Health Savings Accounts Attract Wall Street

I'm a little late on this story, but I just read it on my Palm while I was waiting on lunch.

Banks and others are drawn by the promise of lucrative fees they can generate by offering consumers mutual funds and other investment vehicles as their account balances grow. Most also charge $50 to $75 to set up a health savings account, and they collect perhaps $40 or more each year in maintenance charges and service fees.

Not since the creation of the individual retirement account in the mid-1970's has such a potentially huge mountain of money landed in the lap of the financial services industry.

"Billions of dollars that used to be written in the form of checks with insurance companies' names on them would instead go to credit unions, banks, and long-term investment houses," said Dan Perrin, the publisher of H.S.A. Insider and executive director of the H.S.A. Coalition, a lobbying group backed by 70 small-business and medical industry groups as well as the American Bankers Association. "You know America: you see a financial opportunity and it sets off a gold rush."

Two years ago, not a single major bank offered a health savings account. Only seven small banks had any sort of plan. Today, more than 300 financial services companies, including big banks, are taking deposits or will be soon. About 150 more are on the way. Some of the country's biggest health insurance providers have started their own banks.

To be sure, health savings accounts will make up only a small fraction of earnings at a financial giant like Citigroup. But at a time when deposit growth has slowed and higher interest rates have hurt profits, they represent a steady stream of new income that is increasingly hard to find. Banks are betting that what the administration calls consumer-directed health care catches on.

Supporters say that the discipline and marketing might of financial services giants could spur the adoption of consumer-directed care. Critics argue that the banking industry's involvement only bolsters their case: the accounts are more about wealth than health.

The first thing that pops out at me is the fees banks are charging for HSA's. High fees were a big argument waged against private Social Security accounts and are a valid concern. But, my guess would be these fees will go down once the market is saturated with every bank and health insurance company around competing for the HSA dollar.

The other noteworthy aspect of this article is the "If you build it they will come" attitude. Government created a program allowing health care consumers market choices and the market is flooding the country with different insurance and banking options. These choices are great because they're not tied to someone's employment and there's greater competition. The next thing GWB needs to do is allow insurance company competition across state lines and allow pre-funding of the HSA.

Also, imagine what would happen if the federal government started giving out school vouchers. Based on this article it would seem there would be a whole bunch of schools opening up.

Egalitarian V. Meritocracy

Matt Yglesias, once again argues against the American meritocracy.

But meritocracy is a bad thing and we shouldn't be complacent about inequality. Better social insurance and better provision of basic social services (America's libraries, parks, subways, etc. are all messed up, as are a shockingly large proportion of our urban sidewalks and streets) is part of the answer, but ultimately inadquate. There's nothing wrong with a little income redistribution, but this is hard to achieve and sustain on a massive basis over time.

I just about bled out of my eyes when I read that. The thing I like about Yglesias, though, is that he's not afraid to write what he really thinks. I think that's a great quality and have enormous respect for that.

The Tipping Point

I finished reading "The Tipping Point" by Malcolm Gladwell the other day. Once again Gladwell wrote a wonderful book that makes you think. I had really enjoyed "Blink" and hoped that "The Tipping Point" would be as enjoyable. It was and it changed the way I thought about some things.

The main thing the book gave me was a wonderful defense of Capitalism when I read something like I read in the comments section of Drum's blog (I can't find the link now so I'm paraphrasing): "What Republicans don't understand is I don't want to negotiate the best deal for electricity, I want to flip on the light switch and have my lights come on. I don't want to go through some hassle to do it." Sentiments like this are completely understandable because I'm the same way. Gladwell, while not specifically addressing this in my terms, refutes the notion that everyone has to negotiate the best deal in everything they buy. Instead, Gladwell writes, there are people who he calls 'mavens' that love to find the best deals, negotiate for prices, etc.. He wrote the story of a college professor in Texas that was a maven. One of his students came up to him around the holidays and asked him where the best place would be to buy a ham. To this question the professor asked "You know I'm Jewish, right?" The questioner indicated that he knew the professor was Jewish and the professor said "go to so and so deli, ask for this kind of ham with this kind of seasoning, it should cost this amount of money." My wife is like that, she knows where to buy everything and at what price to buy it.

Gladwell also writes of the two other types of people that make Capitalism work, connectors and salesmen. Salesmen are fairly self explanatory. Connectors are people who know a lot of people. I know several people that are connectors but the one that comes to mind is Rick Sutcliffe, baseball broadcaster and ex-Cubs pitcher. He lives in the Kansas City area and is sports radio quite a bit. He knows everybody and has a story about everyone. It's great to listen to him broadcast a baseball game because he tells stories all the time that are relevant to the game at hand or to illuminate a player's personal interest story. Connectors, as well as salesmen, are integral to the Tipping Point because they are the ones that get the word out about a fad. Lots of things are popular in all kinds of subcultures. Connectors are the ones that let the rest of the world in on them, whether it be a great restaurant or a really great pair of shoes. A maven working with a connector can really broadcast the best cell phone service to get, for instance, so that people like me don't really have to get the information from every service and compare and try to figure out the best one.

That's why Capitalism works. Businesses try to cater their offers to mavens and communicate to connectors through salesmen. When this works you get a successful product or service, when it doesn't the product or service is improved until it's as good as it can be. I'm simplifying the message of course, and it is not necessarily the message Gladwell probably intended, but it's what I took away from it. I gave the book 5 stars on Amazon.

Next up is "Our School" by Joanne Jacobs. I've already started it and so far it's been great. The book is a true story about a charter school in San Jose, CA that takes in failing Hispanic students from regular public schools and gives them college prep classes. The school, Downtown College Prep, gives the students motivation to go to college, the tools to learn effectively and works their tail off to catch them up and qualify for college. Hat tip to Kevin Drum for recommending the book

Underfunded Pensions

Underfunded pensions are not just a private sector issue. From a Chicago Tribune editorial:

The most pressing problem for schools CEO Arne Duncan, though, is to close a $328 million budget gap. One really bad idea being kicked around is to ask lawmakers in Springfield to declare a pension holiday at CPS, freeing the district from having to kick in about $70 million it will owe its teachers pension fund next fiscal year. The pension bill is expected to grow in future years, and the district may also ask legislators to change rules to reduce those costs.

The Illinois legislature could teach a course in how to mess up a pension system.

The solution being discussed for city schools points to exactly how the legislature undermined the state's pension plans--it skipped and slipped on pension payments because it needed the money for other things. And now it has created a huge problem that legislators have tried to solve with massive borrowing and delayed payments. The state's pension woes threaten to drain taxpayers dry in coming years.

It's easy to see why Chicago schools officials would be tempted to ease their budget problems by following the state's lead. If the state can skip out on its pension-fund obligations, then why not city schools? Unlike the state pension funds, the Chicago teachers fund is in fairly good shape. But state law requires that it have funds to cover 90 percent of its liabilities, and that means the schools have to contribute $70 million this year. They're talking about changing state law so they can skip that payment.

If school officials skip that payment, they will substantially weaken the financial standing of the pension fund. They also will be paying for ongoing operations with money they can't count on year after year. They will push off a budget problem, not solve it.

In fact, they'll make it worse. Every dollar placed in the pension fund earns money on the investment. If the Chicago schools skip a $70 million payment, the pension fund will also lose out on the money that would have been earned on that investment. One widely accepted rule of thumb is that every dollar diverted from a pension fund costs $11 in lost income over 40 years. And remember, the pension relief the schools seek may not be confined to just one year.

The only way to ensure your retirement money is safe is to have ownership over it and can choose where to invest it. Relying on others to look out for your retirement will result in a failure to fund your retirement.

Bush Beatdown

George Bush, in a somewhat unprecedented incident, actually gave the beatdown to big business. From the WSJ:

President Bush said General Motors Corp. and Ford Motor Co. should develop "a product that's relevant" rather than look to Washington for help with their heavy pension obligations, and hinted he would take a dim view of a government bailout of the struggling auto makers.

In an Oval Office interview, Mr. Bush said that his administration has discussed the development of new fuel technologies with the nation's top two auto makers, which might make them more competitive, but that he has had no talks about the companies' finances.

