Monday, August 29, 2011
Monday, August 15, 2011
Privatization vs. Competition
They are not the same thing.
Capper points us to the case of LogistiCare, a private contractor hired to arrange non-emergency rides for Medicaid patients. The various failures by LogistiCare, he concludes, provide proof that privatization, "costs a lot more money and provides a lot less service," than the government systems that are supplanted by private entities. Capper may be correct that he is looking at a case of too few services supplied at too high a price, but it is the monopoly power that is the problem, not the privatization.
Let's not get bogged down in the particulars of this case, maybe LogistiCare is totally incompetent, maybe not. What I can say with confidence is that the LogistiCare case is just another example of how competition is what is important, not privatization. That is a lesson that both the left and the right could stand to learn again.
For another example, look at the recent moves by school districts to save money on insurance, some by dropping WEA Trust and some by switching to WEA Trust. When WEA Trust had to compete, sometimes they won and sometimes they lost, but school districts were able to insure they were getting a good price. A great outcome for school districts and further proof of the power of competition to reduce costs.
Making a public monopoly private does nothing to reduce the inefficiencies associated with monopolies. Competition is the key.
Capper points us to the case of LogistiCare, a private contractor hired to arrange non-emergency rides for Medicaid patients. The various failures by LogistiCare, he concludes, provide proof that privatization, "costs a lot more money and provides a lot less service," than the government systems that are supplanted by private entities. Capper may be correct that he is looking at a case of too few services supplied at too high a price, but it is the monopoly power that is the problem, not the privatization.
Let's not get bogged down in the particulars of this case, maybe LogistiCare is totally incompetent, maybe not. What I can say with confidence is that the LogistiCare case is just another example of how competition is what is important, not privatization. That is a lesson that both the left and the right could stand to learn again.
For another example, look at the recent moves by school districts to save money on insurance, some by dropping WEA Trust and some by switching to WEA Trust. When WEA Trust had to compete, sometimes they won and sometimes they lost, but school districts were able to insure they were getting a good price. A great outcome for school districts and further proof of the power of competition to reduce costs.
Making a public monopoly private does nothing to reduce the inefficiencies associated with monopolies. Competition is the key.
Monday, August 8, 2011
Vote For Rob Cowles Tomorow
If you live in the 2nd Senate District of Wisconsin, I urge you to get out to the polls and vote for Senator Rob Cowles tomorrow.
Not sure if you are in the 2nd? Check out this link to find your legislators.
Not sure where to vote? Check out this link for your polling place.
As I wrote in April:
This is not what democracy looks like. This is not even undoing the results of last November's elections, since the Democrats haven't bothered to run anyone against Cowles for a decade or so.
Not sure if you are in the 2nd? Check out this link to find your legislators.
Not sure where to vote? Check out this link for your polling place.
As I wrote in April:
This is not what democracy looks like. This is not even undoing the results of last November's elections, since the Democrats haven't bothered to run anyone against Cowles for a decade or so.
Wednesday, August 3, 2011
How Conservatives Lost on the Debt Deal
The real problem is not that we raised the debt limit. It's that we did so while giving a lot of people the impression that this deal reduces the size of government. It does not. The New York Times:
To those on the right who are mad at Speaker John Boehner because he cut this deal to raise the debt ceiling, I can only say the problem with Boehner is not this deal. It's that he's been in Congress since 1990, and since then the federal government has continued to expand. This is not to say that this is all Boehner's fault, but why would anyone believe that this time around John Boehner is willing and able to reduce the size and scope of federal government in any meaningful way. (To those on the left who think Boehner's deal "slashes" government spending, please see above.)
As part of Boehner's campaign to round up votes for the deal, he apparently sent around this slide show (pdf). I hope this was actually a joke and I just never figured it out because one of the slides includes this:
Wisconsin's Paul Ryan voted for this deal and so did my Congressman, Reid Ribble, whom I respect a great deal. In fairness to them, my preferred solution would have been to raise the debt limit with absolutely no strings attached and then work as hard as possible to actually reduce the size and scope of the federal government. This position is probably less politically viable than the agreement they ultimately reached, unpopular though it is.
I believe the debt ceiling had to be raised, I just wish it could have been done without giving so many people the utterly mistaken impression that this deal made the government smaller in the process.
WASHINGTON — There is something you should know about the deal to cut federal spending that President Obama signed into law on Tuesday: It does not actually reduce federal spendingHere's economist Russ Roberts:
By the end of the 10-year deal, the federal debt would be much larger than it is today....
“It does nothing to address the real drivers of our debt,” said Senator Tom Coburn, Republican of Oklahoma, explaining his decision to vote against the bill. “It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks and reforms no entitlement program.”
According to the CBO baseline spending (go here, page 18), which I understand is the baseline for the cuts of $2.4 trillion, the Federal government will spend $46.1 trillion over the next ten years. So we’re going to go from 46.1 trillion over the next ten years to a mere $43.7 trillion?... For further perspective, in the ten years between 2002 and 2011, the Federal government spent $28.1 trillion dollars.I agree that not defaulting on our past obligations is a good thing, but do either of these descriptions make this deal sound like a win for champions of small government? Not a single program eliminated and spending reduced from $46 trillion to $44 trillion. What's left for Republican, but to declare victory and go home. The only thing missing from this deal was a 'Mission Accomplished' banner.
To those on the right who are mad at Speaker John Boehner because he cut this deal to raise the debt ceiling, I can only say the problem with Boehner is not this deal. It's that he's been in Congress since 1990, and since then the federal government has continued to expand. This is not to say that this is all Boehner's fault, but why would anyone believe that this time around John Boehner is willing and able to reduce the size and scope of federal government in any meaningful way. (To those on the left who think Boehner's deal "slashes" government spending, please see above.)
As part of Boehner's campaign to round up votes for the deal, he apparently sent around this slide show (pdf). I hope this was actually a joke and I just never figured it out because one of the slides includes this:
Failure to remain below these caps triggers automatic across-the-board cuts ("sequestration"). Same mechanism used in 1997 Balanced Budget Agreement.The national debt outstanding in 1997 was bout $5.5 trillion. By 2010 it was $13.5 trillion.
Wisconsin's Paul Ryan voted for this deal and so did my Congressman, Reid Ribble, whom I respect a great deal. In fairness to them, my preferred solution would have been to raise the debt limit with absolutely no strings attached and then work as hard as possible to actually reduce the size and scope of the federal government. This position is probably less politically viable than the agreement they ultimately reached, unpopular though it is.
I believe the debt ceiling had to be raised, I just wish it could have been done without giving so many people the utterly mistaken impression that this deal made the government smaller in the process.
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