Further Sunday assorted links


2. I greatly admire Austin Frakt, but sometimes even the best miss what's obvious. I recall that economists blamed "fragmentation" for the inefficiency in the delivery of health care, specifically the fragmentation in physician services (i.e., lots of solo and small physician practices). If only physicians would consolidate, they could deliver services much more efficiently at lower cost. Well, physicians have consolidated, and guess what: they may well be more efficient, but by consolidating, they have commanded higher prices (reimbursement). Be careful what you ask for. Frakt argues that by aligning a pharmaceutical provider and a health insurer, they will pursue a strategy of greater efficiency in providing both and thus lower cost. Well, no. CVS will pursue a strategy of selling more pharmaceuticals and Aetna will pursue a strategy of reducing reimbursement for everything except for pharmaceuticals, so somebody's ox has to be gored for the combination to lower costs. And who might that be? Economists need to get out more.


Still amazes me that anyone (let alone a group that calls themselves "health economists") would think that encouraging physician groups (or hospitals) to consolidate would help the overall system.

As an entity grows larger and achieves more market power, of course it will raise prices, extract value from others in the value chain, etc. and no one is going to care that said entities are now more "efficient" at providing the care that is their job to provide in the first place.

Single craziest provision (or set of provisions) in the ACA.

4. A couple of years ago while I was driving through the southeast I came upon a long line of stopped cars. The backup stretched for miles to the intersection with the interstate highway ahead, and I could see that even the traffic on the interstate was stopped. The car in front of me, it was an expensive car, a Mercedes or Lexus, had a tag from DC, a vanity plate with IT Guy on it. Well, he suddenly veered in the opposite lane (no traffic since both directions were backed up) and turned up a small country road. I followed, or tried to follow (he was driving very fast), and off we went down a one-lane road, which took us over the interstate, then on a long stretch of a back country road that eventually took us to a highway that took us around the back-up and on to my destination (as everyone else sat there for what turned out to be hours due to an accident). IT Guy could have been an idiot, but he somehow knew more about the back roads of the low country than I did. What if IT Guy develops an APP so that everyone with a smart phone can avoid the next back up. It's like those algorithms that profit from anomalies in the market and generate billions in profits - it works just great until competing quants narrow the potential for profits until they vanish. Or the successful college football coaches who changed jobs this week because they could see their advantage narrowing and they wanted to cash in before it closed.

"What if IT Guy develops an APP so that everyone with a smart phone can avoid the next back up."

You really should get out more. The article is about Waze. That's what Waze does.

Are you an idiot? The point of my comment is that markets will eliminate whatever advantage Wave has, or the quants, or football coaches.

Exactly how will people find all these competing apps to both input data and extract value from it? These are winner take all markets, idiot.

The idiot is rayward. Waze is on the market and is competing just fine. Waze currently does let everyone with a smart phone avoid back ups.

That there will be a point in the future when we all have teleportation and Waze is no longer used is true, irrelevant, and not in the original comment.

Now owned by Google - so the real game is presumably accruing large amounts of data for traffic management for self-driving cars.

3. "we find that extremist nominees—as measured by the mix of campaign contributions they receive"

So, not Goldman funded?

"1. Tony Blair backs a land value tax.

Blair said the ideas were “radical but practical; progressive but in a way which aligns with the modern world and is not in defiance of it”.

What are the pros and cons of a land tax?

... Blair is being understandably imprecise about this extreme left proposal.

Meat of the proposal would be that the government "...would be able to reclaim underused property through the expanded use of compulsory purchase." Sounds like a hyper Eminent Domain authority, where Brit politicians could seize any private land they deemed to be improperly used by its private owners -- so that the larger community/society would benefit. Pure socialism. Bernie Sanders and Bill DeBlasio would love it.

1. Hold the presses. A politician believes he sees a problem and has a solution for it. A new tax!! But wait, but wait; he also thinks it is "fairer and more rational". Who could have seen that coming. Mean while people with money, corporations and productive people are leaving England because of oppressive taxation.

yup, death & taxes; government always wants more and is endlessly creative in its larceny

(did you expect the US Republican Congress to cut any net spending ... or continue spending like a drunken sailor, with the eager Democrats)

Of course, taxes are lower in France of Germany.....haha NO.

"1. Tony Blair backs a land value tax." The delusional Mr Blair backed George W Ballsup.

#4 -- What a non-question.

The question is whether Waze should (a) report the fastest route with the current road conditions or (b) if it should attempt to predict future flows and steer its users based upon that prediction.

