Slowest book review ever

Last summer I was live-blogging Arnold Kling's book "Crisis of Abundance." The project ground to a halt when I lost my copy (long but incoherent and embarrassing story omitted); As a Christmas present to myself, I got another copy, so the posts now resume.

To recap, the book addresses the causes of our rising health care costs. Dr. Kling examines some commonly-held beliefs about the causes of increases in health care costs and finds them wanting. He says the evidence doesn't show that private health insurance is the culprit, nor is overcharging by health-care providers. Instead, it is the prevalance of "premium medicine" that drives up health costs.

Premium medicine can be thought of as the practice of always wanting to use the latest and greatest health technology and medicine, even if it doesn't necessarily improve treatment results.

When I left off, I was on the verge of Dr. Kling's discussion of possible solutions to the problem. With California's governor blundering into drastic state intervention in the healthcare economy, and with some here in Iowa pushing the same direction, the topic is timely, even if my completion of the book isn't.

If you've somehow lost the thread of my earlier posts, you can pick them up below:

LAZY SUNDAY 'CRISIS OF ABUNDANCE' POST
Expat comments on Crisis of Abundance Posts.
Premium medicine in action
C of A: "Three Health Care Narratives"
Crisis of Abundance: "Premium Medicine"
May 20, 2006
May 16, 2006

MERRY CHRISTMAS!

From Tom Vilsack! What a nice surprise:

Presidential candidate Tom Vilsack’s suggestion that ‘‘no one in their right mind’’ would fund an indoor rain forest in Iowa came as a surprise to the project’s supporters who previously counted on his support.

Sure, now that he has an audience outside of Iowa, it's obvious how insane Earthpork is, but, wow. What great news. How can they possibly squander that $50 million now? Here's to you, Governor - what a great present.

Borlaug Travelog

Congress today voted to honor Norman Borlaug, the Iowa farmboy who grew up to save millions through improved plant varieties and farm practice. Bobby and I took a little pilgrimage to his boyhood home in Northeast Iowa this fall.

The farm is about 10 miles south of Cresco, in the far Northeast corner of Iowa.



Cresco honors him in its little downtown with this memorial:



We got directions to the farm by emailing the Norman Borlaug Heritage Foundation, a non-profit "dedicated to promoting education programs and projects which reflect the lifetime achievements and philosophy of Dr. Norman Borlaug." The foundation is restoring the house; you can help out here. We took the highway south out of town about 10 miles to 200th street, a gravel road, and turned west about two miles. For a hero's house, it's modest:



Nothing extraordinary; there are thousands of square old farmhouses like it in Iowa.



The Borlaug house does have an old barn that's nicer than most you see. Eight year-old Bobby is on the left, shooting his pictures.



I don't know how much Bobby will remember about the trip. I think he was more impressed by the Decorah Ice Cave we visited later. I sure hope he retains more about Dr. Borlaug than this farm about 1/2 mile down the road did:



Dr. Borlaug is unenthused about this organic stuff:

Reason: What do you think of organic farming? A lot of people claim it's better for human health and the environment.

Borlaug: That's ridiculous. This shouldn't even be a debate. Even if you could use all the organic material that you have--the animal manures, the human waste, the plant residues--and get them back on the soil, you couldn't feed more than 4 billion people. In addition, if all agriculture were organic, you would have to increase cropland area dramatically, spreading out into marginal areas and cutting down millions of acres of forests...


If people want to believe that the organic food has better nutritive value, it's up to them to make that foolish decision. But there's absolutely no research that shows that organic foods provide better nutrition. As far as plants are concerned, they can't tell whether that nitrate ion comes from artificial chemicals or from decomposed organic matter. If some consumers believe that it's better from the point of view of their health to have organic food, God bless them. Let them buy it. Let them pay a bit more. It's a free society. But don't tell the world that we can feed the present population without chemical fertilizer. That's when this misinformation becomes destructive.

The house isn't open for regular tours yet, though there is a caretaker who lives onsite in a trailer. Either he didn't notice us running around on the lawn, or he didn't mind.

It's a beautiful part of the state. Visit if you get the chance, and spare a thought for the millions living today thanks to his work.

A platform for a party of me.

Iowa's Republicans just got stomped from the top of the ticket to the bottom. They got whipped by Chet Culver, which is like losing a foot race to a grandma pushing a walker. It's just so embarrasing, Iowa's Republican leaders look like Dan McCarney trying to explain how the Cyclones can lose to Colorado. There's just not much you can say.

