And we are live at Nieman Watchdog with some questions about the "ownership society."
For Nieman Watchdog.
This week, George W. Bush is supposed to roll out his domestic-policy plans for his second term--but according to his spinmasters he is not supposed to say what those plans are. Or so writes the LA Times's Peter Wallsten: "President Bush... overhauling Social Security would be a key part of his second-term agenda, [but] he is likely to avoid offering specifics... according to Bush aides, lawmakers and privatization advocates.... [D]etails... would... embroil him in controversy... his vision for an 'ownership society'... personal investment accounts..."
It's the press corp's job to police this activity: politicians who claim that their policies will provide all kinds of good things--chickens in every pot--should be forced to show that they have thought about how the policies will work, and that they know that chickens hatch out of eggs, need corn and worms to eat, and are preyed upon by foxes and weasels.
Does George W. Bush's "ownership society" pass the "yes, he knows about chickens" test? Or is it just another bunch of weasel words to fool a less-than-sufficiently curious press corps?
Here are eight questions to ask:
Brad,
I've wanted to pick your brains about thos whole "ownership society" idea for some time now. I think I've even sent you a few e-mails about this.
For now, I will talk about health care. Both campaigns use the idea of reinsurance, a relatively fresh step in that it focuses on people who are already covered. (Kerry has many other approaches, while Bush basically has this one.) Bush basically advocates more of a non-governmental approach, by letting people and companies control some money and use it to shop around. Kerry, meanwhile, believes the government should pool the money and then absord most of the costs of the most expensive kinds of medical treatments.
I think there's some sense in both ideas. The problem is that Kerry's plan would cover more than ten times as many people as Bush's plan. (Never believe those rosy estimates of ten million; the number is set at a few million and actually gets worse over time.)
Why is this so? Well, maybe it's because I lack some particular theory in my head, but I see this as a free lunch-style problem. There's only so much that can be done without simply giving people money to buy stuff. We lower the costs by having reinsurance without the government - just like we can by lowing administrative costs, which both candidates try to do - but that's not going to cut it. Basically, we need more money to cover more people.
The way I see it, Kerry's plan does just that: it gives us the money necessary to cover a lot of people. Bush's plan could do the same, I guess, if plans to give people who don't have the money some funds to buy insurance, something that he does in some form. But unless he's willing to fork over a lot more, not as many people are going to be covered.
I'm sorry if that was poorly organized, but I tried to get it out as quickly as I could.
Posted by: Brian at August 30, 2004 06:22 PMThe idea of ownweship of healthcare and shopping around baffles me. I want to see the republican pull up to the hospital having a heart attack and drive away to the next hospital because it was too expensive.
Furthermore, try getting ANY insurance if you are diabetic, let alone shopping for a lower price.
How efficient is it for everyone to become a shopper and negotiator for each medical procedure that they may encounter? Not very. It is like com0panies that did away with secretaries. Now everyone is their own pruchasing agent or travle agent. The people that travel a couple of times a year spend an entire day learning corporate travel policy and how to negotiate the corporate travel Web site. Smae thing with supplies unless you work for IBM and then you have to buy your own supplies.
Posted by: me at August 30, 2004 06:59 PM9
Posted by: praktike at August 30, 2004 08:20 PMThere are owners and there are the owned. What a peculiar institution.
Posted by: SW at August 30, 2004 08:40 PMme wrote, "The idea of ownweship of healthcare and shopping around baffles me."
I agree.
Not only are there high transaction costs that "me" alludes to, there are large information problems.
To wit, people will make decisions based on *what they perceive* is in the best interest for maintaining their long-term health, *not* what *is* in the best-interest for maintaining their long-term health.
It's doubtful *doctors* can rationally make good cost/benefit judgements in this regard, let alone patients/consumers.
