Thursday, October 29, 2009

Stealth Democracy by John Hibbing and Elizabeth Theiss-Morse, Thoughtful Thursday

In this blog, I tackle what might be its greatest critic. "The processes people really want would not be provided by the populist reform agenda they often embrace; it would be provided by a stealth democratic arrangement in which decisions are made by neutral decision makers who do not require sustained input from the people in order to function," a democracy that is visible when the people want it to be, but otherwise does the work of forming and executing policies in the background. Hence the title, Stealth Democracy

Most Americans are moderates, they perceive the government to be moderate as well. As Figure 1.3 on page 28 shows, the United States government is at approximately the same place in the left-right spectrum as the voters.

They asked the following question:
"Some people say what we need in this country is for ordinary people like you and me to decide for ourselves what needs to be done and how. Other say ordinary people should allow elected officials to make all political decisions. Still others say a combination should be best. Imagine a 7-point scale with "1' being ordinary peple making all decision on their own and '7' being elected official s makeing elected officials making all the decisions on their own, while '2,' '3,' '4'H,' '5,' or '6' indicate opinions in-between the two extremes. Which number from 1 to 7 best represents how you think government should work. (See Figure One, scanned in from Page 47, Thier Figure 2.2) This is in contrast to the policy space where the people perceive themselves to be 4.4 on the scale from one (liberal) to seven (conservative). (See Figure Two, scanned in from Page 28, Figure 1.3)

In Chapter Six, they say that the American people do not want to be more involved in politics and Americans want are "Empathetic non-self-interested decision makers." First of all, perhaps Americans and many other countries and cultures, would choose to be governed by friendly space aliens like the Taelons in Earth: Final Conflict or the Quozl in Alan Dean Foster's book, or some kind of intelligent robot. But this is science fiction. We only have humans or as I advocate letting humans cast decisions and computer systems finding ways of combining them.

Yet the poll questions belie that notion. When asked, should we leave "decisions to successful business people" (This was a Gallup Poll in 1998 before Enron and many other business scandles), 59% disagree and only ten percent strongly disagree. 28% Agree and 4% disagree. (Their Table 6.2 on page 138). When asked if decisions should be left to nonelected experts, sixty percent disagree and nine per cent strongly disagree. Only 31 percent agree or strongly agree. (48 percent agree with at least one.) They found a correlation between the decisions to leave decisions with non-elected experts and a desire for more participatory democracy.

Thus, I am looking at mechanisms to combine experts and participatory democracy. One of these, is based upon Courteous Logic Programs. Also, such questions are abstract, people haven't truly tried any participatory democracy except maybe some referendum in their state or locality. Muhl07 experimented with online deliberation in their work and found that Americans became more interested in participatory democracy as the result. They found that online deliberation on a contentious issue of school consolidation reduces Vertical Collectivism. However, it had no effect on the two questions, "Should government be run by experts?" and "Should government be run by business leaders?" But this group like Dr. Theiss-Morse and Hibbing's had a very low agreement level with these. (I found that Dr. Muhlberger wrote a very long article on deliberation which cited this, so Dr. Muhlberger will get a Thoughtful Thursday posting some time.)

IN another survey by the Gallup report, they found that Americans said 77% of the time they were proud of the American People and only 41% were proud of the Federal Government. And to show that people can be angry and proud at the same time, they found that 52% were angry with the American people and 71% were angry at the Federal Government.

(Of course, Dr. James Fishkin and others have experimented with conventional face-to-face deliberation".

Stealth democracy is an additive index based on the following questions:

  1. Elected officials would help the country more if they would stop talking and just take action on important problems
  2. What people call 'compromise' in politics is really just selling out on one's principles
  3. Our government would run better if decisions were left up to successful business people
  4. Our government would run better if decisions were left up to non-elected independent experts rather than politicians or the people.
  5. (And in focus groups)
And they asked, among many other reforms, "People should be allowed to vote directly on policies through ballot initiatives and the like much more often than they do now."

In focus groups, they asked,

  1. "First what do you see as the strengths and weakness of ordinary Americans in terms of their ability to make good political decisions?
  2. Are they smart, informed energetic, interest in politics or are they dumb, uninformed, lazy, politically naive, uninterested
  3. Some people advocate moving toward a total direct democracy where people vote directly on import political decisions and we wouldn't even need to have elected officials anymore. Much like a large New England town meeting, the American people would be making all of the decisions themselves. What do you think of this idea?
  4. Would the decisions be better or worse in a direct democracy that they are in?
  5. Finally, we get the sense that people are really upset with our political system, but rarely are they asked what they think needs to be done to make an improvement. Do we neeed something major done to get the government back on track? Or do you think the changes just need to be small - like campaign finance reform?


