Friday, January 7, 2011

Taxi

     You go to a city you've never been to before and get into a cab. The fares listed next to the meter are the highest you've ever seen. "Why are cab fares so high?" you ask the driver. "Because", he says, "we have so many costly accidents and resulting lawsuits that our insurance is expensive and it increases the fares."
"Are you doing anything to reduce the accidents?" you ask. "No.", he says, "We're trying to make it harder for people to sue us."
     Similarly, doctors complain that malpractice insurance is too expensive and lawsuits should be limited. There seems to be no recognition that they need to reduce medical accidents, which will only be possible when the medical profession turns its attention to accident prevention instead of so-called "malpractice reform".

The Rain Dance

     There's been a long drought, so you do a rain dance. It doesn't rain but you are told that you need to do another rain dance. You do another rain dance but it still doesn't rain. Your advisors insist that more rain dances are needed. After a few more rain dances it hasn't rained, but after many more rain dances it does rain. This proves that you just needed to do enough rain dances.
     A large government stimulus bill didn't fix the economy, nor did the Federal Reserve printing money. Some insist that more stimulus is needed, which is being provided by an extension of the Bush tax cuts and of unemployment insurance; and the Federal Reserve is printing more money ("Quantitative Easing"). Perhaps there will be even more stimulus and Quantitative Easing and eventually the economy will recover. This proves...