Thursday, October 24, 2013

Microsoft... Still Doesn't Get It

A Microsoft executive, Frank Shaw's, attempt to poke Apple has gained some attention,
Note: If you are the TL;DR type, let me cut to the chase. Surface and Surface 2 both include Office, the world’s most popular, most powerful productivity software for free and are priced below both the iPad 2 and iPad Air respectively. Making Apple’s decision to build the price of their less popular and less powerful iWork into their tablets not a very big (or very good) deal.

Since we launched the Surface line of tablets last year, one of the themes we’ve consistently used to talk about them is that they are a terrific blend of productivity and entertainment in one lightweight, affordable package. In fact, we’re confident that they offer the best combination of those capabilities available on the market today.
Wait a second... then why did Shaw just say this?
I have to say, I’m really excited for a 1080p Lumia with a third column on my start screen so I can keep a close eye on more people, more news, more stuff.
That is, if Microsoft's tablets are the best combination of productivity and entertainment on the market, why is Shaw excited about buying a Nokia, even if Microsoft is in the process of acquiring that company? Shaw leaves me with the impression that his blog post is less about touting his company's great product than it is an attempt to promote Windows tablets, generally, by taking digs at Apple. Microsoft was very late to recognize the market for the tablet computer, and continues to withhold Office from competing platforms as it has scrambled to develop its own tablets. On top of that, part of the reason that Microsoft's tablets are "affordable" is that they aren't selling, and as a result prices have been slashed... now twice. I don't want to diminish the Surface as a product, and I suspect that it would have been more successful had it been released two years earlier, but as with the Zune there's a significant price for coming late to market with a product that doesn't capture the imagination of your market.

What strike me most about the piece is how the Surface is, in essence, touted as a laptop. Microsoft, we're told, is the expert in how real people work. Real people want keyboards, trackpads, multiple windows open on their displays, a full version of Office. (Real people also apparently want an obnoxious, in-your-face tile interface shoved in their faces when they boot up a Windows 8 computer, and want touch screens on their portable computers.) And yet real people demonstrate Microsoft's skill in assessing their needs by buying Apple and Android tablets in huge numbers, while largely ignoring the Surface.

If you're typing or editing large documents, are creating spreadsheets, or working with other complex documents, you probably do want a keyboard and mouse or trackpad, but... you probably already have a desktop computer, a portable computer, or both upon which to perform those tasks. If you have a notebook computer that runs Windows, what's the advantage of toting around a Surface tablet with a keyboard cover when you can simply use your computer? The power of Surface has given Windows tablets about 5% of the market, which is enough to keep your toes in the water. Apple has about 5% of the global PC market, so in a sense Microsoft is in good company.

Shaw declares that by offering so much productivity Microsoft is leading the market (from behind)....
And so it’s not surprising that we see other folks now talking about how much “work” you can get done on their devices. Adding watered down productivity apps. Bolting on aftermarket input devices. All in an effort to convince people that their entertainment devices are really work machines.

In that spirit, Apple announced yesterday that they were dropping their fees on their “iWork” suite of apps. Now, since iWork has never gotten much traction, and was already priced like an afterthought, it’s hardly that surprising or significant a move. And it doesn’t change the fact that it’s much harder to get work done on a device that lacks precision input and a desktop for true side-by-side multitasking.
I think Shaw is onto something when he describes how Microsoft is in touch with what people want, if we define "people" as the population that is already predisposed to buy a Surface. The problem is, he is touting solutions that have absolutely nothing to do with how most people use tablet computers. The tablet is largely a product for consumption of media and entertainment, not for productivity. To the extent that you can add on productivity, about 90% of tablet users are going to find all of the power they need (and perhaps more) in the free apps that Apple is offering, and those apps will get better over time.

Perhaps what Shaw is displaying is discomfort at seeing his company's business model increasingly threatened by free software. Sure, the competing software may be less powerful than Office suite, but... free, and good enough for a significant majority of users. It's part of an expectation Microsoft helped create when it launched its browser war against Netscape, and even before that with its controversial bundling practices: the idea that you pay for your computer hardware, and that the software you need for basic functions (an ever-expanding category) should be free. Your Surface tablet runs Windows 8 and Office, but will upgrades to either be free? I doubt that's what Microsoft has in mind.

