administrators. So what does the stimulus bill do in response to this out-of-control spending? It pours gasoline onto the fire by providing tens of billions of dollars for more spending. This includes $10.3 billion more to provide a $2,500 tax credit for college and money for more grants, loans, etc. Apparently, Congress wants to keep on ratcheting up the subsidies for higher education and will later feign surprise when the exploding costs that the subsidies make possible end up making college increasingly unaffordable for anyone not rich or bathed in financial aid.
Incentives also apply when we increase welfare and exempt some people from paying their fair share. Already roughly 33% of taxpayers pay no income taxes. By expanding the earned-income tax credit (a credit that gives poor and working class people back the money they paid in via payroll taxes), the stimulus package furthers the notion that some people don’t have to pay for the government. The House also included $72 billion to extend jobless benefits and increase aid to the poor, including food stamps. There is an old slogan that if you tax something you’ll get less of it and if you subsidize it, you’ll get more of it. We are now increasing the subsidies for being poor and behaviors that cause it (for example, dropping out of school, not working, and having children out of wedlock). We can expect that these subsidies will get us more of these behaviors.
While Obama and his band of merry thieves spend the country into oblivion, Social Security and Medicare loom on the horizon. Social Security will start running in the red by 2017 and entitlement reform is still being ignored. The national debt keeps on climbing and the high tax rates make our country less competitive with each additional year. For example, estate and corporate taxes are very high by international standards.
Providing subsidies to states and school boards that have repeatedly shown themselves to be big spenders will only encourage more of the same. The stimulus bill’s effect on incentives will hurt us in the long run.
Stimulus Package: Adding Fuel to the Irresponsibility-Fire
Dunkirk-Fredonia Observer
February 2, 2009
There is no evidence that the House stimulus bill will work. Even if it did work in the short term, it will have horrendous long-term effects because it transfers assets from the private to the public sector and because it ratchets up the national debt. However, I’d like to focus on another problem. The bill promotes the worst habits of state and local government.
The House passed a bill providing for $819 billion to stimulate the economy. This actually amounts to $1.17 trillion once the $347 billion in interest costs are taken into consideration. The arrogant Senate is currently considering an even more generous bill worth $888 billion, not counting interest. This is in addition to the $700 billion that has already been authorized to bail out the banks. A billion here and a billion there and soon we are talking real money.
My favorite bartender, quoting comedian John Stewart, pointed out that when one adds the Senate’s stimulus bill to the bank-bailout bill, the total is $1.59 trillion. If we divide this amount by the number of adults (230 million), the government could have given each individual $6,900 per adult ($13,800 per couple). In the short term, this is as likely as the stimulus plan to bring the foreclosure crisis to a screeching halt and eliminate the troubled asset problem that endangers many banks. Ask yourself whether you would prefer to receive a check for $13,800 or have Senators Schumer, Kennedy, and Dodd shovel out the money to their campaign donors and other favored groups.
The stimulus package contains $200 billion for the states. One of the main problems with it is the perverse incentives this will provide. As the Wall Street Journal pointed out, state spending has exploded in the last five years. State spending has increased roughly 7% per year from 2003-2007. That is, it increased at 34% compared to 19% inflation during that period. The states also went heavily into debt. Their debt load doubled to $2.23 trillion in 2008 from $1.14 trillion a decade earlier. The $2.23 trillion does not even include the nearly $1.5 trillion in unfunded health and pension liabilities they’ve allowed to pile up. The last thing such profligate spenders need is to have their drunken spending sprees covered by taxpayers from responsible states. Yet this is precisely what the bill does.
As usual, New York is especially worthy of contempt. It faces an estimated $12 billion deficit. But, as the Wall Street Journal points out, New York's government spent more than $1,000 a year more per family than in the average state. New York would have a $5 billion surplus if it had limited its spending to the average for the 50 states. New York has the second highest taxes in the country, having only recently, and probably temporarily, been passed by New Jersey. The legislature still hasn’t passed the budget for this year and its process by which it does so is largely closed to public scrutiny.
As if the effects on the states weren’t bad enough, the effects on education spending are just as bad. The bill contains $159 billion in additional education spending. The stimulus bill grants $39 billion for school districts and public colleges and another $25 billion for high-priority state needs, which may include education. Outside of New York City, New York education costs constitute 62% of the property taxes. When you control for home value, New York has 9 of the 10 highest taxed counties in the country. The driving force is spending. In 2008-2009, New York spent $18,768 per pupil. This is more than any other state and involves a 7.9% annual rate of increase from 2000 to 2006. Why would anyone think it is wise to subsidize school boards that spent their way into oblivion? Worse, why should a country already up to its neck in debt further mortgage its future to bail out these big spenders?
