This YouTube video from the Drug Policy Alliance is both amusing and educational. Don’t miss the disclaimers at the end.

Couldn’t have said it better myself.

The Washington Post reports that Google “does not intend to repeat the mistake that its rival Microsoft made a decade ago.”

Microsoft was so disdainful of the federal government back then that it had almost no presence in Washington. Largely because of that neglect, the company was blindsided by a government antitrust lawsuit that cost it dearly.

Mindful of that history, Google is rapidly building a substantial presence in Washington and using that firepower against Microsoft, among others.

This story just keeps repeating itself. People build companies, and then activists, competitors, and politicians notice that they have deep pockets. It happened to Microsoft, then to Wal-Mart. When the parasite economy first started lapping at Google last year, I wrote this:

Founders Larry Page and Sergey Brin and many other wealthy officers of the company got rich the only way you can in a free market: by producing something other people want. A lot of brilliant people worked long hours producing computer software that hundreds of millions of people chose to use, in the midst of a highly competitive market that offered lots of other options.

But in our modern politicized economy — which National Journal columnist Jonathan Rauch called the “parasite economy” — no good deed goes unpunished for long. Some people want to declare Google a public utility that must be regulated in the public interest, perhaps by a federal Office of Search Engines. The Bush administration wants Google to turn over a million random Web addresses and records of all Google searches from a one-week period. Congress is investigating how the company deals with the Chinese government’s demands for censorship of search results by Chinese users.

So, like Microsoft and other companies before it, Google has decided it will have to start playing the Washington game. It has opened a Washington office and hired well-connected lobbyists. One of the country’s top executive search firms is looking for a political director for the company.

What should concern us here is how the government lured Google into the political sector of the economy. For most of a decade the company went about its business, developing software, creating a search engine better than any of us could have dreamed, and innocently making money. Then, as its size and wealth drew the attention of competitors, anti-business activists, and politicians, it was forced to start spending some of its money and brainpower fending off political attacks. It’s the same process Microsoft went through a few years earlier, when it faced the same sorts of attacks. Now Microsoft is part of the Washington establishment, with more than $9 million in lobbying expenditures last year.

Google has become a brilliantly useful company. We can’t imagine how we got along without it. I can’t even imagine how I got along without Google Desktop. Some of us appreciate that; others believe that becoming indispensable imposes obligations on a company. Google has started to find out how it feels to be the most flagrantly successful company in America.

Alas, Google seems to have taken to Washington all too enthusiastically. As the Post notes,

In its first major policy assault on a competitor, Google’s Washington office helped write an antitrust complaint to the Justice Department and other government authorities asserting that Microsoft’s new Vista operating system discriminates against Google software. Last night, under a compromise with federal and state regulators, Microsoft agreed to make changes to Vista’s operations.

So Google’s brilliant staff are now spending some of their intellect thinking up ways to sic the government on Microsoft, which is once again forced to give consumers a less useful product in order to stave off further regulation. The Post’s previous story on Google’s complaint called it “allegations by Google that Microsoft’s new operating system unfairly disadvantages competitors.”

Bingo! That’s what antitrust law is really about–not protecting consumers, or protecting competition, but protecting competitors. Competitors should go produce a better product in the marketplace, but antitrust law sometimes gives them an easier option–asking the government to hobble their more successful competitor.

Recall the famous decision of Judge Learned Hand in the 1945 Alcoa antitrust decision. Alcoa, he wrote, “insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connection and the elite of personnel.” In other words, Alcoa’s very skill at meeting consumers’ needs was the rope with which it was hanged.

I look forward to more competition between Microsoft and Google–and the next innovative company–to bring more useful products to market. But I’m saddened to realize that the most important factor in America’s economic future — in raising everyone’s standard of living — is not land, or money, or computers; it’s human talent. And some part of the human talent at another of America’s most dynamic companies is now being diverted from productive activity to protecting the company from political predation and even to engaging in a little predation of its own. The parasite economy has sucked in another productive enterprise, and we’ll all be poorer for it.

Colleen Wilcox, Superintendent of Schools for Santa Clara County, has an op-ed in today’s San Jose Mercury News critiquing vouchers. There is a great deal wrong with what she has to say. Referring to Horace Mann, the godfather of American state schooling, she writes:

It’s true that the history of our public schools has seen its share of disappointments. At certain times, in certain places, the system undeniably failed the students. But on the whole, Horace Mann’s model has served us well.

At certain times? In certain places? American students perform worse relative to their international peers the longer they stay in school (see the “Global Context” section of that .pdf). When compared across subjects and grades to other industrialized countries by the Third International Mathematics and Science Study, the Program on International Student Assessment, and the International Adult Literacy Survey, our performance is about average at the 4th grade, below average by the 8th grade, and at or near the bottom among high-school seniors and recent graduates.

