Category: Technology and Regulation

What just happened with Obamacarehealthcaregov site?

In a two-to-one decision, the U.S. Court of Appeals for the District of Columbia Circuit dealt a serious blow to Obamacare by ruling the government may not provide subsidies to encourage people to buy health insurance on the new marketplaces run by the federal government.

What did the court decide?

Section 36B of the Internal Revenue Code, enacted as part of the Patient Protection and Affordable Care Act (Obamacare) makes tax credits available as a form of subsidy to individuals who purchase health insurance through marketplaces—known as “American Health Benefit Exchanges,” or “Exchanges” for short.

This provision authorized low-income Americans to receive tax credits for insurance purchased on an Exchange established by one of the fifty states or the District of Columbia. (The credits were for household incomes between 100 and 400 percent of the federal poverty line.) But the Internal Revenue Service interpreted the wording broadly to authorize the subsidy also for insurance purchased on an Exchange established by the federal government.

The court ruled that a federal Exchange is not an “Exchange established by the State,” and section 36B does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges.

Can you explain that without the legalese?
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“Politics makes strange bedfellows,” said Charles Dudley Warner. And nowhere is that more true than in the political alliances that form around regulation.

In a 1983 paper, regulatory economist Bruce Yandle coined the catch-phrase “Bootleggers and Baptists” for the observation that regulations are often supported by peculiar alliances who have very different end-goals in mind.

Yandle explains the Bootleggers and Baptists theory of regulation in this video by LearnLiberty.

(Via: Art Carden)

bitcoin-wallBitcoin is dead, long live Bitcoin.

A few weeks ago the IRS killed off any chance that Bitcoin could become a mainstream currency. That’s probably for the best since it clears the way for it to become something much more important: the world’s first completely open financial network.

Timothy B. Lee has a superb article explaining why this could be transformative. Lee highlights one particularly helpful innovation:

One obvious application is international money transfers. Companies like Western Union and Moneygram can charge as much as 8 percent to transfer cash from one country to another, and transfers can take as long as 3 days to complete. In contrast, Bitcoin transactions only take about 30 minutes to clear, and Bitcoin transaction fees could be a lot less than 8 percent.

An “alternative to Western Union” doesn’t sound revolutionary, does it? Now look at this graphic produced by The Daily Mail which shows how much money is being sent by migrants to their families back home.
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Last week was one of mixed blessings for those engaged in the U.S. political process. On the positive side, the U.S. Supreme Court – by a 5-4 margin – struck down overall limits on campaign contributions. Unfortunately, the pendulum swung in the opposite direction for Brendan Eich, co-founder and chief executive officer of Mozilla, who resigned after the Los Angeles Times disclosed his $1,000 contribution in support of California’s 2012 Proposition 8.

Eich’s unfortunate circumstances bring to mind the many proxy resolutions submitted to a plethora of companies each year by so-called religious shareholders such as As You Sow and the Interfaith Center for Corporate Responsibility. These resolutions bleat endlessly of the need for transparency in corporate lobbying, political expenses and donations to the American Legislative Exchange Council and The Heartland Institute. The call for transparency, however, is a ruse – what’s most important is shaming the companies publicly so they’ll give up fighting for their First Amendment rights. (more…)

american heroIn a fascinating essay in Mosaic, Charles Murray examines the spirit of innovation in America. He asks,

As against pivotal moments in the story of human accomplishment, does today’s America, for instance, look more like Britain blooming at the end of the 18th century or like France fading at the end of the 19th century? If the latter, are there idiosyncratic features of the American situation that can override what seem to be longer-run tendencies?

The author of Human Accomplishment: The Pursuit of Excellence in the Arts and Sciences, Murray amassed data from virtually all of human history, across cultures and in vast categories of human endeavor. He believes that there are patterns to innovation, creativity and advancement, and that certain cultural standards support and encourage this, while others degrade it. Murray makes the case that America is floundering, if not fading, when it comes to innovation and invention. (more…)

IKEA-Refugee-Shelter3When looking for solutions to humanity’s problems, conservatives and libertarians tend to prefer turning first to free markets rather than government. The reason for such a preference is often misunderstood, and can be difficult to explain since it appears paradoxical: free markets are often better at serving human needs than governments because free markets make it easier to fail.