MUHL07 Muhlberger P. Should E-Government Design for Citizen Particpation? Stealth Democracy and Deliberation. In Proceedings of the 2006 national Conference on Digital Government Research ACM Press. New York, NY 2007 53-61.

Monday, October 26, 2009

Tyranny of the Majority, Helping the World's Poor

Dr. Fishkin points in that there should be some mechanism for preventing a majority from oppressing a minority. Dr. Fishkin wrote a separate book on Tyranny and Legitimacy which I will review for another Thoughtful Thursday. A veto such as that from the Supreme Court declaring a law unconstitutional only preents tyranny of commission. But what happens when the people ignore suffering that they could relatively cheaply solve. Or when a group with a veto, uses it to preserve "an unjust status quo." One of the ultimates of this is helping the poorest in the world, the 1.4 billion that earn less than the World Bank Povery lnie of 1.25 dollars per day. Peter Singer writes with many cogent facts about this in Chronicle Review, March 13, 2009, B6 to B10 and about how Americans could spend more money to help alleviate this suffering and the low percentage of their incomes that Americans spent on this type of foreign aid.

Sunday, October 25, 2009

Wage Stickiness

I have been long aware of the problem with sticky prices and wages. That is why we have Keynesian economics, fiscal stimulus and the like. I said the solutionw as to make wages a share of revenue and I found that someone else already had this idea, L. Weitzman and his book on the Share Economy. He said wages shoudl be a percentage of gross revenues. I also read a book, Why Wages don't fall during a Recession by Truman Bewley. He interviewed employers and simply asked thim a simple question: Why don't you just cut everyone's wages during hard times rather than lay them off?

AS I heard the Savings and Loan Crisis of the 1990's I came up with the idea of the share economy, where all payemnts are simply a share of income. This is a cure for all sorts of financial crises.

Dr. Krugman cites this stickiness of prices in his proposal to rebalance the American Trade Deficit, let the dollar fall, beautiful in his citing of evidence about stickiness and relative real exchange rates. But he doesn't look at the alternatives,

  1. removing the stickiness of wages
  2. a consumption tax, particularly one aimed at badness

Health Care

This American Life had a special on Health Care . This illustrates many of the problems in our current health care system. The first is the cost and stress of the billing process.

They featured a Four-physician office has four people in the billing department. There are 20 to 25% on billing department and bad code that don't go through. And part of the problem is that the coding system is inconsistent. There is a code for for a spacecraft accident but no code for someone coming in with a complaint of "weak arms." 200,000 medical coders in United States and BLS expects that this will rise.

I have recomemnded that sortition juries look directly at the medical records to determine what doctors, and hospitals should be payed.

How do we pay the pharmaceutical industry? Obviously, we want to pay those who manufacture the drugs and those who develop new drugs. The latter should be proportional to the benefit of new drug over previously-discovered drug. But the system we have doesn't work well. Each pharmaceutical company encourages doctors and patients to demand their new drugs even if the difference is marginal. Meanwhile, the insurance companies charge copayments so that the patient would demand the cheaper generic drug. Example is a drug which can be taken once a day instead of twice a day whcih costs much more expensive. (That is, a time release version of the drug is four hundred dollars a month more. The show emphasized an acne patient with "pimples.") There is also a question of whether insurance companies increase expenditures on health care and making individuals responsible for their own health care reduces expenditure. If it is coming out of your pocket, presumably, one will spend more carefully, than if it is coming out of the health insurance industries pocket. They talked about the veterinary medicine industry where pet insurance is just developing. They featured a couple who spent a lot of both their money and a lot of their veterinary insurance companie's money on Harriet, a hedgehog. So how do we make a payment system where the patient helps control costs without scrimping on things that would truly make them more healthy and perhaps save money in the long run? They had economists who talked about how insurance is driving up costs by separating the consumer from the payment for the services they provide. Yet, Paul Krugman can state, "Serious students of health care have known for a long time that the magic of the marketplace doesn't work in health care..." As a side note, his blog led me tot he article that Massachusetts REsidents support their new health reform by 59 percent to 28 percent. But there is a concern about cost.

