Coyote Blog

I have never understood the argument that allowing same sex marriage would weaken marriage.  I couldn't possibly fathom why allowing two men to marry made my marriage worse.  This same argument was made by John Stossel arguing with Ann Coulter on his show.   Coulter said it was not an issue about one's own marriage getting worse, but about a general loss of respect and strength for the institution as a whole.

I am still not buying it.  But I want to help.  If we really want to improve the general respect for the institution of marriage, here is my modest proposal:  Allow gay marriage and ban Kardashian marriage.

You're welcome.

I always suspected government jobs programs and job training programs were a waste of time.  I never imagined they were total vaporware:

"There are no jobs!" That is what people told me outside a government "jobs center" in New York City.

To check this out, I sent four researchers around the area. They quickly found 40job openings. Twenty-four were entry-level positions. One restaurant owner told me he would hire 12 people if workers would just apply.

It made me wonder what my government does in buildings called "job centers." So I asked a college intern, Zoelle Mallenbaum, to find out. Here's what she found:

"First I went to the Manhattan Jobs Center and asked, "Can I get help finding a job?" They told me they don't do that. 'We sign people up for food stamps.' I tried another jobs center. They told me to enroll for unemployment benefits."

So the "jobs" centers help people get handouts. Neither center suggested people try the 40 job openings in the neighborhood.

From John Stossel, who has a lot more at the source link.

I hear rumor that a few snippets from a series of interviews I did on the minimum wage with John Stossel's crew may have appeared on his "Politicians' Top 10 Promises Gone Wrong" show tonight.  I have it TIVO'd but have not been able to watch it yet.  It is being replayed (in Hannity's usual time slot) at 9pm and Midnight on Sunday (EST).  Even if I am not in it, it still looks like a great show and I can't imagine that readers of this blog would not enjoy it.   More here.

No time today to comment, so I will direct you over to John Stossel who has more on this really awful piece of legislation.

Update: More in the Washington Examiner.  And here is a rare bit of honesty, where a Democratic Congressman admits the law is about keeping Republicans from being elected.  Team Coke wants to keep Team Pepsi from advertising.

This is an issue that has been around for a while, and one of the illiberal legacies of the war on drugs.  Police have broad powers to seize your property with very little due process, and the incentive to do so as they are generally allowed to keep the proceeds of these seizures in their budgets.  John Stossel writes about the problem in his column today.  Unfortunately, I see little bleed-through of this issue our of libertarian blogs into the partisan ones, though I do remember Kevin Drum doing something on it a while back.  Knowing politicians, I hold out little hope that in a time when government budgets are under assault, politicians will voluntarily give up the power to grab operating funds off the street.

Most of the stories in the article were familiar to me, though this expansion of the concept was new:

[Radley] Balko has reported on a case in which police confiscated cash from a man when they found it in his car. "The state's argument was that maybe he didn't get it from selling drugs, but he might use that money to buy drugs at some point in the future. Therefore, we're still allowed to take it from him," Balko said.

Sounds like that Tom Cruise movie "Minority Report," where the police predict future crimes and arrest the "perpetrator."

John Stossel has this chart to clearly define the power that is OSHA regulation:

Wow, that sure makes a big difference.  Which confirms my experience as a business owner.  Financial incentives like workers comp rates are a FAR more powerful force, at least in my business, to root our safety issues than the arcane and bureaucratic mandates that flow out of OSHA.

The narrative is that small business credit markets are frozen.  John Stossel argues the facts say otherwise?

More melodramatic prose from today's Washington Post: "White House moves to free up lending for small businesses."  "Unfreeze the markets." "Free up lending." Given such language, I would think that loans to small businesses have stopped. The market must be broken, right?

... lending to [small] companies has fallen. Federal data show that lending to small businesses by community banks declined by about $8 billion, or 2 percent, between September 2008 and September 2009.

