Hilary’s Universal Health Care:

Do you buy it?

"We're going to have universal health care when I'm president — there's no doubt about that. We're going to get it done".

Hilary’s “universal health care” seems to attract much attention lately. Too bad that it includes no more details of the plan yet:

"The reason she hasn't 'set out a plan and said here's exactly what I will do,' Clinton said, is that she wants to hear from voters what kind of plan they would favor. "

We already discuss in class that Medicare/Medicaid are kind of most expensive part of U.S. Budget, and how to pay for this Universal Health Care?

"'We're going to change the way we finance the system by taking away money from people who are doing well now,' she said. Asked who that was, she mentioned insurance companies. "
"We're going to take things away from you on behalf of the common good. "

Obviously quite a lot of American people regard it unacceptable because of violation of liberty and freedom or a socialist act. I am surprised. I think it is wasting time to discuss the institution and freedom thing when to open up such a policy. If we want to do something really good for the society, why not just focus on how many people are going to benefit from it and how good it does to the society. A policy failure might not necessarily be the failure of the policy itself but one because of biased obstructions.

Quotes from:

http://www.hillaryforpresident-2008.com/
http://news.yahoo.com/s/ap/20070326/ap_on_el_pr/clinton_health_care;_ylt=Ak6Vm1wjV2NAKcU8CSeDW8nMWM0F
http://news.yahoo.com/s/ap/20070324/ap_on_el_pr/democrats2008

Hug a Hummer

This study came up yesterday in class. If you are interested in reading about it click here.

This commentary of a study done on the energy efficiency of hybrids comes from the Reason Foundation. www.reason.org

Politics Meddling with Markets

I just read an article that describes how officials in San Francisco recently voted to ban plastic shopping bags.

It is another classic case of elected officials working to impose what they think is best on their constituents. Would an incentive to return shopping bags or use cloth bags have been better? Or does SF really need to wage a "war" on plastic bags?

Logan City and Power Decisions

It is interesting to consider the reasons behind the recent decision by Logan City Council to not buy into IPP3 power plant in Delta Utah. More than anything this policy decision seems to be driven by a relatively small group of very vocal citizens who were able to dominate the agenda and who rather than providing actual facts hopped on the recent Global Warming band wagon. The power from IPP3 is going to be produced and used, we've found the power from earlier phases of the project to be both reliable and cheap.

The alternatives presented are expensive and not fully developed yet, the geothermal proposal is still just that a proposal and there seems to be some hope that it will be viable but that is far off in the future.

It appears that policy is being made on emotion in this case and not on objective facts.

This letter is from Logan City Power and Light.

