Archives: January, 2010

Tuesday Links

  • Americans tuning out the State of the Union: “When Obama had to make way for ‘Lost,’ some lamented the fact that many Americans preferred trash TV over presidential enlightenment. But the public’s lack of interest in the SOTU is actually a sign of political health.”

Groopman on How Behavioral Economics Undermines the Case for Central Planning

In The New York Review of Books, oncologist and author Jerome Groopman delivers a stunning rebuke to those in the Obama administration (read: OMB director Peter Orszag) who think the federal government can improve health care quality by telling doctors how to practice medicine:

in the Senate health care bill…Doctors and hospitals that follow “best practices,” as defined by government-approved standards, are to receive more money and favorable public assessments. Those who deviate from federal standards would suffer financial loss and would be designated as providers of poor care…

Over the past decade, federal “choice architects”—i.e., doctors and other experts acting for the government and making use of research on comparative effectiveness—have repeatedly identified “best practices,” only to have them shown to be ineffective or even deleterious.

For example, Medicare specified that it was a “best practice” to tightly control blood sugar levels in critically ill patients in intensive care. That measure of quality was not only shown to be wrong but resulted in a higher likelihood of death when compared to measures allowing a more flexible treatment and higher blood sugar. Similarly, government officials directed that normal blood sugar levels should be maintained in ambulatory diabetics with cardiovascular disease. Studies in Canada and the United States showed that this “best practice” was misconceived. There were more deaths when doctors obeyed this rule than when patients received what the government had designated as subpar treatment (in which sugar levels were allowed to vary).

That’s just one of many examples Groopman offers of where government planners have gone awry.  He concludes:

Ironically, the failure of experts to recognize when they overreach can be explained by insights from behavioral economics…

The care of patients is complex, and choices about treatments involve difficult tradeoffs. That the uncertainties can be erased by mandates from experts is a misconceived panacea, a “focusing illusion.”

Come to think of it, Groopman makes much the same case as I did in my article, “Pay-for-Performance: Is Medicare a Good Candidate?” (Yale J. Health P. Law & Ethics, Vol. 7, issue 1: Winter 2007): evidence-based medicine is essential, but variation in disease burden and patient preferences (read: values) makes it impossible for central planners to define quality accurately.

Read the whole thing.

Data Privacy Day’s Man About Town

Betcha didn’t know that January 28th is Data Privacy Day. That’s the day on which it’s customary to give gifts of cash and money to your favorite privacy advocate. No, not really. Though Hallmark hasn’t gotten a hold of it, it is a day on which some extra attention gets paid to privacy issues.

I’ll be speaking at two events coinciding with Data Privacy Day. On Wednesday, I’ll be speaking at the 2010 Internet Data Privacy Colloquium put on by a group called Dialogue on Diversity. Register here.

And on Thursday I’ll be speaking at an event put on by the Future of Privacy Forum called “Online Privacy: Your Reputation is ON the LINE.” (Get it? “ON the LINE”? Online? We’re talkin’ computers, folks.) You can register for it on the event’s page.

There you have it! Data Privacy Day! The one day this year, among many, that you should lavish your favorite privacy expert with gifts and praise. And gifts.

Obama the Deficit Peacock

Last week the Democratic-friendly Center for American Progress published an essay entitled: “How to Spot a Deficit Peacock: Four Ways to Tell When Someone Isn’t Serious About the Deficit.” According to the author, “Deficit peacocks like to preen and call attention to themselves, but are not sincerely interested in taking the difficult but necessary steps toward a balanced budget.”

#2 on CAP’s list is particularly interesting given that President Obama is reportedly going to propose a three-year freeze on non-defense discretionary spending in his upcoming budget:

Beware anyone offering easy answers. We face a very large budget gap over the coming decade, and the scale of the problem is such that no one solution is going to solve it all. It is going to take a mix of increased revenues, spending reductions, and improved government efficiency to get our fiscal house in order. Those who claim that we could get the budget back to sustainability if we only cut out earmarks, or say that the solution is to simply freeze discretionary spending, are just peddling fiscal snake oil.

If freezing discretionary spending is “peddling snake oil,” what does the CAP consider proposing to freeze only the non-defense portion of it?

Although I want to give the administration credit for proposing to at least freeze something, it’s too little too late. The Washington Post, which spoke with senior administration officials on the details, says that “the freeze would shave no more than $15 billion off next year’s budget.” That’s chump change compared to the president’s $787 billion stimulus bill and $900 billion for health care reform. And as I warned in December, any new-found “austerity” on the part of the president would be a political sleight of hand:

The “minibus” appropriations bill signed by the President last week jacked up funding by a combined 8 percent for programs ranging from education to housing to transportation. And that’s at a time when inflation is low. Further, funding hasn’t been passed yet for the president’s recently announced troop surge in Afghanistan, which will cost around $40 billion per year.

President Obama will be probably be announcing in his new budget a FY2010 deficit that’s even larger than FY2009’s massive $1.4 trillion deficit. He’s blowing the bank on his stimulus bill, giant health care bill, and large increase in FY2010 appropriations. He’s also looking at the polls, which show his plunging popularity and rising concerns over federal spending and debt.

He’s got to pretend to introduce an “austere” budget for his political survival and the political survival of Democrats up for election next year. That’s why I’m wondering whether the Democrats are purposely jacking up FY2010 spending so high so that they can show a freeze or even “cuts” for FY2011.

