Thursday, November 30, 2006
Intellectual Property Rights
My reaction is like that of a character in a Dickens novel: “The law is a ass.” Patents and copyrights were originally intended to stimulate invention and creation of literature by guaranteeing the inventor or writer a stream of income from his or her creations. The ultimate benefit was to be the public who would eventually have free and ready access to improvements in technology and new literature and art. But that’s not what patents and copyrights accomplish today. They were originally designed to be effective for a limited term of years, after which the material would be in the public domain. Over time, the laws were amended so that today copyright holders have a perpetual right to block free dissemination of the writing or other material protected. A similar situation holds for patents. A drug company patents a profitable drug. Before the patent runs out, the company makes a small change in the formulation and is able to renew the patent.
I think that our laws regarding patents and copyrights need to be reexamined and changed to promote the public interest in using the material rather than the interest of the creators in a perpetual stream of revenue from their creations. Perhaps instead of granting patents and copyrights, successful inventors and writers and artists should be given prizes for their creations.
Monday, November 20, 2006
Reflections on the Influence of Milton Friedman and the Needs of a Just Society
1. Free markets are better at making economic decisions than governments.
2. Individuals make better economic decisions than government.
3. Government is unable to create jobs. Any new jobs resulting from government action only take money away from other jobs. Government can only redistribute jobs, not create new ones.
Although many Conservatives accept these statements as axioms, our history as a nation contains counterexamples. Friedman’s dicta are true part of the time, but not all the time.
The first and second dicta (or axioms) assert that individual decisions about spending money and the supply and demand forces that set prices give “better” results than prices and spending priorities of governments. My question is, better for whom? If you consider a sum of money that, in one situation is taken by a government in taxes, and in another situation is spent by the individual, it may be true that letting the individual spend the money is better for him or her than letting the government spend it. However, the result may not be better for society as a whole.
It is easy to cite examples that contradict the third dictum. The Internet was a government invention. The result has been a profound change in the way information is transmitted and the creation of a whole new industry with many jobs. Other examples of government creating infrastructure that created new industries and new jobs are the Erie Canal, the interstate highway system, and the U. S. Postal Service. There are many others.
At present we Americans have serious problems that will not be solved simply by government inaction and letting free markets work on them. Two important ones are the breakdown of our system of health care and the lack of good public transit systems in our cities.
Our health care system has always depended on medical doctors acting as private entrepreneurs, like grocers and barbers, providing medical treatments in return for fees. This model seemed to work fairly well when I was a child in a small town in Michigan. I would go to the village doctor for immunization shots, eye examinations, health check-ups, and treatment for various diseases. The doctor would extend credit to those patients who were temporarily short of money. Some patients never were able to pay. Care in hospitals worked the same way. No one was denied medical attention or treatment for lack of money.
This small-town model may actually still prevail in some parts of the country. I don’t know; I have not lived in a small town since I left home in 1944. Since that time I have lived in Washington, DC, in Champagne and Urbana, Illinois, in Fayetteville, Arkansas, in New York City, and in Los Angeles. I recall that my wife spent time in a hospital in Fayetteville; the bill for the stay was nine dollars a day. Today a stay in a hospital costs more than a thousand dollars a day. At the time that my wife and I were living in Arkansas, I was a professor at the University earning a salary of $4800 a year. Today a starting salary for a professor is at least fifteen times that much. If the cost of hospital stays were still in the same ratio to professors’ salaries, the cost would be $135 per day. This is an example of how medical costs in the United States have risen much faster than the inflation index.
Of course, Fayetteville may not be a good example. While we were living in New York, my wife was in a hospital there to give birth to our first child. The total bill, including the services of the doctor, was about two hundred fifty dollars. The year was 1952. I was earning $5600 a year as an employee of Columbia University, working on a Navy project to study the transmission of sound under water over long distances.
