Canadian Drugs Face U.S. Lawsuits
Brian Ferguson, a health care economist at Ontario's University of Guelph, offers another reason why "re-importation" of drugs from Canada is a non-solution to the problem of prescription drug affordability: Lawsuits.

If imports from Canada are expanded to the degree necessary to make any substantial difference, Canadian firms will face enough of a threat of lawsuits to make cost savings evaporate.

"The U.S. is a litigious society .... according to a 1997 study, published in the Journal of Law and Economics, fully half the price difference between Canadian and U.S. drugs can be explained by the need to set aside reserves against litigation awards.

Canadian firms would not be immune; where millions of dollars are involved, lawyers will find a way. Large scale re-importation from Canada would require some business presence in the U.S., and that would be vulnerable to American juries." (permalink)

How About a Little "Soul" Food for Your Public Policy?
The Acton Institute for the Study of Religion and Liberty sent me their latest bimonthly periodical today. If you're unaware of them, this broadly Christian group is worth checking out. They offer a moral defense of free markets, but also remind us of the imperative of ethical leadership in both the private and public sectors. (permalink)

Revisiting Detroit School Reform.
John Engler, former Michigan governor, chats with the Detroit News about school reform in Michigan's largest city. Engler gained notoriety for advocating a state takeover of the perennially dysfunctional schools.

Looking back five years after the fact, he says "It was stunning there was such a passive acceptance of a lousy school system by the community leadership. In fact, there was more interest in a few union jobs and a few people with positions and titles than the 160,000 kids that were in the district."

If you want to know why school performance isn't matching the high level of spending (over $10,000 per student in many school districts), it may be that the money isn't really going to higher the best teachers. Or teachers, period. Says Engler: "Detroit is one of the very few districts around where less than half of the money spent on schools ever got to the classroom."

And finally, my favorite zinger from the interview: "In the case of the city of Detroit schools, we arguably were in violation of the Constitution because what we were providing was free and public but it wasn't under any stretch of the imagination called education."

Labels: Education

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Two Conferences Health Savings Accounts.
Finally, something is going right in health care policy. Health Savings Accounts, created out of the otherwise hideous Medicare drug legislation of last year, are going to be an important part of making health care financing more consumer, rather than bureaucratic-driven. Once people learn that health care is not "free," and that they can benefit financially (and other ways) from being aware of medical costs and options, some problems of affordability and access will take care of themselves.

If you're in the midwest, you may check out two upcoming conferences on the subject. On November 10, the Citizens' Council on Health Care (directed by a professional acquaintance of mine) is holding a morning event. In the Kansas City area, the Flint Hills Center for Public Policy (a client of mine) is hosting a workshop on Friday, November 12. (permalink)

Flu Vaccine Shortage? Look to Government.
Craig Westover offer an explanation of why we are seeing a shortage of the flu vaccine. (permalink)

ADMIN: Light Blogging Ahead.
Yeah, I hate seeing these kinds of announcements on blogs I read, but here it goes: expect light-to-no blogging for the next week or so. (Last week, by the way, was taken up with business-related tasks.) Election duties at the Detroit News blog (where I serve as one of a handful of citizen-bloggers) will take up most of my blogging time. Plus, hey, I've got a life, too. (permalink)

Health Care Financing Makes the Tax System Look Rational.
If you think the federal income tax system, with its nightmarish audits, special favors, and impossible-to-understand rules is bad, you should consider our health care system.

Over 90 percent of people with employer-sponsored insurance are in some sort of managed care system that restricts their ability to choose a doctor.

People who work for small companies face the worst of it. They already get paid less, and because of behind-the-scenes regulatory requirements, they tend to pay more for insurance--if they can get it.

Perversely, the federal tax treatment of insurance gives greater benefits to the higher-income workers.

Meanwhile, Medicaid and Medicare are such poorly run programs that they would be shut down by regulators, if they were private companies. Medicare is governed by 110,000 pages of regulations--six times as many as those governing the tax system. It attempts to bureaucratize every medical procedure known to man, using over 7,000 billing codes that include treatment for falling from a spacecraft.

Of course, one of the biggest problems is that 40 million people don't have health insurance--sometimes from their own choice, sometimes out of financial desperation.

Some people might, when confronted with this situation, call for even more government-based reform efforts. But we got into this mess by heavy-handed, top-down, government involvement. Bureaucratically-driven health care financing and administration has become a full-time employment act for lawyers, accountants, and consultants. Much like the tax system, in other words.

It's time to move away from that. Allowing fraternal and religious groups to form insurance pools, letting people buy insurance across state lines, giving people who buy insurance on their own the same tax treatment as large corporations, and promoting the value of health savings accounts, not to mention reforming a sometimes out-of-control legal system would all go a long ways to promoting more sensible health care purchasing.

Labels: Health care, Medicaid

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Education Reform Event Brings More Blah, Blah, Blah.
Education is one of those topics that lots of people love to talk about--but do nothing to change the fundamental dynamics.

Craig Westover recently attended a public forum on K-12 education. His contribution to the event--the suggestion that Minnesota employ some form of universal tuition tax credit--was hardly given the dignity of a refutation before the gathered experts went back to the well of "More [money] please." As Westover observed, nearly everyone involved in the event had a stake in the status quo.

Actually, there was one other fundamental reform proposed. But it's an appalling one: threaten parents with visits from social workers if they do not review children's homework according to state school-developed standards. His comments, "MPR town hall was painful," are here.

Labels: Education

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The Silver Lining of Budget Gimmicks: They Reveal a Fundamental Shift in Expectations.
Michigan's political establishment, like that of many states, responded to budgetary shortfalls by accounting gimmicks (delaying accounts payable, accelerating taxes receivable) and raising taxes on tobacco and casino winnings.

