Two Truly Craptacular Ideas from the State of the Union
Health Savings Accounts + High-Deductible Insurance
The President proposed a plan for "Health Savings Accounts" where you could save money tax-free to spend on your health care as long as you get a high deductible insurance plan. The argument is that forcing people to pay more for health care will cause them to make wiser choices when purchasing medical procedures. The hope is that the invisible hand will then make medical care in the U.S. more efficient. Given that we spend a greater percent of our GDP on healthcare than any other industrialized nation and don't get better results, this seems like a laudable goal.
But, of course, capitalism doesn't work very well in the absence in of readily available, transparent information about the costs and quality of products and the ability to pick and choose between them. Going to the hospital is not like remodeling your house — it's hard to know how much it will cost ahead of time (like, say, before you've been diagnosed) and once you're receiving treatment, it's sometimes difficult to switch to another vendor. I heard one flak say Bush's plan was great because it will allow people to choose "alternative" healthcare. Hmmm. Couple this with people's tendency to put off preventative care because it costs more upfront and it's not at all clear that this will actually make health care more efficient.
The only sure winners in this scenario are the banks, who will manage health savings accounts, and employers, who will have an excuse to move their employees into health care plans with lower premiums.
It also seems likely that this will remove rich healthy people from the insurance pool (poor sick people won't be able to afford to make the switch to HSAs — remember you have to be able to save money to put money in a health savings account) which kind of defeats the point of insurance.
Not to mention these tax-free accounts help make the tax code more regressive because people in higher income brackets perversely end up saving more in taxes, than those in lower brackers, who, presumably, need more help paying for healthcare.
It seems like a great idea in theory — use free market voodoo to make stuff more efficient! — but it seems unlikely to work very well in practice.
Getting Better Educated Tech Workers by Removing Educated Tech Workers from the Workforce
The Bush Administration is increasingly worried about ensuring the continued dominance of the United States in the technology sector in the face of rising science and math test scores in India and China. Whenever this issue comes up a small part of me wants to scream "Well maybe if you encouraged teaching science in the classroom instead of religion we might be a little bit better off. Maybe if you stopped demonizing scientists and progress more students might decide to go into science." But it seems they think the fundamental problem is a lack of qualified science teachers. Bush apparently considered paying for most of the tuition for college students who study math and science if they, in return, agree to teach in public schools for five years — but he rejected this approach because it would be too expensive. Instead, he proposed to provide financial incentives to get workers in the math and science-related fields to leave their jobs in industry for a while and teach in public schools. A wise plan, methinks — surely the best way to ensure we have a well-educated tech industry workforce is to lure well-educated tech industry workers into another sector. My guess is the original plan was scrapped not because of its cost ($12B is a lot of money, but it would be spread over 5 to 8 years and would pay dividends for 30+ years) but because they didn't like the idea of 70,000 new unionized public sector workers. The new plan will cost only $380 million and will also try to train existing math and science to teach AP classes.
More teacher training is good, I guess, but I don't see it solving our long term competitive advantage problems. What it really boils down to is "Anything we can do, they can do cheaper." And once they can do it in a way such that it's not so-crappy-as-to-be-unusable the WalMart effect takes over and everthing becomes cheap, crappy, and not produced in the United States (see, e.g. Consumer Electronics).
It seems like a no-brainer to try to take advantage of our current monopolies content creation and in basic scientific research. The content creation monopoly will take care of itself, of course, as we are in the enviable position of creating demand simply by virtue of providing supply. But the science side is more problematic. I think we should make basic scientific research and productizing that research to fundamental goal of our economy. There's serious money to be made in materials science and biomedical research. We shouldn't have look to Asia for the next great great wonder alloy or the latest revolutionary medical procedures. These are going to be disruptive technologies — they will surely transform the world in the next three or four decades. We need to own those industries. We've been milking the status quo for all it's worth, but this can't last forever. Something's gotta give.
I can't help but think that we'd be better off if our current leaders weren't so afraid of progress (see Bush's hilarious reference to human-animal hybrids).
I can't help but think we'd be better off if our current leaders spent their energy getting the best and brightest from those brown countries to come here rather than trying to keeping them out. It makes no sense to allow people to come here to get PhDs only to force them to leave when they're done — we should be doing everything in our power to convince them to stay and join our research establishment. We just paid for their education, afterall — we might as well get something out of it. The sheer idiocy of the racists who are designing our immigration laws is mind-boggling.
We've got serious structural problems. Somehow I don't think teaching more AP Calculus is going to get us through this one.