I don't think it's the end of the world. It's healthy to occasionally have changes of control politically, because any party that has power too long seems to inevitably get flabby and corrupt. I don't think Chet and the Democrats will be good for Iowa, but the Republicans haven't exactly been covering themselves with glory either.

So what should the Republicans do? Krusty thinks they should be more Konservative; Mr. Sporer thinks they should rebuild from the ground up. State 29 thinks they should find something to stand for besides "responsible Republican alternatives."

Maybe they're all right. I'm not smart enough to tell the Republican party what it would take to get people to vote for them. If I ran for office, I might not be able to get my wife to vote for me. Actually, I know I wouldn't, because she'd probably dump me for being demonstrably insane, and then insist I keep my full-time job so I could make my alimony payments.

While I can't tell the Republicans how to win, I can tell them how to make me care again whether they do.

NEWS ITEM: A Council Bluffs candidate for the Iowa house had this stirring battle cry:

The second tier is generally program and incentive driven. I support the Values Fund and believe it will continue to create and attract high paying jobs. Tax Increment Financing is also an effective program that allows cities and counties to attract businesses by helping pay for necessary infrastructure. Also, small business development centers help existing and new businesses grow in the state.

The sad thing: this candidate who says the government can grow the economy by taking money from some taxpayers and businesses and giving to their competitors is the Republican. Throw in my local Republican Senate candidate (Dan Clute) weighing in against "Big Pharma" in a leaflet left at my house, and we barely need Democrats. If only Democrats run, Democrats are probably going to win.

Since the Branstad days Iowa has been trying to grow the economy with high taxes, tax credits, gambling and, especially lately, ethanol. As ethanol only is an "industry" thanks to federal subsidies, it's basically an economy on the dole. Our economic policy debates in Iowa are just detached from reality, like a couple on food stamps arguing over whether they should buy a Lexus or a Cadillac, based on their plans to win the lottery.

So how do they get me excited about electing statehouse Republicans?

Promise to lower tax rates, end the futile corporate income tax, and get the government out of the business of allocating investment capital. This means no research credits, no ethanol credits, no historic building credits, no venture capital credits, no tuition credits, and an individual top rate no higher than 4%. You say that that doesn't raise enough money to finance government? Then...


Shrink Iowa's government. Iowa delivers government services with the same structure that it has had 100 years ago. Does any business operate that way? Go to 10-15 counties; we sure don't need 99. Force more school consolidation. Stop squandering money on convention centers, stadiums, and the like. And maybe trim duplicated programs at the state universities. What about our "unmet needs?" If jobs are going begging in Iowa, like the Register keeps telling us, any such needs aren't likely things the state of Iowa will be very good at fixing.

What about social issues? Don't bother with abortion, stem-cell research, and the like. That's above the pay grade of anybody at the statehouse. Gay marriage? Feh. We have too much work to do to argue about it.

I would like to see them look for ways to empower people and to get the government out of peoples hair. Give parents vouchers to send kids anywhere to school, as long as they can get them there. Make school districts compete for their students, and make it possible for parents to get educate their kids the way they see fit. If they want to home-school, or send them to Dowling, or send them to a new school, let the parents decide. And if they want to try college early, don't make them waste time high school. If a kid gets a perfect grade on her ACT as a junior, let her take classes at ISU, or MIT, for that matter, if she doesn't care to hang around for the senior prom, and let her use her voucher to pay for it.

Oh, and roll back drug laws. We spend a lot of money keeping drug users in jail. Let them pay their own keep on the street. It's only our problem because we make it our problem. Use the space for people who are a danger to others, like drunk drivers and child predators. If the sex offenders really can't be trusted to be within 2000 yards of a school (another stupid law), they shouldn't be out in the first place.

What other stuff would follow from this approach? No county-owned casinos or city-owned sports bars. No state-owned liquor wholesalers. Forbid red-light cameras or speeding cameras in Iowa. Allow High speed-limits on four-lanes. No restrictions on spinner hubcaps and no "adult entertainment" taxes. (Update: and none of this state as lifestyle police garbage either).

This I could fight for. It's a platform that would get my vote, if nobody else's. I wouldn't be too surprised, though, if it actually proved popular. And it's not like they're winning now by trying to out-pander the Democrats. Who knows? A principled stand for freedom and growth might actually be be popular.

