A good conversation between Harry McCracken of Technologizer and Bob Wright of bloggingheads.tv. Topics include Apple’s ascent (and world domination?); iPhone vs. Android; whither Microsoft; Facebook’s privacy flub; etc.

“My guess is that the euro will survive, but no one will trust it like they used to. At the end of the day, it’s an entitlement problem. In Greece, the public sector makes up 40% or more of the work force, with short weeks, lots of vacation and lavish retirement benefits. All of that needs to be paid for with real income, not debt, and the markets are anticipating the day of reckoning. One can only hope European policy makers listen to the market. I wonder if California and Medicare are taking notes.”

— Andy Kessler, May 8, 2010

See our new CircleID commentary on the China-Google dustup and its implications for an open Internet:

China is nowhere near closing for business as it did five centuries ago. One doubts, however, that the Ming emperor knew he was dooming his people for the next couple hundred years, depriving them of the goods and ideas of the coming Industrial Revolution. China’s present day leaders know this history. They know technology. They know turning away from global trade and communication would doom them far more surely than would an open Internet.

Akamai announced a record peak in traffic volume on its content delivery network on April 9.

In addition to reaching a milestone for peak traffic served this past Friday, the Akamai network also hit a new peak during the same day for video streaming, as well as a near high for total requests served.

• With online interest in major sporting events – including professional golf and baseball – helping to drive the surge in demand, Akamai delivered its largest ever traffic for high definition video streaming.
• Over the course of the day, Akamai logged over 500 billion requests for content, a sum equal to serving content to every human once every 20 minutes
• At peak, Akamai supported over 12 million requests per second – a rate roughly equivalent to serving content to the entire population of the United States every 30 seconds.

If you really want to understand the climate debate, you simply must read this book, by A.W. Montford, about a Canadian scientific detective named Steve McIntyre, who humbly but doggedly pursued the truth about the 1,000-year temperature reconstructions that generated the famed “hockey stick.”

The November 2009 email “hack” of Britain’s Climatic Research Unit that has generated so much recent news is only a brief epilogue. The real story happened day by day over the last decade as McIntyre, a retired mining engineer, and a his fellow Canadian Ross McKitrick, an economist, searched for, and then through, shabbily constructed data sets and magical algorithms, with surprising finds on almost every page.

As my friend George Gilder wrote:

The reader should know that the supposed email “scandal,” as described in the book, is in fact a rather trivial and even defensible part of the story. Few people are at their best in emails. What is shocking — and I use the word advisedly as a confirmed sceptic not easily shocked — is the so called science. I never imagined that it was quite this bad. It is shoddy beyond easy belief.

The hockey stick chart mostly reflects a defective algorithm that extends and inflates a few deceptive signals from as few as 20 cherry-picked trees in Colorado and Russia into a hockey stick chart that is replicated repeatedly through reshuffles of the same or similar defective and factitious data to capture and define two thousand years of climate history. These people simply had no plausible case and were pressed by their political sponsors to contrive a series of Potemkin charts.

Almost, but not quite, as surprising, was Montford’s narrative itself. Somehow he turned an esoteric battle over statistical methodology into a captivating “what happens next” mystery. British science writer Matt Ridley agreed:

Montford’s book is written with grace and flair. Like all the best science writers, he knows that the secret is not to leave out the details (because this just results in platitudes and leaps of faith), but rather to make the details delicious, even to the most unmathematical reader. I never thought I would find myself unable to put a book down because — sad, but true — I wanted to know what happened next in an r-squared calculation. This book deserves to win prizes.

Engrossing. Astonishing. Devastating.

The Yo-Yos versus the Distavores. The HurriKeynes versus the Invisible Hands. And the team with more Monetary Madness appearances than any other — Stuff Happens. This was the scientific bracketology that determined the real cause of the Great Panic at the American Economic Association’s recent meetings:

(hat tip: David Warsh)

“…commercial real estate loans should not be marked down because the collateral value has declined.  It depends on the income from the property, not the collateral value.”

— Ben Bernanke, Feb. 24, 2009, finally, if tamely, acknowledging the crucial role of mark-to-market accounting in the financial death spiral.

(via Brian Wesbury)

That’s the question I ask in this Huffington Post article today.

