The efficiency of the private sector

Via Priceonomics:

In 2004, UPS announced a new policy for its drivers: the right way to get to any destination was to avoid left-hand turns. ...

When better tracking systems emerged in 2001, the package delivery service took a closer look at how trucks performed when delivering packages. As a logistics company with some 96,000 trucks and several hundred aircraft, much of UPS's business can be distilled to a series of optimization problems around reducing the amount of fuel used, saving time, and using space more efficiently. (Trucks in UPS facilities park just a few inches apart with their side mirrors overlapping to save space.)

UPS engineers found that left-hand turns were a major drag on efficiency. Turning against traffic resulted in long waits in left-hand turn lanes that wasted time and fuel, and it also led to a disproportionate number of accidents. By mapping out routes that involved "a series of right-hand loops," UPS improved profits and safety while touting their catchy, environmentally friendly policy. As of 2012, the right turn rule combined with other improvements... saved around 10 million gallons of gas and reduced emissions by the equivalent of taking 5,300 cars of the road for a year.

It probably says a lot about me that I find this extremely cool. I love it when someone comes up with a better way to do something we've been doing the same way for years.

I also love pointing out that it's invariably in the private sector that these innovations emerge. Private companies exist to make a profit, and so they have a huge incentive to figure out more efficient ways to do things. Rethinking these types of things saved UPS a ton of money. That's not only good for their bottom line, but good for consumers as well, as it allows them to keep their prices very competitive.

Contrast this to the Unites States Postal Service, which operates in the red to the tune of a billion dollars a year. The USPS has little incentive to be efficient. It's not their money, and the people who run it aren't really answerable to anyone, so there's no real reason to seek out better and cheaper ways of moving packages.

UPS is able to make money because they provide a superior service. Their continued existence depends on their continuing to provide a superior service. The USPS continues to exist because tax payers are forced to fund it, and because federal law makes it illegal for companies like UPS to deliver first class mail. Who has the best incentive to, er, deliver the best service?

Out of desperation, Obama makes the conservative case

Last week, President Obama gave an interview to Spanish-language media. In a question from the audience, a man observed that he can't afford the plans available to his family under ObamaCare. Obama's response is interesting.

I guess what I would say is if you looked at that person's budget, and you looked at their cable bill, their telephone bill... other things that they're spending on, it may turn out that it's just they haven't prioritized health care.

What is interesting is that this is a fundamentally conservative argument. The notion that individuals are responsible for their own needs, and that they must prioritize and make informed choices about what is best for them is not something we hear from the Left very often.

If only Obama actually believed this and championed policies that were grounded on this philosophy. We would be spared programs like ObamaCare, Common Core, minimum wage laws, "stimulus" bills, and the rest. All these programs are founded on exactly the opposite premise: that the needs of every person and family are the same, and that only a few Really Smart People in Washington know what those needs are, how they should be provided, how much they should cost, and how much you should be fined if you don't do as you're told.

The truth is, Obama doesn't believe the things he said in the interview. He only said them because they were convenient. When confronted with the on-the-ground reality that the "Affordable" Care Act isn't actually affordable, he adopted an argument his opponents have been making all along for why ObamaCare is a bad idea: Everyone's circumstances are different. They know their circumstances better than anyone else. And so they need as much freedom as possible to prioritize and make the choices that are best for them and their families.

Second hand stupidity

LA Times:

The Los Angeles City Council on Tuesday approved sweeping new regulations that would treat e-cigarettes like conventional cigarettes, after one of the most personal debates to be heard on the council floor in years.

On a 14-0 vote, lawmakers outlawed "vaping" -- the practice of inhaling the vapors produced by e-cigarettes -- in most work sites and many public places, including parks and certain beaches.

The Nanny State strikes again.

As far as I'm aware, e-cigarettes are completely harmless. They pose no health risk to the people using them or to anyone around them. Those who smoke actual cigarettes find e-cigarettes a helpful aid when trying to quit. Yet they are now banned, even in many outdoor spaces, in the city of Los Angeles.

Much like the gun-Nazis in government schools who are suspending kids for wielding fingers and pastries because they resemble guns, the tobacco-Nazis must purge the Earth of anything that resembles a cigarette -- even if it actually benefits those who wish to quit the very malady they oppose.

That this law war passed on a 14-0 vote is perhaps the most disturbing of all. Apparently, not one of the city council members was willing to stand and defend individual freedom, which should include the freedom to make poor personal choices, but now doesn't even extend to the freedom to make good personal choices which might indirectly encourage others to make poor personal choices. This is a trend that will not end well.

Apparently, one of the members did make a gesture toward minimizing the council's usurpation of personal freedom, but when his amendment failed, he voted for the measure anyway. An admirable display of courage, that.

Buscaino introduced an amendment to allow bars and nightclubs to be removed from the new regulations. But his measure received only six votes -- two shy of the amount needed for passage.

E-cigarettes “are not tobacco,” he said. “And I don’t think they should be regulated exactly the same way.”

Here's a thought. How about they shouldn't be regulated at all?

