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A Great Step Toward Regulatory Relief

Until they get tangled up in them, most people probably pay little attention to the metastasizing regulations that governments impose on us.  Spread across society, regulations tend to avoid focusing so much pain as to spark broad, targeted resistance, whereas special interests, including established businesses with incentive to create barriers to entry for competition, have great incentive to keep the ratchet turning.  Moreover, most people don’t see the direct link between regulation and mounting costs in the prices of goods and services and opportunities they personally never realize.  That’s why common sense rules of thumbs like this, described by the Wall Street Journal editorial board, are important:

President Trump signed an executive order Monday that will require federal agencies to eliminate two existing regulations for every new one created, fulfilling another signature campaign trail promise.

The president signed the order from the Oval Office minutes after emerging from a roundtable with small business owners, who surrounded the Resolute desk as Trump praised the rule.

The executive order would also forbid estimated costs of regulations from going up.

We need this sort of policy on steroids in Rhode Island.  Maybe a dozen regulations killed for every one introduced.

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Fix-the-System Reform Means Preserving the Very Things Causing the Problems

Andy Smarick, of the American Enterprise Institute, explains how President Obama wasted a whole lot of money for zero results in education reform:

The final IES report on the SIG program is devastating to the Obama administration’s legacy. An evaluation commissioned by the US Department of Education and conducted by two highly respected research institutions delivered a crushing verdict: The program failed and failed badly.

As I’ve periodically written, fix-the-system education reforms that seek to preserve the very qualities that are causing the problem — predictable labor union incentives, central planning, the disconnect of decision making from bill paying, and a lack of direct accountability to students and parents — cannot work. We must admit this.

In any area of life except government (specifically, progressive government) it would be considered pathological to look for all sorts of complicated ways to avoid addressing the underlying problem of unhealthy behavior.  Unfortunately, the clear objective of those who do such things (specifically, progressives) is to make government do things it shouldn’t be doing, so of course perpetuating that activity becomes the irreducible factor.

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Doesn’t Money Have to Come from Somewhere?

A nagging question is never addressed in this Christine Dunn’s Providence Journal article:

One of the Trump administration’s first actions last Friday was the suspension of a previously announced 0.25 percentage point rate cut in the Federal Housing Administration’s annual mortgage insurance premium. The planned cut, scheduled to become effective Jan. 27, had been projected to save new FHA-insured homeowners an average of $500 this year….

The FHA is a part of the U.S. Department of Housing and Urban Development, and it offers mortgage insurance, most often to first-time buyers and low-income individuals. An estimated 16 percent of mortgages in the U.S. are FHA-insured. The mortgage insurance is designed to protect lenders against defaults.

Was there no information about why the Trump administration took this action or where the money comes from?  Maybe this move benefits corporate interests, or maybe it benefits taxpayers; it would seem incumbent upon journalists reporting the benefits of a government program for the recipients to also give some sense of whom it affects adversely.

Inadvertently or deliberately, this omission perpetuates an imbalanced understanding in the public, disallowing us from weighing costs when assessing how well government is making decisions.

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Stop Putting Half Our Eggs in the Federal Basket

Hey, here’s a thought: Maybe the State of Rhode Island should stop acting like a subsidiary of the federal government and start acting like a sovereign state that thrives when its people thrive.  If this isn’t a wake-up call, I don’t know what could be:

While other states – including Mississippi, Louisiana, Tennessee, Montana and Kentucky – are more federal aid-heavy than Rhode Island, a newly-released analysis by the nonpartisan Tax Foundation, of 2014 census data, found Rhode Island 16th highest in the nation in terms of how much of its budget is financed by federal dollars. In that year, 34.7 percent.

Anyone worried? The answer: You betcha. But some more openly worried than others.

In large part, this is the government plantation, but it’s also indicative of the government’s crowding out the private sector as an economic competitor, too.

Any wise investor upon having a scare with a particular stock would figure out the importance of diversifying.  It’s time for Rhode Islanders to stop relying more on government as an economic driver and start relying on each other.

And don’t let fear of President Trump specifically be the end of your consideration of the matter.  Think about how vulnerable to real tyranny it makes us that our supposed leaders apparently have to make decisions about governance in order to keep the money flowing.  Everything else, from culture to global warfare, could easily take a back seat to that bottom line.

