The Independent Institute


How Occupy Wall Street Nearly Scuttles Hell or High Water

HellorHighWaterHell or High Water, one of the most talked about films of 2016, is billed as a modern-day western, “heist crime,” or Bonnie and Clyde. A contemporary western is more apt, and its excellent acting, steady pace, tight story and screenplay will likely make it an Oscar contender. The film also makes me yearn for a day when filmmakers learn economics, because they could use that knowledge to take stories to new levels. What is now a well-crafted genre Western could have become a much better film if the screenwriters had eschewed the self-righteousness of the Occupy Wall Street crowd and given everyone humanity and dimension, not just the thieves and police.

Hell or High Water is low-budget film ($12 million production budget) with high production values, enlisting the acting chops of veteran actors Chris Pine, Ben Foster, Jeff Bridges, and Gil Billingham among others in only a slightly updated cops-and-robbers buddy film. Pine and Foster play brothers—Toby and Tanner—who set off to rob banks to save the family farm from imminent foreclosure by the local bank. Tanner, the rebellious older brother, has just been released from prison for killing their abusive father, and he provides a fitting contrast to the more cerebral and pacifist Toby, who plays the role of the dutiful son.

The two brothers execute a well-planned series of robberies focused on a regional bank’s small town branches, taking the cash from the drawers to avoid larger bills that could be traced. Crusty Texas Ranger Marcus Hamilton (Bridges) is put on the case with his mixed race (Comanche and Mexican) partner, Alberto Parker (Billingham). Hamilton is intentionally offensive, tossing off-color jokes to goad Parker, creating a tension that offsets the brotherly commitment that bonds Toby and Tanner. But it works as the partners come to accept each other’s foibles in their relentless pursuit of the brothers through West Texas.

Tanner, however, is near psychopathic, riding the rush of the heists, his familial loyalty barely keeping him in check. Only Toby’s genuine compassion bridles his older brother, who appears to be a hair’s breadth away from becoming a modern-day version of the murderous Depression Era outlaw Clyde Barrow. This delicate balance between violence and deference to his younger brother’s vision for the robberies—steal just enough to pay off the debt and back child support for his ex-wife and sons—keeps the brothers’ relationship on edge as each robbery ratchets up the stakes with higher levels of violence. In the end, as the Texas Rangers and local law enforcement close in, Tanner and Toby are forced to make choices that can potentially save one brother but not both.

More than One in Five Americans “Churn” Through Health Coverage within a Year

46618074_MLThe U.S. Census Bureau has just released the Current Population Report’s Health Insurance Coverage in The United States, 2015. This report sits alongside the Centers for Disease Control and Prevention’s National Health interview Survey as a critical source of understanding changes in health insurance in recent years.

The report discusses coverage during the three years from 2013 through 2015, so it does not reveal the large increase in employer-based coverage since the Great Recession. During this shorter period, there was an insignificant gain in employer-based coverage, and a large increase in persons dependent on Medicaid, the joint state-federal welfare program that provides health benefits to low-income residents. The number of people dependent on Medicaid for at least part of the year increased from 55 million in 2013 to 62 million in 2015. (Almost the entire increase took place in 2014, Obamacare’s first year of implementation.)

(As I have noted many times, it is incorrect to categorize Medicaid dependents as “insured” alongside those with private benefits, because the latter are earned. It is like categorizing those receiving cash welfare payments alongside wage-earners as people with “incomes.” Nevertheless, every official source makes this error.)

Conflicted Feelings about Colin Kaepernick

32795429_MLA couple weeks ago, San Francisco 49ers quarterback Colin Kaepernick came under intense scrutiny for refusing to stand up during the national anthem. As he plans to continue this behavior during the regular season, it’s unlikely the firestorm will subside anytime soon.

To say the responses to Kaepernick’s actions (or lack thereof) are mixed would be an understatement. To some, his actions are admirable. Others are so offended by his actions they are burning his jersey in protest.

When questioned as to why he chose to remain seated during the anthem, Kaepernick stated that it was his form of protesting what he perceives to be the mistreatment of blacks in the United States. In particular, Kaepernick pointed to the treatment of minorities by U.S. law enforcement.

Upon first hearing about this story I did two things.

A Headline You Won’t See in the U.S.


From this morning’s Irish Times:

Teachers Defy Union Ban on Assessing Their Students

Medicare’s Accountable Care Organizations Still Underwhelm

14742678 - medicare word cloud concept on a blackboard with great termsMedicare’s Accountable Care Organizations (ACOs), which launched in 2012, were supposed to introduce a significant shift away from paying for “volume” to paying for “value.” Critics of Fee-For-Service medicine claim this system causes physicians to do more to patients so they get paid more, notwithstanding benefits to patients. Those critics seldom identify the moral hazard associated with third-party payment (by insurers or governments) as a cause of too many medical tests or procedures.

So, they introduced ACOs, which would increase quality and cut costs by getting rid of straight Fee-For-Service and putting more financial risk on physician groups. If the physician groups pass certain thresholds of cost and quality, they can pocket some of the savings. This doctrine is also embedded in the 2015 Medicare physician payment reform legislation, which committed Medicare to sweeping away most Fee-For-Service payments within a few short years, in favor of new payment models designed by the Centers for Medicare & Medicaid Services.