While such moves are subject to criticism for not addressing the fundamental problems (chief of which is overspending), they are actually good news. At least that's the takeaway I have from today's commentary from the Mackinac Center for Public Policy. Write Michael LaFaive and Jack McHugh,

It is a testament to how much the landscape of political possibilities in Michigan has shifted that the new governor ruled out increases in general taxes to solve the budget crisis. In contrast, when former Gov. Blanchard was faced with a state deficit in 1983, he did not seriously cut spending; he lobbied to raise the state income tax by 38 percent.

This option is unthinkable today. Now what is "thinkable" is raising peripheral taxes ? cigarette and casino taxes, to name just two. This is still bad news, especially for smokers and gamblers, but the good news is that in order to raise revenues, officials did not feel able to tap the general public, where the big money really is.

A similar story could be told in high-service, high-tax Minnesota, where a "no new taxes" governor and House stared down a Senate inclined to raise income taxes "on the wealthy."

This is not simply a partisan development. In Minnesota, the Republicans control the governor's office as well as the House, while the Democrats run the Senate. In Michigan, the governor is a Democrat, while the Legislature has Republican majorities. In neighboring Ohio, Republicans have controlled the House, Senate, and governor's office for quite a while. And what has the Buckeye State seen? Taxes, taxes, and more taxes, including a 20 percent increase in the statewide sales tax. (permalink)

State Takeover of Detroit Schools Comes Up Short.
Showing that bringing new management to the same old broken system has only limited potential, latest test scores in the Detroit Public Schools are not much better now than they were when the State of Michigan took them over five years ago. Actually, the scores have not just meagerly improved, they've declined.

According to the Detroit Free Press, "Kenneth Burnley, chief executive officer for Detroit Public Schools, said the test scores do not measure all the improvements made in the last five years, such as increased teacher training, parental excitement about a new reading program and more efficient business operations."

Obviously, Burnley has a difficult job: the DPS has been a mess for quite a while now. But his response to the scores exemplifies what's wrong with K-12 education policy for quite a while. We focus on inputs, rather than outcomes. As long as schools are run as government monopolies, it won't much matter which level of government holds the monopoly. (permalink)

Want to Make Health Insurance More Affordable? Slash Regulations.
Health care, perhaps more than most areas of policy, suffers from the free-lunch illusion. You know, we can get everything we want, and get someone else to pay for it. There's one significant problem with that thinking: it doesn't work as designed.

A new analysis from the Cato Institute finds that regulations inflate the costs of health care by $339.2 billion a year. Christopher J. Conover says that the regulations have a benefit of $170.1 billion, leaving a net cost of "only" $169.1 billion per year, or $1,500 per household.

Among the factors driving up costs: litigation, FDA regulation, mandated health benefits, and accreditation and licensure requirements.

The high costs of regulations have implications for both health coverage (responsible for 16 percent of the number of uninsured) and life itself. Says Conover, "4,000 more Americans die every year from costs associated with health services regulation (22,000) than from lack of health insurance (18,000)."

Labels: Health care

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The PolicyGuy's Alter Ego.
This blog is and will continue to be about policy rather than politics. The study of makes for good policy, and making the case for it, is a different activity than studying or participating in politics. Obviously, they are related, and that's a good thing. I wouldn't want government to act simply because a bunch of policy guys got together and said "this is the way it should be." Even if they all agreed with me. Why? One reason: the path of policy-by-dictat is (to borrow a phrase from a different context), the road to serfdom.

Over in the Detroit News election 2004 weblog forum, I make some of the same points that I do here, though in a political context. (permalink)

Social Security, Health Care: Act Now, or Stick Your Head in the Sand.
Some of the most important things to do are always the most difficult ones to pull off. This is certainly true of Social Security and health care.

Today's Wall Street Journal does an excellent job of quickly making the case for action, in two editorials that contrast President Bush and John Kerry.

Here's the Journal on the question of Social Security's viability: "[Mr. Kerry] pledged that 'if, later on after a period of time, we find that Social Security is in trouble, we'll put together the top experts in the country . . .' If? Later? Again, at least Mr. Bush is willing to risk his popularity addressing a problem that only Presidential leadership can solve."

The editorial cuts to the chase on the problems facing health care and social security, and (as you would expect) speaks favorably of tax cuts.

Read the whole thing here. (It's on their free site, OpinionJournal.com).

Editorial page editor Daniel Henninger expands on these points in a slightly longer and related essay, also available free of charge, here. Perhaps the key point: "Proposals such as Social Security privatization or individually run health-savings accounts are not being offered as just an intriguing 'policy' alternative. These ideas are an historic necessity to surviving in the world economy as it exists today. Intellectually, the case for making the leap is compelling."

Worried about globalization and offshoring? Rising costs of health care and weather Social Security will be around when your time comes? We better act now. Doing the same old same old isn't going to work for much longer. (permalink)

Contracting Out Working Out for Porkies Ski Area.
Opponents of contracting out of government services (usually government employee unions) stir up fears of declining service and lower prices. But it looks like things are working out pretty well in the case of one formerly state-operated ski area.

Two years ago I called for the state of Michigan to get out of the business of running a downhill ski area in a remote part of the Upper peninsula. A year ago, the state followed suit. In April 2004, at the end of the first season with a private management, I offered an update, pointing out the benefits of contracting out. (To be sure, there were a few bumps along the around; it's not as if the state contracts out ski operations every month.)

