For the past few years, elite colleges and universities have ... unveiled some very generous “grand prizes” in the form of making college free for low-income students,eliminating loans for others, or capping payments for improperly defined “middle income” individuals. But while this makes for a big payoff, the school doesn’t have to worry too much—they can keep costs down by controlling who they let in and the extent to which they sell these policies to lower-income students.
To an elite institution, these policies are a win-win calculation: good press for seeming generous, but it doesn’t have to worry about going too far in letting in these more expensive low-income students because it doesn’t take a proactive approach to recruiting them and convincing them to applyif institutions are truly committed to improving their socioeconomic diversity, then they need to do more just announce a new policy with a flashy press release. Instead, admissions officers should do a better job visiting lower-income high schools, forming relationships with guidance counselors where they can, and generally take a more proactive approach to identifying promising lower-income students. Admittedly, this is labor intensive and has some costs, but without a greater commitment, these generous financial aid policies will be little more than a flashy exercise with little risk of significant success.
Wednesday, September 30, 2009
Wednesday, September 16, 2009
1) Health Savings Accounts
The "use it or lose it" penalty for health savings accounts would no longer apply--put money in, tax free, into a health savings account; and you can use it whenever you want. The money would also be invested and interest accumulates in your account (if you don't like stocks, they can be put in inflation-protected Treasuries). Once you get old, you have the chance to move some of this money into your retirement account.
2) Mandatory Release of Costs for Hospital Procedures
Put them on the internet, nail them to churches, print them on the back of driver licences, burn them into the backs of people's retnas for all I care. It's insane that people will drive for miles to shave off a penny per gallon of gas but don't--and can't--know how much an MRI costs.
3) A Public Plan
The public plan would only offer catastrophic coverage (ie, severe emergency room care only) with high deductibles. Under the government plan, you, by default, put in ten percent of your salary into a Health Savings Account to handle most health spending. Preventative care is covered.
4) Guaranteed issue, community rating, and mandatory coverage
Everyone needs to buy health insurance. You can buy the government plan, or a private one. No insurer can turn down anyone who wants care, and can only charge premiums based on age.
5) Insurance Exchanges
All insurers must provide a "basic" plan that offers similar catastrophic care as the public option, as well as a more traditional package. Benefits are standardized across the two levels to allow easy comparison shopping. These exchanges are set up on a national level. All insurance spending (but not health account savings) is taxed.
That's it. The left should love the plan because it eliminates (or greatly reduces) the uninsured population while allowing people with pre-existing conditions to purchase insurance. The public option keeps insurers "honest." The right should love the plan because it increases competition--instead of insurance companies making their money by refusing care, they now make money by holding costs down. Young people should love it because they can purchase the public option cheaply. And everyone should love the plan because it reduces healthcare costs: the more people are accountable for their own spending, the more costs go down.
In the long-run, Medicare and Medicaid would be obsolete. People will start entering retirement with lots of money to pay for their own care; those (young or old) who can't afford care will be given subsidies to buy their own insurance (paid out of taxing insurance coverage). This will stave off the government's looming fiscal collapse.
Naturally, we're not going to see anything like this plan.
Sunday, September 13, 2009
When Texas capped non economic medical malpractice damages to $250,000 in 2003, most conservatives argued that the reform would free doctors from having to prescribe unnecessary treatment. It didn’t happen. According to the Dartmouth research on disparities in health care spending, many Texan doctors are still prescribing aggressive treatments that don’t improve outcomes. In fact, as of 2006, Texas was still at the top of the list of high-spending states.
Saturday, September 12, 2009
Monday, September 7, 2009
But the story of Lego’s renaissance — and its current expansion into new segments like virtual reality and video games — isn’t just a toy story. It’s also a reminder of how even the best brands can lose their luster but bounce back with a change in strategy and occasionally painful adaptation.
Nevertheless, Lego hasn’t entirely shed its Scandinavian sense of social mission when it comes to making toys. It kept quality high and never moved any manufacturing to China, avoiding the lead paint scare and grabbing market share when rivals stumbled amid multiple recalls.
Maybe it was a great strategy for Lego not to outsource manufacturing. Maybe it would even have been a good idea for Denmark to prevent Lego from doing so. But protectionism isn't moral. What's moral, and in line with a social mission, is helping millions of people rise out of absolute deprivation.
At least we're consistent in lauding aid agencies and local manufacturing--both fail to help poor people, and both are socially conscious.
It’s easy to think that college classes are mainly about preparing you for a job. But remember: this may be the one time in your life when you have a chance to think about the whole of your life, not just your job. Courses in the humanities, in particular, often seem impractical, but they are vital, because they stretch your imagination and challenge your mind to become more responsive, more critical, bigger. You need resources to prevent your mind from becoming narrower and more routinized in later life. This is your chance to get them.This claim is often made, and I would probably agree with it. But I don't think it's too much to ask that the claim be made through slightly less hackneyed language. You would never drop two hundred grand more on a house because a highly interested party said it would "stretch your imagination and challenge your mind to become bigger," so use some of that supposedly non-narrow, non-routinized brainpower to write something better.
Of course, maybe I'm assuming too much about College kids. Maybe they need to major in the Humanities before they can realize how tired and bad some of the arguments are for taking the Humanities.
Sunday, September 6, 2009
The parallels are clear between financial markets and driving in traffic. Arbitrage is the controlling force. For example, on the freeways arbitrage equalizes the traveling time across lanes, the commuters version of the efficient markets hypothesis.
You don’t have to have spent much time on the freeways to understand why arbitrage is not always efficient. An individual driver can get where he is going faster by changing lanes, but since there is a fixed capacity on the road this is always at the expense of somebody else. In equilibrium the total distance traveled by all is the same as if everybody were required to stay in their lanes. The arbitrage turns out to be a pure social loss due to the increased frequency of accidents.
I take a more sympathetic view to arbitrage (cars careening across highways). Here are three theorems in highway-finance:
1) Inefficient Highways Hypothesis: If not all drivers are willing to change lanes, differences in travel times can persist across lanes. The lack of 'leverage' on highways--you only control your own car--sharply limits efficient travel.
2) Arbitrage is always efficient: Suppose you have two lanes, a fast and slow lane. If enough cars move from the fast to the slow lane so as to equalize the travel times, average speed will decrease for everyone. Moreover, such arbitrage always decreases variance speed across lanes, allowing drivers to better predict travel times.
3) Noise-Drivers are efficient: Suppose drivers randomly change lanes. As drivers spend more time in slow lanes than fast ones, over time highways will move to the efficient solution where travel times are constant (but, by Theorem 1, will probably never reach there).
There are other similarities, in the form of "traffic waves." Like manias, booms, and busts; traffic tends to cluster into times of congestion, which generally can't be fixed by shifts from individual drivers (investors). And just as financial instruments are ultimately a function of the real economy, highway travel ultimately depends on people getting to actual places.
Saturday, September 5, 2009
Wednesday, September 2, 2009
Between 1939 and 2009, human ingenuity has invented a lot of new things one can do with one’s time. Human ingenuity has not, however, invented a method for stuffing more hours into the day. Consequently, if you look at just about anything that people could do in 1939—read for pleasure, take care of children, cook, etc.—they do somewhat less of it in 2009. People who are really into books, or cooking, or natalism, or what have you tend to interpret this inevitable crowding of the timespace as a sign of cultural crisis and decline but it’s an inevitable result of heterogeneous preferences and innovation.