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Ad Nauseum: Addressing America’s Advertising Problem

Published by Anonymous (not verified) on Fri, 24/06/2022 - 12:41am in
by Haley Mullins

One of the biggest roadblocks to achieving a steady state economy is advertising. While seemingly innovative solutions to consume conscientiously are becoming more prevalent, most people aren’t Marie Kondo-ing their way through each purchase, stopping to question whether the item in their shopping cart will “spark joy.” But how much blame can we really assign consumers when they’ve been dropped onto a hamster wheel of coupons, cash-back credit cards, and “consumer confidence” indicators?

We live in the age of the internet, where we can purchase anything with one click on Amazon. Websites track our movements and preferences as we surf the web, offering us personalized advertisements so we can discover and buy more of what interests us. To put into perspective how expansive advertising is in the USA, China is the second-largest advertising market in the world, yet its ad expenditures are estimated at less than half the amount calculated for the USA.

Advertising and Growth

Super Bowl promotions in a grocery store, featuring doritos advertising.

Super Bowl Sunday might be better named National Advertising Day. (CC BY 2.0, JeepersMedia)

In 1941, right before a baseball game between the Brooklyn Dodgers and Philadelphia Phillies, the first legal TV commercial aired in the USA. It was just ten seconds long and only cost the company nine dollars. Forty years later, the standard for prime-time TV was 9.5 minutes of ads per hour; today, it’s up to 14–17 minutes per hour. The cost of advertising has skyrocketed, too, but marketers are still willing to pay big bucks to make buyers aware of the “Next Big Thing.” In 2020, advertisers spent an average of $5.6 million for a 30-second spot in Super Bowl 54.

Firms advertise to create demand and promote consumption. (I don’t know about you, but I didn’t want socks with my cat’s face on them until I saw a Facebook ad for it.) While firms compete against each other for our business, they rally around the goal of GDP growth. Wall Street and Madison Avenue aren’t far apart—figuratively or politically—and both have skin in the growth game.

Americans have a love-hate relationship with ads though. A typical American might understand the role of advertising in economic growth, yet—apart from Super Bowl Sunday—we detest ads and go to great lengths to avoid them. By 2021, 27 percent of U.S. internet users used ad blockers on their connected devices. Younger generations are particularly put off; 48 percent of Gen Z consumers and 46 percent of Millennials prefer to pay a premium than watch advertisements on streaming video services.

First Things First

Steady staters have some significant hurdles to overcome in the degrowth of the American ad industry, the first of which is the First Amendment.

Advertising falls under the First Amendment right to free speech and free press, the most cherished of our constitutional rights. However, even the sanctity of the First Amendment doesn’t guarantee the freedom to say anything. The circumstances are important, too. Reasonable restrictions of free speech are imposed most notably when public safety is concerned. The classic example of unprotected speech is yelling “Fire!” at the movie theater when no fire exists, as the welfare of people supersedes your right to yell “Fire!”

While advertising isn’t as directly harmful as in this example, the prevalence and effects of advertising—unnecessary consumption, growth, and environmental impact—have become increasingly harmful to public welfare. Advertising restrictions already in place substantiate our cultural awareness of advertising as a danger to the public. Under the law, claims in advertisements must be truthful, and cannot be deceptive or unfair. Additionally, there are restrictions on promoting harmful products like tobacco and alcohol, as well as advertising to children, who can’t interpret ads with a critical lens.

Society understands the power of advertising and the dangers it poses when used manipulatively. Thus, it’s poor reasoning to use the First Amendment as an excuse for “anything goes” in the advertising industry. So, what policies could we enact to moderate advertising, slow consumption, and (in the process) improve wellbeing?

Ad-equate Policies

Defenders of advertising argue the importance of the practice in aiding competition, a fundamental facet of a capitalist system to keep prices low and fair. As American economist Lester Telser once described, “If sellers must identify themselves in order to remain in business, then formally unless they spend a certain minimum amount on advertising their rate of sales will be zero. Regardless of price, buyers would not know of sellers’ existence unless the sellers make themselves known by incurring these advertising outlays.”

1960 Budweiser advertisement with four Black men holding beers and chatting in a kitchen.

Advertising: framing the consumption of market goods as raising one’s quality of life. (CC BY-NC 2.0, ChowKaiDeng)

Touché, Telser. Eliminating the practice of advertising isn’t practical, as people would struggle to discover necessary goods and services. But billions of dollars are spent annually on advertising, far surpassing the optimal scale of the industry. In 2020, U.S. firms spent $240 billion on advertising; all of it tax deductible, as it’s considered a necessary business expense to generate or keep customers. Herman Daly and Joshua Farley argue for advertising taxes in Ecological Economics (Second Edition), declaring it appropriate to tax advertising as a public bad because production should meet existing demand rather than create new demands for whatever gets produced.

