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Posts Tagged ‘regulation’

Eric Posner’s article on Cass Sunstein is an excellent profile of the man’s views and positions and it also accurately summarises why I am happy about the Sunstein appointment.

Sunstein has strong liberal instincts—his work is animated by his concern for the rights and well-being of poor and vulnerable people and oppressed groups—and he believes that government is there to help. But what makes his work so interesting and influential is that he has a hard-headed appreciation of the problems of government, and has explored, with extraordinary imagination, approaches to regulation that harness the power of government without unduly infringing on people’s freedom or in other ways producing bad outcomes.

The approach that has received the most attention recently is Sunstein’s argument (with Dick Thaler) in support of what they call “libertarian paternalism,” government policies that help prevent errors that people predictably make because of cognitive biases (Sunstein is a prominent critic of the rational actor model used by economists) without interfering with the choices of sophisticated people who know their interests better than the government does. This book is a perfect example of how Sunstein thinks. He shares the liberal-friendly view that people do not always act in their rational self-interest and therefore benefit from government regulation, but he rejects the strongly paternalistic policies that have done more harm than good and are in any event politically unpopular and have led to backlash. His middle way is a sophisticated attempt to support a kind of regulation that might do some good and enjoy political support from both sides of the spectrum, and hence actually have a chance to persist across administrations and vicissitudes in public opinion.

[…]

Sunstein is one of the most talented academics around. With his deep knowledge of government regulation, he would be the perfect head of OIRA. Among the many people I have met in academia and government, he is one of the least ideologically rigid, one of the most open to argument and evidence. His critics should at least admit that he will give a fair hearing to their concerns. He would be an extraordinary asset for the Obama administration.

To read all Sunstein-tagged posts on this blog, click here.

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I missed this post by Andrew Sullivan from a while back.

One reason I’m a conservative is the British National Health Service. Until you have lived under socialism, it sounds like a great idea. It isn’t misery – although watching my parents go through the system lately has been nerve-wracking – but there is a basic assumption. The government collective decides everything. You, the individual patient, and you, the individual doctor, are the least of their concerns. I prefer freedom and the market to rationalism and the collective. That’s why I live here.

Andrew, of course, is a British citizen, who was born and raised there but has been living in the US for a long time now, so his perspective is certainly worthwhile.

Now I’ll be the first to admit that this is mere anecdotal evidence which does not prove anything. Andrew Sullivan’s healthcare experience has been better in the US; there are obviously British citizens who prefer their system. However as long as we keep the anecdotal nature of this statistic in mind, there is nothing to lose by considering it. Indeed, I get the idea that a lot of dyed-in-the-wool liberals who have lived in the US all their life automatically assume that everyone who has lived in single payer prefers it. Quotes like these may at least help them open their minds to the truth.

For the truth is much deeper than that little quote by a popular blogger. Yes, the US healthcare system sucks in many ways. However any system of government mandated healthcare has fundamental drawbacks. Excessive regulation adversely affects medical research and the quality of healthcare provided. It encourages the passage of nanny-state laws designed to compel people to stay healthy. Even the claimed reduction in costs does not necessarily happen in all cases; see this article on the Massachusetts mandate. Above all there is a moral issue — a government mandate involves coercive takings and elimination of choice.

My personal preference leans towards “freedom and the market”, as Sullivan puts it. If the government has to be involved it should do so in the following ways:

1) Change the nature of regulation to light, smart ones designed to reduce costs (those associated with litigation, inefficient record keeping, bureaucratization, compliance with unnecessary rules), increase transparency/information disclosure and foster competition.

2) Replace Medicare etc. with a system of vouchers that can be spent on any health provider.

3) Retain one catastrophic government run health insurance system with a high deductible that would cover everyone in case of emergencies and other catastrophes and deal with the free-rider problem in those situations; eliminate all other government insurance schemes.

These measures are influenced by Milton Friedman’s views, espoused among other places in this article.

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We bring you, courtesy the great guys at CCF, the following awesome analysis:

Also read: Your health is my business. And please do not point out that what works for Olympic athletes will turn an average person into a hippo.