I propose that sortition juries allocate the 9.6 per cent, now higher, of the health care budget that is spent on pharmaceuticals. Each pharamaceutical company would get ap ayemnt based upon the improvement they made in the health compared to their competitors. This would encourage them to spend money on research and not on marketing.

The next issue is the war and race to consolidation among both insurance companies and hospitals. Aetna dropped eight million patients/policy holders. (Bill Potters talked about this first on Bill Moyers show and also to a U. S. Senate Committee.) Aetna dropped out of the markets where it was not the top insurer, so it could not negotiate good contracts with the providers. Fragmented insurers are not be able to negotiate the prices. Their health care economics expert compared insurer market share with the hospitals considilated. Thus, there is a race to of monopolists vs. monopsonists.

He advocated the system in Maryland, where there is a standard price for each procedure, regardless of the size of the insurance company or if the person is uninsured. (But what do we do about individuals whose diagnosis, symptoms or treatment just doesn't fit any of the predefined categories. This is replacing the coding problem for insurance companies with a coding problem for the bureaucracy that sets these rates.) I should add in fairness that John Hopkins Hospital, in Baltimore, Maryland, has been number one in the US News and World Report top hospitals ranking since 1991.

And we can bring the group back to group insurance. The group would have a pool of money from premiums. There would be groups that would handle catostrophic cases, cancer, transplants and unfortunate accidents and other groups tht would handle the routine stuff ( a simple broke n leg or a appendectomy). The latter group would make referrals to the other hand. They would bargain with the hospitals, or as I pointed out earlier, pay after the fact so the individuals can deal just with their doctor about the health care. What was the insurance company would be paid for their expertise in organizing information, not for apparently heartless acts like dropping out of markets?

Although not relevant to participatory demoracy, I enjoyed their historical presentation. At 1900, some doctors were still using leaches. There were no hospitals as we know them. They were for the ill. Recall that President McKinley recovered from his wound at the home of the president of the Pan American exposition, where he was to die. (Source, wikipedia, and Complete Life of William McKinley and Story of his Assassination by Marshall EVerett.) Then, the average person spent five dollars a year on health care, $100 a year in today's money. 1909 was the first drug that cured an illness. Salvorsen cured syphillis.

Hospitals started curing things and not a poorhouse for the sick house. In the 1920's Baylor Hospital had unfilled beds due to the price, but people spent more money on cosmetics that on the health care, but the president remarked that a person would have to save up twenty years to cover a hospital bill. So they started the first insurance, $6.00 a year for up would pay for up to twenty-one days. They sold this policy to teachers in Texas. Blue Cross came out of this and started marketing to employers. By World War II, only nine percent of Americans were insured.

In 1943, an unknown bureaucrat at the IRS, made a routine ruling, employers don't have to pay taxes on the health insurance premiums for their workers. This was included in 1954 Tax Code unambiguously.

Saturday, October 24, 2009

Miscellaneous Jury Information

Some miscellaneous reports on the jury system:
  1. Some states require that after the juror comes back with a verdict, that someone checks with each juror whether they agree with the verdict. If one of them says no, they can be sent back for further deliberations. After this process, one jury changed from completely acquit to finding the defendant guilty of a lesser charge.
  2. Lord Judge, "the most senior judge in England and Wales" says that conventional trials should be replaced by the opportunity to sift through the evidence. I would argue that this should be true for sortition juries, as well. Thus, a sortition jury deciding on a tax situation might listen to some of this on the car or public transportation and click around the information provided at their own pace and in little bits of time.
  3. And there is a proposal to try using expert panels instead of juries to resolve malpractice cases. The Obama administration plans to test this idea. I would argue the jury is the cheapest part of the civil litigation and one should get rid of the lawyers and judges.
Thanks to the Blog by Professor Hoffmeister who led me to these links.
Another tale of two professions talking about whether theoretical economics is math or a science in the "falsifiable" sense of Karls Popper. They mention that a theorem such as the Arrow theorem is simply true, not falsifiable. And there is a discussion of whether one should study for the real world for its value or its inherant beauty.

I remember a Herbert Simon quote that computer science is the queen of the artificial sciences like mathematics is a queen of the physical science and economics is in that sense a branch of computer science.

I believe and think I remember a quote that computer science/informatics is a branch of knowledge as different from the sciences and the branches of mathematics and social science, as those three are from each other.

