French President François Hollande: "It is business that creates wealth, activity and jobs"

See Hollande Woos Entrepreneurs, from The Wall Street Journal, 4-29-2013. Excerpt:

"Our first duty is to stimulate the spirit of business and initiative in our country," Mr. Hollande said in a speech at the Élysée Palace. "It is business that creates wealth, activity and jobs."

President Obama: "No government program alone can take the place of a great entrepreneur"

See Billionaire Executive Pritzker Picked for Commerce Post , from The Wall Street Journal, 5-2-2013. It is about Penny Prizter being nominated for Secretary of Commerce. Excerpt:

""Penny is one of our country's most distinguished business leaders," Mr. Obama said from the White House. "She knows from experience that no government program alone can take the place of a great entrepreneur."" 

Alternatives to the War on Drugs From Gary Becker

Click here to read the article. Excerpts:

"The war on drugs makes it much more difficult for individuals who are unhappy about their addictions to cocaine or other drugs to end their addictions. When using drugs is a criminal offense, drug addicts who want to quit hesitate going to drug clinics, or seeking other help, because they are subject to arrest. Although decriminalizing drugs makes it easier to experiment with using drugs, it also encourages the development of for-profit and non-profit organizations that help individuals terminate their reliance on cocaine, heroin, and other addictive drugs. Since smoking and drinking are legal, the non-profit organization AA could develop to help heavy drinkers end their addiction, and profit-making companies had the incentive to create patches to help individuals stop smoking.

The evidence from Portugal, a country that decriminalized all drug use in 2001, offers some support for the claim that decriminalization of drug use will reduce addiction to drugs. A 2010 study in the British Journal of Criminology concluded that decriminalization in Portugal reduced imprisonment on drug-related charges, only slightly increased, if at all, drug experimentation among young persons, increased visits to clinics that help end drug addictions, and reduced deaths from drug overdoses."

"...full decriminalization on both sides of the drug market would lower drug prices, reduce the role of criminals in producing and selling drugs, improve many inner-city neighborhoods, encourage more minority students in the U.S. to finish high school, lessen the drug problems of Mexico and other countries involved in supplying drugs {to the U.S.}, greatly reduce the number of federal and state prisoners and the harmful effects on drug offenders of spending many years in jail, and save the financial resources of government.

In most countries, including the United States, smoking and drinking are rather heavily taxed through so-called “sin taxes”. For those concerned that legalizing drugs would greatly increase the use of drugs, legalization could be combined with a tax on drugs, like these other sin taxes. Some drug transactions might move underground to avoid paying this tax, but most production would remain legal because of the many contractual and other advantages of legally producing drugs."

Penalizing Hospitals For Re-admissions Might Be Counter-Productive

See An ObamaCare Penalty on Hospitals: This approach to reducing Medicare patient readmissions will have unintended consequences by STEPHEN SOUMERAI AND ROSS KOPPEL, from the WSJ, 5-6-2013.Excerpts:

"Research shows that most readmissions can't be prevented.
 
Readmissions are often unavoidable consequence of life-threatening complications that can appear after discharge from the hospital."

"...only about 25% of all readmissions are preventable"

"...patients that are elderly, minority, poorly educated, poor, smokers and the noncompliant (among others) have higher readmission rates."

"Readmission penalties will have unintended consequences that harm patients."

"Hospitals will seek to keep such patients in emergency rooms rather than admit them. Why? The simplest way to avoid readmission is not to admit a patient in the first place." 

"The policy discriminates against poorer hospitals.
 
Small and financially struggling hospitals lack the resources to effectively manage their discharged patients at home."

"...of 2,200 hospitals found that "safety-net" hospitals that treat a higher number of lower-income patients are "30 percent more likely to have 30-day hospital readmission rates above the national average.""

"...rained physician and nurse-practitioner teams can help homebound elderly and heart-failure patients avoid readmissions, sometimes reducing rehospitalizations by nearly 50%."

"...Medicare penalties for hospital infections deemed "preventable" failed to reduce infections. Instead, the penalties contributed to misleading coding to give the appearance of fewer infections."

"...paying doctors extra money for individual quality metrics (like treating high blood pressure) rarely, if ever, works."

Dr. Soumerai is a professor at Harvard Medical School and the Harvard Pilgrim Health Care Institute. Dr. Koppel, a professor of sociology at the University of Pennsylvania, conducts health-care research at Penn and Harvard.