But if we’re truly to curb overconsumption of market goods, merely reducing the quantity of advertising will only do so much in the aggregate. To change consumer habits, an alternative to market goods must be introduced. Thus, in addition to taxation, Daly and Farley suggest making media information flows more symmetric so that the public is equally exposed to nonmarket goods as they are to market goods. Essentially, we need a sort of nonprofit advertising to balance out the advertising of firms.

Nonmarket goods, things that are neither bought nor sold directly, do not have a readily quantifiable monetary value. Some examples include visiting the beach, birdwatching, or going for a walk. Perhaps, with more attention given to nonmarket goods, consumer culture might shift to better appreciate our planet and better understand the true cost of frivolously consuming market goods that come from the Earth and return to the Earth as waste. Our resources might then be reallocated to the preservation of invaluable nonmarket goods, a shift that may aid in transitioning to a steady state.

Redefining Ethical Advertising

Cartons of cigarettes with several different warning labels making it clear that smoking is hazardous to people's health.

Full disclosure: unchecked consumption kills people and planet. (CC BY 2.0, kadavy)

The U.S. Federal Trade Commission (FTC) defines “ethical advertising” as “truthful, not deceptive, backed by evidence, and fair.” The FTC assesses the adherence of these principles through the lens of a “reasonable consumer” to determine whether an ad meets the requirements. However, some argue that the FTC has a responsibility to protect the ignorant consumer to the same extent as the reasonable one.

If the last several decades of celebrated economic growth are considered, I’d say the vast majority of consumers fall into the ignorant category—ignorant to limits to growth, at least. Is it not within the scope of ethics, then, to make the true cost of consumption for advertised market goods evident? Is it not deceptive for ads to display a price tag that fails to factor in the environmental costs of production? We have warning labels on tobacco and alcohol products that consumption may lead to adverse effects, so why aren’t we warning buyers of the consequences of consuming other goods?

If we don’t restrict the amount or reach of advertising, the least we can do is demand full-disclosure advertisements that detail the environmental cost of producing and purchasing the product. This would, at minimum, include estimated life-cycle emissions, quantity of natural resources extracted, and the energy required to produce each unit. Such disclosures would, over time, raise awareness of limits to growth and could, perhaps, be the catalyst that converts our culture of conspicuous consumption to one of careful conservation.

Haley Mullins, managing editor for CASSEHaley Mullins is the managing editor at CASSE.

The post Ad Nauseum: Addressing America’s Advertising Problem appeared first on Center for the Advancement of the Steady State Economy.

Some thoughts on fixing the Australian health system

Published by Anonymous (not verified) on Mon, 13/06/2022 - 12:35pm in

Tags 

Health, Health, policy

This is an edited version of an article that first appeared in Crikey on 3 June 2022.

As I see it, the four most pressing challenges for the new Minister for health and ageing concern: 1. promoting health (not just treating disease); 2. addressing the disconnect between care settings (particularly hospital, primary and dental care), 3. fixing the private sector; and 4. addressing the national disgrace that is aged care.

‘Health’ is much more than medical interventions

 Firstly, the portfolio needs to encompass health, not just healthcare. The distinction is important. Health is more than the absence of disease. Healthcare is mostly concerned with treating illness. It has little to say about promoting health and avoiding illness unless it involves medical interventions (part of the problem is how we pay for care… but we’ll get to that).

The most pressing issue is the pandemic, which is far from over. The new government needs to listen to experts and work with, not against, the states and territories on containing it. In fact, COVID-19 perfectly demonstrates the value of public health interventions. They suppress spread (distancing, masks, periodic restrictions) and severity (vaccination).

Beyond that, we need to invest more in promoting health especially in tackling “upstream” risk factors. We have a pedigree here. Australia led the world in reducing tobacco use — a globally recognised public health success despite a determined campaign opposing it. Nicola Roxon, the health minister at the time, did a very good job standing up to vested interests.

The minister was less successful at adjusting the cataract surgery rebate to align with the cost-effectiveness of Medicare reimbursement for other procedures. To be fair, this was a harder sell than tobacco but it nevertheless illustrated Machiavelli’s timeless observation that:

“…nothing is more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system 1 for the initiator has the enmity of all who would profit by the preservation of the existing ways and merely lukewarm defenders in those who gain by the new ones.”