Among all the books, articles, and academic papers analyzing the financial meltdown, very few have pinpointed and exposed what I think was the accelerant that turned a problem into an all-out panic: namely, the zealous application of mark-to-market accounting beginning in the autumn of 2007. In this video, two of these very few — Brian Wesbury and Steve Forbes — discuss the meltdown, mark-to-market’s crucial role, and the stock market’s short and mid-term prospects. Wesbury and Forbes have also written two great books explaining the Great Panic, why it’s not as bad as you think, and how capitalism will save us.

Holman Jenkins today also picks up the theme of mark-to-market’s central role in the panic.

Wyoming wireless operator Brett Glass has 20 questions for the FCC on Net Neutrality. Some examples:

1. I operate a public Internet kiosk which, to protect its security and integrity, has no way for the user to insert or connect storage devices. The FCC’s policy statement says that a provider of Internet service must allow users to run applications of their choice, which presumably includes uploading and downloading. Will I be penalized if I do not allow file uploads and downloads on that machine?

4. I operate a wireless hotspot in my coffeehouse. I block P2P traffic to prevent one user from ruining the experience for my other customers. Do the FCC rules say that I must stop doing this?

6. I am a cellular carrier who offers Internet services to users of cell phones. Due to spectrum limitations, multimedia streaming by more than a few users would consume all of the bandwidth we have available not only for data but also for voice calls. May we restrict these protocols to avoid running out of bandwidth and to avoid disruption to telephone calls (some of which may be E911 calls or other urgent traffic)?

7. I am a wireless ISP operating on unlicensed spectrum. Because the bands are crowded and spectrum is scarce, I must limit each user’s bandwidth and duty cycle. Rather than imposing hard limits or overage charges, I would like to set an implicit limit by prohibiting P2P, with full disclosure that I am doing so. Is this permitted under the FCC’s rules?

14. I am an ISP that accelerates users’ Web browsing by rerouting requests for Web pages to a Web cache (a device which speeds up Web browsing, conceived by the same people who developed the World Wide Web) and then to special Internet connections which are asymmetrical (that is, they have more downstream bandwidth than upstream bandwidth). The result is faster and more economical Web browsing for our users. Will the FCC say that our network “discriminates” by handling Web traffic in this special way to improve users’ experience?

15. We are an ISP that improves the quality of VoIP by prioritizing VoIP packets and sending them through a different Internet connection than other traffic. This technique prevents users from experiencing problems with their telephone conversations and ensures that emergency calls will get through. Is this a violation of the FCC’s rules?

18. We’re an ISP that serves several large law offices as well as other customers. We are thinking of renting a direct  “fast pipe” to a legal research database to shorten the attorneys’ response times when they search the database. Would accelerating just this traffic for the benefit of these customers be considered “discrimination?”

19. We’re a wireless ISP. Most of our customers are connected to us using “point-to-multipoint” radios; that is, the customers’ connection share a single antenna at our end. However, some high volume customers ask to buy dedicated point-to-point connections to get better performance. Do these connections, which are engineered by virtually all wireless ISPs for high bandwidth customers, run afoul of the FCC’s rules against “discrimination?”

See our new commentary at CircleID:

The Internet has two billion global users, and the developing world is just hitting its growth phase. Mobile data traffic is doubling every year, and soon all four billion mobile phones will access the Net. In 2008, according to a new UC-San Diego study, Americans consumed over 3,600 exabytes of information, or an average of 34 gigabytes per person per day. Microsoft researchers argue in a new book, “The Fourth Paradigm,” that an “exaflood” of real-world and experimental data is changing the very nature of science itself. We need completely new strategies, they write, to “capture, curate, and analyze” these unimaginably large waves of information.

As the Internet expands, deepens, and thrives—growing in complexity and importance—managing this dynamic arena becomes an ever bigger challenge. Iran severs access to Twitter and Gmail. China dramatically restricts individual access to new domain names. The U.S. considers new Net Neutrality regulation. Global bureaucrats seek new power to allocate the Internet address space. All the while, dangerous “botnets” roam the Web’s wild west. Before we grab, restrict, and possibly fragment a unified Web, however, we should stop and think. About the Internet’s pace of growth. About our mostly successful existing model. And about the security and stability of this supreme global resource.