Expected price of Obamacare mounts

See Expected price of Obamacare mounts: The Affordable Care Act could boost the cost of underlying claims by 32%, with worst-hit states including Ohio and California by Aimee Picchi of MSN.

"With many Americans and businesses concerned about the impact of Obamacare, a new study from the country's top group of financial risk analysts is providing fodder for those fears.

Underlying claims costs -- which form the basis for insurers' health care coverage premiums -- will jump by one-third across the U.S. after the Affordable Care Act goes into effect next year, according to the Society of Actuaries.

But that increase won't be felt evenly across the country because the study forecasts that some states will feel more pain than others. Among the hardest-hit will be Ohio, where claims costs will jump by almost 81%, and California, with a 62% increase.

Other states projected to see big increases in claims costs are Wisconsin, with an 80% jump; Indiana at 68%; Maryland, with a 67% bump; and Idaho at 62%.

What does that mean for individuals? If you're already covered by your employer's plan, not much. But if you're uninsured or buy health insurance directly, the study indicates costs could rise for some people, according to The Associated Press.

The actuaries' report is a blow to the Obama administration, which designed the new law to decrease the ranks of uninsured Americans and to whittle away the overall cost of health care. As many as 32 million Americans are expected to receive health care coverage through the law.

The study also supports criticism coming from many business owners, such as the Five Guys Burgers and Fries franchisee who complained earlier this month that Obamacare is forcing him to delay expansion plans and might increase prices. Top executives and franchisees for companies including Wendy's (WEN -0.87%) and Whole Foods Market (WFM +0.49%) have also aired worries about the plan.

One problem: An influx of sick people joining the insurance rolls "will overwhelm the expected lower costs" from younger and healthier people joining the program, the study notes.

The Obama administration questioned the findings, saying costs will go down under the law, which takes effect next year, the AP notes. 

The silver lining in the study is its finding that some states will actually see decreasing costs. Among those are New York, with claims costs sliding 14%, and Massachusetts, with a 13% decline.

"In simplest terms, the states that will see large increases generally have low current individual costs and those showing decreases have high current individual costs, with all states moving closer together but at a higher level overall," said Kristi Bohn, a consulting health staff fellow at the Society of Actuaries, in a statement.

The Society of Actuaries doesn't view itself as a political group, Bohn told the AP. "We are trying to figure out what the situation at hand is," she said."

David Neumark's Latest Paper On The Minimum Wage

See MINIMUM WAGES: Evaluating New Evidence on Employment Effects by Neumark and J.M. Ian Salas. Excerpts:

Executive Summary:

"The fierce political debate over raising the minimum
wage, which is repeated yearly in legislatures across the
country, has at times been matched by a strong academic
debate on the subject. Specifically, economists have argued
over whether a higher minimum wage reduces the
employment of less-skilled jobseekers.

The published research on the subject points overwhelmingly
in one direction: A summary of the last two decades
of literature on the minimum wage, co-authored by the
lead economist on this study, concluded that most of the
evidence points to job loss following wage hikes. Economists
have detected this job loss using state variation in
minimum wages, with states that do not raise their minimum
wage acting as a “control group” for states that do.

But today, a small group of economists (listed at right)

Arindrajit Dube
University of Massachusetts-Amherst
Sylvia Allegretto
University of California-Berkeley
Michael Reich
University of California-Berkeley
T. William Lester
University of North Carolina

has mounted an aggressive challenge to the existing academic
consensus on minimum wages. In a series of studies
first published through the organized labor-aligned
Institute for Research on Labor and Employment (and
later in the journals Review of Economics and Statistics
and Industrial Relations), they’ve argued that prior studies
on the minimum wage were incorrect in blaming the
policy for a drop in employment opportunities among
less-skilled employees (like teens) or in service-intense industries.
Rather, they claim, these employment declines

are due to unrelated changes in states’ economies—in

particular, unexplained downturns in employment of

unskilled workers that just happen to coincide with dozens

of state minimum wage increases.

To get around this purported problem, they toss out most
of the labor market data available to detect the effects of
wage increases, and restrict their analysis to either neighboring
state border counties or states in the same Census
division. Using this highly-restrictive model, they claim,

provides better control groups and shows that a higher

minimum wage has no negative effect on employment.

With the encouragement of the economists themselves,
who have a history of working in support of progressive
causes, these studies (henceforth IRLE papers) have
gained prominence among activist groups who leverage
them to claim that mandated wage hikes will have no
adverse impact on employment. (One of the economists
even said explicitly at a 2010 conference in Atlanta that
this research should “help to pave the way” for higher
mandated wages.)

