BuckeyeBlog

This election season has seen a lot of talk about how to fix the health care industry in America. Most on the Left seem to think that we have some sort of unregulated, free market health care system that’s a mess because government doesn’t regulate it enough. In reality, though, we have a quasi-socialist system that suffers the problems it does largely because government interferes too much.

Over at the Cato Institute, Shirley Svorny produced a report that illustrates how medical licensing laws do not help the consumer but instead restrict competition and drive up the price of health care, leading to less access to those with lower incomes:

…licensure not only fails to protect consumers from incompetent physicians, but, by raising barriers to entry, makes health care more expensive and less accessible. Institutional oversight and a sophisticated network of private accrediting and certification organizations, all motivated by the need to protect reputations and avoid legal liability, offer whatever consumer protections exist today.

Consumers would benefit were states to eliminate professional licensing in medicine and leave education, credentialing, and scope-of-practice decisions entirely to the private sector and the courts.

Robert Scott, the author of the EPI report which I criticized earlier today, defended his study in a response to my post. In that defense, he draws heavily upon statistics and models from which his conclusions and assumptions are drawn. It’s easy to get caught up in numbers and leave the principles that give them meaning far behind. But detailed observations don’t always reflect the truth, and it’s easy to fall into a trap when one forgets which is the master and which is the servant. For thousands of years, humans observed the sun moving from the east in the morning to the west at night. From this observation, they developed the theory that the sun revolved around the earth. They were so convinced of their beliefs that they were willing to kill others to preserve their theory. As we now know, however, they were wrong. Data and observations by themselves serve only as the various colors on a painter’s palette. One must have the principles to use as a brush if he wishes to paint a picture.

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This just in from the Enquirer—competition lowers prices! Say it ain’t so, Sherlock!

The more stations competing nearby for your business, the less you pay.

An Enquirer analysis of daily sales at 716 area gas stations in May and June found that regular, unleaded fuel was about a penny-a-gallon less at stations with at least one competitor within one mile, compared to stations with rivals farther away.

Competition lowers prices by a penny? Our super sleuths must have missed a few clues to come up with that analysis. One can hardly call a study comparing gas prices based on stations’ relative distance from one another an analysis of the effects of competition. I’ll crawl out on a limb here and suggest that prices would go up by more than a few pennies if competition were removed from our system. If you are looking for some more hard-hitting, in-depth analyses from the Enquirer, it’s your week—today, the sage advice is not to drive too far out of your way to save a few pennies, because…it uses up gas in your tank that you already purchased to get there.  (For the Enquirer crowd: That would mean it offsets your savings from the lower pump price.)  Look forward to the culmination of “gas analysis” week at the Enquirer in Sunday’s edition, which will contain a special report on the “rapidly changing gas market.” It promises to be equally enlightening.

If we don’t carefully regulate the business world, can corporations take over the world and abuse it at the expense of helpless consumers? The belief that they can certainly is a popular one, and the debate started simmering in my head as I watched Pixar’s new film, Wall-E. In the movie, the fictitious “Global CEO” of the monopolistic Buy n Large Corporation, which Pixar implies used its power and market share to bury the globe in garbage, issues directives that determine the lifestyles of and choices available to humankind.

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Washington, D.C. school choice leader Virginia Walden Ford talks about the importance of families sharing their experience in the scholarship program. My favorite quote from this clip:

Legislators need to see the faces of the children who will benefit from their parents having choices.

Go here for more Voices of School Choice.

The LA Times reports on a new study of charter school performance in the city of angels.  The study, conducted by the California Charter Schools Association, found that “charters in LAUSD outperform traditional public schools on a variety of student achievement measures.”  But, the interesting part of this story is not the study’s findings, but rather the response from the LA school system.

Ramon C. Cortines, L.A. Unified’s newly appointed senior deputy superintendent, said the report pointed to how traditional schools could learn from charters — a strikingly different attitude from that typically expressed by district officials.

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From yesterday’s Gongwer Report ($) on Ohio’s attempt to lure an MMK Steel Plant to Haverhill:

[Strickland] said the administration is also eager to work with existing steel companies on projects that retain and create jobs in the state. “But we also have an obligation to try to attract new investments in Ohio.”

The state will avoid putting one company at a competitive disadvantage to another one, he said. [“]But we want to encourage competition. That is the free market approach and so we think we’re doing what is reasonable, fair and just and I don’t see any reason why any existing company should feel threatened by this possible investment.”

Governor, I have served with the free market approach. I know the free market approach; the free market approach is a friend of mine. Governor, you’ve no idea what the free market approach is.

The way competition is created in the free market approach is by investors seeking profits building new businesses to compete with old. Competition created by politicians seeking votes is, well, just the politics of government picking winners and losers in our economy.

In rewarding investors with profits, the free market approach also rewards sound management, innovation, smartly-run operations and attention to customers. In short, keys to success in the 21st Century global economy. Successful, new competition through the free market approach sends the message to established companies that they need to sharpen their business practices and make the investments which improve their competitiveness and productivity.

The competition the governor speaks of, that borne of politics, rewards companies for the quality of their lobbying in securing tax and regulatory breaks, the attention they pay to their public relations campaigns to back up the lobbying, and their adeptness at playing two governments such Ohio and Quebec off of each other. In short, things good to know in getting government to give you what you want, but not for much else.

New competition of the governor’s sort signals established companies that sound business strategies, investments and execution are not enough to succeed in Ohio. Under the governor’s version of economics, a business will be more successful in Ohio by spending on a lobbyist or a PR firm than by investing in new production techniques or in product-improving R&D projects.

And that’s no way to grow prosperity in Ohio.