In Praise of Wal-Mart.
Bashing Wal-Mart has become a hobby in some quarters. But the firm has provided several benefits to the U.S. economy, including enabling the poor to stretch their budgets, providing a productivity boost to the U.S. economy, and reducing the rate of inflation. (permalink)

States Should Use Hard Times to Shape Up.
Like most states, South Dakota is looking at weaker-than-expected tax revenues. The Great Plains Public Policy Institute reminds policy makers that this difficulty is an occasion for reviewing public functions. Too often, higher taxes pay for more of the same apparatus, and not better results.

Borrowing from public sector management consultant Peter Hutchinson, the Institute offers several prescriptions for sound policy. The first one in the list is foundational: "Clear the decks of all programs and activities not central to government's core purpose."

Mission creep is bad in the private sector (think of conglomerates that try to do everything and fail, and then of the Jack Welch mantra that a company should be #1 or #2 in a market, or leave it). It is perhaps inevitable in the public sector, but without the disciplining hand of competition, its effects are more serious. (permalink)

Why the Delay in HSA Offerings?
While HSAs (health savings accounts) are the biggest market-based reform to hit health care policy in years, it may take a while for the idea to take off.

Writing in the November 3 Wall Street Journal, Ron Lieber offers several reasons why. One: "Most larger employers plan their insurance offerings for the following year by the middle of the previous year, but it took the Treasury department until this summer to sort through all the questions that employers had about how to administer" the new arrangements.

A second reason, he says, is the question of how the accounts will work for people with chronic conditions. "Many employers would like to give enhanced overage to people with these diseases, paying for care and drugs related to certain conditions before the employee has hit the deductible. If they can't, then people with these afflictions will drain their savings accounts year after year as they reach and pass the deductible."

In the worst case, it would seem that this will turn out as a wash for the employer. Through expensive low-deductible coverage that serves more as a pre-paid services plan rather than an insurance plan for unexpected, catastrophic events, employers (and in reality, employees) are already paying large sums. If the employee must take the money out of the HSA, then the HSA is simply making the spending explicit. But other employees, by contrast, can benefit from the growth of HSA funds that are unused, roll over from year to year, and growth through compounding returns.

Lieber says that some companies are considering HRAS (health reimbursement accounts) as an alternative. That's not as worker-friendly as the HSA path. An employee who leaves a company can keep the funds in his HSA, but funds in an HRA can revert to the employer in the case of an employee departure.

Labels: Health care

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A Little Shame for Capitalist Pigs.
Warning: Rant ahead.

Generally, commerce is a wonderful thing, delivering lots of choices in quality, variety, and service. Think of what our economy delivers ($29 DVD players, available even to the poor. Out-of-season fruit and vegetables from formerly exotic locales. It puts "The Wells Fargo Wagon" of Americana to shame.)

While government-imposed regulations on the marketplace often misfire, there's still room for old-fashioned shame and consumer education. Here's my lesson: don't buy anything based on a rebate. You may be sorry.

About a month ago I bought a new printer, plus an external hard drive from OfficeMax and Circuit City, respectively. In both cases, the attractive shelf price was based on rebates. "Oh well," I thought. "Send in copy of the invoice, get cash. I can do that."

Once at home, I see that the hard drive rebate requires sending one pile of papers to one state, and another pile of papers to a second. Obtaining the rebate on the printer (roughly a price cut of 50 percent) requires photocopying the receipt, cutting out a piece of the cardboard box, and writing in some other information.

To date I've received one of the two rebates for hard drive. I also got a post card from another company, saying that I need to send in the serial number of the unit. This after, I'm sure, carefully studying the instructions.

Today I cut out yet another piece of the box, wrote the serial number on the postcard, and sending the package back to the remote post office box.

Obviously, the "trick" here is to entice suckers customers with a lowball price, knowing that some will, due to "process fatigue," never receive the lower price.

Should this practice be banned on grounds that it is deceptive? There's probably a self-styled consumer advocate somewhere ready to call for it. But for some people, jumping through the hoops is worth the trouble. In my case, the hoops were more difficult chore than I had imagined; next time, I'll look at the top line, not the alleged after-rebate price. (permalink)

I Love Firefox. I hate Firefox.
For the last two months or so, I have been using the Firefox browser; Internet Explorer resides on the computer, but I don't launch it unless I have to.

