At a recent health policy forum in Washington, D.C., noted health economist and wit Uwe Reinhardt shed some light on that question:

[T]he following can be said: the United States Congress has absolutely no interest in reducing . . . dubious Medicare expenditures. Let me repeat that. The United States Congress has no interest whatsoever in reducing dubious Medicare expenditures . . .

So the interesting and intriguing question for all, for journalists too, [is]: why is the Congress so disinterested in cost containment when it constantly whines about having to restructure Medicare? That is to me a huge mystery.

Obviously, Prof. Reinhardt hasn’t read this.

Peter Goodman writes in the New York Times that we live in a laissez-faire world created by Milton Friedman and that that wild, unfettered market has led to our current economic problems.  David Henderson, the first editor of Cato Policy Report, begs to differ. David R. Henderson is a research fellow with the Hoover Institution, an economics professor in the Graduate School of Business and Public Policy at the Naval Postgraduate School, and the editor of The Concise Encyclopedia of Economics (Liberty Fund, 2008). Here’s his critique of the Times article:

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Economists Jonathan Klick and Thomas Stratmann find that it does.  In the latest issue of the Journal of Law and Economics, they write:

In the face of rising rates of diabetes, many states have passed laws requiring health insurance plans to cover medical treatments for the disease. Although supporters of the mandates expect them to improve the health of diabetics, the mandates have the potential to generate a moral hazard to the extent that medical treatments might displace individual behavioral improvements. Another possibility is that the mandates do little to improve insurance coverage for most individuals, as previous research on benefit mandates has suggested that mandates often duplicate what plans already cover. To examine the effects of these mandates, we employ a triple-differences methodology comparing the change in the gap in body mass index (BMI) between diabetics and nondiabetics in mandate and nonmandate states. We find that mandates do generate a moral hazard problem, with diabetics exhibiting higher BMIs after the adoption of these mandates.

Two weeks ago, the Senate passed legislation ostensibly intended to address home foreclosures. That legislation is now being criticized as little more than a handout to corporate interests. The criticism is legit; the bill is largely a package of tax breaks for developers (and other struggling industries, including those that have nothing to do with housing), along with tax credits for the purchasers of foreclosed homes (a provision that has its own criticisms) and grant money to local governments that want to play Flip This House.

Across Capitol Hill, the House is considering different foreclosure legislation that would give tax credits to first-time homebuyers and developers of lower-cost housing (proposals that are subject to some of the same criticisms now being lobbed at the Senate bill). House and Senate committees are also considering additional legislation that would permit the Federal Housing Authority to underwrite as much as $300 billion in mortgages for borrowers who are at risk of falling behind on their payments.

Lawmakers’ interest in combating the mortgage problem is understandable: default and foreclosure are painful for homeowners, clusters of vacant houses are hard on communities, and the struggling homebuilding industry is a significant contributor to the nation’s overall economic malaise. (Another factor that makes it understandable: this is an election year.)

However, before Congress puts taxpayers (most of whom are also paying mortgages or renting their homes) on the hook for billions of dollars in grants, tens of billions in tax breaks, and guarantees for hundreds of billions of dollars in mortgages, three points should be acknowledged:

1. The bailout proposals are as much a benefit to lenders as borrowers.
2. The homebuyers who are to be rescued are not the victims of “raw deals” (unless they were deceived or defrauded).
3. The bailout could make the nation’s overall economic condition worse.

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Las Vegans have been a little jumpy — and rightfully so — since public health officials revealed that a number of endoscopy clinics re-used syringes and medication vials, thereby infecting at least seven patients with hepatitis-C. 

Nevada’s physician-licensing board has proved largely inept in this matter, and a little too cozy with the profession it’s supposed to regulate.  Nevertheless, some want to give the licensing board more power.

Here’s an interview I did on Las Vegas 1’s Face to Face with Jon Ralston.  I argued that licensing laws don’t add much in the way of patient protection, and instead block innovations that would improve patient safety.  (The first interviewee provides lots of good information about the crisis, but if you want to skip to my interview, it begins about 12 minutes into the program.)