To: Logan City Light and Power CustomersFrom: Jay Larsen, Light and Power DirectorDate: March 23, 2007Re: Council Decision to Reject IPP 3
In the Council Meeting on March 20, 2007 the Logan City Council voted 3-2 to reject our participation in the future IPP Unit 3 Project. The Council Chambers was filled with advocates of the Sierra Club and other environmental groups. There were very few attendees that spoke in support of the project.
When the motion to reject IPP 3 came up, Council Woman Tami Pyfer, suggested a 10 MW participation level as a compromise position. Steve Thompson supported that idea but they were out-voted by the other 3 Council Members. Steven Taylor, Joseph Needham and Laraine Swenson all voted to reject IPP 3 in favor of yet to be proven options.Logan has been studying this power supply option for several years. Logan and the other participants have invested several million dollars and several years performing air quality studies, and complicated contract negotiations with the owners of The Intermountain Power Project Units 1 & 2 (IPP 1&2). It is anticipated to take 5-6 years to complete the construction and bring the unit on line.
The Intermountain Power Agency (IPA) received its approval order from The Utah Division of Air Quality (UDAQ) in October 2004 to proceed with the construction of the project. This project meets the EPA and Utah Division of Air Quality (UDAQ) rules. The Sierra Club and Western Resource Advocates appealed the decision of UDAQ to issue the Approval Order soon after it was issued. We must now go back and reiterate the issues brought to the UDAQ by the environmentalists. We do not expect the UDAQ decision to change. We have substantial data generated by reputable engineers. It will add additional cost and time to reiterate our position.
The IPP Unit 3 Project was originally designed to be a sub-critical boiler design with Selective Catalytic Reduction and Ultra Low NOx burners. This design was changed during the study phase to include a super-critical boiler design that is even more efficient and will produce fewer emissions than the original design. This project will be one of the cleanest coal plants ever built.
We have a contract to purchase 10 MW of power from the Bonanza Power Plant near Vernal, Utah that expires in 2015. 10 MW of IPP 3 would only replace that power and still leave us with room for other options, if they become available. Reducing our participation is a compromise position.
Logan’s current portfolio contains hydroelectric, wind, natural gas, firm contracts and coal power. It was the hydroelectric and coal power that sustained the recent power crisis without sharp price increases. All of the other power supply options were affected radically by insane market conditions.
I believe the recent political movement to reduce greenhouse gasses and switch to “green-power”, that was very effectively conveyed by the Sierra Club advocates, was a major influence on the recent Council decision. While I believe we need to move in that direction, I do not believe it is wise to totally abandon a proven, reliable option at this time.
The latest cost estimates I have of alternative power supply options are all higher than the proposed Unit 3 project. Wind power is currently priced at about $65 / MWH. Solar power costs in excess of $100 / MWH. Geothermal power could be produced for as little as $75 / MWH, with pressure from political market conditions driving prices higher. Our latest proforma of the IPP 3 costs are $49 / MWH in 2013, when the plant could be on line.If we purchased 10 MW of Geothermal at $75 / MWH instead of IPP 3 at $49 / MWH it would increase our overall power supply costs by about $1.5 million or 6.2% of our annual power supply costs. If we purchased 20 MW of Geothermal it would increase our overall costs by about $3.5 million or 14%. I think this is too high a price to pay for a small utility.
During the 2000-2001 California Power Crisis we lost our system reserves. We had about $10 million in reserve and ended up $3.5 million in the red. We had total losses of about $13.5 million due to extreme market conditions. Firm power supply is a hedge against these types of problems.
Logan is also in the process of upgrading our local transmission system. We need to upgrade our existing 46 kV transmission system to a 138 kV system to meet our growing demand. Our current plans are to bond for the first phase of the conversion at a cost of about $6,000,000. This first phase would build the first phase of new 138 kV power lines and convert the first two substations to 138 kV. This would get us past a critical phase and we could then convert the other fours substations over time without additional bonding, if we have the funds available. Without this upgrade our system cannot meet our growing demand. If we spend all of our available funds pursuing green power we may need to bond for as much as $12,000,000 or more to complete the upgrade. This will add additional debt load that may not have been necessary.
Our current upgrade plan would allow us to continue to provide reliable system capacity while incurring affordable debt. The annual cost of opting for 10 MW of Geothermal versus IPP 3 is about the cost to convert one substation to 138 kV. I think it makes a lot more sense to move into renewable power options in smaller affordable increments.
We are a member of the Utah Association of Municipal Power Systems (UAMPS). UAMPS has 49 other public utility members in the region. UAMPS is buying 450 MW of the 900 MW IPP 3 project. Members sign up for the amount that meets their individual needs without taking on the entire risk. This provides economy of scale while allowing members to meet their individual needs. We are currently buying 2 MW of wind power with this type of arrangement. Early discussion with UAMPS about the proposed geothermal option indicates that UAMPS could take up to all of the output of the proposed geothermal project, depending on the other members desire and the viability of the project as it emerges. This approach reduces our risk of a yet to be determined project.
In my opinion 10 MW of IPP 3 balances the environmental issues with long term price stability, while 0 MW of IPP 3 leaves us too vulnerable to future market pricing conditions. With no additional base load power our current forecast shows that we will begin to have a shortfall of base load power supply beginning in about 2018 to 2019. This base load deficit will increase with time.
Although the council voted down our participation in IPP3 at last week’s meeting, we could still participate if that decision is changed. If you feel strongly about this issue, I urge you to contact council members Laraine Swenson, Joe Needham and Steven Taylor and ask them to place this resolution back on the council agenda at one of the two April meetings, and urge them to support the compromise position of a 10 MW participation level. Please let them know how increased power costs will impact your businesses. I don’t believe the council members received any input from our large power customers before this vote, and so perhaps your contact can make a difference.

Wind Power and Water Power:

So Happy Partner Together

Wind power is known of many fine attributes as a power source, but steady predictability is not one of them. Water power, on the other hand, is often highly controllable. Proponents of wind in the Northwest say it is a match made in heaven, and here is the article.

Lowering Physicians Wages to Reduce Healthcare Costs

Now that we all understand something about healthcare policy (thanks Bobby), albeit superficial, I thought some of you might be interested in this post from Marginal Revolution. Click Here

At the end of his post Cowen states that first step in reducing healthcare costs in the U.S. is to reduce doctor’s salaries, by allowing a greater number of qualified foreign doctors practice in the U.S.

