Make a Difference

Category: Economics (Page 3 of 3)

Building Submarines in Adelaide… Why?

I cannot join in the general rejoicing about the subs being built in Adelaide.

Submarines and other defense requirements should be built so as to provide the best possible equipment for our defense personnel, at the best possible value for Australian taxpayers.

Building the subs in Adelaide will cost an additional $18 billion. That is, at a cost of approximately $15 million per new job in Adelaide.

$15 million per job in Adelaide in additional taxes which have to be extracted from businesses and workers. Which of course means $15 million per job that can no longer be used in private enterprise to employ people, to research and develop and provide new products and services.

To put this another way, each new job in Adelaide in the sub project will cost the jobs of approximately fifteen people employed elsewhere, because the money that would have been used to pay them will now be going in additional taxes to fund make-work in Adelaide.

This is not job creation; it is exactly the opposite.

Or of course, if we were willing to pay the taxes required to fund an extra $18 billion, that would have been enough to buy an extra four subs.

This decision is not good policy. It is economically illiterate, and very poor value for Australian tax-payers.

Green Power, Black Death

That is the subtitle of Paul Driessen’s powerful book describing how Western “green” restrictions on the cheap energy the West demands and takes for granted result in suffering and death in the world’s poorest nations:

It could just as well be the tile of Brendon Pearson’s article “Carefree ignore consequences of limiting supply of fossil fuels” in The Australian a few days ago. This is just a few paragraphs. Read the whole thing.

“The response from green advocates is that the emissions from coal and fossil fuels are different — they can be replaced by renewables. Let’s do the maths. Last year wind and solar ­energy produced the equivalent of nine days of global primary energy needs. Coal produced 109 days and fossil fuels combined produced 313 days of the world’s ­annual primary needs. Despite all these power sources, 1.3 billion people still missed out on electricity and a further 1.7 billion only had partial access.

To put this problem into context — the energy used by Christmas lights in the US in an average festive season is more than the ­national electricity consumption of many developing countries, such as El Salvador, Ethiopia, Tanzania, Nepal or Cambodia.

Halting or limiting coal or fossil fuels output will simply mean that those with no or partial access to electricity would have to wait much longer in the dark.

That is an uncomfortable but incontrovertible fact. If you limit something or make it more expensive to the poor then you are delaying or denying that access. Not just for weeks, months or years, but generations. Hundreds of millions of people will live shorter, more miserable lives as a result of the choices of the comfortable and warm.”

That is it exactly. The cost of cozy green self-righteousness is that hundreds of millions of people will live shorter, more miserable lives.

Why Socialised Medicine Does Not Work

I don’t usually copy and paste entire articles, but this, by John Stossel on his hospital experience, is just too accurate to ignore:

I write this from the hospital. Seems I have lung cancer.

My doctors tell me my growth was caught early and I’ll be fine. Soon I will barely notice that a fifth of my lung is gone. I believe them. After all, I’m at New York-Presbyterian Hospital. U.S. News & World Report ranked it No. 1 in New York. I get excellent medical care here.

But as a consumer reporter, I have to say, the hospital’s customer service stinks. Doctors keep me waiting for hours, and no one bothers to call or email to say, “I’m running late.” Few doctors give out their email address. Patients can’t communicate using modern technology.

I get X-rays, EKG tests, echocardiograms, blood tests. Are all needed? I doubt it. But no one discusses that with me or mentions the cost. Why would they? The patient rarely pays directly. Government or insurance companies pay.

I fill out long medical history forms by hand and, in the next office, do it again. Same wording: name, address, insurance, etc.

I shouldn’t be surprised that hospitals are lousy at customer service. The Detroit Medical Center once bragged that it was one of America’s first hospitals to track medication with barcodes. Good! But wait — ordinary supermarkets did that decades before.

Customer service is sclerotic because hospitals are largely socialist bureaucracies. Instead of answering to consumers, which forces businesses to be nimble, hospitals report to government, lawyers and insurance companies.