. . . strips away privacy before it goes to work.

Here’s a nice, discrete example: S. 2485, introduced in the U.S. Senate last week, would require asset verification of participants in State Medicaid programs, exposing the personal information held by financial institutions to government access.

This privacy loss is a natural outgrowth of entitlement programs. It’s nearly mandated by the simple and warranted effort to reduce waste, fraud, and abuse.

My 2004 Policy Analysis, “Understanding Privacy - and the Real Threats To It,” explored how entitlement programs almost always carry with them a significant privacy-cost:

To provide benefits and entitlements—and, of course, to tax—governments take personal information from citizens by the bushel. Nearly every new policy or program justifies new or expanded databases of information—and a shrunken sphere of personal privacy.

Here’s the chronology:

1. Someone tells Sen. Hillary Clinton (D-NY) an anecdote. 
2. Without checking to see whether it’s true, she repeats it on the campaign trail. 
3. Turns out, it might not be true. 
4. She agrees to stop repeating the anecdote.

A fine example of the perils of letting anecdotes guide public policy [$].

Quite appropriately, today exposes another facet of the foolishness that is U.S. immigration policy. April 1st is the day each fiscal year when employers are allowed to begin filing petitions with the US Citizen and Immigration Services for highly skilled workers to be given what are known as H-1B visas. For the second consecutive year, the quota of these visas was reached on this first day of eligibility.

H-1Bs allow employers to hire foreign workers in certain professional occupations. They are good for three years and can be renewed for another three. Though an H-1B cannot lead to a green card, it’s still a pretty good deal.

The problem is that, even in this apparent economic downturn, there aren’t enough visas: Congress limits the number of annual H-1Bs grants, and that magic number has been set at 65,000 for five years now. Before that, and in response to the technology boom of the late ’90s, Congress temporarily raised the H-1B cap to 195,000. But that expansion expired in 2004, and the cap has been reached earlier and earlier each year since.

In 2005, that meant August. In 2006, May 26. Last year, by the afternoon of April 2, 2007 (April 1 was a Sunday), USCIS had received over 150,000 H-1B applications. Officials quickly announced that they would randomly select 65,000 petitions from all those the agency had received in the first two days of eligibility.

Last week, with demand for the prized work permits only increasing, the powers that be decreed that this year’s lottery would accept all entries received in the first five business days. USCIS simultaneously promulgated a rule prohibiting employers from trying to game the lottery by filing multiple petitions for the same employee.

As for the vast majority of employers and employees who will be out of luck, the immigration laws say, like so many “rebuilding” baseball teams this opening week, “wait till next year.” Except, in this case, next year means putting your business or career on hold until October 1, 2009—the day people who secure H-1Bs for fiscal year 2010 can start work.

If only this were all a bad April Fools’ joke.

Read more on this in the article I have up on National Review Online today.

Two stories from the British press highlight regulatory excess from the Brussels bureaucracy. The Times reports that a winemaker is being harrassed because he is selling his wares in 37.5cl bottles instead of the 50cl or 35cl sizes allowed by European regulation:

An award-winning winemaker whose wares are sold at the royal palaces is facing a £30,000 bill after European bureaucrats ruled that he was using the wrong-shaped bottles. Jerry Schooler, who sells 400,000 bottles of fruit wines and mead a year, has been threatened with prosecution over his determination to use traditional measurements. The proprietor of the Lurgashall Winery in West Sussex, has been told to halt the sale of beverages such as mead, silver birch wine and bramble liqueur in 75cl and 37.5cl bottles. If he continues to sell them, he could be taken to court under a new EU directive that permits the sale of such products in 70cl, 50cl or 35cl measures only. …Mr Schooler now faces costs of about £30,000 to change his production line. “We are going to have to change all our bottling, the labels, machinery, boxes and maybe the corks as well and it is going to cost me thousands to do it,” he said. …West Sussex County Council’s trading standards department said that the winery was bound by EU Directive 2007/45/EC, which was drawn up in September to “lay down rules on nominal quantities for prepacked products”. It said the directive meant that the use of 37.5cl bottles for liqueurs was illegal.