Today the Congressional Budget Office released its budget outlook for the next ten years. One paragraph in particular puts the president’s proposed deficit-reduction effort in context:

Those accumulating deficits will push federal debt held by the public to significantly higher levels. At the end of 2009, debt held by the public was $7.5 trillion, or 53 percent of GDP; by the end of 2020, debt is projected to climb to $15 trillion, or 67 percent of GDP. With such a large increase in debt, plus an expected increase in interest rates as the economic recovery strengthens, interest payments on the debt are poised to skyrocket. CBO projects that the government’s annual spending on net interest will more than triple between 2010 and 2020 in nominal terms, from $207 billion to $723 billion, and will more than double as a share of GDP, from 1.4 percent to 3.2 percent.

In the president’s first year in office, he continued the Bush spending spree. He supported jacked-up appropriations, and he’s proposing more defense and entitlement spending. And now he proposes a non-defense discretionary freeze with savings that would pale in comparison to the rising cost of financing the federal debt. Calling the president a “deficit peacock” would probably be too kind.

In Before the Ban

From the Washington Post:

Travel along a two-block stretch of Central Avenue in Prince George’s County, and you’ll find a staggering 11 fast-food restaurants.

For community activist Arthur Turner and state Sen. David C. Harrington (D-Prince George’s), the strip is evidence of the proliferation of burger joints and Chinese takeouts in the county, especially in poorer, inner Capital Beltway communities.

Pointing to studies that rank Prince George’s residents among the least healthy in Maryland, Turner and Harrington want to limit new fast-food restaurants in the county, a far stricter approach than what has been enacted in such places as New York City and Montgomery County, which banned the use of trans fats in those establishments…

“Our county is inundated with unhealthy food choices,” Turner said. “In some areas, if someone wants a healthy choice, there are no options. We want healthy options in our community.”

Opponents of such efforts say that what people eat is a matter of personal choice and that it should be up to the free market to determine which restaurant goes where…

Turner said that his group identified Panera Bread and Chipotle as preferable alternatives to a fast-food burger restaurant and that he plans to seek similar compromises with other developers.

Given the weak correlation between dieting and long-term weight loss, and the very, very weak correlation between dieting and the marginal difference between Chipotle and McDonald’s, basically all that we have here are politicians and activists remaking the community to suit their personal tastes, as if Prince George’s County were just SimCity with slightly cooler graphics.

My prediction: This is a very good deal for any fast food restaurant that gets in before the ban.

‘Avatar’ Is about Property Rights

In the Los Angeles Times today, I write about “Avatar”, which has just become the biggest-grossing movie in Hollywood history, and how conservatives have missed the issue at its core:

Conservatives see this as anti-American, anti-military and anti-corporate or anti-capitalist. But they’re just reacting to the leftist ethos of the film.

They fail to see what’s really happening. People have traveled to Pandora to take something that belongs to the Na’vi: their land and the minerals under it. That’s a stark violation of property rights, the foundation of the free market and indeed of civilization….

“Avatar” is like a space opera of the Kelo case, which went to the Supreme Court in 2005. Peaceful people defend their property against outsiders who want it and who have vastly more power. Jake rallies the Na’vi with the stirring cry “And we will show the Sky People that they cannot take whatever they want! And that this is our land!”

Economists may wonder about the claim that “Avatar” is the highest-grossing film of all time. The Hollywood Reporter estimates that so far it may only have sold half as many tickets as the 1997 “Titanic,” and Box Office Mojo says that adjusted for inflation “Gone with the Wind” remains the movie with the highest U.S. revenue, followed by “Star Wars.”

Obama’s Dilemma

Today Politico Arena asks:

State of the Union:  What Should Obama Say?

My response:

Obama’s in a difficult spot:  His head tells him to tack right, but his heart’s not in it – and he’s not the first Democrat to be in that spot.  That’s brought out today in a CNN Opinion piece, “When liberals revolt,” written by Arena’s (and Princeton’s) Julian E. Zelizer.  Tracing similar dilemmas that Johnson, Carter, and Clinton faced, Zelizer shows how they all paid a price for tacking right, which it looks like Obama may do.  Johnson faced primary challenges that led him to withdraw from the 1968 race.  Carter was challenged by Ted Kennedy.  He prevailed; but weakened, he then lost to Reagan in 1980.  And Clinton’s move to the center after the disastrous 1994 midterm elections helped him win reelection, Zelizer argues, but it also left him with a thin legislative record on domestic policy.

In short, moving right has its costs, Zelizer claims.  Many liberals are “deeply unhappy with the president, believing that he has already drifted too far away from the promises that animated his supporters in 2008.”  He’ll need those liberals in 2010 and 2012.  Pointing to the “long tradition of Democratic presidents taking the left for granted at a cost to their administrations,” Zelizer notes that they learned “that the ire of the left – a constituency that is very vocal, highly mobilized and politically engaged – can cause enormous damage.”

That it can.  But can the left do more than cause enormous damage?  In particular:  Can it govern?  Zelizer cites Ted Kennedy castigating Carter, saying that ”the Democratic Party needed to ‘sail against the wind’ of conservative public sentiment by using the federal government to help alleviate social problems.”  Fine speechifying.  But will it get you (re)elected – much less enable you to govern?  The evidence is not encouraging.  In fact, the deeper problem the left is facing is that self-identified conservatives in America outnumber liberals by better than two to one.  Cambridge may have voted against Scott Brown by 84 to 14, but that just shows how out of touch Harvard is with the rest of Massachusetts – to say nothing of the rest of the country.  Obama won not because the country was enthralled with his vague message, but because his opposition, like Clinton’s in 1996, was so uninspiring.  In sum, the left’s problem – and Obama’s – is that the country isn’t buying the message, now that it’s clearer.  And that’s the heart of the matter.