Whenever there’s a mistake, politicians impose new rules: the Health Insurance Portability and Accountability Act paperwork, patient rights regulations, new layers of bureaucracy…

Nurses must follow state regulations that stipulate things like, “Notwithstanding subparagraph (i) of paragraph (a) of this subdivision, a nurse practitioner, certified under section sixty-nine hundred ten of this article and practicing for more than three thousand six hundred hours may comply with this paragraph in lieu of complying with the requirements of paragraph (a)…”

Try running a business with rules like that.

Adding to that is a fear of lawsuits. Nervous hospital lawyers pretend mistakes can be prevented with paper and procedure. Stressed hospital workers ignore common sense and follow rigid rules.

In the intensive care unit, night after night, machines beep, but often no one responds. Nurses say things like “old machines,” “bad batteries,” “we know it’s not an emergency.” Bureaucrats don’t care if you sleep. No one sues because he can’t sleep.

Some of my nurses were great — concerned about my comfort and stress — but other hospital workers were indifferent. When the customer doesn’t pay, customer service rarely matters.

The hospital does have “patient representatives” who tell me about “patient rights.” But it feels unnatural, like grafting wings onto a pig.

I’m as happy as the next guy to have government or my insurance company pay, but the result is that there’s practically no free market. Markets work when buyer and seller deal directly with each other. That doesn’t happen in hospitals.

You may ask, “How could it? Patients don’t know which treatments are needed or which seller is best. Medicine is too complex for consumers to negotiate.”

But cars, computers and airplane flights are complex, too, and the market still incentivizes sellers to discount and compete on service. It happens in medicine, too, when you get plastic surgery or Lasik surgery. Those doctors give patients their personal email addresses and cellphone numbers. They compete to please patients.

What’s different about those specialties? The patient pays the bill.

Leftists say the solution to such problems is government health care. But did they not notice what happened at Veterans Affairs? Bureaucrats let veterans die, waiting for care. When the scandal was exposed, they didn’t stop. USA Today reports that the abuse continues. Sometimes the VA’s suicide hotline goes to voicemail.

Patients will have a better experience only when more of us spend our own money for care. That’s what makes markets work.

Veges Rule!

This image has been floating around Facebook for the last few days:

veges

Prompting various responses:

response

Here’s the mind-blowing argument: “If we each grow a large crop of different food, we could all trade with each other and eat for practically free.”

Where to start?

Well, for one thing, growing your own food isn’t exactly “free,” not even “practically free.” As anyone who has his own vegetable garden knows, it requires seeds, fertilizer, irrigation, weeding, protection from insects and birds and animals, and a lot of work. The cost may not all be measured in monetary terms, but it isn’t free. In fact, it’s notoriously easy for a vegetable garden to end up costing more money than it saves, which is why most of us do it just as a hobby.

But let’s not pick this apart. Let’s take the idea seriously. Hey, what if we all became small farmers and traded with each other? As they say on the Internet: you’ll never guess what happened next.

Maybe instead of everybody growing the same things, we could all produce what we’re best at and trade with others for what we need. We could come up with a catchy name for this, like “division of labor.” And we would need somewhere to exchange these goods with each other, which we could call a “market.”

Maybe we could get even more specialized. Some people could devote themselves just to growing young plants in greenhouses in the spring for others to plant when the weather gets warmer. Or they could provide seeds for other people to use, or breed hybrids with better yields or other desirable characteristics.
Maybe some crops would grow better in different areas, or at different seasons.

And maybe some crops would grow better in different areas, or at different seasons. I’ll bet you can’t grow blackberries in the middle of winter, but there are other areas of the country, or of the world, where these things still grow even when they won’t grow in your front yard. Maybe you could trade with people who live in those places.

Still, crops come ripe at different times, so maybe we need a system where I can trade my spring harvest of peas for somebody else’s fall harvest of pumpkins. Maybe we could write this all down on little pieces of paper which we pass between us to make trades. Has anybody ever thought of that?

Go read the whole hilarious article at The Federalist.

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