Category Archives: markets

The Professors Have a Thought

Posted on by
Reply

Charles Silver, Civil Procedure Professor at University of Texas Austin’s School of Law, and David Hyman, Professor of Health Law & Policy at Georgetown Law, have an idea on how to improve Medicare, and it doesn’t even include cutting Medicare or raising taxes. Here’s their straightforward solution:

Rather than pay providers, Congress should give Medicare money directly to enrollees, as it does with Social Security. The government should deposit each enrollee’s subsidy into a health savings account, letting seniors decide what they need and how much they are willing to pay. By reducing the government’s role, this reform would eliminate most forms of healthcare fraud, waste, and abuse immediately, saving hundreds of billions of dollars.
The reform would also significantly improve healthcare. When patients pay for it directly—as they do for cosmetic surgery, Lasik, over-the-counter medications, and other elective procedures not covered by insurance—things work well.

Such a move likely would increase the number and range of doctors available to seniors, also. Large numbers of doctors, for a variety of reasons, currently won’t take patients who are on Medicare. Among those reasons are Medicare’s reimbursements to doctors being so low that many doctors lose money on Medicare patients, and Medicare’s slow rate of payments. With patients paying their doctors directly, albeit with Medicare dollars, those doctors would be paid promptly and wouldn’t have to worry about taking a loss on the appointment.

Letting people be responsible for their own decisions. What a concept.

The professors’ thought is a very good one.

Wrong Mindset

Posted on by
Reply

As self-driving cars, misnomerly termed AI-driven cars, become more common, or at least less uncommon, there is growing concern about the ethics of the AIs involved. It’s a valid question, but it aims at the wrong target.

What will the roadway scruples of AI look like?

What to do about avoiding collisions vs the consequences of an avoidance maneuver? Relatedly, dodge the large animal but don’t bother about the small animal? Which property is more legitimate to avoid if any avoidance maneuver means collision with something or damage to the maneuvering car—into the ditch or into the tree to avoid another collision.

There are easier questions, too, whose answers left to the AI are just examples of laziness.

Is taking the fastest route the core metric that should guide autonomous vehicles, or are other factors just as relevant? Focusing on getting to the destination quickly would allow self-driving ride-share vehicles to make more trips and more profit, but might result in more danger. Giving priority to safety alone could slow and snarl traffic. And what about choosing routes that let passengers enjoy the journey?

After all,

The trade-off between safety and speed is “the one thing that really affects 99% of the moral questions around autonomous vehicles,” says Shai Shalev-Shwartz, chief technology officer at Mobileye…. Shifting parameters between these two poles, he says, can result in a range of AI driving, from too reckless to too cautious, to something that seems “natural” and humanlike.
The software can also be calibrated to allow different driving styles, he says. So, for example, an autonomous sports car might drive more aggressively to enhance a sense of performance, an autonomous minivan might put the biggest emphasis on safety and an off-road vehicle might default to taking a scenic route.

There’s no need to leave those factors solely in the software. It’s just not that hard to break them out into separate routines, with the human car driver selecting one when he gets in and boots up his car. Planning a trip is what humans do now, whether a trip across town or to another city or the short trip to the grocery store, even if the latter is planned sub rosa. That needs to be in the hands of the human.

Even if we decide to turn driving over to the AI system running the autonomous vehicle, only the driving itself should be turned over—while maintaining human oversight and real-time overruling capability and responsibility during the driving. It’s hard enough for a human to make the value judgment call regarding a broad variety of collision scenarios, especially regarding those outlined at the start of this post. It’s impossible, at least for the foreseeable future, for humans to write code to wire those judgments into the software running a car.

Autonomous vehicles cannot be only AI operated. The human must be responsible for the decisions he makes in validating the car’s real-time decisions, or overruling them. Or flipping a switch and taking over the task of driving because the software has gotten over its code.

Don’t Only Blame Gensler

Posted on by
Reply

The Wall Street Journal‘s editors have their panties in a twist over SEC Chairman Gary Gensler’s imposing $393 million in fines on 26 companies that fail[ed] to track employee “off-channel” [personal] communications.

