The Privacy Competition Myth

In his non-book-review of Garret Keizer’s new book, Privacy, “Reason” Magazine correspondent includes this ill-informed quip on privacy:

With regard to modern commerce, Mr. Keizer grumps: “We would do well to ask if the capitalist economy and its obsessions with smart marketing and technological innovation cannot become as intrusive as any authoritarian state.” Actually, no. If consumers become sufficiently annoyed with mercantile snooping and excessive marketing, they can take their business to competitors who are more respectful of privacy. Not so with the citizens of an intrusive state.

There is almost no market for privacy among merchants. Companies learned long ago that raising privacy as an issue backfires–it causes consumers to worry about it rather than feel safe about an alternative product. Whether online or offline, going to a competitor doesn’t increase your privacy, in real or perceived terms. It’s simply too easy to hide invasive practices from consumers.
Our work at Berkeley shows the folly of simply going to a different site in order to have more privacy. Here’s just one example, in our Web Privacy Census, we did a large-scale survey of popular websites in order to assess mercantile snooping and excessive tracking. Of the most popular 1,000 websites, Google trackers are present on 712 of them. Good luck finding a competitor who is more respectful of your privacy.

There is no There There — Ron Paul's Loud, Thin Base

Writing in today’s Times, Richard A. Oppel asks, “Whatever happened to Ron Paul?”
Ron Paul has fans, in the traditional sense of the word–fanatics. They foam over this small and strange man, whose career in Congress has largely been ineffectual. Thousands go to his rallies, but as Oppel observes, “A Feb. 27 event at Michigan State University drew 4,000 people. But at polling places the next day, Mr. Paul finished third — with 3,128 votes — in Ingham County, where the campus is. Mr. Romney got more than three times as many votes.” Paul’s supporters attribute this to a failure in conveying the urgency to vote.
Paul is emblematic of the larger libertarian movement, if it can even be called that. Paul’s supporters are loud and able to manipulate the levers of public spectacle and the media. They seem omnipresent in Washington, DC, on policy panels and the like, but support for their ideas is not widely shared. In general elections, libertarian candidates routinely capture less than 1 percent of the vote. Perhaps that is a reflection of the power of our two political parties. But Ralph Nader, representing the complete opposite of the libertarian canon, captured over 2% in 2000.
The Ron Paul people remind me of the Lyndon LaRouche supporters who used to plague the Berkeley campus. They typically were good looking young people who would accost others with a message that might be popular on the campus: “Impeach Dick Cheney.” That might be a conversation starter. But once one looks at the spectrum of where that conversation goes–in both LaRouche’s case and in the case of the libertarians–one might be turned off. All sorts of crazy is on parade, from years-long campaigns against global warming, bluster about the stimulus, and hysterical attacks on Obama’s healthcare plan.
One cannot just cause a spectacle and win an election. It takes people, investment, and time. Once one takes the time, invests in people, and actually organizes, one sees that the world is a complex place and perhaps is less likely to vote for the likes of Ron Paul.

The post in which I continue to attack the damn libertarians

Also pissing me off this week is the continuing nonsense from Cato’s anti-universal health care club which is suggesting that increasing health care coverage will lead to an increased number of deaths because of increasing medical errors.

Sack notes that “at least twice as many Americans are estimated to die each year from medical errors as from lack of access to care.” He quotes economists Helen Levy and David Meltzer’s conclusion that there is “no evidence” that expanding coverage would be the best way to improve health and save lives.

If there is no evidence that expanding coverage would deliver the biggest improvement in health for the money, then expanding coverage could actually increase death and disability compared to a superior policy. I’ll be debating Nichols tomorrow at a meeting of the National Association of Business Economists. Should be a good time.

Now, if you want to be a libertarian and think of no one but yourself all the time, that’s just freaking great, but it’s totally different if you’re going to start spreading around this crank nonsense about medical errors being a big bad killer. Inherent is this suggestion is that medical care is of net negative benefit, which is totally absurd. And the Institute of Medicine reports on medical errors are poorly understood as people fail to understand two critical aspects of the studies. For one, much of the medical errors resulting in injury have to do with inpatient care and an inpatient population is a really different beast from the types of medicine we’re talking about with universal coverage. People under universal healthcare won’t go into a hospital, lay in a bed for a few days and get a decubitus ulcer because they suddenly have free medical care. Much of the medical “mistakes” described in these reports aren’t really mistakes by doctors but represent fundamental problems with keeping people healthy in hospitals. Much of it has to do with nursing and support care, spread of nosocomial infection, and clerical errors (the last of which we’re improving on with increased digitization) and affecting a population which tends to be very fragile to start with. This stuff simply isn’t relevant to the type of outpatient care universal coverage seeks to provide.