Today the Ironwood Daily Globe, in nearby Ironwood, Michigan, reports that one of the complaints of the ski area users--insufficient grooming of cross-country trails--may be alleviated with a new arrangement between the state, a local users group, and the private contractor that runs the Porcupine Mountain ski area.

The state will give the Friends of the Porkies $5,400 to groom XC trails. The company that operates the downhill operations under the state contract has agreed to kick in $3,000 for equipment costs, though the user group will perform the actual grooming. Sounds like a good idea.

Meanwhile, two possible upgrades are underway. One is the addition of a third lift. The other is the conversion of some surplus buildings on the grounds.

The Friends of the Porkies is in negotiations with the Department of Natural Resources (DNR) over four buildings in the park. The DNR would like to raze the buildings, but the Friends would like to use them for nature education and adaptive ski programs. If they can provide the money and personnel, that's a great idea. (If the ideas proceed with state money and personnel, then we're looking at an expansion of government services, made possible, perhaps, by the savings achieved by contracting out the ski lift operations.)

One other note: despite fears that contracting out will inevitably lead to higher prices, the lift ticket prices will remain unchanged for the upcoming season. (permalink)

Comments on Comments on Tax Cuts.
My commentary on the recent Detroit News series on tax cuts has evidently stirred a lot of interest. The Mackinac Center tells me that traffic to the commentary is very high. Meanwhile, a friend of the center sent me this note:

"The most important reason for cutting taxes and not trying to gouge the well off is that government enforced redistribution of honestly and legally acquired wealth (as opposed to voluntary charity) is immoral, un-American and certainly not a proper exercise of taxing authority." (permalink)

Post-Debate Review.
My review of last night's debate is now available on the Detroit News. Read it. I could have spent the evening watching the baseball playoffs. (permalink)

Smoking Bans Cost a Lot.
Hennepin County (Minneapolis) Minnesota has become the latest local government to enact "we know better than you" legislation. A new law prohibits all smoking in food-serving establishments. Unlike many laws, it makes no exception for bars.

Craig Westover says that the loss of personal choice represents "a high price to pay for the privilege of a smoke-free meal." More details here. (permalink)

Does This House Make Me Look Fat?
That may be the conclusion you draw from reading a recent study alleging a link between health problems and suburban living. The basic idea: living in a detached house discourages walking to the bus, which means that you grow old and fat and out of shape.

But there are two major problems with that approach. The first: So what? Or more narrowly, "so what for the rest of us? Why should our housing choices, even if harmful to our health, be the matter of government concern?" The second: the correlations found in the RAND study don't necessarily prove anything. There may be other factors at work.

Sam Staley offers more in the Dallas Morning News (registration required.) (permalink)

Let's "Keep Options" Open for Tax Increases for Serious Things. Like Football Stadiums.
St. Paul (no, not that one) isn't impressed by the practice of newspapers making political endorsements, even if one newspaper is trending in his (conservative) direction.

In addition, he takes the St. Paul Pioneer-Press to task for advocating "the option" of raising taxes, and then justifying the need for that "flexibility" by boosting the prospects of another professional sports stadium.

Says the newspaper: "While we salute [candidate X], we fear that strict adherence to the no-taxes pledge could back the Legislature into a corner when it comes to investing in important projects, such as the Central Corridor and a new Twins stadium for St. Paul."

Says St. Paul (the blogger): "There it is - defined! Subsidizing professional sports with hundreds of millions of dollars of the public's money - that's the last resort. Maybe by 'resort' they meant this other Merriam Webster definition of the word: 'a place providing recreation, especially to vacationers.' ... What's odd about this logic is that I doubt any single individual on the editorial board actually holds that position, tax increases, but only for stadiums. ... the last thing on their priority list is a new Twins Stadium."

Trojan horse, anyone? (permalink)

Health Care: You're Paying for it Whether You Know it or Not

Writes Holman Jenkins (link is valid for seven days), "The problem [with healthcare] is we hide from consumers what their health care is costing them, though hiding the cost in no way relieves them of having to pay the cost."

As he points out, the tax deductibility of health insurance premiums for employees represents an extra tax benefit for people with higher incomes (in other words, it's a "regressive" benefit.) For that reason, perhaps, he favors eliminating all business tax benefits for insurance premiums, which would mean that the purchase of insurance proceeds without any tax distortions.

Given political realities and force of habit, that's unlikely to happen (as Jenkins admits), so he favors Health Savings Accounts as a second-best strategy. But HSAs supplement, not replace, insurance policies. Should people who buy insurance policies that go with HSAs also get a tax break? Jenkins is not clear on this point, but here's what I say: Yes, if businesses get tax breaks, so should individual purchasers who buy policies.

Where Jenkins shines is his analysis of the political hijinks that occur under the present arrangement, which combines tax breaks that favor employment-based insurance and politically-driven regulation of insurance. Assorted mandates imposed by government allows "politicians to spend the public's money on health care in ways the public would never choose for itself either in the marketplace or the voting booth."

How's that? The additional money spent on insurance, as a result of political controls (mandated benefits and other forms of regulation) is money not available for business investment or pay raises for employees.

"The middle class pays for the middle class's health care, whether by taxes, insurance premiums, reduced wages or over-the-counter prices. And the sooner the middle class is empowered to judge the value of health care versus its cost, the sooner we'll get a system that produces results to justify the resources that American workers pour into it."

Labels: Health care

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I'm Too Hung Over to Vote.
If you think that your fellow voters are too drunk to vote, you may be right.

Today's Wall Street Journal (link for subscribers) describes how some states are setting up "satellite" voting booths in supermarkets, casinos, and airports.

