American Elephants


Peter Orzag Recommends “Taylorism?” by The Elephant's Child

With an economy in crisis, Obama compared it, continually, to the Great Depression,and reached back to FDR’s economics for a solution.  Pelosi and Reid pushed through a huge Keynesian stimulus.  Republicans, completely outnumbered, refused to vote for the $860 billion stimulus.

Republicans tried to explain that Keynesian economics had never worked in the past, that incentives matter, and that the “multiplier effect” was a flawed notion, all to no avail.

Reaching back again to Britain’s establishment of the National Health Service just after World War II, Democrats were just sure that Americans would  love government-run health care as soon as they rammed it through Congress.

The proposed economics of the thing made no sense, but Democrats insisted that they had ways to reduce the costs.  Peter Orzag, President Obama’s former Office for Management and Budget Director wrote an opinion piece for the New York Times on the need for medical malpractice reform.  But tort reform has long been a Republican idea.

His approach has little to do with reform of legal practices. “What’s needed,” he says, “is a much more aggressive national effort to protect doctors who follow evidence-based guidelines.  That’s the only way that malpractice reform could broadly promote the adoption of best practices.”

Of course there are doctors who are not quite up on the very latest, but that is not what Mr. Orzag is talking about.  He has the illusion that “comparative effectiveness research” will deliver the best practice, and that all patients are “average” patients.  Sounds to me like another of those “progressive” ideas that they think are new.  Goes back to the “scientific management” of Fredrick Taylor (1856-1916).

It is impossible to develop single authoritative guidelines for every medical condition, let alone to trust any one entity to suddenly become the sole arbiter of what is acceptable medical practice.  Most improvements in the practice of medicine have  come about because some doctor did not follow accepted guidelines, but saw a better way.

Orzag testified before the Senate Finance Committee that “to alter providers’ behavior, it is probably necessary to combine comparative effectiveness research with aggressive promulgation of standards and changes in financial and other incentives.”  Under the Patient Protection and Affordable Care Act, Medicare will penalize hospitals through reduced reimbursement rates based on their performance on quality measures.

There you go.  This time they’re reaching w-a-a-y back.  Scientific management or “Taylorism” as it was called, said that decisions based on tradition or rules of thumb should be replaced by precise procedures developed after careful study of individuals at work, including time and motion studies.  Fredrick Taylor had  ideas of efficiency that are excellent in the development of specialized machines, but not so much in the control of enterprising, creative, independent, free Americans.

Democrats, or “progressives” as they prefer to be called, like to think of themselves as embracing progress, though they reached back to Woodrow Wilson for that designation. Since they believe that the wise people in government can do a superior job of ordering the affairs of the country, they end up being “control freaks.”

From Obama’s lecturing to the snide remarks of media pundits, examples of their lack of respect for the American people abound.  They love their ideas, and if we were as intelligent as they are, we would embrace them too.  Because their ideas are so good, they don’t need to examine how their ideas have fared elsewhere, nor do studies to estimate how they would work.

So they never realize that their ideas are old, tired and ineffective.



Experience is a Great Teacher, But We Have To Pay Attention! by The Elephant's Child

Getting regulations right is always hard, and usually the fewer regulations imposed, the better.  Some regulation is obviously needed, or we would all crash into each other in intersections.  If budgets are tight, it’s often easier to raise taxes than to cut expenses. That’s why we admire New Jersey’s Governor Christie so much. Legislators who do not adore increased revenue are few and far between.

In January, Oregon voters decided that it was a good idea to raise taxes on (are you surprised?) the rich to increase revenue.  Measure 66 passed 54–46 on January 26, to increase funding for “education, health care, public safety and other services.”  (I’ll bet they said “for the children” too).  It increased the rates from 9% to 10.8 % on single filers earning $125,000 to $250,000 a year, and on joint filers earning $250,000 to $500,ooo.

For individuals pulling down more than $350,000 a year and families making more than $500,000, the rate went up 2 percentage points.  A pure envy tax.

The ballot initiative was pushed by aggressive public employee unions.  The supporters spent $6.9 million campaigning for Measure 66 and for Measure 67 telling voters that 66 alone would raise an additional $472 million.

Envy doesn’t pay.  Tax revenues went down.

Oregon’s revenue forecast predicted that tax collections through July 2011 will come in $577 million short of the budgeted amount, because of lower-than-expected personal income-tax collections.

“Capital will go where it is wanted and stay where it is well treated.  It will flee from manipulation or onerous regulation of its value or use and no government power can restrain it for long.” (Walter Wriston: The Twilight of Sovereignty)

In New Jersey, from 2004 to 2008, $70 billion in wealth left.  Moved.  They fled a tax code that punished success.  Same thing happened in Maryland.  Millionaire tax — they lost one-third of their millionaires on their tax rolls, and tax collections were $100 million less than before the tax was raised.

Governor Christie is proposing a sweeping privatization effort in New Jersey, and vetoed, in May, the legislature’s income-tax surcharge on millionaires, and the legislature could not override the veto. Taxing wealth and productivity may sound like a good idea.  The evidence proves otherwise.




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