The absurdity of this story makes one wonder how such a regulation came into existence. Did a bureaucrat wake up on the wrong side of the bed one day and decide that wine should only be sold in bottles of certain sizes? Is there some sort of crazy health or safety rationale for the regulation? Speaking of which, that’s the alleged reason for a regulation that is forcing English bus companies to make customers disembark in the middle of routes. This foolish regulation apparently is designed to prevent driver fatigue, but, as reported by the Sun, the practical effect is to make people waste their time:

Thousands of passengers are being forced to hop off buses midway through journeys to comply with barmy EU laws. A Brussels ruling has banned local services longer than 30 miles to ensure drivers don’t spend too long at the wheel. As a result, drivers have to pull in as they hit that limit and order everyone off their bus. They then change the route number on the front and invite passengers to jump back on before resuming the trip. …Western Greyhound has split its Newquay to Plymouth route in three — even though it uses a single driver throughout. Passengers must buy three tickets and break their journey twice. Managing director Mark Howarth said: “It’s a farce. We have to kick customers off as soon as the driver hits the 30-mile limit. “Often it’s in the middle of nowhere. Passengers think we’re crazy.”

In a New York Times piece of March 23, “It’s Hard to Thaw Frozen Markets,” Tyler Cowen concludes that “regulators should apply capital requirements consistently to the off-balance-sheet activities of financial institutions.” That conclusion follows from a surprisingly innocent confidence in regulation in general and capital requirements in particular. But it also follows from a faulty analysis of the situation.

Cowen writes, “What is distinctive today is the drying up of market liquidity — the inability to buy and sell financial assets — caused by a lack of good information about asset values. . . .The results have been a form of financial gridlock.”

To explain this alleged “drying up” process he says, “Starting in August, many asset markets lost their liquidity, as trading in many kinds of junk bonds, mortgage-backed securities and auction-rate securities has virtually vanished.” Cowen thinks “market prices have been drained of their informational value” in “many asset markets.”

With the possible exception of mortgage-backed securities, that seems fanciful if not absurd. The spread between junk bonds and Treasury widened mainly because Treasury yields fell, but there is massive trading in such bonds. Sales of nonfinancial commercial paper have grown briskly this year, and so have sales of financial paper aside from the “asset-backed” variety. There may be little trading of mortgage-backed securities, but that just suggest many owners (unlike, say, e-Trade) are in no hurry to sell at prices low enough to attract borrowers.

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Given the financial/regulatory system that we have — which is a very important pre-condition — I grant the Fed and Treasury a TEMPORARY “coordinating” role to help tide over the current crisis.  However, the initiatives and actions implemented so far appear unlikely to succeed.

I agree only with its role in the Bear buyout by JPMorgan.  It is, by nature, a one-time action that does not protect Bear’s shareholders and operators but protects the financial system from unraveling further — similar to it’s actions re: LTCM. Even if it is repeated for another investment bank, it does not raise the issue of moral hazard because no such bank wants to end up like Bear.

However, the Fed’s new and almost direct support of mortgage backed securities through its primary dealers introduces another moral-hazard potential — likely to be a huge problem down the road, and especially because of the interest rate policy it is adopting.

Interest rate cuts are being overdone. Large cuts are continuing the Fed’s past mistakes of introducing greater uncertainty in market participants’ expectations. It is using the wrong (inflation fighting) tool to achieve its goal of systemic stability which has arisen from poorer visibility of asset quality. The added uncertainty will prolong the resolution of current credit/liquidity shortages.