(Hat Tip: Reason Hit and Run)

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There are many good arguments libertarians put forward against the idea of mandating universal health insurance (either through single payer or a Massachusetts style measure).

It is morally wrong to coerce some people to disproportionately pay for others’ costs or to tell someone who decides to take his chance that he cannot do it.

A mandate would almost surely be accompanied by excessive regulation which would adversely affect medical research and the quality of healthcare provided.

It will encourage the passage of nanny-state laws designed to compel people to stay healthy.

Despite these flaws, it was assumed that such a measure would at least reduce medical costs and thus make life better for a lot of people. However it now appears that even this economic rationale does not hold good.

Of course, the linked article of course only looks only at the Massachusetts model but it seems extremely likely that the same problems will arise in any similar scheme.

So what’s the best solution? I don’t have a completely satisfactory answer; check out, however, Milton Friedman’s short essay on the topic.

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If you, like me, think it is outrageous that the US government tells you that you may not indulge in internet gambling, you can call, fax or email House Financial Services Committee and let your views be known. For more details, click here.

If you decide to act, please do so by Tuesday. That’s when the house will consider the bill, co-authored by Barney Frank and Ron Paul, which aims to remove some of the most draconian aspects of the internet gambling ban. Here is what they have to say about the matter.

“These regulations are impossible to implement without placing a significant burden on the payments system and financial institutions, and while I do disagree with the underlying objective of the Act, I believe that even those who agree with it ought to be concerned about the regulations’ impact,” said Rep. Frank.

“The ban on Internet gambling infringes upon two freedoms that are important to many Americans: the ability to do with their money as they see fit, and the freedom from government interference with the Internet. The regulations and underlying bill also force financial institutions to act as law enforcement officers. This is another pernicious trend that has accelerated in the aftermath of the Patriot Act, the deputization of private businesses to perform intrusive enforcement and surveillance functions that the federal government is unwilling to perform on its own,” said Rep. Paul.

Indeed.

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This article begins:

Democrat Barack Obama told voters Saturday he would push an aggressive economic agenda as president: cutting taxes for the middle class, raising taxes on the wealthy, pouring money into “green energy” and requiring employers to set up retirement saving plans for their workers.

Hidden deep inside the article, however, is the following passage:

He said employers should be required to set up retirement saving plans for workers even if they contribute no money to them. Workers would automatically be enrolled unless they choose to opt out, he said.

I am not a huge fan of Obama’s economic policies, but I do like the fact that he prefers a nudging approach as opposed to the full-blown nanny-state one favoured by many politicians. That was also apparent in his approach to health insurance, which, unlike Hillary’s, does not include a mandate that everyone has to buy insurance. In Obama’s worldview, the state ought to be there to help, but not by applying too much direct force. It is debatable if the resulting policies are good, what is indisputable is that this kind of ‘soft paternalism’ that consists of opt-ins, opt-outs and nudges is infinitely preferable to the coercive paternalism advocated by some others who believe they know best how you ought to run your life.

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I still prefer Obama over McCain, but some of his views are depressing.

For those interested, my position on anti-trust laws is here. This issue, however, is more worrying than the old-fashioned Microsoft harassment that was the motivator for my old post. The media, for all its faults, is a vital expression of free expression and any attempt to regulate it will be an enourmous step in the wrong direction.

Update: I think this comment by one reader that appeared below the linked Reason article is worth reproducing in full:

Dear Senator Obama

Let me tell you about something called the Internet.

It is a medium where every sort of opinion – from far left to far right and way beyond either – gets aired. And thrashed.

It is a wide open, no holds barred, forum where anyone can speak his piece and find those who agree with him. Those who don’t agree are equally free to rebut, make counter-assertions, abuse or insult the first one. They, in turn, are subject to the same give-and-take. (Try googling “flame war”.)

The internet is almost unregulated (aside from a few asinine attempts by your fellow senators and their counterparts in other countries), yet still manages to achieve this remarkable fairness.

I humbly suggest that this example should persuade you that fairness will be best achieved if the regulation of media is decreased, not increased.

Yours truly,

Your neighbor, Aresen.

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