As individuals, families, and a state, being dependent makes us weak and vulnerable.

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Rhode Island’s Parable of the Snake and Parasite

For the Family Prosperity Index (FPI) forum on Tuesday, Mike Stenhouse developed an interesting slide showing how the balance in our society (amplified in Rhode Island) is being thrown off as the government encroaches on the institutions of civic society — churches, private businesses, and other private organizations — even as it fosters and encourages a radical individualism that leads people to disengage from those intermediary community groups and connect directly with government for all of their needs.

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I made an attempt to get Stenhouse to amplify this point with imagery, essentially a start to an unwritten parable.  In his chart, the government is like a constrictor snake squeezing the life out of society from the outside, and as individuals stop turning to their communities as their first social contact and, instead, look to government to take resources away from their neighbors to pay for their benefits and services, they become more like parasites.  So, basically, this:

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Central planning and government action dehumanize us.  We stop being self-directed individuals in relationships and transform into variables in an equation to be manipulated so that we fit the space the government has shaped for us.  Through it all, our attitude toward others and sense of our own character dissipate.

Then, at some point, when there’s nothing left but the government and the individual, the snake will keep squeezing until it has claimed every drop of human blood.

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Catching Up to My Traffic Observations, Government Still Shouldn’t Take Action

Back in 2013, I expressed frustration with Rhode Islanders’ willingness to merge early before a lane reduction and let “scum” take advantage of them by driving up the open lane to the very end and described the results when I decide to be a traffic vigilante:

I’ve tended to take that on as a cause of one.  Wherever my place should be, that’s where I stay, but in my own lane, with the length of empty road before me.  Without fail, as soon as the remaining scum in front of my blockade have been absorbed, the line, which had previously been at a standstill, begins to move smoothly.

But as proven by their waving arms and the number of times that I’ve had to sneak on to side roads to avoid road rage once the obstacle had been passed, the scum apparently feel that the moral advantage has been passed to them.  I am at fault, in their eyes, for preventing them from taking advantage of everybody else.

Well, whaddaya know:

There’s a growing consensus among many state transportation officials that when a lane closure is looming, getting drivers to use all available lanes until the point where cars need to merge can keep traffic moving more efficiently and safely, and even cut down on road rage.

The article is too delicate to explain the mechanism that makes it less efficient and safe when drivers get over too soon, but it’s clear nonetheless.  But come on, folks, we shouldn’t need government to cajole us into orderly cooperation.  If one individual out of every 50 or so drivers is willing to stand up to the scum, we’ll solve the problem entirely through private action and civil society.

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RI Should Be Embarrassed of Federal Dependency

Morgan Scarboro of the Tax Foundation has taken a look at the states’ reliance on the federal government when it comes to taking money from other Americans and padding their own budgets:

In fiscal year 2014, over 60 percent of federal spending in the states went to benefits payments to individuals, including Social Security and Medicare. Aid is also given to states for education, transportation, housing, agriculture and more. Medicare is the largest grant program and continues to grow. Federal aid to states as a whole also grew 25 percent (adjusted for inflation) from 2005 to 2014.

Rhode Island is in the top group of states, with 34.7% of our state revenue transfered to us from the federal budget, more than any state this side of West Virginia other than Maine, which is poorer. This is the government plantation, and it ought to be an embarrassment to Rhode Islanders.

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Left and Right Need to Acknowledge Decisions Based on Policy

Hugh Hewitt makes a great point that conservatives like me sometimes need to hear:

It would be fair to announce the end of the mortgage-interest deduction in 30 years. It would be fair to phrase out the deductibility of state taxes by, say, 2050. But not overnight. Not unless you want to give the gavel back to Nancy Pelosi.

Purists have great arguments against “market distortions” in the tax code—in theory. But Americans don’t live in theory. They live in homes they bought at a value based on the existing deduction, in states whose taxes were partly offset through the federal code. Change those rules and what’s left of the GOP in high-tax states will be gone.

While those on the Left would like to treat this sort of consideration as justification for keeping government programs going forever, those on the Right do have to acknowledge that people make decisions based on bad government policy, and it can be overly harsh to the point of injustice to drop onto their heads the roofs that they’ve built over the policy framework.