The longer that credit/liquidity problems last, the more likely is the introduction of PERMANENT new financial market regulations — which would hinder efficient operation — in the very function that is key to resolving current credit shortage problems — the generation of price information.

Finally, Prof. Cowen’s recent NYT oped (”It’s Hard to Thaw a Frozen Market“) compares market pricing under capitalist and socialist systems.  In brief, the argument is that socialist systems’ poor market pricing abilities appear to be reflected in the current credit-market woes of the American “capitalist” system. This comparison appears misplaced to me. The general U.S. economy may be relatively free and capitalist — but financial and credit markets are not quite so free.

Current credit market problems are not the result of pure and free market operation/competition.  We have a fiat currency whose supply and purchasing power is controlled by Fed interest rate policies. And it appears to have made serious mistakes in the process. This involves larger issues of whether asset prices should be objects for setting Fed policy and whether and how the Fed should respond to supply/oil shocks. Fundamentally, however, financial market participants naturally don’t look to “the free” market to set their expectations about the dollar’s future purchasing power. Those expectations are set by a “central planner” — the Fed.

A letter to the editor of the Las Vegas Review-Journal just came to my attention.  It reads:

In his Sunday commentary, “On the road to health care hell,” Steven Miller quoted Michael F. Cannon of the Cato Institute, hardly a person who could be trusted to give an even evaluation of government spending on health care, considering that the Cato Institute wants to limit government.

It is wonderful of Mr. Miller and Mr. Cannon to place all responsibility for Southern Nevada’s public health crisis on the government and none on the greedy bastards who violated their oath to do no harm, and to line their pockets with as much wealth as they could squeeze out of the public. Those who treated Mr. Duke Breuer and sent him home with an IV needle in his arm all had licenses from the state of Nevada, so I guess that Mr. Miller and Mr. Cannon would, by their twisted logic, place the blame solely on the state of Nevada.

However, I hold the state of Nevada responsible for not providing the level of regulation that is currently required, and in view of the level of greed that these doctors have shown, it is high time to level the playing field. We should strip them of every nickel that they have.

Wallace Eastman

LAS VEGAS

Whuh? There’s a public health crisis in Southern Nevada? I’m an apologist for greedy bastards? They sent some guy home with the needle still in his arm?? Yikes!

I went back and read the original Las Vegas Review-Journal op-ed by Steven Miller, vice president for policy at the Nevada Policy Research Institute. Actually, Miller provides a more responsible critique of the U.S. health care sector than most free-market advocates. For example, Miller takes seriously the alarming number of medical errors that Eastman decries. 

Eastman may be surprised by how much he and Miller have in common. Nevada’s physician-licensure laws obviously are not doing enough to protect patients from low-quality care. While Eastman argues that more stringent regulation would fix things, I suspect Miller would argue that licensing simply does not work that way; that physicians inevitably come to control the licensure process and manipulate it to protect themselves from competition, including competition from delivery systems that would reduce medical errors.

My guess is that Eastman and Miller agree that there are greedy bastards out there trying to squeeze as much wealth as they can out of the public, but that Miller would argue it’s the very regulations Eastman supports that’s letting the greedy bastards get away with it.

(As for my trustworthiness: Sure, I want to limit government. When I claim government is ineffective, readers should bear in mind my viewpoint. That’s fair, and doesn’t worry me.)

Imagine that you do business in California.  Maybe you’re in construction, or health care, or auto repair.  Now imagine some or all of your income comes from state contracts; using the above examples, perhaps you build schools, or take care of patients on Medi-Cal, or fix broken-down LAPD squad cars.  Now imagine that the state comes in and says, aha, because we pay your bills — again, on contracts relating to construction, health care, auto repair, etc. — and we love unions, you can’t talk to your employees about any negative aspects of unionization.  Ridiculous, right?  Who is a customer to tell you what to do with money that’s already in your pocket?

