Government – Page 156 – artdiamondblog.com

Studies Show Economic Freedom Boosts Economic Growth

A trio of European economists have just published a meta-analysis on the effects of economic freedom (EF) on economic growth. After many pages, here is their bottom-line conclusion:

(p. 182) Most studies reviewed in this paper have serious drawbacks, including lacking senstitivity analysis and poor specifications of the growth model used. However, studies that have applied some kind of sensitivity analysis and sensible specfications generally find support for a positive relationship between changes in EF and growth. This suggests that liberalization will indeed boost economic growth.

For the full article, see:
De Haan, Jakob, Susanna Lundström, and Jan-Egbert Sturm. “Market-Oriented Institutions and Policies and Economic Growth: A Critical Survey.” Journal of Economic Surveys 20, no. 2 (2006): 157-91.

Private Enterprise “computer-chip makers have better hand-cleaning standards than most hospitals”

With rising alarm over hospital infections, which cause 90,000 deaths annually, a growing number of hospitals are adopting aggressive hand-hygiene surveillance and monitoring programs, and in some cases imposing penalties for doctors, nurses, and other health-care workers who don’t follow the rules.
. . .
Despite strict guidelines issued by the CDC to stop the spread of bacteria on contaminated hands, and wide adoption of alcohol-based hand-rub dispensers in patient rooms and hospital corridors to make it easier for harried health-care workers to disinfect between patients, compliance rates remain mired at 40% to 50% nationwide, studies show.
The IHI program recommends a far more activist approach that holds hospital administrators and staffers accountable for failure.
“It no longer is tolerable to accept noncompliance rates of more than 50% when we are dealing with critically ill patients,” says Don Goldmann, a senior vice president of IHI and a professor of pediatrics at Harvard Medical School, who notes that computer-chip makers have better hand-cleaning standards than most hospitals. While the IHI program emphasizes education and positive feedback, “repeated violations in health-care, or any industry, need to have consequences,” Dr. Goldmann says.

For the full story, see:
LAURA LANDRO. “THE INFORMED PATIENT; Hospitals Get Aggressive About Hand Washing; Staff Surveillance Programs, New Penalties Aim to Boost Sagging Compliance Rates.” The Wall Street Journal (Weds., April 5, 2006): D3.

Ernie Chambers Right in Supporting Parents’ Role in Education

For several months, the Omaha community has been roiled by the hostile efforts of the Omaha Public School (OPS) district to seize the schools and territory of long-established suburban school districts. Here ia an email that I sent to my representative in the Nebraska unicam on Sun., 4/9/06:

Dear Mr. Brashear:
I have appreciated your hard work as my representative in the legislature, and I have always voted for your re-election.
We believe strongly in giving our 11 year-old daughter a Montessori education. The Millard School District is the only area district that has had the entrepreneurial initiative to offer such a program, so we filled out the paperwork to option Jenny into the Millard District.
I strongly resent the implication of OPS that those who choose other school districts necessarily do so for racial reasons. We would have been very happy to stay in OPS (and it would have been more logistically convenient), but OPS does not support the diversity of educational options that Millard does.
Ernie Chambers is often wrong, but he is not always wrong. Dividing OPS into three districts would be a modest step toward increasing parental choice. Parents of all races want to be free to choose.
Tomorrow, I hope your vote will be to support freedom and competition.
Thank you for considering my views.
Sincerely,
Art Diamond

A Salute to Villepin is Still in Order

Source of image: http://www.lesoir.be/rubriques/monde/page_5715_419028.shtml

PARIS, April 4 — Waves of demonstrations, strikes and violence hit France again on Tuesday as Prime Minister Dominique de Villepin, weakened but defiant, refused to bend to the demand that the government scrap a disputed youth labor law.
It was the fifth nationwide protest since February against a modest initiative that was aimed at encouraging the hiring of young people but that has provoked an improvised, open-ended campaign against the French government itself.
. . .
But, in a sure sign that this was not a country paralyzed, the Paris Métro and bus system ran on a normal schedule. Mail and many newspapers were delivered. Only 18 percent of railroad workers were on strike, compared with 28 percent a week ago. Fifteen percent of domestic flights were canceled, half the percentage of last week. The Education Ministry reported that 23 percent of its workers were absent, compared with 36 percent last week.
In the National Assembly, Mr. de Villepin faced savage criticism from the opposition.
“Mr. Prime Minister, who is governing France today?” asked Jean-Marc Ayrault, the leader of the Socialist party bloc in the Assembly. At another point he said: “You govern no more. You hold the appearance of power, but you no longer exercise it.”
Mr. Ayrault said France was mired in a “crisis of regime with two prime ministers,” apparently referring to the active role that Interior Minister Nicolas Sarkozy has played in trying to open a dialogue with the unions.
In reply, Mr. de Villepin vowed, “The government will not give in.” Despite predictions that the law is doomed, he insisted: “What we want is a victory against unemployment. This is a victory for France.”