Unfortunately, as with everything else, we can expect that reasonable concessions from conservatives will not be reciprocated.  For example, with the beginning of this century, special interests pushing bonds and Tiverton’s Town Council doubled the tax levy in Tiverton in less than a decade, to the point that house buyers who shop based on the monthly payment on a 30-year mortgage payment would have to pay around 15% less for a house in Tiverton than in Westport, Massachusetts, next door.

Those who bought in Tiverton before this punishment was dished out have been unfairly penalized, and many have been responding by cutting their losses and leaving town, not just because of the cost, but also because of the injustice.

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How Should One Feel About a Terrible Project When It Doesn’t Work?

On WPRI, Susan Campbell and Shaun Towne personalize the latest example of the Unified Health Infrastructure Project’s (UHIP’s) glitchiness:

Since its launch in September, the $364-million United Health Infrastructure Project – or UHIP – has been plagued with problems, including two separate outages on Tuesday and Wednesday.

On Thursday, a Pawtucket woman told Target 12 her husband’s citizenship status was changed in the system, suddenly claiming he wasn’t a U.S. citizen.

What’s amazing to me about all this is that I’m completely and utterly anti-UHIP (aka RIBridgesas a functional project.  The fact that it’s still not functional is just astounding, and I’m not really sure how to react.

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Never Any Way to Fix Costly Government Programs, Medicaid Edition

Reporting on a study by a couple of health care experts, Ted Nesi writes on WPRI:

Using 2015 data, their projections showed Rhode Island would lose $514 million in annual federal Medicaid funding under such a formula – a huge amount of money, equal to 22% of the state’s $2.3 billion in total Medicaid spending during the 2014-15 budget year. Massachusetts would lose $3.4 billion under the scenario.

First, let’s have a little perspective, here.  The revised spending on “Medical assistance (including Medicaid)” for fiscal 2015 was $2,382,919,281.  The year before — in fiscal 2014 — it was $1,819,597,682.  If you don’t have a calculator handy, that’s a difference of $563,321,599, or about $50,000,000 more than the “huge amount of money” in the possible reduction.

According to the mainstream calculus, government spending can never go down, even just to the prior year’s level.  On the one hand, we’re told it would be a terrible thing if Congress were to block grant Medicaid based on state income because states that rely on the program as a large part of their budgets would face massive reductions.  As the study says, it “would result in a seismic redistribution of federal spending.”

On the other hand, the authors go on to say, we can’t possibly calculate block grants based on current spending, because that “would lock in large and arguably unfair variation in funding across states.”  The only solution, clearly, is to just keep giving states as much money as they need for however many Medicaid recipients they’re able to sign up.

Folks, this is the government plantation, or company state.  As I wrote when I first began tracing that economic model in Rhode Island, when the state’s major industry (government) relies on its ability to sign up people for services in order to charge other people for them, the people forced to pay the bill will eventually flee the system, if they’re local, or push their own representatives to stop the bleeding, if they’re in other states being soaked by the feds.

Rhode Island should take the opportunity of the Trump Administration to get off this track.  The chasm toward which it leads has no bridge.

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Rhode Island Buying the Economic Development Stock at a High

This recent unsigned editorial in the Providence Journal about economic development and innovation is telling:

Another lesson, just as important: Massachusetts has been at this for decades. Its success didn’t just happen overnight. Which suggests that Rhode Island must steer itself in this direction and pursue the policies that foster innovation as part of a long-term plan. Only over the long haul can such a strategy succeed.

The editorial board is, sadly, in the don’t-disrupt-anything, “government first,” insider crowd, but its musings do inadvertently raise an important point: The Massachusetts approach worked through some decades of growing national debt, wild market speculation, and the early explosion of IT.  In emulating the Massachusetts model, Rhode Island is “buying in” to the trend late.  As we’re seeing with the price tag for corporate cronyism, the price of this particular investment is currently high.

A question none of the big-government central planners are asking is whether the next few decades will continue the last few in the key ways that have worked for states like Massachusetts.  Personally, I think not.  I think the next few decades are going to favor (even more) states that get back to basics and allow individuals to experiment with technology, business models, employee compensation and schedules, and so forth.

