Sunday, November 18, 2007

With a Flick of My Wrist

I got myself a new watch.

I used to go through about one watch a year; apparently I'm a very caustic person and would corrode them until the case was all pitted and the crown would come off. I finally clued in and the last one I got was a stainless steel Seiko which lasted something like seven years, but its crown finally broke off a couple of weeks ago when I tried to adjust it for daylight savings time ending. I tried doing without and just looking at my cell phone like the cool kids are doing these days, but I'm old school and set in my ways, so I checked Amazon for a new one, and got another Seiko.

I like the blue dial.

Friday, October 05, 2007

The Metaverse Manifesto

When I look at virtual worlds with fixed features at specific virtual locations, which is most of them, I think what this place really needs is more user control. Consider some kind of user-controlled remapping capability. Let's say Starbucks has staked out one corner of every virtual block, but I personally don't care about Starbucks. I don't want to see it there, so I click it and tell the environment to show me a nice grassy park square instead of a Starbucks whenever I run across one. Maybe the Virgin Megastore is three blocks away from Tower Records, and I couldn't care less about anything in the virtual real estate in between. I click on the street in front of one store and drag it over to the street in front of the other, and now the stores are right next to each other and I don't even see what's in the middle. How about user-added mash-up capabilities? Say I've found some third-party service that can put a big colored column in the air over the stores selling something I'm interested in, perhaps with taller columns for lower prices. I can just look around and tell where I want to go shopping. Or maybe I want to hop every virtual bar, so a mash-up app could draw a dashed line on the street for me to follow like Jeffy in Family Circus. Give the user control over appearances. Maybe I want to theme the world, so every building looks like it's ivy-covered University Gothic and the streets are all grassy quads and everyone else's avatar looks like Joe College from the '50s. Make the user's choices persistent and portable. Make it so all my changes are stored in a way that lets me hand a token of some sort to someone else, and they can see the virtual world the way I do, and vice-versa. Give me a dashboard that can show me when my friends are online no matter what service they're using, and send them a ticket via IM so they can teleport right to where I am in the virtual world. Maybe there's a toggle switch on the dashboard that lets me view things with my theme, or see them the way their creators intended, or with all the signs translated into Japanese. Maybe there's a whole scrolling list of possible themes I can pick from, and I can download even more. Let me create the themes, the mash-up services, the virtual remappings, the dashboard applets. These facilities probably need to be built into a virtual world toolkit so developers can make them available to users. Maybe not everyone will want to implement all of them in their virtual worlds, but those that do will probably be popular. I want to be able to pick whether I see flying genitalia avatars or not, whether I see advertising or not, whether random strangers can talk to me or not, and I want my choices to be respected portably across all kinds of virtual worlds. Let me choose whether I wear rose-colored glasses or not. Don't censor the environment for me (at least, beyond some initial setting like Google's SafeSearch default at Moderate), let me do that myself if I want to and how I want to. Give the users control.

Saturday, September 15, 2007

Plutocrats Are People Too

I've been toying with an idea for meaningful campaign finance reform, which to me doesn't actually have anything to do with the ridiculous amounts spent on them, since I don't really care about that. No, what irks me is the risible fiction that candidates are offering no quid pro quo, just their hearty thanks and congratulations on the civic-mindedness of their donors who are giving them money with no thought of personal gain, because that would be wrong.

The gist of my proposal is that Congress disallow any contribution or spending on campaigns for elected office by artificial persons. No corporate body could provide any funds or other valuable consideration whatever to a candidate. That would include businesses, non-profits, unions, corporate organizations of any kind including ones set up for advocacy, as well as any of the usual rent-seeking suspects. Corporations of any sort would have to keep their money away from campaign coffers. Individuals, on the other hand, could contribute all they like. Individuals could provide services in kind, but businesses couldn't. Broadcasters and newspapers, if corporately held, would be required to offer advertising space on equal terms to all comers, at whatever rate they liked, including free if they were so inclined, but editorial content endorsing or supporting one candidate would be allowed only if equal guest editorial space was offered for free to every other candidate. The equal protection clause of the Fourteenth Amendment would be specifically circumscribed by Congress in regards to artificial persons to limit their freedom of speech. Unlike the current laws' limits on individuals' expression, the Supreme Court would likely go along with this restriction.

