Government – Page 109 – artdiamondblog.com

Government Mandates Insurers Pay for $4,300 Tests on Potential Donors Recruited by $60,000 a Week “Flirtatious Models”

(p. A16) BOSTON — On its face, it seemed reasonable enough: a bone marrow registry sending recruiters to malls, ballparks and other busy sites to enlist potential donors.

But the recruiters were actually flirtatious models in heels, short skirts and lab coats, law enforcement officials say, asking passers-by for DNA swabs without mentioning the price of the seemingly simple procedure. And the registry, Caitlin Raymond International, was paying up to $60,000 a week for the models while billing insurance companies up to $4,300 per test.
. . .
The registry is a nonprofit subsidiary of UMass Memorial Medical Center in Worcester, . . .
. . .
James T. Boffetti, the state’s senior assistant attorney general, said the registry had hired models based on their photographs and had given them “explicit instructions” to wear heels and short skirts.
. . .
New Hampshire passed a law in 2006 requiring insurers to pay for tissue-typing tests for potential bone marrow donors.

For the full story, see:
ABBY GOODNOUGH. “Flirty Models Were Hired in Bid to Find Bone Marrow.” The New York Times (Fri., December 17, 2010): A16.
(Note: ellipses added.)
(Note: the online version of the article is dated December 16, 2010.)

“Can Congress Tell Us to Join a Gym?”

(p. A31) HENRY E. HUDSON, the federal judge in Virginia who ruled this week that the individual mandate provision of the new health care law is unconstitutional, has become the object of widespread derision. Judge Hudson explained that whatever else Congress might be able to do, it cannot force people to engage in a commercial activity, in this case buying an insurance policy.

Critics contend that Judge Hudson has unduly restricted Congress’s authority to regulate interstate commerce, the principal basis on which the government defends the law. Some also claim that he ignored the “necessary and proper” clause of the Constitution, which allows Congress leeway to choose how to put in place national economic programs. Yet a closer reading shows that Judge Hudson’s analysis could prove irresistible to the Supreme Court and that there is a reasonable chance it will agree that the insurance mandate is invalid.
. . .
Indeed, the court has never confronted a federal statute that forces people to engage in some action like this. The conservative justices in particular will no doubt wonder what else Congress can make Americans do if it can make us buy health insurance. Can Congress tell us to join a gym because fit people have fewer chronic diseases? Can Congress direct us to purchase a new Chrysler to help Detroit get back on its feet?

For the full commentary, see:
JASON MAZZONE. “Can Congress Force You to Be Healthy?” The New York Times (Fri., December 17, 2010): A31.
(Note: ellipsis added.)
(Note: the online version of the article is dated December 16, 2010.)

Government “Gave People the Crazy Juice”

“Peter J. Boettke of George Mason University is the emerging standardbearer for a revived Austrian school of economics.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B1) Peter J. Boettke, shuffling around in a maroon velour track suit or faux-leather rubber shoes he calls “dress Crocs,” hardly seems like the type to lead a revolution.

But the 50-year-old professor of economics at George Mason University in Virginia is emerging as the intellectual standard-bearer for the Austrian school of economics that opposes government intervention in markets and decries federal spending to prop up demand during times of crisis. Mr. Boettke, whose latest research explores people’s ability to self-regulate, also is minting a new generation of disciples who are spreading the Austrian approach throughout academia, where it had long been left for dead.
To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of “creative destruction.”
. . .
(p. B3) It wasn’t a lack of government oversight that led to the crisis, as some economists argue, but too much of it, Mr. Boettke says. Specifically, low interest rates and policies that subsidized homeownership “gave people the crazy juice,” he says.

For the full story, see:
KELLY EVANS. “Spreading Hayek, Spurning Keynes; Professor Leads an Austrian Revival.” The Wall Street Journal (Sat., AUGUST 28, 2010): B1 & B3.
(Note: ellipsis added.)