Here's what is great about Firefox. It opens quicker than MSIE. The search function within a web page is fantastic. (It's hard to explain, so I won't try. Let's say it beats MSIE by a mile). The thing that people like most about it, though, is the ability to do "tabbed browsing." Think of it as browsing windows within a window. Very nice. (No more icon after icon lined up on the Windows task bar.)

Here's what I have grown to hate about Firefox lately: it doesn't play well with Adobe Acrobat 6. Note I said Acrobat (the full-fledged program that lets you create and mark up PDF files), not Acrobat Reader.

After I upgraded (you know where this is going, don't you?) from 1.0PR (pre-release) to 1.0, Firefox hung whenever I launched Acrobat.

So I did some googling, and decided that installing Acrobat READER 6.0 would do the trick. (In other words, reserve the full Acrobat program until I needed to actually mark up documents, which usually isn't the case if I am just web browsing.)

I still get a system hang-up whenever I "accidentally" click on a link that requires an Adobe product.

What to do? (permalink)

Economic Freedom and Prosperity
Freedom isn't just a moral good, it also produces greater wealth. That's the conclusion of a study recently published by the Pacific Research Institute, which analyzed each of the 50 states.

"If all states ranked as free as [top-ranked] Kansas," the Institute notes in a press release, "the annual income of an average working American would rise 4.42 percent, or $1,161, putting an additional $87,541 into his or her pocket over a 40-year working life. This would be a sizable addition to individuals’ private retirement accounts."

Further, says the Institute, "The report confirms that the most economically free states are experiencing population growth, as Americans are moving to states that have the most business- and job-friendly climates."

The factors used to rank the states are:

• Fiscal policy (structure of the tax system, per capita taxes);
• Regulatory climate;
• Judicial climate;
• Government size (spending as a percentage of the state economy; government employment as a percentage of workforce);
• Welfare state size

The top five states:

• Kansas;
• Colorado;
• Virginia;
• Idaho;
• Utah

The bottom five states:

• Illinois;
• Rhode Island;
• Connecticut;
• California;
• New York

Things get more interesting, though, when we look at the Great Lakes region, where states scored low on the economic freedom index:

• Indiana (14);
• Michigan (34);
• Wisconsin (38);
• Ohio (43);
• Minnesota (44);
• Illinois (46)

for an average ranking of 36.5. Compare this with the ranking of per-capita income:

• Illinois (8);
• Indiana (31);
• Michigan (20);
• Minnesota (7);
• Ohio (24);
• Wisconsin (19)

The one state in the region with above-average freedom (Indian) also has a below-average income, while the other states have below-average freedom and above-average income.

There are two possible explanations: government intervention produces all sorts of good things that promotes economic growth. That's the social democratic line. The other is that as the economy grows, demands for government intervention grow.

There's one other test to look at, and that's the population test. In broad terms, states with more economic freedom have seen more population growth, while states with less have seen less population growth. Call it the "voting with their feet" test. (permalink)

Tax Incentives for Jobs That No Longer Exist.
In the wake of the merger between Sears and K-Mart, the Mackinac Center's Michael LaFaive offers this observation:
I applaud The Detroit News for its editorial on tax incentives for Kmart ("Kmart Tax Incentives a Questionable Investment," Oct. 29) but hasten to point out that Kmart has already received generous state tax incentives - twice. In 1998, and again in 2000, the Michigan Economic Growth Authority declared Kmart an economic "winner" and awarded a total of up to $29 million in incentives. The second MEGA package was approved just 17 months before the company went bankrupt. Through 2001, Kmart earned more than $6.1 million in Single Business Tax relief for creating jobs that no longer exist.

As part of its MEGA agreement, Kmart promised to maintain a base employment as high as 4,159 jobs. Today, the corporation employs about 2,000, and it has been promised a third incentive package, worth about $40 million, if it promises to maintain at least 1,500 jobs.

A better alternative would be to concentrate on the fundamentals: cutting taxes and regulation for all Michigan businesses. (permalink)

Recent Educational Achievement Gains Not That Impressive.
The Brookings Institution has looked at "the nation's report card," and is not impressed.

"Math items on the National Assessment of Educational Progress (NAEP) math assessment lack challenging arithmetic, often requiring skills that are several years below grade level," says a press release. "The findings cast a disturbing light on recent highly-publicized math gains as measured by the NAEP assessment."