It is clear to most Americans that our system of health care needs repair. Relying on Friedman’s dicta isn’t going to bring about any improvement. Depending on market forces won’t provide health care to persons who can’t pay for it. The existing institutions – doctors, hospitals, insurance companies – will continue to make profits under the present system as long as they are not obliged to provide any care for those who can’t pay. A corollary of Friedman’s dicta is that government should not interfere and enact laws that require hospitals to care for the indigent. As long as the existing system is restricted to providing medical services to those who can afford them, that part of society will continue to be well-served. One of the big problems is that hospital emergency rooms are obliged to care for anyone. Our compassionate laws do not allow a seriously injured person to die just outside the entrance to a hospital for lack of money.
Perhaps I am unfair to the late Professor Friedman. I have not taken into account the existence of compassionate benevolent organizations, such as churches. These organizations take care of the poor. In Professor Friedman’s society, they would care for those poor wretches who can’t afford the medical care provided to the more affluent members of society. Unfortunately, there are too many poor wretches and too few benevolent organizations.
As a long-time resident of Los Angeles, I am aware of the limitations and inadequacies of the public transit system of this city. In all of my working experience here I have never held a job where it would have been convenient to take public transportation from my home to my job site. I had to use an automobile to commute to work. During the last twenty years of my working life the commute was either twenty or thirty-six miles one way. Like millions of others, I drove on our excellent freeway system. During part of my working life I commuted with other workers, either car-pooling or riding in a van pool. Even then I had to use my car to drive from my home to the meeting place for the van, a distance of about four miles. If I had ridden the bus, the bus routes were laid out so that I would have had to make one transfer. During rush hour the buses I would have taken ran at intervals of half an hour.
Car pooling and van pooling are results of following Friedman’s dicta and letting free markets solve the problem of getting me to and from work. Although I was able to ride a pool van to get to work, millions of other commuters drove in their cars with one person per car. That is easily the most expensive way to transport workers back and forth from their homes to their jobs. A fraction of the cost of operating and maintaining and insuring all those autos would have provided an excellent and extensive rapid transit system. However, such a reordering of priorities and resources was beyond the ability of our political leaders and contrary to the prejudices of the voting and tax-paying public. People would rather pay the cost of owning and operating a car than the increase in taxes necessary to maintain an effective and convenient public transit system. Many conservative or libertarian politicians advocate building additional freeways, perhaps with double decks, to accommodate the ever increasing number of private automobiles used to transport workers between home and work.
Friedman’s dicta allow private entrepreneurs to offer commuting services. A number of private bus companies have come into existence, principally to provide transportation between communities outside of Los Angeles and various job sites that employ large numbers of workers. I have not examined the operation of any of these bus lines with respect to just where they pick up and discharge passengers. I assume that the discharge locations are at several aerospace firms in the city that employ thousands of workers. One bus carrying fifty workers is certainly more economical than fifty cars carrying the same workers. In addition, the one bus is less demanding of highway facilities than fifty cars. These private bus lines represent a limited validation of Friedman’s dicta, but they also show the limits of what can be achieved by relying on free markets and government inaction.
I am convinced that relying on private entrepreneurs and free markets will never provide a system of public transportation in a large city that is fair to all residents. Private enterprise will develop profitable routes that serve the more affluent part of the population; that is, people who can pay the price will enjoy convenient and comfortable transportation between their homes and jobs. The poorer part of the population have just as great a need for good public transit, but their needs will be met by methods that are less comfortable, less convenient, and less reliable. A good, comprehensive, and convenient transit system for a large city is not a profit-making proposition. Where such systems exist in the world they are subsidized by local governments. Everyone in the city pays to keep the transit system in operation. Receipts at the fare box are never sufficient to pay the cost of operating and maintaining a good system.
The same argument can be applied to public health care facilities. Years ago the County of Los Angeles maintained many free clinics where one could go to receive certain simple but useful medical procedures, such as immunizations against smallpox, measles, and influenza. These and other services were provided free of charge to any resident of the county. Because of cutbacks in revenue, largely due to the passage of the property tax limitation (known as Proposition 13 in California), these free clinics have been closed. People desiring or needing medical care who can’t pay are now forced to go and wait in hospital emergency rooms. The crowding in these rooms is a serious problem not merely for the indigent waiting for medical care but for the affluent who are stricken with heart attacks or strokes and need immediate attention. They also have to wait.
