Competition Deniers Strike Again

Posted on May 27, 2014 by alsanblog

The recent agreement in principle between Partners Healthcare (a hospital system in the Boston area) and Massachusetts Attorney General Martha Coakley is a good example of how liberals view competition and go about enforcing the antitrust laws, which is to say they don’t enforce them at all.

Whenever a hospital or other merger is likely to substantially lessen competition in a relevant market, the appropriate action for a state or federal agency would be to go to court to block the questionable merger with an injunction. Such a remedy then would prevent the market from becoming more concentrated and avoid the price increases likely to result.

In February, after an investigation, the Massachusetts Health Policy Commission found that the proposed acquisition of South Shore Hospital by Partners would indeed lessen competition and increase prices. But rather than seek to block the transaction, Coakley has agreed to what is called a “conduct” remedy, which allows the hospitals to merge and seeks only to regulate Partners’ subsequent behavior (see here and here).

The DOJ also investigated the proposed acquisition, but in so far as the state has agreed to a settlement short of blocking the deal, it is unlikely that DOJ will act to stop the transaction. Usually, the federal agency will take the lead in a merger investigation, but in this instance, it appears that DOJ has disappeared, or perhaps the DOJ is just “leading from behind.”

The remedy agreed to by AG Coakley involves implementation of price controls until the year 2020, restrictions on the ability of Partners to negotiate rates with payers as a single entity (i.e., everyone will pretend that individual hospitals in the Partners system will act as independent decision makers) as well as restrictions on Partners’ ability to acquire other hospitals (with exceptions) and physician groups.

So the conduct remedy, rather than an injunction, moves Massachusetts even further away from an economy that is regulated through competition in markets to one that is centrally planned, which will help insure a relatively stagnant economy. In her campaign for governor, Coakley evidently intends to be the stagnation candidate (although that will hardly distinguish her from other candidates in a chronically blue state).

In her press conference announcing the agreement, Coakley called Partners a “Goliath” in the market that has “used its dominance” to drive up prices. Well, okay, but again, the answer would be to prevent the Goliath from adding yet more hospitals to its lineup, and it would even call for the state to break up the Goliath into a number of smaller pieces to create a genuinely competitive market.

Of course, a consolidated market means fewer firms in the market, which makes it easier for central planners to control. Perhaps this explains the Obama administration’s absence from the Partners’ proceedings – a conduct remedy is perfectly consistent with the administration’s desire to place one sixth of the U.S. economy under the thumb of the central authority.

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Getting Excited About Elizabeth Warren

Posted on May 21, 2014 by alsanblog

E.J. Dionne of the Washington Post seems to have a thing for Elizabeth Warren, the wannabe Native American junior senator from Massachusetts. Dionne never tires of praising or defending Warren, even if it means setting up and knocking down a straw man, even the same flimsy straw man over and over (see here).

More than once, Dionne has gotten excited about the answer given by Warren while attending a living room gathering during her Senate campaign in 2011:

There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for.

For Warren, all of this is part of the “underlying social contract,” language that Dionne finds especially thrilling because it’s a phrase politicians “don’t typically use.” Of course, America’s founding fathers based the Constitution on social compact and natural rights theory, but liberals like Warren rejected this ages ago. Dionne is talking rubbish when he tries to link Warren’s views with those of the founders.

According to Dionne, Warren doesn’t back away from any of the facts about economic infrastructure and its role in the economy. But guess what? Neither does anyone else. Dionne’s opponents are purely imaginary – nobody believes that people who get rich in this country do so all on their own and that infrastructure is irrelevant to economic activity.

The question isn’t whether the government should provide a legal and even physical framework within which economic activity takes place,* but whether and to what extent the government should engage in economic decision-making rather than leaving the decisions to firms and individuals interacting through competitive markets.

Dionne does not even pretend to address the real question. Instead, all we get is another attack on the same straw man and praise for Warren as she parrots the most obvious and non-controversial facts about economic infrastructure (which FDR and others used to similarly mislead the public over 80 years ago). Not exactly original.

*Although much infrastructure in fact can be provided by private firms, e.g., toll-roads.

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Teacher Diversity In America

Posted on May 10, 2014 by alsanblog

The Center for American Regress Progress (CAP), a left-wing think tank, is sounding the alarm about teacher diversity or rather the lack of it (see here). According to CAP, the findings of studies about teacher diversity are stark:  minority students make up 48 percent of the U.S. school-age population whereas only 18 percent of their teachers are minorities and the gap is only getting worse.