To make voting easier for people who are physically unable to stand in long lines, Texas and Florida offer "curbside voting" satellite sites, at which voters cast ballots without leaving their cars. "Saying 'My girlfriend's hungover out in the car and doesn't feel like coming in,' won't work," says Bill Kenyon, spokesman for the Texas secretary of state.

If you're too drunk, or reeling with the aftermath of being drunk, to get out of your car, should you really be voting? (permalink)

Teachers Get Graduate Credit for Attending Political Rally?
One status-quo approach to improving K-12 education is to send teachers to more continuing and graduate education courses.

So what if one of those "courses" consists of doing a "lit drop" for a politician endorsed by the teachers union? In Colorado, the Jefferson County Education Association tried to entice its members to the political event by promising graduate credit at Adams Stage College for the four-hour time commitment.

The Independence Institute has details. (permalink)

Are Tax Cuts the End of the World as We Know It?
The Detroit News recently ran a series of articles about last year's federal tax cuts. Though their various articles feature individuals from Michigan, the themes could appear in newspapers anywhere: government programs, good; tax cuts, bad. Writing for the Mackinac Center for Public Policy in today's "Current Comments," I answer the charge against tax cuts. (permalink)

Blogging Troubles.
For some reason, I'm having troubles with blogging today. There's been some technical issues to deal with, which are now resolved. (permalink)

Companies Start Hiring Based On Health Records.
With our reliance on employer-paid health insurance, it was bound to come to this: if you smoke--even in the privacy of your home--you don't get a job.

The idea of charging higher insurance premiums for smokers is nothing new, especially in life insurance. But according an article in today's Wall Street Journal (subscription required), higher premiums may be the least of it. "Union Pacific Corp. Recently stopped hiring smokers in seven states as a pilot program to weed out potential high-cost workers."

Now, I should make the obligatory disclaimer: I don't smoke, and think it's a vile habit. But tobacco is a legal product used by millions. I also think that if a company wants to not hire someone because he smokes, it should be free to do so.

So I mention this story not to call for yet another government intervention into employer-employee relations. Instead, it points to the folly of our tax system, which provides a bias towards employer-sponsored and paid health insurance. Once people have to pay their own premiums, such matters as whether or not to smoke will work themselves out.

Labels: Health care

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Two Letters from Iraq.
How about some on-the-ground reports from Iraq? I have two today.

I have a graduate degree in international relations, so I know that foreign policy is important. On this blog, though, I concentrate on what I write about professionally--domestic policy--education, health care, budgeting, and so forth.

Still, every so often I come across something that merits inclusion on the PolicyGuy blog. So it is with this entry. It is composed of 2 different letters from U.S. military personnel in the Persian Gulf theater. They come to me through a friend of a family member. (One author is the friend, the other is an acquaintance of the other.) As always, no single personal recollection is compelling in and of itself. But I think they make some good points.

I have edited the letters for length, and for reasons of privacy, omitted any personally identifiable information.

Letter 1: MY VIEW AN IRAQ UPDATE.
by Major ___

TO ALL

My intent with this letter is to give you a no kidding, from the Foxhole, where the rubber meets the road, version of what is taking place in this country. I know you all get CNN and FOX and the other news programs, but I'll tell you the real deal. I give you this view from my perspective, not official Army talk, but my opinion from someone who has worked at the ground level. You may agree or disagree, I really don't care, but I'm telling you how it is take it or leave it.

Why are we in Iraq? The attached letter by SGT ____ explains the best reason, but the bottom line is to make the world safer IN THE LONG run, and we will and have. I see this firsthand, these people deserve to be free. Yes their culture is different, that doesn't mean these people want anything less in life. To be able to live and raise their kids in a society free from a tyrant.

This isn't about oil. Like my liberal friends in Europe think, I live next to the biggest refinery in Iraq and believe me there isn't a lot of oil flowing yet, but it will.

It isn't about WMD, although that seemed to be the reason we came here. It doesn't matter if we had good intelligence or not. WE ARE NOW IN IRAQ, these people who were for the war when it started and now are against it kill me. Get over it and realize this war on terrorism is a marathon, not a sprint. It took 50 years to wipe out communism by staring down the Russians, well think the same for terrorism, only people are fighting and dying this time, not threatening to throw Nukes around. Bush is right, it is better to fight here, now then later. I'd rather do the fighting now, than have your kids and nephews and nieces have to come back here in 10 years. We say bad news only gets worse if you hide it, well Iraq was bad news and wasn't going away anytime soon unless we did something. We acted decisively and that is the key.

It would have been nice to have some help, other then the Brits, god bless them, but in reality we are better off from a MILITARY standpoint without the Europeans. Their armies suck and they don't do anything decisively. Saddam was crazy, I see that. I've been to his palace in Baghdad, saw the gold toilets. I have also driven out the gate of this palace and saw kids and women begging for food and living in mud huts. Nice man this Saddam.

The approach that we didn't need to do anything because he didn't have WMD, is a nice argument if you want to sit in fear of Iraq for the rest of time, because even if Saddam eventually went away there were plenty of other crazy bastards (SADR) to take his place.

What we have done in a little over 1 year here is truly amazing. Yes, it is still dangerous, but the Iraqi people are free. They all do not understand what that means yet, because they were terrorized for 35 years, but they will. Educated Iraqis I talk to know what the US did was needed and understand it will take time, but in the end Iraq and the world are better off.

Uneducated Iraqis, well they are fence sitters, they are waiting to see how their lives improve, and they are.

Terrorists, old regime elements, want to return to the days of Saddam, they are the insurgents putting up the fight for now, but the fight is waning. The new Iraqi government seems to mean business and with our continued help they will succeed and this country will prosper. Mark my words, in 5-10 years Bush's decision to get rid of Saddam and turn Iraq and a large part of the Middle East into a democratic, free country will be looked upon as a great decision for America and the world. It may screw him in November, but again IN THE LONG RUN, it was the right decision to make and the world is a safer place for all.