It’s certainly true that Gensler badly overstepped his bounds with those fines. The SEC, and no one in it, has any authority to surveil or to require surveillance of private company’s private employees’ personal communications. Gensler and his SEC should be swatted down—hard—in court for that excess.

However.

A major part of the blame for this overstep belongs on the management teams of those 26 companies. Those worthies demonstrated deeply disgusting cowardice when they meekly acceded to the fines. They’ve done a disservice to the companies of which they’re in charge, they’ve betrayed their shareholders, and they’re right next door to betraying the fiscal duties those managers have to their companies’ shareholders. Their meekness serves only to expose their companies to further government overreach, and it exposes their employees to further unwarranted (in both senses) surveillance by an overreaching government.

That betrayal vastly outweighs any financial “savings” from agreeing to pay the SEC fines…because it’s less costly than resisting in court. And it interferes with that necessary swatting-down, an interference that potentiates the likelihood of those future costs.

Price Controls and Ways Around Them

Posted on by
Reply

Donald Boudreaux and Richard McKenzie, economics professor at George Mason University and emeritus economics professor at UC Irvine’s Merage Business Schoo, respectively, reflected on Progressive-Democratic Party Presidential nominee Kamala Harris’ price control scheme and some ways around them.

[C]competitive market forces will encourage them to do so, even when illegal.

Competitive forces, especially, are human nature: all of us want our goodies for as little as possible, and where there are at least two suppliers of something, those suppliers will compete with each other on some form of price in order to get our business.

Thus:

  • “shrinkflation”— keep prices the same but shrink the portions of goods
  • nonprice adjustments, such as relabeling/redefining “select” grade steaks as higher-ranking “choice” grades
  • hire fewer workers
  • devote less effort to cleaning produce
  • reduce hours of operation

Another major way, for all that it’s an illegal path—that pesky human nature—is the black market. Price controls are an open door for these to thrive, even where they’re illegal. And yes, that includes here in these United States. Keep in mind, especially vis-à-vis black markets that human nature—wanting stuff for as little as possible—can be made to work strongly against black market: free markets, especially those without price controls, will always and everywhere be able to produce goods and services at less cost and so for lower prices than can any black market. The latter’s production costs always include things that are intrinsically absent in free markets: the cost of evading the lawman along with the risk premium necessarily charged against the likelihood of getting caught.

Downsizing Government

Posted on by
Reply

Or, perhaps more accurately, an earlier buzz-term: right-sizing government. With our Federal government so bloated with employees, it may be that a partial solution is developing, particularly in DC, where the bulk of our Federal government sits.

The Biden administration has struggled to get more of the tens of thousands of members of the federal workforce in the District of Columbia back to the office on a more regular basis. That struggle is likely to continue if a Democrat wins the White House in November, especially Vice President Kamala Harris, whom Biden endorsed Sunday when he announced he was exiting the race.
If [former President and current Republican Presidential candidate Donald] Trump returns to the White House, the district’s office market could be hit even harder. He has already pledged to abolish the Education Department, which has more than 2,500 employees in the district.

Trump is on the right track in eliminating no longer necessary Executive Branch departments. However, the Federal workforce is proffering its own solution, one that would work well in parallel with the Trump path: those who don’t return to the office to do their work are self-selecting themselves for termination from government employment.

There’s this, too, regarding the commercial landlords who might be hurt by such moves:

The district’s office market is poised to get worse regardless of the outcome of the election. ….
Six agencies, including the Justice and Treasury departments, have lease expirations between 2024 and 2027 in which they are expected to give up close to 600,000 square feet, according to Cushman & Wakefield.

A solution suggests itself for this, a solution that even Progressive-Democrats should love: DC, in partnership with those landlords, could translate those 600,000 square feet of space into affordable housing. Such a solution even would be intersectionally beneficial.

Alternatively, under a Trump administration, with reduced regulatory interference with the chief business of the American people (that being business, as President Calvin Coolidge noted), more businesses likely will move to DC and occupy much, if not most, of those newly available vacancies.