Any suggestions for a new line to close out the national anthem?

Think it over, then do as you're told

Washington Times:

The Obama administration announced Wednesday that it would allow insurers to issue until October 2016 health plans that do not meet Obamacare regulations, pushing back another Affordable Care Act deadline well past November's midterms.

Facing the prospect of another wave of cancellation notices this fall, the administration took even further action to mitigate the blowback from President Obama's broken promise that all Americans could keep their health care plans under Obamacare.

Not long ago, congressional Republicans attempted to pass legislation which would have made changes to ObamaCare. Obama fought this legislation, insisting that ObamaCare is "settled law." This made no sense, of course, since Congress has the constitutional authority to pass new laws. A law is only "settled" until Congress says it's not. (The president has veto power, of course, but the point stands: there is no such thing as settled law as Obama would have it.)

Since then, Obama has made dozens of changes to what he insists is "settled law," all without these changes being first voted on by Congress. The president has no authority to make or change laws on his own, which means that in addition to being a liar and a hypocrite, Obama has repeatedly violated the oath he took to uphold the Constitution. In a sane world, he would be impeached for this, but we don't live in a sane world.

As the Times article suggests, this latest change, allowing insurers not to obey "settled law" until after the 2016 presidential election, is politically motivated. Democrats own ObamaCare, and they can't afford to have millions of cancellation notices sent out prior to a big election. They say otherwise, of course, but the rationale they give is completely transparent:

“We’re extending this to give people an opportunity to make a judgment about what works best for them and their families,” a senior administration official said, briefing reporters on the major policy change.

Let's walk this through. The law, as written, automatically cancels the insurance policies of millions of Americans and forces them into policies the government says they must have. People are upset about this, as Obama repeatedly promised them the law would do no such thing. ("If you like your health care plan, you'll be able to keep your health care plan, period. No one will take it away, no matter what.")

So now comes this delay, pushing the betrayal of that promise up past the 2016 presidential election. And the reason given is "to give people an opportunity to make a judgment about what works best for them." But what will happen after people make that judgement? The government will ignore it, cancel their policies, and herd them into ObamaCare policies anyway! 

We'll give you a little time to decide before we force you to do it our way.

I'm tempted to ask just how stupid they think we are, but we keep electing people who treat us like sheep, so I guess I have my answer.

The local effect of ObamaCare

I had a medical scare a couple of nights ago and had to drive myself to the local emergency room. Fortunately, it turned out to be something relatively minor, but while I was there I took the opportunity to ask a nurse how ObamaCare was impacting things at the hospital. Here's what I learned.

To begin with, Anthem is the only insurance company in the state that is participating in the ObamaCare exchange -- so much for Obama's promise of increased choice and competition. Next, for some reason I don't fully understand, Anthem is only able to cover patients served by one of the two hospitals in my area. As a result, the Anthem patients who would normally go to the hospital nearest me (Hospital A) are now required to drive across town to the other hospital (Hospital B). This means that Hospital B is being flooded with new patients -- crowding and delays, on top of the inconvenience of the extra travel on icy New Hampshire roads. In response, many of the Medicare patients that would normally go to Hospital B are now driving across town to Hospital A to avoid the logjam at Hospital B. So Hospital A is now treating more Medicare patients and fewer patients with private insurance. Since the government only reimburses doctors for a fraction of each dollar spent on Medicare patients, Hospital A is not only losing money from the lost Anthem patients, it's also losing money on the extra Medicare patients it's picked up.

How's that for a government "solution"?

Red States vs. Blue States

Here's something.

The Mercatus Center has just released a study that examines states’ abilities to meet their financial obligations. It isn't a pretty picture, mostly due to rising health care costs and the burden of government worker pensions.

Here's the thing I found most interesting. Take a look at the top and bottom 10 and notice how Red States states compare to Blue States. (Wikipedia has some handy maps which show voting trends over the past couple of decades.)

Top 10:
1. Alaska
2. South Dakota
3. North Dakota
4. Nebraska
5. Wyoming
6. Florida
7. Ohio
8. Tennessee
9. Montana
10. Alabama

Bottom 10:
50. New Jersey
49. Connecticut
48. Illinois
47. Massachusetts
46. California
45. New York
44. Maryland
43. Hawaii
42. Pennsylvania
41. West Virginia
40. Kentucky

 Pretty definitive, no?

Eight of the top 10 fiscally solvent states are solidly Red; eight of the bottom 10 fiscally solvent states are solidly Blue.

Further, the same striking pattern emerges when we look at other measures of success. I took a look at William P. Ruger and Jason Sorens' latest edition of Freedom in the 50 States. In it, they rank the states by a host of measures of personal and economic freedom. If you take a few minutes to thumb through the various charts, you'll see that Red states consistently outperform Blue states, especially when it comes to fiscal issues.

There was a time when we didn't have the data to determine whether conservative or liberal policies lead to better outcomes over the long run. But that time has long past. We now have many decades of data to examine, and the results are clear: liberal policies don't hold up over time.