Brookings also finds that middle school math teachers often "lack formal undergraduate training in mathematics."

It's past time to break the stranglehold of education-school teacher certification programs that emphasize banal courses in pedagogy and in at least one case has included course credit for political activism. For too long, enduring educational fads has taken priority over subject matter competency in deciding who is and who is not qualified to be a teacher.

As education scholar Andrew J. Coulson has observed, "we have built a public school system that could not hire Bill Gates to teach computer science, Sandra Day O’Connor to teach American government, or Lance Armstrong to teach physical education." What is needed is "combination of school autonomy and parental choice."

Recent Educational Achievement Gains Not That Impressive.
The Brookings Institution has looked at "the nation's report card," and is not impressed.

"Math items on the National Assessment of Educational Progress (NAEP) math assessment lack challenging arithmetic, often requiring skills that are several years below grade level," says a press release. "The findings cast a disturbing light on recent highly-publicized math gains as measured by the NAEP assessment."

Brookings also finds that middle school math teachers often "lack formal undergraduate training in mathematics."

It's past time to break the stranglehold of education-school teacher certification programs that emphasize banal courses in pedagogy and in at least one case has included course credit for political activism. For too long, enduring educational fads has taken priority over subject matter competency in deciding who is and who is not qualified to be a teacher.

As education scholar Andrew J. Coulson has observed, "we have built a public school system that could not hire Bill Gates to teach computer science, Sandra Day O’Connor to teach American government, or Lance Armstrong to teach physical education." What is needed is "combination of school autonomy and parental choice."

(Cross-posted to the Detroit News.)

Labels: Education, School choice

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Saving Money and Improving Education Through 3-Year High Schools.
Here's an idea that just may work for some people: graduate from high school in three rather than four years, and get a college scholarship based on the money that would otherwise be spent on your behalf in a fourth year of school.

The upside: taxpayers save money; ambitious high school students avoid a year of tedium in a school that is not challenging enough for them; families of these students get some extra financing for college expenses; the money spent in the K-12 system is slightly reduced; and the money spent in the K-12 system is spent on a better cause than in keeping a seat open for someone who is ready for the next level.

The Yankee Institute has the details in this PDF report.

Labels: Education

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The Future of Health Care Lies in Health Savings Accounts.
Writing for the Texas Public Policy Foundation, Devon Herrick explains Devon Herrick, (PDF) why HSAs will lead the way to a more rational future for health care for government programs as well as the private sector. (permalink)

Another Path for Prescription Drug Policy
The Maine Public Policy Institute now has on their web site my commentary on drug importation (PDF). In I offer the usual arguments against lifting the ban on drug imports (safety, incentives to continue development). But then I go on to suggest alternatives to the "just say no" approach.

If we use public policy to deliver cheap meds, we're effectively using the state to transmit welfare from everyone (that is, everyone who needs for drug companies to have financial incentives to innovate) to a select group of people (for whom higher prices are especially burdensome.) That being the case, it may well be worthwhile to make the welfare subsidy explicit, and offer (or more likely, expand) means-tested programs to help people purchase prescription drugs.

Hey, it's not ideal, but it may beat subjecting everyone to the short-term gain and long-term damage of price controls. (permalink)

Medicaid Nursing Home Payments, the Middle Class Welfare Program
Few situations in health care illustrate the perverse incentives and consequences of our health care financing system than nursing home care.

For a variety of reasons (some legitimate, others not), insurance to cover long-term care is expensive. Given the fact that government (Medicaid) will pick up the tab, most people don't buy the insurance. (Come to think of it, this activity, which suppresses demand, may be one reason why rates are so high.)

Few people are willing to cough up their life savings to make out-of-pocket payments for nursing home expenses, and few boomer parents are willing to see their inheritance spent on mom's stay at Shady Rest Skilled Nursing Facility--especially when they see other families getting their stays covered at the taxpayers' expense.

Now, there's Medicaid, but that's a program for the poor and even destitute, and most people who enter nursing homes are not destitute. So what to do? Engage the services of a small industry of lawyers whose practice is engaged in hiding or shifting assets in order to qualify an elderly person for nursing home coverage. It's good business for them, and of a certain financial advantage to the families. After all, if your own sacrifice for the good of the public fisc. is going to be overwhelmed by everyone else dipping into the public pool, why sacrifice yourself?