The 2015 results for Medicare’s ACOs have been reported, and the results are underwhelming:

According to the results, over 400 Medicare ACOs generated more than $466 million in total program savings in 2015, accounting for all ACOs’ experiences. Of these, 125 qualified for shared savings payments by meeting quality performance standards and their savings threshold.

First, if over two-thirds of ACOs (275) did not get to pocket any profits from their participation, they will surely drop out. Second, $466 million is a trivial share of Medicare spending: Less than one-sixth of one percent of Medicare Part B (physician) spending of $279.0 billion and less than one-fourteenth of one percent of all Medicare spending of $647.6 billion.

Instead of maintaining third-party payment and getting rid of Fee-For-Service, Medicare should get rid of third-party payment, let seniors spend their Medicare dollars directly, and let the physicians re-design their payment systems in response to patients’ demand.

* * *

For the pivotal alternative to Obamacare, see the Independent Institute’s widely acclaimed book, Priceless: Curing the Healthcare Crisis, by John C. Goodman.

Gary Johnson Finally Gets Some Media Attention

40593358 - voter registration application for presidential election 2016I am amazed at the lack of media attention Gary Johnson, Libertarian Party candidate for president, has received. He’s polling at about 10%, and despite the huge negative perception many voters have of Clinton and Trump, the media rarely notes that Johnson is a relatively popular alternative.

With much discussion throughout the political spectrum about mainstream media bias, it does look like the media has pretty much chosen to ignore third party candidates. Surely, if Johnson got more media coverage, his popularity would increase. The media is keeping him from being a viable candidate.

But this past week Johnson did get media attention, when in an interview he didn’t know what Aleppo is. Interesting that a candidate who’s polling around 10% gets no media attention until he’s caught in a gaffe, causing the media to jump on him. Considering his lack of media attention so far, this recent attention may actually help him, in that people will perceive that the media is taking his candidacy seriously.

As I noted before, Johnson would not have to get a large percentage of the votes to win the presidency. If he could just get enough electoral votes to keep Trump and Clinton from getting an electoral majority, the Constitution says the House of Representatives would choose the president from among the top three electoral vote recipients. Surely the Republican House would not choose Clinton. It is likely they would choose Johnson, a former Republican governor, over Trump. The dislike many representatives have for Trump is well-known, and they could claim to be making a non-partisan choice if they chose Johnson.

Despite the media’s negative spin, Johnson’s recent media attention could give him more recognition as a serious candidate. If they started covering everything he had to say, the widespread negative perceptions people have of Clinton and Trump could push more votes his way.

A Cantaloupe Illustrates the Key to Prosperity

38451562 - fresh cantaloupe for sale at the marketMy family eats a lot of cantaloupes. We buy them from Lucio, a Mexican man who heroically hauls produce and other goods in his rickety pickup truck three times each week a hundred miles from Bacalar to our house on a wretched road at the extreme limit of the semi-civilized world in southeast Quintana Roo.

Yesterday, as I was about to cut up a melon, I noticed the label, which stated that the fruit had been produced by Pappas Produce in the USA. I immediately recalled Pappas Farms from my boyhood, when I worked in the summers for General Box Company making crates for the shipment of cantaloupes and putting colorful, artistic labels on the end slats. Pappas Produce continues to operate today, as it has since the 1930s, only now with a different, improved shipping technology. (In my day, the melons were graded, packed in wooden crates, loaded into railroad cars, and covered with crushed, blown ice to keep the fruit fresh while it was carried to markets around the USA.)

Pappas’s operation is located in Mendota, California, which is the little town west of Fresno to which my family moved from Oklahoma in 1951. We lived in a labor camp southwest of town for about five months before moving 25 miles up the road to Dos Palos, where my dad had found a better job on another ranch, and three years later we moved again to a ranch about midway between Mendota and Dos Palos, east of Firebaugh, where we lived from 1954 till I left home in 1961.

So, once again, as I enjoy the firm, sweet fruit brought to me thousands of miles from the place where I grew up, I have reason to declare, hurray for the free market. Hurray for private enterprise and enterprising immigrant entrepreneurs. Hurray for open international trade. And hurray for the free migration that allowed George Pappas to move from Greece to the USA in 1914 and, later, allowed my parents to move our family to a place where our economic fortunes promised to be better—as indeed they turned out to be.

EpiPen: A Case Study in Health Insurance Failure

61756232_MLI recently wrote a post describing EpiPen as a “Case Study in Government Harm,” describing how the government had made it possible for the manufacturer to increase prices of the life-saving drug multiple times without fear of retaliation. It is also a case study in how health insurance distorts our choices and increases their cost. I learned this by following an Internet advertisement for EpiPen down its rabbit hole.

The ad induced me to download my “EpiPen Savings Card,” which would ensure I paid nothing for my EpiPens (up to six, according to the ad).