“Pumping Your Own Gas Is Illegal in New Jersey” and Oregon

“Will Corcoran pumps gas at Tim’s Westview in Ridgefield Park. Pumping your own gas has been illegal in New Jersey for 61 years.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A1) RIDGEFIELD PARK, N.J.–People in New Jersey pick their own strawberries. They chop down their own Christmas trees. They check themselves in at airports and check themselves out at supermarkets. Lately, a few New Jerseyans have been wondering whether it isn’t about time they were allowed to pump their own gas.

Pumping your own gas is illegal in New Jersey. It has been for 61 years. It’s also illegal in Oregon, and in the New York town of Huntington, on Long Island. Just about everywhere else, self-serving Americans do it themselves. As paying at the pump gets easier, the gas station attendant is fast going the way of the elevator operator.
Don’t tell Will Corcoran. When you pull into Tim’s Westview, a Gulf station across from the train tracks in this north Jersey town, you’ll sit in your car while he fills your tank.
Under a cold rain one weekday, he stood at the driver’s window of a Chevy, bent over, yakking. He wore blue. His cap had Gulf Oil’s orange disk on it. After his customer signed the credit slip (Tim’s pumps don’t process cards), Mr. Corcoran, 42 years old, shook hands and saluted like a gas jockey in an old commercial.

For the full story, see:

BARRY NEWMAN. “Self-Service Nation Ends at Garden State Gas Pumps; Changing Law May or May Not Lower Prices; ‘New Jersey Is Heaven!’.” The Wall Street Journal (Sat., NOVEMBER 27, 2010): A1 & A14.

The Psychology of How Power Corrupts

(p. B1) Being in a position of power . . . may make people feel that they can do no wrong. In recent experiments, Dana Carney, a psychologist at Columbia University’s business school, has found that acquiring power makes people more comfortable committing acts they might otherwise be reluctant to commit, like lying or cheating. As people rise to a position of power, she has shown, their bodies generate more testosterone, a hormone associated with aggression and risk-taking, and less cortisol, a chemical that the body generates in response to stress.

“Having power changes you physiologically, reducing your body’s internal feedback that tells you which actions are good or bad,” says Prof. Carney. “Power temporarily intoxicates you.”

For the full commentary, see:
JASON ZWEIG. “THE INTELLIGENT INVESTOR; What Conflict of Interest? How Power Blinds Us to Our Flaws.” The Wall Street Journal (Sat., OCTOBER 16, 2010): B1.
(Note: ellipsis added.)

Castro’s Reform: Private Restaurants May Now Have Up to 20 Seats

“Restaurants, . . . , offer limited menus.” Source of caption: print version of the WSJ article quoted and cited below. Source of photo: online version of the WSJ article quoted and cited below.

(p. A18) HAVANA–A package of capitalist reforms from President Raúl Castro is creating something new for many Cubans: uncertainty.

Since 1959, when Fidel Castro rode into Havana atop a tank, the Cuban state has promised its people the certainty of a job, food, education and health care. No one expected to get rich under the arrangement; the old joke here is that people pretend to work, and the government pretends to pay them.
. . .
On the island, where many Cubans have taken to using the word “changes,” rather than “reforms,” to refer to the restructuring, people remain cautious. Some suspect that once the economy recovers and small businesses begin to grow, the Cuban government will tighten the noose on entrepreneurs with stricter regulation and steep taxes.
A restaurant on Calle Animas offers an example of such frustrations. Opened in 1996 after an effort by Fidel Castro to jump-start the domestic economy after the collapse of the Soviet Union, it has never expanded, because of a law that limits privately owned restaurants to only 12 seats. “It’s the rules, you live by them,” the owner says.
Prices are high–about $20 for a lunch with fish from the fixed menu–largely, the owner says, because she can’t find ingredients anywhere except in underground markets, where prices are steep. Under the new rules, private restaurants will be permitted to have up to 20 seats. Still, the owner complains that state-run restaurants in the tourist district, which don’t face such restrictions, have many more than 20 seats.

