If you’re interested in anything you see here at Radically American, please check me out at http://jakeruss.com. I have a full RSS feed working there as well. Thanks!

I cringe at that.

Alex then recounts an experience when he thought he found money in the street, but it was really just a cleverly placed advertisement (flier). It was made to look like a dollar in the street. Alex seems to take this as confirmation of EMH.

I cringe at that too.

Let me say now that I like the analogy of not being able to find money in the street as an intuitive explanation of EMH. It’s easy for people to grasp that concept and how it relates to market activity. If there was a profit opportunity just lying around, someone would have found it by now. Right? But I take the analogy only that far. Literally finding money (or not) in the street is no evidence against (or for) EMH. Why?

I don’t take EMH to mean that new profit opportunities do not exist, period. I mean they clearly do. Just that you cannot predict the success of specific companies ahead of time. My favorite example is Under Armour. Before UA, that market was not there. People just used t-shirts and sweats.  (Kevin Plank built a brand).

What does reality say about the tenner Gross found?

People actually do drop money in the street. By definition someone has to be first. Assuming the money is found at some point. Which the EMH “money story” does assume.

For me, to “prove” EMH false, one would have to be able to predict these profit opportunities ahead of time. In other words, if you could tell me that you could predict when and where people were going to drop money in the street, and then demonstrate your claim, I’d render EMH dead.

Maybe I’m wrong, but I don’t hear many people making that claim. And certainly not proving it to be true.

So for me, EMH lives.

I was just about to lose interest myself when I ran across this section at page 45:

The proposal for government loans to private individuals or projects, in brief sees B and forgets A. It sees the people into whose hands the capital is put; it forgets those who would otherwise have had it. It sees the project to which capital is granted; it forgets the projects from which capital is thereby withheld. It sees the immediate benefit to one group; it overlooks the losses to other groups, and the net loss to the community as a whole.

The case against government-guaranteed loans and mortgages to private businesses and persons is almost as strong as, though less obvious than, the case against direct government loans and mortgages. The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified B at the expense of some unidentified A. Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief in the long run they do not increase overall national production but encourage malinvestment.

You want to talk about someone calling the housing crash of 2006? Add the name Henry Hazlitt to that list. Writing in 1946!

As I finish the rest of this book, I will keep my eye out for more “predictions.” Though I already give this book an A for this snippet of text alone. Babe Ruth once “called his shot” mere moments before he hit a home run. Henry Hazlitt called his shot sixty years before he hit his home run.

Excerpt:

Atlas Shrugged outsells Human Action by a wide margin. As of this writing, the Amazon sales ranks are 101 and 16,331, respectively.[2] (Admittedly a limited measure, but still interesting.) But Atlas also outsells Rand’s own non-fiction books, by similarly wide margins. The Virtue of Selfishness trails at 11,993, with Introduction to Objectivist Epistemology all the way down at 120,117.[3] If the greater market success of Rand as compared with von Mises were due to Rand’s broader philosophy, wouldn’t we see this reflected in sales of Rand’s non-fiction works, in which she explicitly develops that philosophy?

The data fit another hypothesis: that the novel is a far more accessible and popular vehicle for communicating ideas than the monograph. The lesson for defenders of freedom seems clear. We need more novelists, screenwriters, and other artists.

Naturally, I go to Megan McArdle for her political commentary on what Congress is likely to do next. She makes a suggestion… that upon reading I basically agree would be a practical compromise.

David Henderson goes all Debbie Downer on her proposal. Some rubbish about marginal tax rates. He writes as if we humans could understand those in practice. (Sarcasm, I believe we do.)

The meshing together of commentary over a wide range of serious sources keeps me informed and keeps me balanced on most issues. I love the speed at which this all happens too. Maybe I should be feeling some deja-vu? I wrote this almost exactly a year ago.

#####

BTW, I use Google Reader for my RSS feeds. I’ve started to use the share feature. This allows me to quickly share posts I find interesting as I scan the blogs I read. More stuff than what gets written about on this blog. If you are interested in that, it can be found here.

I’ve been pondering whether health care should be considered a right.

Back in October, Greg Mankiw authored this NYT piece and he posted these comments to his blog as a follow-up. In the Times he writes:

President Obama’s push for reform is premised on the belief that access to good health care should be a right of all Americans — a proposition better judged by political philosophers than economists.

So I started to look if there were any philosophers out there who had written about this. At that time, I came up empty handed.

Much to my delight, Steven Landsburg posted a video debate he had with Professor Ted Brown trying to answer the health care as a right question. The debate is between an economist and a history professor, neither of which claims to be a health care expert, but I’ll take it. The rest of this post is my responses to the videos Landsburg posted.