A decline of two percent. TWO PERCENT. That constitutes a credit "freeze"? Considering the rash of bank failures from 2008 - 2009 due in large part to bad loans made by banks, a decline of two percent in loans to small businesses strikes me as a prudent response.

So does our science-based President address the narrative or the facts?  Here is a hint:  narratives can affect elections, while facts are often ignored.  Therefore, Obama is proposing to use $30 billion of TARP money to so something about the $8 billion drop in small business lending.

Until today, we had the right to free speech, and the right to assembly, but not the right to free speech when we were assembled.  The Supreme Court has thankfully corrected that absurdity.  Quick roundup:  Jonathon Adler, John Stossel, Katherine Mangu-Ward,  JD Tuccille, Jacob Sullum

This is a long-running series on this blog, and the most recent example comes from John Stossel.

[T]he IRS plans to require paid preparers to register with the agency. Subsequently -- the timeline is not yet firm -- they will be required to pass competency tests and receive continuing professional education"¦

In a report issued Monday, the agency also raised concerns about the quality of tax-preparation software"¦

As is usual in such cases, the IRS uses some ridiculously mundane task (in this case, hair cutting) as an example of something which is licensed but its super-critical target industry is not.  This is typically supposed to be read as a justification of the extension of licensing to the new industry, though I always read it as a comment on how over-licensed we already are.

In field tests, the IRS noted Monday, tax-return preparers often gave bad advice"¦

Of course, in numerous field tests, the IRS itself often gives bad advice as well.  From MSN Money a while back:

Two decades ago, Ralph Nader's Tax Reform Research Group prepared 22 identical tax reports based on the fictional economic plight of a married couple with one child. Identical copies were submitted to 22 different IRS offices around the country.

Each office came up with an entirely different tax figure. Results varied from a refund of $811.96 recommended in Flushing, N.Y., to a tax-due figure of $52.13 demanded by the IRS office in Portland, Ore....

Physician, heal thyself.  Maybe the problem is in the tax code, not the preparers.  From the same MSN Money article:

Since 1988, Money magazine has conducted an annual study where 50 tax professionals, including attorneys and certified public accountants, have been asked to complete a tax return for a hypothetical family.

The results have been unnerving. The professional preparers come up with different results each year -- with spreads of as much as $1,000.

So let's see where we are. The IRS can't get the answers right. Neither can the professionals. That may explain why there have been U.S. Supreme Court tax cases where as many as four of the justices got the answer "wrong."

Maybe the justification has nothing to do with the quality of tax preparation.  Let's see who was happy about the IRS announcement:

H&R Block's enthusiastic response to the IRS's regulation plans suggests that the same thing will happen once the IRS licenses tax preparers:

Under the new rules, H&R Block "won't be competing against people who aren't regulated and don't have the same standards as we do," said Kathryn Fulton, senior vice president for government relations.

I will end, as I always do on this topic, with a quote from Milton Friedman:

The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.

John Stossel has a story on errors found in new textbooks in Texas public schools  (the word "we," for example, was misspelled).

One high school textbook misspelled the word "we." When describing an actor's "role" in a play, the book spells it "r-o-l-l."

A 9th grade literature book refers to a poem as a piece of 21st century literature, even though it was written in 1911 and the author died in 1933.

How do you misspell the word "we"? They spelled it, "wee."

The publishing companies said the textbooks were just first drafts that would be "cleaned up" before they make it into classrooms. But that doesn't wash with the TV station:

(P)ublishers said the same thing about math books... in 2007 that were eventually found to contain more than 100,000 mistakes...

Those math books are now in classrooms, and teachers continue to find errors.

Stossel is usually pretty quick to the jugular, but I think he misses the true reason for the screw-up.  In a private market, suppliers must compete on price and performance because they know that companies will buy their product based on those criteria.  In the government market, however, suppliers often can sidestep that whole product quality hassle and shortcut the process via political lobbying.  Get a few key legislators or other government officials on your side, and that textbook order or military toilet seat contract is yours.  Get John Murtha on your side, for example, and you can make money selling the government just about anything, or even nothing.

