Does the Dental Regulator know the meaning of quality care?

My dental surgery presented me with a two page medical history questionnaire to complete before being allowed to see the dentist.  You know the form. As nothing had changed since the last one, I offered to sign and date a copy.  That was not an option because (a) their technology didn’t not permit extracts or copies (a likely tale) and (b) completing a new form was a legal requirement.  They meant it was a Care Quality Commission (CQC) requirement.  “May I see at least last year’s as a prompt?  At my age, memory is imperfect: I cannot remember my medications when the tablets are at home.”  “No.  You have to complete the form unaided.”

The Adam Smith Institute has long drawn attention to regulators failing because they descend into box-ticking.  The financial crash of 2008 was one example. The CQC is a new regulator but this descent is already apparent.  Ensuring primary care achieves and maintains high standards is clearly important and was given impetus by the Harold Shipman tragedy.  But that is my point: whilst Shipman was good at the paperwork and complying with regulations, he was also killing his patients.  The Mid Staffs Hospital is not a primary care unit but the issue is the same: they could have been ticking all the boxes and still killing their patients.

The CQC’s 2nd Annual Report sets out five criteria for establishing dental care quality:
(a) Do the dentists treat their patients with respect and discuss their proposed treatments?
(b) Do they fully assess patients’ needs and deliver the care and treatment they need?
(c) Do they protect patients from the risk of abuse and treat them in a clean surgery without risk of infection?
(d) Do they recruit staff effectively and conduct thorough checks on them?
(e) Are patients’ records up to date and kept safe and confidential?

Incidentally, there is nothing here banning the use of copies of prior records. Item (c), however, is responsible for the new ban on coffee in dental surgeries.  According to my dentist, the CQC claims that this could give rise to cross contamination with medications even though there is no evidence that such a thing has ever happened. Harold Shipman would have passed these five criteria with flying colours.  

Patients visit dentists to retain their teeth as long as possible and, when that fails, have false teeth fitted, all in as agreeable and painless a manner as possible.  We want our teeth to look good too. The word “teeth” does not even appear in the CQC criteria and nor does the patient experience. “Quality”, in this context, means that we have teeth that work, avoid pain and look good. It would not be difficult to develop scales for these quality indicators.  Adjusted tooth loss rates could be measured in a similar fashion to Professor Sir Brian Jarman’s adjusted mortality rates for hospitals. The CQC does interrogate some patients but their conclusions rely mostly on what they glean from dental surgeries.  This is the wrong balance: patient experience, and especially the pain endured, is only known by the patients themselves.  When the care quality of each surgery, relative to equivalent surgeries, is established, its patients should be informed.  The aggregate scores in the CQC annual reports, all around 90%, tell us nothing.

An example of why Greece has such problems

So there was guidance that people who work at computer screens should have breaks from using computer screens:

"According to the European regulation, those using a computer should take a 15-minute break every two hours," the general secretary Ermolaos Kasses said.

This dates from the 1980s and seems fair enough given the computer screens of the 1980s. They might indeed have an effect upon your vision for example. But then what happened?

"It is not easy to have all those breaks during the day, so it was decided back then that it should be given as a day off every two months."

Facepalm.

Talk about entirely and totally missing the point. So, the upshot of this workplace safety regulation was that:

Greek civil servants stand to lose the six extra days of paid vacation they get each year—just for using a computer—after the government moved Friday to rescind a privilege that has been around for more than two decades.

It's also true that modern screens don't pose the same health risks. But imagine an economy riddled with these sorts of practices and you'll begin to understand why Greece is in such a mess.

Diamond cuts to the chase

The FT reports that Bob Diamond is giving his support to our long and oft expressed view that bank regulation should be global, not national or EU.  See for example “Saving the City”, March 2013.  Big banks now operate in a global market and a single market requires a single set of regulations.  Any more, or any fewer, in the major banking countries distorts competition.  A major bank failing in one country may well bring down others and at the very least have knock-on effects.  This is one of the most important lessons from 2008.

The EU is a particular worry as each member state seeks to impose handicaps on the others in order to enhance its own financial services industry.  Furthermore, Brussels seeks to take over all financial regulation from member states. These politicians fail to see that such shenanigans can only damage not just London but the EU financial services industry as a whole.

Basel III has its faults, not least in loading up capital requirements at the wrong time.  Higher capital requirements may have been a good idea pre-2008 but introducing them now inhibits the very lending to SMEs that is essential to growth.  Likewise moves to downsize banks or introduce new Chinese walls may be a good idea in due course but not just now.  Yes, of course we need to get away from banks, or any other financial institutions, being too big to fail but they are not about to do so.  Financial crashes come around every 50 years or so, so on that metric the next one is not due for 45 years.