Yet this scenario presents plenty of problems not only for the public purse, but for those who engage in this asset-shifting.

Few people are more tireless in their efforts to find a way out of this morass than the principals and staff behind the Center for Long-Term Care Financing. Here's an excerpt from one of their weekly newsletters.

"Is it a legitimate function of Medicaid to pay for long-term care so that people can buy more expensive homes, cars and funerals? At whose expense? Taxpayers? Yes. But private-pay residents in nursing homes have to pony up half again as much as Medicaid for their care. That's called cost shifting. People who also pay LTC insurance premiums are thus triply taxed while the clients of Medicaid planners skate. ... As we've said before, as long as people can ignore the risk of long-term care, avoid the premiums for private insurance, and pass the cost of care to Medicaid, most won't buy insurance and Medicaid will continue its precipitous decline."

Labels: Health care, Medicaid

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Prosecuting for Profit?
Did you know that you can lose your property for a crime that someone else committed? That happens with civil asset forfeiture law, which is typically used in drug-related cases.

The Goldwater Institute is out with a new publication on the topic, arguing that "civil forfeiture laws are one of the most serious assaults on private property rights in the nation today because many forfeiture schemes give police and prosecutors a direct financial stake in the outcome of forfeiture proceedings by allowing them to keep the money and property confiscated from individuals."

While defending the right of police to be funded, the report calls for the end to such laws. (permalink)

We Don't Like Targeted Tax Breaks. Or Maybe We Do.
A while ago, the 6th U.S. Court of Appeals ruled against targeted tax breaks as an economic development tool. Fine and good; targeted benefits are an opportunity for mischief.

Business columnist Dale Gibson applauds the ruling, saying "Whether the program is in Ohio or North Carolina, it's just plain unfair to the tax-paying citizens of this state as well as to the businesses that have operated here for years."

He notes that politicians usually say of these breaks "We wish we didn't have to use 'em, but to be competitive we do."

Now that the game may be over, thanks to the courts, at least two politicians are singing another tune. Two U.S. Senators, a governor, and a big city mayor are part of a bipartisan chorus that now says, in effect, "Oh wait, we were wrong. We would like to have the ability to offer goodies to companies."

Targeted favors, of course, allow politicians several advantages. First, they get to claim credit for new jobs: "See what I have done." They also allow for a degree of economic engineering: tax credits for this activity, but not for that. Providing low-cost, effective government that works for everyone's economic interest is the best way of doing things, but it has few political advantages. (permalink)

All About HSAs
Though the Health Savings Account (HSAs) is a promising new product in the health insurance market, it's still not widely known. HSA Insider hopes to change that.

The site features news about the latest HSA products, as well as how companies and individuals are using them. There is, for example, a list of companies that can help self-insured employers offer HSAs to their employees. Then there's a alphabetical list of insurance companies offering HSA-related products. There's even a pull-down menu through which you can get a list of companies in your own state.

Labels: Health care

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How Drug Importation May Work to the Advantage of Free Markets
Craig Westover offers an e-mail with some additional thoughts on the question of drug importation. I have called for keeping the federal ban in place. Craig thinks that is not the right view, as he explains below:

[John, your last post offered an] Excellent summary of the drug reimportation issue. However, here's where I think you left us -- The U.S. can't allow reimportation because of fears that foreign governments will steal patents, reduce revenues and therefore hinder drug companies ability to produce new drugs. So, American consumers are stuck with the status quo of paying considerably more for drugs than Canadians et. al.

I think we need to toss a reality onto the pile. First, denying reimportation is becoming politically intolerable. Reasonable Americans who understand economics know they are paying more than they should for prescription drugs, let alone the masses susceptible to the propaganda that "evil drug companies are ripping them off." Under the current situation, drug companies are evil and you get bills like the Dorhan bill that take advantage of public sentiment to get reimportation AND restrictions on drug companies -- the worst of all possible worlds. With current public attitudes, that's the type of legislation we're going to get, like it or not, which will lead to your worst fears about lack of R&D funding for new medications.