Well, that’s precisely what the great state of California is trying to do with a new statute that small businesses are challenging in the case of Chamber of Commerce v. Brown.  It’s a little bit more complicated than I outline above because the case implicates highly technical provisions of the National Labor Relations Act (and previous Supreme Court interpretations thereof), but the gist is that California is attempting to silence employers by tying speech restrictions to unrelated state spending.  For reasons that the petitioners ably present in their briefs and that I summarize in a podcast and in Cato’s own amicus brief, the Supreme Court should strike down this statute.

In any event, that’s the background to my trip to the Court to hear argument in Chamber v. Brown today.  (The plaza in front of the courthouse steps was remarkably free of demonstrators after yesterday’s hoopla surrounding the DC Gun Ban case.)  I’ll save you the detailed summary of the argument, but suffice it to say that the outcome will almost certainly go against California.  It’s always dicey predicting the scorecard, but based on oral argument it will probably be 7-2, 6-3, or maybe 6-1-2.  On one side, Justices Scalia and Alito and Chief Justice Roberts were safely on the side of free speech; Justices Justice Souter surprisingly led the charge against California’s interpretation of labor law; Justice Breyer, though skeptical, will likely write his own opinion agreeing in the Court’s opinion for separate reasons or possibly calling for remand rather than strict reversal; and Justice Thomas was silent but is expected to join the majority.  On the other side, Justices Stevens and Ginsberg seem to have no problem with California’s regulation.  On his own side as usual, Justice Kennedy’s vote seems to be up for grabs, but – based on his decisions in previous labor and regulatory preemption cases – I would bet on him siding with the majority.

In short, California employers will live to speak another day.

The Washington Post refers to Ralph Nader’s Public Citizen as “a public-interest group” in an article on costly federal regulations that the group is defending. So I wondered: Does the Post think federal regulation is always in the public interest? Or that groups that defend regulation are really acting “in the public interest”? What about groups that work to reduce the burden of government on consumers or taxpayers? Are they “public interest groups”? Certainly, as a member of the public, I don’t really see bigger, costlier government and more expensive products as being in my interest.

So I went to Nexis to investigate. Sure enough, in the past year the Post has used the phrase “public interest group[s]” 41 times. In every case (except one Associated Press story), the groups were on the political left. They demanded more spending or regulation by the federal government, actions that some but not all people would say are in the public interest.

I don’t always disagree with these “public interest groups.” For instance, one story quoted the Media Access Project. They almost always support more regulation of media companies, except when the question is regulation of obscenity or profanity. In this story MAP, “a public interest group,” applauded a court ruling striking down an FCC ruling that the use of profanity on a Fox News broadcast was indecent. Hear, hear. Now if only MAP would defend the rights of media companies to make their own decisions on non-obscene broadcasting.

But how about the National Taxpayers Union, which works to eliminate wasteful spending and reduce the burden of government? Was it a public interest group? Not in the Post. How about the Competitive Enterprise Institute, which works for competition and more choice for consumers? Not a public interest group.

The Post seems to have a very consistent but arguably wrong-headed view about just what is in the public’s interest.

This story from a Florida TV station probably calls for some serious analysis about over-regulation and the need for cost-benefit analysis. But that presupposes a level of maturity that I don’t have. Instead, I’ll just note that it’s about time that politicians address issues where they have genuine expertise:

A proposed law currently making its way through the Florida legislature might help you with what can be an embarrassing problem. Here’s the bottom line, the bill would be a mandate that all eating establishment must have enough toilet paper when you go into the restroom. The only problem is the bill doesn’t dictate how much toilet paper is “enough.” State Senator Victor Crist, a Republican from Tampa, felt the problem was so important, a law must be passed to protect the backsides of anyone in Florida. The measure will also try to regulate the cleanliness of restrooms in eating establishments.

In 2002-2005 I documented in some detail what today’s Wall Street Journal editorial referred to as Eliot Spitzer’s “consistent excesses as Attorney General.”

A January 2003 piece on “Spitzer’s Shakedown” revealed the fatuous nature of his inquisition against Wall Street.

