The Liberal Order

Is Health Care "Insurance" Really Insurance?

John Cochrane has an excellent op-ed in the Wall Street Journal. It's regarding the mandate that all employer-provided health care insurance covers prescription contraceptives, but Cochrane does an outstanding job of explaining why health care coverage for foreseen expenses is a bad bet, including this great example.

The minute pills are "free," under insurance, the incentive for drug companies to come up with cheaper versions vanishes. So does their incentive to develop safer, more convenient, male- centered or nonprescription birth control. And by making pills free but not condoms, the government may inadvertently be contributing to an increase in sexually transmitted diseases.

 

Private Property and Incentives

Alex Tabarrok has an outstanding post regarding the effect of property rights changes in China before, during, and after the Great Leap Forward (Backward). 

The question is, what is the tipping point? Are the marginal effects prevalent throughout the range of confiscation of private property, or is there a paradigm shift where a critical mass just stops producing and lives off the work of others? (But of course, nobody works, so there is mass starvation.) How big must your public sector get before that critical mass kicks in?

We're #1

A most dubious statistic.

The U.S. incarcerates the greates percentage of its population, greater than places like Rwanda and Georgia and Russia and Cuba. Here is an old New York Times column on the topic.

And it goes without saying, read the graphic below to see the rate of incarcerating black Americans.

The Criminalization of America by Criminal Background Check.org

 

Thriving Global Black Markets Are Ubiquitous

What happens when the formal economy becomes corrupted by rent-seekers and government officials? People turn to the informal economy to avoid the graft and corruption.

It is estimated that more than $1 trillion, or 8.3% of the U.S. economy is black market exchanges. Isn't this evidence that income inequality is not necessarily as bad as it's made out to be?

The total global trade in black markets is estimated to be $10 trillion. Following the collapse of the former Soviet Union, it was revealed that the economic data that came out of the USSR was totally fabricated - made up. Things were worse than the rest of the world was led to believe. But then it was revealed that there was a thriving black market that even members of the Soviet politburo turned to to satisfy their desires. Maybe things weren't as bad.

Proctor and Gamble provides its goods to these markets around the world. It is revealed in the video that black market sellers are responsible for about 20% of P&G's total global sales, an amount that exceeds even Wal-Mart's contribution to P&G's total global sales.

 

 

 

Santorum Nails It

I'm not a fan of Rick Santorum (I'm not a fan of any presidential candidate, I always write myself in), but he explains superbly the importance of the Constution and Declaration of Independence and how it explictly explains the relationship the relationship between the governed and their government.

 

Strict Liability v. Negligence - An Example of the Latter

Watch the video below. (Caution: Language) It looks like a couple of joy riders or some suicidal person with a death wish. I'll say more after the video jump.

 

 

Apparently it's a woman who suffered problems with a diabetic attack. Now, had she ventured onto oncoming traffic and killed someone, would she suffer civil lebal liability? It depends.

Had she struggled with this problem in the past, it was then a foreseeable hazard for her to be driving. If, however, this was a first occurrence, and more importantly if she didn't even know she had diabetes, then the potential for accident was not foreseeable and she would likely not be held liable. That may be a tough burden to prove in either direction.

In the end, some enterprising lawyer would have devised some reason to sue the car company and the state for not removing snow from the median. Fortunately, she did not hit anyone.

HOAs and State Legislation

What differentiates a local, state, or national government from a homeowner's association (HOA)? Given the limited scope of the HOA, as well as the incentives of developers to provide an efficient mix of public goods (i.e., landscaping, garbage and lawn debris removal, pools, etc.), as Don Boudreaux and Randall Holcombe point out, HOAs tend to be less controversial. The HOA agreement is an ex-ante contract that you agree to prior to buying your home. 

So HOAs ought to be viewed more favorably than typical forms of government, thought they still are governments. Consequently, there has to be some means of residents petitioning and challenging their HOAs without having to run for office.

North Carolina's state legislature is considering limits on HOAs that intrude on homeowners' rights. 

Another hot-button issue was the ability of HOAs to foreclose on homeowners that don't pay their dues and assessments.

Tammy Neal, a real estate broker and former appraiser who lives in Union County, said she ran across an HOA board that foreclosed on a homeowner who owed $50. She called it "a travesty."

I agree, that sounds heavy-handed, but is it any less egregious than current asset seizure forfeiture laws? 

HOAs need to find more resident-friendly means of addressing delinquent residents and those who refuse to comply with guidelines. Yes, some residents are simply malcontents, who then need prodding by formal public institutions to hold them accountable. But such action should be a last resort. 

From my experience, I've seen too many people who sit on HOA boards who are control freaks that relish in exercising their authority and pushing people around. But it's also the case that HOAs cannot selectively enforce regulations, leaving them little room when it comes to enforcing what appear to be minor infractions.

For example, if the HOA agreement stipulates no commercial vehicles are permitted in a homeowner's driveway for more than ten consecutive days (this provides leeway for a homeowner having commercial work done on their home), then by allowing a resident to park a car in her driveway emblazoned with logos on the side of the college where she works, it makes the HOA susceptible to a lawsuit if it then denies the right of the homeowner who owns a moving business to park his moving truck in his driveway.  

On Stephen Colbert Running for President of South Carolina

Below is a hilarious clip of Stephen Colbert mocking the 2010 landmark Supreme Court case Citizens United. It's humorous, but it misses the bigger point. 

Let's say that the NFL basically tells its officiating crews that there are rules to regulate the game of football, but that the officials will now have much leeway in calling penalties outside those specified in the rule book if they believe that by doing so they improve any given game. As a consequence of this new discretion on the part of officials, they begin accepting bribes that advantage one team, or one of its members, over the other team (obviously advantaging the team paying the bribe), under the ruse that their penalties were making the game "fairer" or "better."

The officials are getting rich and accusations of impropriety on the part of officiating crews fly. Would any reasonable person argue that the problem of such impropriety by NFL officials is caused by how they receive their bribes? Just change the way bribes are paid and the improprieties and rent-seeking by prospective officials seeking a job officiating in the NFL will stop? Really? Isn't the problem caused by permitting the officials to stray from the strict rules and guidelines they were hired to enforce, including rules that limit their actions on the field?

There is not too much money in politics; there is too much government and politics in money. 

 

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Is it a war we're winning?

If you're fighting a war and the other side shows no sign of letting up, and in fact has increased its efficacy and sophistication at achieving its objecitves, can you say you're winning? And is a "war" really a perpetual thing?

Federal agents in California have uncovered the "most sophisticated" drug tunnel in years, the latest discovery in what an official said had become a "major phenomenon" in the war on drugs.

[...]

More than 70 tunnels have been discovered by federal authorities since October 2008, according to a report by The Associated Press, which first reported the new find.

Another Ironic Tale

[Ex Colorado Sherrif] Patrick Sullivan, 68, found himself on Wednesday in a jail that was named for him, facing charges of offering methamphetamine in exchange for sex from a male acquaintance.

Story here. Emphasis mine.

Oh, if only drug use was decriminalized, he might never have gotten himself into this mess.