Excellent analysis of Google’s plan to build a few experimental fiber networks from my former colleague Barbara Esbin:

NetworkWorld reports that by constructing its own fiber network, Google “is trying to push its vision for how the Internet as a whole should operate.” I wish the company all the success in the world with GoogleNet. Business model experimentation and new entry to the broadband Internet service provider market like this should be encouraged. If this “open access” common carrier network proves to be a viable business model that attracts both customers and followers, it will be a fabulous addition to the domestic Internet ecosystem. But this vision should not be turned into unnecessary government mandates for other Internet network operators who are similarly trying to experiment with their business models in this brave new digital world.

Surprisingly, I also agree with Harold Feld’s analysis:

the telecom world is all abuzz over the news that Google will build a bunch of Gigabit test-beds. I am perfectly happy to see Google want to drop big bucks into fiber test beds. I expect this will have impact on the broadband market in lots of ways, and Google will learn a lot of cool things that will help it make lots of money at its core business — organizing information and selling that service in lots of different ways to people who value it for different reasons. But Google no more wants to be a wireline network operator than it wanted to be a wireless network operator back when it was willing to bid on C Block in the 700 MHz Auction.

So what does Google want? As I noted then: “Google does not want to be a network operator, but it wants to be a network architect.” Oh, it may end up running networks. Google has a history of stepping up to do things that further its core business when no one else wants to step up, as witnessed most recently by their submitting a bid to serve as the database manager for the broadcast white spaces devices. But what it actually wants to do is modify the behavior of the platforms on which it rides to better suit its needs. Happily, since those needs coincide with my needs, I don’t mind a bit.

I do mind.

See our new analysis of Net Neutrality regulation’s possible impact on the U.S. job market.

“My attitude is this: if you are getting attacked by Krugman, you must be doing something right.”

— Eugene Fama, University of Chicago professor, in The New Yorker

For those of you not wishing to sift through 15,000 comments submitted to the FCC for its Net Neutrality proposed rule making, let me recommend what — so far — is the best technical filing I’ve read. It comes from Richard Bennett and Rob Atkinson of the Information Technology Innovation Foundation.

Also very useful is a new post by George Ou on content delivery and paid peering, with important policy implications.

These are among the least discussed — but most important — items in the whole Net Neutrality debate.

Separately, from the FCC’s “Open Internet” meeting at MIT last week, see summaries of each panelist’s remarks: Opening Presentations, Panel 1, Panel 2.

“Here’s one problem with digital collectivism: We shouldn’t want the whole world to take on the quality of having been designed by a committee. When you have everyone collaborate on everything, you generate a dull, average outcome in all things. You don’t get innovation.

“If you want to foster creativity and excellence, you have to introduce some boundaries. Teams need some privacy from one another to develop unique approaches to any kind of competition. Scientists need some time in private before publication to get their results in order. Making everything open all the time creates what I call a global mush.

“There’s a dominant dogma in the online culture of the moment that collectives make the best stuff, but it hasn’t proven to be true. The most sophisticated, influential and lucrative examples of computer code — like the page-rank algorithms in the top search engines or Adobe’s Flash — always turn out to be the results of proprietary development. Indeed, the adored iPhone came out of what many regard as the most closed, tyrannically managed software-development shop on Earth.”

— Jaron Lanier, author of the new book You Are Not a Gadget.

A bunch of good metrics on the decade that was from Oliver Chiang. Here are a few:

–Number of e-mails sent per day in 2000: 12 billion

–Number of e-mails sent per day in 2009: 247 billion

–Revenues from mobile data services in the first half of 2000: $105 million

–Revenues from mobile data services in the first half of 2009: $19.5 billion

–Number of text messages sent in the U.S. per day in June 2000: 400,000

–Number of text messages sent in the U.S. per day in June 2009: 4.5 billion

–Number of pages indexed by Google in 2000: 1 billion

–Number of pages indexed by Google in 2008: 1 trillion

–Amount of hard-disk space $300 could buy in 2000: 20 to 30 gigabytes

–Amount of hard-disk space $300 could buy in 2009: 2,000 gigabytes (2 terabytes)

Completely missing from the health care debate is a conversation about health care innovation and productivity. But not only are these legitimate factors — they are the most important factors.

Look around the world, however, and see the crucial advances being made.

“Japanese companies reinvented the process of making cars. That’s what we’re doing in health care,” Dr. Shetty says. “What health care needs is process innovation, not product innovation.”

At his flagship, 1,000-bed Narayana Hrudayalaya Hospital, surgeons operate at a capacity virtually unheard of in the U.S., where the average hospital has 160 beds, according to the American Hospital Association.