In 2004, there was Spitzer’s ridiculous “Mutual Fund Fee Fantasy.” In 2005, in “Trial by Press Release,” I unraveled Spitzer’s flimsy case against the insurance brokerage arm of Marsh & McClellan.

Shortly after one of these articles appeared I received a phone call at home from an investigative reporter with one of the largest New York newspapers. He prodded me for quite a while to find out if I had been influenced or bribed by one of the companies Spitzer had attacked. Did I know anyone at, say, Merrill Lynch? (Nope). Do I own stock in the company? (Not then, and I’m currently shorting financials.)

I explained that nobody has accused me of any breach of integrity since I began writing in 1971. Besides, it would be very expensive to bribe me, I joked, because I had accumulated more money through investing than I know how to spend. I asked the reporter where he had gotten this very bad tip. He told me he had been contacted by Mr. Spitzer’s office. Hardball was their favorite game.

What follows is an unpublished February 2005 speech I gave to some small group in D.C. (which paid me less than half what Gov. Spitzer apparently spent for far less entertainment). Excerpts later appeared in my “Trial by Press Release.”

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Like many newer office buildings, Capitol Hill’s Hart Senate Office Building has automatic doors that make access for handicapped people much easier. They are activated by a pressing large blue button, which causes the glass double-doors to swing outward.

On several occasions recently, I have noted able-bodied Senate staff taking advantage of this convenience. Though they could open the doors themselves and enter more quickly, they press the button and pause a moment as the doors slowly open.

There is a lesson here for policymakers (including those Senate staff): Offered help, people of all abilities will accept it, whether they need it or not. Over time, their abilities to help themselves may atrophy.

So it goes with economic and social policies. A few years ago when Social Security reform was a hot topic, my father (who still wants to be a trucker when he grows up) observed casually that the truckers he talks to wouldn’t know what to do if they were responsible for their own retirement. The complexities of investing are too much for them.

I believe the contrary, that given responsibility for their retirement security, truckers would swarm over the problem and figure it out. The CB radios of the nation would crackle with investment advice. Like most cohorts, this group is fully capable of handling savings and investment. And just as able-bodied Senate staff can get through doorways more quickly on their own, truckers in aggregate would have more retirement security and more comfortable retirements. But they’ve been offered enough help (indeed - mandated to accept it) that they’ve ceded the field.

Assistive devices for the handicapped are a good thing, but I rue the day when able-bodied Americans come to expect automatic doors and regard it as an imposition or impossibility to reach forward, grasp a handle, and pull. Something to think about the next time you’re standing on an escalator because the stairs make you winded.

The United Network for Organ Sharing on its website provides a running total of the number of people waiting for an organ transplant. Today that number is at 98,059. Next Thursday, Cato is holding a policy forum “Human Organs for Sale?” where solutions for solving the U.S. organ shortage will be discussed by well known advocates both for and against the sale of organs. Also under discussion will be Iran’s organ vending system which some say is so successful that Iran has been without an organ waiting list for almost a decade. To join us, please register at events@cato.org.

New York Mayor Michael Bloomberg’s continuing crusade to manage every aspect of his constituents’ lives has generated another perverse consequence: Customers of Wendy’s in New York will now get less information on nutrition than they did before the newest regulations. Wendy’s has posted this notice “For NYC Customers” on its Nutrition website:

Special notice to inquiries originating from New York City:

We regret that Wendy’s cannot provide product calorie information to residents or customers in New York City. The New York City Department of Health passed a regulation requiring restaurants that already provide calorie information to post product calories on their menu boards — using the same type size as the product listing.

We fully support the intent of this regulation; however, since most of our food is made-to-order, there isn’t enough room on our existing menu boards to comply with the regulation. We have for years provided complete nutritional information on posters inside the restaurant and on our website. To continue to provide caloric information to residents and customers of our New York City restaurants on our website and on our nutritional posters would subject us to this regulation. As a result, we will no longer provide caloric information to residents and customers of our New York City restaurants.

