A Space Program for the Rest of Us

Apollo was not a methodical space program; it was an anomalous race in the Cold War in which anything could be wasted but time. It turned out to be unsustainable and unaffordable, which is why it boggles the mind that over three decades later—during which time there were huge technology advances—Apollo was chosen as a model for a program that was supposed to be affordable and sustainable.

The shuttle program didn’t demonstrate that reusable vehicles don’t work. In fact, the one reusable part of the shuttle—the airplane-like orbiter—was the only part that didn’t kill crew (the solid rocket booster was responsible for the Challenger accident, and the external fuel tank’s foam was responsible for the Columbia accident). Moreover, the shuttle program tells us nothing at all about reusable space transports that are designed to reasonable requirements and high flight rates—particularly fully reusable ones that don’t shed hardware each flight.

Neither does the shuttle experience prove that we shouldn’t mix crew and cargo. All it tells us is that if we are going to build a reusable vehicle, it has to be sufficiently reliable to safely carry either crew or valuable cargo (just as airplanes are), because space transports cost too much to lose, regardless of their payloads. When Columbia was lost, we lost seven astronauts, yes. But we also lost a quarter of our orbiters. That is simply unaffordable. Cheap bulk cargo could reasonably be launched on less expensive, less reliable vehicles, but when we do develop practical space transports, the notion of throwing rockets away will make no more sense than burning a 747 on the runway after it lands with a load of cut flowers.

Likewise, the space station doesn’t teach that we must avoid assembling things in orbit; if anything, it shows that orbital assembly can be very effective when building something large out of many smaller pieces. That it took so long and cost so much is attributable to the constraints of the shuttle (and of the co-opting of the station for diplomatic ends). For that matter, the several repairs to the Hubble Space Telescope, various satellite repair missions, and the first Skylab mission back in 1973 show how even complicated and dangerous repair and servicing operations can be successfully conducted in orbit.

via The New Atlantis » A Space Program for the Rest of Us.

The Arrogance of Health Care Reform

It's crazy for a group of mere mortals to try to design 15 percent of the U.S. economy. It's even crazier to do it by August.

Yet that is what some members of Congress presume to do. They intend, as the New York Times puts it, “to reinvent the nation's health care system.”

Let that sink in. A handful of people who probably never even ran a small business actually think they can reinvent the health care system.

Politicians and bureaucrats clearly have no idea how complicated markets are. Every day people make countless tradeoffs, in all areas of life, based on subjective value judgments and personal information as they delicately balance their interests, needs and wants. Who is in a better position than they to tailor those choices to best serve their purposes? Yet the politicians believe they can plan the medical market the way you plan a birthday party.

via The Arrogance of Health Care Reform: Why do politicians with no business experience think they can run 15 percent of the economy? – Reason Magazine.

Health Reform? Try Markets!

I think it is fair to conclude from this that the Massachusetts health reform plan, which in some ways is the model for the plans currently under discussion in Congress, was a failure. Thanks to Mark Ambinder for the pointer.

Maybe the commission's proposal is a step in the right direction. Even if it is, I would suggest that perhaps no expert knows how to design the health care system. We may need a lot of trial and error. Government takeover means that you try something new every few years…maybe. Your choices are limited because entrenched interests preclude many options.

With markets, trial and error takes place continuously. A lot more things get tried. Failure gets weeded out more ruthlessly.

via Massachusetts Health Reform, Version 2.0?, Arnold Kling | EconLog | Library of Economics and Liberty.

Mass. “Capitation” Health Plan

According to the chap who runs the Massachussetts exchange, the state and medical providers still face a hefty expense for treating those who don't have insurance, with over half the cost of medical care for the uninsured still persisting. And the new system is very expensive, particularly in a time of fiscal trouble.

It's thus predictible that a commission appointed by the governor wants to move in a new direction: capitation. That's when the state pays providers a fixed amount for each person (in the plan, or in their practice) and lets the providers figure out how to treat them.

Capitation looks attractive, because it discourages doctors and hospitals from doing too much. But, as with all good things in life, it has a few downsides …

I don’t like a system where the doctor has a financial incentive to give me unnecessary tests. But I’m even less fond of the idea of giving her financial incentives not to give me necessary ones.

via Massachussetts Health Plan Pushes for Capitation – Megan McArdle.

Health Care Competition

I take Lipitor. The drug may extend my life. But this doesn't lower my health-care costs. Years of pill-taking increases costs. If the pill works, I may live long enough to get an even more expensive disease. And maybe I, like millions of others, take Lipitor unnecessarily because we would never have had heart attacks. We then spend more, not less, on health care.

Health-care expert John Goodman of the National Center for Policy Analysis says there are “literally hundreds of studies from over the past 40 years that show preventive medical services usually increase medical spending … Contrary to popular belief, checkups for children and adults do not save the health care system money.”