United States of Africa

I reported from the Economist that there is a move to unite the countries of East Africa. A Board Game entrepreneur has a game to help promote the vision of a United States of Africa. Unfortunately, the board game says nothing about how the country should be governed, its constitution, etc. It is part chance and part "Trivial Pursuit," answering questions like "Which country in Africa was never colonized?" and identifying the President of the Ivory Coast. We need to simulate this process so people can learn about how it would actually work, which is the proposal of my Constitution Construction Kit.

Thursday, October 22, 2009

Do we need a financial System?

Do we need a financial system?

Many people think we do. Martin Sloan was very critical of the problems in our financial system. He said that low interest rates may be better than high interest rates. "Because I don't want to see the financial system collapse." And in the next sentence, he says there has been a massive transfer of wealth from the savers of America to the spenders of America.

But do we need a financial system? First of all, this is not an argument for a total barter system. Money would still serve as a medium of exchange.

One of our best computer science students went on to earn an MBA from a prestigious University and work at a hedge fund in Connecticut. I asked her what social value the hedge fund gives us. She was unable to come up with one. Another Computer Science students has gone on to a financial engineering degree. After over a year there, I asked what purpose a financial system serves. Does leverage have a value to society? He could not give one; he just said that it is a way that some people can make more money than following natural growth.

I asked one of our finance students the same question on the need for all the financial markets and products? And he conceded that it was reasonable and could not argue with me either. I of course am in favor of a share economy with no debt or derivatives. The only financial instrument is a share of the revenue. One is not allowed to sell it, only enjoy the income stream as it comes in. but as I argued elsewhere, firms could sell new shares and bonds directly to the consumer without intermediaries. There would be no secondary market; what you bought you own and gets passed on to one's heirs.

And I asked one of our accountancy faculty. He said that people just expect there to be a financial system, but he could not say that we could not do reasonably well with out one.

Kornai, Soft Budget Constraints, Do We Need Money? Thoughtful Thursday

Businesses that run out of money should go out of business. That simple statement is not true in "bailouts." This was pointed out in the nineteen-nineties for banks which were outlined. "It is quite rare these days for a large bank in severe financial trouble to go out of buisiness" (James Kornai, Eric Maskin, Gerard Roland, "Understanding the Soft Budget Constraint" Journal of Economic Literature Deember 2003, Volume 41(4) Pages 1095 to 1136.

Dr. Kornai looked at shortages and constraints in his two volume set, Economics of Shortage And he points out that a producing firm has both real-world constraints and man-made constraints. And he uses the analogy and terminology of linear programs. The real-world constraints are technological or chemical or physical. If one is making Sulfuric Acid, one needs a mole of Sulfur and a mole and a half oxygen2 and a mole of water. And other technological and manufacturing processes need specific amounts of energy or other input. This is a hard constraint and no amount of cajoling or lawmaking or begging other humans will change that. But the constraint that a firm must make as much money as outgo can be soft. Loans can be extended in a capitalist country, or it can be simply allowed to write checks without any balance--that is, to effectively print money. And, of course, we know that sovereign nations do the latter. And in general a firm does not produce more than it can sell. Although that too can be waived, at least until it runs out of room to put its output. In a capitalist country, the demand constraint is usually the issue for a firm. In a socialist country, it cannot get enough input goods to produce as much as it could sell to its customers.

Kornai talked movingly of the effect of shortages in Chapter Two. A firm that cannot get enough of a part for a given output, might produce something else, might use a substitute and produce a lower quality good. It might attempt to make the missing part in its own shops with idle workers. It has slack, resources that it woudl normally use, but it cannot because of the shorting of one material. These Mr. Kornai refer to as slack. Companies hoard things they may need so as not to be shortdown when there is shortage. And a chronic shortages of goods, means that one of the slacks is labor. Thus, workers are in the demoralizing situation of coming in day after day and not being useful. In Hungary, Dr. Kornai's home country, most workshops will sell up to whatever resource is the bottle neck. And, "it is rather exceptional for the producer to refrain from expanding production solely because the product is unsaleable." If there are buyers who obviously want the product, are queueing up for it symbolically or for real, it is hard to resist their 'voice.' And buyers can complain to top management or government officials when businesses appear to be hording and not producing up to their limit. And each workshop is itself queueing up for resources it needs so it is empathetic with the above. A business adjusts its technology and manufacturing methods in response to frequent shortages of input X instead of a business buying a new machine in response to the increase of price of something, say labor. A money economy is more impersonal. It "presumably" means managers are under less stress and find it simpler in a money economy. Managers making a decision don't look at the relative frequency of hitting resource constraints. They look at cost calculations and expectations. And I would add they may use the signals from financial products like corn futures to make those decisions. But Dr. Kornai does not cite any evidence that looking at actual resource limitations is not more meaningful than looking at prices. From the Computer Science literature, one can look at the ability to approximate the optimal via a market mechanism both with and without money. And is the "shock" of not being able to get Input A a better or worse method of deciding on buying a new machine than looking at an increasing cost and having the shock of not being able to pay a bank loan or having a bank call a loan that you had for thirty years.