Asked if he had spoken to GM Chairman and Chief Executive Rick Wagoner or Ford Chairman and CEO William Clay Ford Jr., Mr. Bush replied: "Not about their balance sheets." He added: "And I haven't been asked by any automobile manufacturer about a bailout."
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Mr. Bush said little to suggest the companies should find comfort in that precedent[Carter bailout of Chrysler]. "I have been very reluctant -- I'm mindful of the past where at one point in time, a predecessor of mine was faced with that same dilemma," he said. "I would hope I wouldn't be asked to make that decision."

Asked if the government should take any pre-emptive action, he said: "I think it's very important for the market to function." He suggested he felt optimistic about the companies' prospects.

"I think it's very important for the market to function", is not a sentence you expect to hear from a politician of any political stripe that's not on a TV show (I'm looking at you Alan Alda).

Stroud's

I love Stroud's fried chicken. The Stroud's nearest to my house is being torn down to make way for a new and expanded bridge. To call the old Stroud's building a shack would be generous. They're looking for a new location in the area and are doing it the old fashioned way by negotiating with owner of private property.

After searching for months, Donegan found an appropriate spot — a former firehouse at the northeast corner of 95th street and Holmes Road. Still, he needed another parcel of land for a parking lot, and he said he tried to work out a “fair” price with the owner of that property. Donegan didn’t want to see the city use eminent domain on the property, he said, because he didn’t want another property owner to experience what he had at the original Stroud’s.

Donegan could take the easy way out and have the city government steal the land for the parking lot. Instead, Donegan showed some integrity by turning down the city government. Good for him, makes me want some pan fried chicken and greasy fries.

Government Failure

Kevin Drum caught an occurrence of government failure that I missed even though I read the article in question. From the WSJ:

For decades, executives relied on the same pension plan as other company employees, so they had an incentive to make it generous. The shift toward a dual system started in 1994, when Congress passed a law intended to limit the cost to taxpayers of runaway executive pay. The law barred companies from taking a tax deduction on compensation in excess of $1 million a year for any current employee. The result: Companies began setting up supplemental pension plans that encouraged senior managers to defer compensation.

In short, to combat excessive executive compensation Congress passed a law limiting tax deductions for companies paying more than $1 million. So, executives set up supplemental pension plans and quit funding adequately the employees' pension plans. Sure the executives are slimy in this regard but they're acting in their own best interests. Of course, Drum's proposal would be to make another law appending the original law to correct the original unintended consequences instead of repealing the original law.

So the government passed a law to try to obtain a pretty trivial amount of revenue and in the process screwed up millions people's pensions putting them at more retirement risk instead of less and then the government never really increased their revenue. Good Work, Thanks!

I won't get into several other sticking points about Drum and underfunded pension plans (such as Social Security) and his love of pension plans in general.

Missouri Valley Basketball

As Brad Hamilton said "Learn it. Know it. Live it." Missouri Valley basketball is the best around.

Ozone over Asthma

The FDA is willing to sell out asthma sufferers over concerns about the ozone layer. In another episode of the government doing more harm than good.

An advisory panel voted 11-7 Tuesday to recommend that the Food and Drug Administration remove the “essential use” status that Primatene Mist and other similar nonprescription inhalers require to be sold, spokeswoman Laura Alvey said. Final revocation of that status would mean a de facto ban on their sale.

The FDA usually follows the advice of its outside panels of experts, though a decision can take months. If the agency opts to follow the recommendation, it will begin a rulemaking process that includes public comment, Alvey said.

Wyeth Consumer Healthcare estimates that 3 million Americans use Primatene Mist for mild or intermittent cases of asthma, spokesman Fran Sullivan said. About two-thirds also use a prescription inhaler but rely on Primatene as a backup. An additional 700,000 use the inhalers because they don’t have a prescription or lack health insurance, he said.

The company is the biggest maker of epinephrine inhalers, with $43 million in sales last year. The drug opens air passages to the lungs to relieve temporary wheezing, shortness of breath and troubled breathing, according to the FDA.

The over-the-counter inhalers proposed to be banned contain the drug epinephrine along with chlorofluorocarbons, or CFCs, which propel the medicine into the lungs of asthmatics.
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On Tuesday, Wyeth asked that the FDA stay any such ban on Primatene Mist until it is ready to market an approved CFC-free version, said its representative, Sumon Wason. Wyeth hopes to have such an inhaler ready for sale in 2009 or 2010, Wason added.
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“It provides an important public health benefit, there’s no other OTC alternative to CFC epinephrine inhalers, and the environmental risk from the release of CFCs from Primatene is small and justified given the benefit it provides,” Sullivan said.

Great work, FDA! Thanks!

Cold Medicine Ban

In the interests of making Kansans safer, the Kansas Legislature passed a law, nearly unanimously, putting OTC cold medicines behind the pharmacist counter. This law was supposedly going to limit the amount of meth in KS. Several other states have enacted similar bans. This law was a giant pain in the ass one day for my wife when my twin girls were sick. She had trouble finding any store that would sell her baby cold medicine. Part of the problem was a lack of understanding in the implementation of the law, but mostly it was such a hassle for pharmacists that some pharmacies didn't carry baby cold medicine anymore.

Anyway, that experience prompted me to write an email to my state senator, Barbara Allen, telling her how this law affected everyday people and didn't really benefit us at all (I never actually sent the letter because she missed the vote for the legislation). What's more it would do little to curtail meth use, which is of virtually no concern to me whatsoever anyway.

The NYT has a good story highlighting my point.

But Mr. Van Haaften, like officials in other states with similar restrictions, is now worried about a new problem: the drop in home-cooked methamphetamine has been met by a new flood of crystal methamphetamine coming largely from Mexico.

Sometimes called ice, crystal methamphetamine is far purer, and therefore even more highly addictive, than powdered home-cooked methamphetamine, a change that health officials say has led to greater risk of overdose. And because crystal methamphetamine costs more, the police say thefts are increasing, as people who once cooked at home now have to buy it.
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"It's killing us, this Mexican ice," said Mr. Van Haaften, a former sheriff. "I'm not sure we can control it as well as we can the meth labs in your community."

The influx of the more potent drug shows the fierce hold of methamphetamine, which has devastated many towns once far removed from violent crime or drugs. As Congress prepares to restrict the sale of pseudoephedrine, the cold medicine ingredient that is used to make methamphetamine, officials here and in other states that have recently imposed similar restrictions caution that they fall far short of a solution.

"You can't legislate away demand," said Betty Oldenkamp, secretary of human services in South Dakota, where the governor this month proposed tightening a law that last year restricted customers to two packs of pseudoephedrine per store. "The law enforcement aspects are tremendously important, but we also have to do something to address the demand."

Here, officials boast that their law restricting pseudoephedrine, which took effect in May, has been faster than any other state's in reducing methamphetamine laboratories. Still, when Mr. Van Haaften, director of the Governor's Office of Drug Control Policy, surveyed the local police, 74 percent said that the law had not changed demand, and 61 percent said supply had remained steady or increased.
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A methamphetamine cook could make an ounce for $50 on a stovetop or in a lab in a car; that same amount now costs $800 to $1,500 on the street, the police say.

"Our burglaries have just skyrocketed," said Jerry Furness, who represents Buchanan County, 150 miles northeast of Des Moines, on the Iowa drug task force. "The state asks how the decrease in meth labs has reduced danger to citizens, and it has, as far as potential explosions. But we've had a lot of burglaries where the occupants are home at the time, and that's probably more of a risk. So it's kind of evening out."
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Some law enforcement officials say that addicts may find the crystal form more desirable. "If they don't have to mess with precursor chemicals, it's actually a bit easier on them, and safer," said Kevin Glaser, a drug task force supervisor for the state highway patrol in Missouri, which last year led the nation in methamphetamine lab seizures.

But the switch has also increased the risks. "People are overdosing; they're not expecting it to do this much," said Darcy Jensen, director of Prairie View Prevention Services in South Dakota. "They don't realize that that fourth of a gram they're used to using is double or triple in potency."

So the law restricting the sale of cold medicine has in effect caused me great trouble in purchasing cold medicine and increased my chances of being burglarized and increased the number of people addicted to meth. Brilliant work! Thanks!