Apple seems to be taking the position that software is a commodity product that is best used to sell hardware, and by expanding the sphere of what its customers get for free - and how well its products play together - they want to keep customers in the Apple ecosystem. I can see merit in Microsoft's vision of the future, with people having full capacity to do whatever it is that they want to do on whatever device they have with them, but I'm not sure that the vision is compatible with Microsoft's business model - at least not in the mass market. If expensive software upgrades are required for any product running Windows, that cost will quickly undermine Microsoft's claim that its products are more affordable than those that offer free upgrades. Apple's vision of the future seems to be to allow users of its products to transition from one device to another, phone, tablet, computer, Apple TV, while having each device know exactly where you left off on the other. Continue your movie from where you paused, continue editing your document from where you stopped.... That vision seems to be more viable, and is unquestionably consistent with Apple's business model and - despite Mr. Shaw's claims - seems to be more consistent with how people in the mass market are using their devices.
So, when I see Apple drop the price of their struggling, lightweight productivity apps, I don’t see a shot across our bow, I see an attempt to play catch up.
Whereas I see Apple as obviating the need for 90+% of its customers to ever purchase "Office for IOS", should Microsoft ever muster enough courage to release such a product.
I think they, like others, are waking up to the fact that we’ve built a better solution for people everywhere, who are getting things done from anywhere, and who don’t have hard lines between their personal and professional lives. People who want a single, simple, affordable device with the power and flexibility to enhance and support their whole day. :)
I admit it. If I had to choose between doing my professional work, or even blogging, on a tablet or a notebook computer, I would pick the notebook computer as the "single, simple, affordable device with the power and flexibility to enhance and support their whole day". But I don't have to choose, and thus can use my smartphone or tablet for the functions they provides extremely well - basic communication, media consumption, web browsing, simple games, demonstrations, and online reference materials - and switch to my notebook computer (or go to my desk) for more complex tasks. To look at it another way, the fact that I have a Swiss Army knife and thus can sometimes avoid using a more specialized tool doesn't mean I'm going to throw away my saws, knives, screwdrivers and scissors. If your vision of a typical tablet user is somebody typing away on a keyboard using a fully featured windows OS, you're not looking at how people interact with their tablets.

Wednesday, October 23, 2013

Ed Rogers Is Terrified That Obamacare will Succeed

Ed Rogers, one of the Washington Post's political demagogues blogging in the PostPartisan (get it?) section of their website, blathers about Obamacare:
Since I’m always admonishing others to admit the obvious, I will now make an admission of my own: I’m rooting for Obamacare to fail. And I encourage others to do the same.
If you're familiar with Rogers or his history, that's really all that he needed to say. It would stand as a naked admission of his political bias, and his preference to cause harm to the millions of people who will benefit - and are already benefiting- from the PPACA if it gives advantage to the Republican Party. And if he left it at that, it would be fair to point out that people of Rogers' ilk used to go ballistic over criticism of George W. Bush, pretending that any criticism constituted a near-treasonous (or... should I say treasonish) wish for the nation to fail. But... he can't stop there.
I do not hope the uninsured stay uninsured, but Obamacare is not the solution.
You know what would have been a good follow-up to that claim? A proposed solution. Do you think we got one? Get real. The reason Rogers and his ilk are jumping on the "Glitchgate" bandwagon is because they don't have any ideas.
Obamacare is a harmful policy that will be bad for the country if it is forced upon Americans and the American economy.
You know what would have been a good follow-up to that hyperbolic claim? Any evidence that it is connected to reality. Do you think we got one? Yeah, same answer.
Why would anyone hope it limps into existence and settles like a cancer on the U.S. health-care system?
Wow... people having health insurance is like cancer. Who would have thunk.
The president asked his critics to stop rooting for its failure, but I, for one, refuse to do so.
And there he circles back to my first point, but again he finds himself unable to stop.
Also, the failure of Obamacare would do a lot to expose the false promises of big government programs.
Let's see... the three biggest ticket items are Medicare, a highly popular and effective health insurance program, Social Security, a highly popular and effective program to provide retirement benefits and disability insurance, and the military. Which of these does Rogers believe will be proved to be a "false promise" by a government program that, rather than following the successful lead of Medicare, compels people to buy insurance from private companies?
President Obama has been and always will be an unapologetic promoter of classic liberal activism.
Do you have the first clue what "classic liberal activism" means? If it were a little less polite, it might be a meaningless phrase Rogers picked up from Rush Limbaugh.... Does Hannity use that phrase? Seriously - when I search for the phrase "classic liberal activism" in quotes, Google returns a whopping six results, three of which are the same screed from WorldNetDaily, Joseph Farah's gift to reactionary trolls who want to play journalist. Perhaps that's Rogers' source?
Liberals think that Washington knows best and that increasing citizens’ dependency on government is a goal in and of itself.
When the facts fail you, there's nothing like a hollow man argument to save the day. Which liberals hold that belief, Ed? Can you name even one? Didn't think so.
Like all Republicans, I believe we need smaller government.
Straight from the hollow man to the false generalization. History tells us that Republican Presidents like to talk about smaller government, while nonetheless significantly expanding the size, reach and cost of government. Going back to 1982, which presidents have presided over the slowest growth in annualized federal spending? Clinton and Obama, by significant measure. If Republicans believe in smaller government, why do they have such a difficult time voting for politicians who reduce the size of government, implementing policies to reduce the size of government, or applauding the presidents who actually walk that walk? (Which again takes us back to my first point).
Obamacare is the opposite of a smaller, less obtrusive government.
No, as Rogers would figure out if he were to actually think about the issues, it is not. Millions of people are trying to sign up for health insurance through the exchanges because they want insurance. Millions of people went to the exchange site the day it opened for that very reason. Rogers may sit around with his wealthy Republican peers, sniveling about how ordinary people don't really want health insurance, but the fact is that millions of people like the provisions of the PPACA that are already in effect (such as allowing kids to stay on their parents's health insurance until the age of 24) and are eager to finally get health insurance that they can afford or that will cover their pre-existing conditions. In terms of being "smaller", quite obviously the program is designed to minimize the public role. The opposite of that would be single payer.
The failure of Obamacare would discourage and hopefully deter those who think a bigger, more domineering U.S. government is the answer to our problems.
Actually, the lesson would be that we should do the sensible thing, and follow the lead of pretty much any other western democracy - all of which have national health insurance programs of one sort or another that are both popular and largely successful. It is the adherence to "free market" principles that keeps this nation's health insurance costs so high, while providing the average American with less care than they would be able to obtain under a less costly "socialized" model.
And most important, the horrors of this debacle and the collapse of Obamacare would have a chilling effect on politicians who want to promote big government solutions.
And there you get to the real problem - Rogers is cheering for Obamacare to fail because his bladder trembles at the thought that it might succeed. And then governments might do crazy things, like adequately funding public education and fixing roads and bridges.