Suddenly, corporate interests would have to have the support of individuals to get congresscritters attention. Farmers, workers, teachers, business owners, shareholders, and issue advocates would all be pressing their various agendas and writing checks, but that's only to be expected. However, they'd all be doing it one person at a time. No longer could the AARP print up postcards for a mass-mailing effort in favor of a candidate, or the NRA or NEA have giant checks printed up to hand over to candidates on stage. There could still be organizations like that, because individual rights to assemble would remain inviolate, but if incorporated, they would be restricted from favoring - or disfavoring - any candidate for office. Members, on the other hand, could favor and disfavor all they liked.

I'm not sure this idea would cure the various evils of elected officials being corrupted by money, but at least they'd be hearing from lots of real people and not just from deep-pocketed self-interested organizations. Would it work? It's got no protection against plutocracy, but hey, plutocrats are people too.

Sunday, September 09, 2007

It's Not as Intuitive as You'd Think

Boy, if you want to see free markets (and Milton Friedman) get libeled, you couldn’t do better than this. If I were to diss on Milton Friedman, it would be because he invented income tax withholding, not because the Chileans 'disappeared' thousands of people.

Give me some time and I'll write up why unemployment and shuttered factories are often a good thing for society as a whole, and why it would generally be better for everyone if, say, travel and trade in goods were as easy between countries as they are between the US states. Folks get up in arms about a trade imbalance between the US and China, while nobody is concerned about the trade imbalance between Nevada and California. Wonder why?

One thing to remember about free markets is that they don’t exist in a vacuum. A whole lot of social context is required before you can have lots of random people getting together to buy and sell successfully. For instance, being free to make and sell something presupposes a property right which is protected somehow from thievery and thuggery. The buyer needs that same assurance so that he can take his purchase home and make use of it. A buyer is able to shop for the best prices in the market only when there is a common means of exchange, with a reasonably constant value that isn’t subject to radical swings due to it being based on some fickle commodity, or raging hyperinflation. And there needs to be some recourse for fraud and misrepresentation. The social background level of honesty and integrity makes a difference in the emergence of markets. In an ideal market, information spreads about those participants who try to cheat, and lie, and steal, and their transactions get discounted appropriately, if they can make any at all. Real markets suffer from information flow problems, and then everyone pays extra when some bad actors appear. The social costs of creating and enforcing the conditions that allow reasonably free markets to exist must be paid somehow, through fees or taxes, however indirect. Economists are well aware that the free market of microeconomics is a simplification and model of how real markets work, and that the reality is far more complex and nuanced. Kind of like how a physicist might model an internal combustion engine, fully aware that what takes place under the hood of his Toyota is an entirely other kettle of fish. The model is useful and instructive and gives insight into what’s going on, but it’s no substitute for the real thing.

That said, economists are also fully aware of things like environmental side effects and social ill effects. The word used for something that happens indirectly as a result of a market exchange is "externality," which means that someone gets a benefit they haven’t paid for, or faces a cost they haven’t been compensated for, because of that activity.

Let’s say that Ann sells Bob some firewood in the firewood market. Ann cut down some trees on her property to make the firewood. Bob goes and burns it in his fireplace. As a simple exchange, Ann and Bob are both better off, because Ann wanted to trade her trees for some money, and Bob wanted to trade some of his money for firewood. But Ann and Bob are not the only people affected. Charlie lives near Ann and Bob. He used to enjoy the view of Ann’s trees out his window, and now they are gone. And the air is now all smoky because Bob’s badly ventilated chimney sends all that sooty air Charlie’s way. Charlie was previously enjoying a view provided by Ann, but he didn’t pay anything for it, and now it’s gone but no one paid him any compensation. Charlie also had gotten used to some clean air, which he enjoyed for free, but now it’s all smelly and irritating his eyes, and no one has paid him to make up for it. These are externalities with respect to the firewood market.

One way to deal with an externality is to make paying for it part of the cost of a transaction in the relevant market. In the case of the firewood market, for instance, buyers of firewood might have to pay extra, and that money might go to paying for filter masks for people like Charlie, or to a fund for subsidizing clean-burning wood stoves for polluters like Bob. This isn’t something that the participants in the firewood market are necessarily going to come up with on their own; it’s a social cost and usually requires the coercive presence of an enforcer like a government to implement some kind of consensus fix. And the cost of administering the fix is usually high, the fix itself is often less than ideal, and it is usually subject to the vagaries of the political and regulatory process. But with luck, it’s better for Charlie than no fix at all.

