Tag Archives: Market Failure

Posner — Why the market needs supervision

Here’s a book that will relegate Judge Posner to be adjudged as  a sure fire liberal:

In “Catastrophe: Risk and Response” (2004), he took up the problem of low-probability, high-impact events. The financial meltdown certainly qualifies. In this compact and bracingly lucid volume, he offers a simple, but not simplistic, primer: “a concise, constructive, jargon- and ­acronym-free, nontechnical, unsen­sational, light-on-anecdote, analytical examination of the major facets of the biggest U.S. economic disaster in my lifetime and that of most people living today.”

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An admonition to those who created/sold financial derivatives

Actually, this admonition applies to all who say they can deliver a future full of wealth:

See, I am against those who prophesy lying dreams, says the Lord, and who tell them, and who lead my people astray by their lies and their recklessness, when I did not send them or appoint them;  so they do not profit this people at all, says the Lord.

Jer. 23:32

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Regulatory Transparency – will it change your behavior?

A relatively new policy tool, mandatory disclosure of infromation with a regulatory intent, is being proposed as a means to deal with the net neutrality issue.  In an article announcing Obama’s choice of Leibowitz as FTC chair,  Cnet reports:

On the issue of Net neutrality, Leibowitz stood out from his colleagues in June 2007 when the FTC released a report stating no new laws were necessary. Leibowitz issued an opinion saying existing antitrust laws may not have been “adequate to the task” of Internet broadband regulation.

“Will carriers block, slow or interfere with applications?” Leibowitz asked at a public hearing held by the FTC in November 2006. “If so, will consumers be told about this before they sign up? In my mind, failure to disclose these procedures would be…unfair and deceptive.”

Researchers believe that in order for such transparency to be effective a) the user behavior must be changeable via better information and b) the disclosers’ behavior (i.e. internet access providers AT&T and Comcast) must be changeable in reaction to the users’ choices.  I question whether the users will have a choice even if they possess perfect information to act upon (not even gonna get into the details of whether the information disclosed is comprhensible by the average user)>

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Filed under broadband, Policy, policy tools

Internet Privacy – FTC worried self regulation not working

Lots of tangents from the story on new FTC study on industry policing and advertising their privacy policies:

  • FTC has two votes for regulation or legislation (doubts cast upon self regulation as a tool – public failure)
  • Study thinks companies make the information regarding their privacy policies too difficulty for the average person to find/comprehend (market failure = information assymetry)

Points of interest here:

  • Center for Digital Democracy
  • Future of Privacy Forum

Interesting difference in headlines:

Note to self:  Start an inventory of policy tools in each category of cyber policy

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Filed under cybersecurity, policy tools

Unintended Consequences of COPPA

Parry Aftab notes that when COPPA first became effective, a lot of children’s websites simply went away — assumingly because the owners could not manage or understand the COPPA requirements. And, for those that remain:

While the sites want to do the right thing, they are often adopting “do it yourself” methods that violate the law or put kids at risk unintentionally. Best practice standards for the kids Internet industry are new and require professional guidance.

How do you measure the cost of compliance?  Should those costs be transparent when policies are created?

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The word is “Data”

Stephen Baker of Newsweek, starts this week’s essay with the following line:

About three minutes into his speech on Jan. 20, President Barack Obama spoke a word never before uttered in a Presidential inauguration speech: “data.”.

The Obama campaign managed data like no other campaign before.  One would expect, and hope, that data, and the interpretation thereof, will have a prominent place in policy debates.

Which brings me to my point –  data is essential to building an information stream.  Without data, you have no information from which to make valid choices.  No data – no information — and you have either market failure, public failure or both.

How many bills do you think become law – federal, state and local, without data.  How many bills become law without sufficient data?  And how many bills become law without necessary data?

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Chasing the link to The Numerati (Baker’s book), led me to ThinkingAnalytically – where I found a mindmap of the book.  Remember to check out mindmeister for more info.

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Filed under Policy, public failure

The word for this decade “information”

Yeah, plastic is definitely, definitely out.  Information is in.  Got any?  Want some?

Just as plastic raises concerns regarding negative environmental consequences, information raises, metaphorically speaking, similar environmental concerns as individuals and corporations stress over who controls access to information.

Health Care Information Technologies (HCIT) is an area that offers seemingly “low hanging fruit” in terms of immediate individual and societal benefits.  Namely, more reliable information exchange between care providers will significantly reduce errors, thus lowering cost while increasing the quality of care.  Yet, despite bipartisan support for the outcomes of adopting electronic healthcare information systems, the pace of adoption is extremely slow.

Today, a NYT article highlights the difficulties President Obama will face as he pursues the deployment of HCIT.  Here is  one part of a very tough challenge:

“Health I.T. without privacy is an excellent way for companies to establish a gold mine of information that can be used to increase profits, promote expensive drugs, cherry-pick patients who are cheaper to insure and market directly to consumers,” said Dr. Deborah C. Peel, coordinator of the Coalition for Patient Privacy, which includes the American Civil Liberties Union among its members.

And, here is another:

In a letter to Congressional leaders, Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group for insurers, expressed “serious concern about privacy provisions being considered for inclusion in the economic stimulus bill.”

She criticized, in particular, a proposal that would require health care providers to obtain the consent of patients before disclosing personal health information for treatment, payment or “health care operations.”

Which leaves us with this pithy summation:

Such a requirement, she said, could cripple efforts to manage chronic diseases like diabetes, which often require coordination of care among many specialists.

“Health information technology will succeed only if privacy is protected,” said Frank C. Torres, director of consumer affairs at Microsoft. “For the president-elect to achieve his vision, he has to protect privacy.”

As an area of policy, one could ascribe the lack of progress to market failure, public failure, or both.  Multiple public values can be identified within this discussion.  Privacy, quality of life, and economic concerns are just a few of the values inherent to this debate.

The core topic of this debate, as portrayed by the article, is the quality of privacy.  How good is it?  Who controls it?  More importantly, who defines what “privacy” is?

So, who wins the debate?  Whose definition of  “public value” carries the day?  In sum, whose values does policy represent?

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Filed under Health, public values