Posted by: liberal at August 31, 2004 06:07 AMIt's been recognized for a long time that pretty much all the incentives in the health-care business are perverse. Doctors, who provide the information needed to make treatment decisions, make more money (at first approximation) by recommending and performing more expensive treatments. Insurerers and HMOs make more money by either pushing for less expensive treatments (almost regardless of outcome). Patients have very little independent information, high costs for changing either physician or insurer, and aren't even sure what variable they're trying to maximize (quality-adjusted lifespan, avoided costs, whatever). Meanwhile governments or analysts are face with the conundrum that overall system costs may be minimized by seeing certain classes of sick (or eventually-going-to-be-sick) people die relatively quickly.
You can give some lip service to market mechanisms by giving doctors or patients incentives to reduce overall costs, or by making it expensive for insurers to weasel out of their ostensible obligations, but most of these methods turn perverse as well, just as long as you're still denominating your results in cash.
Especially given the information and change costs, it's hard to see how anyone could have thought there would ever me anything like an efficient or effective market in health care. (Of course, lots of people didn't, and are making piles of money as a result.)
Defining an Ownership Society
This is the new theme of the Republican Party that will be presented in the coming days of the Republican National Convention.
As a registered Libertarian I am absolutely thrilled to see the Republican Party adopt important Libertarian values.
Defining an Ownership Society
By David Boaz
President Bush says he wants America to be an ownership society. What does that mean?
People have known for a long time that individuals take better care of things they own. Aristotle wrote, "What belongs in common to the most people is accorded the least care: they take thought for their own things above all, and less about things common, or only so much as falls to each individually." And we all observe that homeowners take better care of their houses than renters do. Thats not because renters are bad people; its just that youre more attentive to details when you stand to profit from your houses rising value or to suffer if it deteriorates.
Just as homeownership creates responsible homeowners, widespread ownership of other assets creates responsible citizens. People who are owners feel more dignity, more pride, and more confidence. They have a stronger stake, not just in their own property, but in their community and their society. Maintaining dignity and confidence is no doubt difficult for those with few economic choices. Geoff Mulgan, a top aide to British prime minister Tony Blair, explains, To escape from poverty you need assetsassets which you can put to work. There is a good deal of historical evidenceas well as abundant contemporary evidence, that ownership tends to encourage self-esteem and healthy habits of behaviour, such as acting more for the long term, or taking education more seriously."
Former prime minister Margaret Thatcher had that goal in mind when she set out to privatize Great Britains public housing. Her administration sold 1.5 million housing units to their occupants, transforming 1.5 million British families from tenants in public housing to proud homeowners. She thought the housing would be better maintained, but more importantly she thought that homeowners would become more responsible citizens and see themselves as having a real stake in the future and in the quality of life in their communities. And yes, she thought that homeowners would be more likely to vote for lower taxes and less regulationpolicies that would tend to improve the countrys economic performanceand thus for the Conservative Party, or for Labour Party candidates only when they renounced their traditional socialism.
Margaret Thatcher saw that private ownership allows people to profit from improving their property by building on it or otherwise making it more valuable. People can also profit by improving themselves, of course, through education and the development of good habits, as long as they are allowed to reap the profits that come from such improvement.
http://pep.typepad.com/public_enquiry_project/2004/08/defining_an_own.html
The information problems that *me* and *liberal* allude to are one of the big problems with libertarian ideas in general. Our society is a very complex place, and there's only so much stuff we can become expert in.
As a result, most of us would prefer that government take care of a bunch of routine decisions for us, so that we don't have to make them ourselves. (I'll bet the Ayn Rand fans love that phrasing!) Remember in the 1980s, when we first got to choose our long-distance telephone provider? Drove people *nuts*, and nothing big was riding on that choice, maybe a couple hundred bucks a year in long-distance charges.
Managing one's own retirement portfolio, or one's own health care plan, is a much more complex series of choices, yet a lot more is riding on choosing well. Not a good mix.
Posted by: RT at August 31, 2004 08:03 AM"As a result, most of us would prefer that government take care of a bunch of routine decisions for us, so that we don't have to make them ourselves."
This is refreshingly direct. I presume from your comments that you are comfortable with Trent Lott making decisions for you? GWB?
Oh, you mean only selfless politicians who are philosopher kings on the side.
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