Most of the objections of the free market being awful to workers and the environment are either cases of externalities becoming apparent or cases of sharp imbalances in market power. When a market has many players in both the buyer and seller roles, and information on the price of the goods is easily shared, it turns into a commodity market, where no one has pricing power and all must accept the going rate or go home without making a trade. In this case, we call the participants price takers because they take the price set by the market. When there are only a few buyers and lots of sellers, or a few sellers and lots of buyers, or information on pricing is difficult to come by, then those few, or the ones with the information, can be price makers, dictating the price through the quantities they are willing to purchase or provide. Say a town full of people looking for a job with few available skills meets up with a mill that will employ a town's worth of people if they'll work twelve hours a day six days a week for a pittance a day and put up with some awful smog. The mill is a price maker, and the townsfolk can work on those terms or not at all. As long as there are lots of towns full of people who a desperate for jobs, and the mill can pack up and move to whatever town they can employ the cheapest, there will be no change in the terms on offer. It’s not until the folks in each town are already well enough off that they can turn down an offer like that, that you will see any significant change. Since any given worker has very little market power, if they turn down a job they have little recourse when there are few employers. Forming a union will help, but like any cartel, a union faces the problem of defectors, those who find the incentive to take a job at a lower rate personally compelling even if it undermines the chance for everyone in the group to do better. Adopting a local ordinance to set the rates of pay will work as long as the mill can’t pack up and move to another town without such an ordinance. And larger governments have traditionally been very conservative about adopting such measures, basically only doing so when the market realities are already mostly changed to match, and only catching a few laggards out. That’s because politics is generally tied to money rather than votes once the legislature is in session, and returns its attention to votes only once in a while. And voters start caring about, say, the environment more when they have already dealt with more pressing issues of being fed and housed and have a little leisure time to enjoy it in.

Friday, September 07, 2007

Sucking All The Air Out of the Room

I'm curious what this notion of a free market that doesn't work means to people who say that.

Let me explain the concept of a free market from the perspective of an economist, and explore some of its ramifications for a bit.

The very basics: if there's a market for a good or service, that means there are people who want to purchase it at some price or other and people who are willing to supply it at some price or other, and they can get together to make a deal. If it's a free market, that means the buyers and sellers all get to pick the best deal on offer, at any price they like, in any quantity they like, without being forced to buy or sell if they don't want to. That means that sellers can try for the highest price that someone will pay, and that buyers can buy for the lowest price that someone will sell at. But the buyers are all in competition to get that best deal, so any seller will raise his price to just under the price at which it wouldn't sell at all and can still find a buyer. Yet at the same time, the sellers are all in competition to make that sale, so they must drop their price to match the lowest available price to make any sale. If they are unwilling to sell at the price that these two effects converge on, (known as the equilibrium price) then they take their goods and go home. If a buyer isn't willing to pay that price, she packs up and heads home empty-handed, money still in pocket. Everyone else makes a deal. The buyers that were willing to pay more get what they want out of the market for less than they'd feared, and the sellers who were willing to sell for less find themselves richer than they'd hoped. A free market matches people up and makes them wealthier - everyone who comes and makes an exchange gets more value in return than they bring. Everyone else has what they started with. They all made a free choice and no one was coerced into paying more or selling for less than they were willing.

There, that's the long and the short of a free market. Maybe other people are talking about something else when they use the term.

Well, how do free markets work? We've been talking about the market for healthcare, but that seems fraught with connotations that I don't want to deal with. Instead, for the purposes of illustration, I'm going to discuss a theoretical community that lives on the deep ocean floor, and trades in a market of compressed air bottles. In this case, the buyers all have a strong motivation to find a deal, since their alternatives are to die a painful death of suffocation or a painful death of the bends, the common factor being a painful death. The sellers, however, are limited in their ability to take advantage of this market by whoever among them is willing to sell for the least amount that will sell all her air bottles. They can't sell a single bottle for more until her supply is all gone. If she can supply as many bottles as buyers want at that price, she'll get a de facto private monopoly, until other sellers lower their price to match, or if they can't, get out of the business.

(For the curious, private monopolies, also known as efficiency monopolies, arise in a competitive market when one seller has a cost advantage over all other sellers and can supply the entire market. A statutory or legal monopoly is one where some government fiat prevents other sellers from entering a market, such as when a product is patented or the field is regulated. A natural monopoly is one where the costs to supply a market go down when there are fewer suppliers, as in, say, roadways or sewer lines. Given the way newspapers have tended to go to one per community, they may be a natural monopoly. Natural monopolies are usually persistent and thus are the most likely to be regulated to prevent abuse of market power; private monopolies tend to be temporary and are occasionally brought to task for abuse of market power through antitrust law, but are unlikely to be regulated.)