Government Looking out for You

The IRS was caught not paying taxpayers their refunds because they were suspected of fraud. That's all well and good except for the fact that they didn't tell the affected taxpayers. In essence accusing taxpayers of a crime and not informing them of it. If a private enterprise such as Citibank froze your bank account because you were suspected of not paying your CitiCard credit card fees, there would be hell to pay from the government. But since it's a government mistake the IRS, out of the kindness of their hearts, are going to go ahead and tell the people they're suspected of fraud. I thought people were supposed to be innocent until proven guilty, it seems that that may be true unless it's a government agency doing the accusing. They'll decide if you're guilty and they'll take their sweet time doing it.

A Threat to the Campaign Law

The NYT tries to wax eloquent about why McCain-Feingold should be allowed to limit our free speech rights.

The lower court interpreted the Supreme Court's 2003 ruling to mean that all ads of this kind were restricted within the 60-day window, and that lower courts should not get involved in trying to separate acceptable ads from unacceptable ones. But the Supreme Court disagreed this week, saying that courts could hear "as applied" challenges like Wisconsin Right to Life's, and consider which ads were really no more than grass-roots lobbying.

There is nothing wrong with that in principle. But it is important that the courts develop a narrow and honest test for when advertisements are grass-roots lobbying. In this case, Wisconsin Right to Life was actively opposing Senator Feingold's re-election. It had supported candidates against him, and the ads it wanted to run right before his election were clearly intended to encourage people to vote against him. The claim that those ads were unrelated to opposing Senator Feingold's re-election is simply not credible.

If the courts create a big "grass-roots lobbying" loophole, it will free corporations and special interests to run phony "issue ads" that are actually a form of unregulated campaign contribution. That is not what Congress wanted when it passed McCain-Feingold, and it is not what the public wants today.

Shorter NYT: we'll tell you what you need to know. Those pesky people with money shouldn't be allowed to tell you their point of view. The media will cover the story.

There is a reason that Freedom of Speech is in the First Amendment, the framers of the Constitution thought it was pretty important. Limiting speech in the immediate runup to an election is probably not what the framers had in mind.

More Enron

Fortune has a good article outlining some of the alleged misdeeds and personalities involved in the Skilling and Lay case. This can serve as somewhat of a primer to understand the case. I know a lot of people see Lay as some sort of master criminal engaging in fraud at every step. I believe that he let his faith in the company get in the way of the facts and he was an ineffective leader because he couldn't see the truth. And I don't believe being ineffective or inept should be criminal.

What looks like deception may not amount to criminal fraud in a jury's eyes, whether because the details are simply too complex or because one thing is not really the same as the other.

Health Savings Accounts

Jane Galt asks an interesting question, "Who do HSA's hurt." The answer is anyone who is in favor of socialized medicine, because HSA's are a step toward a market solution instead of a step towards a government solution. Kevin Drum is predictably in hysterics over HSA's.

The fundamental idea behind HSAs is not to provide better healthcare, it's to provide less healthcare. Conservatives want you to think twice before spending a hundred bucks for your regular pap smear.

What Drum doesn't understand or believe is that if consumers, especially young consumers who are more likely to be candidates for HSA's, are encouraged to price shop, or make choices based on cash on hand, health care prices will go down for those in most need of health care. If consumers, especially young consumers who are more likely to be candidates for HSA's, are using typical insurance they are more likely to engage in unneeded or excessive treatment. HSA's relieve some of the demand for the more elective procedures such as annual pap smears, therefore reducing the price. As HSA's catch on and more people have had them for 10-20 years medical care will reach a tipping point where prices will level off or even decrease.

Is there a point in which medical care prices will decrease in a socialized medical system? I don't think proponents of socialized medicine would even think such a thing. What market has the government ever controlled that actually reduced costs? The government is simply not a good consumer.

As a consumer of health care I would like to point out one flaw in HSA's. I can't prefund my HSA, meaning that I can't on January 1 write a check to my HSA that will cover my bills for January. I have to fund it in equal increments over the course of the year and only have the catastrophic illness insurance without having a base amount. It's a flaw in the system if I were to have a hospital stay in the first couple of months of coverage under an HSA without adequate funds to pay for my hospital stay. I imagine that this little flaw can and will be corrected.

Enron Love

Three accomplishments Enron gave the business and utilities world. Enron was a completely financially dishonest company and are often portrayed as free marketeers run amok. However, their free market ideas did do some good for the country (as well as a lot of bad).

Abortion Fatigue

Thanks Jane!

I'm also sick of pretending that the abortion debate is the only important legal battle going on. It's not and I've quit caring.

Greed, Panic and Fear After Japan Market Crash

A Japanese businessman walks by a digital stock indicator in downtown Tokyo on Friday, after stocks rose moderately following a huge drop. (Koji Sasahara/AP Photo)

Is the caption above missing something, I don't know, anything? Like maybe, perhaps why is the dude walking around wearing a doctor's mask? Was the stock market crash in Japan so bad that people have to walk around wearing masks? Is this the way the Japanese walk around normally? Does this have anything to do with the Bird Flu? So many questions that the caption doesn't address.

Collaboration

Matt Yglesias brings up a point about collaboration that I agree with wholeheartedly. Just because you don't agree with someone on a strong majority of issues doesn't mean you can't work with them on issues you do agree with them. I think this is a problem with our two-party system that we have now. Democrats won't work with Republicans to find common ground on a seemingly apolitical issue simply because the Republicans want to drill in ANWR or some such nonsense. Republicans won't work with Democrats on the War on Terror because Democrats believe in abortion. Each group is only interested in scoring points with the electorate so their party can win the next election. It's to the point where Republicans put themselves ahead of the good of the country.

Sorry for the rant, but I disagree with Yglesias on just about everything. I just wanted to shout out that I agree with him.

Smoking: Worse than Rape

In response to the article in the Seattle Weekly about Salt Lake City on the Sound, the author received an email equating smoking to rape. Radley has the details.

Maryland the Mugger

George Will weighs in on the recently passed Maryland Wal-Mart bill.

In 1786 the Annapolis Convention, requested by Virginia and attended by only four other states, called for a second gathering to revise the Articles of Confederation in order to strengthen the federal government. Some revision: The second meeting became the Constitutional Convention. It scrapped the Articles, partly because the Founders were alarmed by states legislating relief of debtors at the expense of creditors, often in ways not easily distinguished from theft.
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The Constitution's foremost framer, James Madison, understood the perils of democracy at the state rather than the national level of an "extensive republic": State legislatures have fewer factions competing for favors than compete for Congress's favors. States, being smaller than the nation, have legislatures more easily captured by overbearing majorities. Madison would have understood what Maryland has done.

Organized labor, having mightily tried and miserably failed to unionize even one of Wal-Mart's 3,250 American stores, has turned to organizing state legislators. Maryland was a natural place to begin because it has lopsided Democratic majorities in both houses of its legislature.

Labor's allies include the "progressives" who have made Wal-Mart the left's devil du jour. Wal-Mart's supposed sin is this: One way it holds down prices (when it enters a market, retail prices decline 5 to 8 percent; nationally, it saves consumers $16 billion a year) is by not being a welfare state. That is, by not offering higher wages and benefits than the labor market requires. Labor's other allies are Wal-Mart's unionized competitors, such as, in Maryland, Giant Food, a grocery chain. These allies are engaging in what economists call rent-seeking -- using government to impose disadvantages on competitors with whom they are competing and losing.

Government acting as enforcer to allow the weak companies to compete is an affront to capitalism.

Eighty-six percent of Wal-Mart employees have health insurance, more than half through the company, which offers 18 plans, one with $11 monthly premiums and another with $3 co-payments. Wal-Mart employees are only slightly more likely to collect Medicaid than the average among the nation's large retailers, which hire many entry-level and part-time workers. In the past 12 months, Wal-Mart, the largest private employer in the nation and in 25 states, estimates that it has paid its 1.3 million employees $4.7 billion in benefits. That sum is almost half as large as the company's profits, which last fiscal year were $10.3 billion -- just 3.6 percent -- on revenue of $285 billion. Wal-Mart earns just $6,000 per employee, one-third below the national average. Anyway, Wal-Mart's pay and benefits are sufficient to attract hordes of job applicants whenever it opens a new American store, which it does once every three days.

Low gross margins, employee productivity lower than average and employees that are negligibly more of a burden on the state than other retail employees is a sure sign that Wal-Mart is not going to increase its health care expenditures.

Fortunately, as labor unions and allied rent-seekers in 30 or so other states contemplate mimicking Maryland, Wal-Mart can contemplate an advantage of federalism.

