Incentives in everything

December 2, 2009

When asked about the biggest problem facing the criminal justice system, Radley Balko told the Economist:

[T]he incentive problems are most apparent with prosecutors. Prosecutors get no credit for cases they decide not to bring, either because of a lack of evidence or because pressing charges wouldn’t be in the interest of justice. They’re only rewarded for winning convictions. That’s what gets them promoted, or re-elected, or gives them the elevated profile to run for higher office. Every incentive points toward winning convictions. And particularly with prosecutors, there’s really no penalty at all for going too far to get a guilty verdict. One real disservice the Duke lacrosse case did for the criminal-justice system is it put in the public consciousness the idea that bad actors like Mike Nifong are regularly disciplined for misconduct. In truth, that case was really exceptional.

HT: Andrew Sullivan

CEO Offends Customers by Advocating for Their Best Interests

August 18, 2009

Recently, John Mackey, CEO of Whole Foods, wrote an article arguing against President Obama’s proposed health care “reform”. Here is a list of recommendations from Mackey’s article:

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

Refreshing, isn’t it? A plan that would actually work and not trample individual liberty in the process. Unfortunately for Mackey, his wisdom was not appreciated by many of his customers. Radley Balko of The Agitator has an excellent take on the negative reaction:

Mackey didn’t deliberately offend his customers, as some have suggested. He didn’t spit in your face, or, as one commenter so delicately put it, he didn’t “squeeze a turd in [your] punch bowl.” He just overestimated you.

You see, he shared his ideas on health care reform, thinking that you, being so famously open-minded and all, might take to a few of them, or that it at least might start a conversation. I guess he felt he’d built up some cache with you, and wanted to introduce you to some new ideas. His mistake wasn’t in intentionally offending his customers. He’s a businessman who has built a huge company up from the ground. I’m sure he knows you don’t deliberately offend your customers. His mistake was assuming you all were open-minded enough consider these ideas without taking offense—that you wouldn’t throw a tantrum merely because he suggested some reforms that didn’t fall in direct line with those endorsed by your exalted Democratic leaders in Washington. In retrospect? Yeah, it was a bad move. Turns out that many of you weren’t nearly mature enough to handle it.

So much for “change”.

HT: Club For Growth

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