It also confirmed the golden equation of health care: every $ of spending = a $ of income (sometimes a very good income indeed.)

It’s now well established that the most powerful determinants of health (and disease) are social and economic. Inequality is especially harmful. It reduces everyone’s health, not just those at the bottom. The government has the levers controlling many of the factors affecting our health: education, tax, housing, social services and welfare.

Public housing — neglected over the past decade — can deliver some quick health wins. Unsurprisingly, improved housing availability and quality has been shown to reduce hospital admissions and re-admissions. We need health in all policies across the relevant portfolios and through the Council of Australian Governments (COAG).

Sorting out health care

What we call the health system in fact covers mainly medical care. It’s an illness system and, to be honest, it’s a stretch to call it a system at all; it’s more like patchwork, a marble cake that’s increasingly struggling to address modern demands of chronic, non-communicable disease, multi-morbidity and mental ill health.

Some serious changes are needed to improve how the current arrangements work for patients and consumers as well as those for those who toil every day to deliver care (who have really copped it throughout the pandemic).

Mental health care is probably the biggest illustration of the problems and challenges we have . We need to listen to patients, consumers and experts about how to invest in the prevention and treatment of mental ill health. The current ‘system’ is broken – and the current disconnect between primary, community and hospital care is a major contributor.

Hospitals are expensive and at times dangerous places. We must do everything we can to keep patients out of them, and if not, to ensure that their stay is as short and as safe as possible. I concede that this is difficult under a funding model that rewards activity and I caution against simply throwing more money at public hospitals. Inflating the balloon won’t reduce the pressure.

While the states run our public hospitals, the Commonwealth is responsible for primary care. Rising levels of chronic disease mean that our GPs and allied health professionals are on the frontline in helping people manage their health problems and keep them out of hospital. It also gives them a landing pad after they leave acute care, freeing up beds faster and helping reduce wait times at the front door.

(Most states need sub-acute beds and more social care for people who may have trouble coping at home — there are massive savings on offer by reducing the number of ‘boomerang’ patients.)

But we have a GP shortage in areas of greatest need (the inverse care law). Many patients don’t see their doctor because of high out-of-pocket costs (bulk billing data is a sham). Little wonder that compared to those living in other OECD countries, Australians are almost twice as likely to be admitted for respiratory conditions, most of which should be managed out of hospital.

SOURCE: OECD.STAT

We can bolster primary and community care in several ways. We should ensure that electronic medical records used in public hospitals can exchange information with those used in other settings, especially GPs and pharmacies. My Health Record isn’t working. The privacy risks can be managed. The benefits of integration can be considerable.

In the long term, we need a discussion with our medical colleagues about changing the training, socialisation and culture of medicine to value generalists as highly as specialists. Doctors are human so part of that is about money and a career in general practice (a specialisation in its own right) should be a financially attractive option.

Among OECD countries that provide this data, Australia has the second-lowest GP income rates relative to their specialist colleagues.  We need to change this by increasing how much GPs earn.  (Reducing the amount specialists earn is not a fight I would advise anybody to pick – see the cataract example above and what Nye Bevan had to say).

SOURCE: OECD.STAT

Follow the money … FFS

Many of the problems we have boil down to how we pay for health care. We don’t pay for health, nor can we because we’re hopeless at measuring it. So the prevailing approach fee-for-service (with the apt acronym of FFS) with the implicit assumption that the service produce health. Aside from the fact that this assumption often incorrect, FFS is probably the worst way to fund care that seeks to provide joined-up services for the growing number of people with multiple morbidity and complex health and social care needs. (Those suffering from mental ill health are a prime example).

In the interim, we should at least structure FFS to reflect various levels of patient complexity. Providers must have an incentive to invest the time to help their most vulnerable patients. A good start would be to raise the Medicare rebate for general consultations. This should at least begin to improve access for our poorest (and sickest).

But some point, we need to discuss ways to fund care that rewards value, not volume – both in general practice and hospitals. There are calls to unify the funding source for both. This would be the perfect solution. Given their overall vastly superior performance in managing COVID-19, I’d argue that the states would be better placed to manage and fund a unified health system in each jurisdiction. But I suspect that convincing any government to relinquish control of health care is highly ambitious.

