The Liberal Order

Everything Is (Even More) Amazing

As part of this interview with Conan O'Brien, Louis CK discusses how at one time you had to go into a bank to deposit into or withdraw money from an account. Worse still, the bank was only open for a few hours each afternoon. This wasn't really all that long ago. 

Mobile.USAA is getting ready to launch its Deposit@Home program where you can take a picture of both the front and back of a check with your iPhone, transmit them to USAA, and your account is credited with the appropriate amount. No bank - not even an ATM - at all. The PC scanner option is already available.

The CARS Program Again

It seems the government underestimated the number of people willing to steal from other taxpayers turn in their old car for a $3,500 to $4,500 subsidy toward the purchase of a new car. CARS is now suspended. 

The objective of the program was to subsidize the purchase of newer cars that got better gas mileage by purchasing and then destroying older, less fuel efficient cars. The government anticipated destroying about 250,000 cars that to quality had to be operating and currently titled for the year prior to redeeming it for the theft from other citizens subsidy. I would guess that the benefit from any reduction in CO2 emissions as a result of this program is quite small; the improvements in reducing CO2 emissions from automobiles have been substantial for about twenty-five years now. How many cars from the sixties and seventies have been turned in?

Why then do we put so much emphasis on conserving gasoline while wasting perfectly good steel, energy (to produce the automobile components), labor (to manufacture the cars), plastic, foam, leather, vinyl, cloth, and so on?  

UPDATE: I forgot about the 25-year rule, which limits trade-ins to cars manufactured after 1984 (and before 2001). Even the cars built in the earliest years to qualify for this program have enhanced emissions standards. There is little social benefit from taking them off the road relative to the cost of destroying those in good working condition.  

Life Imitates Art

Reminiscent of the Comedy Central show Reno 911:

Lincoln County authorities say [David Todd] Martin somehow managed to steal a police cruiser and drive away overnight, despite being handcuffed.

Arlo Guthrie Nails It

From Arlo Guthrie's interview in the New York Times Magazine:

Have you ever seen “American Idol”? 
No, I have never watched it. But I’m thankful we’re living in a world where we can actually afford to waste your time. What a great thing that is.

HT: David Henderson

I was teaching some high school students during a short camp this summer. At the end of the camp we asked each student to tell the audience what was the most important thing they learned from this camp. I was very proud to have two of the students proclaim that they learned that, their middle class backgrounds notwithstanding, their families are actually very rich. Relative to history and much of the rest of the world, their families are rich.

North Carolina's Education Lottery and Race

Imagine a politician proposing a tax on blacks and other minorities under the ruse of increasing funding for education in their state. This post reveals nothing new; the topic has been researched in other states many times. I just want to further demonstrate the racist nature of lotteries using North Carolina's Education Lottery as the most recent example. (I'm not against lotteries; I'm against states giving themselves the monopoly right to be the sole purveyor of lottery games to the detriment of the least advantaged and the least educated.) 

Using data for North Carolina counties I regressed the log of per capita lottery spending on per capita federal dollars spent in each county (pcfedspend [in thousands]), the percentage of blacks residing in each county (black), the percentage of hispanics residing in each county (hispanic), the percentage of residents in each county with a BA degree or higher (BA), and per capita incomes for residents of each county (percapinc). 

pcfedspend .0265397 (.0098) P=0.008

black .0178301 (.0022) P=0.000

hispanic .0277127 (0070) P=0.000

ba        -.0160224 (.0050) P=0.002

percapinc .0000423 (.00001) P=0.014

_cons 4.439951 (.09586) P=0.000

F(5, 94) = 20.5

R-sq = .5531

What this says is that for each $1,000 increase in per capita federal spending in a county over the mean, per capita lottery spending increased by 2.65%, or about $7. (Note that North Carolina has two major military facilities. Some indeed comes from that military spending, but some certainly comes from federal welfare spending. This confirms Sam Papenfuss's argument that states adopt lotteries as a means of taxing federal welfare benefits.) 

For each one percentage increase in the black population of a county, per capita spending on lottery tickets increased by 1.78%, or $5 per capita. (Note: Numerous studies have shown that blacks are no more likely to play the lottery than whites, but those that do play spend far more on lottery tickets than whites that play.) Also note that the range for black residents is one-half percent black (Graham County) to 61.7% (Bertie County) of a county's population that is black. The average is about 21% (Wake, Cleveland and a few more are about this), which means that during the first two years of the NC Lottery's existence, per capita lottery spending in Bertie County is estimated to be about $200 more than Wake County.

Each percentage point increase in a county's hispanic population increased per capita lottery spending by about 2.8%, or $7 per capita. 

And for each percentage point increase in a county's population with a bachelor's degree (ba), spending on lottery tickets decreased by about 1.6%, or $3.60 per capita. 

Note that I've controlled for income (percapinc), so any increase in black and hispanic spending on lottery tickets is not a function of income, but (at least partly) of race and ethnicity. Note also that my results show essentially no effect from income on lottery purchases, which counters previous studies. My data covers only the first two years of the lottery's existence. It is likely that since it is new it has drawn people from various income levels. This is likely to change over time as the novelty quickly wears off and reason kicks in. 

Differences In Insurance

Bryan Caplan explains the difference in perceptions between health care insurance and auto and life insurance.