States engage in "entrepreneurial federalism," competing to be especially attractive to businesses. A Wal-Mart distribution center, creating at least 800 jobs, that has been planned for Maryland could be located instead in more hospitable Delaware.

So the Maryland legislature at the very least has cost Maryland 800 jobs. I would assume that there's going to be a large increase in self-checkout lanes in Maryland Wal-Marts as well as the other distribution centers being closed down. So the question is, are Marylanders better off with this law or worse off?

Meet the Prosecutors

These are the prosecutors that are going to attempt to take Skilling and Lay down. As I've written before, I think Causey is the key to getting Lay, if Causey doesn't have anything on Lay, Lay is not going to be convicted. Skilling worked too closely with Fastow to escape the fraud charges. So the prosecutors must have made the deal with Causey to get to Lay.

Why isn't Greta spending whole shows on this, instead of Natalee Holloway? It's much more interesting.

Salt Lake City on the Sound

Via Radley Balko comes this article from the Seattle Weekly about the Nannyists being in charge of Seattle. Anti-smoking laws, Anti-malt liquor laws and anti-stripping laws rule the political landscape in "progressive" Seattle. The author of the piece calls Seattle "Salt Lake City on the Sound".

This Washington state blogger is pretty proud of her state's smoking ban while being generally pretty liberal on other issues. If the market won't support anti-smoking establishments we'd better pass government ordinances to force everyone to have an anti-smoking establishment. We don't care about your rights is what dear Aunt Jenna seems to think.

Then comes her dim friend Captain Salty to the rescue. She can't argue her point because she knows of the flaws in her argument but Salty is too dim to see that he's an authoritarian.

These two are caricatures of liberals in America. They will castigate conservatives for their positions trying to legislate morality. But all they want to do is legislate healthism. Both positions are wrongheaded but that's what our two party system has brought us, big government set about to legislate positions they shouldn't be involved in. It's upsetting that neither side can or will see their hypocrisy.

Justice Thomas

In my previous post about the Oregon Assisted Suicide Case, I wondered how Clarence Thomas could have dissented. It turns out his was a protest vote upholding the precedent of Raich. From the WSJ editorial page:

n his own brief dissent, Justice Thomas cuts to the heart of the hypocrisy, pointing out that a mere seven months ago five of the six Justices in the majority in Oregon found broad federal authority under the same Controlled Substances Act to forbid the growth of medical marijuana, overruling a California law permitting the practice in Gonzales V. Raich.

Justice Thomas had argued for a more-limited federal authority in Raich, but in Oregon he seems to have cast what amounts to a protest vote for the minority. "I agree with limiting the applications of the CSA in a manner consistent with the principles of federalism and our constitutional structure," Justice Thomas writes. "But that is now water over the dam." In other words, he's not about to join the Court's liberals in ignoring their own precedents simply to get to their favored policy conclusion.

Once again, Clarence Thomas proves why he's a great supreme court justice. From Glen Whitman I found this key passage from Thomas' dissent:

I agree with limiting the applications of the CSA in a manner consistent with the principles of federalism and our constitutional structure. Raich, supra, at ___ (THOMAS, J., dissenting)... But that is now water over the dam. The relevance of such considerations was at its zenith in Raich, when we considered whether the CSA could be applied to the intrastate possession of a controlled substance consistent with the limited federal powers enumerated by the Constitution. Such considerations have little, if any, relevance where, as here, we are merely presented with a question of statutory interpretation, and not the extent of constitutionally permissible federal power. This is particularly true where, as here, we are interpreting broad, straightforward language within a statutory framework that a majority of this Court has concluded is so comprehensive that it necessarily nullifies the States’ “ ‘traditional . . . powers . . . to protect the health, safety, and welfare of their citizens.’ ”2 Raich, supra, at ___, n. 38 (slip op., at 27, n. 38). The Court’s reliance upon the constitutional principles that it rejected in Raich—albeit under the guise of statutory interpretation—is perplexing to say the least. Accordingly, I respectfully dissent.

So Thomas was somehow trying to bring more Federalism to the court at the same time as he was upholding a bad precedent.

Wal-Mart in New Hampshire

Maryland isn't the only state going after Wal-Mart. New Hampshire has joined the fray. Their law is much more likely to hit another company as they are mandating a 10.5% outlay for health benefits for companies employing 1500 New Hampsireites. The New Hampshire Union Leader opposes this legislation.

The bill would force companies with 1,500 or more employees to spend on employee health insurance an amount equal to at least 10.5 percent of their payroll. If they don't, they would have to pay the difference into a state health insurance fund.
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The legislation really is about three things: 1) hurting the left's favorite bogeyman; 2) moving closer to universal health care; and 3) creating "living" wages.

Activists cannot get the votes for creating universal state health care, so they are trying to use the law to force corporations to provide it themselves.

They also cannot get the votes to pass "living wage" laws, so they are trying to make companies raise employee compensation by paying more for health care.

Then they added this little nugget, similar to my "When in doubt, trust capitalism" saying:

It also makes the terrible mistake of substituting the judgment of individuals in the marketplace — corporate executives, employees and customers — for the judgment of lawmakers. That is rarely a good idea, and this bill is no exception.

Supreme Court Upholds Oregon Suicide Law

The Supreme Court upheld the Oregon assisted suicide law. I was afraid after Raich that we would just end up abolishing state governments and let the Feds take over and homogenize the country. What's interesting, though, is the most staunch defender of state's rights, Clarence Thomas, was on the other side of this one, voting to negate the Oregon law. It seems like the two cases are very similar and I don't know how Thomas can reconcile his conflicting votes.

TV Blogging

"24" started its new season last night. I had been anticipating the return of Jack Bauer, probably my favorite TV character of recent history. Normally, the show is so intense I have to prepare myself with either a glass of Scotch or bourbon. The show last night didn't really grab me the way previous seasons had done. Spoiler Alert!

I didn't anticipate President Palmer being shot and killed. But I did anticipate Tony's wife being blown up with a car bomb and then Tony getting blown up with an aftershock. It was kind of funny seeing Jack in a domestic situation again. He's completely not up to it. The new President is such a jackass it's hard to take him seriously and I really don't like Jean Smart. It's also kind of funny that it was so predictable that Jack's landlord/lover's kid is already involved in a hostage situation. He only learned Jack's real name 20 minutes earlier yet he's really learning what it means to be a Bauer.

I hope the show gets a little more suspenseful, which I think it will tonight.

Update: After the 3rd and 4th hour on Monday night, I'm hooked again. I'm glad Jack got to kill someone at the airport, I didn't think he would get a chance since he was tied up and everything. Sean Astin may end up ruining the show.

Stupid in America

I watched Stossel's show "Stupid in America" Friday night. Granted, it was not a very balanced news story and could have been marketed as the news opinion type show that it was, a nice rebuttal of the show can be found here. However, it was still informative and I enjoyed it. I wish Stossel wouldn't have put everything on the teacher's union because the education system is in shambles not necessarily because of teachers, but because of a systematic failure. Public schools have no incentive to teach your kids effectively. No one's going to lose their job if little Jimmy doesn't do well, no one's going to get a raise if little Jimmy does great. Teachers unions do not allow administrators to reward teacher achievement, let alone punish poor behavior. The school receives the same money every year based on how many kids live in the district and the state enforces where the kids go to school.

Would we allow the state to make a decision for us in any other area where there could be choice? I think not. The big fault of the teacher's union is in trying to prevent school vouchers and parental choice of where to send their children. We run into more problems trying to prop up bad schools than we would in allowing those schools to fail, like any other business (besides the airlines, which Congress typically don't allow to fail, but that's another story). Schools will adapt, bad schools will fail and the ones that are left will be continuosly improving.

When monopolies rule, there is little choice, and little gets done. In America the phone company was once a government-supported monopoly. All the phones were black, and all the calls expensive. With competition, things have changed — for the better. We pay less for phone calls. If we're unhappy with our phone service, we switch companies.

Why can't kids benefit from similar competition in education?

"People expect and demand choice in every other area of their life," Sanford said.

The governor announced his plan last year and many parents cheered the idea, but school boards, teachers unions and politicians objected. PTAs even sent kids home with a letter saying, "Contact your legislator. How can we spend state money on something that hasn't been proven?"

A lot of people say education tax credits and vouchers are a terrible idea, that they'll drain money from public schools and give it to private ones.