How is it really going over here? We are doing well, IEDs are the biggest concern. The enemy is good; they have continued to find ways to hide them. They put a bomb in a donkey cart under some hay the other day and left the donkey and cart along the road, which is a common site. We find 60 % of IEDs before they blow, 30% of them are crap and don't go off ,or don't do any damage, but it is the 10% that hurt or kill US soldiers you guys read about. It is sad, but we are aggressive, we send out special road sweep vehicles twice a day. Soldiers on convoys know what to look for, the unusual, the out of place or something that is different, but it is hard when flying down the road at 60 MPH to spot everything, so short of manning every road we use 24/7 it is impossible to completely stop IEDs.

Vehicle IEDs are the new weapon of choice, they target Iraqi people now, trying to turn them, it is the last desperate technique of cowards. Believe me we are sending a lot more of the bad guys to hell then you will ever know. You guys won't read about it, we don't do body counts, but for every one American that is killed or wounded 3-4 bad guys are given the same fate. We patrol now with Iraqi police and Iraqi National Guard members, everything is done together, we are showing the Iraqi people they are part of this, it is there country, they have to stand up and take their country back. They have a government that is really running things since June 28th. We have let off some, but we always retain the right to defend ourselves and the Iraqi people.

Living conditions are getting a lot better. All soldiers have a place to sleep in A/C. We continue to build and set up better living places, it is getting there. The burn crappers are gone, all chemical toilets in use now with a pumping service. Food is decent; we just got a contracted mess hall set up which serves good food, no more MREs and army food.

We have a couple internet areas and phone centers so everyone has access to both. It is crowded but not bad. The heat and dust is tough, it is 120 today. When the wind blows it is like sticking your head in an oven as the heat rolls across your face. Some bases have better living conditions than others, I can't complain, we also have a gym with weights and our mess hall has big screen TVs so we keep up on the news. We have made great improvements in 5 months.

You all should be proud of your military here. We have done great things that you won't read about or see on TV because it is not "exciting" enough. We have opened schools, fixed roads, built hospitals and numerous other projects. What this country needs now is economic support. Jobs are what are really needed. The country can take care of itself with some help. Things will get better, the oil money will now go to the people, not Saddam and his cronies. Again, given time this country will turn the corner, they just need the help and support from the world.

As I get ready to leave I'm proud of serving in this fine military with the soldiers that lay it on the line everyday here. The blood shed here has not been in vain and by freeing Iraq the world and you and better off. Continue to support the troops, we have received many support packages and letters from all across the country and as long as we are supported back home, we will continue to make great progress over here. I don't know how long we will stay engaged in Iraq, but years is more likely then months.

Take Care, Be safe and never take for granted all we have in the United States. We truly live in the greatest country in the world and we are fortunate for that.


Letter #2 "FOR OUR CHILDREN"
By: SGT ____

It is easy to point at Saddam Hussein and the global war on terrorism and give a thumbs up in approval. However, Saddam is gone now. Why are we still here? Bin Laden is in Afghanistan. The evil terrorist cells are in Syria and beyond. These are the questions that the enlisted were asking themselves.

It was not until a few weeks ago that all became known to me. I was standing in the middle of a dirt pit in central Iraq surrounded by a huge cache of 500kg bombs and wondering if the sun was on a personal mission to cook me alive. A Kurdish man and his 40- year-old son, hired to assist us in removing these little goodies, were both operating a crane and singing the worst Arabic version of "Love in an Elevator" that I've ever heard.

I was about to give them my less-singing-more working speech when the old man sensed my frustration. He lumbered over to me and stopped well within my 'territorial bubble' range. As his son continued to belt out some current Iraqi hits at the top of his lungs, he asked me, "Do you know why we sing?"

I had no reply. He said in broken English, "Because we free. My son not slave in Saddam's army. We have jobs and food for our families. Saddam took all from us and gave to his family. Bush free us and give us jobs and peace. The U.S. is good and my friend. Our children free. I thank you. My children thank you."

I stepped back and looked at his son and he gave me a thumbs up and smiled and then continued with the Arabic version of "I Shot the Sheriff." It then occurred to me that we are doing this for our children, too. By stopping Saddam and staying to ensure that stability would survive, we saved our children from having to come to this place to do it for us. By freeing Iraq, the rest of the region may eventually see that freedom can work. Maybe a few of those terrorists will develop the same sentiment and lay down their arms? Maybe some form of peace awaits us in the near future because of our actions here?

I like to think that our children and our children's children will sleep in peace because we gave our all. The blood, sweat, and tears of a few for the peace and harmony of many. Freedom has always come at a price. The U.S. and her soldiers are its sole defenders. Why should I risk my neck to help a country that has little impact on my life? For our children.

A few things that stood out to me:
1. "Yes their culture is different, that doesn't mean these people want anything less in life. To be able to live and raise their kids in a society free from a tyrant." The dream lives.

2. "Realize this war on terrorism is a marathon, not a sprint." Artificial deadlines are deadly.

3. "Other then the Brits ... we are better off from a MILITARY standpoint without the Europeans." So much for the need for "allies" (code words for France, which has a record of getting in the way of U.S. foreign policy, and Germany, with a meager military operation.)

4. "Saddam took all from us and gave to his family. Bush free us and give us jobs and peace. The U.S. is good and my friend. Our children free. I thank you. My children thank you." (permalink)

Improving Teacher Quality.
Free breakfast, computers in the classroom, and many other "tricks" have been suggested to improve student achievement. Yet the most important factor in education is the teacher.