Davenport city government hates its citizens

Only a government that thinks its own citizens are ignorant, untrustworthy peasants could embrace traffic cameras like the City of Davenport has:

Davenport police have been using their speed enforcement van since the first of the year to deter speeding on River Drive, but now they are using a fixed camera to catch speed-limit violators.

The new camera in the 1200 block of East River Drive has been in place for about a week but wasn’t activated until noon Monday.

And if you peasants think you can keep us from picking your pockets by slowing down for the cameras, think again:

Although the River Drive and Kimberly Road locations will have fixed cameras, it does not mean that Davenport police won’t still use their van at those locations. Venema said police already have been using the van near other fixed sites where drivers will sometimes slow down for the fixed camera then speed up. The van will be stationed a block or two away and catch the drivers when they accelerate.

So pay up, you irresponsible traffic scofflaws. You exist only to comply and pay. Be sure to salute the cameras as you drive by.

I'm Chet Culver, and I approve of this front page

Gee, who do you think the Des Moines Register favors for Governor? Two-thirds of the front page is an unpaid campaign ad for Chet.

This is an example of why campaign finance reform is a bad idea. Without lots of money, a candidate disfavored by the old-line media has no way to get his message out, while the Register, unconstrained by any finance restrictions, distributes free advertising for the Culver campaign statewide.

IRS Collection Division recruiting documentary

Well, not really. It's an outrageously partisan campaign commercial. If you turn the sound off, though, it does look like a Collections Division recruiting piece.

Enjoy. (Via Instapundit)

Note: I had this on the work site at first, but I decided it was a bit too partisan, so here you go.

I know obscenity when I see it...

...and this post crosses the line. Talk about your gratuitous, disturbing content.

20TH CENTURY HISTORY MUST BE A SECOND SEMESTER CLASS AT DOWLING CATHOLIC

One of the selling points of Catholic schools is the way they are free to promote religious values. Dowling Catholic High School has found an interesting way to do this: by incorporating symbols of mass murder and athiesm into a marching band routine. The Des Moines Register reports:

Red flags of the former Union of Soviet Socialist Republics will be on display Friday when Dowling Catholic High School's marching band performs during halftime of the school's football game against Mason City

Well, it's nice that they can let bygones be bygones:

KIEV, Ukraine (AP) The bodies of 190 people were discovered at a monastery in western Ukraine that was used by the Soviet secret police after World War II, investigators said Thursday.

The remains including those of 70 children, some less than 1 year old were discovered by monks restoring a Greek Catholic monastery in Zhovkva, 340 miles west of the capital, Kiev, said Mykhailo Pavlyshyn, a leader of a team of experts investigating the burial site.

In fact millions of Catholics were murdered under the Soviet flag - many starved to death as a matter of policy - and thousands of churches destroyed or defiled. This was part of the great historical experiment documented in The Black Book of Communism:

The breakdown of the number of deaths given in the Black Book is as follows: 20 million in the Soviet Union, 65 million in the People's Republic of China, 1 million in Vietnam, 2 million in North Korea, 2 million in Cambodia, 1 million in the Communist states of Eastern Europe, 150,000 in Latin America, 1.7 million in Africa, 1.5 million in Afghanistan and 10,000 deaths "resulting from actions of the international communist movement and communist parties not in power."

Back to the Des Moines Register article:

The use of flags from the now-defunct communist empire is aesthetic, not political, said Steve Holland, Dowling band director.

Well, that's just so aesthetic. Here's a suggestion for the next home game: a routine where the flag girls charge the field to "Ride of the Valkyries" wearing brown military uniforms and carrying Nazi flags. Or maybe Klan robes and burning crosses to the theme of "Deliverance". Remember, it's just aesthetic, not political.

The Banana Republic of Polk County

Starting and running a small business is hard. There's a lot more to it than just selling something people want to buy. You have to pay and keep good employees and figure out how to get rid of bad ones without getting sued. You have to comply with nightmarishly complex tax laws. And it seems like everytime you need to do anything new, you need to get a permit from the city or the county.

What would you say if same county that holds the power to destroy your business by inspecting you to death or dragging its feet on a needed permit has decided to go into business as your competitor?

You could say, "Welcome to Polk County, Iowa."