As Arnold Kling explains, the best way to deal with failure depends on the institution. An individual needs to fail with a fallback position, a small startup firm needs to fail quickly, and a large, established firm needs to fail gracefully. But government, says Kling, cannot do any of these things well.

Of the many things that governments do poorly, failing is probably the worst. That is why governments rarely produces significant innovations. To produce innovative ideas, products, processes, or services requires testing what works and adjusting what doesn’t until you find the right formula. In a free market, the actions of consumers provide a signal to individuals and firms that they are doing well – or that they are failing.

If a company is failing, they have an incentive to adjust — and are pressured by competitors to adjust quickly — in order to give the customer what they need. They are often faced with a brutal, binary choice: innovate or fail. Government agencies, in contrast, tend to lack such feedback mechanisms and the ability to adjust quickly precisely because they have a low fear of failure. Even if they are unable to innovate and serve the needs of their “customers” they will likely stay in business due to bureaucratic inertia.
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Blog author: jcarter
posted by on Monday, March 3, 2014

“Most CEOs now spray the word ‘innovation’ as if it were an air freshener,” says Dennis Berman in the Wall Street Journal, “A little spritz can’t hurt.” A prime example, notes Berman, is what Kellogg’s CEO John Bryant described as one of their company’s most important “innovations”: a peanut butter Pop-Tart.

Most of us would probably agree that a new flavor of breakfast pastry isn’t as innovative as, say, the iPhone. But how do we know? What exactly is innovation?

As David Brier explains, innovation is about “seeing and connecting the dots.”

MedicaidMoney_jpg_800x1000_q100If a large Oregon study is any indication, says Jonathan Witt in this week’s Acton Commentary, the Affordable Care Act may drive up frivolous emergency room visits and do little to improve people’s physical or economic health:

In essence, the healthcare industry becomes the enabler in a lucrative game in which patients put off needed lifestyle reform, opting instead for prescription pills, surgeries and conversations about “genetic predispositions.” None of this gets at the root problem, and indeed exacerbates the root problem. People face a moral challenge, to accept responsibility as stewards of their bodies to live a healthy lifestyle. The system, instead of spurring them on to do the responsible thing, all too often invites them to believe they are not responsible and should entrust their genetically hopeless selves into the hands of the medical/pharmaceutical industrial complex.

The full text of his essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

Blog author: jcarter
posted by on Tuesday, January 14, 2014

net-neutralityIn a ruling that has significant implications for the future of the Internet, an appeals court has ruled that the FCC cannot impose so-called “net neutrality rules.” What exactly is net neutrality? And why should Christians care?

What is net neutrality?

Net neutrality (short for “network neutrality”) refers to both a design principle and laws that attempt to regulate and enforce that principle. The net neutrality principle is the idea that a public information network should aspire to treat all content, sites, and platforms equally. At its simplest, network neutrality is the idea that all Internet traffic should be treated equally and that every website – from Google.com to Acton.org — should all be treated the same when it comes to giving users the bandwidth to reach the internet-connected services they prefer.

Net neutrality laws are legislation or regulation that prevents Internet service providers (ISPs) from discriminating or charging different prices based on such criteria as user, content, site, platform, application, or type of attached equipment.

What is the basic argument in favor of net neutrality regulation?
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According to a report released this week by the Pew Research Center, the so-called “digital divide” between whites and blacks is slowly being closed by smart phones. Here are the key findings of the report:

(1) African Americans trail whites by seven percentage points when it comes to overall internet use (87% of whites and 80% of blacks are internet users). At the same time, blacks and whites are on more equal footing when it comes to other types of access, especially on mobile platforms.
(2) Overall, 73% of African American internet users—and 96% of those ages 18-29—use a social networking site of some kind. African Americans have exhibited relatively high levels of Twitter use since we began tracking the service as a stand-alone platform.
(3) 92% of African Americans own a cell phone, and 56% own a smartphone.

While this may appear to be helpful information, the way the study is being reported tells us nothing about race. This type of data continues to feed the myth that the digital divide in this country is determined by a “racial wealth gap.” I am not convinced that there ever was a digital divide by race to begin with because the real digital divide in America is determined by class, not race.

If one reads the Pew report closely it becomes apparent that studying the “digital divide” along the axis of race is useless because there is essentially no statistical difference between access to the internet between blacks and whites when controlling the data according to income.
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