###########

To Brown’s opening:

Brown’s argument for health care as a right rests upon a perceived flaw in private delivery of the service. He cites a private fire department as analogous to a private health care system. He claims that under a private fire department system, only those who had the resources to afford fire protection would have access to it. A fair point, unless you consider the fact that we do have privately operated fire departments. And they work. Cheaper.  He mentions nothing specific about health care being an intrinsic (natural) right. The logical implication of what he actually said, taken at face value, is that we should make health care publicly provided. However, just because we might think a service needs to be provided by the public sector, does not in itself make it a right.

Often people will cite lighthouses as a service which needs to be publicly provided. A private lighthouse would only turn on its light for those who have the ability to pay… so the argument goes. That argument can be defeated soundly in 25 words: Suppose a group of sailors banded together and bought a lighthouse for themselves? The group would be free to use the lighthouse how they wanted.  That specific argument aside, does the public provision of lighthouse service make it a right? Do sailors have a right to lighthouse consumption? I would say not. They are free to choose another profession if they don’t like private lighthouses.

To that I would expect someone to reply, yes, but I am not free to choose my health care provider. My health care is decided by my employer. It is attached to my job. And for that I would reply that you, again, have a fair point. But even still, it is not an argument for health care being the right of a citizen of these United States. What that is an argument for is that we stop attaching health care to jobs. Eliminate the tax exemption status for employer provided health care plans and allow people to purchase an individual policy…

A common response is that individuals (and families) can’t afford a health care plan on their own. This is a natural gut reaction. It is also completely false. At this point I need a quick aside to illustrate why:

Imagine you are looking for a job. This should be easy considering you probably are right now. Unemployment is at 10%. When you are deciding which job to choose, the cash part of the job is not the only consideration. You look at their health care offerings, their location, the potential for promotion, career goals, and many more dimensions. All these factors are going to add up to some mental value level in your mind. The whole package makes up your total compensation for doing the job. In order for you to agree to take the job, your total compensation has to meet some desired threshold level in exchange for your employment. If it didn’t, you wouldn’t agree to the work. If a company wanted to hire you, and they did not offer a health care package, you would demand more cash-wages to get your total compensation up to the threshold level.

…So, yes, removing the exemption for employer provided health care will make it increasingly likely that employers will stop offering health care benefits. The missing part of that story is that companies would not then be able to just pocket that savings. They would have to pay you more money to get your total compensation up to your desired level. With a competitive market, individuals’ wages would rise without employer provided health care. Under that scenario, an individual would then be able to afford a health care plan that was not connected to their job. Have you ever put up with a nasty boss because you (or a child) needed the health care? You could quit without having to worry about losing your care. You would be able to express your displeasure with working conditions. You would be freer.

Currently, a health insurance company is not allowed to operate across state lines. So effectively, we have 50 protected monopolies. And since we have 50 monopolies, completion is weak in our health care system. I agree with you that monopoly power in health care is a bad thing. If we could just eliminate the state-line-restrictions on health insurance, we would improve competition and thus reduce the prices of said insurance.

To Brown’s Re-Response:

Brown wants to “control the throttle” of how we throw money at the health care system.  What a great idea. Though he fails to realize though that in the previous segment, Landsburg suggested Health Savings Accounts (HSAs) as an alternative to Medical Insurance. HSAs give individuals the right to say NO to treatment on their own terms. That sounds an awful lot like putting “the throttle” directly in the hands of the people. And setting a dollar value to each account, Landsburg estimates $1mil, also sounds a lot like “controlling the throttle.” (To be fair, Landsburg also fails to make this connection explicit during the taping.)

In the Q&A session:

Brown states twice that the house bills do not end the differences in premiums for those patrons with preexisting conditions. That is false. See: Community Rating. Or look in the bill if you want. 1990 pages. Not a typo.

Brown also makes a comment that a role for government is to be the check on those supposed lying, cheating insurance companies. With no mention of private third party rating agencies. It is as if he has never heard of CARFAX. A solution the market provided to deal with those supposed lying, cheating car sales people. Transparent information about the dealings of insurance companies is something people will pay for.

But what about the rating agencies for the Wall Street firms? The rating agencies lied! AAA was not a valid signal. CARFAX is paid for by the buyers, not the sellers, so CARFAX works for the buyers. The rating agencies, like Moody’s, were paid by the firms themselves for the audits. They worked for Wall Street.

I do not know the particulars of how this debate was set up. I am not sure how much time these two men had to prepare for their respective talks. I had been searching for a discussion of health care being a right. And I got it. For that I thank the both of them. That being said, I found them both to be underprepared for this discussion. I might be overly critical by saying that. As I stated before neither of these two professes to be an expert on health care.  Even still, that is my honest opinion after having watched the tapes. I’m still happy they did it.