DES MOINES MAKES A $1.9 MILLION EQUITY INVESTMENT IN A GLORIFIED SPORTS BAR

A company called inPlay wants to set up an "entertainment center" in the old General Growth building off Second Avenue in downtown Des Moines. They have an unusual equity partner. From the September 12 Des Moines Register:

To make the inPlay project work financially, City Councilman Chris Coleman said, the city and county came up with an unusual incentive package that would work as follows:

- Polk County would make an interest-free loan of $1,875,000 to the city, and the city would make a grant of that amount to Nelson Development for the inPlay project.

- The city would repay the loan in 10 annual installments of $187,500, using new property tax revenue from the project to make the payments.

The most unusual part of the agreement is a profit-sharing plan.

"When inPlay's percentage rent reaches a predetermined amount, the county, city and Nelson will split every dollar above that amount equally," according to the proposal presented Monday night. "Exact details of this structure will be clearly identified in the final loan documents," which will be presented later, the proposal said.

What a great deal. The city and county combine to give a business almost $2 million to compete with every other recreational business in Polk County. Meanwhile Larry Smithson, the Hunter family, the Coppolas and all of the other entrepreneurs who spent years hustling and scraping to keep downtown Des Moines from dying entirely now find the same government that can shut them down by pulling their liquor licenses is now going into business against them. If you think the government would never abuse its power like that, remember how Archie Brooks crudely threatened ZZZ Records with condemnation so that the developers favored by the city could take its building. The rest of the city council and county board may have better manners than the Civic Thug, but don't count on them having better souls.

HOW THE CITY TREATS LESS-FAVORED BUSINESSES

A story in the Des Moines Business Record gives a taste of how the county treats the businesses that it doesn't buy into:

Schaffer's owner Kari Smith would have to sell a lot of $3 cups of coffee at the café she wants to include in her new store to cover an expense created by a recent ordinance change in Greater Des Moines.

Recently, Smith learned that she is required to install a large grease catcher that could cost up to $75,000 for the 20-seat café at the building she plans to share with Boesen the Florist in the West Glen Town Center.

It's a cost she hadn't anticipated, and one that may cause her and her partners to change their plans.

Downtown a new coffee chain, Amici, is getting ready to open an espresso bar in the old Midland Building:

Greg Tornberg, president of Mille Miglia Caffe LLC, which owns the Amici locations, said his company is waiting to hear back from the WRA if the coffeehouse falls under the classification of a food service establishment and would be required to comply with the ordinance. He estimates that the cost to install the underground unit at the new store would be over $50,000.

Tornberg is hopeful that Amici will be excluded from the ordinance because the coffeehouses only prepare beverages, not food. The baked goods sold at Amici are bought from an outside vendor and baked offsite.

Bill Stowe, the bureaucrat in charge of the grease-trap police, doesn't sound eager to help:

"From our experience, a food service establishment can quickly expand from being just a coffee shop to a larger grease producer by adding items like croissants, sandwiches and French fries," Stowe said. "This is our method to be proactive with preventing sewerage overflows while meeting the EPA's requirements for keeping grease and contaminants out of the water."

If a bureaucrat can be this difficult just by being his usual official self, imagine how much fun he could be if he was one of your competitors.

The best that can come out of this deal is that existing businesses are paying taxes to lure and subsidize their competitors. If the government decides to squeeze its new competitors, things could get far worse.

Anytime a government looks ready to dump money into a business, two simple rules should apply:

1. If the business were sound, it could line up private equity and debt financing.

2. If it's not a sound business, the government shouldn't pour our tax money down the rathole.

But in the Banana Republic of Polk County, your government may soon be your competitor, too.

'We can't let them stop the music.'

I was working in Bettendorf five years ago today. I had scheduled my annual trip to the client, which typically took three days, around a concert in Iowa City by Bela Fleck and the Flecktones. I planned to head to the show - a one hour drive - after finishing the day's work at the client office.

It was a gorgeous day, and I was listening to the NPR news on the five-minute drive from the motel to the client office. Nothing out of the ordinary. When I reach the client office, though, I'm told "Did you hear two airplanes crashed into the World Trade Center?"

Puzzled, I asked "How could two airplanes hit the World Trade Center?" I didn't get it. One airplane - a freak accident. Two?

My client is a very smart man. He was the first I heard to suspect Al Queda. When Flight 93 crashed, he correctly suspected that the passengers took the plane down. We watched the towers collapse on his little office black and white TV. He shooed everyone out and got us back to work. Might as well; even in the top floor of the tallest building in Bettendorf, the terrorists probably weren't after us.