Last week's Florida court ruling against vouchers came after teacher Ruth Holmes Cameron and advocacy groups brought a suit to block the program.

"To say that competition is going to improve education? It's just not gonna work. You know competition is not for children. It's not for human beings. It's not for public education. It never has been, it never will be," Holmes said.

Why not? Would you keep going back to a restaurant that served you a bad meal? Or a barber that gave you a bad haircut? What if the government assigned you to "your" grocery store. The store wouldn't have to compete for your business, and it would soon sell spoiled milk or stock only high profit items. Real estate agencies would sell houses advertising "neighborhood with a good grocery store." That's insane, and yet that's what America does with public schools.

Chavous, who has worked to get more school choice in Washington, D.C., said, "Choice to me is the only way. I believe that we can force the system from an external vantage point to change itself. It will never change itself from within. … Unless there is some competition infused in the equation, unless that occurs, then they know they have a captive monopoly that they can continue to dominate."

Competition inspires people to do what we didn't think we could do. If people got to choose their kids' school, education options would be endless. There could soon be technology schools, science schools, virtual schools where you learn at home on your computer, sports schools, music schools, schools that go all year, schools with uniforms, schools that open early and keep kids later, and, who knows what else. If there were competition, all kinds of new ideas would bloom.

When in doubt, trust capitalism.

Shadegg

Stephen Moore at the WSJ is endorsing Rep. John Shadegg for House Majority Leader. I have to agree, he's the most anti-establishment guy running.

To be sure, Mr. Shadegg has the look of a decided underdog. He will take on party-heavyweights John Boehner of Ohio and the acting leader, Roy Blunt of Missouri. But for many of the new-generation, reform-minded House Republicans, Mr. Blunt is seen as too shackled to the K Street/DeLay money-machine to clean up the abuses of power that taint the party. He's an unapologetic supporter of earmarks (at least he's honest!) and was the whip who strong-armed a handful of conservatives to vote for the Medicare prescription drug bill with its multi-trillion dollar price tag. Mr. Blunt has sprinted into the early lead with a pitch that is pure horse-trading power politics -- of the kind that Republicans once denounced and which, thankfully, still repels some in the caucus. If he wins, the leadership team will be composed of the DeLay machine, minus only Mr. DeLay. Where the policy vision and voice for political reform will come from is anyone's guess. The Pelosi Democrats certainly won't complain.

Mr. Boehner, who has Sinatra good looks and style, is regarded as right-of-center on the ideological spectrum, but has never been active in the conservative movement. To his credit, he's pledged to dredge the algae-filled swamp of federal spending. In an interview last week, he derided the pork that keeps getting buried in appropriations bills. "We've become addicted to earmarks as if it were opium," he complained. Mr. Boehner will also resist the xenophobic anti-immigrant streak that has invaded the party, and which is the surest course for the GOP to alienate Asian and Hispanic voters, slow down the economy, and land the party back in the minority.

Still, it is Mr. Shadegg who is unquestionably the primary change-agent in this field. He wants the party, in effect, to make a declaration of independence from pork spending and the government-for-sale corruption that has become its abiding image. "The American people are with us on our substantive policy agenda and our Reaganite values, but are becoming repulsed by our behavior," he told me. With a truthful message like that, don't expect him to corral any votes from the Old Bull Republicans or the College of Cardinal appropriators who have turned pork into haute cuisine of late.

Win or lose, Mr. Shadegg's candidacy will be a measuring rod of just how much trouble congressional Republicans really think they're in. It will also serve as a leading indicator of whether House conservatives will devote the next nine months of this term to slamming the brakes on a domestic legislative policy that has careened off course. The era when Republicans promised to make government smaller and smarter by abolishing hundreds of obsolete federal agencies seems a distant memory now in this era of Bridges to Nowhere. In the last five years, Republicans have enacted the largest increase in entitlement spending in three decades, doubled the education budget, nearly tripled the number of earmarked spending projects, and turned a blind eye toward the corrosive culture of corruption on Capitol Hill that seems so eerily reminiscent of the final days of Democratic rule in the House.

If the Republicans vote for Blunt, they're clearly not interested in cleaning house, Boehner isn't much better. Shadegg would at least try to clean things up. He's also what you would think of if you were to try to remember the Contract With America Republicans. Shadegg has to be voted in to return to the House of '94 instead of the Republican version of the House of '93.

One wonders whether the young-gun conservatives in the House fully appreciate what's at stake here. Few current House members even remember that the first shots in the Republican Revolution of 1994 were fired in 1989 when upstart Newt Gingrich rallied the conservative troops in the House and shockingly defeated by one vote the Bob Michel-machine-candidate for Minority Whip (the #2 leadership perch). The conservatives for the first time in a generation had a foothold of power. Shortly thereafter, the power structure shifted again when free-marketer Dick Armey of Texas, a long time backbencher in the House, evicted another old bull Republican from the leadership team, Jerry Lewis of California. (It's a sign of the party's lost bearings that Mr. Lewis, the epitome of so much of what's wrong with the congressional Republicans, has been made appropriations committee chairman and has been even talked about as belonging back in the leadership.)

The Armey-Gingrich political coups were instigated by a gang of rebellious House conservatives and triggered a domino effect of momentous political changes. For years, Republican House leaders had suffered from Stockholm syndrome, becoming subservient to their captors, the Democratic majority. That gave way to Messrs. Gingrich and Armey devising a D-Day-type battle plan for the hostile takeover of the House in the '94 mid-terms. Its Republicans ran on Reaganite economics and a reform agenda of bringing squeaky clean ethics to Capitol Hill in the wake of House Democratic banking and post-office scandals. Delusional Democrats thought they could merely cover the reek of scandals with disinfectants and then move on -- a catastrophic blunder that Republicans may now be in danger of repeating.

Working Poor Build Wealth

During the election campaign of 2004, I remember several liberals and Democrats scoffing at Bush's idea of an Ownership Society. I, of course, am a big believer that with ownership comes wealth and the more the government allows us to own the wealthier we become as people. Then a couple of days ago I read this story in the WSJ.

In recent years, a growing number of state governments, nonprofit groups, foundations and private companies have been running pilot programs to induce poor and working-class Americans to save. The results, they say, are surprising: When participants get the right incentives and financial counseling, many open savings accounts, arrange for payroll deductions, and begin accumulating assets.
...
The programs are drawing support from both the left and the right. Advocates say they could become productive successors to liberal anti-poverty programs of the 1960s and conservative welfare reforms of the 1990s.

But proponents acknowledge it is difficult to persuade many poor people that they can afford to save, even with financial incentives. And rolling out such a program nationally would be expensive, costing about $40 billion over 10 years, according to one estimate.

Ms. Simmons says she was a "hope-to-die dope fiend" living in cardboard boxes on the streets of Los Angeles when she was arrested in 1998 for prostitution. Freed from prison after one year, she returned to her hometown, Philadelphia, and found low-paying work. With the help of a nonprofit agency that helps administer Pennsylvania's Family Savings Account Program, she got financial advice and opened an individual development account, or IDA.

The program offers to match participants' savings of up to $2,000 over three years with state and federal funds. Households with incomes of no more than twice the poverty level (about $40,000 for a family of four) are eligible. They must save at least $10 a week and attend a series of financial-planning classes. IDA savings must be used for college, job training, buying a home or starting a business.

By 2003, Ms. Simmons had saved $1,007. The program matched that amount, producing enough for the down payment on a $50,000 home from Habitat for Humanity.

There are more than 500 asset-building projects across the country, whose participants have opened more than 20,000 savings accounts. Thirty-three states support such programs on a small scale, using state funds and federal welfare-to-work subsidies for savings matches, and contracting with nonprofits to run the programs. Demonstration projects have also spread around the world from Canada to China. Great Britain last year became the first country with a national program of savings accounts for each child at birth.
...
Advocates of asset-building programs concede it is difficult to get low-income people to save. "The biggest hurdle is just getting them to believe they can save," says Chris Krehmeyer, executive director of a St. Louis nonprofit social agency, Beyond Housing/Neighborhood Housing Services. Given "the struggles of keeping the utilities on, paying your bills, keeping the car running and just dealing with life," he says, even $10 a week is a huge amount.