But the uncertainty is one reason politicians shouldn’t be planning in this way.  The incentives for people who translate votes into favors are all wrong.  Their personal investment is minimal.

More importantly, they aren’t that smart.

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Perhaps Rhode Island’s Size Provides Some Protection

Victor Davis Hanson’s recent experiences of life in California read like one of those everything-goes-wrong-for-the-ordinary-guy movies.  All that’s missing is some heart-warming MacGuffin that the obstacles delay until the end of the movie.

On a more-serious note, though, I do wonder if his essay might give some reason to be grateful for Rhode Island’s small size:

What makes the law-abiding leave California is not just the sanctimoniousness, the high taxes, or the criminality. It is always the insult added to injury. We suffer not only from the highest basket of income, sales, and gas taxes in the nation, but also from nearly the worst schools and infrastructure. We have the costliest entitlements and the most entitled. We have the largest number of billionaires and the largest number of impoverished, both in real numbers and as a percentage of the state population.

California crime likewise reflects the California paradox of two states: a coastal elite and everyone else. California is the most contentious, overregulated, and postmodern state in the Union, and also the most feral and 19th-century.

Rhode Island certainly doesn’t lack for these systemic insults, but Hanson essay relates manifestations of the division that don’t apply to the Ocean State.  Being so small, Rhode Island can’t quite achieve that level of bifurcation and insult.  It isn’t possible for the haves to rope themselves off to the same degree as in California.  (Don’t get me wrong; it’s bad enough.)

That raises an interesting question about what would happen if the states weren’t so small in this part of the country.  The idea of living in a state in which D.C. and New York City were like the East Coast’s Sacramento and Los Angeles is downright frightening.

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Watching the Planners

If there’s a state government agency on which Rhode Islanders should keep a watchful eye, but that slip below the radar most of the time, it’s the State Planning Council.  Roland Lavallee has been providing some eyes and ears:

The State Planning Council is proposing changes to the Transportation Improvement Program known as TIP. The proposed changes to the guide plans would severely limit public input on future transportation projects. The limitations would include a reduction in time for public notice to hearings from 30 days to 10, eliminate hearings at the planning stage, remove requirements for public workshops for applicants and to shorten the public comment period.

He’s posted additional video here and the edited planning document is here.

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The EPA Restricts Lifeboats While Driving into an Energy Iceberg

Ah, the tender extremism of the Environmental Protection Agency, as John Daniel Davidson writes on The Federalist:

… now comes the federal government to tell the inhabitants of Alaska’s interior that, really, they should not be building fires to keep themselves warm during the winter. The New York Times reports the Environmental Protection Agency could soon declare the Alaskan cities of Fairbanks and North Pole, which have a combined population of about 100,000, in “serious” noncompliance of the Clean Air Act early next year.

Read the whole thing, but in sum, according to Davidson this is a local problem isolated to an area that people can choose to leave.  The writer, for one, is willing to take the health risks associated with some wood-fire-related pollution for the benefits of life in the area, but the distant federal government isn’t willing to allow him that option.

Like much progressive, big-government action, the effect of this regulation (intentional or not) will be to limit the places humanity can settle… except, naturally, those privileged few with money to burn.  To be sure, it must be difficult for federal bureaucracies to tell people how to live their lives when we’re so spread out into the wilderness.

Indeed, one finds it difficult not to see a deliberate restriction of human freedom if the picture combines Davidson’s explanation of the energy challenges in the region…

Heating oil is too expensive for a lot of people, and natural gas isn’t available.

… with the EPA’s restrictions and President Barack Obama’s imperial ban on oil drilling along Alaska’s coast.

In The Titanic, one passenger laments that there aren’t enough lifeboats for half of the passengers, and the movie’s wealthy villain proclaims that it won’t be “the better half” who are stranded.  Think of government as a crew both steering toward an iceberg and restricting access to escape and you’ll have something of the sense of how progressive policies function.

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Social Dynamism in Government Policy

A Wall Street Journal editorial has gotten some attention with the headline, “School Choice Saves Money“:

Using data from a crime and graduation study by Corey DeAngelis and Patrick Wolf at the University of Arkansas, the Milwaukee study finds that through 2035 Wisconsin will receive a $473 million benefit from higher graduation rates by choice students. More education translates into higher incomes, more tax revenue and a lower likelihood of reliance on government welfare or other payments. Meanwhile, greater economic opportunity also prevents young adults from turning to crime, which the study estimates will save Wisconsin $1.7 million from fewer misdemeanors and $24 million from fewer felonies over the same 20 years.