Narayana’s 42 cardiac surgeons performed 3,174 cardiac bypass surgeries in 2008, more than double the 1,367 the Cleveland Clinic, a U.S. leader, did in the same year. His surgeons operated on 2,777 pediatric patients, more than double the 1,026 surgeries performed at Children’s Hospital Boston.

Before we turn the whole U.S. system into a larger, more rigid and stagnant, less entrepreneurial, more costly version of Medicare, one that “bends the cost curve” up instead of down, shouldn’t we give at least a few minutes consideration to the real solution to our health care problem: technological, process, and business model innovation?

We Hoosiers are lucky:

Perhaps most appreciated was the governor’s overhaul of the Bureau of Motor Vehicles. It’s gone from one of the worst in the country—a place, he says, “where people would take a copy of ‘Crime and Punishment’”—to one of the best, with an “average visit time of seven minutes and 36 seconds.”

I had my own experience about four years ago, before the BMV was overhauled, where I made some seven trips to the license branch and various other government offices over a period of weeks just to renew my driver’s license.

But as Kim Strassel tells us in her interview with Mitch Daniels, this is only the very tip of the iceberg. In a state challenged by our reliance on the automobile industry in particular and manufacturing in general, instead of imploding like Michigan or profligate California, we had a governor whose common sense, hard work, business savvy, and courageous budgeting has left Indiana in a much better spot than many other states. Especially given our special old-economy obstacles.

This is the ironic but very legitimate question AT&T is asking.

As Adam Thierer writes,

Whatever you think about this messy dispute between AT&T and Google about how to classify web-based telephony apps for regulatory purposes — in this case, Google Voice — the key issue not to lose site of here is that we are inching ever closer to FCC regulation of web-based apps!  Again, this is the point we have stressed here again and again and again and again when opposing Net neutrality mandates: If you open the door to regulation on one layer of the Net, you open up the door to the eventual regulation of all layers of the Net.

George Gilder and I made this point in Senate testimony five and a half years ago. Advocates of big new regulations on the Internet should be careful for what they wish.

The Technology Liberation Front is five today. Go check out these courageous defenders of Internet freedom, of which I am a too-infrequent yet proud comrade-in-arms.

Watch Tyler Cowen talk about his new book to Will Wilkinson. The book’s title, Create Your Own Economy, sounds like just another self-help business pamphlet. But you’ll see Cowen isn’t talking about business or money at all — at least not directly. His subjects are autism, “neurodiversity,” Adam Smith’s division of labor, and the Internet’s ability to match more people with their highly specific talents and passions. Far from the latest trope that “Google [or the Web] is making us stupid,” Cowen argues the the Web helps a vast variety of previously undiscovered intelligences, or “neuro profiles,” flourish.

Tough stuff from the always-insightful David Malpass, who warns that slow growth from a lower economic base could yield an historic downgrade of the U.S. experiment:

With the crisis taking a deep toll on our economy, the expectation is for a “new norm” once recovery kicks in. It’s a dismal prospect: slower growth from a lower base, with higher unemployment and bigger government.

Rather than a healthy frugality, the new norm implies an outright decline in median living standards, a disaster for both prosperity and fairness. For President Obama such economic mediocrity spells extended deficits, a “jobless” recovery and, at best, a stiff reelection fight instead of the cakewalk that his perfect timing–inaugurated at the exact bottom of the crisis–deserves.

The U.S. decline isn’t inevitable. Game changers exist. The Fed could improve dollar policy to make the tens of trillions of dollars in new U.S. Treasury debt more salable. It should stop buying Treasurys to make it utterly clear that it will not monetize debt. Buying Treasurys is the monetary equivalent of government workers digging a hole, filling it back up and calling it GDP.

To underscore the new commitment to price stability and creditors the Fed has to stop using core inflation for its report card. It’s a loud signal to the world, proclaiming: “The Fed is not serious. Money should flow to Asia. Sell the dollar.”

In the wake of EC antitrust chief Neelie Kroes’s charge that Intel’s microchips are too tiny, too fast, and too inexpensive, the company has quickly unveiled a new line of huge, power-hungry, slow, overpriced, out-dated products.

Intel unveils new huge, expensive, power-hungry, slow "EuroChip"

Of the Treasury’s long-awaited non-plan bank plan, Andy Kessler writes, “Mr. Geithner should instead use his ’stress test’ and nationalize the dead banks via the FDIC — but only for a day or so.”

