Wednesday, 31 October 2012

On Obama and the popular vote

The events surrounding Hurricane Sandy increase the chances of a scenario in which Obama wins the presidency but loses the popular vote. Many argue that that would undermine the legitimacy of an Obama win and the nature of his mandate. I found those arguments unpersuasive when posed against Bush and I find them unpersuasive now. Candidates and the voters behave in response to the parameters of the election. The fact that Obama is likely to win California and New York while Romney is likely to win Texas affects turnout in those states. Why go to the polls if you know your guy is going to win or lose? Similarly, it affects the way candidates campaign. If winning the popular vote were the relevant consideration, candidates wouldn't be spending all this time in Ohio at the price of their other sources of potential supporters.

Measuring candidates by popular vote when they've been aiming for electoral college votes is like changing the baseball criterion for success to net runs over the season after teams having been simply pursuing wins. Teams would object that had they been told that net runs had been the relevant criterion they would have followed much different strategies in games in which they were far ahead or far behind. We can't define success by one criterion and then measure success by a very different one particularly when the metric's definition has such a direct effect on the nature of performance.

Sunday, 14 October 2012

On garbage pickup fees and universal health care

Some years ago I had a discussion with a friend about the prudence of a municipality charging a nominal fee (~$1) for each bag of garbage it picked up. I argued in favour of the policy as I thought it would discourage waste and, I argued, my friend should also support it based on his support for the principles of free market economics. Surely a $1 fee in which users are forced to recognize and absorb some of the cost of moving garbage was preferable to one in which the government absorbed all costs and the user of the system was almost completely insulated from actual cost of the service. His argument was that the public's interest in making it maximally easy for people to keep their homes and yards clean and tidy far outstripped such considerations. In other words, the government should absorb all the costs because it was funding a key  public good and keeping it cheap / free greatly enhanced the value of that public good.

I've been thinking about that argument recently because the town in which I live recently made it much easier to get rid of all sorts of household waste, yard waste, etc. It used to be the case that getting rid of non-standard garbage required a call to the city and required paying a substantial fee after a household's quota was exceeded. Now the town simply picks up all forms of garbage on every garbage disposal day. I realize that it has actually made us a lot more ambitious about doing yard, basement and shed cleanup. We no longer wait until we have a significant amount of potential waste before underaking a cleanup project and it has indeed resulted in a much tidier yard and shed. (the basement, well ...) So, I'm going to acknowledge that my friend was right. It certainly hasn't increased our consumption or wastefulness, just our cleaning efforts.

An article by Sarah Kliff in today's Washington Post reminds  me that there's a version of the "free garbage pickup" argument in support of providing affordable (free?) universal health care. Kliff summarizes a study observing that as health insurance costs for workers rise, productivity drops. Unsurprisingly, making it difficult to go to the doctor results in people going to the doctor less, being or becoming less healthy and, as a result, being less productive on the job. For the same reason that it makes good sense from a productivity perspective for employers to give their employees free flu shots, it makes bad sense from a productivity perspective for employers to make it expensive to go to the doctor. Similarly, data indicate that concerns about maintaining health insurance coverage are a huge disincentive to people contemplating kicking off a business start up. (In fact, there's a heavily disproportionate number of people of Medicare age who participate in startups because they don't share the worry about need a health care plan backup.) Or consider how the high costs of funding private health insurance act as a significant disincentive to global companies considering the possibility of starting a business in the US.

Perhaps the health care debate needs to focus on such things to bring the free-marketeers onside for a universal health care system. There's not just an obvious moral argument for doing so, there's an excellent economic reason for doing so. The introduction of a universal health care system may well pay for itself in terms of increased economic productivity, innovation and competitiveness. A single payer system may not in itself be a manifestation of pure free market ideology, but it's well worth it because of all the grease it gives to the turning of the cogs in an effective market economy.