There is, in the words of NN Taleb, a difference between computing and thinking.

There is, in the words of NN Taleb, a difference between computing and thinking.

I've spent the last year without insurance and I've questioned my doctor on the cost of everything she's proposed.

The problem is, she doesn't know the cost of any of it. Can you imagine this occurring in any other market? Imagine going into Best Buy and asking a salesperson how much something cost and they replied, “I don't know.”

Why doesn't she know? Because her customers don't ask. Why don't her customers ask? Because they aren't paying for it.

True, but your if your provider knows you can drop him at any time, there is incentive to treat you right.

Those with heavy concentrations of capital need regulation? Are you saying that those people who have earned a lot of money need to be kept a close eye on? By whom? The good people down at the government? What evil things do they do that requires such restraint?

Instead of government, unbridled competition is the preferable way of keeping companies in line. What motivating force do you think caused Microsoft to address the grievances of Windows Vista by delivering Windows 7? Was it the Justice Department? The Better Business Bureau? Or might it Apple and Linux? Who is going to keep Google from getting fat and lazy when it comes to search? The Lord Obama? Or might it be Steve Ballmer and his highly capitalized (and thus suspect according to you) company Microsoft?

When I'm thinking market, I'm thinking free people freely entering into transactions with each other. Some guy calls himself a doctor and tells me he knows what I need to do about some problem I'm having. I don't know that much about medical stuff so I'm definitely at a disadvantage when it comes to deciding if I should follow his recommendation. If we both know I can quickly and easily get second or third opinions (shop around, as it were) then at least the doctor (the highly trained specialist) has some incentive to make an accurate, truthful recommendation because he knows I can cross-check his story for veracity. That's what I meant about not having to take the highly technical specialist purely at face value. Just because one particular highly trained specialist makes a recommendation does not mean that I will or should automatically follow it.

I do agree with you that “Human nature allows all of us to justify feathering our own nests”. The marketplace is there for competitors to keep each other honest. Unrestrained competition is the best way to keep human nature in check.

Caps on punitive damages have the same problem as caps on compensatory damages, they don't allow for large awards in the most egregious cases of negligence, regardless of how small their occurrence is.

I think that there are other ways to limit abuse without trampling on the only means to make “whole” those who are truly injured.

There are undeniably instances of incompetence and negligence in the medical profession, regardless of how small the percentage of lawsuits they represent (a quick search showed that 86% of medical lawsuits in TX found no fault on the part of the defendant). It is the other 14% that I am speaking of. When someone is under anesthesia and the wrong dose of medication is given, or contraindicated drugs are administered, foreign objects left behind in one's body, etc. that result in death or disability, I think those are potential grounds for a lawsuit. In those instances, I don't think that the limits on liability should be capped. Some people's losses can easily exceed $750,000. That's the only point I was trying to make.

BTW, Texas' tort reform legislation was passed in 2003 and went into effect in September 2003, I believe, so it's been in effect for 6 years, not 2.

Also, you only need 7 out of 12 jurors in a civil case to rule in your favor. So yes, I do think that Jury ignorance/symapathy play a major roll in the ease it is for the bottom feeding attorney's to get large awards. It is not by accident that the Plaintiff in these frivolous cases ALWAYS demand a jury trial.

Reforms like “loser pays,” and a mediation/arbitration requirement prior to trial could be effective in weeding out the frivolous lawsuits. I suppose it is the one-size-fits-all cap on awards that I am most opposed to.

Just curious, superheater. Do you know what coursework Leonhardt pursued in receiving his B.S. in Applied Mathematics from Yale? Applied mathmatics at Yale would include standard courses such as numerical analysis, optimization, harmonic analysis, and differential equations. Applied mathematics at Yale might also include statistics, probability, financial mathematics, and econometrics.

Of course, Leonhardt has been paid to study and write about business for the past 15 years. It is likely he has acquired more general business knowledge than he possessed upon graduation in 1994.

A very important point, DrT1. A point I'm sure is routinely ignored by those who would demonize the medical profession.

If you are a medical professional, please remember that economists and some who comment on this blog are often out of touch with most consumers on this issue. Surveys have consistently revealed that:

- Americans trust nurses and doctors more than any other professionals;
- the 89% of Americans who possess some form of health insurance are satisfied with the medical care and coverage they are receiving.

It is true that customer satisfaction with insurers has declined almost in lockstep with attacks by politicians on the health insurance industry. Why the average American cannot see through the attempt by Democratic politicians to seize economic power is just amazing.

I got it. Russ gave a great example. I've bought three Dell computers over the past six years. I'll bet HP bought that many Dell computers yesterday. I wonder why they'd do that?