Some years back the RI Center for Freedom & Prosperity had a victory, in our view, pushing dynamic scoring into the legislative debate with our proposal to eliminate the state sales tax.  Dynamic scoring means that one considers the economic effects of a policy and subtracts the increased tax revenue from the policy’s “static” (“sticker,” or first-order) cost.  The above paragraph reminds us that there is a social dynamism, too, reducing the need for government services as well as increasing the tax take from a healthier economy.

Obviously, this has perverse relevance to Rhode Island’s “government plantation,” which might gain back some lost tax revenue but lose clients and political leverage over them.

But imagine if we had policies that kept kids engaged in good schools (through school choice) and gave them opportunities for more entry-level jobs (through a lower minimum wage and reduced licensing requirements). It might just reduce the cost of paying government to mitigate social problems, create an environment of entrepreneurship, and turn our state around.

Of course, it would require us to shift away from the government plantation, so it won’t happen.

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Education Overreach to Public Violence

Heather Mac Donald’s connection of holiday-season mall violence with federal pressure for public schools not to uphold disciplinary standards that may affect minorities disproportionately is worthy of consideration:

The Trump administration must tear up every guidance and mandate in the Justice and Education Departments that penalize school districts for disproportionate rates of school discipline. Absent clear proof of teacher or administrator racism, Washington should let schools correct student behavioral problems as they see fit. Students in classrooms where disruption is common are far less likely to learn; that is the civil rights problem that should get activists’ attention. Taxpayer dollars should not be funding specious federal crusades against phantom discrimination; school districts might have more resources if their local taxpayers were not also being hit by federal levies, which are redistributed around the country in the delusional pursuit of “social justice.” Until the two-parent family is reconstructed, classrooms remain the only hope for socializing children and for preventing the teen violence that broke out across the country this Christmas. Schools can only accomplish that civilizing mission, however, if they are allowed to insist on strict rules, respect for authority, and consequences for misconduct.

I generally agree with Mac Donald’s reasoning, here, although I’d want to look at some more evidence of the claim that she’s making if such a policy were to come up in Rhode Island.  Assuming she’s correct, though, I can only wonder how we can get people to see such progressive destruction for the misguided meddling that it is.

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The Key Question When Government Enlists Stylists as Informers

On the sagacity of Illinois’ forcing beauticians to be trained in discerning signs that their clients are in damaging relationships (and, presumably, to do something with that knowledge), Mark Steyn offers his usual insightfulness:

Just as the Stasi turned neighbors and relatives into spies, the State of Illinois is making your stylist one. Will the “spirit of camaraderie” survive this new legislation? Or will such stock inquiries about coming vacations and plans for the weekend suddenly seem far more loaded and alert the customer that she’s now in the blow-dried equivalent of a Bulgarian hotel lobby circa 1978? …

… like so much government makework paper-shuffling schemes, it won’t do anything to reduce the problem it’s meant to be addressing, but it will be just one more tedious time-consuming obstacle to making a modest living.

There is likely one of two processes behind this legislation.  One is that activists with some ulterior motive (whether reducing competition in the beauty industry or padding the budgets of abuse and assault activists) pressured legislators.  The other is that some Illinois lawmaker observed that stylists fill somewhat of the same role that bartenders used to be considered as filling for men and thought it would be a great way for government to “do something” if the law went straight from social truism to professional mandate.

Either way, the most important question is:  Who keeps electing these people?

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Maybe Child Prostitution Isn’t Something to Decriminalize, Just Now

As Rhode Island enters another legislative session, we should keep a careful eye on other states so we can spot progressives’ destructive plans when they make their way here.  Republican Assemblyman Travis Allen points out, in the Washington Examiner, a big one out of California: 

Beginning on Jan. 1, prostitution by minors will be legal in California. Yes, you read that right.

SB 1322 bars law enforcement from arresting sex workers who are under the age of 18 for soliciting or engaging in prostitution, or loitering with the intent to do so. So teenage girls (and boys) in California will soon be free to have sex in exchange for money without fear of arrest or prosecution.