I think Landsburg makes the point clear to me that for health care to be a natural right, it would have to have always been a right. But the health care we can offer today hasn’t always existed, we had to invent it, so it couldn’t have been a natural right of the people who lived 200 years ago. Logically, if it wasn’t a natural right then, it can’t be a natural right now. Contrast that with numbers, numbers always existed, we just discovered them. But I think I agree with the position that health care is an invention, and thus not a right. Willing to be challenged on that point though.

Lastly, having completed this review, I see that this looks slanted solely against Professor Brown. Not what I had in mind at the start. I wrote these things right after I watched each segment.  I didn’t agree with everything Landsburg said, but I also didn’t find anything specifically wrong with his statements. It would be fair to say I side with his general approach though, to be honest about my bias.

State law does not allow local governments to ticket people for moving violations based only on photographic evidence unless they’re dodging tolls.

The county cites dangerous accident rates, 28 crashes at the intersection of Summerlin Road & Colonial Blvd in 2008 alone, as its basis for the new cameras. Hundreds of cars were caught running red lights with a test camera, at that same intersection, over a six-month period that ended two weeks ago.

I do not advocate running red lights. I have to wonder though if these cameras will do more harm than good. In an effort to curb one problem, I fear these government officials will cause another.  Drivers slamming on their brakes to avoid tickets in situations where it would be safer to continue on through the intersection. Our government officials do not want to consider these cases. Just like their attempts to regulate the environment, no amount of pollution is acceptable, no matter how high the cost of reduction.

In the end, this policy may achieve its stated goal, but I’m curious as to whether the potential benefit of this intervention outweighs the cost.

My prediction? If it goes through, the accident rates for these intersections stay roughly the same, due to compensating behavior changes of drivers. Also, the behavior changes will probably occur in a way I haven’t accounted for in this post. Reflecting the difficultly of doing things ex-ante.

The Progressives long for a world in which they can make decisions without facing a skeptical public. That was in fact the world of 1914, in which, as Fromkin points out, leaders were able to make decisions autonomously and in secret, while the public was easily deceived and manipulated into providing support.

It is my thesis in Unchecked and Unbalanced that the Progressive ideology is in a state of decline, because in the age of the Internet knowledge is becoming more dispersed, which makes elite technocratic government less effective. Perhaps, like the German and Austrian military leaders of 1914, the Progressive elites are at their most dangerous when their status is threatened.

The Internet is leveling the playing field. This is the one thing that keeps me optimistic about the direction we’re heading as a nation.

Update: The Daily Show offers related commentary. This message comes to life, on screen.

Just today she linked to an old article she wrote about Christmas. A holiday I’ve come to loathe. I much prefer Thanksgiving. There is no pressure to engage in mass spending. I meet up with my extended family and we stuff ourselves with great food and catch up on the family gossip news we might have missed in the last year. Maybe a nap and some football on TV. Now, because of my family, I actually get off pretty easy around Christmas time. There is the slight anxiousness I feel about buying gifts, but mostly Christmas has become a second Thanksgiving each year. Another big meal with family, and very little of the religious aspects of Christmas.

I realize my stance on Christmas places me squarely in the minority on this issue.

Ms. Trunk uses Christmas to outline a severe lack of tolerance of diversity in American workplaces. She lists five reasons, but the heart of her message is here:

4. “You can also take a day off for Hanukkah.”
First of all, Hanukkah is eight days. Second of all, the holiday isn’t a big deal to us, except that it’s a way for Jewish kids to not feel outgunned in the gift category. Jacob Sullum wrote in Reason magazine last year, “It is inappropriate…to make such a fuss over Chanukah, a minor Jewish holiday whose importance has been inflated in the popular imagination by its accidental proximity to Christmas.”

So look, we don’t want a day off for Hanukkah. Or any other Jewish holiday. We want floating holidays that everyone uses, for whatever they want. It doesn’t have to be religious, or it can be. But we don’t need our work telling us when to take time off. It’s insulting and totally impractical.

Just because a majority of people in this country belong to a specific religious group, that shouldn’t mean that everyone who is not a part of that religious group should be mandated to live life around its holiday. The floating holiday is a Radically American idea. It outlines a specific tension in our quest for tolerance. And no our country is not a Christian nation:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

We need to stress more open dialog in this country. The kind of dialog Ms. Trunk is putting forth.

The reason some people are shocked and disgusted by the things she writes is people still feel compelled to keep parts of the human experience hidden from the rest of the world. As if the rest of the world couldn’t handle it. Maybe, just maybe, if we allow ourselves to talk openly about things, we’ll actually learn something from one another. Reading her blog has increased my knowledge of both Asperger’s Syndrome and miscarriages, among other things. I fully expect  that some day a person in my life will miscarry a child. Be it a co-worker, family member, or significant other. With the help of Ms. Trunk, I’ll have a fighting chance to actually help them deal with it.

To be more tolerant in this country, we need to expose taboos for what they are: integral parts of what it means to be human. Intolerance is rooted in ignorance and fear. The antidote for intolerance is open discussion.