The same concern applies to higher education spending. From 1982 to 2007, college tuition and fees rose 439%. Compare this to medical-care costs which rose 251% over that period and inflation (consumer price index) which rose 106%. Colleges and universities have devolved away from a focus on education and now contain politically correct multicultural affairs, affirmative action, and equal opportunity offices as well as a host of bureaucracies only distantly related to education. These include counseling centers, overstaffed police forces, sports teams, and armies of staff and administrators. So what does the stimulus bill do in response to this out-of-control spending? It pours gasoline onto the fire by providing tens of billions of dollars for more spending. This includes $10.3 billion more to provide a $2,500 tax credit for college and money for more grants, loans, etc. Apparently, Congress wants to keep on ratcheting up the subsidies for higher education and will later feign surprise when the exploding costs that the subsidies make possible end up making college increasingly unaffordable for anyone not rich or bathed in financial aid.
Incentives also apply when we increase welfare and exempt some people from paying their fair share. Already roughly 33% of taxpayers pay no income taxes. By expanding the earned-income tax credit (a credit that gives poor and working class people back the money they paid in via payroll taxes), the stimulus package furthers the notion that some people don’t have to pay for the government. The House also included $72 billion to extend jobless benefits and increase aid to the poor, including food stamps. There is an old slogan that if you tax something you’ll get less of it and if you subsidize it, you’ll get more of it. We are now increasing the subsidies for being poor and behaviors that cause it (for example, dropping out of school, not working, and having children out of wedlock). We can expect that these subsidies will get us more of these behaviors.
While Obama and his band of merry thieves spend the country into oblivion, Social Security and Medicare loom on the horizon. Social Security will start running in the red by 2017 and entitlement reform is still being ignored. The national debt keeps on climbing and the high tax rates make our country less competitive with each additional year. For example, estate and corporate taxes are very high by international standards.
Providing subsidies to states and school boards that have repeatedly shown themselves to be big spenders will only encourage more of the same. The stimulus bill’s effect on incentives will hurt us in the long run.
21 January 2009
Obama #2: Stimulus Package
The Objectivist
President Obama and the Stimulus Package
Dunkirk-Fredonia Observer
January 19, 2009
In the weeks leading up to his inauguration, President Obama pushed the $825 billion House spending plan. By the time Congress sends it to him, this package could well reach $1 trillion. His argument is that the plan is necessary to jump start the economy by increasing demand for goods and services. Obama claims that it contains $275 billion in tax cuts. However, because a significant portion of this goes to people who do not pay income taxes and politically favored businesses, much of this is just more government spending. For example, the plan gives tax cuts to many of the roughly 40% of Americans who were in families that paid no income taxes. Giving money to people who don’t pay income taxes is welfare, not a tax cut.
The stimulus package provides a Christmas tree of goodies to politically correct causes. This includes gifts to the environmental, education, and law-enforcement special-interest groups. For example, the bill includes $20 billion for renewable energy and energy conservation. It also includes $141 billion in grants to states and localities for education spending. It also includes $4 billion for state and local law enforcement. One cringes at how this will encourage wasting even more money and lives on drug prohibition. There is also massive new welfare spending. This includes $43 billion to extend unemployment benefits, $20 billion to increase food stamps, and $9 billion for various welfare programs including, get this, $1 billion for community-action agencies.
It is not clear why we should think that this plan will work. First, it is hard to see how in theory it will work. The money to be spent must come from somewhere and there are only two sources: taxes and loans. If the money is taken from taxes, then the assets are simply transferred from one group of citizens (taxpayers) to another (government beneficiaries). This is unlikely to generate economic growth because taxpayers (in a free market) spend money more efficiently than does the government. If the money is taken via loans, then in the future this money will be taken from taxpayers. This will work only if the additional economic gain is greater than the losses that will occur because taxpayers have less money later on and because interest must be paid to get the loans. Again, this is unlikely.
Second, it is hard to see what historical evidence supports such a plan. The recent bailouts show no signs of working. This might be because of the short period since they were implemented, but at the very least they as yet provide no signs of helping. The federal government has already implemented several stimulus programs, none of which has improved the economy. On February 13, 2008, the federal government authorized a $168 billion stimulus package that consisted of a $300-$600 rebate per person. On March 24, 2008, the federal government set aside $30 billion to allow one investment bank to acquire another (JP Morgan bought Bear Stearns). On October 3, 2008, the government authorized $700 billion for the massive Troubled Assets Relief Program (TARP) that was supposed to be used to buy loans from banks. These loans have declined in value due to the dropping real estate prices. Instead, the government spent the money to own part of the troubled banks. Other money was spent to bail out GM and Chrysler. On November 25, 2008, the government also authorized $600 billion and spent around $20 billion shoring up the assets of Fannie Mae and Freddie Mac, two government-sponsored mortgage-purchasing companies that owns or guarantees about half of the mortgages in the U.S. Between the rebate-stimulus package (February 13, 2008) and now, the stock market has dropped roughly 37% (using the S&P 500 Index).