For the full story, see:
ELAINE SCIOLINO and CRAIG S. SMITH. “French Premier Refuses to Bow to Protests by Angry Youths.” The New York Times (Weds., April 5, 2006): A8.

Wildcatters Find 80% of Oil in U.S.

Source of image: WSJ article cited below.

(p. A1) David F. Morehouse, senior geologist with the U.S. Department of Energy’s Energy Information Administration, contends there is more new oil to be found in the continental U.S. Finding it, he says, will “depend on people doing the data analysis and, quite frankly, people going in and drilling enough in the right places.”
Mr. Findley, who is 54 years old, did just that. Now production in this part of eastern Montana is growing, and new investors are arriving to explore the potential. At least one midsized firm, Marathon Oil Co., has begun buying leases. Halliburton Co., the big Houston-based oil-services company, has invested with Mr. Findley. The state says the proven oil find in the area will likely be in the range of 150 million barrels, hardly what oil-patch hands call an “elephant,” but nevertheless boosting the nation’s proven oil reserves by about 1%.
. . .
(p. A14) While many people associate big oil finds with big companies, over the years about 80% of the oil found in the U.S. has been brought in by wildcatters such as Mr. Findley, says Larry Nation, spokesman for the American Association of Petroleum Geologists. Wildcatters search for oil, nail down drilling rights, then seek money from banks or bigger companies to extract it.
Mr. Findley grew up in Corpus Christi, Texas, the son of an accountant for a chain of grocery stores. A brother-in-law, a geologist, hired him as a field assistant to hunt for oil in west Texas. “I just fell in love with geology,” he recalls. He graduated from Texas A&M University in 1975 and got a job as a geologist with Tenneco Oil Co. In 1983 he left to found his own Montana-based consulting and exploration company, a one-man operation.
Three years later, world oil prices crashed, and fluctuating prices dogged Mr. Findley as he tried to stay in the business. In the 1990s, the majors left the area in the belief that it was played out. Mr. Findley felt there was more oil to be found and began putting together small exploration deals.
His income had dropped by more than half to $45,000 a year, and he wasn’t sure how much longer that would last. “Many times, my wife and I sat down at the kitchen table and said, ‘What are we going to do next?’ We always came to the same conclusion. [Geology] is what I know. This is what I love. So we just kept going.”

For the full story, see:
JOHN J. FIALKA. “Second Look; Wildcat Producer Sparks Oil Boom On Montana Plains After Majors Pulled Out, Mr. Findley Drilled Anew; Size of Find Still Unclear; A Rival Counts Tanker Trucks.” The Wall Street Journal (Weds., April 5, 2006): A1 & A14.
Source of map: WSJ article cited above.

Solution to Problems in Health Care and Higher Education: Change the Incentive Structures

Vernon Smith, one of the 2002 recipients of the Nobel Prize in economics, advocates fundamental institutional reform:

Physicians and medical organizations face escalating administrative costs of complying with ever more detailed regulations. The system is overwhelmed by the administrative cost of attempting to control the cost of medical service delivery. In education, university budget requests are denied by the states who also limit the freedom of universities to raise tuition.
If there is a solution to this problem, it will take the form of changing the incentive structure: empowering the consumer by channeling third-party payment allowances through the patients or students who are choosing and consuming the service. Each pays the difference between the price of the service and the insurance or subsidy allowance. Since he who pays the physician or college calls the tune, we have a better chance of disciplining cost and tailoring services to the customer’s willingness to pay.
Many will say that neither the patients nor the students are competent to make choices. If that is true today, it is mostly due to the fact that they cannot choose and have no reason to become competent! Service providers are oriented to whoever pays: physicians to the insurance companies and the government; universities to their legislatures. Both should pay more heed to their customers — which they will if that is where they collect their fees.

For the full commentary, see:
VERNON L. SMITH. “Trust the Customer!” The Wall Street Journal (Weds., March 8, 2006): A20.

Private Health Care Taking Root in Canada

TORONTO, Feb. 19 – The cracks are still small in Canada’s vaunted public health insurance system, but several of its largest provinces are beginning to open the way for private health care eventually to take root around the country.
Last week Quebec proposed to lift a ban on private health insurance for several elective surgical procedures, and announced that it would pay for such surgeries at private clinics when waiting times at public facilities were unreasonable.
The proposal, by Premier Jean Charest, who called for ”a new era for health care in Quebec,” came in response to a Supreme Court decision last June that struck down a provincial law that banned private medical insurance and ordered the province to initiate a reform program within a year.
The Supreme Court decision ruled that long waits for various medical procedures in the province had violated patients’ ”life and personal security, inviolability and freedom,” and that prohibition of private health insurance was unconstitutional when the public health system did not deliver ”reasonable services.”