And this concern about soft constraints is true in socialist governments transitioning to Market Reforms, Japanese Keiretsu and Korean Jaebol which bail out divisions that are making losses, now in the context of a soft constraint on a budget or money or bail out or government loan.

And he mentions the phrase "too big to fail" there. Recently, Dr. Kornai provided a list of bail outs from 1980 to 2008, from Indonesia to the United States.

Empirical evidence from countries transitioning to the market economy such as Russian, China and Bulgaria showed that firms with hard budget constraints (HBC's) mean that firms layoff workers ("shed suplus labor") and restructure in bad times. And he cites studies from developing countries and problems of SBC on enterprises.

And the article discusses when a central bank such as the Federal Reserve should lend or bail out banks. The rules say they should loan to solvent but illiquid banks. This theory goes back to 1873. And they show that such policies of bailing out large institutions may even be efficient.

Would participatory democracy harden or soften budget constraints. A juror chosen randomly wouldn't have the prestige or "cover-your-ass" reasons mentioned in the article. They won't have an incentive to hide a bad decision extending credit to a company many years ago. However, the human concern for the people who would be laid off if the firm failed would definitely be there. And the human concern for the economic dislocation for a large firm going out of business. Should we allow these to influence our economic decisions. And in some sense, the share economy belies the need for budget constraints, hard or soft. Firms don't have debts; they simply pay to their workers and their investors a certain percentage of their income. They go out of business when all their workers leave them because they can get better income elsewhere.

The article says that the soft-budget-constraint problem is caused by the government not being able to credibly to say that it will not bail out projects that turn out to be poor. They note that possibly when the project was started, it appeared to make sense. The question is what to do when they see later that it wasn't profitable. They could say with twenty-twenty hind site that they would not fund it again. However, money was already put into pouring a foundation for a building, starting a SynFuels corporation or a Superconducting Supercollider., a Eurotunnel or a huge steel plant. Dr. Kornoi, said that the concerns is the desire of a 'parternalistic' government to avoid socially and politically cost of layoff. Will a representative government be more or less likely to pull the plug than a sortition jury? Would a sortition jury be better able to make decisions that lead to layoffs than politicians that answer to public opinion and of course elections?

What are the reasons to avoid Soft Budget Constraints:

  1. Investing in poor enterprises crowds out the production of goods for consumption. This is a bad thing if consumers truly don't have the things they "need." On the other hand, it might make sense to invest more in socially useful enterprises, especially if many of these are into particular projects than for consumers to consume frivolous goods. In other words, idle woerkers could insulate buildings, even if the return on their time would be very low, as long as the energy to make the insulation itself is less than the energy that it saves.
  2. If the government expects to keep many inefficient enterprises afloat, that makes it will be less likely to take a risk on an innovative project. The government would be unable to stop it (That reminds me of employers who won't hire, or won't hire a possible risk, because they know they won't have the stomach to fire a poor employee.)
However, models show that Hard Budget Constraints can have troubles as well: Firms that have bad projects cannot pay their suppliers, trade debts. The suppliers start to go out of business, rippling, causing the bank and society to have to have problem problems. This problem, which came to a head with the GM bankruptcy, was identified in 1993.

The authors close with a caution. "The SBC literature may give the impression that hardness is 'good' and softness is 'bad'" "Neverthless, a responsible decision about whether, say an indebted corporation should be rescued can be reached only after consideration of all direct and indirect consequences. And what combination of traditional government, traditional market forces, rules and regulations for government, and sortition can best do this.