Historically, there is no evidence that these plans work. Following the November 1929 crash of the stock market, Presidents Hoover and Roosevelt instituted massive new government-spending programs. Yet, as economist Thomas Sowell points out, for nearly three consecutive years from February 1932 to January 1935, the monthly unemployment rate never fell below 20%. In that last month, it fell to 19.3%. The Great Depression provides no evidence that government spending will jump start the economy or reduce unemployment. Columnist Michelle Malkin points out that in contrast to the disastrous Hoover and Roosevelt presidencies, no recession since World War II has lasted more than two years. In addition, other countries (for example, Japan) have tried this type of plan with piddling results.
Even if there were some evidence that this plan would work, it depends on the money being spent on useful projects rather than ones that favor the politically powerful. For example, there are over 35,000 lobbyists in Washington, D.C. who have and will spend billions of dollars in political contributions. These special interests and pork-barrel spending will divert large amounts of this money away from infrastructure and other less wasteful programs.
Even if we assume that the plan would not be diverted by special interests and politicians, the increase in the debt make it likely that the plan’s costs will outweigh its benefits. Under President Bush, the federal debt exploded. It went from $5.6 to an estimated $9.7 trillion. This is higher than any year since 1960. This is about 68% of the total economic output this year from all sectors of the economy. Because the current 2009 deficit is projected to be $1.2 trillion before the .8 trillion stimulus package is added on, the government will tack on another $2 trillion onto the debt next year (increasing it by 21%). In the future, this massive debt will be a millstone around neck of the U.S. economy. Congress and Presidents Bush and Obama are dumping their problems on future generations.
Obama’s support for the stimulus plan indicates that like George W. Bush, he will govern from the left and damage the economy. What a mess.
President Obama and the Stimulus Package
Dunkirk-Fredonia Observer
January 19, 2009
In the weeks leading up to his inauguration, President Obama pushed the $825 billion House spending plan. By the time Congress sends it to him, this package could well reach $1 trillion. His argument is that the plan is necessary to jump start the economy by increasing demand for goods and services. Obama claims that it contains $275 billion in tax cuts. However, because a significant portion of this goes to people who do not pay income taxes and politically favored businesses, much of this is just more government spending. For example, the plan gives tax cuts to many of the roughly 40% of Americans who were in families that paid no income taxes. Giving money to people who don’t pay income taxes is welfare, not a tax cut.
The stimulus package provides a Christmas tree of goodies to politically correct causes. This includes gifts to the environmental, education, and law-enforcement special-interest groups. For example, the bill includes $20 billion for renewable energy and energy conservation. It also includes $141 billion in grants to states and localities for education spending. It also includes $4 billion for state and local law enforcement. One cringes at how this will encourage wasting even more money and lives on drug prohibition. There is also massive new welfare spending. This includes $43 billion to extend unemployment benefits, $20 billion to increase food stamps, and $9 billion for various welfare programs including, get this, $1 billion for community-action agencies.
It is not clear why we should think that this plan will work. First, it is hard to see how in theory it will work. The money to be spent must come from somewhere and there are only two sources: taxes and loans. If the money is taken from taxes, then the assets are simply transferred from one group of citizens (taxpayers) to another (government beneficiaries). This is unlikely to generate economic growth because taxpayers (in a free market) spend money more efficiently than does the government. If the money is taken via loans, then in the future this money will be taken from taxpayers. This will work only if the additional economic gain is greater than the losses that will occur because taxpayers have less money later on and because interest must be paid to get the loans. Again, this is unlikely.
Second, it is hard to see what historical evidence supports such a plan. The recent bailouts show no signs of working. This might be because of the short period since they were implemented, but at the very least they as yet provide no signs of helping. The federal government has already implemented several stimulus programs, none of which has improved the economy. On February 13, 2008, the federal government authorized a $168 billion stimulus package that consisted of a $300-$600 rebate per person. On March 24, 2008, the federal government set aside $30 billion to allow one investment bank to acquire another (JP Morgan bought Bear Stearns). On October 3, 2008, the government authorized $700 billion for the massive Troubled Assets Relief Program (TARP) that was supposed to be used to buy loans from banks. These loans have declined in value due to the dropping real estate prices. Instead, the government spent the money to own part of the troubled banks. Other money was spent to bail out GM and Chrysler. On November 25, 2008, the government also authorized $600 billion and spent around $20 billion shoring up the assets of Fannie Mae and Freddie Mac, two government-sponsored mortgage-purchasing companies that owns or guarantees about half of the mortgages in the U.S. Between the rebate-stimulus package (February 13, 2008) and now, the stock market has dropped roughly 37% (using the S&P 500 Index).