If wages are lowered won’t better qualified potential med-school candidates go someplace else, leaving us with less qualified doctors? What do you think?

P.S. the rest of the post on the French healthcare system is interesting as well.

Technology

F. Hayek in The Constitution of Liberty, talked about the importance of knowledge and freedom, by which he means the absence of coercion, to progression. He would favor what Postrel called a “dynamists” intellectual point of view which advocates the limiting of “universal rule making to broadly applicable and rarely changed principles, within which people can create and test countless combinations”. It is freedom, the use of knowledge and the general absence of structure that allows for capitalism to progress and expand.

But Hayek wrote his book during the 60s when technology was not as fast-paced as it is today. In class a few weeks ago, it was mentioned that we are having a hard time keeping up with technology. So I wonder if Hayek would still think a dynamists point of view regarding progression and capitalist expansion is a good idea. Or maybe he would at least favor a more constrained dynamist or even a stasis intellectual point of view. As Postrel explains, “. . . modern society changes very rapidly owing to technological change. Thus there is no stable framework. . . . The technophiles are taking us all on an utterly reckless ride into the unknown”.

How much progression do we need or how long will it take us to decide whether we are comfortable enough with regards to our standard of living? Where are we going with all this technological progression? Have there been any policies advocated with regards to slowing society down?

http://isi.org/lectures/text/pdf/lawler8-6-04.pdf
http://geocities.com/Athens/Olympus/5599/philosophy/technology.html

Private Schools Refuse Vouchers

The Utah State Legislature expanded its school voucher program this past legislative session. Now there are private schools in Utah that are refusing to accept state vouchers. They're worried that if they accept state funding in the form of vouchers they will fall under state regulation over time.

Tyler Cowen of the blog, Marginal Revolution includes the above stated concern in his posting “My worry about vouchers.”

Cowen has some interesting concerns that are not often expressed or popularized about voucher programs. It is worth taking a look at.

Smart Boys, Bad Grades

I found a very interesting article in today's desert news.
The article covers the gender gap between girls academic performace and boys. Female students in High School hvae 37% higher GPAs than their male counter-part. The article brings a different perspective to this issue than the traditional wisdom. The traditional wisdom is that boys are lazier and do not complete their assignments. This article argues that elementary, junior high and high school teachers are generally female and they women teachers have the tendancy to inadverntently teach in methods that are more conducive to female learning attributes. The article talks about how males and females learn in different ways and boys needs are being met. Male test scores and female test score still remain virtually the same. The problem is that students are graded by behavior that has nothing to do woth what they are learning. The article argues that boys understand the concepts so they don't want to do "busy work". Opponents argue that boys will not learn accountability. However when placed in jobs, males generally still complete assignments and arrive at to work on time. Males do not see the incentive at school.

The article has a link to an interesting study that covers in far more details the needs of boys in educational setting. I went to the website and read most of the material and found that it made sense to me.

Here is the link.

http://deseretnews.com/dn/view/0,1249,660204566,00.html

More questions about world poverty

Previously I have addressed the problem of world poverty. For another class we are reading the Constitution of Liberty, by Friedrich Hayek, and I thought his point of view about poverty was very interesting. First of all, Hayek addresses progress and the notions of inequality. In essence, he claims that progress demands inequality, and as the upper class moves up, so does the lower class. In other words, the lower class benefits from the upper class’s advancement. As I read this, it seemed true that although there are large divisions between the West and other poorer countries, as the West advances, those poor nations do as well.
Therefore, like we talked about in class, Hayek would agree that poverty is an endless, necessary cycle. I had never really looked at addressing poverty like that before, and realized that it does make a lot of sense. Although there are many underlying issues that people would raise regarding the wealthy, such as the wealthy are not necessarily the innovators, they just finance the innovations, it is obvious that the problem of poverty does not come with an overt answer.
Another important aspect Hayek looks at is the utilization of knowledge, and that wealthy countries are wealthy because of their use of knowledge. Therefore, could the division between wealthier and poorer countries be lessened through more education? If wealthy nations funded more educational programs and helped generate more knowledgeable institutions, could poorer nations close the divide somewhat?

The Global Inferno is Everywhere

I read in a recent issue of SKI that banks in Europe and the U.S. will not give loans to ski areas that are below 5000 feet. This recent financing restriction is a direct result of global warming. Its mind blowing that the fears of global warming are percolating into all aspects of society.
Ask Bob how global warming is changing the sex industry.

Bono loves Africa or Himself?