Monday, October 21, 2013

Senator Jim Inhofe, Dishonest, Irresponsible Demagogue

I see that Jim Inhofe is lying about ObamaCare.
Sen. Jim Inhofe (R-OK) told the radio station WABC on Sunday he may not have been granted his recent emergency quadruple bypass heart surgery if he was insured under Obamacare, BuzzFeed reported.

"You are talking to someone right now who probably wouldn’t be here if we had socialized medicine in America," he said on host Aaron Klein's radio show, referring to Obamacare.

Inhofe, 79, told Klein he discovered he needed immediate heart surgery for clogged arteries after going in for a routine colonoscopy, and that had he been in a country with “socialized medicine like Obama is trying to impose upon America,” the operation might have been unavailable.
As even a half-informed half-wit would know, coronary bypass surgery is performed as a matter of routine in nations with socialized medicine. But more than that... And such a person would likely also realize that, despite irresponsible demagoguery from people like Inhofe, Obamacare involves the purchase of insurance from private insurance companies. Surely Inhofe can still generate enough sparks between his neurons to understand the difference between buying insurance from a private company, even if pursuant to a mandate, and "socialized medicine."

Inhofe has two taxpayer-funded insurance policies. The first is the insurance the taxpayers provide to him through his employment as a U.S. Senator. Second, he is the beneficiary of a truly socialized health insurance plan, the extremely popular program called Medicare. Nothing about his coverage is going to materially change on January 1. He would still have his two taxpayer-funded policies, and with coordination of coverage it was likely the socialized Medicare program that paid for his recent surgery and that would pay for it had his need arisen next year.

You know what? Let's toss ObamaCare out the window, and give everybody exactly what Jim Inhofe enjoys - government paid health insurance on top of government-paid Medicare coverage. Deal?

Monday, October 14, 2013

The (Non-)Political (Non-)Persection of JPMorgan Chase

The Washington Post tells us what some conspiracy theorists have to say about the prosecution of JPMorgan Chase for the London Whale fiasco and for the sins of its acquired companies leading up to the financial crisis:
We’re less impressed by the more backward-looking attack on JPMorgan for allegedly misleading investors about the quality of securities it marketed before the crash. Mr. Dimon reportedly is facing a demand for $11 billion in fines and other payments to settle the case, under threat of a Justice Department criminal investigation. Yet roughly 70 percent of the securities at issue were concocted not by JPMorgan but by two institutions, Bear Stearns and Washington Mutual, that it acquired in 2008. Among the investors supposedly ripped off were the sophisticated government-sponsored enterprises known as Fannie Mae and Freddie Mac. As was inevitable, some say the case is payback for Mr. Dimon’s criticism of Obama adminstration policy.
The editorial continues,
We don’t take that view; nor do we pity JPMorgan, which is still a lucrative business despite its legal woes and which purchased the institutions for their valuable assets mixed in with their massive liabilities. When it bought them, it bought their legal issues, too — known and unknown.
There's an obvious tension between the Editorial Board's whine, "70 percent of the securities at issue were concocted not by JPMorgan but by two institutions, Bear Stearns and Washington Mutual, that it acquired in 2008" and their subsequent statement, "When [JPMorgan Chase] bought them, it bought their legal issues, too — known and unknown". If they're responsible, then the percentage doesn't matter. Even if you buy into the subsequent "poor little rich boy" argument, "then-Treasury Secretary Henry M. Paulson Jr. told Mr. Dimon that doing so would help the country by stemming market panic. That gives the case a certain 'no-good-deed-goes-unpunished' quality", the companies' misconduct was not exactly a state secret at that point and potential liabilities were factored into the fire sale prices. Robert Pozen offers another version of the "poor little rich boy" stance, that admits as much,
If JPMorgan had purchased Bear Stearns under "normal" circumstances, JPMorgan's shareholders would have been a reasonable target of the lawsuit. Typically, if one corporation (call it A Corp.) buys another (call it T Corp.), A assumes all of T's former liabilities-its bonds, pension obligations, and, yes, its legal liabilities.