Monday, October 19, 2009

Fiscal Stimulus Transfer Money from Savers to Spenders (and Wall Street Investment Bankers )

Governments are flooding the economy with money to create monetary and fiscal stimulus. This lowers interest rates and Wall Street hedge firms and others use this to make money. As Martin Sloan says, they use leverage or "borrowed money." The result is that savers get little interest if they keep their money in prime money market fund or treasury bills. But it is not just Wall Street Investment Bankers with their big buck bonuses. It is a transfer of wealth from savers to spenders, that is individuals who borrowed big for the too-large home. And much of this has been going for a long time, and one of the problems is that government officials such as the fed did not do anything about asset bubbles, thinking that just reducing inflation sufficient. A share economy eliminates asset bubbles as people make their money off the revenue from their investments not by buying and selling them.

Of course, the money transfer should go directly to the businesses. This is what Ann Petifor and the New Economics foundation would say. Mark Warner advocates allocating some of the TARP bailout to small businesses. He beleives that the banks provide a due diligence. If Congress directly allcoated the money, there would be political pressure to lend to certain businesses in certain districts... John Edmund's book, Brave New Wealthy World excoriates the inefficiency in the developing world when government connected banks make loan decisions to crony capitalists. The reporter pointed out a business that had the same loan for thirty years and has been paying each payment on time. The bank is now calling the loan, apparently to shore up its balance sheet. Yet obviously, he never paid it off. Would not that business be better off with a share loan, the bank takes a share of gross revenue.

But government stimulus can be distributed by sortition juries. They would check and watch each dollar, each business receiving a government loan, to ensure that the money is put to constructive purposes.

Friday, October 16, 2009

Maverick Economist takes on Global Macroeconomics

To what extent is capital and fiscal stimulus better allocated by sortition juries than conventional financial sector? Ann Petifor and the New Economics Foundation argue that the public sector should distribute the free money that is now generated by fractional reserve banking. And I wrote that fiscal stimulus, or stimubucks, can be tightly controlled by sortition juries, tighter than either a conventional financial system or government that sways in the winds of political interests. He proposes fiscal stimulus works when there is idle resources, which clearly is true in the United States. He points that monetary policy tools such as expanding base money by purchasing government only works when the problem is illiquidity, not bank insolvency. And the money support to the banks is not going to individuals and businesses.

The Maverick Economist also tooks about the issues of global fiscal stimulus. He talks about Islamic mortgages and cases of mortgagors sharing in upside opportunities--that is if the mortgagee sells the house for more than they paid for it, the mortgagor get ssome of the benefit. And he points out the problems for the unemployed or undemployed. But he misses a true share-economy mortgage, replace the mortgage with a fixed payment and interest with a share of the person's income and let this get propagated.

Wednesday, October 14, 2009

James Fishkin, Democracy and Deliberation, Thoughtful Thursday

James S. Fishkin is of course known for his work in deliberative poling. His book, Democracy and Deliberation, of course discusses this; but more important is his work on classifying democratic thought and the references to different political thought and critics of democracy.

We should compare this quadrant system and set of two axis to that of Dr. Hibbing and Dr. E. Theiss-Morse. They hypothesized an axis where American's were asked how much direct democracy they wanted and on the other direction, the familiar left-right dichotomy. They pointed that there was a bell-curve with a centrist opinion of people's opinions in both axis. But in America, we have no direct democracy but the government is right in the middle on the conventional left and right political spectrum.

Aemrican Constitutional evolution has been pushing the direction of quadrant four. Obvious examples are the ammendments to the constitution:

  1. Ammendment Seventeen that provides for the people to elect the Senators.
  2. Ammendment Ninteen provided for women sufferage
  3. Ammendment twenty-four disallowed the poll tax
  4. Ammendment twenty-six allows eighteen years old to vote.
He points out that president and legislatures pay more attention to public opinions. This was termed the "plebiscitary President" Our electoral College simply votes as the individuals who selectd a slate for a particular party wanted them to. Similarly, delegates to political convetions vote for whom they want. (This was a shift to quadrant four.)

And now all States use primaries and the officials and elders in political parties have little power to select the individuals running for high office. Dr. Fishkin points that we have not had a series of ballots in a Presidential party convention since 1952 and the primaries started in the 1920's. And he despairs about the horse-race mentality, one lamented specifically by Dr. Krugman in the health care debate. Dr. Fishkin cites that sixty percent of presidential campaign coverage was to "horse race convention."