And these patterns hold not only for the overall averages, but for our top-scorers as well. Not just at certain times. Not just in certain places. 

Wilcox objects to vouchers on two grounds. First, that they are ostensibly “contrary to our fundamental belief in the separation of church and state.” Not so. As the U.S. Supreme Court ruled in Zelman v. Simmons-Harris, a universally available school voucher that treats parents’ religious and non-religious school choices neutrally is entirely consistent with the First Amendment and the principle it is meant to uphold. Anyone worried about compelled support issues under vouchers can simply opt for tax credits instead, as I recommend here.

Her second objection is that allowing families to chose “private schools would drain precious dollars away from public schools.” But, the thing is, if the children aren’t in the public schools anymore, there is no point in paying them for those children is there? Then we’d be paying them, literally, for doing nothing.

Now, you might counter that, given the number of functionally illiterate and unprepared students graduated by public schools every year, we are already paying public schools for nothing. But this, please note, is entirely by accident. A system of deliberately paying public schools for nothing would not be an improvement.

Educational freedom, and market competition, beat government monopoly provision. The sooner we realize that, the better off our children and our nation will be.

And as for Horace Mann, he predicted 160 years ago that if we “let the Common [a.k.a. “public”] School be expanded to its capabilities, let it be worked with the efficiency of which it is susceptible, and nine tenths of the crimes in the penal code would become obsolete; the long catalogue of human ills would be abridged.”

Eight generations and trillions of dollars later, color me a little skeptical about the merits of state schooling.

In preparation for what should be a fun health policy forum on Thursday — hey, where are you going? — I’m reading Ezra Klein’s article “The Health of Nations” from the May issue of The American Prospect. The article includes an interesting omission that might explain Klein’s preference for letting experts — rather than consumers — ration health care:

[T]he right…has argued for a move toward high-deductible care, in which individuals bear more financial risk and vulnerability. As the thinking goes, this increased exposure to the economic consequences of purchasing care will create savvier health-care consumers and individuals will use less unnecessary care…

Problem is, studies show that individuals are pretty bad at distinguishing necessary care from unnecessary care, and so they tend to cut down on mundane-but-important things like hypertension medicine, which leads to far costlier complications.

(Actually, cost-conscious patients also tend to cut down on health care that harms them. That’s why the best evidence available indicates — contrary to what Klein suggests — that when patients control more of the money and do more of the rationing themselves, overall, it doesn’t harm their health.)

Later, Klein offers this explanation for his claim that Great Britain’s health care system is just as productive as the U.S. system, despite spending less than half as much on medical care:

Much of the health care we receive appears to do very little good, but we don’t yet know how to separate the wheat from the chaff. Purchasing less of it, however, doesn’t appear to do much damage.

So Klein acknowledges that neither individuals nor experts appear to do a good job of separating the wheat from the chaff. Agreed.

But he appears to prefer rationing by experts, because he believes that when consumers make the necessary tradeoffs, they hurt themselves. Except that this is not true overall — and it’s very hard to find evidence that supports an argument to the contrary.

So if Klein will acknowledge that letting consumers do the rationing does not lead to worse health outcomes — and I don’t see how he cannot — then why the preference for rationing by experts?

A friend of the Cato Institute shares the following nasty-gram mailed to him by Massachuestts’ Commonwealth Health Connector:

Thank you for your cooperation. We will now connect you to the Massachusetts Department of Revenue…

A must-read article by Howard Rich*, chairman of the Parents in Charge Foundation, ran this weekend in the Wall Street Journal. It explains why pursuing targeted voucher plans is a bad long-term strategy:

Broader choice plans equal broader support. You don’t have to take
Grassroots 101 to know that successful coalitions are based on
addition, not subtraction. Yet in many instances school choice
supporters have been conditioned to believe that confining the
parameters of parental choice will lead to a broader base of public
support. The opposite is true. As employee stock options and personal
savings accounts have shown, nothing motivates individuals quite like
becoming personally invested in an issue.

Supporters of school choice cannot afford to leave a single ally on
the sidelines — for Christian school parents, home school parents,
parents with special-needs children or parents who for whatever reason
aren’t satisfied with the public school they are zoned for, universal
choice plans offer a much broader base of grassroots support than more
narrowly-drawn proposals.

Rich should be commended for spearheading a new strategy in South Carolina that expands the school choice coalition and makes long-term success more likely.

Educational freedom for all is good policy and good politics.

* Howard Rich is also a Cato Institute Board member.