20.10.04

PRESERVED AS IF IN AMBER. Now that I have brought up the queries of my colleague, perhaps this is a good time to address another one. Once again, debunking a popular myth takes a lot of work, much of it simply to demonstrate the untruths that have become commonplace. Then there's the little matter of false analogies. The question, first. We are offered an example of a government program that my correspondent views as a success.
THE SALK VACCINE: The Salk vaccine was developed to deal with the growing number of cases of Polio in the 1950s. Development of the vaccine, I believe, was majorly if not entirely supported by the federal government. Dissemination of the vaccine once developed involved public institutions * e.g., the schools * in a government coordinated/government funded program. The result? The specter of Polio disappeared from the experience of America's subsequent younger generations.

Where is the equivalent program today that would wipe out childhood hunger? Or, is there evidence to the contrary that "there is no need for such a program; the private sector will produce those same results without government interference" as conservatives claim?
Let's start with a few salient facts. First, the development of the Salk vaccine involved private philanthropies, most significantly the March of Dimes. There is a reason President Franklin Roosevelt's head is on the current dime and that the current fundraising campaign against birth defects (the survival of the organization being more important than the cause) starts on January 30 of each year. And although schools participated in the immunization of kids, both with Dr Salk's shots and Dr Sabin's later sugar cubes, many kids got their shots from their family pediatricians. But that's nitpicking over facts.

Second, let's look at that loose talk about "equivalent" [government?] programs. What you are seeing, dear readers, is an example of the false analogy I call the "going to the moon" argument. The argument runs something like this. The Apollo program spent about $24 billion in 1969 dollars to land two men on the moon and safely return them to earth. So ... pick any other problem that looks like it could be fixed if the national government threw, say, $24 billion at it, and assert, "If we can put a man on the moon, we certainly can achieve these results." Compelling, huh? Here's the rub: a moon shot is a straightforward optimal control program. There is so much mass to be accelerated to a known escape velocity, steered to the proper path, decelerated to a safe landing velocity on the Moon, accelerated to a lower escape velocity (the savvy reader will note the use of expendable boosters and orbital velocity achieved first, then a translunar or transterran injection, that gets rid of a lot of mass and burns off a lot of fuel) and then decelerated to a safe splashdown velocity. The polio vaccine problem had much in common with a moon shot, as one vaccine worked reasonably well (although not without some tragedies and false starts) against polio.

On the other hand, flu vaccines, which Dr Salk also worked on, must be tweaked every year to deal with the latest mutation of the most dangerous influenza virus, and there is a bit of guesswork involved in manufacturing sufficient vaccine to treat that strain. And there is some legal fallout from the development of the polio vaccine that influences the production and distribution of the influenza vaccine. Here are some excerpts from a William Tucker article that Craig Newmark recommended.
With vaccines, there will be allergic reactions and a tiny but predictable percentage of people will suffer some kind of permanent damage or even die. Because of liability without fault and the generosity of the tort system, the result is huge damage awards.

The first instance of this came in 1955 with polio vaccinations. Cutter Laboratories, the California company that now distributes Cutter's Insect Repellent, made an early batch of vaccines, some of which had live viruses in them. Almost all the children in Idaho were administered the vaccine and several dozen contracted polio. In 1957, the parents of Anne Gottsdanker, an 8-year-old girl whose legs had become paralyzed, sued Cutter, with famed personal injury lawyer Melvin Belli representing them.

The jury found Cutter's actions were not negligent--the orders had been rushed, standards had not been clear, and safety precautions were still rudimentary at the time. But, using the new doctrine of liability without fault, the jury held Cutter accountable anyway and awarded $147,300. "That decision made Ralph Nader possible," Belli later claimed.

"It was a turning point," says Dr. Offit, whose book The Cutter Incident will be published next year. "Because of the Cutter decision, vaccines became one of the first medical products to be eliminated by lawsuits."

That this would be the outcome wasn't immediately clear. Soon after the trial, the Yale Law Journal published an article arguing that insurance against adverse reactions was the solution. The public wouldn't buy policies because it would be too complicated and expensive, but vaccine makers could. Insurance would cover the cost of bad outcomes and the manufacturers would pass these costs on to their customers. Those few who were harmed by a vaccine would be covered by those who benefited. Everything would work out. Unfortunately, this thesis failed to anticipate how high damage awards would go.

WHEN AN UNUSUAL EPIDEMIC occurred at Fort Dix, N.J., in 1976, for example, the federal government decided to vaccinate the whole country against the new "swine flu." To the astonishment of Congress, the insurance companies refused to participate. Senator Ted Kennedy charged "cupidity" and "lack of social obligation." The Congressional Budget Office predicted that with 45 million Americans inoculated, there would be 4,500 injury claims and 90 damage awards, totaling $2 million. Congress decided to provide the insurance.

As Peter Huber recounts in his book Liability, the CBO's first estimate proved uncannily accurate. A total of 4,169 damage claims were filed. However, not 90 but more than 700 suits were successful and the total bill to Congress came to over $100 million, 50 times what the CBO had predicted. The insurance companies knew their business well.
Looks like in this second case the private sector assessed the risks better than Senator Kennedy did. Did the government-sponsored swine flu shots (I passed on that one, as I have on all the other ones since then, there's a theory of public finance story to tell in another post ...) crowd out an insurance effort. Or, did the immunization program produce inefficiently many immunizations? (The efficient immunization rate is less than 100% even in the case of shots without side effects.)

I put it to you: if a government sponsored immunization program is not an easy technocratic fix, by what leap of logic can you look for an "equivalent" program to address childhood poverty, where the root cause might be a teenager who couldn't keep her pants, on or a mother widowed because her husband died in a UN peacekeeping operation somewhere, or a father was deserted by a wife who decided to explore a different sexual identity, springing the Two Income Trap, or a host of other stories? It has less to do with some ideologized free market alternative than it does with the lack of an easy technocratic fix.

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