We regret this inconvenience. If you have questions about this regulation, please contact the New York City Department of Health and Mental Hygiene and refer to Health Code Section 81.50.

A central claim of those eager for restrictions on tobacco use is that smokers cost society more.

A new study from the Netherlands may help lay that oft heard chestnut to rest. The study shows that there would be no cost savings for governments and taxpayers from preventing obesity or reducing illnesses caused by smoking.

The study found, quite to the contrary, that healthy people cost more.

The study, undertaken by the National Institute for Public Health and the Environment in Holland, found that ultimately healthy people, who live on average four years longer than obese people and seven years longer than smokers, cost the health system about $417,000 from the age of 20 compared to $371,000 for obese people and $326,000 for smokers.

One of the economists working on the study commented: “if you live longer, then you cost the health system more.”

That’s how Len Nichols of the New America Foundation described market prices for health insurance 41 minutes into this this webcast:

“We stopped child labor.  We stopped slavery.  We ought to stop extreme risk selection, too.”

I imagine more than a few actuaries and twentysomethings would be offended by the comparison.

Thanks to alert viewer Terry Holman for catching what I missed as I sat there listening to Nichols.

That’s what Sherry Glied (Columbia University’s Mailman School of Public Health), Len Nichols (New America Foundation) and I discuss with Larry Levitt in this Kaiser Family Foundation webcast. 

The Richmond Times-Dispatch issues a stirring editorial call today for free-enterprise insurance reform. It’s worth quoting in full:

In a state that ostensibly is a bastion of capitalism, government intervention in the marketplace turns up surprisingly often. Two parties who are negotiating a contract for a good or service often find a third party — the commonwealth — sticking its nose in where it doesn’t belong.

For decades, Virginia law prevented insurance companies and policyholders from deciding who could receive health coverage. Not until three years ago did the General Assembly pass legislation allowing group accident and sickness policies to cover any class of persons mutually agreed upon by the insurance company and the policyholder.

Before then, health-insurance coverage was limited to spouses and dependent children. If a worker wanted to include someone else in his or her coverage, the law said he couldn’t — even if the worker’s employer and the insurance company both were happy to fulfill the request.

This year Del. Adam Ebbin is sponsoring legislation (HB 865) that would open up life-insurance coverage in much the same way: It would allow insurance companies to offer group coverage to anyone policyholders wished to cover — brother or sister, elderly parent, life partner, or third cousin twice removed — not just spouses and children.

Note well what this bill is not: a mandate. Insurance companies would not be required to cover anybody they did not wish to. They would remain free to reject coverage they did not care to offer. They simply would not be prohibited from covering persons they are willing to cover.

In a free market, that is precisely how insurance ought to work: The buyer and the seller of the policy work out the terms between themselves. The state’s job is merely to enforce the contract — not to write it. Ebbin’s bill deserves a resounding and unanimous aye.

The Times-Dispatch is well known as a conservative editorial page, so it’s gratifying to see them endorsing this pro-free enterprise, pro-business bill — even though some conservatives might object to it on the grounds that it will allow, though not compel, businesses to offer group life insurance to employees with same-sex partners. The Times-Dispatch commendably wants such issues worked out within companies, not by a state legislative ban.

Today the Supreme Court, in one of the most important securities law rulings in years, Stoneridge Investment Partners v. Scientific-Atlanta, decided that fraud claims are not allowed against third parties who did not directly mislead investors but were business partners with those who did. Investors, the Court said in a narrow 5-3 ruling (Justice Breyer took no part in the case), may only sue those who issued statements or otherwise took direct action that the investors had relied upon in buying or selling stock – whether that involved public statements, omissions of key facts, manipulative trading, or other deceptive conduct. One impact of the decision is likely to be the end of a $40 billion lawsuit against financial institutions growing out of the Enron scandal.