A national health reform commission, however, could begin drawing up transition in funding to deal with this and other challenges we face. There’s plenty of alternatives to FFS. Perhaps we could try paying providers a lump sum per patient based on their level of health need (Gonski for health). We could incentivise people registering with primary care providers. We could encourage more care integration by bundling payments across the entire care cycle rather than pay for each individual component as if the patient were a product on an assembly line (albeit a very inefficient assembly line that would have Henry Ford spinning in his grave).

This commission — comprising representatives of patients and consumer experts as well as the usual suspects from the clinical world and academia — would be well placed to begin incorporating dental care in the health system. This is a much-needed reform that can 1. alleviate a lot of immediate suffering, 2. improve overall health, and 3. reduce pressure on other parts of the system.

‘Private’ health needs a major rethink

Most Australians receive elective procedures in the private sector. “Private” healthcare in this country is a cosy arrangement between insurers and providers, all propped up by billions courtesy of the taxpayer each year. The truth is that private health diverts resources away from the public sector, rather than taking pressure off it. The result is a two-tiered arrangement where those who can afford it get care (sometimes excessive and unnecessary care) while those who can’t go without, languishing on waiting lists. Little wonder the industry is in real trouble.

We can have a private sector (we will continue to have one regardless of what anybody thinks or says) but it must be designed to serve consumers — not providers and insurers. Several things can be done. Stronger regulation on fees and charges, including better transparency and limits. Also, why not publish provider outcomes so that patients can assess the quality they’re getting for their money?

We need to press on with efforts to modernise the Medicare Benefits Schedule, which is full of items that are obsolete or do not reflect effective, high-value care. And maybe giving more say to health funds in how care is delivered could improve efficiency and value in the sector.

Markets: a good servant, poor master — just look at aged care

The most fundamental tenet is this: health isn’t a commodity, and healthcare is fundamentally different to any other service or product. Market forces can play a role (note the health systems of Israel or the Netherlands) but they must be carefully guided and regulated. Relinquishing it all to the invisible hand will simply result in paying more for worse health outcomes. For evidence, just look at the USA.

In fact, we need not look abroad at all. Australian aged care is a prime example of what happens when we leave it to all to the market. It’s a complete mess, and a taskforce to implement the Royal Commission findings is needed as soon as possible. In a nutshell: more regulation, outcomes data, consumer protection and better pay for care staff. (We often hear ‘you pay peanuts you get monkeys’. Well, if this is true it applies equally here just as it does for executive remuneration.)

We shouldn’t waste a day.

Nation’s Real Estate Agents Tell Tenants To Hand Over Their Super Or Else

Published by Anonymous (not verified) on Tue, 17/05/2022 - 8:19am in

The Australian Real-estate Sales Executive (Arse) has spoken out in favour of Prime Minister (for now) Scott Morrison’s plan to allow people to use their superannuation to buy houses.

”What a great a way to help our members gain more commissions,” said a Spokesperson for ARSE. ”The last couple of years have been great for our industry but you know, some of our Sydney agents are doing it tough.”

”I heard of one poor agent who was only able to afford a normal toilet in their house renovation instead of a gold plated one, can you imagine?”

When asked what measures they felt the Government could take to fix the housing affordability affordability problem, the ARSE said: ”What problem, houses are very affordable, heck I’ve got five.”

”But, you know maybe the Government does need to do more. Like allowing people to sell their organs to raise money for a deposit.”

”That would be a win win, as young people would get a house and our treasured boomers would have a ready supply of kidneys and livers should they need it.”

Mark Williamson

@MWChatShow

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Keeping the Charities Commission Opens Door to Real Reform

Published by Anonymous (not verified) on Tue, 24/02/2015 - 9:55am in

Australia Failing to Close the Gap

Published by Anonymous (not verified) on Thu, 12/02/2015 - 10:14am in

NFPs Warn of Homelessness Program Closures in Govt Appeal

Published by Anonymous (not verified) on Tue, 10/02/2015 - 8:48am in

Morrison Dumps Marriage Counselling

Published by Anonymous (not verified) on Tue, 03/02/2015 - 9:47am in

Indigenous Children in Care Up 65 Per Cent Since National Apology

Published by Anonymous (not verified) on Tue, 03/02/2015 - 9:41am in

Airline Carrier Announces New Policy for Disabled Passengers

Published by Anonymous (not verified) on Thu, 29/01/2015 - 9:47am in

Tags 

disability, policy

Revised GP Co-Payment Still Bad Policy: ACOSS

Published by Anonymous (not verified) on Thu, 11/12/2014 - 9:20am in