In Washington, support for a bigger federal role in asset-building programs for low-income Americans ranges from conservative Republicans such as Sen. Rick Santorum of Pennsylvania, former housing secretary Jack Kemp and former House Speaker Newt Gingrich, to left-of-center Democrats and potential 2008 presidential candidates Hillary Clinton and John Edwards.

Thus far, budget deficits and partisan politics have stymied advocates of a nationwide policy. During his 2000 presidential campaign, George W. Bush advocated fighting poverty "by building the wealth of the poor." He proposed a $1 billion tax credit for banks that match some savings deposits of low-income workers. As president, he didn't make the proposal a priority, and it died in the House, in part for reasons unrelated to the proposed credit.

In 2001, Congress created the Saver's Credit, the only federal savings incentive designed for low- and middle-income households. It reduces taxes on savings of up to $2,000 a year for people making less than $50,000 a year. But Americans who don't owe income taxes aren't eligible. About 40% of Americans don't earn enough to have an income-tax liability, according to the Retirement Security Project, an academic venture sponsored by the Pew Charitable Trusts.

The government spends about $150 billion a year on tax breaks to encourage retirement savings, which mainly benefit the affluent. About 70% go to the top one-fifth of earners, the Pew project concluded. Many simply shift existing savings into tax-favored accounts. The 40% of Americans who don't have tax liabilities do not qualify for these breaks. And most low-income workers do not have jobs that offer 401(k) retirement plans.
...
Numerous ideas have been floated for encouraging low-income workers to save more. Making enrollment in 401(k) plans automatic for new hires is one. Giving taxpayers the option of saving all or part of their annual tax refunds -- sometimes by offering them a financial incentive -- is another. Tests of that concept in Tulsa, Okla., by a community and academic team, and in St. Louis, by H&R Block and the Retirement Security Project, showed that some people were willing to save a portion of their refunds.

It's pretty clear that these programs designed to get poor people to save can and do work. The key, I believe, is getting financial counseling. I've long felt that personal finance should be a core class in high school curriculums across the country. Also, government sometimes works to provide disincentives to save.

One-third of U.S. households have no financial assets. An additional one-fifth have insignificant holdings. But households with about $2,000 or more in assets, including retirement savings, are ineligible for basic welfare programs, which provides a disincentive for the poor to save.

GWB didn't really push for the tax credit for banks to match low income savers' savings, but I'm sure the Democrat's argument would have gone something like, "this is a tax credit for the rich...trickle down economics doesn't work...give the tax credit to the poor". Those are fine arguments but GWB would have been villified for the proposal.

I hope that these programs get much bigger and affect many more poor households. The key to alleviating poverty is giving people ownership over their lives instead of living off government handouts such as government housing, food stamps and welfare. The talking points should be jobs, home ownership and savings.

Notwithstanding...

Doesn't this kind of make the whole checks and balances thing kind of moot. Canada's quirky. It reminds me of the scene in "A Few Good Men"

Lt. Weinberg: "I strenuously object?" Is that how it's done? Hm? "Objection, your Honor." "Overruled" "No, no. I STRENUOUSLY object." "Oh. You strenuously object. Then I'll take some time and reconsider."

Liberty

Michael Kinsley has a nice editorial in the WaPo today.

Most of us are not Patrick Henry and would be willing to lose a great deal of freedom to save our lives. It's not even necessarily deplorable. Giving up a certain amount of freedom in exchange for the safety and comfort of civilized society is what government is all about, according to guys like Hobbes and Locke, who influenced the Founding Fathers. And that's good government. Many people live under bad governments that take away more freedom than necessary, and these people choose not to become heroes. That is not a contemptible choice, especially if we're talking France or maybe even China, and not Stalin's Russia or Hitler's Germany. The notion that freedom is indivisible -- if you lose a little you have lost it all; if one person is deprived of liberty then we all are -- is sweet, and useful for indoctrinating children. But it just isn't true.
...
Arguing for abstractions while the other side argues for practicality is, to some extent, just a burden that civil libertarians -- or even liberals in general -- will always have to bear. In the old days, liberals at least had the luxury of the easy, tempting argument in the economic sphere -- "here is some money from the government" -- while conservatives were stuck with long-term abstractions such as fiscal responsibility. Now conservatives promise tax cuts starting yesterday and liberals are left defending big government and fiscal responsibility as well.

The good guys need to frame their argument in ways that don't require people to be heroes -- to give up something practical and immediate, such as safety from terrorism, in exchange for an abstraction, such as liberty, especially the liberty of someone else (like a young Arab swept off the streets of Baghdad and locked up in a secret prison).

I disagree with much of what Kinsley writes and believes, but he's a good writer and his opinions are well thought out and clear. This editorial points out the main reason we lose liberty every day, Abstractions vs. Practicalities. Abstractions are hard to get someone to care about when they're trying to solve a specific problem. The main abstraction I see is the law of unintended consequences, but freedom is often considered an abstraction. The Wal-Mart bill from the previous post is an example, as are anti-smoking bills. Kinsley does a good job of pointing out the difficulty liberals (those he's concerned about) and civil libertarians (those I'm concerned about) have to overcome these Abstractions vs. Practicalities.

Wal-Mart Bill

Whaaa?
How could this happen? I can't believe a state government would try to dictate how much a private company must spend on health care for it's workers. Next they'll try to come up with how much they should be paid and how many hours they can work. O0ps they already do that don't they? This kind of thing has to stop somewhere.

Critics called it a dangerous precedent that ultimately would cost Maryland jobs.

It's nice that they threw in that sentence.

Update: The MD legislature overrode the governor's veto. Now this statute is law. WaPo has a nice editorial here.

The Maryland bill is a legislative mugging masquerading as an act of benevolent social engineering. It is true that skyrocketing health care costs and the growing ranks of uninsured workers represent a burden on the state's health system that other corporations in effect help subsidize. But Wal-Mart employees, like the employees of other large retailers that employ many low-wage workers, are only slightly more likely to collect Medicaid benefits than the national average. And unlovable as it may be, Wal-Mart serves low- and middle-income people, both by creating entry-level and part-time jobs for people who might otherwise be unemployed and by saving its moderate-income customers a staggering amount of money.

The legislation has prompted imitators in 30 states. Where it passes, no one should be surprised by unintended consequences. Wal-Mart and other targeted firms may shift jobs or planned facilities elsewhere. Many low-wage younger workers may still opt out of health coverage even if offered a more generous plan. In trying to address the national problems of health care and uninsured workers, lawmakers in Maryland and other states could inflict on themselves a new set of problems while failing to solve the underlying one.

Travels with Barley

I just finished reading "Travels with Barley" last night. In the book, author Ken Wells takes a trip through the US along the mighty Mississippi river, which he dubs the river of beer, trying to find the perfect beer joint. I had been intrigued by this book for several months and finally got it for Christmas.

My marketing tagline for the book would be "This book is like having a conversation with someone who is high on marijuana, it may take diversions but it will eventually pull together to produce a coherent story." Half of the book (every other chapter) explored beer culture, mostly from the homebrewer and microbrewer perspective. There was some interesting beer history and brewing methods explored in these chapters and they tended to be the more entertaining chapters. The chapters where the author was travelling along the river of beer were not as intriguing. He seemed proud that he did no planning of his trip and ended up closing his eyes and pointing at a map to find out where he was going to drive the next day. Once there he just asked people where he could go to get a beer. Sometimes this resulted in success, but mostly it ended up in some sort of ramshackle shack with few customers and much filth. It didn't seem like he really found one great beer joint, mostly just a collection of off-the-beaten-path bars, which are fine but not the reason I was interested in reading the book.

Mostly, this book was a disappointment, but it was mildly entertaining and the subject matter, beer, is always interesting.

Next up is "The Tipping Point", by Malcolm Gladwell. I really enjoyed "Blink" by the same author and my expectations for "The Tipping Point" are high.

For the Children

Just something to remember next time someone invokes the "it's for the children" argument when they want to expand government.

The audit comes on the heels of a separate analysis documenting that as many as 36 children died of abuse or neglect while receiving services from the Maryland Department of Human Resources or within a year of leaving the state's care.


Those deaths, between 2001 and 2004, account for about 30 percent of all child-abuse fatalities in Maryland in that time, raising concerns among child advocates and lawmakers about whether the agency assigned to protect children has let some slip through the cracks.
...
One of those who will oversee that effort, Del. Talmadge Branch (D-Baltimore), said this week that he is shocked that nothing has been done to resolve the agency's chronic problems.