The transfer of legal liability relies on the logic that A could have performed due diligence prior to acquiring T, and reduced its offer price to account for any potential legal liability. Thus, the expected cost of future lawsuits flows through to T's shareholders, as it should in the normal case.

But JPMorgan's acquisition of Bear Stearns was different. JPMorgan purchased Bear Stearns at the behest of top federal officials-who needed JPMorgan to quickly announce a deal in order to quell a potential financial panic. Furthermore, the offer price was effectively set by these federal officials. There was no opportunity for JPMorgan to learn about Bear Stearns' legal liability, nor to adjust its offer price accordingly. Indeed, JP Morgan initially walked away from the acquisition because it did not have enough time for due diligence.

Thus, punishing JPMorgan's shareholders does nothing to align incentives-it merely punishes shareholders for acts in which they are blameless. Even worse, this fine discourages companies from engaging in "white knight" acquisitions at the request of federal regulators. In the future, company executives will demand broad guarantees against losses from the government before taking over any troubled institutions.
The short answer to that is that, while I feel some sympathy for a company that plays white knight and ends up with a worse deal than it anticipated, nobody forced JPMorgan Chase to say "yes". Pozen admits that they understood the risk and chose to go forward with the purchase anyway. As for their being a fixed price and no room to negotiate, clearly there were negotiations - JPMorgan Chase was free to walk away, did so, reconsidered, and came back to close the deal. Further, the facts belie the notion that the government presented JPMorgan Chase with a "take it or leave it" price - they had initially agreed to pay $2/share, and it was the threats of Bear Stearns shareholders to fight the sale that inspired them to raise their offer to $10/share. The total selling price was less than the value of Bear Stearns' Manhattan headquarters - you can't look at the negotiations or the purchase price without recognizing that JPMorgan Chase knew it was taking on potentially massive liabilities.

As for future "white knights" being afraid to step forward, let's be honest: JPMorgan Chase acted because it saw a business opportunity. Pozen and the Washington Post Editorial Board assume that JPMorgan Chase was unaware of the possible downside. I don't attribute that level of incompetence to its negotiators, and have little doubt but that they carefully considered outcomes far worse than the present proposed fines when they agreed to buy Bear Stearns at a stock valuation of 7.5% of its 52 week high.

But more than that, if the Board sincerely does not endorse the view of the conspiracy theorists, the unidentified "some" who "say the case is payback for Mr. Dimon’s criticism of Obama adminstration policy", why did Fred Hiatt and his crew choose to title their editorial, "JPMorgan Chase’s political persecution"? Was Hiatt trying to mislead readers into believing that the Post endorses the stance of the conspiracy theorists? Does he understand what the word "persecution" means? And why are they suggesting that holding JPMorgan Chase responsible for misconduct for which they acknowledge it to have assumed liability imperils the government's reputation for impartiality? How would it be impartial for the government treat JPMorgan Chase more favorably than it would treat another, similarly situated company?

Alas, these are the types of questions that Fred Hiatt's Editorial Board can never seem to find space to answer.

Sunday, October 13, 2013

Pat Buchanan's Fantasy of... His Own Private Idaho?

Pat Buchanan, after describing how nations that had been part of the USSR reclaimed their national identities, and in some cases balkanized afterward, and carrying on for a bit about various secessionist movements in Europe, conflates the secession of a region to create a new, independent nation state with the redrawing of political boundaries within a nation state.
What are the forces pulling nations apart? Ethnicity, culture, history and language—but now also economics. And separatist and secessionist movements are cropping up here in the United States.

While many Red State Americans are moving away from Blue State America, seeking kindred souls among whom to live, those who love where they live but not those who rule them are seeking to secede.
Buchanan appears to be conceding that the primary driving forces behind these secessionist movements, foreign and domestic, are ethnicity and culture. In the context of ending a civil war between ethnic groups with the bloody partitioning of a country, it's not really surprising that ethnicity and culture play a role in that division - it's to be expected. But there are no similar crises within the United States. Buchanan may be correct that the citizens of the regions he describes later in his editorial are concerned about protecting their ethnicity and culture, but perhaps the real problem is that they're too resistant to getting on board with the proverbial "great American melting pot".
The five counties of Western Maryland—Garrett, Allegheny, Washington, Frederick, and Carroll, which have more in common with West Virginia and wish to be rid of Baltimore and free of Annapolis, are talking secession.
I found Ilya Somin's "vote with your feet" concept to be a bit ridiculous, but I have to say Buchanan's idea is far more precious. Why move across a nearby state line when you can instead move the state line? Buchanan has given no apparent thought to the permanence of such an arrangement. Does he anticipate that states will trade counties like kids trade baseball cards? (Perhaps I should say Yu-Gi-Oh? Kids, it seems, have their own cultural secessionist movements every decade or so.) Perhaps he imagines a context in which any number of people who claim to be disgruntled with their state government can split off and form their own state? Could I be my own state, and perhaps serve as both senators?

