What the Science Actually Says About Exercise
In this post, I disputed the so-called “scientific” exercise program of Little and McGuff. So I figured it was probably worth describing the exercise program that I do believe the science supports. The following recommendations hold for the “average” person who simply wants to be in decent shape for every day life.
The Exercise Book that Could Have Been
I wanted to like Little and McGuff’s Body By Science. The fact is that most people, from novices to professionals, follow exercise programs that at best waste their time and at worst are counterproductive. BBS does do a good job of pointing out these areas. However, the conclusions it draws about what people should do instead are also not well supported by the science.
I get the feeling that Little and McGuff started with a pre-conceived exercise ideology and then went hunting for science that supports it. I would sum up this ideology as: less is more, weight machines are better than free weights, cardio is bad. The actual science on this is strong, non-existent, wrong.
What really rubbed me the wrong way was how they evangelized their specific program . I categorize the objectionable evangelical tactics into three categories: blinding readers with science, selective application of principles, and just plain wrong.
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Small Government: Lesser of Two Evils
Like many libertarians, I feel that small government is an eminently practical rule of thumb proven by hundreds (if not thousands) of years of observation. So when Rafe recently posted in response to a presentation that David Cameron made at TED, it got my dander up. Calling the small government philosophy, “… ivory tower idealism,” felt like a blatant misrepresentation. But then I wondered. Maybe Rafe had formed the honest (though mistaken) impression that small government advocates think that reducing government functions will lead to some sort of emergent order utopia?
I don’t know exactly what Cameron said because I can’t find a public video archive. This Guardian account indicates that he mostly hung platitudes on the scaffolding of giving people more choice and transparency. Choice is a big part of small government, but I thought it would be worth outlining what I think is the non-politician’s version of the libertarian small government ideology. It’s far from ivory tower. More like back alley.
It’s based on two observations: (1) local knowledge is important to good decision making and (2) concentration of power leads to abuses. I think few students of political history and organizational behavior would argue against these points, so I won’t detail them here. However, if anyone honestly thinks they are in doubt, I’d be happy to cover them in a subsequent post.
So, any time society assigns a role to government, it incurs the costs of (1) and (2). These costs tend to increase over time and as a situation departs from the ideal future path. So the expected net present value of these costs can be substantial. Libertarians therefore conclude that the benefits that the government brings to a role should, as a general rule, be quite large before we even consider it as an option. Notice that this does not imply no government at all. Rather, it implies we should use government sparingly.
The repeated pattern observed by libertarians goes like this. A problem arises. Everyone (even libertarians) agree that it is problem. Progressives push through a government program to address it. Initially, the program somewhat ameliorates the problem. However, the problem turns out to be trickier than first believed, so the benefits are usually not as great as expected. Over time, the problem evolves and adapts, further eroding program benefits. The government program evolves and adapts too, but more to promulgate its own survival than address the problem.
So we are left with much lower benefits than forecast and significant unforeseen costs (in the form of an everliving, mostly useless program). Libertarians conclude that in many cases the “cure” is worse than the disease. Not that it doesn’t suck having the disease. The irony of course is that the progressives then identify the results of an old government program as a new problem that requires… another government program (cough, cough, government intervention in financial markets, cough, cough).
Of course, some illnesses are actually bad enough that the (painful) cure is better than the disease. In those cases, bring on the government program. But let’s be realistic about the long term benefits and costs.
Even More Reason to Be a Skeptic
Things just got worse if you put your faith in the “consensus” about catastrophic anthropogenic global warming (AGW). You’ll recall that the disclosure of internal emails undermined confidence in both the surface temperature record and the peer-review process that qualifies research for inclusion into the blue ribbon International Panel on Climate Change (IPCC) reports.
Now we find out that some of the more sensational claims about potential consequences contained in the IPCC AR4 report are not actually backed up by peer-reviewed research. Instead, they come from assertions made by advocacy groups such as the WWF and Greenpeace. Then there’s the dependence on anecdotal newspaper and magazine reports. Oh, and an amusing reference to a boot cleaning manual from an Antarctic tour operator.
It all started with the infamous, “Himalayan glaciers will be gone by 2035,” claim, which was substantiated solely by a WWF report. Not cool because IPCC rules state they should only reference peer-reviewed research from respectable journals.
Things get worse. Bear with me here. The story is a bit involved, but it reveals how feckless the guys at the top of the AGW food chain can be. India’s environmental minister tried to call BS by referring to, you know, actual measurements of glacial retreat. But the chairman of the IPCC called this “voodo science.” Of course, the scientist who lead the development of that section of IPCC AR4, eventually admitted that the claim about glaciers disappearing by 2035 was not supported by peer-reviewed research. And it turns out that the chairman of the IPCC was actually informed about the problem months earlier.
Now for the cherry on top of this crap sundae. The chairman of the IPCC runs an institute that received a ton of money based on… wait for it… the claim that Himalayan glaciers would be gone by 2035.
I realize that people want to defer to the leading scientists in an area. It’s perfectly rational. In fact it was what I did before I started looking into AGW myself. But there should be some evidence that will cause you to update this position. I think we’ve reached that point.