Historically, there is no evidence that these plans work. Following the November 1929 crash of the stock market, Presidents Hoover and Roosevelt instituted massive new government-spending programs. Yet, as economist Thomas Sowell points out, for nearly three consecutive years from February 1932 to January 1935, the monthly unemployment rate never fell below 20%. In that last month, it fell to 19.3%. The Great Depression provides no evidence that government spending will jump start the economy or reduce unemployment. Columnist Michelle Malkin points out that in contrast to the disastrous Hoover and Roosevelt presidencies, no recession since World War II has lasted more than two years. In addition, other countries (for example, Japan) have tried this type of plan with piddling results.
Even if there were some evidence that this plan would work, it depends on the money being spent on useful projects rather than ones that favor the politically powerful. For example, there are over 35,000 lobbyists in Washington, D.C. who have and will spend billions of dollars in political contributions. These special interests and pork-barrel spending will divert large amounts of this money away from infrastructure and other less wasteful programs.
Even if we assume that the plan would not be diverted by special interests and politicians, the increase in the debt make it likely that the plan’s costs will outweigh its benefits. Under President Bush, the federal debt exploded. It went from $5.6 to an estimated $9.7 trillion. This is higher than any year since 1960. This is about 68% of the total economic output this year from all sectors of the economy. Because the current 2009 deficit is projected to be $1.2 trillion before the .8 trillion stimulus package is added on, the government will tack on another $2 trillion onto the debt next year (increasing it by 21%). In the future, this massive debt will be a millstone around neck of the U.S. economy. Congress and Presidents Bush and Obama are dumping their problems on future generations.
Obama’s support for the stimulus plan indicates that like George W. Bush, he will govern from the left and damage the economy. What a mess.
10 December 2008
Skyrocketing College Costs
The Objectivist
HIGHER EDUCATION COSTS: POURING FUEL ON THE FIRE
Dunkirk-Fredonia Observer
December 8, 2008
The cost of higher education is skyrocketing. This is troubling, not just because it involves massive waste, but also because it threatens to make college less affordable. This will lead to not only economic loss, but also personal loss if a college education generally makes people’s lives go better.
According to The National Center for Public Policy and Higher Education, college tuition is climbing at an alarming rate. From 1982 to 2007, college tuition and fees rose 439%. This rise is even more impressive when one considers that medical-care costs rose 251% over that period and inflation (consumer price index) increased 106%. This alarming climb makes college less affordable. This is particularly true because the increased cost of college is running far head of the increase in family income during this period (median family income rose by 147%).
In concrete terms, college is expensive. The cost of an average public four-year college (including tuition, room, and board) is $13,842. For middle-income families, this is 25% of their income and this is true only when we reduce this amount by taking financial aid into account. For many, financial aid has helped to reduce these cost increases. In 2003-2004, roughly 63% of students received aid and this reduced the average out-of-pocket costs to $6,600 per student. This percentage is even higher (69%) at public four-year institutions.
As usual with public education, taxpayers are carrying a good deal of the load. One 2003 study by Cato scholar Neal McCluskey, using data from the National Center for Educational Statistics, pointed out that more than half of public universities’ revenue came directly from federal, state, and local taxpayers. In comparison only about 19% came from student fees and tuition. On a per pupil basis, the taxpayers at all levels currently pay about $9,500 for each full-time student. This includes grants, loans, and tax credits. Even the rich line up at the trough. For example, in 2002, 8% of college students from families with parental income of $100,000 or more received state aid, with the average award being $2,400.
These patterns also hold true for New York. The state paid around $7,800 per student (6.9% of state and local tax revenue). This might explain why even spendthrift New York charges only slightly more for tuition, room, and board than the national average, $13,589. When prices are so reasonable, you know New York taxpayers are being fleeced.
As usual, when the government starts blindly shoveling money into something, performance suffers. According to The National Center for Public Policy and Higher Education, when it comes to Americans ages 25-34, the U.S. has slipped to 10th place in the percentage of persons with an Associate’s Degree or better. We lag behind not merely Asian competitors such as Japan and Korea, but also our Canadian neighbors and European competitors like Ireland, France, and Belgium. Worse yet, when it comes to percent of college students who get a degree, the U.S. performance is mediocre. The U.S. ranks 15th in worldwide graduation rates. This is made worse because the percentage of U.S. students who finish college in four years is surprisingly low. For example, at Fredonia less than half of the entering freshmen graduate from Fredonia in four years (in 2000-2003, the percentage was about 47%) and less than two thirds graduate in six years (around 64% from 1999 to 2001).