Buchanan has something dead wrong in his earlier secessionist argument, suggesting that economics are now driving European secessionist movements. To the contrary, economics tend to hold back peaceful secession. When you live in a small, rural area you gain considerable advantage by being associated with a larger, more economically developed state. Such regions usually receive massive subsidies from their states, sometimes direct, and often in the form of government enterprises that exist only by virtue of state funding. Buchanan states,
Folks on the Upper Peninsula of Michigan, bordered by Wisconsin and the Great Lakes, which is connected to lower Michigan by a bridge, have long dreamed of a separate state called Superior. The UP has little in common with Lansing and nothing with Detroit.
I'm not sure what Buchanan means by "The UP has little in common with Lansing", or if he even knows what he means. Or Detroit, for that matter, unless it's as basic as "skin color". Economically, many parts of the UP are quite comparable to Detroit. Baraga County in the Upper Peninsula has an 18.3% unemployment rate - comparable to Detroit's. Dependence upon public assistance is high. What keeps the UP's unemployment rate from being even higher? Six of the UPs fifteen counties are home to state penitentiaries, with the good-paying jobs that go along with them. The UP also benefits from the state's promotion of tourism, it's leading industry. A separate state of "Superior" would have to pay its own way, which may be part of why the most feverish part of the "long dream" of which Buchanan speaks broke in the 1970's. Also, given how easily Democratic Senator Debbie Stabenow carried the UP, perhaps the political culture is not as removed from the rest of the state as Buchanan imagines. I wonder if Buchanan even knows about the Mackinac Bridge?

In any event, even if Buchanan's worst case scenario unfolds, and we have another G.W. Bush-type President or continued incompetent House leadership by the likes of John Boehner, such that "another Great Recession hits or our elites dragoon us into another imperial war", and we "hear more of such talk", so what? It's a pipe dream. Nothing is going to come of it. I guess it's a bit more peaceful than the violent, genuinely secessionist fantasies of some of Buchanan's more extreme peers, but let's face it: We're not going to allow small regions to form their own states, we're not going to give five sparsely populated counties of Maryland or nine similarly rural counties of Colorado statehood, along with a minimum of two U.S. Senators and three Members of Congress. And beyond the fantasy, counties that enjoy being heavily subsidized by their urban peers tend to wake up at some point to the reality of what their tax bills and public services would look like if they actually carried their own weight.

Calling People "Low Information Voters" Doesn't Validate Decentralization or Privatization

In a recent article in Forbes, Ilya Somin bangs one of his favorite drums, that of the "low information voter". Somin complains that many voters don't understand the background to the government shutdown, or how much government spending goes to Medicare, Social Security and foreign aid, then lectures, "This kind of basic knowledge may not be all voters need to know to form intelligent opinions. But it’s hard to do so without it." He complains further that even informed voters can misunderstand the evidence, and that people with conflicting political beliefs can interpret the same evidence as being consistent with their own beliefs. Somin, in essence, blames this all on laziness:
It is easy to blame ignorance on stupidity or on the media. But basic information about most political issues is readily available in the media and online. It isn’t hard to find out what Obamacare insurance exchanges are. The problem is that most people don’t take the time and effort to do so. That is not because they are stupid, but because there is so little incentive to acquire political information.
I'll take issue with both of Somin's assertions. First, there is a concerted effort by parts of the media, the so-called news entertainment industry, to mislead its audiences into believing utter nonsense. If you're marginally informed about the issues, you can't turn on Fox News or drive time talk radio without figuring that out. Whether or not people should trust that type of news source isn't really the point, as many people do trust those sources and end up being misinformed and distracted from the actual issues.

Further, the mainstream media has an unfortunate tendency to turn every policy debate into a horse race, taking the proverbial "view from nowhere" while airing guests and interviews that they know to be objectively false or misleading. It seems that people like the argument more than they like to be educated, and that conflicts and contests generate more readers and viewers than a dispassionate explanation of the facts and how one side of the issue has a weaker case or is just plain wrong. A case in point would be "death panels", an outright lie about the PPACA (Obamacare) that was concocted, refined and perpetuated by the right-wing media. The mainstream media could have snuffed out that absurdity at the outset, but instead treated it as if it was a valid claim and let partisans lie on the air about the meaning and effect of perfectly reasonable provisions of the PPACA. Even though those provisions were dropped as a result, to the detriment of elderly patients, many people remain convinced that the PPACA creates "death panels". The fault for that lies almost entirely with the media. Another example would John Boehner's statements, including his widely distributed editorial, about the government shut-down. If you believe what he says you'll be less informed than when you began trying to follow the issue - but the media is not going to help you understand that, because they want Boehner to submit editorials or make appearances on their shows.