Robert Reich: Wrong About State/Local Bailout
Rafe linked to this essay by Robert Reich. I don’t have much of a problem with his first point backing Obama’s plan to offer a tax credit for hiring. I think temporarily suspending the employer’s share of payroll tax is a better mechanism (as suggested by Bryan Caplan a year ago), but close enough.
However, I think he goes off the rails at the end where he suggests the federal government should prop up spending by state and local governments. No. They’re the problem, not the solution. Fortuitously,m Bryan’s partner Arnold Kling referred just today to this Reason essay by Steven Greenhut revealing that the number of state and local workers per 100 citizens has grown from 2.3 to 6.5 since 1946. Yes, that’s 180% growth in the fraction of people employed by state and local governments.
Recall my own analysis showing that real per capita state and local spending in California increased 38% in the last 10 years and that we would have no budget problem if we had kept real per capita spending at 1999 levels.
The problem is we have more bureaucrats riding on the backs of productive workers. Economic innovation and growth comes from the private sector. Much better to substitute every single dollar Reich wants to give to state and local governments for more tax breaks to private sector employers that hire people.
Quest for Insurance Part II: The Coverage
The trials chronicled in Part I have a happy ending. I eventually obtained an excellent individual plan from Assurant Health. I followed my own advice and got a high deductible plan that covers no primary care. I thought it would be worth comparing to the traditional PPO coverage I had previously.
The table below shows the salient aspects of each plan. To compare apples to apples, I had to estimate the 2010 premiums for the previous plan. I used a 9% increase over 2009, which is what a PricewaterhouseCoopers survey says will be the average for employer sponsored plans. Note that this is less than the 10.8% actual increase my company saw from 2008 to 2009 on this plan.
| Insurer | Aetna | Assurant Health |
| Annual Premiums | $17,593 | $7,760 |
| Deductible | $2,000 | $10,000 |
| Co-Insurance | 20% | None |
| Out-of-Pocket Maximum | $8,000 | $10,000 |
| Office Visits | $35 | $0, after meeting deductible |
| Generic Drugs | $15 | $0, after meeting deductible |
| Brand Name Drugs | $35 | $0, after meeting deductible |
| Lifetime Maximum | $6M | $15M |
We see something very interesting here. The annual premium on the new plan is $9,833 less than the estimated annual premium on the old plan. Now, we all get checkups each year. Also, my wife and son have monthly medications they take for allergies. Adding in the copays for those yields extra $500 on the old plan, pushing us to $10,333 more guaranteed expenditures on the old plan than the new plan. Obviously, this excess is more than the new plan’s deductible.
So there’s no way I can loose on the new plan. If we stay healthy, I get to pocket $10,333 minus the cost of routine visits and medications. If something bad happens and someone has a major medical issue, I save at least $8,333 due to the deductible and coinsurance on the old plan. Probably much more due to co-pays for additional office visits and prescriptions, which are not limited by the out-of-pocket maximum. I actually ran the scenarios and there’s no way I don’t save at least $5,000 per year.
Moreover, the new plan is much better at insuring against catastrophic loss. The lifetime maximum is 2.5 times as high. That’s a real selling point for me. I don’t want the plug pulled on my ventilator because my insurance ran out.
How can this be? Why do we even have PPO plans? You may think the tax deductibility of employer-paid premiums is the reason. But this doesn’t explain why employees wouldn’t choose an employer-sponsored version of the high deductible plan. Those are paid with the same pre-tax dollars. (It also doesn’t affect me because I’m technically self-employed and deduct my premiums anyway). It certainly explains why the CEO of Whole Foods is absolutely right to offer his employee’s a high deductible plus HSA plan. It saves everyone money. The math speaks for itself.
The only explanation that makes sense is that people want to spend more on health care when it doesn’t come out of their own pockets. A combination of moral hazard and mental accounting. On the moral hazard front, they go to the doctor more often than they otherwise would because the marginal cost to them is so low. On the mental accounting front, the automatic monthly deduction from their pay is less painful than personally writing checks to pay doctors. But it’s irrational.
Perhaps some marketing wizards should figure out how to pitch high-deductible plus HSA plans in a way that the average person would find attractive. How about an infomercial that promises to save you thousands of dollars every year with a proven system and throws in a set of handy dandy steak knives if you act now?
Quest for Insurance Part I: The Search
As you may recall, I previously posted about my recommendations for fixing health care (Part I, Part II, Part III). Recently, I had to navigate the current system and thought I’d share my experience in the context of those recommendations. You see, COBRA ran out on my health insurance from the last startup I founded and the new one hasn’t set up a company health plan yet. Thus I had the, um, “pleasure” of trying to obtain individual coverage.
I started by going to eHealthInsurance and hitting up the big three companies: Aetna, Anthem (BlueShield/BlueCross), and HealthNet. My first disappointment came when I discovered that there is no universal application. You have to type in roughly the same information in substantially different formats for each company. What value exactly is eHealthInsurance adding here?