Or so they hope. But in this new study, University of California-
Irvine labor economist David Neumark worked
with UC-Irvine Ph.D. student J.M. Ian Salas to determine
whether the IRLE papers have merit. Specifically,
do the studies make good on the claim their authors’
have put forth, of overturning the decades of research
preceding them?

Neumark and Salas report that the evidence presented in

the IRLE papers only runs contrary to earlier studies because

the authors’ empirical models rely on inappropriate

control groups, and toss out the economic data necessary

to detect the impact of a minimum wage increase. They
are unequivocal in their conclusion: “[N]either the conclusions
of these studies nor the methods they use are
supported by the data.”

The authors of the IRLE papers provide no direct evidence

to justify their highly-restrictive study design, instead
speculating that nearby states or counties constitute
ideal control groups against which to measure the effects
of the minimum wage. But Neumark and Salas demonstrate
that the premise of the IRLE papers is wholly incorrect:

If you examine the characteristics of the control

counties and states used in the IRLE papers (which the

authors of those papers failed to do), you find that they’re

generally very poor control groups.

• For instance, the authors’ preferred control for Leon
County, FL—home of the Florida state capital in
Tallahassee, with a population of roughly 275,000
people—is Grady County, GA, which has barely
25,000 people and no major cities.

• Similarly, one control state for Connecticut—a vibrant
northeastern state with 3.5 million people and
$237 billion in annual economic output—is Vermont,
a state with roughly 1/6th of Connecticut’s
population and one-tenth its economic output.

Instead of speculating about which states represent ideal
controls, Neumark and Salas closely examine the economic
characteristics of all states in each Census Division,
and find that it’s mostly states outside the Census
Division that serve as better control groups. (A similar
pattern holds for nearby counties, which they also examine
individually.) Yet all of this identifying data is discarded
by the authors of the IRLE papers.

In other words, the robust set of control groups the authors
use actually aren’t robust at all—indeed, they’re less
suited to the task at hand than studies that have come
before. And in the small number of cases where nearby

states or counties are appropriate controls, the data in

these cases show that employment did fall after a minimum

wage increase.

Given their numerous methodological problems, it’s not
surprising that the evidence in favor of the empirical approach
advocated in the IRLE papers is “weak or non-existent.”

When the analysis is not restricted to these inappropriate

control groups, the data clearly show that wage

hikes do cause job loss. Indeed, in some cases Neumark
and Salas find that the IRLE authors omitted evidence
that exposed the weaknesses in their approach.

Neumark and Salas end with a strong admonishment to
the authors of the IRLE papers: “[P]rior to concluding
that one has overturned a literature based on a vast number
of studies, one has to make a much stronger case that
the data and methods that yield this answer are more
convincing than the established research literature that
finds disemployment effects, and understand why the
studies in that literature would have generated misleading
evidence.”

It’s a warning that the economists themselves should
heed, as should legislators eager for studies (no matter
their accuracy) that validate their ideological preferences."

Conclusions

"In two recent studies, Dube et al., 2010 and Allegretto et
al., 2011 present evidence and a forceful critique of much
of the prior research on the employment effects of minimum
wages. They argue that the evidence of negative
employment effects for low-skilled workers is spurious,
and generated by other differences across geographic areas
that were not adequately controlled for by researchers.
And they put forth a self-proclaimed “fourth generation”
of minimum wage studies that control for this spatial heterogeneity
and conclude that once one does this, there are
“no detectable employment losses from the kind of minimum
wage increases we have seen in the United States”
(Dube et al., 2010, p. 962).

The Minimum Wage Seems To Affect Teenagers

See Let’s review the adverse effects of raising the minimum wage on teenagers when it increased 41% between 2007 and 2009 by Mark Perry. Excerpt:

"During the 2002-2007 period when the minimum wage was $5.15 per hour, teenage unemployment exceeded the national jobless rate by about 11% on average. Each of the three minimum wage increases was accompanied by a 2 percentage point increase in the amount that the teenage jobless rate exceeded the overall rate, from 11 to 13% after the 2007 increase from $5.15 to $5.85 per hour, from 13% to 15% following the second hike to $6.55 per hour, and from 15% to 17% following the last increase to $7.25. The 17.5% “excess teen unemployment” in October 2009 was the highest on record, going back to at least 1972, and was almost 5 percent higher than the peak teen jobless rate gap following the last recession (12.7% in June 2003)."