I think it's pretty clear that like defense contractors, municipal bond underwriters, and other government suppliers, textbooks suppliers have shifted resources from the product to political lobbying.  Makes one pretty excited about prescription drug procurement under government health care, huh?  Do we really want to see arguments for Viagra vs. Cialis played out on the house floor, as we do today for political footballs like the V-22 Osprey?

John Stossel has a post on Dan Rather's really bad idea to have the government restructure and, presumably, fund the media.

A press that is financially dependent on the government cannot be free. Even if it had formal protections against micromanaging by elected officials, socialized journalism would inevitably be compromised journalism. It would be no more independent than a subsidized farmer or a defense contractor.

Perhaps an even better example are state governments.  There are explicit protections - not just legal, but Constitutional - of state's authority vs. those of the Federal government.  Theoretically, it should be impossible for the Federal government to impose, say, seatbelt laws or restrictions on drinking age, as those are clearly in the purview of states.

But enter Federal highway and education money.  Time and again, states are threatened by the Federal government that it will withold money from a state -- money collected from taxpayers in that state -- unless the state passes legislation of its choosing.  If the Feds can use funding to push around California and Texas, what hope does the LA Times or the Houston Post have of avoiding such control, if their survival becomes dependent on federal funds.

This is from Tori Barnett on John Stossel's blog (Stossel being yet another member of the powerful Princeton Tower Club libertarian blogging set):

As we approach ABC's Wednesday White House Health Care town meeting, I'm thinking more about how health insurance"”private or government run"”destroys the individual's incentive to shop around. People spending their own money and dealing directly with doctors is the only thing that honors individuals' different preferences and controls costs.  How can we hold costs down at all if the market isn't allowed to work?

But few people are talking about that.

The pundits write about the popularity of Medicare.  Of course it's popular.  People love getting free stuff.  But Medicare is on an unsustainable path. It is more than 30 trillion dollars in the red!

As I wrote previously:

Take purchasing a car.  When I need a new car, who determines what car I end up with?   Why, I do.  And who pays for the car and shops around for a price that makes sense in the context of the perceived value of the car?  Why, I do again.  The person who uses the car, the person who chooses the type and quality of the car, and the person who pays for the car are all the same person.

This clever procurement model of integrating the payer, the shopper, and the user all into a single individual is one we use for, well, just about every product and service we buy.  Milk, Internet service, DVD's, house painting, airline tickets "” all the same model.

OK, lets consider a model that does not work this way.  Let's say someone just rear-ended your car and, miracle of miracles, they actually have a good, solid insurance policy that owes you for your car repairs.  In this case, you will be consuming the repair services, and have the incentive to find the absolute best, cost-no-object body shop you can find to do the best, most fabulous job fixing your car, because someone else (ie the insurance company) is paying.  The insurance company has a different incentive.  They want to get off with as small a loss as possible, to protect their profitability as well as keeping prices low for future policy-holders.  They are going to want you car fixed cheap, particularly since you are probably not even their customer.  They are going to try to deliver the minimum.

No surprisingly, people tend to get ticked off in these situations, as they grind against the opposing incentives of the insurance company.  It's one reason that the insurance field is highly regulated (because nowadays people complain to their Congressman whenever they get irritated).  It's also a measure of how ineffective regulation is in really managing this friction, since despite zillions of government rules people still get pissed off.  The reason is that there is simply no good solution.   Both parties want a solution at the extreme end of a cost-value scale, neither have much of an incentive to compromise, and neither will be happy with a solution in the middle of these extreme incentives, and no amount of government fiddling with the tradeoff point is going to change this.

OK, but in this example, at the end of the day, it is just a car, and probably this is a once-in-a-lifetime event.  What if we replace "car" with "baby daughter" or "grandmother" or "your life?"  Now, as Bill Murray says, the kidding around is pretty much over.  It is a recipe for an incendiary disaster.  Which is exactly what we have in health care.