Just as a good public transit system requires a subsidy from local government, so also does a good system of basic medical care. If the people are willing to provide less than satisfactory public transit and less than satisfactory public health facilities they are not living up to traditional American values of fairness to all. We have a conflict of values between fairness and efficiency. Friedman’s dicta provide a means of utilizing resources in the most productive and profitable way possible. They do not provide fairness in social policy.
Friday, November 17, 2006
Diversions and Deceits
There are several things that can be talked about and proposed as partial solutions. For example, we can talk about the meager funding that public hospitals receive from cash-strapped local governments. We can talk about the scandal of the large and growing number of people who don't have and can't afford health insurance. We can talk about establishing a single-payer organization to provide health insurance to all residents, with premiums adjusted to the person's income and a subsidy from government to make up the difference. There are other things we can talk about.
What do the spineless, unscrupulous politicians say? Many of them change the subject to the broken immigration system. The overcrowding of emergency rooms is a consequence of the great number of illegal, poor immigrants who have come here for low-paying jobs and free public services. Get rid of them and the emergency rooms will no longer be overloaded with freeloaders. Of course, there's no practical way of getting rid of all of the illegal immigrants. There are way too many of them. However, they make a convenient scapegoat. Illegal immigrants don't vote and don't have much money. They do not represent a political obstacle. More money for hospitals means less money for the police, fire protection, and other local government services. The public will become angry if the police or fire departments have to be cut back. A single-payer health insurance entity will be bitterly opposed by the insurance companies now in the profitable business of selling health insurance policies. Insurance companies can raise huge sums of money for political campaigns against those politicians who have the courage to advocate a change that will reduce the profits of the insurance companies.
I recently listened to an argument on a news broadcast. A man was complaining of the very high cost of the American medical care system. Our nation ranks in the 70's among the industrial countries in terms of the cost of health care and the benefits receive. That is, our costs are high and the benefits low compared with 70 or so other countries (e.g., Canada, England, France, Japan, Germany, Sweden, etc.). The interviewer asked the man whether he would favor a single-payer system, such as the one in Canada. The man replied that this country is not yet ready for that reform. What has to be done first, he said, is reduce the cost by eliminating some of the unnecessary tests and other medical procedures that American doctors prescribe and perform.
I don't know whether the man was a politician. However, what he said sounds to me like a diversion. The man did have one suggestion worth considering: let more care be performed by the primary care physician and less by specialists to whom the primary care physician now refers his patients. The man stated that too few medical students go into primary care compared with the number that go into specialties.
So, let us consider that suggestion. First, let's follow the money. Primary Care physicians have a financial incentive to refer their patients to specialists. If you've ever tried to make an appointment with a specialist yourself, you have to fill out a questionnaire about your health and the name of the doctor who recommended you to this specialist. The Primary Care physician gets a kick-back from the specialist. The more recommendations, the more kick-backs. Also, the more business for the specialist. Eliminating the practice of the kick-back would take away one incentive to refer a patient to a specialist.
Others (not the man in the interview just cited) have said that physicians try to avoid doing procedures that subject them to the risk of malpractice lawsuits. A physician might refer a particular patient to a specialist so that the specialist would have to risk the malpractice suit. A physician might refer a healthy by hypocontriac patient to a specialist for fear of being sued for not making the reference. The real problem in any such case is not the malpractice suit itself but the insurance premium the physician or the specialist pays to cover the possibility of a judgment.
Some politicians have attempted to reduce the damage awards for malpractice by imposing legal limits on the size of the award, particularly punitive damages. Nobody in office has dared go after the insurance companies for setting their premiums to cover their losses from bad investments rather than on a realistic estimate of future costs due to malpractice lawsuits.