However, I had to answer a skill-testing question first: What was my insurance coverage? As you can see from the screenshot below, when I answered I had no insurance, the EpiPen savings card was figuratively ripped from my hand:

Epipen 2

However, when I answered I had private insurance – Hooray! My EpiPen Savings Card was confirmed:

Epipen 3

This is an extreme example of a coupon strategy used by some drug makers: Immunize the patient from the direct cost of the medicine so the health insurer has to pay a price much higher than the market can bear. Of course, the insurer might get a discount from the list price, but the uninsured patient will never benefit from that.

Further, the above-market price is paid by patients through high insurance premiums, so nobody is really saving money. In Canada, where EpiPen is sold over-the-counter in drugstores to cash-paying customers, it sells for about $80 (U.S.), instead of over $600 in the United States. Much of that price differential is due to our overreliance on health insurance to pay for medical goods.

Shades of Healthcare Future: Irish Government May Fall for Lack of a New Diagnostic Lab

Imagine if the upcoming national election hinged entirely on whether or not San Francisco General were to be provided funding to add a diagnostic lab.

Imagine if one of the candidates, foiled in his efforts until now to get this funding, lashed out at his political opponents with attacks such as:

I don’t want to bring down the Government. But if it takes that, I will have to.

I am not going to be f***ed over by anybody. I don’t care if it is the man on the street or some guy threatening me. And you can print that.

—Again, all over a broken promise to fund one new lab in one hospital.

Yet such is the story now dominant in Ireland.

During our now nearly two weeks in Ireland, the continuing saga over the EU’s Apple tax ruling vies each day for prominence on the front page with one story after another of a total crisis in the provision of healthcare here:

September 8:

Record 530,000-plus Patients on Hospital Waiting Lists
Over 74,000 Waiting Longer Than a Year for Appointments, NTPF Figures Show

—This in a country of 4.6 million people: 11.5% of the population. In the U.S., this would be the equivalent of 37 million people on waiting lists.

September 7:

VHI [Ireland’s State-owned Health Insurer] Warns Soaring Claims Could Overwhelm System
Health Insurer Expresses Concern at Surge in Claims Costs as a Result of Ageing Population

September 5:

Cost of Each Extra Hospital Bed €325,000, Report Finds
Department of Health Indicates Few Funds Available Outside of Planned Big Projects

September 6:

Beaumont [Ireland’s national neurosurgical center] Turns Away Patients in Urgent Need of Brain Surgery
Refusal at Neurosurgical Centre Due to Lack of Beds and Theatre Access, says Clinical Director

This follows on the earlier story:

Most Neurology Patients Wait Over a Year for MRI, Report Claims
Staff Issues and Lack of Beds Lead to A&E Waits, Neurological Alliance of Ireland Says

Meanwhile, in news affecting Northern Ireland, the Junior Doctors union has called off the strike called for this week, after massive protests (April’s strike headline: Hospitals Cancel 12,500 Operations as Junior Doctors Strike). However, “October, November and December strikes will go ahead.”

Last year, The European Court of Justice ruled that Ireland was not violating labor law in assigning junior doctors 24-hour shifts:

Ireland Won’t be Fined Over 24-hour Shifts for Junior Doctors

I don’t know about you, but I’m not sure I’d have a lot of confidence in the judgement of a doctor working her 23rd hour.

Ever since the Apple ruling was announced, speculation has raged that the current coalition government might fall as a result of disagreement over whether to appeal the ruling or not.

Yet, today’s front page bombshell is not the government’s falling over Apple—but over the reneged promise to put a heart specialist lab in a hospital:

September 11:

I Will Rain Hell on This Government

A key government minister—elected by his constituency as the only means by which it is possible for them to get a needed diagnostic lab—is threatening to resign and bring the government down with him following the government’s refusal to put in the lab. The language he employs in his protest makes American politics look positively civil—and all over a matter most Americans can’t imagine dominating their national politics: one new lab for one hospital.

Rather gives pause to think: Is this really the system Americans want to emulate? Or do we simply believe, “It can’t happen here”?

Are you willing to bet your life on it?

9/11 and the Political Uses of Crisis

59086742_MLFifteen years after the September 11th terrorist attacks, we can see that the horrific events unfortunately fit the pattern of other major tragedies. As Independent Institute scholar Robert Higgs has documented so ably in his work (see, for example, here, here, here, and here), the Leviathan State exploits a crisis in order to expand its power. Ironically, the federal government had already intervened heavily in the air transport industry to provide safety prior to 9/11, and we have mountains of evidence that its subsequent takeover of passenger screening has been an unnecessary boondoggle.

Conservative right-wingers fumed when Obama advisor Rahm Emanuel declared that “you never want a serious crisis to go to waste,” but the Bush administration acted on the same tenet after 9/11. The United States government invaded and occupied Iraq, even though the latter had nothing to do with the attacks. (It certainly hadn’t supplied 15 of the 19 hijackers, which U.S. ally Saudi Arabia had done. Also, to forestall angry emails from people telling me I’m naïve for buying the government’s official story: I’m showing that even according to its own narrative the U.S. government’s response makes no sense.)

Yet I’m not an expert on foreign policy or military matters, so let me focus on economics. Specifically, does it make sense that the federal government nationalized airport screening for passengers and luggage?