Yet teacher training is in shambles. Entry to the K-12 teaching profession in government-run schools (in the large) requires the possession of a teaching certificate. The certificate, in turn, requires the would-be teacher to spend lots of time and money in trivial courses in education schools. And when they finally settle into the profession, a bad teacher earns as much money as a good teacher--as long as they both have the same number of college credits and have been on the job for the same number of years.

In an era when a good education is more important to personal and economic prosperity than ever, the old school is no way to run a school.

Robert Holland offers a prescription for improving teacher quality in his book To Build a Better Teacher. A preview of the book is available in Policy Review.

"Of all the factors [to student success] we study — class size, ethnicity, location, poverty — they all pale to triviality in the face of teacher effectiveness."

Holland calls for "value-added assessment" of teacher quality combined with rewarding better-performing teachers with higher pay. (He also calls for deregulating the current system of teacher training, to remove some of the inane requirements that currently discourage many good people from entering the profession.)

Labels: Education

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About those Safe Drugs From Canada.
During last night's debate, Kerry (and to some extent, Bush) talked about getting cheaper, safe prescription drugs from Canada. But there's just one problem: doing so is not necessarily safe, either in the short-run or the long run.

Here's an essay I recently wrote on the subject. Normally I simply link to my work published elsewhere, but it's not yet online. I'm not going to re-create the hyperlinks; write to me if you would like the footnotes.

ALTERNATIVES TO PRESCRIPTION DRUG IMPORTATION
Facing tight budgets, discontented citizens and activists group, and perhaps seeking an opportunity to gain political advantage by striking a populist pose, many a government official may be tempted to endorse, facilitate, or even engage in the "re-importation" of prescription drugs from Canada or other countries. While the appeal is understandable, more effective and useful means are at hand.

A Faulty Solution
The importation of prescription drugs bypasses the usual process of FDA approval and controlled distribution within the U.S. There are several health related, legal, and other reasons why this is a faulty solution.

Imported drugs are not necessarily safe. The FDA cannot and does not assure that drugs imported from other countries are safe. U.S. Customers and FDA inspectors can not possibly keep up with the quantity of imported drugs that came from Brazil, Pakistan, and other countries. And while some countries have agencies analogous to the FDA, they do not vouch for the safety of drugs shipped elsewhere. Many drugs purportedly to come from Canada, for example, are first shipped there from elsewhere, leaving a murky trail of accountability and mishandling that may reduce drug potency and effectiveness.

Drug importation is against the law. To date, at least five states have actively violated federal law by helping residents or state employees "by setting up Web sites to help citizens buy less expensive prescription medicine from Canada" as well as other countries. But William Hubbard, associate commissioner of the FDA, says, "at some point we may have to go to a federal judge to referee this matter and get a ruling on the legality. We think we would win fairly easily."

Imported drugs may be funding organized crime and terrorist activity. In the word of former New York City mayor and prosecutor Rudy Giuliani, a "high profit, low risk business for the counterfeiters or those involved in circumventing the laws in supplying medicines outside the traditional distribution chain” may “be appealing to organized crime and terrorist organizations."

Importing drugs from other countries brings harmful price controls here. A drug produced by an American drug company, in America, usually costs less when purchased in another country. That is usually because the foreign country can set its own price; that is, it can (and does) impose price controls. As one commentator explained international law essentially handcuffs our drug companies when they negotiate with other countries. It allows a country to violate a drug patent — steal the new drug — if the country is unable to negotiate a contract at "reasonable commercial terms." As FDA Commissioner Mark McClellan has said, "the needed incentives to develop new medicines through excessive price controls is slowing the process of drug development worldwide." So far, the U.S. market has been large enough to cover the costs of drug development--up to $1.7 billion per new drug to market, by one estimate--and provide the necessary profit. But it will not be sufficient if American governments help bring foreign price controls here.

Importation can hurt U.S. pharmacies and pharmacy employees. Money spent on pharmacies or distributors outside the U.S. means a loss of income, and perhaps jobs, U.S. pharmacy workers. When a local or state government assists or participates in a purchase contrary to U.S. law, it inflicts an economic loss to honorable businesses and individuals who play by the rules governing the distribution of prescription drugs.

Where to Go From Here?
The desire of officials to "do something" is understandable. But too much of "doing something" is doing harm.

Demagoging drug companies is not helpful. Research-based pharmaceutical companies face bipartisan criticism for allegedly excessive profits. But as physician David Gratzer pointed out, drug companies, motivated by profit, invest $6 billion a year on cancer research, not to mention hundreds of other drugs. The result of profit-driven research: improved quality of life and in many cases, saved lives. Tour de France champion cycling Lance Armstrong said of the pharmaceutical company that saved his life, "had they not been in existence, these drugs would not have been in existence. I wouldn't be alive. That's the bottom line."

Any taxpayer-provided benefits should be means-tested. Tax dollars should not be taken from a thirty-something working family to subsidize the prescription drug purchases of a wealthy individual who chooses to forgo health insurance.

Make health insurance more affordable. Prescription drugs are but one form of medical spending; any improvement in the affordability of health insurance frees up money that can be used for necessary prescription drugs. The issue of state mandates and insurance regulation should receive strict scrutiny.

Promote health savings accounts. Under new federal legislation, people who purchase certain insurance policies can have a health saving account (HSA). By accumulating funds on a tax-free basis, people are free to purchase drugs that are best for them. Smart shopping can make those dollars go farther; a review of pharmacies in Michigan found that the retail price of a prescription drug can vary by up to 400 percent.