Second, the Canadian system survives only because it's marginally profitable for the pharmaceutical companies to keep it in place. It provides less profit than the U.S. market, but it's still profitable. Drug companies still set the prices for prescription drugs in Canada. The Canadian government decides at those prices which drugs will be put on their approved list and qualify for the Canadian health care program. Yes, drug companies price to make their products acceptable to the Canadian government, but they still control the prices, and many newer drugs and improvements to existing drugs are not available in Canada because the Canadian government refuses to pay the asking price. The point is, removing the ban on imports motivates drug companies to be more aggressive in their Canadian pricing and more moderate in their U.S. pricing.

Third, assume that Canada breaks the patents of U.S. companies. Here is an issue for government intervention. I do not think that for all their bluster, breaking the patents of U.S. companies is something Canadians would take lightly. In addition, were Canada to break drug company patents, they still need to find a manufacturing source. Suddenly the red herrings of drug safety and counterfeit drugs becomes a reality. There would be dead Canadians, and the argument (which is factious right now) that Canadian drugs cannot guarantee safety would be real. Public relations-wise, Canada, not the pharmaceutical industry becomes the bad guy.

The silver-lining of that third scenario is that it motivates Americans to look at the cost of bringing new drugs to market and the impact of excessive regulations -- which is where Milton Friedman sees the problem. If the cost of bringing new drugs to market is significantly reduced, pricing becomes less of an issue.

Under the current system, except consumers, everyone is happy -- Canada gets cheap drugs, drug companies make money, and there's no motivation to examine the regulatory system. But the rising tide of consumer unrest will prevail -- already the administration's resistance to reimportation is crumbling.

Lift the ban on reimportation, force drug companies to enforce their own contracts but provide them government support in that battle, and the unleashed forces will drive a market solution that includes addressing the regulatory issues. The do-nothing approach guarantees they worst-case scenario of reimportation and pharmaceutical industry restrictions leading to less funding for R&D. Operating from free-market principle gives us a fighting chance. (permalink)

Private Sector Solutions to High Drug Costs.
A reader alerts me to Rx Outreach, which offers discounted generic medications. It's a means-tested income, so it won't please middle-class folk who are offended simply at the thought of high prices for prescription drugs. But it might help some.

On the other hand, I'm not sure that it will do much to combat the rising expectation that "something ought to be done" about drug prices.

UPDATE: The St. Louis Post-Dispatch has a story on the program. "This year, about 70,000 people enrolled in a trial Rx Outreach program. About half of those participants are Medicare beneficiaries." (permalink)

Competitive Contracting Benefits Education
In the face of dismal test scores, the state of Pennsylvania took over the Philadelphia school district. Roughly half of the schools were then turned over to the for-profit Edison Schools company for management. That was two years ago.

Today? Test scores have been released, and the "gains achieved in Philadelphia are among the highest of any of the nation's largest school districts."

Labels: Education

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Rigged Elections
The truth is out: the 2004 elections were (practically) rigged. I'm referring, of course, to the congressional elections

Every two years, each seat in the U.S. House of Representatives is up for grabs. That's 435 offices, and roughly 400 incumbents each year. (Some incumbents retire or seek other office, but most run for another term.) So how many incumbents lost this time out? A mere 7.

The editorial board of the Wall Street Journal looked the election numbers, and concludes in today’s edition that "Not only are most outcomes foreordained, but the contests aren't even close."

If a candidate wins with 60 percent or more of the vote, that's probably more a sign of an uncompetitive district rather than a superb incumbent. Over half of all seats (225) were won with 60 percent or more of the vote. Of those, 75, amounting to 17 percent of all House races, were won by candidates garnering 70 percent or more.The opposition, if there was one, was the token "sacrificial lamb.”

On the other hand, a race in which the winner collected no more than 55 percent of the vote can fairly be labeled a competitive one.

So just how many competitive races did we have? Only 37 races, or 8.5 percent of all House seats. Flip that number over, and we find that over 90 percent of all races were all-but-won from the git go. Of course, every politician will tell you that no election is guaranteed. And they're right. But for most challengers, the odds are prohibitive.

The cause of all this, if you haven't guessed it by now, is gerrymandering, or the state-level drawing of district lines to favor one party or the other. It's a bipartisan monstrosity. Even minority-party politicians benefit; their seats are often as safe as those of majority-party pols. Gerrymandering helped keep the Democrats in control of the House and many state legislatures for years, and now, Republicans are returning the favor. Thanks to data mining techniques and any number of software packages, the practice is becoming ever more sophisticated and effective.