That left the concert. At the end of the day I called the University of Iowa ticket office, and they said the show was still a go. I had a half tank of gasoline, which was handy, because there were panic lines at the gas stations -- I thought it was moronic, because the hijackers didn't bring down any oil refineries or anything. I also thought the gas operators who raised their prices to $5 a gallon were doing the right thing - it was a way to slap some sense into the panic buyers - but the politicians cried "price gouging."

It was a great concert. I think I was the only male in the crowd with both short hair and no beard or mustache. I was probably the only accountant, too. The band started with one of their best songs, "Big Country," which now always says September 11 to me. During the concert Bela Fleck, whose family lives in lower Manhattan, said his family was all right. The Flecktones bassist, Victor Wooten, has his birthday on September 11 (happy birthday, Victor!). The band rocked, but I was strangely agitated and couldn't relax. The music was great, but I was preoccupied trying to sort out the days events and my mind kept drifting away from the music.

A year or two afterwards, Bela was touring with another great bassist, Edgar Meyer, doing a classical tour. They did a little seminar thingie during the day before the concert, and I had a chance to chat with Bela. I asked him about the September 11 show, and he said that they weren't sure whether they should play. Then Victor Wooten settled the issue when he said "We can't let them stop the music!"


That works as a battle cry, for me. The Islamists of September 11 were of the same ilk as those in Afghanistan, who literally stopped the music. They still want to. They've been trying since at least 1993. They're still at it and they'll keep at it. Nothing but our death, their death or our conversion to their death cult will satisfy them.

We can't let them stop the music.

Experiencing Oatmeal

The newspaper this morning came wrapped in one of those plastic bag that has ads and a free sample. It promised more than I think it is likely to deliver.



I thought it was appropriate, though, in that it enclosed the Des Moines Register, itself an oatmeal experience, in its own way.

I think this ad slogan also sums up the election for me. I know that voting is supposed to be a civic duty and all, but I'm really not happy with the selection. The partisans do their best to get us excited, but it's still just another oatmeal experience.

Governor: Culver v. Nussle

Iowa is one of the least dynamic states in the country. We have the same structure for delivering government services that we had 100 years ago. We have high taxes, 99 county sheriffs, 99 county attorneys, 99 little self-preserving political machines dedicated to keeping 99 sets of public employees employed. Our leaders attempt to grow the economy by taking money from our current businesses and using it to lure and subsidize their competition. And what do our leaders want to do?

Chet Culver wants to raid the public employee pension fund to lure and subsidize competition for existing businesses.

Jim Nussle wants us to grow and burn corn.

It's as if we're doomed to choose between Terry Branstad and Tom Vilsack forever.

The only reason Chet even gets on the ballot is because his father used to be Senator - and one of the most self-righteous and bombastic ones ever, on a level with Ted Kennedy. Oh, and because the Iowans voting in the Democratic primary decided he was the "electible" candidate, with the same keen insight that gave them the same idea about John Kerry.



And to think they could have had Ed Fallon. What were they thinking?

Nussle is running because it's his turn. That's how it seems to work with Iowa Republicans. Doug Gross had his turn last time, and Lightfoot had his turn before. I suppose Latham or somebody like that gets the next try.

I will vote for Nussle mostly because he's not Chet. He's shrewd and unlikely to really screw up anything. He's also unlikely to do anything worthwhile.

Come to think of it, comparing this choice to oatmeal isn't right. I actually like oatmeal.

Always cite this insightful site

Brent is impatient for a new post. The postman provided this:



That's what I like about blogging; you can fix embarrassing typos. Unless, of course, they really think people will be incited by Chuck Grassley. That's sort of like being whipped to a frenzy by a bowl of Cream of Wheat.

Iowa Pork!

Congressional appropriations bills have more pork that the Iowa State Fair. Here is a link to Iowa "earmarks" in the pending "Labor, Health and Human Services" appropriations bill. No doubt all of the spending reflects urgent national priorities, including:

$250,000: Des Moines - Blank Park Zoo for exhibits, programming and equipment.

Compared to Earthpork, maybe that's a bargain...

$250,000: Des Moines - Des Moines Area Community College, for training dislocated workers, and for career exploration and preparation for high school and community college students.

$250,000? That won't pay a single jobs training executive for one year!