Then,

strip out all the toxic assets and put them into a holding tank inside the Treasury. . . .  inject $300 billion in fresh equity for both Citi and Bank of America. Create 10 billion new shares of each of the companies to replace the old ones. The book value of each share could be $30. Very quickly, a new board of directors should be created and a new management team hired. Here’s the tricky part: Who owns the shares? Politics will kill a nationalized bank. So spin them out immediately.

Some $6 trillion in income taxes were paid by individuals in 2006, 2007 and 2008. On a pro-forma basis, send out those 10 billion shares of each bank to taxpayers. They paid for the recapitalization.

Each taxpayer would get about $100 worth of stock for each $1,000 of taxes paid. Of course, each taxpayer has the ability to sell these shares on the open market, maybe at $40, maybe $20, maybe $80. It depends on management, their vision, how much additional capital they are willing to raise, the dividend they declare, etc. Meanwhile, the toxic assets sitting inside the Treasury will have residual value and the proceeds from their eventual sale, I believe, will more than offset the capital injected. That would benefit all citizens, not the managements and shareholders who blew up the banking system in the first place.

Is Kessler crazy? Well, maybe. In his own creative and boisterous way. But not nearly so crazy as Washington’s fumble-bumble these last few months. I’d much prefer Kessler’s out-of-the-box plan to D.C.’s muddle.

What becomes clearer every day is that all the government’s efforts, from the AIG “bailout” to TARP 1.0 and TARP 2.0 onward, have essentially been efforts to get around the terribly destructive interaction of “mark-to-market” accounting and regulatory capital requirements. A few keen observers — David Malpass (I), Brian Wesbury (I, II, III, IV), Steve Forbes (I, II) – have made this point from the start. But the government and most economists clung stubbornly to “fair value” in an apparent attempt not to “let the banks off the hook.” 

But what a time for an attack of conscience, a principled stand for supposed accounting purity! We’ll spend trillions and totally alter the nation’s financial landscape, but a minor (though powerful and free!) accounting change — relaxing mark-to-market — is a bridge too far? Explain that one. (more…)

Dateline, Illinois. Tim Carney exposes history’s largest earmark.

Futurist and The Singularity Is Near author Ray Kurzweil and the very impressive X-Prize Foundation chief Peter Diamandis launch Singularity University with the goal of “preparing humanity for accelerating technological change.”

Susan Lee on the post-crash, post-Madoff universe.

May your 2009 be less “interesting” than 2008.

‘Twas the night before Christmas
And all through the house
Not a thing was dry
Not even my spouse

The icy rain fell
The water pipe froze
Slipping and sliding
There was no time to doze

We vacuumed and pumped
The whole night through
Yet when we awoke
Santa’s dream had come true 

Merry Christmas. 

Thank goodness Nancy Pelosi and Harry Reid are reviewing the Big Three’s business plans before “investing” a couple hundred bil’ of taxpayer money. I’m so relieved. Silicon Valley could learn a few things from these bleeding edge venture capitalists…and the CEOs groveling for our money.

Or opportunity of a lifetime? That’s the question economist Scott Grannis asks as he surveys the sickly prices of stocks and corporate bonds.

Any way you look at it, the pricing on corporate bonds and stocks today implies that the next several years will be the most disastrous in the history of the U.S.

In order to fully appreciate why that prediction is unlikely to prove correct, consider that not one of the key ingredients that precipitated the depression exists today.

(Hat tip: Real Clear Markets)

“The point is not to deflate asset bubbles, but to avoid them in the first place.”
– Gerald P. O’Driscoll, Jr., November 17, 2008

After an exhausting political season, Rich Karlgaard relaunches his great Digital Rules blog to focus on innovation, mavericks, and entrepreneurs.

Eliot Spitzer reemerges to claim vindication. Shameless does not begin to describe…

“Hyperbole is not harmless; careless language bewitches the speaker’s intelligence. And falsely shouting ’socialism!’ in a crowded theater such as Washington causes an epidemic of yawning.” 

– George Will, November 15, 2008, wondering what to call existing bail-outs galore and almost $4 trillion of annual Federal spending.

Is Paul Ryan the future?

After two straight electoral defeats, it is time for a substantial party shake-up. We don’t need a feather duster; we need a fire hose.

We need to be honest about the root causes of our current financial crisis: loose money, crony capitalism and a lack of market transparency and information.