Shoveling taxpayer dollars toward higher education also likely fueled the cost increase. After all, when competing for students, administrators felt little pressure to engage in disciplined spending. My guess is the subsidies have helped to pay for an expansion of student services. The modern university is stocked with workers who provide psychological counseling, career counseling, child care, and special services for minority students. Other staff members handle public relations, promote diversity and affirmative action, and provide a sizable on-campus police force. This is in addition to employees who serve the food and oversee dormitory life. Even at small colleges, these programs cost tens of millions of dollars and drive up tuitions and fees. It is interesting to consider whether higher education would be better served without the bells and whistles.
This pattern can be seen at Fredonia State. There around 36% of full-time employees are faculty and they likely account for less than half of the 33% (inflation-adjusted) increase in spending that occurred at the school between 1998-1999 and 2007-2008 academic years.
Another interesting issue is whether taxpayers should subsidize college students in such large amounts. On average, college graduates make more than those without a college degree. As a result, it seems a little unfair to force blue-collar workers to subsidize their soon-to-be wealthier peers. It is often argued that education has positive effects for third parties (that is, it benefits people other than students and the people who provide educational services) and this explains why we should subsidize it. For example, higher education makes people more productive, thereby leading to more scientific and commercial discoveries, new businesses, more tax revenue, etc. However, subsidies also have negative effects. They encourage young adults to purchase more education than they want or, in some cases, can handle. Consider the low graduation rates. Subsidies also lower academic standards as colleges try to educate students who are not ready for college. On one estimate, 29% of state university freshmen needed a remedial course. And, as noted above, subsidies probably also ratchet up the cost of a college degree, thereby making college less affordable and saddling many students with weighty loans.
The balance of positive and negative effects that flow from massive subsidies to higher education is unclear. What is clearer is that politicians who promote higher education subsidies and then criticize skyrocketing costs are working at cross purposes. In addition, we should have little tolerance for those demagogues who bemoan the lack of taxpayer support for higher education.
HIGHER EDUCATION COSTS: POURING FUEL ON THE FIRE
Dunkirk-Fredonia Observer
December 8, 2008
The cost of higher education is skyrocketing. This is troubling, not just because it involves massive waste, but also because it threatens to make college less affordable. This will lead to not only economic loss, but also personal loss if a college education generally makes people’s lives go better.
According to The National Center for Public Policy and Higher Education, college tuition is climbing at an alarming rate. From 1982 to 2007, college tuition and fees rose 439%. This rise is even more impressive when one considers that medical-care costs rose 251% over that period and inflation (consumer price index) increased 106%. This alarming climb makes college less affordable. This is particularly true because the increased cost of college is running far head of the increase in family income during this period (median family income rose by 147%).
In concrete terms, college is expensive. The cost of an average public four-year college (including tuition, room, and board) is $13,842. For middle-income families, this is 25% of their income and this is true only when we reduce this amount by taking financial aid into account. For many, financial aid has helped to reduce these cost increases. In 2003-2004, roughly 63% of students received aid and this reduced the average out-of-pocket costs to $6,600 per student. This percentage is even higher (69%) at public four-year institutions.
As usual with public education, taxpayers are carrying a good deal of the load. One 2003 study by Cato scholar Neal McCluskey, using data from the National Center for Educational Statistics, pointed out that more than half of public universities’ revenue came directly from federal, state, and local taxpayers. In comparison only about 19% came from student fees and tuition. On a per pupil basis, the taxpayers at all levels currently pay about $9,500 for each full-time student. This includes grants, loans, and tax credits. Even the rich line up at the trough. For example, in 2002, 8% of college students from families with parental income of $100,000 or more received state aid, with the average award being $2,400.
These patterns also hold true for New York. The state paid around $7,800 per student (6.9% of state and local tax revenue). This might explain why even spendthrift New York charges only slightly more for tuition, room, and board than the national average, $13,589. When prices are so reasonable, you know New York taxpayers are being fleeced.
As usual, when the government starts blindly shoveling money into something, performance suffers. According to The National Center for Public Policy and Higher Education, when it comes to Americans ages 25-34, the U.S. has slipped to 10th place in the percentage of persons with an Associate’s Degree or better. We lag behind not merely Asian competitors such as Japan and Korea, but also our Canadian neighbors and European competitors like Ireland, France, and Belgium. Worse yet, when it comes to percent of college students who get a degree, the U.S. performance is mediocre. The U.S. ranks 15th in worldwide graduation rates. This is made worse because the percentage of U.S. students who finish college in four years is surprisingly low. For example, at Fredonia less than half of the entering freshmen graduate from Fredonia in four years (in 2000-2003, the percentage was about 47%) and less than two thirds graduate in six years (around 64% from 1999 to 2001).