And this is true on the world stage as well. Compare East Germany to West Germany, Hong Kong to mainland China, or North Korea to South Korea. In each case we see free market policies along side state-controlled economies within the same culture and time. The free market approach wins every time, and the differences are dramatic.

Market entrepreneurs versus political entrepreneurs

I just watched the first part of Bill Whittle's interview with Dr. Burt Folsom, author of The Myth of the Robber Barons.

Folsom makes an interesting and important distinction that I would like to see work its way into our public discourse: the difference between what he calls market entrepreneurs and political entrepreneurs.

Market entrepreneurs are those who try to succeed by competing in the marketplace and selling things at a competitive price. Political entrepreneurs are those who try to succeed by using government subsidies or regulations to gain an advantage in the marketplace.

Market entrepreneurs are heroes. They create wealth for themselves by giving value to others. The only way they can succeed is by finding ways to deliver a better product, one that consumers will be willing to voluntarily exchange for their hard-earned money.

Political entrepreneurs are leeches. They use their power and influence to buy government favors and rig the system, typically by getting politicians to give them taxpayer dollars or pass regulations that give them an unfair advantage over the competition. We sometimes call political entrepreneurs crony-capitalists, but that is a misnomer because they aren't capitalists at all and calling them that gives capitalism a bad name.

One of the strongest arguments for small, limited government is that it breaks up the corrupt partnership between political entrepreneurs and the government they need to exploit to succeed. Without government, businesses have no real power over us. If we don't voluntarily buy their products, they go out of business.

This is why political entrepreneurs love a big government with extensive powers. It gives them many ways to bribe, control, and manipulate things for their own profit. A lean government with few powers -- like the one the Founders designed for us -- denies them a way to control us. There is less taxpayer money to steal, and a government that has little power over us is not much good to them.

Obama's economic illiteracy

Barack Obama: "Voting for unemployment insurance helps people and creates jobs. And voting against it does not".

I wish some reporter would ask the president how taking money (via taxes) from a productive member of the private sector and giving it to someone who is producing nothing creates a job.

I also wish some reporter would ask how the above can in any way be called "insurance." Insurance is when you voluntarily pay a fee to someone in exchange for their assuming a specific risk you wish to avoid in the future. In the case of unemployment payments, we are taking money, by force, from one person and giving it to another, who hasn't worked for it and to whom it does not belong. That's not insurance.

We can argue about whether paying people not to work is a good idea, but let's call it what it is: welfare, or, more accurately still, forcible income redistribution.

You keep using that word...

I'm posting this chart just so I'll have it handy next time someone says we need to "invest" more in education.

We've increased our "investment" in education nearly 300% over the past several decades. We've got exactly nothing in return.

From God's lips to your ears

Matthew 20

New International Version (NIV)

The Parable of the Workers in the Vineyard

20 “For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. ² He agreed to pay them a denarius for the day and sent them into his vineyard.

³ “About nine in the morning he went out and saw others standing in the marketplace doing nothing. ⁴ He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ ⁵ So they went.
“He went out again about noon and about three in the afternoon and did the same thing. ⁶ About five in the afternoon he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’
⁷ “‘Because no one has hired us,’ they answered.
“He said to them, ‘You also go and work in my vineyard.’
⁸ “When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’
⁹ “The workers who were hired about five in the afternoon came and each received a denarius. ¹⁰ So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. ¹¹ When they received it, they began to grumble against the landowner. ¹² ‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’
¹³ “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? ¹⁴ Take your pay and go. I want to give the one who was hired last the same as I gave you. ¹⁵ Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’
¹⁶ “So the last will be first, and the first will be last.”

I'm not a Christian, so I defer to others on how this passage should be interpreted. For my part, I find verse 15 instructive. Christ, the very embodiment of altruism, relies on the individual right to do as one wishes with one's own money to support his teaching. Further, He exposes the pettiness of envy. The grumblers were not wronged in any way by the landlord's generosity to others. Yet they took offense at a perceived slight and became ungrateful. There's a powerful lesson there for those who trade in class envy.

A related point: many liberals appeal to the concept of "Christian charity" to justify higher taxes (inevitably on the rich). They either don't understand, or pretend not to understand, that charity is a voluntary act. You can't force someone to be charitable, and you can't be charitable with other people's money. What these people are promoting is much closer to theft than charity.

And another: President Obama often insists that we need this or that government program because the Bible teaches that we are our brother's keeper. I'm pretty certain he's got this wrong. In the first place, I can't find the part in my Bible where it says I'm my brother's keeper. In the second place, even granting that we have a duty to help those in need, why does he take this as a call for bigger government? Government is notoriously bad at identifying those in need, let alone helping them. Individuals, on the other hand, are very good at this. Most people don't realize that poverty rates in America were dropping steadily right up until government declared its "War on Poverty." Since then, poverty rates have flat lined, and even gotten worse.

Ask not what your country can do for you, nor what you can do for your country. Ask instead what you can do for yourself, your family, and your community.

Oh, and keep your self-righteous hands out of my wallet.