A few states--Iowa and Washington, notably--use nonpartisan panels equipped with techniques that end up minimizing the effects of gerrymandering.

Oh yes, remember those 7 incumbents who were defeated? It’s time to adjust that number. Of the 7, 4 came from Texas, where they lost to, you guessed it, another exercise in gerrymandering.
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Fewer Government Holidays.
Happy Veteran's Day, everyone.

You forgot that it's a holiday? You can be forgiven. For most of us, a good number of holidays--Veterans, Columbus, and President's Day, to start with--don't mean much, aside from a reprieve from bills and junk mail delivered by the US Postal Service. Maybe it's time to junk Veterans Day, at least as a government holiday.

Why? Real holidays are widely observed. Not only do politicians let their employees (bureaucrats) take the day off, but so do most private sector employees. Real holidays are marked by the widespread practice of community or family events.

Real holidays have this power to change our behavior, if only for a day, by evoking the very identity of the country and causing us to, if only for the length of a parade or a fireworks show, cherish it (Independence Day). Or they may be a time of religious reflection and intense celebration of fellowship and family (Christmas, and Thanksgiving).

Still other real holidays have lost most of their original meaning, but have been transformed to hold a significant role in American life. Some serve as markers of seasonal changes that affect the schooling of the young, family vacations and temporary employment for millions (Memorial Day and Labor Day).

Another holiday (New Years Day) represents not a seasonal change, but a mere calendar change. Its largest significance lies in recovering from hangovers from the previous evening's unofficial holiday, and overindulging in watching college football games. Not much noble or inspirational there, but at least it is widely observed.

Other holidays, the mostly-government days, have suffered due to cultural changes, and have not been reinvented to take on significant places in our lives. I vaguely remember Abraham Lincoln and George Washington meriting holidays of their own, though even the observance was meager. Now Presidents Day is a joke. Which presidents are we honoring? Ronald Reagan and Harry S. Truman, who stood up for freedom against oppression? Or perhaps the disgraced Richard Nixon and the inept Jimmy Carter? Must we really honor all of them by giving government employees a day off, and auto dealerships another excuse to run loud and garish television commercials? Time to relegate this holiday to history.

Columbus Day, of course, has come under fire from critics who find the American settlement offensive, while the rest of the population is wary of embracing it too publicly. At best, Christopher Columbus is an ambiguous figure in the public mind. Sorry, Chris. Hope you enjoyed your stay.

The birthday of Martin Luther King, Jr, has yet to catch on. Given its significance in recognizing our national delay in recognizing the American ideal of civic equality--a problem that figures large in political life, even today, I'd say we should keep it for a while.

As for the decline of Veterans Day, I have no clear explanation. Widespread pacifism is clearly not the reason. The day's original occasion is long gone (as is its original name, Armistice Day). For some reason--perhaps its time of year--it has not been reinvented as a marker for anything else (as is the case of Memorial Day and Labor Day). So it languishes on, as a vague and barely observed tribute all who have served in the military. Obviously, we should honor the people who serve in the military, but a day that is largely confined to public employees isn't doing much. Let it go.

In the future, it would be nice to have a participation test for holidays. If, for example, only 80 percent of private sector employees work on a given holiday (Flag Day, anyone?), then that day clearly does not enjoy widespread public support. And if the public is working, so should the public's employees.

As someone who had done time as a government employee, I know that the extra days off are one of the fringe benefits of public service. But we're long overdue for some rationalization in the way we run our holidays. (permalink)

Allow Prescription Drug Importation AND Drug companies Restrictions on Reselling.
While most free-market analysts decry the importation of cheap drugs from Canada as importing price controls, it’s not a universal position. The idea of allowing drug importation can roughly be said to be the view of the Cato Institute’s Roger Pilon. Twin Cities-based writer Craig Westover takes a similar position, outlined in this rebuttal of an editorial by Minnesota's senior senator.

The quick read of the argument put forth by Westover and Pilon: drug companies have legitimate reasons for charging different prices to different customers (e.g., Canadians versus Americans), and not all of them stem from price controls. If drug companies wants Canada, which buys on the cheap, from re-selling to the U.S. at discounted prices, they ought to strictly enforce their contracts with Canadian customers. (“Sell to the U.S., and you lose your supply.”) Instead, they got the US government to do its dirty work by imposing a ban on imports of prescription drugs.