The second idiocy here is that the type of medicine under a universal health system will hopefully be fundamentally different than what we have now. Currently, doctors are essentially penalized for providing more care, and rewarded by insurance companies for providing less care. There is also completely inadequate support for preventative medicine. Despite these measures to reduce cost we still manage to spend more per capita on healthcare than any other nation, are ranked almost dead last among industrialized nations for provision of care (mostly due to access problems), and have over 40 million uninsured. These facts make a prima facie case for the need to reform our medical delivery system. The current system is unjustifiably stupid economically, and the restructuring of healthcare delivery has the potential to gear medicine more towards better disease prevention, screening, and overall increased quality of care as people are less fearful of being dinged by their insurance company for the crime of getting sick or being diagnosed with a disease.

The third idiocy is to say the reason for universal healthcare is just improving patient outcomes. We’re also trying to prevent people from being bankrupted, whether they’re insured or not, because of medical problems. Even with insurance illness frequently leads to financial distress and even bankruptcy.

I want universal health care because I think it is the right thing to do medically, morally, and economically. Our current system is too expensive, poorly designed for delivery of good medical care, and ultimately is biased against people getting the care they need. If you can fix the system under a free-market approach that will prevent people from being financially ruined by health issues, will cover everybody, encourage the widespread adoption of preventative care and not cost five times as much per capita as any other country’s care, I’m all for it. As it stands what we have is too little care for too much money. The best Cato can do is make the absurd argument that more care = more mistakes. By this logic we should just stop all medical care from being provided if mistakes are such a net negative. If that’s the best the defenders of the free market can do, the free market is in trouble.

Sexism or just idiocy from Cato?

I’m flattered that Pandagon liked our post on a terrible ad campaign for diamonds.

But if Amanda thought that was bad, she should see some of the latest “reason” coming from our libertarian friends at Cato. David Boaz writes a post for Cato entitled “All Those Who’d Like to Live in Rwanda, Vietnam, or Cuba, Raise Your Hands” in response to a Parade article complaining about the lack of female representatives in Congress:

Parade magazine frets:

In the current U.S. Congress, women account for only 16.3% of the members: 16 of 100 in the Senate and 71 of 435 in the House of Representatives. Eighty-four nations have a greater percentage of female legislators than the U.S., including our neighbors Mexico and Canada, as well as Rwanda, Vietnam and Cuba.

It’s not exactly clear that legislatures with more women produce better government. So why, then, as Parade notes, does the United States demand that emerging democracies have gender quotas that we would never accept in our own politics?

After the overthrow of the Taliban in Afghanistan and of Saddam Hussein in Iraq, the United States made sure that when those two countries held elections, 25% of the seats in their legislatures would be reserved for women.

So what do we think people? Stupid? Sexist? Both?

No one in their right mind would read the quoted paragraph from Parade and make the idiotic leap that they were suggesting those governments are better. In fact, it’s a sign of how pathetic it is that our government lacks women that these governments we consider repressive still manage to surpass us in female representation. It’s a little bit like being behind Alabama in adult literacy. Gender quotas, further, are necessary to prevent countries that have deep problems with female equality from oppressing 50% of their population.

Why is Boaz playing stupid with us? He knows full well the purpose and reasoning in both cases. Is there no better argument sexists can use for the promotion of the status quo than the “duh” card?

It is pathetic we don’t have more women in congress because after all these years, almost 90 now since women’s suffrage, we still don’t have anything approaching equal representation in government. We have never elected a female president. Why does it matter? Because as long as moralizing cranks are going to occupy office and make decisions impinging on women’s health, and not men’s we’ve got a problem. When Viagra gets covered by government health programs but contraception is cut, we’ve got a huge problem. When the best solution government can come up with for improving families is covenant marriage, and abstinence education in the face of higher teen pregancy rates, we’ve got a ridiculous problem. Other than just fundamental fairness, recognition of the equality of females, and human decency there are specific instances in which women are having decisions made for them that affect their health and their bodies by a majority male government, and I don’t think that’s a coincidence.