CAP claims that closing the diversity gap would benefit minority students. For example, more teachers of color would benefit students of color because there would be more teachers serving as role models to make students feel more welcome in the classroom. In addition, minority teachers would have “insider knowledge” which helps students do better on a variety of academic outcomes.

But CAP ignores the experience of Asian American students (who are included in CAP’s definition of students of color). These students, despite being taught by all those teachers who don’t look like them, rank among the best academic performers in the U.S. and Asian Americans as a group are among the highest income earners, primarily because of their commitment to education and academic achievement.

Ignoring Asian American success suggests that CAP’s position on teacher diversity is not based on evidence. More likely, it’s a matter of blindly following the idea that every ethnic and racial group must be represented in any institution or other setting according to a formula based on their representation in the larger population (“quota games” as once described by former president Bill Clinton).

This view forms the basis of the “disparate impact” theory of discrimination beloved by DOJ that seeks to hold employers responsible for disparities among groups for any reason. The idea also fits nicely with liberals’ genetically implanted desire to organize every last detail of our lives, no matter how small. For liberals, there is “a place for everything and everything in its place.”

The attempt, however, to bring about proportional representation of ethnic groups in every activity under the sun is ill-advised. As economist Thomas Sowell has pointed out, there are many geographic, demographic, cultural, and other factors that make “equal outcomes among races, classes or other subdivisions of the human species progressively less likely.”

The CAP report describes a number of reasons for the lack of teacher diversity and for once liberals don’t blame racism (at least not at the moment, which is refreshing). Although CAP offers policy suggestions to increase diversity, it concludes that what’s really needed to insure that “teachers standing in the front of the classroom mirror the students filling the seats” is political will.

Of course, if the standard is that people in front of an audience must mirror the audience, then one wonders how CAP views the disparities in professional sports, such as football and basketball, where the players certainly do not reflect members of the audience who not only “fill the seats,” but also finance the entire operation.

Perhaps CAP will formulate policy proposals to attract white kids to sports and develop their abilities, but we shouldn’t hold our breath. And as for teachers in our nation’s schools, it sounds like CAP is preparing the groundwork for what may turn out to be an unfortunate program of massive and systematic discrimination against white teachers.

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Punishing Bad Thoughts – Part 2

Posted on May 5, 2014 by alsanblog

So liberal folks have had a week to mull over the punishment of Donald Sterling, owner of the L.A. Clippers basketball team, due to statements he made in the course of a private conversation with one other person, which is to say because of his thoughts.

Liberals have celebrated and a few, flush from their victory and not content to stop with Sterling, have called for an all out purge of the NBA. Mike Wise of the Washington Post is now urging sponsors, fans, and league employees to punish other owners – ostensibly for their bad actions, not their thoughts (see here). Without explicitly calling for their ouster, Wise implies that the owners of at least four other teams need to be removed.

According to Wise, two team owners contributed to campaigns opposing gay marriage (shades of Brendan Eich) and one of the two also owns an energy business that engages in – gasp! – fracking. And oh yes, another owner is in the mortgage industry who, according to Wise, almost single-handedly brought on the financial meltdown. And the fourth is a Russian who apparently hangs out with the Putin crowd. Wise is not only intellectually and morally superior to the rest of us, but evidently he’s an expert on foreign policy as well.

From these complaints, it is clear that Wise is bothered more by who these owners are, including their occupations and political outlook, than anything else. Wise believes that NBA Commissioner Adam Silver meted out social justice when he banned Sterling, and Wise is now ready to sally forth and remedy other social ills to achieve even greater justice.  And he hopes that those who agree with him will employ the same “mob-rule zeal” seen in the Sterling matter to achieve his goal.

So there we have it. A columnist at one of the leading news organizations in this country calling for punishment of NBA owners because he doesn’t like what they do or their politics (i.e., thoughts). NBA owner Mark Cuban suggested that punishing Sterling for his speech could put the league on a slippery slope. And here it is, at the top of a diamond slope with its skis dangling over the edge.

Wise fancies himself as one who believes the “planet can be better,” but his planet resembles an Orwellian police state more than anything else. Wise and his editors at the Post are simply out of their minds.