If the policy elite really wanted cost-cutting competition, they would deregulate medicine. No one has ever found a better way to stimulate competition than freedom.

via Health Care Competition: If the policy elite really wanted to cut costs, they would deregulate medicine. – Reason Magazine.

“Powerful GM” ?

The writer suggested I begin: “it was once the most powerful company in the world…”

GM was indeed the most “profitable,” or “biggest”—that I get. But powerful? Why do people think about business that way? GM has/had no armies with which it can invade other companies. It had no power for force anyone to work there. It couldn’t force anyone to buy GM cars.

Your average two-bit government bureaucrat has more “power.” He can send people with guns to take your money (tax collection). He can lock you up, seize your property, tell you what you cannot do on your property, summon you to court, and so on. Government has the monopoly on power.

via “Powerful GM” – John Stossel’s Take.

Obama as Health Care Salesman: He Sucks!

It's also time, Obama tells his viewers, to lose weight, and stop smoking, and pull up your socks. Later on he tells people that they are foolish to prefer brand name drugs to generic drugs, and to want multiple medical tests. “If you only need one test, why do you want five tests?” Stop clinging to your tests! You're worse than those people in Pennsylvania.

Who knew we were electing a national mother-in-law? And get a chance to endure increased taxes for the privilege. Obama's supposed to be rallying support from voters, not castigating them. Outside the S& M parlor, most people do not enjoy paying to be disciplined.

via Kausfiles : Obama as Health Care Salesman: He Sucks!.

Deflation Coming?

In my opinion, the signs are now pointing more strongly toward deflation. Or in other words, to the next leg downward in the collapse of the housing bubble. The heroic efforts of government policymakers to deny reality and act as if they can forestall a necessary readjustment appear to be fizzling out. And the behavior of policymakers is an important clue to this situation. As usual, the focus falls on the mild personage of Fed Chairman Ben Bernanke.

I had an interesting argument with a friend yesterday who is involved in politics. She asked me if the operations to save the banking system worked. I said yes, certainly. The world’s largest banks are no longer in danger of a cascade of collapses, as was threatened by the failures of Bear Stearns and Lehman Brothers. A moment later, she referred to this as a good thing, and there I stopped her. It worked, yes, but was it good? Only if you believe that it’s good to have a large raft of all-but-nationalized financial institutions kept fat and happy by exceptionally high reserve levels, and with no economic incentive to actually do their job, which is to intermediate credit, not to lobby Congress for higher salaries and bonuses. What Bernanke did was necessary to prevent a systemic collapse, but the aftermath isn’t pretty.

Still, that’s only half of the story. While the financial system has been rescued, the real-world economy is still in a deep funk. And it’s going to stay there for a while, because we all have to work off the effects of the credit bubble. Here, the policy responses of the Fed, the Administration and Congress are being less successful. But they won’t stop what they’re doing, because politically that would take a lot more courage than Barack Obama has.

via Bernanke vs. History: Our Economic Outlook | The New Ledger.

Pet Med Care Costs Rising Too

Veterinary spending is rising just about in line with human medical spending. Kudoes to AEI for publishing a graph that seriously undercuts one of the major conservative arguments about health care: that the main problem is consumers who don't bear their own costs. Veterinary spending is subject to few of the perversities that either left or right suppose to be the main problems afflicting health care spending. Consumers pay full frieght most of the time. They are price sensitive, and will let the patient die if keeping him alive costs too much. There is no adverse selection. There is no free riding on mandatory care. Government regulation is minimal. Malpractice suits are minimal, and have low payouts. So why is vet spending rising along with human spending?

Two reasons, presumably: technological change and rising income. As we get wealthier, we spend more of our income on former luxuries, like keeping our pets healthy–nineteenth century veterinary care for sick cats consisted of a sack and some stones to weight it down with. And improvements in health care technology are giving us more things to spend that money on. With the help of my family, I bought my dog five extra years of life with an MRI that diagnosed his slipped disk; without it, we'd have had to put him to sleep when he was three. Worth it? I think so. But in 1950, I couldn't have afforded it, even if it had been available.

via The Price of Innovation – Megan McArdle.

War Against the Producers

The New Culture of “Pay Up, Mister–or Else!”

For Obama to pull this off, an entire sort of new vocabulary, rhetoric, and attitude is necessary. And the model is California: the carpenter and the bricklayer are laid off, and the state snoozes; while the assistant solid waste inspector of Green Acres is on television every night (his union can afford the advertising) to weep, and claim that if he and those like him (retire at 55 with $100,000 for life) are laid off, then Dantesque things follow.

Remember the logic: the poor Californian voter who works at Starbucks or Target is angry that the grandee social worker is unnecessary and grossly overpaid at $90,000 a year, with lush retirement and benefits, and so is told that if he does not raise taxes to over 10% income and 9% sales, then firemen, police, and water workers will quit/be laid off/furlow and so he will starve, be murdered, and have no sewage.

viaWorks and Days » The War Against the Producers.