"What is it that's going on over there?" asked Branch, who is vice chairman of the House Appropriations Committee. "We need someone closely looking at the causes of these deaths and focusing on that to find measures that might prevent any more of them."

Branch said he was particularly concerned about the audit's finding that social workers failed to make monthly visits to check on children under their supervision.

"Using telephone calls is not working," Branch said. "We created a state law that said they had to go out and see these children face to face, and they're not complying with it. I don't know what their thinking is, but certainly, this is not working."

People like to point out market failures but gloss over government failures. It's important to shine just as much light on government failures.

Millionaire Shocker

Add another millionaire to the list of Shocker millionaires. I'm glad Pelfrey had a poor senior year at Wichita Heights which caused him to fall in the draft to the ninth or tenth round. After fielding clearly unacceptable offers he decided to forego pro ball and joined the Shockers and pitched at an All-American level for 3 years upping his draft status to ninth overall. I hope he performs just as well in a Mets uniform.

TV Blogging

I watched an episode of "Criminal Minds" on the DVR last night. "Minds" is a mildly entertaining show that we record from time to time. The episode I watched (I have no idea of the original air date) was about some sniper who was shooting people in parks (similar to the beltway sniper). The only reason I bring this show up is there was a scene where it was integral that the FBI profilers find out who a reporters source was for a story. In the confrontation with the reporter the FBI profiler told the reporter that they considered the sniper a terrorist and the FBI could hold the reporter indefinitely under the Patriot Act until they got the information they wanted from the reporter. I know it's only a silly TV drama but I have to believe there's a kernel of truth to the idea that the FBI and other law enforcement agencies invoke the Patriot Act to scare the wits out of suspects and witnesses they're interviewing.

We recently purchased season 1 of "The O.C.". Neither my wife nor I had seen any episode of "The O.C." but we were kind of interested in it. So we got it and started watching. I can't believe no one told me how extremely fabulous and funny this show is. Adam Brody who plays Seth Cohen is like a young VV (Vince Vaughn). He may be the funniest character on TV since George Costanza. Seriously every part of this show is great, I can't believe I haven't been watching.

Job Insecurity

Are we more insecure in our jobs than previous generations? Harold Meyerson points to a study that says we sure do feel more insecure in our jobs. Russell Roberts took exception to this in a kind of hamfisted way, basically saying that people shouldn't feel much job insecurity because they're more likely to be able to find a job in a short amount of time. But, his argument falls a little flat because he has tenure and is in a job that would be easy for him to find elsewhere. That leaves the rest of us who don't have tenure and compete with thousands of other professionals for the same job.

Sebastian Mallaby takes a better approach than Roberts. He uses real world statistics that show that job insecurity had risen temporarily around 1990 but fallen again. Also just about the same percentage (just over 50%) of men who neared retirement in 1969 and 2002 had been with a single employer for at least 20 years.

Now, there seems to be a disconnect between what is actually happening in the United States employment picture with how Americans feel about their employment situation. I think a big portion of that comes from the way offshoring is portrayed in the media. It certainly seems as though everyone's job, particularly those in IT, are up for grabs by Indian and Chinese companies. However, while some jobs certainly are disappearing, that number is almost trivial in the grand scheme of things and other jobs are being created to pick up the slack.

Another factor may be that employees are more empowered to take control of their careers than in previous generations. Younger people are no longer conditioned to think that they will be with their company for their entire career. They're responsible for continuing to find jobs to further their career. This empowerment may cause some people discomfort and worry that their current jobs won't exist in 5 years. That's probably true, but that is a function of a dynamic economy.

As I mentioned in my review of Cowboy Capitalism I'm always leery of studies that draw conclusions about a state of affairs by using opinion surveys instead of real world data. Of course sometimes real world data is hard to come by, but, employment data is not. And the employment data backs up the fact that Americans have as much job security as they have in past generations.

Russell Roberts also has a follow up post.

Yuck

I just threw up in my mouth a little bit.

Korean Cloning

Korea spent $65 million on Dr. Hwang's laboratory which he used to fabricate evidence that he had cloned human cells. He also used 2061 human eggs and produced no real results. However, there's still no mention of focusing funding on adult stem cells, which actually have worked. No, the focus of the article seemed to be on the companies that would be back in the game for embryonic stem cells. I did find this little nugget:

Dr. Hwang's escapade may have prevented other researchers entering the field of human cloning because he seemed to have it all sewn up. "I have to admit that I decided not to push the efforts here at Stanford because it would have been almost unethical to work with human eggs if he had made the process so efficient," said Dr. Irving Weissman, a leading stem cell researcher.

I'm not that big on the morality issue involving human embryos, but even some scientists feel a little skeevy about it.

Belafonte and Robertson

Harry Belafonte apparently opened his mouth again and said something stupid. Belafonte calling Bush "the greatest terrorist in the world" while in Venezuela is a little bit worse than Pat Robertson saying that Sharon's stroke was God's punishment for dividing up God's land. At least Robertson said it on his own property and in his own country. Of course we should pay no attention to anything these guys say.

Child Booster Seats

This article in the KC Star should be used as evidence that newspapers are not straight down the middle in their reporting. Kansas lawmakers are trying to decide whether it should mandated by law that children under the age of 7 be required to ride in a booster seat. Then the article cites several statistics saying that booster seats are much safer than just the use of regular seat belts.

This year, as he has for most of the last five years, Vickrey is supporting a bill in the Kansas Legislature that would require children who have outgrown child-safety seats to ride in booster seats for a few years. Similar bills also have been introduced once again into the Missouri General Assembly.

In the past, opponents have taken issue with the cost of booster seats — they’re available for $10 or $20 or even free in some places — or have bristled at the government intruding in one more aspect of their lives.
...
“We know that motor-vehicle crashes are the biggest single killer of children ages 4 to 8,” said Cindy D’Ercole, a lobbyist for Kansas Action for Children.

Vehicle accidents account for about 40 percent of the deaths of children ages 1 through 14. They kill about 1,800 children younger than 16 each year and injure 280,000.
...
Last year the Kansas Department of Transportation stationed observers throughout the state in places where they could look into slow-moving vehicles to see whether children were properly restrained. They estimated that 81 percent of children from birth to 4 years of age were buckled up, along with 49 percent of children ages 5 through 9, and 46 percent of children ages 10 to 14. (This would include car seats, booster seats and seat belts.)
...
Legally requiring booster seats is important because parents often model their own behavior after the law, Durbin said. Even if their pediatricians recommend booster seats, he said, parents tend to think, “If it’s not in the law, it must not be important.”

Had this article not been in the KC Star and had I not recently read Freakonomics, I may have fallen hook, line and sinker for the notion that booster seats save lives. I certainly wouldn't have been in favor of making a law that makes parents' behavior criminal. I also remembered that several months back I read that booster seats weren't the child safety panacea they are marketed to be.

Sure enough Freakonomics had an article in the New York Times Magazine in July citing evidence supporting my thoughts.

They certainly have the hallmarks of an effective piece of safety equipment: big and bulky, federally regulated, hard to install and expensive. (You can easily spend $200 on a car seat.) And NHTSA data seem to show that car seats are indeed a remarkable lifesaver. Although motor-vehicle crashes are still the top killer among children from 2 to 14, fatality rates have fallen steadily in recent decades -- a drop that coincides with the rise of car-seat use. Perhaps the single most compelling statistic about car seats in the NHTSA manual was this one: ''They are 54 percent effective in reducing deaths for children ages 1 to 4 in passenger cars.''

But 54 percent effective compared with what? The answer, it turns out, is this: Compared with a child's riding completely unrestrained. There is another mode of restraint, meanwhile, that doesn't cost $200 or require a four-day course to master: seat belts.

For children younger than roughly 24 months, seat belts plainly won't do. For them, a car seat represents the best practical way to ride securely, and it is certainly an improvement over the days of riding shotgun on mom's lap. But what about older children? Is it possible that seat belts might afford them the same protection as car seats? The answer can be found in a trove of government data called the Fatality Analysis Reporting System (FARS), which compiles police reports on all fatal crashes in the U.S. since 1975. These data include every imaginable variable in a crash, including whether the occupants were restrained and how.