Yet our system is representative. On the federal level, there has never been a national referendum on any topic. We may write to our legislator about our opinions on a health care reform; we may threaten to vote the ... out of office, but ultimately, we are powerless to control what the reform will be.

But systems can vary in the amount of dleiberation they allow. Dr. Fishkin hypothesized a system like QUBE. This was the system that first had Pay-per-view and video-on-demand. It allowed the system to collect answers to a multiple choice question with five answers Dr. Fishkin hypothesized that the remote coudl be used for voting. But he despaired that people would quickly make a click on an important national issue without thinking about the consequences. And of course demagougery is an issue that Dr. Fishkin mentions and I discussed when I reviewed Paul Woodruff's book on Athenian democracy. Dr. Fishkin cites the famous argument in Federalist Number Ten that "was designed to show how impediments tto majorities could prevent tyranny" and also to find "representatives" that will protect the true good of the nation that puts us in quadrant one.

Dr. Fishkin, of course, studied deliberative polling. The goal is to get the same percentage results that would be gotten if the entire population could be forced to deliberate and think about an issue before voting or answering a poll. A group is selected randomly, as they would for conventional polling. However, they are given briefing materials and then meet, often telievised. They meet for a weekend and discuss the issues with experts and with trained moderators. Parts are televised As an experiment, they look at the opinions of the participants before and after the deliberative polling exercise and the Center for Delibrative Democracy reports on these differences. The Intelligence Squared Debate system has the audience give their opinion before and after the debate and reports the difference in the votes.

As one would expect, Dr. Fishkin talks about first democracy. And he mention the "graphe paranomon" It was literally a trial of a person who made an illegal proposal before the main assembly. It was 500 people. But it mentions two things I raised earlier in this blog: that the committee had little or no guidelines as to what to consider and they considered the whole life of the person.

Again, I look forward to chasing all the wonderful references in the back of the book which provide a good guide to political theory relevant to this blog.

Sunday, October 4, 2009

Citizen Juries, Financial Responsibility and Health Insurance

Obviously, there are those who choose not to have health insurance. They may prefer to save money. Perhaps, they just want a catastrophic health insurance plan. Certainly, as Ms. Robinson points out, she would like the health insurance plan to give her a discount because she is like the care. And she prefers to deal directly with the doctor for payment and uses alternative care such as chiropractors and naturopaths.

And, of course, there are other ways to be financially responsible, saving, and other insurances one should have. One of my students dropped out of their Ph.D. program because he did not get the insurance on a rental vehicle which got stolen--and he was stuck with the cost of the car.

Rather than a mandate, citizen juries could look at each individual and determine whether they are being financially responsible. That includes the combination of savings and insurance as well as investing in one's own business and one's education. I think one would have more sympathy for the person who uses the money they would have paid for premiums to pay for a college degree in a field with good job prospects than those who use it to party hardy.

Medical cooperatives

Medical Cooperatives

This idea has come up in the health care debates recently. Many people poo-poo it; I heard a legislator saying that coops can work well for grain elevators and the like but not for health care. There are two successes, Health Partners in the Twin Cities of Minneapolis and the Group Health Cooperative of Seattle. There have been failures. My mother was a member of HIP which merged into Group Health Insurance which apparently is oging to health. They claim that one needs 600,000 members in the same location. This enables the coop to have its own physicians and buildings.

NPR had a presentation on this, in response to the Senate Finance Committee having approved this Unfortunately, the difference between medical cooperative and a non-profit insurance company like Blue Cross Blue Shield is that in a medical cooperative, one has the opportunity to vote for a board of directors. In the Seattle one, only one percent of the members vote. Minnesota does do better at one third. I belong to several professional societies; we get to vote for directors, the president and maybe a few other officers. Although, the members do have their "say" through a yearly vote, and the organizations seem to do a fine job, their costs do seem high and we really don't have a meaningful voice in the day-to-day running of our organization. Similarly, the Cooperatives have less complaints than regular insurance companies but costs are at best comparable.

In China, 726 million people in rural areas are members of a "rural cooperative insurance system," but where the government pays eighty percent of the costs. article does not discuss other people who might be living in rural areas such as hte medical providers), are coverd by a rural cooperative system. Yet, there are problems with theft, $100,000.00 out of about five billion in one county alone.

The real challenge is to make them particpatively run, where each decision is made by a randomly chosen subset of the members, from how much each person is paid and whether they are going to get. Also the amount of premiums or membership fees should be voted on by the group and should be a median of the amount selected.