Government imposes too many criminal penalties for people’s free activities, catching too many people up in the system and making it more difficult for them to overcome adversity and thrive.  But can we at least agree that the underage sale of sex is a likely indicator that the public has an interest not in punishing the kids, but in taking a closer look at what their problems are?

To be sure, I’ve got a generally dark view of government’s ability to do such things, but as with legalizing marijuana, we have to acknowledge our current circumstances and consider the effects of changing them at this particular time in a particular way.  If our society were healthier, with strong social institutions, instead of deteriorating ones, we might consider changes that will tend to produce socially harmful effects, but to do so in a rush of progressive ambition is lunacy.

ADDENDUM (12/31/16 4:16 p.m.):

In anticipation of objections, I should address immediately objections that the intent of the law is not as Allen suggests.  Nobody should doubt that most progressives think they’re doing good by their actions.  But consider this, from bill author Holly Mitchell:

The problem is that not every county has services available in juvenile justice for minor victims.

Followed with NBC’s note that:

Various district attorneys’ offices in the state have expressed a similar apprehension toward the law —but some say it’s because the state just isn’t ready to provide adequate services.

Good intentions can be deadly.  If they feel, for whatever reason, that sex for money is in their best interest, CA children can now know that the worst-case will be services (for which they’re probably already eligible).

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Government in the Loan Servicing Business

I have a quick question after reading Christine Dunn’s Providence Journal article on the quasi-public Rhode Island Housing’s new deal with Maine Housing to service the latter’s mortgage loans:

“The agreement will allow Rhode Island Housing to generate additional funds to be used to support programs, including the financing of housing to meet the state’s growing demand,” the agency said in its announcement Thursday.

Why is this a government agency?  Somewhere in the deal must exist some artificial restriction from government or some implicit public backing of the business.  Whatever the case, if RI Housing is engaged in profitable business, it ought to be spun off from government because that oughtn’t be the way government operates.

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If It’s “Unpaid Care,” It Cuts into the Government Plantation’s Market

It seems a point of personal pique for him, but Wesley Smith makes a great point when he objects to the characterization of families’ taking care of their own special needs children as “unpaid care”:

Really? What about mothers providing “unpaid care” for their babies? Or spouses for each other? Should such care also be measured in terms of the cost of having services provided by professional caregivers?

As Smith goes on to insist (emphasis in original), “the societal expectation should also be that families are the first line of care-giving.”  The first line of care-giving.  The first line of financial assistance.  The first line of loan guarantees.  The first line for education.  The first line, period.

The problem is that such activities cut in on the government plantation’s market.  Governments can’t tax other people to provide the services.  Labor unions can’t take a cut (although they do try).  And politicians can’t count on votes from people who aren’t dependent on government.

The deeper affront of the “unpaid care” attitude is how it teaches us to see caring for those we love.  The insinuation can be that families would (and maybe should) offload care if they can afford to do so, just as a homeowner may patch a wall to save the cost of a tradesman.  As a new state senator from Lincoln touchingly exemplifies, caring for loved ones can be a joyful fulfillment, and society should encourage us to see it as such.

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Government as Majority Customer, Making Healthcare Worse

So when do problems in healthcare stop being the fault of the proverbial greedy insurance companies and start being an indication that the system is too socialized already?  Maybe when it’s more than 50% reliant on government?  Consider this from a Ted Nesi report on WPRI.com:

Care New England also said more than half its gross revenue from patient services came from the two major government health programs in 2015-16, with Medicare accounting for 32% and Medicaid accounting for 28%. The share from Blue Cross was roughly steady at 20%.

At this point, Care New England is essentially what I’ve been calling a “government satellite.”  Given heavy regulations, it’s essentially a quasi-public agency that has some independent revenue.

Keep this in mind, too, the next time you hear about how government is going to hold reimbursement prices down for Medicare and Medicaid.  If you ran a business and your biggest — indeed, majority — customer (which also happened to have regulatory power over you) dictated prices for the services you provided to it, your only option would be to reduce services to other clients or find ways to soak those clients for more.

This is just one way in which government involvement in the healthcare industry is making things worse.

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