Shoveling taxpayer dollars toward higher education also likely fueled the cost increase. After all, when competing for students, administrators felt little pressure to engage in disciplined spending. My guess is the subsidies have helped to pay for an expansion of student services. The modern university is stocked with workers who provide psychological counseling, career counseling, child care, and special services for minority students. Other staff members handle public relations, promote diversity and affirmative action, and provide a sizable on-campus police force. This is in addition to employees who serve the food and oversee dormitory life. Even at small colleges, these programs cost tens of millions of dollars and drive up tuitions and fees. It is interesting to consider whether higher education would be better served without the bells and whistles.
This pattern can be seen at Fredonia State. There around 36% of full-time employees are faculty and they likely account for less than half of the 33% (inflation-adjusted) increase in spending that occurred at the school between 1998-1999 and 2007-2008 academic years.
Another interesting issue is whether taxpayers should subsidize college students in such large amounts. On average, college graduates make more than those without a college degree. As a result, it seems a little unfair to force blue-collar workers to subsidize their soon-to-be wealthier peers. It is often argued that education has positive effects for third parties (that is, it benefits people other than students and the people who provide educational services) and this explains why we should subsidize it. For example, higher education makes people more productive, thereby leading to more scientific and commercial discoveries, new businesses, more tax revenue, etc. However, subsidies also have negative effects. They encourage young adults to purchase more education than they want or, in some cases, can handle. Consider the low graduation rates. Subsidies also lower academic standards as colleges try to educate students who are not ready for college. On one estimate, 29% of state university freshmen needed a remedial course. And, as noted above, subsidies probably also ratchet up the cost of a college degree, thereby making college less affordable and saddling many students with weighty loans.
The balance of positive and negative effects that flow from massive subsidies to higher education is unclear. What is clearer is that politicians who promote higher education subsidies and then criticize skyrocketing costs are working at cross purposes. In addition, we should have little tolerance for those demagogues who bemoan the lack of taxpayer support for higher education.
29 November 2008
For Prostitution
The Objectivist
Revisiting Prostitution
Dunkirk-Fredonia Observer
November 24, 2008
Prostitution is one of those businesses that is here to stay and yet, outside of the Eliot Spitzer scandal, receives little discussion. The case for legalizing it is surprisingly strong and yet there is little movement for doing so. Even in liberal San Francisco, voters turned down a measure that would have prevented the police from arresting prostitutes.
The case for legalizing prostitution is straightforward. On one version, if two persons wish to engage in a transaction that does not harm anyone else, then they should be allowed to do so. A second version focuses on rights. In prostitution, the customer, almost always a man, gives the prostitute money, something which he has a legal and moral right to do. The prostitute has sex with the man, which she (or he) also has a legal and moral right to do. Somehow, the combination of these acts is illegal. This ban does not cover payment to actors in pornographic movies for reasons that escape me.
One argument for banning prostitution is that we should protect prostitutes from themselves. This is an odd argument in that you might think that the state is not your father and hence should not be in the business of protecting you against yourself. One might also think that consistency should prevent such laws. After all, we allow adults to eat unhealthy things, smoke, get fat, drop out of school, and serve in dangerous wars. However, even for fans of paternalism, the issue arises as to whether prostitution is a bad for women.
This is a claim that prostitution is bad for the women (and men) who work frequently made. The empirical studies in fact show that the job has a distinct mixture of benefits and costs. The best window into this mixture is one of the few in-depth studies on prostitution that was done by University of Chicago economics professor Steven D. Levitt (author of “Freakonomics”) and Columbia University sociology professor Sudhir Alladi Venkatesh.
In Chicago, street prostitutes earned around $27 an hour, roughly four times their hourly wage in other jobs. In other work sectors, these women averaged around $7 an hour. Interestingly prostitutes who worked for pimps, or business agents as I like to call them, earned around $41 an hour. In a week, the average prostitute only worked around 13 hours per week , averaged 10 sex acts, and earned around $340 a week, which is more than they made through other work. My guess is that this light work week might be valued by women who can’t afford much day care and whose other work prospects are undependable, dreary, and don’t pay much. Surprisingly, another academic study indicated that in many cases prostitutes enjoy the sex.