Surely these are arguments for advocating women in government that even an libertarian could understand. I hope we don’t have to dumb it down even more.

Cato is shocked, shocked! To find wait times for care in the US.

The NYT reports on the differing wait times between high-cost cosmetic procedures in dermatology, and low-cost potentially life-saving screenings for melanoma and other skin cancers.

Patients seeking an appointment with a dermatologist to ask about a potentially cancerous mole have to wait substantially longer than those seeking Botox for wrinkles, says a study published online today by The Journal of the American Academy of Dermatology.

Researchers reported that dermatologists in 12 cities offered a typical wait of eight days for a cosmetic patient wanting Botox to smooth wrinkles, compared to a typical wait of 26 days for a patient requesting evaluation of a changing mole, a possible indicator of skin cancer.

Dr. Michael J. Franzblau, a dermatologist in San Francisco, said doctors typically charged $400 to $600 for a Botox antiwrinkle treatment, for which patients pay upfront because insurance does not cover it.

Meanwhile, doctors have to wait for health insurance to reimburse them for mole examinations, for which they receive an average of $50 to $75, Dr. Franzblau said.

What’s then great is to see the “market solves all problems” types at Cato try to wrap their heads around this astonishing instance in which the market doesn’t provide good for all and cute dancing little elves.

With regard to Medicaid, it’s easy to see what’s interfering with the price mechanism: Medicaid prices are set by state governments, and so they don’t change to eliminate shortages (i.e., waits) the way market prices might. The same is largely true of private coverage: those prices are set by insurers, who mostly just track the prices that the federal government sets through the Medicare program

But then why would there still be shortages for patients who come with cash in hand? The price mechanism seems to be working for cash-paying Botox patients, but not for cash-paying ambulatory clinic patients. One possibility is that there might be spillover effects that affect cash-payers in markets dominated by third-party payment and rigid prices. But then wouldn’t we see cash-only ambulatory clinics emerge to capture those customers? If not, that suggested supply constraints to Peter and me.

Oh yeah, it must be the influence of medicare to blame! If it weren’t for the bad influence of those dirty socialists the private insurers would be reimbursing preventative care with gold dubloons!

Or, maybe, just maybe, the market doesn’t provide goods equally between between socioeconomic strata. Maybe, just maybe, people who can afford 600 dollar botox injections receive faster more prompt care than the average schmo looking to figure out what some growth is. Maybe this is a sign that the profit-motive in medicine leads to shortages of care for more important needs and poorer patients as the profitable low-hanging fruit will always be more appealing than dealing with insurance companies and the average peons off the street who may not be able to pay their medical bills.

Cato can blame “markets dominated by third-party payment and rigid prices”, and there is some truth to that, but the bigger problem is that fighting with insurance companies for reimbursement with their “mommy may I” and 10% routine rejection policies is a hassle. It’s just easier to take rich people who want botox injected into their face than practice the routine preventative care that is critical for keeping healthcare costs down. It’s a sign that our medical priorities are screwed up, the private insurance based system is not providing adequate care, and the right type of medicine is being discouraged. It’s also ironic that as much as Cato complains about wait times in Canada (wait times for “emergency” cataract surgery – oh noes!), they aren’t nearly as quick to judge a market systems critical flaws as those of a socialized one.

This is a think tank?

The critical word being “think”. Cato’s Daniel Mitchell writes The More You Tax, the Less You Get . His stunning proof? Cigarette taxes. Wow.

An article in USA Today notes that big tax hikes on tobacco have dramatically reduced consumption of cigarettes. This is hardly surprising. Indeed, politicians openly state that they want higher tobacco taxes to discourage smoking, and their economic analysis is correct (even if their nanny-state impulses are not).

It is frustrating, though, that the same politicians quickly forget economic analysis when the debate shifts to taxes on work, saving, investment, and entrepreneurship. But just as tobacco consumption fell when taxes rose, it is inevitable that there will be less productive activity if statists in Congress follow through on plans to hike tax rates on capital gains and corporate income:

Yes, because working/investment and cigarettes are so alike. People pay for this kind of output?