Minor Thoughts from me to you

Three months ago, I reported that Jim Doyle wanted to hike the hospital tax in order to give hospitals more money. Well, he still wants to. Only now we know that the amounts the hospitals will supposedly receive, is less than Diamond Jim hoped for:

UW Hospital had been projected to gain $23.3 million in Medicaid reimbursements over two years under the original proposal. Under the new calculations, it would receive about $11 million. Meriter, which had been projected to get almost $22 million, would receive about $14 million. The projected reimbursement for St. Mary's Hospital's increased by half a million dollars, to $4.8 million.

Oops. Of course, people not affiliated with the Doyle administration think that hospitals will actually lose money by being taxed, not gain it:

In March, the Wisconsin Hospital Association released an analysis showing hospitals would lose money in the next two years if the hospital tax is approved, not gain $283 million, as Doyle claimed. The group is still analyzing the new data, but remains skeptical.

Of course, it's not even a given that the hospitals will receive all of the money from the tax scheme:

"A large portion is diverted to other programs. ... It's difficult to say where the funds will ultimately be used," Quinn said.

Government efficiency, marching onward. Roll Wisconsin!

The U.S. Postal Service raised it's rates for first-class mail today. No longer will you be able to buy a $0.39 stamp. The day of the $0.41 stamp is upon us. The rate hike is annoying, but ultimately not all that relevant to my life. Aside from thank-you notes and renewing license plates, I don't really use the Postal Service.

However, the USPS isn't just raising rates on first-class mail. The Postal Regulatory Comission also decided to change the way it calculates rates for periodicals and magizines:

Starting in July, postal rates for some publications will rise by as much as 30 percent, and a growing number of critics say the new rates will saddle small, independent publishers with inflated costs and betray protections granted by the founding fathers to the press.

The U.S. Postal Service gave periodicals a special class of mail more than 200 years ago and averaged rates to make it cheaper to send a magazine than a letter, while still giving publishers first-class service.

The cost to the Postal Service of sending periodicals has also risen disproportionately to other types of mail over the past 10 years.

Very basically, here's how the changes in rates are calculated: The average cost increase to periodicals is 11.7 percent, but this rate skews lower or higher for many based on price-based incentives created to push publishers to streamline their mailing operation.

A 758-page document details the plan, which plugs many variables into a pricing equation: packaging, co-mailing, co-palletting, pounds, pieces, shape, sacks, drop-shipping, points of entry, distance traveled and editorial weight versus advertising weight.

Confused? So are many publishers. It doesn't help, they say, that the computer software created to help them solve this equation won't be available until mid-June.

Both sides agree that the issue is, at its core, an ideological debate between those who believe periodical postal rates should be averaged for all to protect the democratic dissemination of information and those who see averaging as a subsidization that hinders efficiency.

It's also a fairly pointless debate. The only reason it's happening at all is that periodicals have exactly one choice for delivery: the USPS. There is no competition for first-class mail delivery. By law, anyone who tries to compete with the USPS in first-class mail delivery commits a crime. Publishers are forced to use the government monopoly, instead of using whichever company gives them the best combination of price and service.

It's time to end these pointless, stupid debates over the best way to calculate postal rates. Allow Fed-Ex, UPS, DHL, and other carriers to compete with the USPS. Let publishers choose their own mail carrier. Some carriers might have rates that are less expensive than current Postal Service rates. Other carriers might have rates that are more expensive than current Postal Service rates. Regardless, they would be rates that publishers choose to pay, based on their unique needs. Everyone would get the best combination of price, speed, and service that they need.

Right now everyone gets the same combination of price, speed, and service -- whatever the Postal Regulatory Comission decides is best for the nation.

How un-American.

For our troops fighting the war in Iraq, the number one threat isn't gun battles with terrorists, it's improved explosive devices left by the roadside. IED's cause fully 70% of American casualties in Iraq. This has been known for a while. What's also been known for a while is that Hummers do little to protect the troopers riding in them.

Unfortunately, most members of Congress have been too busy pointing fingers over the war to spend time figuring out how to help the military actually fight the war. Fortunately, it appears that some members of Congress are finally starting to see the light:

What my amendment will do is allow the military to put 2,500 more mine resistant ambush protected vehicles--known in the military by its acronym, MRAP--in the field by the end of this year. ... MRAP vehicles provide four to five times more protection to our troops than up-armored HMMWVs. That statement, that these MRAPs provide four to five times more protection than up-armored HMMWVs, is not my estimate. That is the judgment of our military leaders. The Commandant of the Marine Corps, GEN James Conway, with whom I spoke as recently as this afternoon, wrote on March 1 to the Chairman of the Joint Chiefs of Staff. He said:

Multi-National Forces--West, that is, the Marines in Iraq [JK Background: specifically, in Anbar province], estimates that the use of the MRAP could reduce the casualties in vehicles due to IED attack by as much as 80 percent.

Let me explain the specifics of the MRAP. Each vehicle can hold 4 to 12 troops. Like the rhino, these vehicles have raised steel, V-shaped hulls and chassis. The raised hull is valuable because it gives the blast more time to expand, lessening the impact. The V-shape pushes the blast up the sides of the vehicle and away from the occupants. With an up-armored HMMWV or any humvee, the flat bottom sends the blast through the floor right into the occupants. In addition, the vehicles have side armor and bulletproof glass, and they also have tires that can be driven when flat.