For the full story, see:
A WSJ Staff Reporter. “Cubans Dip a Toe in Capitalist Waters; As State Cuts Half a Million Jobs, Future Looks Murky to Some; ‘We’re Being Left to Fend for Ourselves’.” The Wall Street Journal (Weds., October 6, 2010): A18.
(Note: ellipses added.)

Syrian Government Wastes Water in Drought: “No Money, No Job, No Hope”

“Refugees have left their farmlands and are living in tents in Ar Raqqah, Syria, because of a drought.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) AR RAQQAH, Syria — The farmlands spreading north and east of this Euphrates River town were once the breadbasket of the region, a vast expanse of golden wheat fields and bucolic sheep herds.

Now, after four consecutive years of drought, this heartland of the Fertile Crescent — including much of neighboring Iraq — appears to be turning barren, climate scientists say. Ancient irrigation systems have collapsed, underground water sources have run dry and hundreds of villages have been abandoned as farmlands turn to cracked desert and grazing animals die off. Sandstorms have become far more common, and vast tent cities of dispossessed farmers and their families have risen up around the larger towns and cities of Syria and Iraq.
“I had 400 acres of wheat, and now it’s all desert,” said Ahmed Abdullah, 48, a farmer who is living in a ragged burlap and plastic tent here with his wife and 12 children alongside many other migrants. “We were forced to flee. Now we are at less than zero — no money, no job, no hope.”
. . .
(p. A17) The drought has become a delicate subject for the Syrian government, which does not give foreign journalists official permission to write about it or grant access to officials in the Agriculture Ministry. On the road running south from Damascus, displaced farmers and herders can be seen living in tents, but the entrances are closely watched by Syrian security agents, who do not allow journalists in.
Droughts have always taken place here, but “the regional climate is changing in ways that are clearly observable,” said Jeannie Sowers, a professor at the University of New Hampshire who has written on Middle East climate issues. “Whether you call it human-induced climate change or not, much of the region is getting hotter and dryer, combined with more intense, erratic rainfall and flooding in some areas. You will have people migrating as a result, and governments are ill prepared.”
The Syrian government has begun to acknowledge the scale of the problem and has developed a national drought plan, though it has not yet been put in place, analysts say. Poor planning helped create the problem in the first place: Syria spent $15 billion on misguided irrigation projects between 1988 and 2000 with little result, said Elie Elhadj, a Syrian-born author who wrote his Ph.D. dissertation on the topic. Syria continues to grow cotton and wheat in areas that lack sufficient water — making them more vulnerable to drought — because the government views the ability to produce those crops as part of its identity and a bulwark against foreign dependence, analysts say.

For the full story, see:
ROBERT F. WORTH. “Parched Earth Where Syrian Farms Thrived.” The New York Times (Thurs., October 14, 2010): A1 & A17.
(Note: ellipsis added.)
(Note: the online version of the article is dated October 13, 2010 and has the title “Earth Is Parched Where Syrian Farms Thrived.”)

Source of maps: online version of the NYT article quoted and cited above.

School Choice “Makes Parents and Students Happier with Their Schools”

Davis Guggenheim’s “Waiting for ‘Superman'” movie has brought renewed attention to the case for school choice. New York Times commentator Ross Douthat reasonably discusses that case:

(p. A21) Guggenheim’s movie, which follows five families through the brutal charter school lotteries that determine whether their kids will escape from public “dropout factories,” stirs an entirely justified outrage at the system’s unfairnesses and cruelties. This outrage needs to be supplemented, though, with a dose of realism about what education reformers can reasonably hope to accomplish, and what real choice and competition would ultimately involve.

