Archive for 2014

LEVI’S CEO ON HOW TO WASH YOUR JEANS: Don’t.

WELL, WHY WOULD IT? ObamaCare Isn’t What’s Slowing Costs.

I think we can be pretty sure that public policy is not making the system more efficient, for two reasons. First, the decline started in the middle of the last decade, and there’s no plausible policy mechanism that would have caused cost growth to moderate just then. And second, the same broad trend shows up in pretty much every high-income country. No matter how smashing you think Obamacare was, it didn’t stabilize health-care spending in Switzerland.

It could be a matter of better practices in the industry. One piece of evidence for this: The cost growth seems to decline most steeply in English-speaking countries, which could reflect some sort of information dissemination.

And yet, I’m skeptical. Health care is not a competitive industry the way automobiles are. The British, Canadian and American systems do not much compete for patients; moreover, each is organized so differently that it’s hard to imagine all of them implementing the same productivity-enhancing measures at the same time.

Industrial diffusion is simply inherently slower than the trends we seem to be seeing — it’s not as if Toyota invents just-in-time production, and two weeks later, it’s in every factory at General Motors. This has to be especially true in health care, where competitive pressures are limited and heavy government involvement makes major change into a ponderous process.

Technological decline seems more plausible; see this Brookings Institution paper for the extended argument. Basically, health-care innovation is expensive, and for roughly the last decade, we’ve been doing less of it. As old innovations come off patent or are refined into cheaper and better versions, costs fall.

If you think health-care innovation is all useless me-too drugs, you should be pleased that we’re getting less of it. As it happens, I don’t think that’s the case, so while I’m pleased about the budget impact, I’m less pleased at the prospect of fewer new medical technologies.

Yes, and ObamaCare is likely to exacerbate that problem.

THE PUSHBACK IS BIPARTISAN: Zephyr Teachout Blasts Andrew Cuomo on Common Core. “The root problem with Common Core is that it is undemocratic. It is a scheme conceived and heavily promoted by a handful of distant and powerful actors. Here in New York, it was adopted with insufficient input from local teachers, parents, school boards or students, the very people whose lives it so profoundly affects.”

WHO COULD HAVE SEEN THAT COMING? The Economist: The more people are exposed to socialism, the worse they behave.

The game was simple enough. Each participant was asked to throw a die 40 times and record each roll on a piece of paper. A higher overall tally earned a bigger payoff. Before each roll, players had to commit themselves to write down the number that was on either the top or the bottom side of the die. However, they did not have to tell anyone which side they had chosen, which made it easy to cheat by rolling the die first and then pretending that they had selected the side with the highest number. If they picked the top and then rolled a two, for example, they would have an incentive to claim—falsely—that they had chosen the bottom, which would be a five.

Honest participants would be expected to roll ones, twos and threes as often as fours, fives and sixes. But that did not happen: the sheets handed in had a suspiciously large share of high numbers, suggesting many players had cheated.

After finishing the game, the players had to fill in a form that asked their age and the part of Germany where they had lived in different decades. The authors found that, on average, those who had East German roots cheated twice as much as those who had grown up in West Germany under capitalism. They also looked at how much time people had spent in East Germany before the fall of the Berlin Wall. The longer the participants had been exposed to socialism, the greater the likelihood that they would claim improbable numbers of high rolls.

Pretty much everyone, actually.