I agree that there is a popular perception that health insurance is an unusually crooked industry.  My main explanation is that customers of health insurance companies have more latitude for unreasonable demands.  If your dad dies, the life insurance company owes you $X.  If customers ask for $X+1, the firm refuses, and no one sees this as proof that the free market can't be trusted with life insurance.  If you get sick, in contrast, it's hard for an insurance company to decisively prove that they've lived up to their agreement.  You can always insist on another expensive test, even if the insurer knows it's useless.

First, Steve Horwitz has a valid argument in the comments. In fact, I would add that as a company that provides my employees health insurance as a benefit, I may not really care about the quality of the insurance coverage as long as the rates are low. Yes, information spreads, especially in the internet era, but how many people actually research a company's health insurance benefits prior to taking a job? Unless of course they have some pre-existing condition requiring coverage and don't want a waiting period. But in addition to Bryan's comment about the caps on coverage, there is not likely any uncertainty about my payout from a life or auto insurance company when it's time for me to exercise my rights under the policy. If I die I die. There is no, "Well, he died from causes different than what we expected, therefore you only get .8X of your coverage." 

And if I am involved in an automobile accident, not only are there limits to what my insurance company can and will pay out on my behalf specified in the policy, other than medical costs, fixing my car is fairly routine and objective. There is little dispute if my quarter panel is not dented - they don't replace it. In fact, most automobile insurance policies require you to see their adjuster first, who gives an estimate of what they will pay, which you can take to any repair shop. The repair shop must be within a certain percentage of that estimate or you can bring it back to the adjuster. Disputes are handled beforehand. Health insurance on the other hand, includes coverage that is not only subjective, but the services I expect to consume as part of my policy are continuously changing. Medical technology is rapidly changing and, with no caps on my coverage, I want the newest and best service available. In fact, I refuse to go anywhere other than top medical research universities for my medical care. A lot of the fault of this poor perception of health insurance providers lies with doctors and the medical profession as a whole for pushing unnecessary procedures. The consequence is that it pits the consumer and doctor against the insurance company and the latter comes out looking like the ogre because it needs to weed out cost-ineffective services. 

Doctors have an incentive to perform unnecessary or unproven procedures, including surgery, and then pontificate about how they are not able to provide what their customer/patient needs after the insurance company rejects coverage for the procedure. Two doctors recently told us that my son required additional corrective surgery for Legg-Calvé-Perthes disease, his regular doctor and a second opinion. We did our own research and found that the procedures for this ailment that these doctors were advocating are hotly debated within the profession and so we sought a third opinion. That third doctor has been researching this disease for twenty-five years and said that studies show no difference in outcomes of those who had the surgery and those who did not. He told us that fifteen years ago he would have recommended the surgery, but today with this new information, he can't. The Hippocratic Oath notwithstanding, which course of action do you expect most doctors to take. For an automobile policy it's easier for an insurance company to detect fraudulent and unnecessary charges and refuse to pay for it. The procedure is not performed and I get my car back with no discernible difference in performance. With the medical example above however, I am not likely to discern the success or failure of the procedure for years to come, and even then will be unlikely to attribute any benefit or harm to the medical procedures undertaken in the past. I therefore fault the insurance company when they refuse to pay for what my doctor recommends.

Robert Samuelson On Obama's Healthcare Reform

It's politics as usual.

But what helps many Americans as individuals may hurt society as a whole. That's the paradox. Unchecked health spending is depressing take-home pay, squeezing other government programs -- state and local programs as well as federal -- and driving up taxes and budget deficits. The president has said all of this; he simply isn't doing much about it. He offers the illusion of "reform" while perpetuating the status quo of four decades: expand benefits, talk about controlling costs. The press should put "reform" in quote marks, because this is one "reform" that might leave the country worse off.

Samuelson also reveals how part of the problem can be explained by Bryan Caplan's irrational voter model.

Judged objectively, "reform" may do exactly the opposite of what Obama says. But because the president is so well-spoken, he has the ability to make misleading statements sound reasonable or sophisticated. Still, they're misleading.

CARS

The Car Allowance Rebate System (CARS), better knows as "cash for clunkers, tops out at 18 miles per gallon. If you have a car that gets better mileage than that it does not qualify for $3,500 to $4,500 of other taxpayers' money. 

Why is this mileage requirement so high low? 

[O]ne of the reasons that 18 mpg was set as the upper limit in the CARS bill was that charitable organizations requested it, since they were worried that a higher limit would negatively effect vehicle donations. 

Story here.

What Is Man's Greatest Achievement?

CNN asks, "What is man's greatest achievement?"

How about free market capitalism?

Arianna Huffington On the Death of Laissez-faire Capitalism

As if it really ever existed in this country, at least through most of its history, Arianna Huffington tolls the death knell of laissez-faire capitalism.

The collapse of Communism as a political system sounded the death knell for Marxism as an ideology. But while laissez-faire capitalism has been a monumental failure in practice, and soundly defeated at the polls, the ideology is still alive and kicking.

Really!?! And from where did your riches come from Ms. Huffington? Welfare?

This made me think of the lyrics to Oingo Boingo's song, "Capitalism."

You criticize with plenty of vigor

You rationalize everything that you do

With catchy phrases and heavy quotations

And everybody is crazy but you

You're just a middle class, socialist brat

From a suburban family and you never really had to work

And you tell me that we've got to get back

To the struggle masses (whoever they are)

You talk, talk, talk about suffering and pain

Your mouth is bigger than your entire brain

What the hell do you know about suffering and pain . . .