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Punishing Bad Thoughts

Posted on May 1, 2014 by alsanblog

Liberals continue to attack anyone whose thinking doesn’t conform to their ideology, and their efforts seem to be picking up steam. Lately, liberals have sought to punish Phil Robertson of Duck Dynasty and Donald Sterling, owner of the NBA’s Los Angeles Clippers, for certain statements relating to homosexuality and race. And some liberals are even calling for the criminalization of speech that questions climate change.

The problem with criticism of Robertson and Sterling is that their statements were made to only one other person. The statements may be odious, but because they were made in private, they harmed no one. Yet in Sterling’s case, the absence of harm did not stop Sally Jenkins of the Washington Post (see here) from demanding that the NBA punish Sterling and take away his team. And it did not stop NBA Commissioner Adam Silver from insisting that Sterling’s comments were harmful (see here).*

Silver responded to critics by banning Sterling from the NBA for life and fining him $2.5 million. So Sterling’s critics, including the players, have pressured the NBA with the threat of lost revenues to do their bidding, and we are now witnessing the punishment of an individual solely for his thoughts. Let us give a hearty welcome to the expansion of the liberal police state (actually a “shadow” police state because it is privately operated, at least for now).

But liberals claim that bad thoughts and words directed to a particular group do harm members of the group by making them fearful of bodily injury or by causing psychological harm. But even accepting this, an individual cannot inflict this harm on his own. None of the harm can occur without the assistance of the media and those in the media are not objective bystanders. They actually make the decisions to disseminate such statements, which is to say it is they who inflict the harm in question.

If the person who originally utters the nonconforming statement deserves punishment because of the alleged harm, then so much more deserving are members of the media who either publish or broadcast the statement to millions. They must not only be punished, but should even be removed from their jobs if they fail to learn their lesson.

So far there is no word on whether the NBA intends to punish Sally Jenkins or TMZ Sports, the website that originally published Sterling’s statements. No doubt Jenkins and others think dissemination of the bad statements somehow teaches America about tolerance, but harm is harm, no matter how liberals might justify it. Punishment for Jenkins and others in the media should be as swift and firm as that for Sterling. No self-respecting police state can allow the media to go unchecked.

Liberals seemingly cannot get it right. They either punish people for their thoughts or they fail to punish the right people for their harmful conduct. We shouldn’t hold our breath, however, waiting for liberals to think and act consistently, and oh yeah, as the liberals’ police state continues to advance, anyone who questions the facts of global warming would be well advised to watch their back.

* Interestingly enough, the NAACP selected Sterling to receive a lifetime achievement award for his actions in donating to black causes, although it has since withdrawn the offer. For the NAACP, words evidently count more than actions.

NOTE: This post has been revised from its original form in response to a comment.

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Attacking Federal Worker Compensation

Posted on April 27, 2014 by alsanblog

Conservatives think they have scored again in their ongoing attack on federal workers. Writing in the Wall Street Journal (see here for a reprint at AEI), Paul Kupiec points out that federal bank regulators earn higher compensation – gasp! – than employees of the firms they regulate.

Evidently, the average bank employee earned $49,540 in 2012 and compensation of the average employee of a federal bank regulatory agency was 2.3 times higher and in some cases “considerably more.” Predictably, Kupiec wants Congress to establish control of these “runaway” labor costs, and seems to suggest that regulators’ salaries should be no greater than bankers’ salaries.

Okay, but shouldn’t we also apply this logic to other federal employees (not to mention state employees)? After all, the compensation for law enforcement personnel and prosecutors working for the federal or any state government most likely is also higher than the compensation of those arrested and prosecuted by the government.

If Kupiec’s standard is to equalize the salaries of government employees who enforce the law with the salaries of those who violate the law, then the salaries of police officers and prosecutors are also out of control. And why stop there? Let’s also look at the military: Kupiec’s reasoning would lead us to equalize the pay of American soldiers fighting in Afghanistan with the earnings of the Islamists fighting against them. But somehow I don’t see Kupiec going along with this.

Kupiec also points out that the compensation gap between the regulators and the regulated is greater at the lower pay grades. But this insight is not new. Both the Federal Salary Council and the CBO have found that salaries at the lower pay grades are higher for federal employees than private workers, but at the higher pay grades (e.g., occupations such as doctors, attorneys, economists, etc.) private sector salaries are higher.