Although this was the result expected by Court-watches, the split decision – along the usual “liberal/conservative” lines, with Justice Kennedy writing the opinion as he has tended to in such situations – was a bit of a surprise. The opposite result would have been disastrous for Wall Street, with massive ramifications on the economy as a whole. It would also have greatly expanded the court-created private right of action that is not expressly spelled out in the relevant securities laws. Ultimately, the Court’s ruling in Stoneridge wisely prevents an implied cause of action against the whole marketplace in which those who do directly mislead investors do business.

Tens of millions of Americans have cats in their homes, notwithstanding the possibility that some cat hair may get in their food. Bureaucrats in New York City, however, want to save consumers from this horrifying possiblity, so they fine store owners who keep cats on their premises. But the Grinches at the Health Department fail to realize that the cats are the most effective way of controlling rodents. This creates a no-win situation for entrepreneurs. They can keep a cat in the store and risk getting fined, or they can go without a cat and get fined for rodent infestation. The New York Times reports:

Amid the goods found in the stores, there is one thing that many owners and employees say they cannot do without: their cats. And it goes beyond cuddly companionship. These cats are workers, tireless and enthusiastic hunters of unwanted vermin, and they typically do a far better job than exterminators and poisons. When a bodega cat is on the prowl, workers say, rats and mice vanish. … But as efficient as the cats may be, their presence in stores can lead to legal trouble. The city’s health code and state law forbid animals in places where food or beverages are sold for human consumption. Fines range from $300 for a first offense to $2,000 or higher for subsequent offenses. … Still, many store owners keep cats despite the law, mainly because other options have failed and the fine for rodent feces is also $300. “It’s hard for bodega owners because they’re not supposed to have a cat, but they’re also not supposed to have rats,” said José Fernández, the president of the Bodega Association of the United States.

To understand what this really means, the article tells the story of Mr. Martinez, who is trying to earn a living while dealing with the mindless bureaucracy:

…last winter, a friend brought Mr. Martinez a marmalade kitten in need of a home. Mr. Martinez, who was skeptical of how one slinky kitten could fend off an army of hungry rats, set up a litter box in the back of the store, put down an old fleece jacket and named the kitten Junior. Within two weeks, Mr. Martinez said, “a miracle.” “Before you’d see giant rats running in off the streets into the store, but since Junior, no more,” he said. Junior sometimes brings Mr. Martinez mouse carcasses as gifts, which he said bothers him less than the smell that permeates his store when the exterminator’s victims die and rot under a freezer. In October, a health inspector fined Mr. Martinez $300 and warned him that if Junior was still there by the time of the next inspection he would be fined $2,000. “He wants me to get rid of the cat, but the rats will take over if I do,” Mr. Martinez said. “I need the cat, and the cat needs a home.” Because stores do not get advance notification of an inspection, Mr. Martinez is trying to keep Junior in his office as much as possible. Many bodega owners reason that a cat is less of a health threat than an army of nibbling rats. “If cats live in homes and apartments where people have food, a cat shouldn’t be a threat in a store if it’s well maintained,” Mr. Fernández said.

I don’t have much opportunity to patronize New York City bodegas, but I prefer cats over rats. Too bad the city’s bureaucracy doesn’t let the market decide which animal should take precedence.

According to The Austin-American Statesman:

[A]n Austin doctor [is] among the 64 doctors the Texas Medical Board recently disciplined….

Dr. Marci Roy, an Austin neurologist, must pay a $1,000 fine because of Web site advertising that suggests she has a superior ability to treat carpal tunnel syndrome at her clinic than other doctors who provide similar services, according to the board.

When confronted about the wording, Roy said that it was not a violation of the board’s advertising rules but that she changed the language after a complaint was filed, the order says.

Roy said Friday that the problem was “a typographical error that was corrected immediately.”

“It was certainly inadvertent on my part,” she said.

And we wonder why patients can’t judge physician quality.

Hat tip: MKS.