More than that, though, why does Somin believe people should have to dig for information in order to be informed, when they are reading the newspaper (or virtual equivalent) or watching the news and are being assured by the talking heads that they're getting enough information to be informed? Not everybody has the luxury to be a law professor, with many hours in an office to explore areas of esoteric interest, read the Internet, and discuss the issues of the day with informed colleagues. Most people work jobs that do not afford them similar luxuries, and it's perfectly reasonable for them to believe that the time they spend catching up with the news before heading to work, in the car, or after putting the kids to bed is sufficient to keep them informed. It's not what Somin deems being "rationally ignorant", with people knowing that they are informed but choosing to spend time on other things. It's a matter of there being only so many hours in the day, and the fact that the less you know the less aware you are of how much you need to learn.

Let's recall also that the concept of democracy does not anticipate that every voter will be informed on every issue, or even most issues. The Founding Fathers includes a number of checks on popular democracy out of concern that the masses might make bad choices - hence the non-elected Senate and the Electoral College. Inherent in the popular vote is the notion of the wisdom of the crowd - the idea that the larger body of voters will collectively exercise a level of insight and wisdom that significantly exceeds that of the typical individual voter. That's not an excuse for failing to try to better educate the pubic about the issues of the day, but if you accept that concept it's much less worrisome that people wish that spending for foreign aid were only 1% of government spending... it's actual level... instead of 10% or more.

From that rather dubious perch, Somin launches himeslf into a non sequitur:
The problem of ignorance is exacerbated by the enormous size and scope of government. Government spending accounts for well over one third of GDP, and government also regulates nearly every aspects of life. Even if voters devoted far more time to following political issues, they would still be ignorant about most government policies.... But we can help alleviate the problem by limiting and decentralizing government. When people “vote with their feet” in the private sector or in choosing what state or local government they want to live in, they have much better incentives to acquire information and use it rationally than when they vote at the ballot box.
That argument strikes me as utter nonsense. The federal government gets an incredible amount of media attention. The more local government becomes, the less media attention it typically receives. In many communities there's no meaningful media coverage of local government. While there have been corruption scandals at the federal level, in recent decades they have typically involved a small number of individuals with little impact on the overall functioning of government. The problem of corruption can be significantly more pronounced at the state level, as evidenced by Illinois, and can be appalling at the local level, as evidenced by Kwame Kilpatrick's Detroit. It is absurd to pretend that it is easier for voters to stay informed in relation to matters handled by a panoply of state and local governments, than it is to stay informed in relation to the actions of the federal government. Were that not true, one would reasonably expect that corruption and misconduct would improve at the local level, not significantly worsen.

Also, it's a rather arrogant conceit to suggest that if people don't like where they live, it's simple for them to sell their homes, uproot their families, get new jobs, and relocate to a community more to their liking. While there is no question but that when things get really bad a growing percentage of people will "vote with their feet", the significant number of people who stay behind reflect the reality that for most people it's not simple or easy, and for many it's an unaffordable luxury. More than that, there's more involved in choosing where you live than whether or not you like the state or local government, and moving to a different location that has a government more aligned with your beliefs may mean sacrificing social, employment and cultural opportunities that are important to your quality of life, as well as giving up easy access to top hospitals or similar local amenities.
Most of us spend far more time and effort acquiring information when we choose what car or TV to buy, than when we choose the president of the United States. The person deciding which car to buy knows that their decision is likely to make a real difference to the outcome. The same goes for a person deciding where to live in a federal system.
Perhaps he's speaking for himself, but I disagree with Somin's initial assertion. Most people give considerable thought to the president, and whether or not they will vote for or against an incumbent president. One might argue that much of that thought is partisan, and thus "doesn't really count", but that would sidestep Somin's claim - which is tantamount to arguing that people start thinking about their next car or television the moment they bring a new one home. I think people who vote hope that their vote makes a difference. A real difference in the outcome? Very few people who move to a new community do so with Somin's unrealistic notion that they will somehow influence local government simply by leaving one community or by joining another - I don't believe that I've ever met such a person. Moving to a different community based upon an assumption that it will be materially better than the place you live because of your perception of the political ideology of the local government seems like a fool's errand.

Somin presents no evidence, nor really any argument, that localized government would be cheaper, better, more transparent, less corrupt, more efficient... that it would provide any actual benefit to the public. He does not address the complexity of the modern nation state, nor the fact that some of the things of which he complains (e.g., ignorance of spending levels for foreign aid, Social Security and Medicare) are going to remain at the national level. He may have a pipe dream where programs like Social Security and Medicare become state-run programs, but the added complexity of such an approach should be obvious, as should be the impairment of people's ability to "vote with their feet" when they have to worry about how benefits are coordinated between states. But if you leave the big ticket items at the national level - military spending, Social Security and Medicare, along with matters that the federal government alone can reasonably address, such as managing foreign relations, regulating interstate commerce, providing the FDA, FTC, SEC, EPA, FEMA, USCIS, ICE, USPTO and the like, Somin's approach isn't actually going to simplify choices for voters at the federal level. It will instead add to the complexity of their other votes while doing next to nothing to simplify the federal government.