I don't know how the Canadian system works in detail. It seems to me that the single-payer system might also provide insurance for the participating doctors. A doctor who was deemed to be guilty of malpractice could be dropped from the list of physicians eligible to receive payment for services provided.
I leave this rant half-done. I invite comments, especially from those who disagree with me.
Monday, November 13, 2006
Apologize to Bush?
The idea of apologizing to President Bush is not a new one to me. My friend H insisted that we "liberals" issue an apology to Mr. Bush after the story was published that it was Richard Armitage and not some White House operative (e.g., Karl Rove or Scooter Libby) who first revealed to columnist Robert Novak that Joseph Wilson's wife was a CIA operative named Valerie Plame. Evidently Armitage was a bit trusting and didn't expect that Novak was going to "out" Ms Plame. My friend H was triumphant. See, Bush didn't out Valerie Plame. It was someone else. Bush had nothing to do with it. You liberals should apologize to Bush for blaming him for destroying Ms Plame's career and for trying to discredit Joe Wilson, etc., etc., etc.
If an apology is to be issued to Mr. Bush, Mr. Bush has to issue his own apology. He must apologize not to Democrats but to the American People for telling them that a vote for Democrats would be a vote for Al Qaeda and the other terrorists. Bush and his apologists will now argue that he never said those words - just like he never said that our Iraq policy is "stay the course," or that his surrogates never said that Saddam Hussein was responsible for the attack that destroyed the World Trade Center and damaged the Pentagon on September 11, 2001. My friend H and the writer to the newspaper should remember that what goes around comes around. Mr. Bush and the Republicans started all this nastiness. Let them be the first to apologize.
Saturday, November 11, 2006
Democrats on Probation
Advice to the Democrats is to govern from the center. Don’t do reckless things just to please the Democratic base. Republicans have been pleasing their base for the past ten years and especially since George Bush took office. Some of the results are a law that bans a certain abortion procedure, a law that prevents the Medicare from negotiating drug prices, and some appointments to the federal judiciary. Pleasing the Republican base often meant angering every one else. One result was that Congress left untouched several serious problems: immigration reform, fixing the broken national health system, investigating and exposing the bungling of the war in Iraq, and assuring the future existence of the Social Security program. Our system of government requires consensus, not a mere majority, to get any important law enacted. Clinton showed us that in 1994 when he tried to enact universal health care with a majority of only Democrats.
Governing from the center and getting bipartisan support for important bills in Congress is wise advice. As a President or a member of Congress, you won’t always please your base with such a course, but you will get some things done. It remains to be seen whether Mr. Bush will learn this lesson.
Now that I’ve written this paean to centrist governance, let me write that, as a part of the Democratic “base” I expect to be disappointed with the new Democratic Congress. I regret that there will not be a serious attempt to impeach George W. Bush, even though there are several grounds for impeaching him. There has been a change in the leadership at the Defense Department. I regret that there will be no corresponding change at the State Department. Perhaps the Secretary of State will learn as much or more from the election than her boss, President Bush.
My issue is universal health care. We need a simple, practical, workable system to provide adequate health care to any American who needs it, just as we provide police protection and fire protection to every resident of the city in which I live. We do not have different levels of police and fire protection for persons of different income; a poor man can count on the police just as much as a rich man and the fire department puts out fires without regard to the economic status of the home owner.
I am sorry that universal health care seems to be a partisan issue. It’s an issue championed by Democrats and ignored by Republicans. I don’t know of recent public opinion polls on the issue, but many years ago it seemed that about 60 percent of Americans favored some sort of universal health care system. Many Americans look with favor on the Canadian system of universal single-payer health insurance.
Some Republicans see the system recently enacted in Massachusetts as something they can support. The Massachusetts plan leaves in place the private insurance companies and requires that each resident of the State buy health insurance from one of those firms. Persons who don’t earn enough to pay the premiums receive a subsidy from the State to help pay the premium cost.