The down side is that prostitutes are in a violent, unhealthy, and stigmatizing field. Levitt and Vankatesh’s study indicates that working street prostitutes report being a victim of violence (from customer or business agent) about once a month. They are also at risk for disease because condoms are used about 25% of the time. Prostitutes also get arrested, although fairly infrequently (1 arrest per 450 tricks). They get imprisoned even less frequently (1 in 10 arrests leads to a prison sentence). They frequently buy off the police with sex. Incredibly, around 3% of their tricks are given to the police to prevent arrests. This is a higher rate than freebie sex given out to gang members for protection. Other researchers argue that being a prostitute is stigmatizing and leads to diminished marriage opportunities.
Do the costs outweigh the benefits? This is hard to tell. It depends in part on what other employment and marriage prospects the women have and what they value. It is unclear whether it is worse than their other options. Even if prostitution is bad for the women, one wonders whether they would be better off were prostitution legalized, thereby allowing women to gain better access to medical professionals, honest cops, and reputable business agents.
The cost-benefit analysis is also unclear when we look at high-end prostitutes. Venkatesh’s research indicates that some of these women make a lot of money (around $7,500 per session or $10,000 per session depending on how elite their clientele is). However, their other opportunities are probably quite good. At this level, the women tend to be white, have a college degree (or are in college), and only take referrals. In addition, they are also exposed to violence (on average, twice a year).
A second argument for prohibiting prostitution is that it is necessary to prevent business agents from exploiting prostitutes. Levitt and Vankatesh’s study casts doubt on this argument. In Chicago, business agents allow prostitutes to earn substantially more money (50% more) per trick, turn fewer tricks, get arrested less often, and give less freebie sex to cops and gang members. In return prostitutes pay a flat 25% fee on all of their tricks.
A third argument for banning prostitution is that it carries with it negative externalities. A negative externality is a harm to people who are not part of the transaction. In particular, prostitution is thought to cause crime, tamp down property values, break up families, promote immorality, etc. Negative externalities usually do not provide a good reason to ban something as opposed to zoning it. For example, the state allows bars and industrial plants despite the fact that they are alleged to cause crime and noise and tamp down property values to drop. In an analysis of Chicago neighborhoods, prostitution did correlate with crime. In contrast, this is not true of the drug trade. In the absence of data, it is hard to assess the claims about family breakup and promoting immorality. Also, the externalities need not be all negative. When studied, many rapists report preferring voluntary sex. This might indicate that prostitution will reduce the incidence of rape, although this is pure speculation. In addition, the negative externalities might be outweighed by the gains to prostitutes and their customers.
A fourth argument is that prostitution will lead to the importation of foreign sex slaves, thereby leading to sexual slavery. However, Emily Bazelon in Slate.com points out that in countries that legalized prostitution (Australia, Germany, and the Netherlands) have not become awash in foreign sex slaves. Neither have the parts of Nevada in which it is legal.
A fifth argument is that hiring prostitutes is wrong and that the law should enforce morality. This is an odd view of the state for those who think liberty is important. In addition, it is inconsistent with laws that permit people to enjoy pornography, alcohol, gambling, and adultery. The real problem, however, is that it is hard to see what is wrong with hiring a prostitute. People hire others for pedicures, hair cuts, and massages, all involve human contact. Why is sex different? At least in the short run, the exchange of sex for money appears to be mutually beneficial, otherwise such exchanges wouldn’t occur. The proponent of this argument needs to explain why morality supports banning of prostitution, but not premarital and gay sex. Paying for sex may seem distasteful, but such aesthetic objections are no more telling on prostitution than they are with regard to sex with a fat person.
It is surprisingly hard to see why prostitution should be criminalized. The most obvious arguments fail or lack supporting evidence. Perhaps we should revisit this issue.
Revisiting Prostitution
Dunkirk-Fredonia Observer
November 24, 2008
Prostitution is one of those businesses that is here to stay and yet, outside of the Eliot Spitzer scandal, receives little discussion. The case for legalizing it is surprisingly strong and yet there is little movement for doing so. Even in liberal San Francisco, voters turned down a measure that would have prevented the police from arresting prostitutes.
The case for legalizing prostitution is straightforward. On one version, if two persons wish to engage in a transaction that does not harm anyone else, then they should be allowed to do so. A second version focuses on rights. In prostitution, the customer, almost always a man, gives the prostitute money, something which he has a legal and moral right to do. The prostitute has sex with the man, which she (or he) also has a legal and moral right to do. Somehow, the combination of these acts is illegal. This ban does not cover payment to actors in pornographic movies for reasons that escape me.
One argument for banning prostitution is that we should protect prostitutes from themselves. This is an odd argument in that you might think that the state is not your father and hence should not be in the business of protecting you against yourself. One might also think that consistency should prevent such laws. After all, we allow adults to eat unhealthy things, smoke, get fat, drop out of school, and serve in dangerous wars. However, even for fans of paternalism, the issue arises as to whether prostitution is a bad for women.