So what if there is a monopoly on the air bottle supply? Won't a profit maximizing monopolist restrict the supply and jack up the price? Well, sure, if that actually brings in more profit. Those are some ridiculously motivated buyers, after all. However, if raising the price to a certain point will bring some new sellers into the air bottle business, the monopolist is likely to try to stop just short of that price, lest she wind up attracting competitors, selling fewer bottles and losing out on those profits. That price point in turn will be something under the price at which that new seller could make any money, or just about where their costs of producing and selling the air bottles would be exceeded by the price they could get. In other words, a private monopoly will still be limited in what it can get away with charging for very long, as long as there are no barriers (other than startup costs) to new sellers entering the business, even if they never actually do. The monopolist can hold on to that position as long as she has costs lower than any new seller would, and she can supply all the bottles people want to buy at her price.

However, another factor in the pricing equation is, how many more bottles might the monopolist sell if she lowered the price? If the number sold goes up enough that the reduced profit per bottle times the new number sold is bigger than the old profit per bottle times the old number sold, then the monopolist is better off selling for less. When the buyers' quantity demanded is very sensitive to price, this can easily happen. On the other hand, air bottles aren't really that kind of good - the buyers only need so much of it, really, without much use for excess, but the amount they do need is fairly rigid and they're willing to pay quite a bit for it, since the alternative is a painful death.

What if the monopolist can produce more air bottles than people want to buy at the profit-maximizing price? An enterprising monopolist might see that there are some people who can't or won't pay the full price, maybe because they're poor, or getting good at holding their breath, or mooching off neighbors or something. As long as the monopolist could still make some profit selling to the rest of the market at a lower price, there's an incentive to do so, as long as it doesn't undercut the main market. Perhaps she could sell discount air bottles only to people with AARP cards, for instance. Or maybe add a bad smell to the cheaper bottles. The smart seller will try to maximize the value extracted out of what buyers are willing to pay by segmenting the market this way. As long as no senior citizens start up an air bottle reselling business, and most buyers aren't willing to put up with the smell for the discount, things are good for the seller. The seller may continue to find ways to sell air bottles until the price made from selling the cheapest bottle no longer exceeds the cost of producing and selling it. (In economics-speak, that's when marginal revenue equals marginal cost.)

Let's take the other side of the market. Say that after enduring high prices for entirely too long, the community of air bottle users agrees "We're tired of being held over a barrel for our oxygen. Let's form a collective buyer's association and reverse the market power situation." They pool their funds and stop buying the air bottles individually, instead putting out a single bid request saying "We want this number of air bottles, and this is what we will pay. Any takers?" The sellers are now in a position of either supplying at the bid price, or not at all. Some may choose to take their air bottles and go home, but a few may figure it's the only deal in town and they can still make some money, so they'll sell. As long as the buyers' club can get all the bottles they request, all is good. If they can't, they may request a few more bottles offering a higher price, and repeat until they've got all they need. This turns around the market segmentation case for the buyers' benefit. They pay a lower net price for their air bottles because their monopsony power is extracting a bigger share of the value of the exchange from the sellers.

Conventional economics considers a market failure to be the result of inefficiency of some kind, as when a monopolist or monopsonist uses its market power to extract more value from exchange in a way that constrains the amount of surplus value that its trading partners can get from the market. The amount of value gained by the one is less than the value denied to the other, and the difference is known as a deadweight loss. This is the potential value that is lost to market participants in comparison to a market that is at a competitive equilibrium. (Other sources of a deadweight loss and attendant market failure include when a price floor or ceiling is applied to the market, or the quantity supplied is constrained or rationed, or production or purchase is subsidized or taxed, or informational asymmetry is pronounced between buyers and sellers. These subjects involve lots of math and graphs and are beyond the scope of this already way to long exposition.)

By a strict definition then, in the real world, every market is a failure to some extent, because there is always some conglomeration of taxation and subsidy and information asymmetry and uncompensated externality and market distorting transaction cost going on and causing inefficiency, but it's a question of degree. It's like calling an A-minus student a failure for only getting a 95% score. If a market is at an equilibrium that is reasonably close to its theoretical ideal, despite its inherent practical inefficiencies, the costs of market intervention by a government can easily outstrip the potential gains in improved efficiency. If we consider the cost of market intervention as a potential deadweight loss and compare it to the actual deadweight loss of existing market inefficiency, then we can say that any market where the actual loss is less than the potential loss is real-world optimal and (at least on economic grounds) should not be intervened in. On the other hand, when the existing market is likely to have its efficiency improved by more than the cost of intervention, then intervention is economically justified.