Note this is a question for Waze to answer, not for some bureaucrat or some pandering journalist. Note that (a) is clearly the v1 product, although it is likely that specifying even the current road conditions is quite complicated and required multiple versions as more data sources were added in an attempt to get a "true" vision of the current conditions.

(b) is far more complicated than (a) and may be where Waze is going, but it will likely take a considerable amount of time as it is likely composed of multiple models and features.

Agreed. Also, these problems also occurred before Waze existed. This is how th world tells the bureaucrat where it wants the roads.

#4 Of course Waze is going to act in the interests of the driver. This reminds me of the silly talk about self-driving cars which might choose to allow the passengers to die rather than some larger group of people. Who would buy such a car?

A lot of times you can kind of guess the future. I mean, if Waze sends me to some small road in order to bypass some jam (a normal jam, not accident jam. Waze tells you which) in peak hours, then you can kind of guess it won't turn out very well.
The problem with small roads is that even one car can really slow traffic down, if it is driving slow, parking badly, etc.
Since I usually care more about the variance than the mean(I want to guarantee arrival by a certain hour), I try to avoid the small roads.

We still need to use our tools intelligently. It doesn't matter if the tool is a compass and a map or a phone with Waze. AI helps both dumb and smart people make better decisions, but the baseline still matters.

This is self-correcting, though. If the small road gets slower than the main road, there will no longer be an advantage, and the app won't recommend the route to drivers.

The equilibrium result in this scenario is multiple alternative routes being used to the point where they all have roughly equal travel times, but with better road utilitization and faster overall travel times than when the app did not exist.

#2...Special Pleading of the week:

"Consolidation in health care has generally not been good for Americans. Here’s why this seems to be an exception."

Future headline:

"The idea that five families might control the U.S. has previously been considered as anathema. Here's why it might be a good thing to try."

As Michael Oakeshott makes clear, it isn't simply an argument against the special pleaders abstruse arguments about efficiency, it also.has to with morality and the basis of liberty:

"No doubt the libertarian, in this matter, will have to listen to the complaint that he has neglected to consider the efficiency with which his economic system produces the goods; how shall we reconcile the conflicting claims of freedom and efficiency?But he will have his answer ready. The only efficiency to be considered is the most economical way of supplying the things men desire to purchase. The formal circumstances in which this may be at its maximum is where enterprise is effectively competitive, for here the entrepreneur is merely the intermediary between consumers of goods and sellers of services. And below this ideal arrangement, the relevant comparison is not between the level of efficiency attainable in an improved (but not perfected) competitive economy and the efficiency of a perfectly planned economy, but between an improved competitive economy and the sort of planned economy (with all its wastefulness, frustration and corruption) which is the only practical alternative. Everything, in short, that is inimical to freedom - monopoly, near monopoly and all great concentrations of power- at the same time impedes the only efficiency worth considering."

The Political Economy of Freedom by Michael Oakeshott. PDF can be downloaded here:


3. A generation ago, this would have been called the Falwell effect, as Falwell himself recognized, removing the Moral Majority from national politics. https://en.wikipedia.org/wiki/Moral_Majority

5: But if we permit the "expresso" spelling, what will happen to the way that Americans pronounce the word?

Or do large numbers already pronounce it with an "x" instead of an "s"?

The people I hang out with tend not to drink espresso, but when they do use the word they pronounce it with an "s". But maybe I live in an espresso bubble (or crema).

#4 is a classic "Oh no, something is happening and the government is not regulating it!" article. So tiresome, so wrong, and so harmful.

Navigation apps help better distribute traffic between multiple routes, allow motorists to plan ahead and avoid peak traffic times, allow pro-actively avoiding obstructions like accidents before you get stuck in a line of cars, etc. All of this supports the common good, not just the individual driver. They are a great innovation, which means someone has to come along and try to kill it.

Also, from the article's scare-mongering tone ("a for-profit company is directing the country’s traffic"!!!! Oh no!), you might miss the fact that it is talking about an app that merely provides information to drivers (which they can voluntarily choose to use, or not). Waze is not coercing anybody to do anything. The people rooting for the government to take this over in some way are the ones who want coercion.

Dan1111, guess what? Sometimes someone can do harm just by providing information.

And sometimes someone can do harm to some people while helping others.

Waze does sometimes send people through residential neighborhoods. I use it quite a bit for my work, throughout northern Virginia. And folks don't always like more cars driving by their houses, with the noise and sometimes extra danger they bring.

Also, do we know enough about Waze to be confident that no one can manipulate, bribe or coerce them into "just providing information" to direct traffic one way instead of another?

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