With that in mind, I have a modest proposal: Copies of Frederick Hess’s recent National Affairs essay, “Does School Choice ‘Work’?” should be handed out at every “Waiting for ‘Superman’ ” showing, as a sober-minded complement to Guggenheim’s cinematic call to arms.
. . .
A real marketplace in education, he suggests, probably wouldn’t fund schools directly at all. It would only fund students, tying a school’s budget to the number of children seeking to enroll. If there are 150 applicants for a charter school, they should all bring their funding with them — and take it away from the failing schools they’re trying to escape.
This is a radical idea, guaranteed to meet intense resistance from just about every educational interest group. But Hess makes a compelling case that it needs to be the school choice movement’s long-term goal, if reformers hope to do more than just tinker around the edges of the system.
In the shorter term, meanwhile, he suggests that school choice advocates need to make a case for greater competition that doesn’t depend on test scores alone. Maybe charter schools, merit pay and vouchers won’t instantly turn every American child into a test-acing dynamo. But if they “only” create a more cost-effective system that makes parents and students happier with their schools — well, that would be no small feat, and well worth fighting for.

For the full commentary, see:
ROSS DOUTHAT. “Grading School Choice.” The New York Times (Mon., October 11, 2010): A21.
(Note: ellipsis added.)
(Note: the online version of the commentary is dated October 10, 2010.)

The Hess article is:
Hess, Frederick M. “Does School Choice “Work”?” National Affairs, Issue 5, FALL 2010.

When Inventors Could Get Patents that Were Durable and Enforceable, “the World Started to Change”

(p. 50) . . . Coke, who had . . . been made Lord Chief Justice of’ England, drafted the 1623 “Act concerning Monopolies and Dispensations with penall Lawes and the Forfeyture thereof,” or, as it has become known, the Statute on Monopolies. The Act was designed to promote the interests of artisans, and eliminate all traces of monopolies.

With a single, and critical, exception. Section 6 of the Statute, which forbade every other form of monopoly, carved out one area in which an exclusive franchise could still be granted: Patents could still be awarded to the person who introduced the invention to the realm–to the “first and true inventor.”
This was a very big deal indeed, though not because it represented the first time inventors received patents. The Venetian Republic was offering some form of patent protection by 1471, and in 1593, the Netherlands’ States-General awarded a patent to Mathys Siverts, for a new (and unnamed) navigational instrument. And, of course, Englishmen like John of Utynam had been receiving patents for inventions ever since Henry VI. The difference between Coke’s statute and the customs in place before and elsewhere is that it was a law, with all that implied for its durability and its enforceability. Once only inventors could receive patents, the world started to change.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics in original; ellipses added.)

Capitalism’s Market Entrepreneurs Benefit the Common Man

“Rails to riches: An 1870 cartoon depicting James Fisk’s attempt to stop Cornelius Vanderbilt from gaining control of the Erie Railroad Company.” Source of caption and cartoon: online version of the WSJ article quoted and cited below.

I have read H.W. Brands’ Masters of Enterprise book and found that it contained some interesting anecdotes, but not very insightful interpretation. From Amity Shlaes’ useful review quoted below, I would expect the same from Brands’ most recent book.

(p. C7) Mr. Brands laments that capitalism’s triumph in the late 19th century created a disparity between the “wealthy class” and the common man that dwarfs any difference of income in our modern distribution tables. But this pitting of capitalism against democracy will not hold. When the word “class” crops up in economic discussions, watch out: it implies a perception of society held in thrall to a static economy of rigid social tiers. Capitalism might indeed preclude democracy if capitalism meant that rich people really were a permanent class, always able to keep the money they amass and collect an ever greater share. But Americans are an unruly bunch and do not stay in their classes. The lesson of the late 19th century is that genuine capitalism is a force of creative destruction, just as Joseph Schumpeter later recognized. Snapshots of rich versus poor cannot capture the more important dynamic, which occurs over time.