Faulty or otherwise, Basel is the only global financial regulatory structure we have and we need to work with it and improve it. The fact that we do not have an imminent crisis makes this the ideal time to introduce the radical revolution we need.  The EU and national governments should turn over all financial market regulation to Basel. Who should monitor and supervise those global regulations is a more difficult problem but in the short term it will have to be by nation state, in the UK by the Bank of England.

But let us not get caught up in that.  First things first means that banking regulation needs to go global now.

So why are the Chinese saving so much?

I think we all know that China, or perhaps the Chinese, havs/have a mindbogglingly high savings rate. Something around 50% of GP as compared to our own few paltry percent. Don Boudreaux does a wonderful little piece of intellectual judo in explaining the implication of this:

If Haltom’s claim is correct, the high household savings in China today is evidence that government provision of welfare substitutes to some extent not only for private provision generally, but also for provision at the level of the household. People are neither as personally irresponsible nor as incapable of planning for and providing individually for their own needs as many today – “Progressives” and some conservatives alike – presume them to be.

Just to lay this out again in all its elegant simplicity.

We currently have a welfare system that provides unemployment pay, health care, pensions and so on. We also have a very low savings rate. That's fine, it just is that way. But when the cold hearted and callous like myself suggest that perhaps we might want to reduce some aspects of that welfare state the cry goes up, but bit, what will people do? There will be no pensions, the old will starve in the streets, there will be no health care, there will be a disaster!

And the answer is that we can actually see what happens when there is not that welfare state. It will be as it is in China. People will, in the absence of a decent welfare system, save their own money in order to provide those highly desirable services to themselves. As, actually, the British working classes did in great numbers through the friendly and provident societies before there was a welfare state.

This is not to say that private savings to provide these things is better than taxation provision of them. Nor that it is worse. And it's entirely possible to argue for a blended system (I certainly would argue for tax financing of catastrophic medical care for example). My point here is simply to show that there really are viable alternative systems: the proof being that such alternative systems do in fact exist.

This isn't very liberal is it?

We've just spent a couple of centuries enshrining in the law the idea that consenting adults can do, in matters sexual, pretty much whatever consenting adults wish to do. This is one of the great liberal victories. Yes, it's easy enough to point to those who make something of a mess of said freedoms but no one ever said that freedom and liberty were perfect, only that their presence is better than their  absence.

At which point we get this proposal:

A shake-up of the law to give extra legal rights to unmarried couples who separate is set to be backed by the Liberal Democrat conference. Supporters of the move say it is a widespread myth that cohabiting couples enjoy the same rights as if they had married. There are almost three million cohabiting couples in Britain. The Law Commission suggested six years ago that former partners who have lived together for two years should be able to make a financial claim if they break up. The amount awarded could reflect whether claimants suffered a financial loss – by giving up a job, for example – as a result of the relationship.

Last time I looked the Lib Dems were at least claiming to be something of a liberal party. So what is this illiberality? Why must cohabitation lead to financial rights? There's a perfectly good government mandated contract to take care of those issues if consenting adults should wish to use it. Called marriage and it's open to every possible legal pairing of a couple in matters sexual. Why must those who do not wish to avail themselves of this contract be corralled into something very similar just because they wish to have sex with someone for a few years?

It's a decidedly illiberal idea and goes entirely against the grain of everything that liberalism has managed to achieve in the sphere to date.

On the tricky problem of benefits: pick any two from three

There's an old engineering saying, faster, better, cheaper, pick any two. Meaning that if you want your product to be better and developed faster, it's not going to be cheaper,  if you want it to be better and cheaper you're not going to get it faster and so on through the possible combinations. As Arnold Kling points out, this also applies to welfare systems:

1. Use “means testing” in order to provide a significant benefit that is aimed at the poor.

2. Keep the marginal tax rate low.

3. Keep the budget cost low.

If you've got a significant benefit to the poor and you want a low marginal tax rate as people earn their way out of the means test then the taper must be shallow, making the cost of the program high. If you've got that low taper and you also want a low budget cost with a means test then you cannot have a significant benefit and so on. Andrew Biggs tries to plot a way out of this:

a limited but universal government-provided retirement benefit, set at the poverty threshold and paid to every retiree regardless of income or work history. Since the plan is universal, there’s no phase-out and thus no implicit marginal tax. Since the benefit is relatively modest, the explicit taxes need to finance it are lower than what we currently pay for social security. And unlike the current program, which leaves around 9% of seniors in poverty, the universal benefit would essentially eliminate poverty in old age.