Promote the use of pharmaceutical discount plans. A number of pharmaceutical companies have programs to assist low-income households. The web site NeedyMeds, for example, has information on over 1,900 prescription drugs and dosages that are available through a variety of patient assistance programs. Some offer reduced rates, while others give drugs free of charge. State and local offices should be able to find creative and effective ways of publicizing these programs.

Call on federal officials to reform the FDA approval process. Dr. Mark McClellan, commissioner of the Food and Drug Administration, has recognized that process for approving new drugs takes too long, costs too much money, and thus adds unnecessary expense to cost of developing new drugs.


UPDATE: I'll have more comments on this issue in a day or so.

Labels: Health care

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Live Blogging Bush v. Kerry II.
Tonight I'm watching the Bush v. Kerry II debate at an "undisclosed location" with about 7 other bloggers. My thoughts are going up at the Detroit News blog. (permalink)

Fewer Students = More Money?
In nearly all Michigan counties, the number of preschool children is on the decline. A number of people are using that as a reason to increase the amount of money given to K-12 government-run schools. Instead, schools should look for ways to cut costs in response to the declining need. That's my take in an article published today by the Mackinac Center for Public Policy. (permalink)

If you think politicians should get a raise only if they balance the budget ...
... then you will appreciate this item. The Minnesota House and Senate were unable to resolve their differences during the last session, leaving the state without a proper budget. Now, the Senate has given itself a raise. Nice work if you can get it. (Did I mention that senators are not up for election this year?) (permalink)

Stupid High School Tricks
The latest in adolescent stupidity and cruelty: "Vote unpopular students ... onto the homecoming court. And then make fun of them."

The Detroit Free Press is on the story, and reports on a very sensible solution: students must first nominate themselves before being placed on the ballot.

Labels: Education

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Smart Drugs, Smart Consumers, Dumb Incentives.
Vioxx, a painkiller, has been taken off the market--and the insurance market may be to blame.

Holman W. Jenkins, Jr. provides some details in today's Wall Street Journal. Roughly 4.5 million arthritis sufferers face a severe risk of stomach bleeding -- which can lead to death -- from conventional painkillers. Some 16,000 people die each year from such bleeding. That's where a class of drugs known as COX-2 inhibitors (including Vioxx) comes in: they deal with the pain without the internal bleeding. In 1999, when Vioxx was introduced, hospital admissions for pain reliever-induced bleeding decreased 8 percent. That translates into cost savings in hospitalization, better lives for people who take the drug, and potentially, fewer deaths.

But like many drugs (including standard painkillers), Vioxx has side effects of its own. In this case, it brings an increased risk of heart attack or stroke.

So clearly Vioxx wasn't for everyone. It was best for those people who had to weigh the increased risk of heart attack or stroke (Vioxx) against the increased risk of fatal bleeding (other drugs.) If you weren't at risk of fatal bleeding, in other words, you were probably better off with something else. But if you were, it may have been worthwhile.

So who ended up taking the drug? Some 65 percent of those taking Vioxx were in fact not at risk of severe stomach bleeding. In other words, the majority of the people taking the drug should not have, strictly on medical grounds.

So why did they? Were these people duped by an evil and greedy drug company, unable to resist the snare of advertising? Not quite. Economics, and our twisted health care system, play a key role. Says Holman:

As a matter of statistical revelation, drugs turn out to be part of the health-care system, exhibiting all the maladies thereof. Bruce Stuart at the University of Maryland examined thousands of patient records and found that whether a patient took a Cox-2 or a cheaper drug was determined less by medical need than by whether or not an insurance company was picking up the tab.

Labels: Health care

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Live Blogging the Vice-Presidential Debate
I tried live-blogging the presidential debate for the Detroit News website the other day. It didn't work too well, for a variety of technical problems.

I did the live-blogging tonight, and due to some technical adjustments, I was a lot more successful. Among the techniques: have Word and the blogging software open simultaneously. Open Word. Start writing. Periodically cut and paste into the blogging software, and while that's processing, go back to Word and start writing again.

The results are here. (permalink)

Tax Credits for Stay-at-Home Parents?
Put your child in a paid day care, and you get a federal (and sometimes state) tax break.

Professor Mickey Hepner suggests that stay-at-home parents get a tax break, too. "We give tax credits to homeowners in order to help families buy a home. We give tax deductions for charitable donations to make it easier for families to donate to charities. Likewise, we can give tax credits to stay-at-home parents to help them take care of their children."

I'm in two minds on this. On the one hand, it's simply not right for public policy to give a greater tax credit for people to put their kids in day care (as opposed to someone staying home with them.) But on the other hand, it also doesn't seem right to be giving tax breaks to anyone's choice of childrearing methods.

Why don't we income taxes in general so that after-tax incomes of everyone go up. That would relive some of the economic pressure that some families may feel to send two earners into the workforce. (permalink)

Taxpayer-Funded Ballparks is a "Field of Schemes."
Looking for information about the folly of taxpayer-funded stadiums for professional teams? Try the website/blog Field of Schemes. (permalink)

FCC: Stay on that Couch!
While health departments wants you to exercise, the FCC wants you to stay on the couch and get fat.

Well, that's not exactly the way it is. But the Federal Communications Commission does want you to buy the latest and greatest TV set. The FCC is launching a new campaign touting the benefits of high-definition television sets.

From today's Wall Street Journal:

Using the slogan "DTV: Get It!," Federal Communications Commission Chairman Michael Powell announced a major initiative by the agency to educate the public about what digital television is and what is needed to get it.

Says FCC chairman, Michael Powell: "The FCC felt the need to jump in and provide some leadership." (I thought Powell was a free-market guy. Hmmm.)