I don’t care for the plan myself. Supporters argue that the analogy is car insurance. Everyone who operates an automobile must have liability insurance. I think that is the wrong analogy. A somewhat better one would be to require everyone to have collision insurance; that is, insurance that pays for damage to his own car. My health insurance is to pay for medical care for me, not for someone who may have caught my cold or my flu or my cholera or my diphtheria. Car insurance provides a range of options, mostly deductibles, as well as unpublicized policies of the insurance companies regarding payment to innocent victims of auto accidents.
Health Insurance doesn’t work the same way as car insurance. If you are a victim of an accident with an insured driver, his insurance company may delay payment for many months and may require that you sue the other driver in court and obtain a judgment before it will pay. If you are sick with pneumonia, you shouldn’t have to sue an insurance company to obtain the money to pay for the doctor and the hospital. However, we must be realists. Private insurance companies are in business to make a profit, not to keep people healthy and well-cared for. Private companies will offer a range of policies, with prices to match. Individuals who are required to buy insurance must shop around for the policy and price that they are comfortable with. Many of them will later find that their insurance doesn’t cover the particular illness or condition that has afflicted them.
In spite of these reservations about letting private for-profit firms provide health insurance, I am willing to go along with such a plan if it is the only plan that can find broad bipartisan support. Once such a plan is under way, it may become politically impossible to rescind it. If it turns out as I suspect, the public will insist on providing a single, non-profit agency to provide health insurance for everyone. That is my hope.
A more optimistic hope is that many Republicans will embrace the concept of the non-profit single-payer health insurance organization, funded by a combination of premiums paid by individuals and a subsidy from the government. This system will be a godsend to businesses who are trying to cope with rising premiums and increasing deductibles in the insurance plans they buy for their employees. If we can relieve responsible business men of the responsibility and extra cost of providing health insurance for their employees, we will improve their competitive advantage in the increasingly global market in which they must operate. Republicans who champion the cause of business should enthusiastically embrace this concept.
Thursday, November 09, 2006
It is generally thought that the election was a referendum on the Republican Party and its President. It is said that the public voted their dislike of the Republicans and not their preference for the Democrats. As usual, the election was decided by independent voters, voters not allied with either of the major political parties. If this analysis is correct, Democrats will have to show that they can behave better in office than Republicans. Otherwise, things will go against them a few elections from now.
There are some growing problems in our society that require political solutions. If left to themselves, they will simply fester and grow worse. Unfortunately, there is a split in public opinion that makes a political solution very difficult, if not impossible. Here are some of the problems:
- The nation's health care system is going from bad to worse. People with money and people with good health insurance plans and some people on Medicare are well taken care of. Others have to depend on hospital emergency rooms for care when a medical problem becomes a crisis. Some hospitals are having to close their emergency rooms because they don't have the resources to take care of all the uninsured patients that use them.
- The pension system for retired workers is breaking down. Some companies have abandoned their guaranteed benefit pensions and are encouraging their employees to invest some savings in 401k plans. It is reported (and you are invited to do the calculation) that one must invest at least an amount equal to fifteen percent of his wages over his working life to have a big enough investment at retirement age to last him for the rest of his expected life. The amounts that workers with these plans are saving are nowhere near the required fifteen percent. In addition, the workers must choose how to invest their money and many will make poor choices.
- The quality of the public education system is spotty. Some areas have excellent schools. Some have very poor schools. Many attempts to remedy this problem have been based on ideology rather than pragmatism. An example of an ideology-driven reform is testing the students to determine the quality of the schools and teachers. Another example is privatizing, or letting a for-profit company take over the operations of schools in an area, including designing the curriculum. Still another is issuing vouchers to allow students in an area where poor quality public schools prevail to attend private schools.
Liberals like myself look for public means of solving these problems. We believe that in two of the cases, medical care and pensions, the problems arise from unregulated private firms making decisions that increase their profits but do not improve services. Health insurance is left to insurance companies. Pensions are left to the companies that provide them. We believe that Canada has provided a model for universal health insurance that is practical, fair, and effective. We believe that California's Public Employees' Retirement System (CALPERS) is a good model for pensions. Another model is provided by the Teachers Insurance and Annuity Association that provides retirement pensions for employees of many universities. (I receive a small pension from TIAA for having worked briefly for two universities: University of Arkansas and Columbia University of New York.)