OK, he's talking about the US pension system only and he also agrees that it doesn't make Kling's problems go away. It's a balancing of the various options, that 's all.

Moving this over to here and then to a consideration of the basic idea of welfare at all I think I'd make the same sorts of trade offs. I think that it's the marginal tax rates (combined with benefit withdrawal of course) that make the problem so pernicious. We absolutely do have people stuck in situations where they're very definitely over the peak of the Laffer Curve. Heck, the budget documents themselves point out that there's millions who face tax and benefit rates of over 60%, some even of over 100%.

Which is why I find myself moving over to the idea of the citizens' basic income, or the universal basic income to taste. We're going to have a benefit system whatever else happens so we should have one which distorts the rest of the economy the least. And the only way to get rid of those high marginal rates, at a budget cost that is anything like possible, is to make it an unconditional income. Everyone gets that (low) amount no questions asked. Given a tax allowance on top of it we've thus got people facing marginal tax rates of zero: which would rather encourage people into work I would have thought.

For this to be palatable you do indeed need to be assuming that there's going to be redistribution and a welfare system run by government, come what may. But once you have, I put it to you that a cbi or ubi is going to be the least bad of possible options.

The BBC and the licence fee will be tackled when hell freezes over

In the light of the recent pay-off scandals at the BBC, one would expect there to be demands for the abolition of the licence fee and the excessive protection the BBC enjoys.  There have been some mutterings, but nothing serious.  Nor is it likely to.  Why is this?

Public Choice Theory, which explains human actions in terms of weighing the costs and benefits by each individual, offers a powerful explanation as to why the BBC continues to enjoy such widespread support.  It is important to keep in mind that the more an individual has to gain from a particular action, the harder he/she will fight for it.

The politician
Fighting the licence fee and the BBC:
                Cost: Very high. Death by BBC silence. Politicians live and breathe by media attention.
                Benefit: Low. A large part of the population believes in the BBC.
Standing up for the BBC:
                Cost: nil.  Will have political outlets to make his views known. The licence payer pays.
                Benefit: Very high. Becoming the Darling of the BBC. Re-elected.

The BBC employee
Fighting the licence fee and the BBC:
                Cost: Very high. Ostracised/unemployed/no leaving sweetener.
                Benefit: Nil. Unlikely to succeed – portrayed as disgruntled ex-employee.
Standing up for the BBC:
                Cost: Nil
                Benefit: Very high. Promotion?  High salary, cushy job, big sweetener when leaving.

The licence payer
Fighting the licence fee and the BBC:
                Cost: very high if one wants to make any impact at all, as virtually everybody has a reason to like the BBC (favourite nature programme, that soap, etc.).
                Benefit: £145.50 if the licence fee were to be abolished.

Standing up for the BBC:
                Cost: Little—join the club.
                Benefit: The BBC continues as before.

Observe that in all three cases the individuals involved have a personal vested interest in the continuation of the licence fee and the BBC as before.  Politicians and BBC employees have the strongest incentives and will therefore campaign extra hard.

So the BBC need not fear: neither the pay-off scandal, nor Jimmy Savile, nor BBC bias are likely to challenge the status quo.  The only chance of change is a Churchillian figure with a bee in his bonnet. Churchill famously abolished the BBC monopoly in favour of commercial TV.  He called the BBC tyrannical for having effectively banned him from the airwaves in the 1930s. John Reith, the BBC’s founding father, said that commercial television would be as disastrous for Britain as “dog racing, smallpox and bubonic plague”.  John Reith’s objection was probably the main reason why Churchill went for it.  One more Churchill might just do the trick tomorrow.

JP Floru is the author of What the Immigrant Saw and How to Create Mass Prosperity. On Saturday he will speak at the Conservative Renewal Conference about the abolition of the licence fee.

Yes, the minimum wage really does reduce the number of jobs

We're back to Bastiat and what is seen and unseen I'm afraid in this latest research into the effects of the minimum wage. It isn't that a rise in the minimum wage is going to immediately cause the mass unemployment of millions. Rather, that over time the rise in the minimum wage is going to lead to fewer jobs being created:

The findings are unequivocal: higher minimum wages lead to lower rates of job growth. Indeed, a ten percent increase in the minimum wage causes roughly half a percentage point reduction in the rate of job growth, a very large effect. The effect of this hypothetical increase is not permanent, though, since it is eroded by inflation and increases in the state’s comparison group. Our calculations show that this ten percent increase in a state’s real minimum wage, relative to its regional neighbours, causes a 1.2% reduction in total employment relative to what it would have been.