The credit crisis almost deep-sixes the company that makes the commemorative M&A toys for Wall Street execs.

This spring came what Kern called “the tiny-globe craze.” Sokoler rolled his eyes. “Oh, don’t start with that,” he said. “You know those things you see in Sharper Image, where there’s a base and a little globe just floats over it?” (They work by means of magnets.) Somebody at Merrill decided to order a hundred of them to celebrate an M. & A. deal, and all of a sudden everybody had to have one. “It was a real pain in the ass,” Sokoler said. “People were calling my cell phone in the middle of the night, saying, ‘It’s not floating!’ And you’d have to, like, walk them through it. You’d say, ‘Yes, it is floating—you just have to hold it in the right place.’”

“Let us bend over and kiss our ass goodbye. Our 28-year conservative opportunity to fix the moral and practical boundaries of government is gone — gone with the bear market and the Bear Stearns and the bear that’s headed off to do you-know-what in the woods on our philosophy.”

– P.J. O’Rourke, November 10, 2008, repeating George Will’s sentiment, but from a . . . shall we say . . . different angle.

(via Don Luskin)

Advancing faster than Moore’s Law, hard disk digital storage technologies are are the unsung heroes of the tech revolution. The beat goes on, and a large number of new technologies, from hybrid drives to phase-change ovonics to racetrack memory, promise to match the capacity of digital storage and/or DRAM with the speed of SRAM and other solid state memories. See a big special report from MIT’s Technology Review on all these ”next memory” candidates, and more.

Janet Novack writing in Forbes details the long-term U.S. budget and tax realities that will lead to “The Coming Shakedown.” Big taxes and skimpy benefits, she writes, are baked in the cake:

Here’s what sober budget analysts (from both parties) see when they focus on 2020 and beyond: The well-off will pay higher federal taxes, for sure. But ordinary folks will pay more, too. They will pay as tax burdens diffuse into the costs of things they buy. They will likely pay more for fuel and electricity, as the costs of carbon permits and renewable-fuels mandates get built in. They may be asked to pay a European-style value-added tax. And they will pay on the other side of the ledger: Their retirement benefits will get clipped.

The federal government will get bigger, but not big enough to keep all the promises Washington has made. So the normal age to receive Social Security retirement benefits, already rising in steps to 67 for those born in 1960 or later, will increase further, perhaps to 69. High earners will pay more in and get less back in retirement. Call it a “tax” or call it “means testing”—it’s government, and it will make you poorer.

Economists of all stripes think we absolutely need a new value added (or a kind of sales) tax.

“A VAT has got to happen. We’re at a point where the traditional money-raising options are not going to work,” says Yale law professor Michael J. Graetz, who was a Treasury official during the Administration of President George H.W. Bush and has been pushing a plan to use proceeds from a VAT to reduce corporate income taxes and exempt families earning less than $100,000 from the income tax. A VAT encourages personal savings, which the U.S. needs more of. Plus, it forces retirees to help pay for their government benefits. Says Graetz: “You tax the elderly and you tax the coupon clippers. But no politician is going to say that out loud.”

To be sure, a VAT faces tremendous hurdles. Two decades ago economist Lawrence H. Summers, who later became President Clinton’s Treasury Secretary and is now an Obama adviser, famously observed that the U.S. hadn’t adopted a VAT because “liberals think it’s regressive and conservatives think it’s a money machine.” The country might get a VAT, he went on, when liberals realized it was a money machine and conservatives figured out it was regressive.

Larry Summers is a smart liberal, one of my favorites, and he’s probably right. But let’s get something straight: layering a VAT on top of our current tax system would be catastrophic. Some have suggested trading a VAT for a reduction in the corporate income tax. But that too is a dangerous game. One option I’d consider, versions of which have been suggested by both Art Laffer and Sen. Jim Demint, is a low-rate flat income tax with a low-rate VAT — say 8% each. That would be a hugely efficient and growth-fueling fundamental tax reform.

But it wouldn’t be the increase in government that the normal VAT backers have in mind. The way to “solve” the Medicare problem is not to gouge American producers in an inevitably futile effort to close the $43 trillion dollar unfunded budget gap. We shouldn’t wrack our brains trying to pay for the current bloated system. Much better to transcend the issue altogether by transforming health care with new medical technology and a newly dynamic, entrepreneurial, and consumer-driven market.