Consumer Protection for Intellectuals
Nate Anderson at Ars Technica has a good write-up of the New America Foundation’s interesting proposal for labeling of broadband services, something akin to the nutrition labels we have for food.
Labeling and disclosure are better than direct regulation of the terms on which goods and services can be sold, of course. Labeling does not presume to decide unalterably what factors are or will be the most salient to consumers. But it does seek to channel those interests, and it does presume that consumers discover information that is important to them via labels. (I dealt with some of these concepts in my recent post about privacy notices.)
What labeling is really about, I believe, is pushing consumers to focus on the terms that intellectuals believe are most interesting. Smart people’s interests often match up with everyone else’s, but not always. Anderson’s write-up wonders aloud “whether requiring disclosure of the ‘maximum round-trip latency to border router’ will do more than induce eye glaze among most broadband users.”
I want my ISP to give me a live tech-support person that can solve the problem with my wifi router, but that didn’t make it into New America’s labeling plan. Any labeling plan will likely be either overinclusive or underinclusive or both, obscuring and omitting the most relevant information.
Yes, labeling is “market-friendlier” than regulation dictating what broadband providers can and can’t offer. But if we believe that markets discover the dimensions of goods and services that are salient to consumers, we can also believe that markets discover what information consumers want, and how they best learn it.
You’re for Fair Competition, You Say?
Len Nichols is the top health-policy guy at the New America Foundation. He’s spent the past few months trying to negotiate a compromise between the Left and the far Left over the creation of a new government health insurance program that would compete with private insurers. With John Bertko, Nichols wrote a paper on how to create a level playing field between a government program and private insurance.
Yesterday’s CongressDailyAM, however, had an interesting article that sheds light on Nichols’ sense of fair play. According to the article:
Nichols has floated the idea of writing into law a requirement that certain changes to the system would require a two-thirds vote to pass rather than a simple majority.
Never mind that such a requirement would guarantee that the new program would breed even more stagnation and death than Medicare and Medicaid do.
What Nichols proposes is that a Democratic Congress should be able to create a new Fannie Med by a simple majority vote in each chamber, but if a subsequent (Republican?) Congress wanted to repeal it, they should face a higher bar.
Keep that in mind when you hear talk about a level playing field.
Full of Sound and Fury, Signifying Nothing
That’s an apt way to describe this week’s health-care-reform media blitz by the White House.
It’s probably also a good way to describe this debate over that media blitz:
Shuffle, Shuffle, Shuffle…
This morning I attended a federal student aid event at the New America Foundation. The big topic? Not the effect of aid on out-of-control college prices, by far the most important concern from the contexts of economic growth, affordability, fairness to taxpayers, etc. No, it was the Obama Administration’s “bold” (NAF’s word) proposal to kill the federal guaranteed student loan program and do all lending directly from Washington. It was just the kind of debate folks in DC love, one that sounds really important but leaves the government-created problem almost totally untouched.
Here’s the critical reality that was completely ignored: taxpayer-furnished financial aid – whether coming directly from DC or delivered by “private” institutions completely backed by DC – appears to be a very big enabler of rampant tuition inflation. Quite simply, as I lay out in the most recent Cato Handbook for Policy, when government ensures that customers can pay more, students demand more and colleges raise prices.
Of course, the argument that aid drives prices is not without its critics, but they’ve got a tough case to make both in terms of economic theory and college cost reality. In Washington, however, this isn’t even being discussed. In DC, it’s all about the deck chairs and nothing about the sinking ship. But then, as we’ve learned oh-so-clearly over the last several months, politicians gain little from averting disasters they’ve helped cause, and lots from handing out life jackets.
Fortunately, Cato is here to remind politicians about the important stuff, not just to bicker over which special interest gets the biggest tax-dollar windfall. On April 7 we will address the fundamental problems with student aid, hosting a Capitol Hill Briefing on the effects not just of switching from guaranteed lending to direct lending, but of all federal student aid. It’ll be just the kind of discussion Washington so desperately needs but so rarely has.
Register here to attend, or watch online the day of the event.
This Is Why Universal Coverage Is a Religion — and Not about Compassion or Saving Lives
I was invited to participate in an email/online/sorta exchange for the Washington Post yesterday. Unfortunately, the effort was spiked after just a few rounds of emails. But rather than let my participation go to waste, I thought I’d post one exchange that I think highlights why I’m not just being colorful when I describe supporters of universal health insurance coverage as the Church of Universal Coverage. I could summarize the exchange, but I’m lazy. So I’ll just copy and paste.
I wrote:
All the interest groups are meeting with all the right politicians and making all the right noises, thus the Church of Universal Coverage says the stars have aligned for fundamental reform… Everyone is at the table right now because no one wants to be on the menu. But when the Democratic leadership makes its intentions clear, today’s love-fest will turn into a bloodbath.
Andres Martinez of the New America Foundation (who owes me a taco al pastor) responded:
I am a proud member of the church, Michael. As New America’s own recent study on the urgency of reform — which reads like a strong courtroom closing argument — noted, how can the world’s most prosperous nation afford to have tens of thousands of its citizens die each year because they lacked access to health care? Health care reform is a moral imperative, so your reference to a church (um, even if sarcastic) is appropriate…
I replied:
The Institute of Medicine estimates that every year, about 20,000 Americans die because they lacked health insurance, but as many as 100,000 die from preventable medical errors. What moral code compels the Church of Universal Coverage to solve the first problem before addressing the second?
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