Many Conservatives reject public or political approaches to these problems. They believe in the power of the market place to provide both efficiency and satisfactory service. If a particular company doesn't provide good health insurance, people won't sign up for it. If companies default on their pension promises, people won't work for them. Besides, people should look out for themselves and not depend on government to take care of them.
Sunday, November 05, 2006
A Story with Several Interpretations
Here are some reactions to the story:
My friend H wrote:
Some time in the past I talked about how we can be blind to some facts. Al, S****, and S*****, would you agree the bad guys in the Middle East want the Dems to win?
Just today, it came out that (I think a Rep) Congressman put pressure on the GB Ad to publish a document on the web from Iraq which shows in great detail how to build an an atomic bomb. To me I would say the Dems have been making a big deal about not finding WMD but are blind to the fact that they were all prepared to so.
I think Rice found out about it and had to taken off the web.
My friend M wrote:
Not quite right. It really goes like this:
There were tens of thousands of documents seized from the regime of Saddam. The DOD wasn't really too excited about expending the time of translators to go through these docs, because there was more recent communications that the DOD wanted to have the translators review. Senator Rick Santoram led a group of Republican legislator to get these documents published on the web so that independent translators could work on them. The goal was to put to bed the mantra Bush Lied, People Died. There were explicit directions given to DOD NOT to post anything sensitive.
Well some weenie at DOD didn't understand and posted instructions how to make a nuclear weapon along with the trigger mechanisms and other highly classified details. Note! This was from documents captured from the Iraqis (who weren't even close to getting WMD) or so say the Dems!
So, what does the NYT print? We're sorry, Saddam really was a threat and was closr to getting WMD's, and Bush was right to take him out? NOOOOOOOOOOOO! They print, "See, see, see, those filthy Republicans are leaking nuclear secrets"!
I am just sick and tired of the biased nut wing (with a left hand thread) media. Why don't they all just put on their DNC membership buttons and be done with it. They won't wear American flags, no that would show bias. What A**H*** hypocrites.
My Question: These were untranslated documents in Arabic. The "weenie at DOD" didn't understand Arabic, so how was he to know what the documents were about? If he had known Arabic, he would have understood and translated the documents and so wouldn't have needed to post them. I would put the blame on the "weenie in Congress" who advocated posting the documents and some high official in the Pentagon who went along with the crazy stunt.
It's interesting that neither H nor M, both ardent Republicans, attach any blame to the Republicans in Congress for this fiasco. They both twist the story to blame the Democrats for -- doubting the claim of WMD and opposing Bush's Iraq War.
Thursday, November 02, 2006
Mr. Goldberg does not mention another set of "logs:" those who look for a practical and humane solution to the chaos that now prevails. As one of these, I recognize that it isn't realistic to try to round up and punish all of the twelve million or so illegal immigrants now living and working in the United States. An ideal solution isn't possible. We don't have the resources, to say nothing of the will, to round up and deport twelve million people. I think that a proposal supported by the President (he is also a conservative, in case Mr. Goldberg has forgotten) and passed by the Senate is a good basis for a practical solution. It isn't ideal. It wouldn't round up the 12 million illegals and put them on buses, trains, and planes to Monterrey or Ciudad Mexico (or maybe Juarez; it's closer and the bus fare would be less). It would fine the 12 million for breaking our laws and entering the country illegally. It would improve border security. What it would not do, as far as I can determine, is increase the number of legal immigrants allowed into the country each year.
Suppose there were a solution that would allow the million who now enter the country illegallly to come legally? They would still come to work. However, they would be legal residents (perhaps temporary for some period of time) and less subject to threats or intimidation by their employers. They would feel safe to join labor unions and demonstrate, like their naturalized and native-born counterparts, for better working conditions and wages.
Would such a solution command the support of a majority of Americans? What do you think?