My second disappointment came when they all rejected the applications for different reasons. There are four people in our family. One of them was rejected by two companies, two of them were rejected by one company, one of them was not rejected at all. The reasons were allergy shots, acne, possible acne, and being underweight. The first two are minor ongoing issues. Considering we were applying for $10K deductible plans with no office visit or prescription coverage, it’s hard to see what the problem is. The second one was unconfirmed by the first doctor, totally minor, and subsequently excluded by a second doctor. The last one is the only one that should have been of any concerned and a check with that person’s doctor would have eliminated the concern.
My working hypothesis is that these companies don’t actually want to offer individual health coverage. For regulatory or political reasons, they have to appear to offer such coverage. But unless an individual is so low risk as to be obscenely profitable, why go to the effort? It’s so much easier to focus on selling group coverage to employers. This is a side effect of the tax deductibility of premiums for most companies but not most individuals.
Luckily, there are niche providers that pursue opportunities that are not attractive to the largest players. One of them is Assurant Health. After filling out the online application at their Web site, I received a call from their underwriting department within two days. They wanted to review the medical records for the two family members receiving allergy shots to make sure these were not indicative of larger issues. No problem, we had signed a release and I had no objection to paying a premium based on actual risk.
Now, the story takes a funny turn. Apparently, HIPAA has made doctors so paranoid about penalties for breaching patient privacy, that they don’t want to give out your medical records to anyone. Despite the general release we signed, two medical clinics wanted us to sign special releases. It took a month to actually get these special releases so we could sign them. Even then, one of the clinics also required us to call them on the phone and give them verbal permission as well. Government intervention strikes again! If the government had clearly specified the mechanism for releasing medical records, there wouldn’t have been a problem. Even better, if the government hadn’t distorted the market for insurance toward employer-sponsored coverage, this transaction would be so routine that the free market would have solved the problem
The story has a happy ending. In Part II, I will analyze the excellent coverage we got from Assurant in the context of my previous recommendations.
I Admit It, I Panicked
I’m usually a rather optimistic person. But yesterday, I thought I saw a sign of the apocalypse and panicked. The usually insightful Coyote Blog posted a chart that I interpreted as saying that the number of people on government payrolls was now larger than the number of people on private payrolls in the US. Such a crossover would be a very bad indicator.
Luckily, I slept on it before posting. I realized from my background knowledge that this fact was unlikely to be true, so I followed the links to the ultimate source. You see, I thought “Goods Producing” was in contrast to “Government” in the chart label, i.e., that the categories were collectively exhaustive. No. According to the original post at NRO, “Goods producing”=construction, manufacturing, mining and agriculture. Well, duh. Our employment in those sectors has been gradually decreasing as they become extremely efficient. Unsurprisingly, government efficiency has not been increasing as fast.
I went to the BLS database and looked up the right statistic. In Jan 1939, private employment was 25,935,000 and government employment was 3,988,000 for a ratio of 6.50. In Dec 2009, projected private employment was 108,443,000 and projected government employment was 22,467,000 for a ratio of 4.83. This is still a relative increase in government employment, which I don’t like, but far from a sign of the apocalypse. A clear indication that private enterprise is more efficient than public enterprise, but I already knew that.
Kevin Gets Acknowledged by a Real Economist
As I have written before, one of my goals is to resolve the differences between Arnold Kling’s and Scott Sumner’s views on macroeconomics. There is now some evidence that I may actually understand what is going on.
Will Ambrosini, wrote about a Blanchard and Gali paper that combines two standard macroeconomic models and then simulates various shocks to the economy. The interesting bit is when they look at a “real” shock: a decrease in productivity of 1%. This corresponds to one of Kling’s “recalculation” events where the economy has to figure out how to redeploy resources.
Well, the result depends on the monetary policy used by the Fed. If the Fed targets just inflation, unemployment spikes almost 10 percentage points before gradually improving. Sound familiar? But if the Fed targest both inflation and unemployment, unemployment only goes up a little over 1 percentage point.
My intuition was that targeting inflation and unemployment is similar to targeting NGDP as Sumner advocates. I sent him email to see if I was right and lo and behold, Sumner posted about it, acknowledging that my intuition lines up with his. So I guess I’m getting a handle on this stuff.
In addition to the ego gratification, this also resolves the tension between Kling and Sumner. Yes, real shocks require recalculation. But monetary policy can make the recalculation easier or harder. Think of money as the lubricant in the recalculation engine. If you put more in, there is a lot less friction and waste heat.
Micro-lending Is Not a Silver Bullet
Tim Harford has a good analysis of the latest research on micro-lending’s effect on poverty. The basic result is that the near and medium term effects are extremely modest. This isn’t too surprising given the relative magnitudes of the intervention and the problem.
But there was always hope that a small perturbation could shift people to a better equilibrium. Alas, it looks like poverty is more robust. Now, there is evidently a lot of research in the pipeline that should tell us more soon. So maybe we’ll have better information for optimizing micro-lending in the future. But don’t expect a silver bullet.
Possible Insight 