For the full story, see:
CLIFFORD KRAUSS. “Ruling Has Canada Planting Seeds of Private Health Care.” The New York Times (Mon., February 20, 2006): A4.

The Market Solution to Email Spam

A COMPANY called Goodmail Systems thinks it has come up with a potential (and partial) solution to the problem of spam and fraud on the Internet. According to Goodmail, market forces are the answer, rather than the kinds of ineffective regulations that have so far failed to solve the problems.
. . .
What shocks me most about the opposition to Goodmail is that people who claim to believe in the free and open Internet, with its welcome attitude to innovation, want to shut down an idea. That’s wrong.
If people like those little stamps that mark their mail as safe and wanted or as commercial transactions, then let the customers have them. And let other companies compete with Goodmail to offer better and less expensive service.
Goodmail isn’t good because it’s new, but neither is it bad because it’s new. If it’s a good model, it will succeed and improve over time. If it’s a bad model, it will fail. Why not let the customers decide?

For the full commentary, see:
ESTHER DYSON. “You’ve Got Goodmail. The New York Times (Fri., March 17, 2006): A23.

86% Agree that Government Should Ban Dihydrogen Monoxide

A junior high school student in Idaho, Nathan Zohner, demonstrated in a 1997 science fair project how easy it was to hoodwink a scientifically uninformed public. As described in “The Frankenfood Myth,” 86 percent of the 50 students he surveyed thought dihydrogen monoxide should be banned after they were told that prolonged exposure to its solid form caused severe tissue damage, that exposure to its gaseous form caused severe burns and that it had been found in tumors from terminal cancer patients. Only one student recognized the substance as water, H2O.

For the full commentary, see:
JANE E. BRODY. ” PERSONAL HEALTH; Facing Biotech Foods Without the Fear Factor.” The New York Times (Tues., January 11, 2005): D7.

The Case Against Privatizing the Post Office

The free market can be defended with a variety of plausible philosophical arguments. But most people care more about what "works" than what is "right." So in the constant struggle between free markets and the government, it may be useful to maintain the government’s monopoly in delivering first class mail. That way when someone suggests a new intervention by the government, the free marketer can refute them with two persuasive words: "post office."

When it comes to first-class mail, the U.S. still does things the old-fashioned way, with one Postal Service. Not so in places like New Zealand and Sweden, which have opened their mail systems to private companies. The latest is Britain, where the Royal Mail lost its 350-year monopoly on delivery. At least 14 companies are now competing to sort and transport mail. British regulators believe competition will be good for the mail system. Japan is soon to follow. With the recent rise in U.S. stamp prices, expect more calls for privatization here too.

Source:

Lyric Wallwork Winik. "Intelligence Report; Is the Mailman Endangered?" Parade (Sun., March 19, 2006): 25.

Fascism’s “Most Notable Achievement Was that It Survived as Long as it Did”

Source of image of book cover: Amazon.com.

Some experts on National Socialism have concluded that its economy was not as efficient as usually believed. According to a recent expert, facism also was not a very efficient economic system (in spite of its oft-mentioned reputation for the trains running on time):

(p. B36) Yet for all the personality cult, the regime’s most notable achievement, as Mr. Bosworth sees it, was that it survived as long as it did. Virtually irrespective of where it set its sights — culture, science, economics, let alone the military — its performance persistently fell short of its discredited Liberal predecessor’s.

Note: in the review, “liberal” refers to 19th-century liberals. E.g.:

(p. B36) Like their 19th-century peers from Belgium to Romania, Italian Liberals yearned for a common flag, parliament, economy, identity, even empire. To a point, the truths held to be self-evident north of the Alps worked in Italy, too. But the transition to constitutional government was a work in progress, where progress needed all the help it could get.
By 1914, it was clear that it would take more than a constitutional monarchy, a railroad, a gold-based currency and African colonies to overcome the limits imposed by geography, culture and history. Eager to play with the big powers, Italians were not only poor, illiterate and economically underdeveloped, they were also allergic to any state, modern or otherwise. This would include dictatorship.

For the full review, see:
DAVID SCHOENBAUM. “Books of The Times | ‘Mussolini’s Italy’; Where Fascism Was Stylish and Vicious, if Ineffectual.” The New York Times (Fri., March 3, 2006): B36.

The book is:
R. J. B. Bosworth. MUSSOLINI’S ITALY: Life Under the Fascist Dictatorship, 1915-1945. Penguin Press, 2006. Illustrated. 692 pages. $35. ISBN: 1594200785

R.J.B. Bosworth. Source of image: NYT book review quoted and cited above.