Topic: Regulatory Studies

Congress Is Concerned about Your Mental Health

Congress is debating a new “mental health parity” law, which would require those who purchase mental health care coverage to buy the same amount of mental health care coverage as medical and surgical coverage. 

The Congressional Budget Office (CBO) just released this not-too-technical summary.  The CBO projects that the law would increase the cost of employer-sponsored health insurance by 0.4 percent.  That means it could add another $46 to the (already rising) cost of a job-based family plan.  Not a huge amount.  But every little bit hurts.  And Congress wonders why the number of Americans without health insurance keeps rising.

Of all the purposes government might serve, there can be none higher than telling people how much insurance they should purchase for mental health care, if they purchase insurance for mental health care.

The Negative Side-Effects of Government Safety Rules

Politicians and bureaucrats frequently impose rules and regulations to protect us from the risks of life. But even if one assumes that all this red tape is well-meaning, the consequences often are negative. The costs to the economy often are the most obvious downside of regulation, but sometimes safety regulations actually make us less safe. John Stossel’s Townhall.com column notes that safety caps on drugs actually have increased the number of children who get poisoned:

A joint study by the Brookings Institution and American Enterprise Institute found that government regulations that are supposed to save lives actually end up killing more people. Why? Because safety laws almost always have unintended bad consequences. …In 1972, the FDA passed a law requiring child safety caps on many medications. It was supposed to keep kids from being poisoned by drugs like aspirin. But there is an unexpected side effect. Because safety caps are hard to get off, some people – particularly older people – leave them off, and some parents, feeling safer with the cap, leave the aspirin where kids can reach it. A study of this “lulling effect” concluded that an additional 3,000 children have been poisoned by aspirin because of the regulation.

Euphemisms for Theft

English is a rich language. One reason is that we don’t have an equivalent of l’Academie Française, which tries (and fails) to prevent loan words, neologisms, and deviations from prior rules of grammar. 

Another reason is that political processes keep generating euphemisms designed to disguise horrid behavior. (“Did I say death camps? I meant happy camps.”) 

To honor that tradition, I offer this list of euphemisms for theft:

Email me mcannon [at] cato [dot] org (here) with additional candidates.

Bureaucrats Drunk with Power?

Last month, Justin Logan blogged about the socialist alcohol controls in Montgomery County, Maryland. For those of you not in the DC area, Montgomery County is a very wealthy, very liberal Washington suburb with our nation’s only completely government-run alcohol distribution system.

Yesterday, the Washington Post ran an excellent article that describes how this system is an absolute nightmare for the county’s restaurants.

Here’s an overview of the wine distribution process:

Let’s say the restaurant orders the wine from a private distributor on Thursday. The distributor then faxes or hand-delivers the order to the Department of Liquor Control. A county employee writes up a purchase order and faxes it back to the distributor. On Monday or Tuesday, the distributor delivers the wine to the county warehouse. On Wednesday, a white or navy blue box truck bearing Montgomery’s “Gardez Bien” county seal delivers it to the restaurant.

Now contrast that with the privately-run distribution system for restaurants in neighboring jurisdictions:

Restaurants in the District and Virginia buy wine from private distributors at wholesale prices, which includes the distributors’ markup. Placing an order is as easy as making a phone call. If an order comes up short or a large party unexpectedly drinks all the Diamond Creek cabernet, the distributor can make a delivery by the next day.

The system results in major headaches for restaurants, limited wine options for oenophiles, and, of course, greater costs for consumers:

A bottle that wholesales for $100 in the District costs Montgomery restaurants $125. If a restaurant tries to double or triple the purchase price – a standard practice – a bottle priced at $200 or $300 in a District restaurant ends up on a Montgomery wine list at $250 or $375.

You might ask why a county would subject itself to such an inefficient and expensive scheme. Well…

“We benefit financially from it,” [Montgomery County Executive Isiah] Leggett Leggett said. “But more importantly, you don’t see liquor stores all over Montgomery County like you might see in other jurisdictions, and I think citizens like that.”

Call me crazy, but I’d prefer a few liquor stores in my neighborhood over outrageously priced, government-controlled wine.

Hubris Today

USA Today writes in an editorial:

That’s one reason the proposed XM-Sirius combination, announced this week, may be the rare merger that is good for consumers.

The rare merger that’s good for consumers? That’s rich coming from the flagship newspaper of Gannett, the rapacious media conglomerate that has swallowed up the major independent papers in Iowa, Mississippi, Kentucky, Tennessee, Arizona, Vermont, and other states.

Now, to be sure, USA Today did endorse the radio merger. And I don’t question the right of newspaper owners to sell their papers to Gannett. But USA Today ought to acknowledge that its parent company has been built on mergers (or takeovers) that in the eyes of critics reduced competition.

The rare merger that’s good for consumers? Mergers often benefit consumers; they can generate efficiencies and reduce costs. And the market is the best test [.pdf] of which mergers work and which don’t.

Fine-Tuning Competition

The Washington Post reports today that the Justice Department has ordered Arcelor Mittal (the world’s biggest steel company) to sell off its Sparrows Point mill in Baltimore “to preserve competition in the eastern U.S. tin mill market.” 

Prior to the Arcelor-Mittal merger last year, three firms supplied most of the tin mill products (steel used for food, paint, and aerosol cans, etc.) consumed in the eastern United States: U.S. Steel, Mittal, and a Canadian subsidiary of Arcelor.  Post-merger, only two firms supply most of the tin to that market and the Justice Department deems that to be a threat to competition. 

Interestingly, just eight months ago, the U.S. International Trade Commission voted to continue antidumping restraints against tin mill products from Japan, citing a domestic industry that was vulnerable to a recurrence of injury from imports in the foreseeable future. 

So, while the Justice Department forces companies to break up to promote competition, the ITC sanctions duties to quell it.  If both agencies took long sabbaticals, I suspect the competition thing would resolve itself.