Unfortunately, economic justification does not address issues of social justification, which may for instance require constitutional limits on intervention in the service of non-economic ideals of individuals' freedom of action or freedom from coercion. But if we go back to our undersea world of air bottle buyers and sellers, we also see other areas of social concern that our economics do not directly address. That is, what about those poor buyers who can't even afford the AARP rate or the smelly air bottles? You can only hold your breath so long, after all. Really enterprising sellers might extend credit to someone who was temporarily experiencing a cash flow crisis, but probably not to someone who was just plain poor and likely to remain so. For the sellers of air bottles, there's some incentive not to let potential customers die off, but the only incentive regarding those who will never be able to pay is a humanitarian one, not a financial one. Unless they could capture more business by saying "buy from us, we're good people who provide air to the down and out" there's not much profit incentive to give the stuff away. Maybe there's a branch of the Sisters of Jacques Cousteau who solicit donations and supply air toots for free to the indigent, but if there are more in need than they can supply, somebody's looking at a painful death, and soon. Even so, this does not represent a market failure. The free market in air bottles is working just fine, supplying all the air they can breathe to everyone who can pay. That said, if people are dying, there may well be a social policy failure.

But what should social policy be? In some strict calculus of human economic value, it may be best to let the elderly poor turn blue instead of taxing others to purchase air bottles for them or coercing bottle sellers to give them away. Subsidizing that air supply for them would cost more than they could ever again return to society. However, if everyone instead agrees that they are willing to pay now while they can, in return for assistance in the future if and when they become aged and decrepit and penniless, in essence paying in advance, it makes more sense. They have created a social contract, where the cost of care, or rather air, for those in need who cannot pay is socialized. And that's fine.

Whether it's better to purchase the air bottles for the social insurance in the market or to create a captive producer for them is another question, one that I'll leave for another day. Suffice it to say for now that you cannot escape the cost of production, no matter who is doing it.

Monday, August 27, 2007

Will The Real Healthcare Fixer Please Stand Up?

The Republicans appear to find a laissez-faire economic system odious, since it doesn't give enough protection to the wealthy and powerful business interests that provide the backbone of their funding. The poor and the working classes generally don't vote Republican (or at least, traditionally they didn't), so there's less incentive to attend to their issues. The Republicans are for small government only to the extent that they give lip service to the fact that in the long run, government spending must equal government income, and they are loath to give the government much income. But enough Republican bashing... for now!

The arguments commonly made against subsidizing health care usually boil down to moral hazard, which is to say, people will consume more than they need if it doesn't cost them anything; and a philosophical objection to socialization. I can't address the philosophical objection, because it's a worldview thing. You may see the world through individualist eyes or as a communal place, you may be paternalistic or antiauthoritarian. The moral hazard issue, however, is what's been driving the opposition to universal coverage and winning the day, and it has some serious flaws.

Malcolm Gladwell outlined the issues of moral hazard in health carebetter than I ever could. In summary, it turns out that people don't like to go to the doctor if they're not sick, and even if healthcare is effectively free, overconsumption is unlikely. Underconsumption, on the other hand, is an issue with the present system, because the uninsured tend to miss out on preventative checkups and well-baby care and immunizations and dental hygiene, and that turns into very expensive issues with actual disease and disability that has high social costs.

That's not to say that there's not an issue with the healthcare we actually get in America costing too much. The fraction of the US economy devoted to healthcare has gone up much faster than any other over the last sixty years. Americans spend about one dollar in five on healthcare, Over a fifth of the cost of healthcare is in administration and paperwork, with something like 12% going to insurance company overhead (less than four percent is spent on overhead for Medicare, while Canada spends closer to two percent). However, the bigger issue is that there is little holding down what medical providers charge. If you're insured, then you've probably never thought about how much that visit to the doctor actually cost, over and above perhaps a token co-pay of ten or twenty bucks.