Now of course that's in the US, with their easy ability to relocate either production or labour across state lines.

But there's another point to this as well. If the major effect of a minimum wage is to reduce the creation of entry level jobs then the major group of people who will suffer from a minimum wage are those looking for entry level jobs. The young, the untrained and the unskilled: all of those who are already the poorest in our society. And it's also true that we can track the rising minimum wages, in both the UK and US, against rising teen and youth unemployment: they've been moving in near lockstep.

The takeaway point from that being to wonderwhy on earth there's so much political support for a minimum wage. Why do people support something whose major effect is to screw over their own children when it comes for the time for them to enter the labour market?

Parliament goes hostile on climate change

Parliament’s cushy consensus over climate change is dead. In 2008, when the Climate Change Bill had its third reading in the Commons, only five MPs voted against. But with doomsday predictions failing to materialize, and the planet failing to warm, MPs are starting to get more skeptical.

On Tuesday, in a Commons Westminster Hall debate, the room was overwhelmingly hostile to the Act. One of those MPs who voted for it, David TC Davies, says that the evidence has made him change his mind:

I am sorry that I was not a member of the famous five who voted against the Act in 2008, but I hope I will now do something to put that right. I must confess that I was one of those who accepted the arguments that were made—I supported the Act when it was passed... I contend that, given what we now know about climate science, we have a strong argument for reconsidering the Act with a view to either revoking it completely or drastically amending it.

While the “famous five” in 2008 were exclusively Conservative, hostility to climate alarmists’ claims now crosses the political divide.  Graham Stringer, a Labour MP, attacked some of the most notable “science” behind climate change legislation. He quoted Lord Oxburgh’s Independent Panel on the Climategate scandal that found that methodology used was “turning centuries of science on its head” and was not replicable. Mr Stringer said that what had happened “was not science but writing narrative”.

Sammy Wilson, a DUP politician, attacked the excessive costs that the Climate Change Act is imposing on consumers and business. “All reason and self-critical analysis go out of the window when people address this subject,” he said.

Peter Lilley called for the Act to be scrapped, to much vocal support:

The Act is not just the most expensive, impractically ambitious and uncertainly based piece of legislation that I have ever known; it is unique in being legally binding and unilateral. No other country has followed us down that route. Since we went down that route, Canada and Japan have resiled from Kyoto, and Australia has just abandoned its carbon tax. It is time we looked critically at the Act, repealed or revised it, and do not allow ourselves to be slavishly, legally bound to continue doing something that no longer accords with the evidence or goes along with what the rest of the world is doing.

But one MP, Alan Whitehead, seemed flabbergasted by the views of his Parliamentary colleagues. “I really do not know where to start…”

“That’s cos you’ve been stuffed!” interjected Tory Philip Davies, to widespread amusement.

We did something right in the 20 th century then

An interesting point being made by the economic historian, Brad Delong:

To put it another way: In 1870 the daily wages of an unskilled worker in London would have bought him (not her: women were paid less) about 5,000 calories worth of human, not horse food: not oats (although Scotsmen would disagree) but bread--5,000 wheat calories, about 2½ times what you need to live (if you are willing to have your teeth fall out and your nutritionist glower at you). In 1800 the daily wages would have bought him about 3,500 calories, and in 1600 2,500 calories. Karl Marx in 1850 was dumbfounded at the pace of the economic transition he saw around him. That was the transition that carried wages from 3500 calories per day-equivalent in 1800 to 5000 in 1870. Continue that for another two seventy-year periods, and we would today be at 10,000 calories per unskilled worker in the North Atlantic today per day. Today the daily wages of an unskilled worker in London would buy him or her 2,400,000 wheat human-food--potato--calories. Not 10,000. 2,400,000. That is the most important fact to grasp about the world economy of 1870. The economy then belonged, even for the richest countries, much more to its past of the Middle Ages than to its future of--well, of you reading this.

It's also worth noting that from Angus Maddison's figures GDP per capita in England in 1870 was about $3,200 (yes, of course, in inflation adjusted dollars). The living standard of roughly India or Nicaragua today.

It's a reminder of quite how poor our forefathers were: or how rich we are if you prefer. And also of quite how poor some other places still are. Along with, of course, the point that to get those other places rich, as we all should want to happen, is going to mean those other places following the same sort of economic path as we did. That strange mixture of capitalism and markets that propelled that North Atlantic world into unprecedented prosperity.