…are on the order of a hundred billion per year, a lot of it from Medicare/Medicaid.
One of the stupider arguments (among many) made by proponents of those programs it that they “have low overhead costs,” relative to private insurers. Well, it’s easy to have low overhead costs if you pay no attention to whether or not a claim is valid. I consider a hundred billion in overpayments in fact a very high overhead cost.
Did it work?
No.
As some wag noted at the time, it was stimulating in the same way a clumsy ugly person doing a pole dance was.
Another review of Rick Boozer’s book
Are we being saved from it by the student loan bubble? What an awful, awful government policy. It’s destroying a generation’s financial prospects.
Colleges and universities are nonprofits. When extra money comes in — as, until recently, has been the pattern — they can’t pay out excess profits to shareholders. Instead, the money goes to their effective owners, the administrators who hold the reins. As the Goldwater study notes, they get their “dividends” in the form of higher pay and benefits, and “more fellow administrators who can reduce their own workload or expand their empires.”
But with higher education now facing leaner years, and with students and parents unable to keep up with increasing tuition, what should be done? In short, colleges will have to rein in costs.
When asked what single step would do the most good, I’ve often responded semi-jokingly that U.S. News and World Report should adjust its college-ranking formula to reward schools with low costs and lean administrator-to-student ratios. But that’s not really a joke. Given schools’ exquisite sensitivity to the U.S. News rankings, that step would probably have more impact than most imaginable government regulations.
Something’s going to have to give.
An interesting (and dismaying) excerpt from Megan McArdle’s new book
About six years ago, commentators started noticing a strange pattern of behavior among the young millennials who were pouring out of college. Eventually, the writer Ron Alsop would dub them the Trophy Kids. Despite the sound of it, this has nothing to do with “trophy wives.” Rather, it has to do with the way these kids were raised. This new generation was brought up to believe that there should be no winners and no losers, no scrubs or MVPs. Everyone, no matter how ineptly they perform, gets a trophy.
As these kids have moved into the workforce, managers complain that new graduates expect the workplace to replicate the cosy, well-structured environment of school. They demand concrete, well-described tasks and constant feedback, as if they were still trying to figure out what was going to be on the exam. “It’s very hard to give them negative feedback without crushing their egos,” one employer told Bruce Tulgan, the author of Not Everyone Gets a Trophy. “They walk in thinking they know more than they know.”
When I started asking around about this phenomenon, I was a bit skeptical. After all, us old geezers have been grousing about those young whippersnappers for centuries. But whenever I brought the subject up, I got a torrent of complaints, including from people who have been managing new hires for decades. They were able to compare them with previous classes, not just with some mental image of how great we all were at their age. And they insisted that something really has changed—something that’s not limited to the super-coddled children of the elite.
“I’ll hire someone who’s twenty-seven, and he’s fine,” says Todd, who manages a car rental operation in the Midwest. “But if I hire someone who’s twenty-three or twenty-four, they need everything spelled out for them, they want me to hover over their shoulder. It’s like somewhere in those three or four years, someone flipped a switch.” They are probably harder working and more conscientious than my generation. But many seem intensely uncomfortable with the comparatively unstructured world of work. No wonder so many elite students go into finance and consulting—jobs that surround them with other elite grads, with well-structured reviews and advancement.
Today’s new graduates may be better credentialed than previous generations, and are often very hardworking, but only when given very explicit direction. And they seem to demand constant praise. Is it any wonder, with so many adults hovering so closely over every aspect of their lives? Frantic parents of a certain socioeconomic level now give their kids the kind of intensive early grooming that used to be reserved for princelings or little Dalai Lamas.
All this “help” can be actively harmful. These days, I’m told, private schools in New York are (quietly, tactfully) trying to combat a minor epidemic of expensive tutors who do the kids’ work for them, something that would have been nearly unthinkable when I went through the system 20 years ago. Our parents were in league with the teachers, not us. But these days, fewer seem willing to risk letting young Silas or Gertrude fail out of the Ivy League.
The combination of the self-esteem movement and the demand for credentials has been a disaster.
It doesn’t come from the welfare state, but from central planning:
Obamacare provides the illustration of this, as I think many people have intuited. The “economic problem,” of course, is inescapable in health care. The supply of health care is scarce (only so many resources can be dedicated to it relative to other ends in society) and the demand is pretty close to unlimited. Somehow or other we have to decide how to allocate these scarce means among all the different ends–preventive medicine, end-of-life care, primary research, specialists v. generalists, etc.
Now one possibility that–thank goodness–we have historically rejected in the United States is the idea that certain people should just feel a moral obligation to die for the good of society. You do hear this sometimes–that some people should voluntarily forgo life-extending treatment for the “good of society”–and it sends chills down my spine. This is essentially the Maoist approach.
The alternative is to come up with some way of allocating scarce resources among competing wants. The myth of Obamacare is the same problem repeated: it rests on the idea that we can simply change the means of health care delivery (central planning of health insurance) but it will not require determining the ends at some point–i.e., in the end who gets treated and what treatments are covered and which are not. So, for example, the core of Obamacare is the system of cross-subsidies for some treatments (maternal care) and the expense of others (unmarried or infertile people). So infertile people have less money for things that they want to do (such as join a health club) because they now have to pay more money for things that the central planners have decided is more important than whatever they would do with their money.
And of course, E. J. Dionne remains clueless, as always.
…yesterday the president issued an executive order (probably preempted by the Fair Labor Standards Act, Service Contract Act, Davis-Bacon Act while violating the Walsh-Healey Act) raising the minimum wage for employees of certain federal contractors to $10.10 an hour. He did so, according to the text of the Order, to increase productivity and improve the economy. If a $10.10 minimum wage for a narrow sliver of the workforce will improve the economy, why not raise it to $20.10? Come on, boost it to $50.10 and really get the economy humming. A Mercedes in every garage.
Then there’s Obamacare. The president’s granted so many waivers and extensions completely contrary to the plain text of the statute it’s hard to keep track. He’s ostensibly done so to, among other things, give individuals and businesses time to comply with the law and avoid some of the immediate costs associated with compliance. Again, why stop with Obamacare? Why not extend this year’s income-tax filing deadline to 2017? Give taxpayers more time to comply and adjust to the costs of compliance. It’s the right thing to do.
Why indeed is $10.10 the right number? This complete arbitrariness reminds me of the story of how Roosevelt determined the daily price of gold:
…the exposure to investors that Morgenthau was getting through the gold purchase project of 1933 was already teaching him something. Investors didn’t like the arbitrariness. It took away their confidence. One day Morgenthau asked FDR why the president had chosen to drive up the price of gold by 21 cents. The president cavalierly said he’d done that because 21 was seven times three, and three was a lucky number. “If anyone ever knew how we really set the gold price through a combination of lucky numbers etc., I think they would be frightened,” Morgenthau wrote in his diary. And they were: In the second half of 1933 a powerful stock rally flattened.
There is no more basis for the $10.10 number than there is for Roosevelt’s lucky number. But there are no limiting principles, as far as I can see. This is the totalitarian impulse.
Linda Billings hates the thought of it.
Peter Robinson has a tribute. His peak was before I was born, but my parents (who were the same generation — he was my mother’s age) used to rave about him when I was a kid. The Carl Reiner character in the Dick Van Dyke show was modeled on him.