Given these facts, if we want government salaries to match the private sector, the rational approach would be to lower the salaries of government employees at the lower grades and increase the salaries at the higher levels. But good luck finding any Republicans willing to push for those adjustments, especially as Democrats are making inequality a campaign issue.

As a matter of principle the government should operate as efficiently as possible. But it’s time for conservatives to stop their ongoing attacks on federal employees. Even if federal employee compensation declined by 10%, the savings from this as a percentage of the annual budget would be less than one-half of one percent. In other words, the savings to the budget would be approximately zero. This issue is getting old and there are other more important things out there.

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Higher Taxes

Posted on April 20, 2014 by alsanblog

The New Republic’s Jonathan Cohn is positively giddy about tax day (see here).  Echoing the first George Bush, Cohn wants everybody to “read his lips.” Except unlike Bush, Cohn is demanding more new taxes rather than no new taxes.  Ah yes, what a clever fellow.

According to Cohn, we shouldn’t resent paying taxes because taxes, through the massive government they support, take care of our “basic needs.” Such as pensions and medical care upon retirement, road and railway infrastructure, clean air and water, national defense, and law enforcement. Our taxes purchase a safety net and social harmony, and who can possibly be opposed to that – well, other than unconscionable Republicans?

The far-sighted Cohn also warns us that Paul Ryan’s budget would reduce government spending and “end government-provided health insurance, housing vouchers, and food assistance for millions.” Not a few people, mind you, but millions and millions. Even if some of us don’t figure to fall into this category, Cohn notes that misfortune can always strike, leaving us also dependent on the welfare state “to get by.”

Cohn casually mentions the welfare state, but with that mention, we’ve come to the heart of the matter for liberals:  dependency on the central government. What Cohn doesn’t tell us is that competition and markets can provide much of the goods and services provided by government – not to mention more efficiently. No, Cohn prefers instead to create the false impression that we have to choose between a welfare state and nothing at all.

But the fundamental choice is between centralized control of the economy, on the one hand, and a system of markets and competition, on the other hand. And although history shows that market approaches are superior to centrally directed ones, Cohn would force the latter upon us all. (Obviously, only government can provide some types of services, so some government will always be necessary.)

The high taxation of European countries impresses Cohn very much, especially those in Scandinavia and Northern Europe, where taxes account for more than half of total national income. He even includes the obligatory chart showing that taxation in the U.S. ranks among the lowest in the developed world, from which Cohn claims there is room for a rise in U.S. taxes.

Cohn argues that high taxes in Scandinavia and Northern Europe provide citizens of those countries with a secure safety net that makes them “more comfortable with a dynamic, ever-changing economy.” These economies are not as “dynamic” as Cohn implies, and by the way, let’s not even think about other highly taxed European countries, such as Greece and Spain, with 26% unemployment rates (over 50% for young people).

If we read his lips, we see that Cohn is demanding higher taxes on wealth and carbon and lower taxes on the working poor. Yeah, that’s the ticket:  take more from those who create the wealth, increase the handouts, and say hello to increased economic stagnation in this country. Catching up to the economic stagnation that permeates Europe is the true liberal vision, and it will harm all of us.

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The Very Courageous Lena Dunham

Posted on March 11, 2014 by alsanblog

So now Lena Dunham joins the crowd of courageous Hollywood liberals who mock the Bible. On this past weekend’s Saturday Night Live (see here), Dunham shed her clothes in a spoof of the Garden of Eden story. Actually we didn’t really see her nude because her body was partly blurred (thank God for small favors). But wow, Dunham is sooo edgy and brave – like no one ever attacks Christianity these days.

I’m still waiting for one of these Hollywood useful idiots to mock Islam the way they do Christianity.  In her SNL bit, Dunham implies that Christianity is sexist so maybe when she gives equal treatment to Islam, she will focus on the misogyny and enslavement of women in certain areas of the world. Of course, these are real issues and addressing them would take real courage, so we can’t expect much from Dunham. People like her are capable of nothing more than posturing.

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Obama’s Consistency

Posted on March 5, 2014 by alsanblog

In his latest column (see here), Dana Milbank thinks he’s caught Republicans in an inconsistency. He argues that Republicans are incoherent when they call President Obama a tyrant as he overreaches on domestic issues while at the same time calling him weak and indecisive on foreign policy, particularly with respect to recent events in Ukraine.