I have nifty insurance that doesn't include any co-pays for any normal preventative or needed care. I do get a statement afterward from the insurance company, though. It turns out an office visit is billed at $140 by my doctor, and the insurance company pays a "negotiated" amount around $90, and I'm covered for the rest. If I had no insurance, the steely ladies at the counter would be after me to pay the whole $140 right then and there. Remember the saying, "never pay retail?" It goes in spades for healthcare, or at least for the sort that your insurance company has a hand in paying for.

And yet, there's a kind of healthcare that my insurance company doesn't pay for at all, and as near as I can tell it's bucking the general trend by becoming both better and cheaper at the same time. Check your newspaper for ads touting "Lasik" treatments for vision correction. The price tag is prominently displayed right there, because you'll be paying it out of pocket. Opthalmologists with fancy equipment are competing for your business, and you're better off as a result.

At the same time, I see ads for where to have your baby. One hospital is touting their cushy "birthing center" and another is all about the quality of their doctors. No mention of the price, though, because delivery is one of those things that's usually covered by insurance. You won't be paying for the luxurious digs with a window with a view, the best trained obstetricians and nurses, or at least not directly, so why compete on price? I don't know, but I'd be willing to guess that these places are actually billing the insurance companies rather more for your enhanced perinatal experience, because they are driven by a profit motive and they're not getting the money from you. Otherwise, you might actually go to the regular hospital delivery room and pay $3000, instead of $5000 for the high-end experience, say, because you're busy while you're there with things that keep your mind off of what's out your window, if you even have one, and the difference isn't worth the money to you as long as your baby has a decent apgar score. Or maybe it is, and you're willing to pay, but how would you know?

I've found two excellent treatises on the issues and possible reforms in healthcare. One is from a well-known progressive economist, and one is from a well-known libertarian economist. I'll let you figure out which is which.

The Healthcare Crisis and What to Do About It by Paul Krugman and Robin Wells.

How to Cure Healthcare by Milton Friedman.

Krugman and Wells appear to have misidentified healthcare advances as the largest factor in the expansion of the fraction of the economy spent on healthcare, and appear to underappreciate the effects of third-party payment on rising costs. Friedman is still a little too attached to moral hazard. Both identify the historical accidents that have given rise to the current system, and how those are playing out. Both advocate an end to tax subsidies for employer-paid healthcare. Both would eliminate virtually the entire medical insurance industry in favor of a government-paid system of some kind.

Friedman proposes universal high deductible catastrophic care insurance provided by the government, and paying out of pocket for the rest of your healthcare needs, with Medicare and Medicaid replaced by a voucher system for the elderly and poor. There would be no moral hazard aspect to care you'd pay for out of pocket. This would also eliminate adverse selection, since all would be covered and all would pay taxes, presumably in the current somewhat progressive way, to pay for it. The poor who qualify for Medicaid would still get subsidized care. There would be no particular incentive for getting preventive care, and those with low incomes but not low enough to qualify for subsidies would probably continue to underconsume it. With this system, there would not be any of the monopsony power over pricing that you can get with a single-payer system for everyday healthcare or prescription drugs, but you would get it for the stuff that really runs up the bills, like heart-bypass operations or cancer care. On the other hand, you'd be more inclined to shop around, and like the Lasik outfits, you could expect to see some competition on price and quality for your business, and Consumer Reports-style ratings of hospitals and doctors would be popular. And in this system, the fraction of the economy devoted to healthcare would vary depending on how much people choose to consume.

Krugman and Wells propose universal coverage for all preventative and medically necessary care provided by the government, and ideally full socialization of the provision of that care as well - hospitals and clinics run by the government, with doctors in government employ, as in the Veterans Administration hospital system. Cosmetic and elective procedures could probably be purchased from the public system or from private providers, as in the British system. Once again adverse selection is eliminated, since all pay for the system through taxes and all are covered. Moral hazard is not a huge issue since it's tough to consume much more preventive and necessary care than you can use anyway, and preventive care and disease management are cost-effective when the provider is also the payer who reaps the benefits of lowered long-term costs. As a result, there would probably not be much underconsumption. Monopsony power, whether providers are private or public, would control pricing at every level and keep costs in line, but might lead to reduced incentives for medical or pharmaceutical research. No telling what choice you might have in medical providers with this system, or what reporting there might be on quality. And in this system, the fraction of the economy devoted to healthcare would basically be by government fiat, which could be too small and lead to delays and rationing a la Britain, or arguably too large as in France, leading to some gold-plating and other economic distortions.

Both systems have plusses and minuses, but both can be reasonably expected to be much less expensive and provide far broader coverage than our current hodge-podge. Think of it - more economical, and more humane! And no candidate is proposing anything remotely like these systems.


