Some Monday Myth Busting And Other Useful Information

Where to start...

How about with health care? The Chicago Tribune this weekend ran a story about the Health Care Justice Act. When originally introduced the intended purpose was to impose a Canadian style single payer system on Illinois. Turns out, though, that the Canadian health care system is imploding. According to The New York Times:

"Canada remains the only industrialized country that outlaws privately financed purchases of core medical services. Prime Minister Stephen Harper and other politicians remain reluctant to openly propose sweeping changes even though costs for the national and provincial governments are exploding and some cancer patients are waiting months for diagnostic tests and treatment.

But a Supreme Court ruling last June — it found that a Quebec provincial ban on private health insurance was unconstitutional when patients were suffering and even dying on waiting lists — appears to have become a turning point for the entire country.

"The prohibition on obtaining private health insurance is not constitutional where the public system fails to deliver reasonable services," the court ruled.

In response, the Quebec premier, Jean Charest, proposed this month to allow private hospitals to subcontract hip, knee and cataract surgery to private clinics when patients are unable to be treated quickly enough under the public system. The premiers of British Columbia and Alberta have suggested they will go much further to encourage private health services and insurance in legislation they plan to propose in the next few months.

Private doctors across the country are not waiting for changes in the law, figuring provincial governments will not try to stop them only to face more test cases in the Supreme Court."

The lessons: government isn't the solution to health care and access to a waiting list isn't the same as access to health care.

Next, it turns out that a low fat diet does you little good when it comes to heart disease and cancer. Jonathan Luit at TCS Daily explains that:

"Of all the beautiful hypotheses in the temple of preventive medicine, the claim that low-fat diets could prevent cancer and heart disease is perhaps the most central. But the last few weeks have been more than a little unkind to the beautiful hypotheses of the lifestyle medicine crowd. In fact the ugly facts have been piling up fairly quickly.

In early January, a study published in the Journal of the American Medical Association reported that low fat diets produced only temporary, moderate weight loss.

Then along came another JAMA study early this year that showed that the consumption of omega-3 fatty acids did not significantly reduce the risk of cancer.

And finally, again in JAMA, there were the three attention grabbing studies which reported that low-fat diets failed to reduce the risks of heart disease, colorectal cancer and breast cancer."

So go ahead, eat what you want. And the next time some bozo in the GA introduces legislation that seeks to protect our kids from junk food, or make litigation easer, try to remember these studies.

"The only closed economy is the global economy," is a phrase from 1999 Nobel laureate Robert Mundel. Mundel used it to point out that all government can do is distort economic activity, they can't stop it. Think video recorders and fax machines in the USSR. They eventually got in. Donald Bordeaux, again at TCS Daily, explains a related matter -- why we shouldn't worry about trade deficits:

"My next-door neighbor in Virginia agrees to mow my lawn for $25. He mows and I immediately give him $25 in greenbacks. Rather than spend his earnings on beer or a back massage, my neighbor uses the $25 to by a share of Microsoft.

Everyone applauds. An American earns money and invests it, making "our" economy stronger.

Now consider a slightly different example in which I live, not in Virginia, but in Maine on the U.S. side of the Canada-U.S. border. My neighbor is a Canadian living in Canada. He mows my lawn; I pay him 25 U.S. dollars.

While my neighbor and I are just as pleased with our transaction in this example as we are in the previous one, pundits and politicians regard the second case with much more suspicion.

First, by spending his dollars on a share of Microsoft rather than on U.S-made goods and services, my Canadian neighbor increases the U.S. trade deficit. The reason is that statisticians count my purchase of his lawn-mowing services as a U.S. import but, because my neighbor doesn't spend his earnings on goods or services made in the U.S., these statisticians find no U.S. exports to "balance" my imports.

So we cheer when the American saves and invests in America, but quake with anxiety when the Canadian does so, fretting about the "imbalance" in American trade. But no economically significant differences separate these two scenarios."

Like it or not, Illinois is part of the global economy. If we don't do something about the business climate then in a few years the global economy will do something about Illinois' business climate.

Politicians are always talking about how we are having to work more and more to make ends meet and what a struggle life is. To hear them tell it, life isn't getting better; it's getting worse. Virginia Postrel's latest column, again in The New York Times, gives us an example of how that isn't necessarily true:

"That seems to be what has happened over the last few decades. Americans are not, in fact, working as much as they used to. They are just getting paid for more of the work they do. Using several different definitions of leisure, Professor Hurst and Mark A. Aguiar, an economist at the Federal Reserve Bank of Boston, analyzed time-use surveys done from 1965 to 2003. Whether they defined leisure narrowly or broadly, they got a consistent result.

"Leisure time — measured in a variety of ways — has increased significantly between 1965 and 2003," they write in "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," a Boston Fed working paper. (The paper is available at www.bos.frb.org/economic/wp/index.htm.) Using the most restrictive definition, which includes only "entertainment/social activities/relaxing" and "active recreation," the economists found that leisure had increased 5.1 hours a week, holding demographics like age constant. (Without that control, leisure has grown 4.6 hours.) Assuming a 40-hour work week, that is like adding six weeks of vacation — an enormous increase."

Hmmm... maybe life isn't so bad afterall...

And if you are thinking of disagreeing with one or all the points made here. Sleep on it or better yet, don't think too much. Turns out we sometimes make better decisions that way.

Update: One other thing. Universal pre-school, whether or not it is affordable, doesn't really help:

"The Blagojevich administration and the General Assembly ought to heed advice given by Head Start co-founder Ed Zigler, when – a decade ago – plans similar to Governor Blagojevich’s were considered on a national scale: “This is not the first time universal preschool education has been proposed…Then, as now, the arguments in favor of preschool education were that it would reduce school failure, lower drop-out rates, increase test scores, and produce a generation of more competent high school graduates…Preschool education has achieved none of these things.”

(One would think that I'd remember to plug my own Institute's research!)