The federal government should lift the ban, and Americans ought to be able to try to buy cheap drugs from Canada. Drug companies, in turn, ought to be able to say to Canadians "Go ahead, make my day," and retaliate if they sell to the U.S.

My quick take: I'm sympathetic to this argument. Far too often, business free-rides by getting government to do the dirty work for them. Arguing against imports is not a position I am comfortable taking.

But I'm also fearful that allowing the import of discounted drugs will in fact reduce the incentives that drug companies have to research and develop new products. While price controls are not the only reason for lower prices elsewhere, the fact is, other countries do impose price controls.

So how would this happen? World Trade Organization agreements give countries the right to break patents in certain circumstances--in effect, they can tell drug companies "Here's what we're going to pay and no more. Got it?"

Red herring? Perhaps. I’m not an international lawyer, and it’s possible that this happy scenario of private rather than public enforcement would work out. But it depends on the trade agreements being interpreted and enforced in a way that respects the role of profits. I'm not too excited about trusting the future of such a vital industry to the tender mercies of international trade bureaucrats. (permalink)

Kansas Needs More Charter Schools.
In today's Wichita Eagle, I argue that Kansas needs more charter schools.

Actually, most states need more charter schools. And private scholarship funds. And tuition tax credits. And vouchers. And simplification of the teacher training process, and ... anything that is not more of the same.

Labels: Charter schools, Education

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Blogging Continues at the Detroit News.
Since August, I've been blogging about politics and policy over at the Detroit News. I have been part of a select panel which anywhere from 8 to (at present) 3 "ordinary folks." The panelists have included hard-core libertarians, "The Nation"-reading left, and thoughtful people filling in the rest of the spectrum. I have seen also conspiracy theorists of the left ("George Bush was wired for radio signals during the debates") but not of the right ("John Kerry received a dishonorable discharge.") A few staff journalists chime in as well, though most do so infrequently.

Associated with the blog is a peanut gallery (called a feedback forum) where everyone else can leave comments. The results in the feedback forum are as you might expect. Some comments raise interesting points that are related to a blog entry. Others dispute the opinions offered by the bloggers. Some of the comments are longer than the blog entries they comment upon. Others are simply the blogospheric equivalent of "you go, girl!" or "you da man!"

A few members of the peanut gallery are regulars. Traffic to the site surged after each of the campaign debates. I suspect that a number of people who left comments after each debate were prompted to do so by a presidential campaign. For some reason, Democrats outnumbered Republicans. (The News has historically been a "Republican" newspaper, though for this election it endorsed "None of the above," which is actually not on the Michigan ballot.)

The blog has been called "Decision 2004," or something like that, suggesting that it would last only until after the election. Thankfully, the election has come and gone--no 31 day examination of hanging chad this time around. The blog continues, suggesting that the Detroit News staff is pleased enough with this experiment that it will continue. (permalink)

Who has the Initiative or Referendum?
The I&R Institute has the goods on the various states, as well as a PDF review of the ballot measures. (permalink)

A Review of Ballot Measures
While everyone's talking about the presidential contest, a number of ballot measures in the states have the potential to bring good (and inflict harm) for years go come. The National Taxpayers Union offers a review of some of the measures decided this week.

Term Limits: Measures to weaken them were rejected in Arkansas and Montana.

Let the other guy pay: proposals to tax tobacco users, high-earners, and out-of-town tourists succeeded in several states. Oklahoma approved a tax on the gullible (i.e., a state lottery.)

I will pay for choo-choos: increased taxes for light-rail boondoggles passed in Colorado and Arizona. On the other hand, Florida voters pulled the plug on a $25 billion bullet train project. Missouri voters approved a measure to make sure that motor fuel tax revenues actually go to roads, and not transit systems.

Don't take me out to the ballgame: Kansas City (MO and KS) area voters rejected plans to increases taxes for sports stadiums. St. Louis county (MO) voters voted in favor of a measure requiring voter approval before any tax money is spent on sports stadiums. But voters Arlington (home of the perennial also-ran Texas Rangers baseball team) voted for a tax increase to buy a stadium for the lovable losers extremely wealthy sports team owners and men who play games for a living.

Let's repeal the laws of economics: Voters in Florida and Nevada approved a higher minimum wage rate, ensuring higher unemployment for the least productive workers.

Labels: Transportation

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