According to Milbank, Republicans “haven’t paused to consider the consistency of their accusations.” Milbank surmises that:

In theory, it is possible for Obama to rule domestic politics with an iron fist and yet play the 98-pound weakling in foreign affairs. But it doesn’t make a lot of sense that one person would vacillate between those two extremes.

If Milbank wants to make sense of this, the key would be to remember just who Obama believes is the true enemy. About that, there’s no doubt the president believes the enemy are Americans who vote for Republicans. Which is to say, approximately 50% of the population.

Obama mocks Americans who “cling to their guns and religion” and those who don’t “think clearly” when frightened. He announces that those who build businesses aren’t as smart as they think and that, in fact, they didn’t build their businesses, giving credit instead to the central government. In instances like these, the targets of Obama’s ire are Americans who stupidly and inexplicably vote for Republicans.

And let’s not forget that campaign speech in 2010 during which Obama exhorted Latinos to vote in order to punish their enemies. Obama wasn’t suggesting that Latinos punish Al Qaeda, Iran, North Korea, or Russia. No, he meant be sure to vote to punish Republicans and by extension, those who vote for Republicans.

According to liberals like Obama, Republican leaders and the people who elect them are responsible for abhorrent domestic and foreign policies, which liberals need to correct. Given the stupidity of half the population, action on domestic policy unfortunately requires liberals to impose their vision on the country, even if it means ignoring the law and using deception (“if you like your health plan, you can keep it”) when expedient. Hello iron fist.

But the iron fist remedy does not apply in foreign affairs. For liberals, other countries are not the enemy, but are mostly victims of Republican aggression. In fact, Republicans have used an iron fist to turn America into an international bad guy and bully par excellence. So the natural and logical response in foreign affairs is for liberals to do the opposite (a la George Costanza) which means either not acting at all or, dare I say, to “lead from behind.”

If Milbank weren’t occupied so much with blindly defending liberals, maybe he could understand how the president’s vacillations from iron fist to weakling are consistent and that Republicans’ criticisms of them are also consistent and quite legitimate.

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Defending Authority

Posted on January 23, 2014 by alsanblog

So again, a writer at the Washington Post characterizes Republicans as jihadists. This time, it’s columnist David Ignatius who mocks Republicans (see here) because they – gasp! – dared question the administration’s actions in the wake of the deaths of the U.S. ambassador and three other Americans in Benghazi on September 11-12, 2012.

Citing the recent Senate intelligence committee’s report on Benghazi (see here), Ignatius admits that the deaths were preventable (i.e., the State Department incompetently managed its operations in Benghazi – no small matter), but focuses on what he believes is the deeper message of the report. Which is that Republicans wasted a year “arguing about what turned out to be mostly phony issues.”

Even if some issues “turned out” to be unfounded, an investigation was still necessary before one could reach such a conclusion. And the fact that some issues may be phony doesn’t mean that the remaining ones weren’t important. The report shows that an investigation in this instance was needed and it’s hard to see how the time was wasted, given the committee’s findings.

Ignatius finds the silliest aspect of the Benghazi affair was the Republicans’ focus on the “talking points” that Susan Rice and others in the administration relied on to explain the cause of the Benghazi attacks. For two weeks, administration officials claimed the attacks were a spontaneous reaction to an internet video rather than a planned and organized effort by a terrorist group.

The Senate committee found that incorrect intelligence about the cause of the attacks formed the basis of the CIA-created talking points and that the CIA corrected this, but not until a week after the points had been used by Susan Rice and others. Ignatius takes this as evidence that nobody within the administration lied when they continued to claim that the video caused the attacks.

Ignatius’ conclusion works, however, only if he and other administration defenders ignore the evidence referenced at the end of the committee report in the statement by Republican members of the committee and a separate statement by Senator Susan Collins. Both statements point out that testimony shows the CIA knew “instantly during the attacks” that it was terrorism (see e.g., footnote 149 and the accompanying text of the report).

Yet Ignatius does ignore this evidence. The idea that the CIA knew about the nature of the attacks, but that somehow this information didn’t get to the president, the secretary of state, or the American ambassador to the U.N. until several weeks later is quite simply unbelievable. And blaming a video for the attacks in support of President Obama’s campaign rhetoric was plainly disgraceful.

Somewhere along the line, Ignatius apparently forgot what journalists are supposed to do, you know, things like question authority and find the truth. Now he’s only able to insult those who do question authority and in the process, allows himself to be played for a fool.

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