Surprisingly, the person leading the charge on this issue is none other than Senator Joe Biden. While he often endures the nickname "Slow Joe", in this case he's faster out of the blocks than far too many of his colleagues. Good for him. Now let's work on getting some MRAP's over to Iraq.

Wisconsin Governor Jim Doyle has a plan to give more money to hospitals. It's very simple -- in order to pay them more, he first has to tax them more. The Wisconsin State Journal gave a breakdown of the plan:

It works like this: The state imposes the tax on hospitals, leading to an increase in the cost of providing health services. The state returns the money raised by the tax to hospitals to help cover the costs of providing care to Medicaid patients. Then the state reports the increased costs of Medicaid to the federal government, which in turn increases its reimbursement to the state.

The state can then use the extra money for health care or other programs.

I'm reasonably certain that any private doctor, trying to increase Medicaid reimbursements this way, would be prosecuted for Medicaid fraud. Why are states are allowed to get away with such blatant fraud? Wisconsin isn't the only state doing this, but it might be one of the last:

"We have, as a state, been much less aggressive than other states in the use of these assessments," said Jason Helgerson, executive assistant and policy director for the Department of Health and Family Services.

Hospital executives say they understand why states are imposing such taxes. But they said the federal government is catching on to what states are doing and federal rules changes could limit Medicaid reimbursements and render the taxation strategy ineffective for states.

This whole scenario is a perfect example of government inefficiency and waste. Whatever faults private insurance might have, this kind of chicanery isn't it.

Reaping the whirlwind:

If prices are rising, that should be a signal to people and businesses to avoid settling in risky areas. The economic centre of the hurricane business is Florida, which is both the most vulnerable part of America and the most valuable. In 2004 the total value of insured coastal property in Florida was $1.937 trillion, compared with $1.902 trillion in New York. Unfortunately, the signal is not getting through to homeowners in Florida, because the government is cushioning the blow. Insurance companies in America may not set their own prices. The rates they charge customers (and indeed the models on the basis of which they calculate their rates) are regulated by state governments. "Communism survives in three parts of the world," says Mr Muir-Wood: "North Korea, Cuba and the American insurance market."

Thanks to subsidised insurance, the risks of living on Florida's coast are not reflected in property prices. In 2005"”the year after the most damaging hurricane year ever"”six of the nine metropolitan areas with the fastest-rising house prices in America were in Florida. The state's population is expected to rise by 52% between 2003 and 2030, as against 21% for the country as a whole. The insurance industry is not impressed. "You've got to send a proper price signal," says David Unnewehr of the American Insurance Association. "You can't subsidise development through insurance."

What would Florida look like if the price signals were getting through? More like Grand Bahama, probably, which is covered by the British insurance market. The Queen's Cove canal estate in north Grand Bahama, which has been flooded three times in six years, is no longer insurable. People are moving out and new houses are being built on stilts.

I'm always quick to criticize the Department of Motor Vehicles. After all, I've spent more time in their lines than I have anywhere else. Still, fairness requires me to praise them when they actually do something right. The Wisconsin State Journal wrote today about the DMV making it tricky to get fake driver's licenses:

Getting a fake state-issued driver's license in Wisconsin now requires more than stolen or forged documents. It might take a plastic surgeon.

Every night, after the cameras have been shut off and the staff has gone home, computers quietly scan the roughly 5,500 images captured at state Division of Motor Vehicles field offices that day and compare them to some 6 million photos from driver's licenses and state identification cards on file.

They look at the shape of the nose, the arch of the eyebrows, the crease in the forehead. If the person photographed that day has had a picture taken for a state ID since 1997, chances are, the computers will find it.

Since the system was implemented it has caught more than 630 attempts to get false ID's -- including attempts by a child molester and a drug dealer trying to establish new identities. This is great news. If a driver's license is to have any validity at all as an identifier, it must be difficult to establish a false ID. While this system won't prevent other people from creating false ID's on their own, it will help make sure that the DMV isn't handing out "official" fake IDs.

Good job -- that's praise-worthy.

If you live in Colorado, you may be surprised at how hard it is to start a business. Coyote recently won a concession to manage the Elk Creek Marina on Blue Mesa Lake. He posted a list on Getting the Government's Permission to do Business. It's a 20 item list. Everything on there is either time-consuming, expensive, or both.

• To register as a foreign corporation, we need to hire a person to be a "registered agent" to be a contact with the state. The only real purpose of this person I have ever found is to provide an avenue for mail to get lost.
• We need to fill out a pretty elaborate application to sell Colorado fishing licenses, and may need to post another bond to do so. (Update: Confirmed, we need a $4000 bond).
• We need to go through an extensive application process to transfer three current liquor licenses into our name. I wrote about liquor license hassles here.
• The person on the phone today told me a corporation in Colorado cannot own more than two liquor licenses. If this is true, we will have to form a second company in Colorado, repeating all the tasks above plus the initial work just to form the company
• Our managers need to attend food handlers training in Colorado. Of course, they have attended the exact same course in California, but Colorado wants them to sit through it again within their state's borders

There's more. Lots more. Think of this if you wonder why there aren't more jobs available. Every potential employer has to go through this hassle before being legally allowed to offer jobs.

Another John Stossel special will be airing on ABC this week. Reason Magazine reprints a summary of Myths, Lies, and Nasty Behavior.

The special will air in Madison on ABC-27 and run from 9pm to 10pm. We have a dinner guest tonight, but I'll be taping it to watch later.

Also worth reading is Stossel's older article Confessions of a Welfare Queen. You may be surprised at who's collecting welfare checks.