From there, Somin doubles down on his non seqiturs:
By reducing the size of government, we can enable more choices to be made in the private sector, where people have better incentives to become informed.
It seems that Somin imagines a future involving a lot more than localization of government, with government either outsourcing various tasks to the private sector or people being left without government support in certain areas of their lives and having to turn instead to private sector solutions. Somin is employed by a major university, and likely chooses his health insurance from a number of heavily subsidized plans offered by his employer - something akin to a health insurance exchange under the PPACA, but with his receiving a large subsidy for which he would be ineligible under that law. It's unlikely that Somin has ever tried to purchase health insurance on the individual market, let alone insure his family in that manner. It is unlikely that he has dealt with insurance companies' arbitrary denial of coverage, or trying to get individual coverage with a pre-existing medical condition. If he had, he wouldn't adhere to the fantasy that "more choices" result in a better informed consumer and even if all he cares about are incentives he would be aware of how difficult it is to actually compare individual health plans - even those offered by a single insurance company.

Were Somin to research the issue he would learn that having too many options can be paralyzing - people get confused, don't know how to draw meaningful distinctions, and may end up making their choices based upon arbitrarily selected, sometimes incorrect, information and assumptions. Somin may fret for hours or days about what TV to buy or what car to purchase, but at the end of the day his life will be little affected by whether he chooses a Camry or an Accord, a Vizio or a Samsung. If Somin believes his own conceit that voters are too lazy to educate themselves, his is a recipe for making that situation worse.

Thursday, October 03, 2013

Rep. Randy Neugebauer - Fool or Fraud

Via TPM,
Rep. Randy Neugebauer (R-TX) got into a heated exchange with a National Parks Service Ranger at the World War II Memorial over the closure of the park because of the government shutdown.

Neugebauer, one of a number of Republicans who have tried to use the closed memorial to bash the Obama administration and Democrats on the shutdown, confronted the ranger while surrounded by a crowd of onlookers.

Neugebauer asked the Ranger how she could turn World War II veterans away.

"How do you look at them and…deny them access?" the congressman asked.

"It's difficult," she responded.

"Well, it should be difficult," Neugebauer snapped.

"It is difficult," the Ranger said. "I'm sorry sir."

"The Park Service should be ashamed of themselves," Neugebauer said.
Yeah... the Park Service should be ashamed that Rep. Neugebauer and his Republican peers are throwing a childish tantrum instead of doing their job.

Medical Malpractice Litigation Really Isn't All That Special

One of the common threads you see in the criticism of medical malpractice litigation from the medical community is that medicine is special - it's so complex that it's just not reasonable to trust malpractice litigation to a jury of laypersons. We are told that we need "health courts", an undefined concept that generally appears to translate into "courts where people like me get to decide what is or is not malpractice." And all of that is fine, insofar as it goes, except...

There's actually nothing special about malpractice litigation. Many incredibly complex cases are resolved within the jury system. An argument could be made that all technologically complex cases should be removed from juries, but that's really an argument for the abolition of the jury system itself - and disregards a long and involved history of how we came to have juries in the first place, why we protect the right to trial by jury in the Constitution, and why we have perpetuated that system into the modern era. The fact is, not all malpractice cases are complex. You're supposed to remove the patient's diseased, left kidney, and you instead remove the patient's healthy, right kidney? That's not difficult to understand. And sometimes what one might assume to be simple cases, let's say a car accident, can end up involving experts in engineering, accident reconstruction, economic damages.... Let's not forget, also, that juries are called upon to decide incredibly complex cases involving business disputes, environmental contamination, intellectual property, antitrust.... There's simply nothing about the complexity of medical malpractice litigation that meaningfully distinguishes it from other types of litigation.

Dr. Robert Centor argues,
We need special health courts. The jury process induces lawyers to couch their words, use sophistry, and work hard to present part of the story. This is clearly true for both the defendant and the plaintiff legal teams. If we had special health courts, then we could have a nuanced discussion of all the details of patient care. A jury trial leads lawyers to focus on details and try to “make mountains out of mole hills”.
I've tried to engage Dr. Centor in the distant past about what he means by a "special health court", to no avail. Pretty clearly, his concept of the "health court" would be a non-adversarial court system, and would not involve a jury. Perhaps he's thinking of something akin to a coroner's inquest (of the type that does not use a jury), or some sort of inquisitorial tribunal system. One can only guess.

It's not at all clear, though, why he believes such a system could be created and yet be completely non-adversarial. It's difficult to imagine a doctor, accused of malpractice, beaming with delight at the thought of having his case tried in a "health court" as opposed to a regular trial court, or being content with lawyers who argue, "We're not actually representing you - our duty is to help the court find the truth, even if that means you're found to have been culpably negligent." All you have to do is look at the effort that doctors and the insurance industry have invested in keeping confidential the results of peer review in malpractice cases to recognize that the medical profession is not interested in placing all of the facts on the table.

We presently have trials that don't involve juries - bench trials - and although the conduct of the trial can be affected by the absence of a jury, even in medical malpractice cases the litigation remains adversarial. There are pro's and con's to the adversarial system, certainly, but on the whole parties like to be represented by advocates who zealously represent their interests.