This is a claim that prostitution is bad for the women (and men) who work frequently made. The empirical studies in fact show that the job has a distinct mixture of benefits and costs. The best window into this mixture is one of the few in-depth studies on prostitution that was done by University of Chicago economics professor Steven D. Levitt (author of “Freakonomics”) and Columbia University sociology professor Sudhir Alladi Venkatesh.
In Chicago, street prostitutes earned around $27 an hour, roughly four times their hourly wage in other jobs. In other work sectors, these women averaged around $7 an hour. Interestingly prostitutes who worked for pimps, or business agents as I like to call them, earned around $41 an hour. In a week, the average prostitute only worked around 13 hours per week , averaged 10 sex acts, and earned around $340 a week, which is more than they made through other work. My guess is that this light work week might be valued by women who can’t afford much day care and whose other work prospects are undependable, dreary, and don’t pay much. Surprisingly, another academic study indicated that in many cases prostitutes enjoy the sex.
The down side is that prostitutes are in a violent, unhealthy, and stigmatizing field. Levitt and Vankatesh’s study indicates that working street prostitutes report being a victim of violence (from customer or business agent) about once a month. They are also at risk for disease because condoms are used about 25% of the time. Prostitutes also get arrested, although fairly infrequently (1 arrest per 450 tricks). They get imprisoned even less frequently (1 in 10 arrests leads to a prison sentence). They frequently buy off the police with sex. Incredibly, around 3% of their tricks are given to the police to prevent arrests. This is a higher rate than freebie sex given out to gang members for protection. Other researchers argue that being a prostitute is stigmatizing and leads to diminished marriage opportunities.
Do the costs outweigh the benefits? This is hard to tell. It depends in part on what other employment and marriage prospects the women have and what they value. It is unclear whether it is worse than their other options. Even if prostitution is bad for the women, one wonders whether they would be better off were prostitution legalized, thereby allowing women to gain better access to medical professionals, honest cops, and reputable business agents.
The cost-benefit analysis is also unclear when we look at high-end prostitutes. Venkatesh’s research indicates that some of these women make a lot of money (around $7,500 per session or $10,000 per session depending on how elite their clientele is). However, their other opportunities are probably quite good. At this level, the women tend to be white, have a college degree (or are in college), and only take referrals. In addition, they are also exposed to violence (on average, twice a year).
A second argument for prohibiting prostitution is that it is necessary to prevent business agents from exploiting prostitutes. Levitt and Vankatesh’s study casts doubt on this argument. In Chicago, business agents allow prostitutes to earn substantially more money (50% more) per trick, turn fewer tricks, get arrested less often, and give less freebie sex to cops and gang members. In return prostitutes pay a flat 25% fee on all of their tricks.
A third argument for banning prostitution is that it carries with it negative externalities. A negative externality is a harm to people who are not part of the transaction. In particular, prostitution is thought to cause crime, tamp down property values, break up families, promote immorality, etc. Negative externalities usually do not provide a good reason to ban something as opposed to zoning it. For example, the state allows bars and industrial plants despite the fact that they are alleged to cause crime and noise and tamp down property values to drop. In an analysis of Chicago neighborhoods, prostitution did correlate with crime. In contrast, this is not true of the drug trade. In the absence of data, it is hard to assess the claims about family breakup and promoting immorality. Also, the externalities need not be all negative. When studied, many rapists report preferring voluntary sex. This might indicate that prostitution will reduce the incidence of rape, although this is pure speculation. In addition, the negative externalities might be outweighed by the gains to prostitutes and their customers.
A fourth argument is that prostitution will lead to the importation of foreign sex slaves, thereby leading to sexual slavery. However, Emily Bazelon in Slate.com points out that in countries that legalized prostitution (Australia, Germany, and the Netherlands) have not become awash in foreign sex slaves. Neither have the parts of Nevada in which it is legal.
A fifth argument is that hiring prostitutes is wrong and that the law should enforce morality. This is an odd view of the state for those who think liberty is important. In addition, it is inconsistent with laws that permit people to enjoy pornography, alcohol, gambling, and adultery. The real problem, however, is that it is hard to see what is wrong with hiring a prostitute. People hire others for pedicures, hair cuts, and massages, all involve human contact. Why is sex different? At least in the short run, the exchange of sex for money appears to be mutually beneficial, otherwise such exchanges wouldn’t occur. The proponent of this argument needs to explain why morality supports banning of prostitution, but not premarital and gay sex. Paying for sex may seem distasteful, but such aesthetic objections are no more telling on prostitution than they are with regard to sex with a fat person.
It is surprisingly hard to see why prostitution should be criminalized. The most obvious arguments fail or lack supporting evidence. Perhaps we should revisit this issue.
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