One capitalist idea (the railroad, say) brutally supplants another (the shipping canal). Within a few generations–and in thoroughly democratic fashion–this supplanting knocks some families out of the top tier and elevates others to it. Some poor families vault to the middle class, others drop out. If Mr. Brands were right, and the “triumph of capitalism” had deadened democracy and created a permanent overclass, Forbes’s 2010 list of billionaires would today be populated by Rockefellers, Morgans and Carnegies. The main legacy of titans, former or current, is that the innovations they support will produce social benefits, from the steel-making to the Internet.
The second failing of “Colossus” is its perpetuation of the robber-baron myth. Years ago, historian Burton Folsom noted the difference between what he labeled political entrepreneurs and market entrepreneurs. The political entrepreneur tends to compete over finite assets–or even to steal them–and therefore deserves the “robber baron” moniker. An example that Mr. Folsom provided: the ferry magnate Robert Fulton, who operated successfully on the Hudson thanks to a 30-year exclusive concession from the New York state legislature. Russia’s petrocrats nowadays enjoy similar protections. Neither Fulton nor the petrocrats qualify as true capitalists.
Market entrepreneurs, by contrast, vanquish the competition by overtaking it. On some days Cornelius Vanderbilt was a political entrepreneur–perhaps when he ruined those traitorous partners, for instance. But most days Vanderbilt typified the market entrepreneur, ruining Fulton’s monopoly in the 1820s with lower fares, the innovative and cost-saving tubular boiler and a splendid advertising logo: “New Jersey Must Be Free.” With market entrepreneurship, a third party also wins: the consumer. Market entrepreneurs are not true robbers, for their ruining serves the common good.

For the full review, see:
AMITY SHLAES. “An Age of Creative Destruction.” The Wall Street Journal (Sat., October 16, 2010): C7.
(Note: the online version of the article is dated October 29 (sic), 2010.)

The book under critical review by Shlaes:
Brands, H.W. American Colossus: The Triumph of Capitalism, 1865-1900. New York: Doubleday, 2010.

The Folsom book rightly praised in passing by Shlaes is:
Folsom, Burton W. The Myth of the Robber Barons. 4th ed: Young America’s Foundation, 2003.

Some Hispanics Support Arizona Immigration Law

“Shayne Sotelo opposes Arizona’s new immigration law, while her husband, Efrain, supports it.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 28) PHOENIX — Arizona’s immigration law, which politicians have debated in the Legislature, lawyers have sparred over in the courtroom and advocates have shouted about on the street, has found its way up a driveway in central Phoenix, through the front door and right onto the Sotelo family’s kitchen table.
. . .
That such a divisive social issue would divide some families is not surprising. But what makes the Sotelos stand out is that they are both Latinos, he a Mexican immigrant who was born in the northern state of Chihuahua and she a descendant of Spanish immigrants who grew up in Colorado.
While polls show that a vast majority of Latinos nationwide side with Mrs. Sotelo in opposing Arizona’s law, that opposition is not uniform. “All Latinos are not opposed to this law — that’s too simplistic,” said Cecilia Menjivar, an Arizona State University sociologist. There are other Mr. Sotelos out there, including an Arizona state legislator, Representative Steve B. Montenegro, a Republican who immigrated from El Salvador and became the only Latino lawmaker to vote in favor of the bill.
. . .
[Mr. Sotelo] thinks his adopted state has been unfairly maligned since the law passed. “I’m a Hispanic, and I don’t have any issues walking the streets,” he said. “They make it seem like the police or sheriff are out there checking everyone’s papers, and that’s not so.”

For the full story, see:
MARC LACEY. “One Family’s Debate Shows Arizona Law Divides Latinos, Too.” The New York Times, First Section (Sun., October 31, 2010): 28.
(Note: ellipses added; bracketed name added to replace “He.”)
(Note: the online version of the article is dated October 30, 2010 and has the title “Arizona Immigration Law Divides Latinos, Too.”)