Wednesday, September 26, 2012

Criss Angel, Swamp Fox

I wonder whether a magician might have some interesting thoughts on military formations and tactics.

The way tricks depend on the audience's perspective to conceal what's really happening reminds me of an army unit trying to stay in defilade.

Tuesday, September 25, 2012

NFL Referees & IRS Agents

Do you agree that the U.S. tax code is convoluted?
Do you think the solution is hiring better IRS agents?

The National Football League is under fire for not agreeing to terms with its top referees. As a result, the back-up refs have been involved in several controversies.

Many commentators have been quick to blame the replacement refs, but how can they be expected to perform at the same level as the fully trained professionals? Perhaps the root cause is more fundamental. The NFL has a kazillion rules in its rule book. New rules and complexity are added each year. Ironically the more "just" the rules become, the harder they become to adjudicate appropriately. This complexity mirrors the federal tax code. The response in this context is often to call for streamlined rules, not better IRS agents. Maybe the league can understand the true culprit is reliance on a system that only a small cadre of experts can maintain. cf. Leviticus

Wednesday, September 19, 2012

Healthcare Delivery, or "I Hope My Podiatrist Knows the Formula for Focal Length of a Spherical Mirror"

If you agree that a system in constantly in flux and then freeze the current best practices, then you should not be surprised when the system has changed enough to where there are new best practices. The problem is the degree to which the current best practices are frozen. When it comes to the delivery of health care, this freeze comes from tactics such as regulation, certificates of need, credentialing, education requirements, and limited medical school admissions. Think those are easy to change?

I imagine a future where division of labor leads to specialization and greater efficiency:

You suspect an injury or illness and contact a Care Coordinator (CC).  The CC sets you up with a Diagnostic Specialist (DS), who is steeped in symptom recognition, testing, and decision-tree diagnosing. The DS diagnoses a kidney stone and creates a treatment plan for you.

The CC sets you up an appointment at the "hospital" with the kidney stone specialist, who treats and was trained on only this family of problems. The CC later follows up with you to ensure you are satisfied. If an emergency happened during the treatment, an Emergency Specialist (ES) would be alerted to stabilize you.

This scenario is over-simplified of course, but it illustrates how specialization creates experts. These specialists/experts do not need to have gone to college for a decade either. Do you care whether your cataract specialist missed classes that discussed knee anatomy? Do you want to pay extra for a podiatry specialist that is knowledgeable on the reproductive system?

Earlier doctors had to be generalists. Today's specialists are really generalists AND specialists. Reminds me of what Mitt Romney said about how he wanted to go to business school while his father wanted him to go to law school:  he compromised and went to both.

In this scenario, training would be radically shorter but radically more focused. Many more people would be qualified to be a specialist. So you would have higher quality (more experts), a larger labor force, and lower cost (wasteful college and training time). This is not to say that there is no place for generalists (a DS would need massive training), just that not everyone needs to be one.

Too bad the medical profession froze its best practices. At least it waited until after the era of phrenology and leeches.

Thursday, September 13, 2012

A Perfect B+ on your Econ Test

Dear Professors Tyler CowenGreg Mankiw, and Mike Shor (economists with interesting blogs):

If a student gets a perfect 100% on your Econ 101 test, then should you deduct for not understanding diminishing marginal returns as it relates to studying? You could change the grading system to be

Final Score = 100 - | 90* - Score |

*Adjust the "90" upward if the student can prove s/he has a boring life.
Rocky VII < Econ 101

Tuition is Unemployment Insurance (for other people)

What would happen to a labor market if the 5% least skilled potential workers voluntarily did not seek employment?

  • The number of unemployed job seekers would drop significantly.
  • The unemployment rate would likely drop (it's a ratio so this isn't a guarantee since there could be a scenario where unskilled labor is in high demand theoretically; probably correct due to minimum wage laws though).
  • The least efficient workers would likely have a better lifestyle, since their returns are relatively low when compared to effort.
These are some rosy results.
Four more years!

Enacting this scenario would have some requirements though, such as the following:
  • The 5% would need a way to remove the social stigma of not working and receiving subsidies.
  • The 5% would need to stay occupied in a fulfilling way to avoid being a further drag on society (idle hands and all).
  • The 5% would need to be subsidized somehow.
We have this system already. This social program is commonly referred to as "college." Workers are taxed to give money in various forms to educational institutions and to subsidize student loans to 18-23 year olds who are kept busy with homework and tests. These students may have tremendous potential, but it is still latent at this point (for the most part). Absent this government transfer of wealth, the number of enrolled students would surely drop. Why? If college is a great investment, then private companies would loan money at the subsidized interest rate levels anyway. They didn't (when they could), so there must be some questionable risky loans underwritten by taxpayers. The program is an overall drain on the economy; that's hard to argue. The political question is whether the net cost is worth the reduced variation in outcomes. Or, in other words, is the unemployment insurance policy worth the premiums?