Once again from Tyler Cowen:

Advertising Age calculates that around $100 million has been spent blanketing billboards and magazines with images of Bono and other "celebrities", while the total sum raised for Africa is $18 million.

Just to be clear... Total spent on making Bono more famous = $100 million.

Total spent on drugs for Africans = $18 million.

Here is the link,

I had a professor in graduate school who often talked about cloaking private interest in public interest. Is this a case of Bono and others cloaking their personal advertising in a cloak of concern for Africa? I prefer models that assume self interest is the prime mover over models that assume people are stupid. If we reject the self interest model in this case are we really just left with stupid, stupid, stupid?

Policy re Africa?

At www.marginalrevolution.com Tyler Cowen posted the following:

Africa

Tyler Cowen

A loyal MR reader asks:

Africa. What are your long term predictions? Which policies should rich countries adopt? Which will they adopt? What can I do?

My long-term prediction is that Africa will stay quite poor. Rich countries should offer Africa complete free trade, but the benefits of this move are overrated. Low productivity, and transport costs and corruption within Africa remain the central problems, not foreign tariffs.

Libertarians are too quick to say that foreign aid is counterproductive. Most African governments would be corrupt anyway, and there is usually some positive trickle-down from the aid. The wastage is massive, and I can understand the desire to stop sending government-to-government aid, but there is a real moral dilemma.

I also think most of Africa is in a Malthusian trap. That is perhaps the better critique of aid, but alas also of trade as well. But even within this trap, wealthy foreigners can help make the transition from one steady state to another less painful. And the trap need not hold in every local corridor. Plus we are offering a lottery ticket (with what p?) out of the trap. Malthus doesn't mean we should turn our backs on suffering.

The intellectual property issues, when it comes to copying drugs, involve an irreconciliable clash between rule and act utilitarianism.

Africa is a much bigger moral dilemma than most people are willing to admit. And that moral dilemma appeared pretty big in the first place.

I see some chance that parts of Africa, such as Ghana and Senegal, will escape the Malthusian trap within twenty to thirty years. That's the most positive prediction I am willing to make.

You can do some good if you are willing to directly administer medical treatments to Africans, in Africa.

Here is an interesting bit:

“Thinking about problems analytically can easily suppress sympathy for smaller-scale disasters without, our research suggests, producing much of an increase in caring for larger-scale disasters”, the researchers said. "Insight, in this situation, seems to breed callousness".

Power Grid

I've been thinking about the idea we discussed in class that the natural monopoly does not lie in providing power, but in the grid (infrastructure) system.

I really like the idea of allowing people to purchase power from wherever they want, and that power would be put into the gird, and the consumer won't necessarily be using the power they purchased, but they would be using the amount of power that was put in.

I think this could create great incentives for people to understand where their power comes from. It would also allow the consumers choices in how environmentally friendly their power is. They could have the opportunity to pay more for their power, if they wanted to use more expensive, green or sustainable power sources. Giving the consumer choices is a good thing. (Although most would care most about the cost of their power above anything else, but this would allow those celebrities talking about the Green Oscars pay to have their consciences cleared, while using green power in their over-sized multipe houses).

Al Gore and carbon offsets

Check out this story from the economist (read the part at the bottom).

It seems, from recent news stories, that Al Gore's concern about global warming may not be as sincere as he suggests. The more important part of the story, however, is how the market for emissions offsets has developed. You can, for a price, pollute as much as you want (like Gore) and purchase offsets that represent others' carbon privation.

The only problem is that, like in many other markets, there is an information problem. Many companies may be purposefully using high-pollution technologies so that they can capitalize on potential rents from carbon offset firms. In fact, carbon offsets may actually discourage firms from utilizing green technologies on their own.

Lastly, for those of you who love The Big Lebowski as much as I do, remember the words of the Dude: "You look for the person who benefits, and there they are." In other words, it's very interesting that Al Gore touts carbon offsets and green technologies when he is so heavily invested in the firms that are providing them. In reality, he is no better qualified to talk about the 'inconvenient truth' of global warming than George Foreman is to objectively compare grilling machines.

regulation topic

Hello.

I have chosen to evaluate the regulation of International Securities issues for my paper and op ed. This is a tabled issue due to the complexities within the market of international securities. It appears that speculation in international markets does have an immediate impact on the trading taking place in the US, however, these trades are not subject to US regulations.

If anyone has any information on this issue which may help me to determine the finite details and identifying the gamut of potential 'holes' involved in international securities regulations, I would appreciate any insight.

Thank you,

Beth Ann