Even a quick look at the FARS data reveals a striking result: among children 2 and older, the death rate is no lower for those traveling in any kind of car seat than for those wearing seat belts. There are many reasons, of course, that this raw data might be misleading. Perhaps kids in car seats are, on average, in worse wrecks. Or maybe their parents drive smaller cars, which might provide less protection.

But no matter what you control for in the FARS data, the results don't change. In recent crashes and old ones, in big vehicles and small, in one-car crashes and multiple-vehicle crashes, there is no evidence that car seats do a better job than seat belts in saving the lives of children older than 2. (In certain kinds of crashes -- rear-enders, for instance -- car seats actually perform worse.) The real answer to why child auto fatalities have been falling seems to be that more and more children are restrained in some way. Many of them happen to be restrained in car seats, since that is what the government mandates, but if the government instead mandated proper seat-belt use for children, they would likely do just as well / without the layers of expense, regulation and anxiety associated with car seats.

Levitt and Dubner suggest that the best alternative is lap and shoulder belts that adjust to smaller children.

George Bush Hurricane

Hilarious!
To steal the joke from "The Soup", my tickle me Kanye says the same thing.

Florida School Vouchers

Kevin Drum, who's one of the few on the left who doesn't outright dismiss charter schools or vouchers, weighs in on the Florida Supreme Court decision to strike down Jeb Bush's school voucher law.

I'm a cautiously optimistic fan of charter schools, which seem to provide a decent avenue for experimenting with different ways of teaching kids while still providing common-sense levels of accountability. Voucher schools typically don't, and while some percentage of inner city schools are going to fail no matter what, there's a big difference between schools that are trying and failing and schools that fail because they're essentially allowed to get away with fraud.

What Kevin's missing seems to be that schools receiving voucher students are accountable to someone, the parents of the students enrolled in the school. Conservatives aren't trying to have it both ways, they're just shifting the feedback mechanism from government to parents, where it should be. If parents had numerous choices as to where they can send their students, the government wouldn't need to hold individual schools accountable. That mechanism is not currently in place.

On Government

can anybody really say that the risk of too little government is greater than the risk of too much? The dangerous idea we all need to learn is that the more we limit the growth of government, the better off we will all be.

That from Matt Ridley via Cafe Hayek. Don Boudreaux has 2 posts regarding Edge's list of Dangerous Ideas. The first linking Adam Smith's invisible hand to Charles Darwin's natural selection. And the second with the above quote, basically saying that with wealth comes more government and we must not be complacent in stopping government's growth.

Radley Reductio

Radley's Fox column today lists his predictions for 2006. If you're a regular reader of his blog, The Agitator, you'll be expecting the punchline at the bottom. But, if you don't read him you may surprised.

Economic Freedom

The rankings are in, and Hong Kong was deemed the most free economically. Big surprise. I was surprised to see Iceland at number 5, mostly because I know very little about Iceland. Estonia, which I happen to know quite a bit about, came it at number 7. Once Estonia got out of the grasps of the Iron Curtain, they went about reforming their economy with a gusto few countries could duplicate. It's a wonderful country to do business in. The biggest surprise is Poland, which also threw off the chains of Communism with gusto but languished in recent years under the rule of some left of center leaders, coming in at 41 just ahead of the People's Republic of France. Hopefully, their new leader will turn things around and get them into the top 15.

Know thy Neighbor

Give this kid an A. Great website that allows you to know where your neighbors are sending their campaign contributions. Just type in your zipcode and it will generate a Google Map (Double True) with all of the political contributions from 2004 in that zip code.

TV Blogging

I watched "inJustice" off the DVR last night. I'm a sucker for that type of show since I think people convicted on circumstantial evidence shouldn't really be in prison. Not that they didn't commit the crime, but the state didn't really prove the person committed the crime (see the ex fertilizer salesman). Call me a softie, but I'd rather not have innocent people in prison. That's where inJustice comes in.

It was a pretty good show, although Kyle McClachlan's hair is downright distracting. As was trying to figure out where I knew the female lead from. Turns out it was Audrey from "Vegas Vacation". I went ahead and set the DVR to record the series so I don't miss any.

Watching the show after reading this post on Cafe Hayek really made me think that there could be some really high priced attorneys in the field of saving those that were wrongly convicted if lawyers would donate money to organizations like the National Justice Project depicted on the show instead of doing pro bono work on their own.

Photograph

I generally don't like Jay Leno, but sometimes his stuff with regular people on the street is funny. Witness the photo booth. My favorite is the kissing one (kiss her like you did when you were in love) followed by the guy stripping down to his underwear.

Teacher Unions

The WSJ has an editorial today that does some reporting on what political donations the NEA is making. Apparently, there's a new Federal law that requires unions to disclose where their taxpayer dues are going when it relates to political donations. The NEA seems to be funding some pretty left-wing causes that have very little to do with teachers and schools:

Many of the organization's disbursements -- $30,000 to the Central Intercollegiate Athletic Association, $122,000 to the Center for Teaching Quality -- at least target groups that ostensibly have a direct educational mission. But many others are a stretch, to say the least. The NEA gave $15,000 to the Human Rights Campaign, which lobbies for "lesbian, gay, bisexual and transgender equal rights." The National Women's Law Center, whose Web site currently features a "pocket guide" to opposing Supreme Court nominee Sam Alito, received $5,000. And something called the Fund to Protect Social Security got $400,000, presumably to defeat personal investment accounts.
...
There's been a lot in the news recently about published opinion that parallels donor politics. Well, last year the NEA gave $45,000 to the Economic Policy Institute, which regularly issues reports that claim education is underfunded and teachers are underpaid. The partisans at People for the American Way got a $51,000 NEA contribution; PFAW happens to be vehemently anti-voucher.

The extent to which the NEA sends money to states for political agitation is also revealing. For example, Protect Our Public Schools, an anti-charter school group backed by the NEA's Washington State affiliate, received $500,000 toward its efforts to block school choice for underprivileged children. (Never mind that charter schools are public schools). And the Floridians for All Committee, which focuses on "the construction of a permanent progressive infrastructure that will help redirect Florida politics in a more progressive, Democratic direction," received a $249,000 donation from NEA headquarters.

If you want to check what your favorite union is doing you can go to the Department of Labor website and check out that union's report. Warning: This is a government website and much like the Bureau of Labor Statistics website is not very intuitive and very difficult to find what you're looking for. I'm sure there's some enterprising young soul out there that could research these things and report on them. I'm not that person.

Blogging Notes

I hate spell checking software and rarely use it, however, I also don't like putting out a post with a misspelled word so I use Blogger's spell check when I put up something with quite a few words. Anyway, when checking the last post, Blogger spell check doesn't like the word 'blog' and wants to replace it with 'bloc'. You would think blogging software would recognize the word blog.

Also, my wife has started a blog where she just posts pictures of our twin girls for family and friends to see. As I was talking to my parents the other day they mentioned her blog and commented that before they had seen my wife's blog they didn't know what a blog was. They had discussed it before and determined it was some kind of computer virus. I would think they would have known since they had watched Dan Rather almost every night for 25 years.

Global Warming - More Good Than Bad

Coyote Blog has a long thoughtful post about global warming and what should or shouldn't be done about it. He makes a similar point that I would make, what's so bad about global warming if it is occurring at all? And is that so bad that we shold grind the world economy to a halt so we can slow global warming?

Millions of people in the world today die prematurely for basically being poor. These deaths come about because of AIDS, malaria, starvation or many other causes, but the root cause is poverty. By simply allowing the world economy to expand, we can alleviate a lot of the poverty in the world. However, if we grind the world economy to a halt or very slow growth, we have just put a death sentence on a good amount of people in Africa and Asia. To me that would be a tragedy.

Read the whole Coyote Blog post. One little tidbit which I found funny but I'm sure the environmentalist crowd would pick up on and deem the whole post stupid and ludicrous is:

By the way, though I know this will really mark me as an environmental Luddite, does anyone really believe that in 100 years, if we've really screwed ourselves by making things too hot, that we couldn't find a drastic way to cool the place off? Krakatoa's eruption put enough dust in the air to cool the world for a decade. The world, unfortunately, has a lot of devices that go bang laying around that I bet we could employ to good effect if we needed to put some dust in the stratosphere to cool ourselves off. Yeah, I am sure that there are hidden problems here but isn't it interesting that NO ONE in global warming, inc. ever discusses any option for solving warming except shutting down the world's economies?