Sunday, August 19, 2007

It Takes One to Know One

The Delightful Spousal Unit had a party in celebration of her birthday just passed on Saturday, with a turnout of several friends of random connection. It seems everyone had a connection of some kind with someone else there that they might not have known about otherwise. And of course, cake. Good times.

And here's a bit more retroblogging, this time on the subject of IQ, from maybe a year ago:

I've only taken two psychologist-administered IQ tests, the first when I was five. The circumstances are telling: I was referred for testing when I was five because my kindergarten teachers were concerned that I might have a learning disability. I wasn't paying attention in class, was a little disruptive, and had difficulty completing tasks. I remember the test, since I remember my parents being a little apprehensive and telling me not to worry about it, which of course makes five year olds sit up and take notice. I was initially concerned, but found out that the testing was a heck of a lot more interesting than kindergarten; plus they gave me a toy to keep. Of course, no one told me what the test was for or why I was there or how I did until much later. Based on some clues in my school records, I believe it was the Wechsler Intelligence Scale for Children, and I did pretty well. Roughly 99.9th percentile well. I think my parents were happy that I didn't have a notable learning disability, because it was entirely plausible that I would, since my father is severely dyslexic. The kindergarten teachers had to adopt a new theory. Mostly, I think they just let me be.

My parents had me tested again the summer I turned fifteen on the recommendation of a teacher in a summer school class for "gifted and talented" students. Apparently I was a standout among the standouts, but the score I got on this test (The Wechsler Adult Intelligence Scale) wasn't quite so ridiculously high, around the 99.5th percentile, although I was younger than the 16-year-old minimum for the scaling factor, so it may have been understated slightly.

And what did I do with this knowledge of my relatively high intelligence quotient? I kept it to myself. It's too bizarre a thing to relate, really, and I was both obvious nerd and social outcast already, and IQ didn't exactly equal bragging material even in my circle of fellow brainy outcasts. It seemed like being proud of having brown hair. After all, what could you do about it? And as the saying goes, "if you're so smart, why aren't you rich?" My take on it was, it was clear I was good at something, but it wasn't that clear that what I was good at was good for much in the real world.

I just did the Tickle test and got a 142, not out of line with the other scores. I've taken the various unofficial test yourself tests for grins and gotten scores ranging from 130-odd to 178 (woot!) and clearly, the only common thread here is that people who have high IQs are the people who do well on these tests. If you've ever been to a Mensa meeting, you quickly learn that IQ correlates poorly with success in life by many standards, but it does seem to correlate well with idiosyncratic behavior, sci-fi and fantasy convention attendance, SCA membership, weird hobbies, and sadly a certain sort of immaturity in interpersonal relations. I joined in college, went to a couple of meetings, then let my membership lapse. I remain interested in IQ tests and the subject of IQ, of "g" or whatever it's being labeled these days, but not in a very serious way; more akin to how I like to do puzzles. For the fun of it.

Friday, August 17, 2007

Taking the Long View

If I haven't been to bed yet, it still counts as whatever day it was when I got up, right? (Not counting the times I've taken Provigil and found myself still awake thirty hours later.) So in some sense it's still my lovely wife's birthday. There was cake. Sadly, my present for her has been slightly delayed, but there will be a big party Saturday and hopefully it will be here by then. We will party like it's 2007.

The big hit, though, was the book of things we love about Sam. Here's my contribution:

Those twinkling blue eyes
Cool name
Infectious beaming smile
Loving Mommy
Smarter than she thinks
Tolerant of hubby foibles
Remembers the important things
Likes to snuggle up close
Blankets in front of fireplaces
Watching the Japanese drama shows
Properly ironic when called for
Ultimate quilt mastery
Always has another idea for a project
Emotionally supportive
Dares to cook new things regularly
Takes the initiative
Got a graduate degree in a year
Stays on top of the little things
Dogged about getting the best school and nanny and experiences for Max
Willing to get dirty in the garden
Bike rides through the greenbelts and around Lake Sammamish
Quick on the uptake
Compatible tastes
A good friend
Gets my obscure cultural references
Likes walks on the beach and kite flying
Never tears anyone down
Expresses displeasure gently
Writes lovely prose
Shares the tough chores
Tactful honesty
Willing to try something new and scary at least once
People just like her right away
Saves the snarky comments for a private moment
Breaks out the steely glare only rarely
Sings along to good tunes
Chooses fun vacation spots
Makes me try to be a better person
The Spiffiest