If we take these three roles - user, service quality specifyer, and payer/price shopper - there are very few places in medicine today where these three roles are united.  Further, despite the fact that the vast majority of the problems in US health care are demonstrably from this role separation, none of the plans currently being considered by Obama or Congress unify these three parties.

With my high deductible medical policy, I am actually one of the few middle/upper class folks who actually shops for health care.  And I can tell I am in the minority by the reaction I get from doctors and medical services companies, that look at me like I am from Mars when I ask for detailed pricing, or when I order less than the full and complete battery of potential tests and services based on my own judgment and price/value trade offs.  Folks in the medical profession are used to people saying "whatever, the insurance company is paying for it."

The post went on to show data for medical care expenses NOT generally covered by insurance, so that they are paid out of pocket.  Not surprisingly, these expenses are the only part of health care seeing actual real price drops:

I have written on a number of occasions that the real problem in American health care is the insulation between the person who receives the services and the true cost of the services.  Other than a few folks like me with high deductible policies, there is no incentive to shop around and no incentive to eschew certain avoidable and high cost procedures.

Marc Cooper complained that he went to the hospital for a day and it ended up costing the insurance company over $100,000.  His take-away form this is that the government needs to step in.  My take-away was different:

Did he ask for a price estimate in advance? Did he ask, as most of
us do with all of our large purchases, for a written estimate or
quotation? Did he get such estimates from two or three competitors? Did
he shop around?

Of course not! Because in a system where someone else is paying the
bills, we have no incentive to shop around. So providers have no
incentive to compete on price or to worry about productivity and cost
control.

Sure, this looks like a rip-off.  But if you went in to buy a car,
concerned only with the quality of the
car, and never asked the price and then got a bill for $100,000 a few
weeks later, would you be surprised?  Would anyone give you sympathy if
you complained you paid $100,000 for the car but admitted you never
asked what the price was?

So I was very pleased to see this from John Stossel:

America's health-care problem is not that some people lack insurance, it is that 250 million Americans do have it.

You have to understand something right from the start. We Americans
got hooked on health insurance because the government did the insurance
companies a favor during World War II. Wartime wage controls prohibited
cash raises, so employers started giving noncash benefits like health
insurance to attract workers. The tax code helped this along by
treating employer-based health insurance more favorably than coverage
you buy yourself. And state governments have made things worse by
mandating coverage many people would never buy for themselves.

Competition also pushed companies to offer ever-more attractive
policies, such as first-dollar coverage for routine ailments like ear
infections and colds, and coverage for things that are not even
illnesses, like pregnancy. We came to expect insurance to cover
everything.

He concludes:

Imagine if your car
insurance covered oil changes and gasoline. You wouldn't care how much
gas you used, and you wouldn't care what it cost. Mechanics would sell
you $100 oil changes. Prices would skyrocket.

That's how it works in health care. Patients don't ask how much a
test or treatment will cost. They ask if their insurance covers it.
They don't compare prices from different doctors and hospitals. (Prices
do vary.) Why should they? They're not paying. (Although they do in
hidden, indirect ways.)

Apparently, we taxpayers gaurantee $645 billion in flood insurance so wealthy folks can build second homes on the beech, and have them wash away every few years at taxpayer expense.  USAToday, breaking from general habit, actually criticized a government giveaway in this article.  But I think that the John Stossel article linked by Q&O is better  (Memo to ABC web guys -- your articles stay online for years so it might be nice to add a year to that date in the byline).  Stossel points out that the tab for flood insurance understates the beachfront subsidy:  Costs for FEMA, disaster relief, Corps of Engineers projects, beech erosion abatement, etc. all are also government subsidies for living in dangerous locations.

But the outrage is that federal flood insurance exists at all. There is
a quarter-million-dollar limit on each payment, and as long as I build
my house in accordance with zoning laws and ordinances, there is no
limit on how many times the government will pay if a house keeps
washing away