I have not seen any research on the subject, but I would expect that HDTV sets, with their crisper resolution, will be a more attractive than the old sets that most people have now. In turn, that should encourage even more television watching. In other words, we're heading towards a more sedentary lifestyle, encouraged by one government agency. Meanwhile, expect other government agencies (state and federal) to run their own campaigns in coming years, aimed at getting people to turn off those wonderful new boob tubes and get some exercise instead.

UPDATE:
A reader more knowledgeable about this e-mails with some comments. The takedown, I guess, is that I stand corrected. But I do wonder if we will spend more time on the touch as a result of digital TV (I have yet to see it for myself.)

The FCC as you know is the US regulator of the electro-magnetic spectrum. What you may not know is the degree to which the spectrum has already been loaded up with stuff. AM, FM, Short-Wave, Radio Control Models, Garage Door openers. The real motivation for the FCC in getting digital TV rolled out as soon as possible and ditching the analog TV equipment is to open up parts of the spectrum that currently have to be used to provide separation for the analog channels. I won't go into the electronics of the situation but digital signals use significantly less space to convey much more information.

Being able to contribute to the client base of the Health Department is just a little bonus. (permalink)

Health Agency: Children's Karaoke Machine.
You'd think that something called the National Institutes of Health would take your tax money and use it to finance research into cancer, heart diseases, and so forth. You know, all those big time, widespread, public benefits that justify taxes under the guise of "public goods."

Well, the NIH does just a little bit more than that. It maintains a web site where children may pick up the oldest "knock knock jokes."

Another section of the NIH site plays sing-along tunes, complete with musical accompaniment. One classic: The Wheels on the Bus, which go, we are told, "round and round."

Just like the tax dollars that go round and round the toilet bowl, before being flushed out.

Granted, there are worse ways to spend taxpayer money. (Are there no private companies that compile jokes and songbooks?) But these pages show that there seems to be no end to the rationalization for government action. We live in such a thoroughly politicized society that nothing, it appears, is beyond the reach of taxpayer-financed bureaucratic activity. (permalink)

What's More Important: Who does it, or that it gets done?
Assume for a minute that governments, right now, are involved in every society demand or need that they are.

Now, what should their role be? Directly employing people to do the work? Or serving as a purchaser of services from elsewhere?

Public policy involves both. In higher education, for example, states run university systems. That's the government-as-employee model. But they also give money (usually in the form of financial aid to students) to private college. That's the government-as-financier model. Or contrast government-run housing units (think of the infamous Cabrini Green) with section 8 vouchers, which serve the same purpose (subsidizing the housing costs of certain people) but rely much more often on the private sector to actually provide the services.

When it comes to food, the government is more of a pure financier. It takes money from taxpayers, siphons some off for itself, and then gives food stamps to the poor, who can redeem the stamps (or these days, EBT cards) for good at Safeway, Kroger, etc. Government does not actually run food stores. (Be thankful! You'd have a "local food board" complete with campaigns and elections, political disputes over "curriculum," or menus, and local food boards would be fighting with the Department of Food in both state capitols and in Washington.)

The government as financier, not provider, is one sense of the term "privatization," and when done properly, it works out very well. (Done poorly, it trades bureaucratic incompetence for sweetheart contracts.)

Few people have done more to write about the proper use of government contracts than the Reason Public Policy Institute. Their annual Privatization Report is now in its 18th edition. This year's edition, like others, follows the trends in contracting out. Topics include corrections (i.e., imprisonment), education, and environmental quality.

The report's editor, Geoffrey F. Segal, notes that privatization not only saves taxpayer money; it is also used to "enhance quality, spur innovation, and complete projects more quickly." (permalink)

Here Comes The Judge.
I got word the other day from my city clerk that I'm on track to serve as an election judge. First up, though is a training session, followed by the big day.

If anyone has tips, or stories, good or bad, about serving as a judge, drop me a line. I've been told that it's "boring." I certainly hope so. Too much excitement (see: Florida and St. Louis, 2000) is not what an election day needs. Busy is one thing, but "exciting" is something else. (permalink)

More on the Debate.
I tried to do a question-by-question review of the debate, but it would just take too long. Here's my latest take over on the Detroit News panel blog, where I pontificate along with 14 others (if I counted them all). Meanwhile, Mitch of Shot in the Dark thinks that Bush's performance will play better on Main Street than with policy wonks. As a wonk myself, I hope he's right. Bush could have done much better, and it's a pity he did not. (permalink)

Drug Importation Will Destroy Jobs.
Drug "reimportation" threaten safety in the short run (many "safe" "Canadian" drugs are neither Canadian or safe.) It threatens safety in the long run (other countries pay less because first, they impose price controls, and second, they are poor).

And now--here's something I haven't seen on this issue before, though it naturally flows from the "long run" problem: prescription drug reimportation will destroy jobs.

A new report by the Beacon Hill Institute concludes "that proposals to lift the drug reimportation ban would destroy 3,957 jobs in Massachusetts over the first six years. Moreover, if the ban takes effect this year, the state would bear $247 million (in 2000 dollars) annually in lost economic activity by 2010."

How is that?

"The complex, highly regulated drug development process is extremely costly and most drugs fail to win approval. The few drugs that do make it to the marketplace must earn enough to pay for R&D for the majority that do not. Reimportation would shrink the pipeline for new prescription drugs by reducing the ability of companies to recover their investment in R&D. In the 12 years following the implementation of reimportation, R&D spending by pharmaceutical and biotechnology firms would fall by $14.8 billion, in net present value terms. Reimportation would also lead to the abandonment of an estimated 262 additional drugs."

The press release about the study is in this PDF file, while the entire report (also PDF) is here. (permalink)