$200,000: Cedar Falls - University of Northern Iowa to expand the National Institute of Technology for Inclusive Education We Build Communication Access Through Technology (WeBCATT) program

The acronym WeBCATT is worth $200,000 by itself!

$100,000: Des Moines - Community Kollel, for K-12 education programs

Who says pork can't be kosher??

$80,000:Cedar Rapids - National Czech & Slovak Museum & Library for upgrade of permanent collection.

Mmmm. Koloches!

Chet Culver spotted with Cliff Barnes

Gubernatorial Candidate Chet Culver was photographed with famous oilman Cliff Barnes (via State 29). Can we assume that J.R. is in the Nussle camp?

Don't let the door hit ya!

Archie Brooks resigned today from the Des Moines city council(hat tip: the Political Madman). Better 13 years too late than never.

From the Des Moines Register's copyrighted story:

Des Moines Mayor Frank Cownie said Brooks did the right thing.

"Nobody wants to be a detractor of the good things he has done," Cownie said. "It was his decision and something I'm sure he thought long and hard about. I think in his mind, he's doing the right thing. I think his decision is appropriate."

Archie has made many notable contributions to the community - from forgetting about whether he had ever dated Ramona Cunningham to forgetting about whether he had approved colossal bonuses to her to forgetting about trying to smear whistleblowers. And who can forget his threatening small east-side businesses to clear the way for well-connected interests economic development?

But the highlight of his career in public service will always be turning off the city's emergency radio system during the disastrous 1993 floods in a snit over being ordered to close the building where he worked. Yes, Mayor Cownie, let's remember all of the good things. What a guy.

Why don't you post more, Joe?

Good question.

For starters, I can't find my copy of "Crisis of Abundance," which is very embarrassing, so I'm reluctant to show my face here. I finished it while waiting for this parade, and then I had to run to the end of the parade route in the rain to rescue some wet marchers. Somehow I lost track of it in the madness and have yet to find it.

Second, I only post if I have something to say. If it's tax or Iowa, and it bothers me, I might post. Or not.

Third, I post elsewhere. I have my work blog and my picture blog so my Mom in Illinois can see lots of pictures of the boys, etc. Also I have posting rights at Chequer-Board for when something in Iowa needs wider notice.

Finally, a poster at a favorite infrequently-updated blog puts it well:

Look, it's not that I don't pay attention to the news. But frankly, I can't see any reason why anybody else should care about my opinion on world or national events. Anything I'd be inclined to say I'm sure has already been said, better than I could say it, somewhere else. Adding value, people. I've already got all the captive audience I need here at home, people I can harangue in person, and even tell to go to their room if they disagree with me.

There are a lot of smart bloggers out there. If I have something to get off my chest that is otherwise neglected - say, the stupid Clive traffic-light cameras - I'll say it. Most of the time, though, somebody else has already said it for me.

Absent due to absent-mindedness

No, I haven't abandoned the "Crisis of Abundance" series. I had just misplaced the book. You may wonder how I could do such a thing. Well, it's a little book, and I had put it where I put my bills and magazines until I sort through them, and then I sat down to pay my bills this weekend, and there it was. Vacation looms, so I will be finishing it up.

If you are looking for something to read meanwhile, I have two recommendations.

1. Kyle has an excellent post this morning, a cri de coeur about the lack of anything to vote for this fall in Iowa. While I quibble with some details of his post (some economic downturn, eh?), he lays out what I see as the real problem for his party - what do they want to actually do?

The money quote:

I'm infuriated by Democrats who spend more time on the stump talking about their opponent's failings than their own strengths. Maybe 8 years ago we could have made an argument that running as non-Republicans might win an election. By now, we should be pretty sure that's not going to work.

While Kyle is talking about his own party, the state Republican organization has a lot of the same problems. The Nussle program, as far as I can tell, is to make Iowa the Saudi Arabia of cornfuel. Yeah, that'll work, sure.

Meanwhile we have about 85 counties more than we need, a shriveling rural population, a government built for the 19th century, an insane income tax system - and nobody even mentions them. Yet it's hard to see how Iowa will achieve any kind of dynamism until somebody tackles these things.

2. The Wall Street Journal has a front page story today telling the story of Hao Wu, the imprisoned Chinese blogger-filmmaker whose face is featured on this home page to the left. I think the link only works for WSJ online subscribers, but it's worth paying 75 cents at the newsstand to read this.