Dr. Centor, himself, highlights a significant flaw with his apparent notion of a "health court", in that no "health court judge" or tribunal will be expert in every area of medicine:
Some physicians will testify in cases about which they really understand little. Reading the depositions of some other physicians saddened me.
I will continue my personal philosophy of only accepting to testify in malpractice cases for which I believe I have clear expertise. Over the years I have accepted less than 10% of offered cases. I had testified once previously approximately 25 years ago, and had been deposed once in another case. But generally, I avoid malpractice cases because I do not consider myself qualified.
If you have judges, even specially trained judges, presiding over a trial where the proposed medical experts are testifying outside of their area of expertise, how is that an improvement over the current system? The judges can't be assumed to have a better understanding of medicine than the experts testifying in court, and Dr. Centor argues that many of those experts aren't qualified. If litigants seek out Dr. Centor due to his credentials and expertise, yet he deems himself qualified to serve as an expert in only 10% of those cases, by Dr. Centor's measure what are the odds that a randomly selected health court judge is going to be qualified to hear an assigned case?

For all of the kvetching, every comprehensive effort to review the outcome of medical malpractice cases suggests the same thing: Malpractice lawyers are very selective about the cases they take, when they take cases that turn out to be weak it's almost always because they lack the information necessary to fully assess the case and cannot get that information without filing a lawsuit, when there's ambiguity in a case juries tend to side with doctors, and to the extent that error occurs it usually favors the doctors. As is quite typical, even when arguing that the case shows a "need" for a health court, Dr. Centor argues that the jury came to the correct verdict. His concession reduces his argument to this: "The system worked. so let's replace it with something I can't define that I think will be more fair."

I'm not going to dispute this:
he psychological impact of these charges on the defendants was palpable. These hard working, conscientious defendants had years of having these charges hanging over their heads. They did nothing wrong. That really does not matter in jury trial.
The distinction between professional negligence litigation and standard negligence litigation is that somebody is pointing their finger at you and claiming, "You weren't competent in this case, and your incompetence caused somebody to suffer an injury." One of my law school professors liked to edify his students by explaining legal practice in very blunt terms. One of his declarations was, "You will all commit malpractice." The fact is, everybody makes mistakes - the big question being, how you respond when you make a mistake. Most mistakes can be fixed and, if you detect your error or omission quickly enough, harm can be minimized or avoided.

When you look at why patients look for malpractice lawyers or bring malpractice lawsuits, you find that bedside manner is a huge factor. When something went wrong, was the doctor helpful? If the doctor made a mistake, did he apologize? Rick Boothman, chief risk officer for the University of Michigan Health System, has advocated for years that doctors and hospitals change their approach to litigation, and has documented that an approach of disclosure, apology and cooperation reduces the number and cost of malpractice claims. No need to reinvent the system. It's an approach more institutions and doctors should take.

A comment on Dr. Centor's blog suggests, as an argument for "health courts", "Attorneys will drag out a weak case in hopes of a settlement getting something instead of nothing." The commenter confuses the exception with the rule. The principal reason that malpractice litigation drags on as long as it does is not due to plaintiff's lawyers. It's due to the successful lobbying by the medical malpractice insurance industry for measures that increase the cost of litigation for a plaintiff and prolong the litigation process. By imposing up-front costs and delays, small but meritorious malpractice cases are squeezed out of the system. The longer a case drags on, the more likely it is that a seriously injured malpractice victim will settle for less than the case is worth. As Mr. Boothman indicates, plaintiff's lawyers are happy to work collaboratively with a doctor or hospital to arrive at an early settlement. No plaintiff's attorney wants to invest $50,000 to $100,000 or more in taking a case to the point of trial (and yes, malpractice litigation is extremely expensive) if they can settle it quickly. The exceptional cases involve the late disclosure by the defendant of information that undermines the plaintiff's case, where the plaintiff's lawyer then angles for a modest settlement to try to avoid taking a loss on the case, or where the plaintiff's lawyer isn't competent to litigate malpractice cases in the first place.

A last point on "health courts": Let's assume an efficient health court system that accurately distinguishes actual malpractice cases from maloccurrence that results from non-culpable negligence, outside factors or bad luck. I very much doubt that health insurance companies would support the implementation of such a health court system. Why? Because right now, only a very small percentage of valid medical malpractice cases are prosecuted. The estimate is usually around 12%. The rest of the cases involve patients whose cases are too small to litigate under the present system, patients who lack the capacity or understanding to pursue a malpractice cases, patients who dread the thought of litigation and, perhaps most importantly, patients who like their doctors. If you create a sufficiently painless system, with efficient, low-cost resolution of malpractice claims, inspiring a significant percentage of that majority to pursue their valid claims, the amount paid out to settle claims could increase substantially. Even if Dr. Centor believed that such a system would be better than the status quo, the malpractice insurance industry would fight its implementation, tooth and nail.