Saturday, August 04, 2007

Evil Mad Scientists have all the fun

I did this a while back, but it was fun, so I'm reposting it:

I was reading Boing Boing, and it pointed at a post on the Evil Mad Scientist Laboratories website (motto: Making the World a Better Place, One Evil Mad Scientist at a Time) on How To Make an Electric Motor in 30 Seconds.
Materials needed picture from the website:

Time it actually took me to find these materials in my office: about two minutes, the supermagnets were hiding beneath a spindle of DVD-Rs.
My motor materials:

Here's their picture of the assembly, with the motor in action:

And here's me with my instant spinning motor:

Pretty cool, huh?

Friday, August 03, 2007

Scatter my ashes to the wind, but let some land in Idaho

Here's another post I made elsewhere, that I feel like quoting...
At my grandfather's funeral a couple of years ago this month, I was wandering around the cemetery in the small Idaho town he was born in and would shortly be buried in, and just by looking at the tombstones I could tell I was probably related to about half the people whose names I read. I hadn't been there for a decade, since my grandmother died and was buried there. They were returned to their roots, buried in a town that they were both born and raised in, but hadn't actually lived in since the 1930s. He died a couple of weeks shy of his 94th birthday. He'd been away for over seventy years, but it remained his psychic home, even as they'd lived in far away places like Washington D.C. or Managua, Nicaragua or Bogota, Colombia. In reflecting on that, I realized that I don't share that kind of connection to the place I was born, or the place I was raised. In some ways I'm envious.

I don't expect I will make many trips in my lifetime to visit grave sites. That's not the sort of place that matters to me when it comes to remembering family or friends that are gone. I tend to make trips instead to the places we lived, or the places we visited and had fun together, to have more fun and to enjoy some reminiscences, when my travels take me nearby. Remembering is part of living, and I prefer to do my remembering when it happens and not on some schedule of holidays or anniversaries.

Then again, there are things I wouldn't do for love nor money

I've been posting elsewhere on occasion, and thought I'd repost some of my more interesting work here. This is from some time back, in response to someone who opined that money was evil, and couldn't we all just get along on love, instead?
Money is one of the greatest inventions in human history, ranking right up there with fire and irrigation and textiles.

Money lets you store value over time in a way that isn't subject to going bad or being consumed like some commodity might.

Money lets you do your bartering half a transaction at a time, and in a fractional way. That is, instead of having to amass enough bread loaves to trade for a whole cow or some such silly thing, you can do just half the barter with one set of people, trading your bread loaves for money, and then later doing another half-barter with some other people, trading your money for just the part of a cow you care about, say, enough to make burgers with. Money is required for there to be a market. In simple terms, without money, there would be no grocery stores.

Money lets you take part in transactions that are far away, without having to worry about schlepping your stuff back and forth. Money makes it so you don't have to keep mental track of an encyclopedia's worth of exchange rates from one kind of good to another.

Money lets you express the amount you value something very precisely, letting you keep the amount of value you might have to round by in a barter exchange in your wallet instead. As a result, money makes you wealthier.

Money lets you engage in complicated transactions that take place over extended periods, like mortgages and bonds, and makes it possible to be a fractional owner of a business and be paid a proportional dividend from the profits. That means lots of people can live in houses while paying for them, instead of trying to come up with some way of amassing enough stuff to trade for a house all at once, and people can join together to make a really big business, say, building ships or skyscrapers or something, that no individuals could pull off by themselves.

Money makes large public works possible, because it's impractical to turn a tax collected in labor or goods into the kinds of labor and goods needed for roads and bridges and canals. Money makes tax collection fairer, since it can be figured in the same terms for everyone.

You may do the work you do for love, and you may love the people you know, but love is a pretty poor substitute for money, especially when most people can't love you because they don't even know you and don't have the time or the emotional wherewithal to care about every person they come in contact with. Love doesn't let you express how what you value compares to what someone else values, whereas money does that perfectly. And when it comes to a material exchange, money is the perfect medium and measure for that comparison of values.

Is that enough material for your essay for class?
This blogging thing: Everybody's doing it, so I figured I'd better join in.

Saturday, January 27, 2007

And They're Off

Sometimes you just have to take a stand. Add a microphone, put up some PowerPoint slides, do a little song and dance number, gladhand the audience afterward, it's all part of the package. Then you get to sit.