He affects people here the same way

"In D.C., Vilsack stresses 'ordinary people'"

-headline on page 1 story in today's Des Moines Register.

LAZY SUNDAY 'CRISIS OF ABUNDANCE' POST

Yes, I'm still reading Crisis of Abundance, Arnold Kling's smart little book on health care economics. I should be posting more, and I apologize to the (almost certainly hypothetical) readers that have been eagerly awaiting my next post. Today - chapters 3 and 4

DOLLARS AND DECISIONS

Health care economics are all about deciding how best to spend the limited pool of dollars available. This may seem obvious when you think about it, but many people probably don't. It's easy if you look at in extreme terms. For example, lets assume we have a billion dollars to spend. What if we could use it to save one life through an incredibly expensive but 100% effective medical treatment? What if that person was already 80 years old? What if we could instead spend the money ensuring sanitary drinking water for an entire developing country, saving thousands of lives that would otherwise be lost through cholera or dysentery? From this viewpoint, you'd almost certainly decide to let the one guy die and save the thousands.

In real life the decisions are a lot closer, and sometimes the answers aren't at all clear. These are the problems Dr. Kling engages in chapter 3 of Crisis of Abundance. He makes five "key points" at the start of this brief chapter and fills them in.

What I get out of the chapter:

• A lot of health care spending isn't clearly necessary or unnecessary; it instead falls into a gray area.
  

• In a perfect world, we could look at a given medical procedure and measure the probability it will help, and value of the benefit if it does work, against the cost of the treatment. In the real world, we can only know the costs for sure; few treatments are 100% effective, and the value of the benefit of the treatment, even if it were 100% effective, is often at best a rough guess.

All of this is complicated by the availability of different diagnostic procedures and treatments with different possibilities of success. The "best" diagnostic tool might be only 10% more effective than the next best, but it may cost 3 times as much. It's not so important if it's a difference between a $10 procedure and a $30 procedure, especially for a serious ailment, but it can make a big difference when you have a $5000 procedure.

Given these difficulties, it's not surprising that different doctors and patients come to different conclusions. Even for Medicare, which is fully paid for out of taxes, the results vary widely by regions. One statistic jumps out of chapter 3"

The proportion of patients seeing 10 or more physicians in the last six months of life ranges from a low of 17 percent to a high of 58 percent."

I don't think it means we have widespread random malpractice in the treatment of dying patients. It does mean that a lot of capable doctors and concerned patients are groping in the dark for answers.

NO PERFECT HEALTH CARE SYSTEM

What, then, should a health care system look like? Chapter four begins to look at this. No system can be perfect. He starts the chapter as follows (highlights are mine):

Any health care system must reflect a compromise of preferences. We cannot have a health care that is both accessible and affordable while insulating consumers from the cost.

It's a point that should be obvious to grown ups, but is often lost in the health care debates. You can can't have whatever you want whenever you want it for free. So we have to sacrifice some combination of accessibility, affordability, or cost. Which go over the side?

accessibility. In a world where we ditch accessibility, says Dr. Kling,

The solution would be to have government set a budget that limits the supply of health care services. Bureaucrats would set health care priorities. Inevitably, some consumers would be denied treatments that they seek.

Affordability. Maybe we could decide we want the best heath care possible, screw the cost. Is that a good idea? At some point it seems you run out of money.

Insulation. Here Dr. Kling hits an area that is one of my pet ideas: if "somebody else" is buying, you'll spend more. The lottery winner just walked in and is buying drinks for the house? You put down your bar scotch and order the Glenlivet.

The conclusion? Dr. Kling puts says that "insulation" goes over the side:

For an economist, it makes sense to sacrifice the principle of insulation to promote unfettered access and affordability. The principle of access unfettered by bureaucratic intrusion is consistent with consumer choice, free trade, and other concepts that economists hold dear. The principle of affordability also has an obvious economic appeal. However, the principle of insulation has little or no economic justification. In fact, I think that the task for economists, and for Chapter 5 of this book, is to explain the high cost and dubious benefits of catering to the principle of insulation.

So on to chapter 5 in the next post.

Previous Crisis of Abundance posts (6!):

Expat comments on Crisis of Abundance Posts.
Premium medicine in action
C of A: "Three Health Care Narratives"
Crisis of Abundance: "Premium Medicine"
May 20, 2006
May 16, 2006