Libertarian Summer Seminars
Students: Apply now for 11 weeklong, interdisciplinary seminars on liberty in its various aspects, hosted by the Institute for Humane Studies at locations around the country.
And don’t forget: Students and everyone else are invited to Cato University in beautiful Rancho Bernardo, California, the last week of July.
Learn about liberty! Enjoy beautiful weather! Meet your favorite libertarian thinkers! Make lifelong friends! And all for the low low price of — well, the IHS seminars are free. There’s a charge for Cato University, and some student scholarships are available.
McArdle on Whether Health Insurance Affects Health
I’ve blogged previously about the tempest that Ezra Klein stirred up in the teapot of the health care debate when he suggested that Sen. Joe Lieberman “seems willing to cause the deaths of hundreds of thousands of people” by holding up ObamaCare.
In the latest issue of The Atlantic magazine, Megan McArdle notes that the economic literature doesn’t quite support Klein’s assumption that covering the uninsured would save lives:
Quite possibly, lack of health insurance has no more impact on your health than lack of flood insurance…
Government insurance should have some effect, but if that effect is not large enough to be unequivocally evident in the data we have, it must be small…
[W]e should have had a better handle on the case for expanded coverage—and, more important, the evidence behind it—before we embarked on a year-long debate that divided our house against itself. Certainly, we should have had it before Congress voted on the largest entitlement expansion in 40 years. Unfortunately, most of us forgot to ask a fundamental question, because we were certain we already knew the answer.
Filed under: Cato Publications; Health, Welfare & Entitlements
Healthcare Fraud Summit
U.S. Department of Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder recently convened a “National Summit on Health Care Fraud.” The two-hour event can be viewed at C-SPAN’s website.
There was a lot of talk about protecting taxpayers, and it was clear that HHS is putting a great amount of resources into the problem. The federal lawyers and accountants speaking at the event who are tasked with rooting out abuse seem to a very dedicated and intelligent group. But this is one of the sad things about complex big government programs—they need intelligent people to administrate them, and that saps the private economy of intellectual resources.
HHS Secretary Sebelius mentioned that funding for anti-fraud measures would go up 80 percent under the president’s new budget. HHS intends to spend money on technology that would do a better job of sifting through the data to detect potential fraud and abuse. But that’s the Catch 22: more taxpayer money has to be spent to “save” taxpayer money.
On Thursday, the head of the House Energy and Commerce Committee, John Dingell (D-MI) had a telling exchange with Sebelius. From Nextgov.com:
“I have wrestled with a number of department agencies over the past [about] their adequacy . . . to upgrade these matters,” Dingell said. “They’ve had good motivation, noble intentions, but the implementation was also lacking, causing substantial waste and confusion.”
When he asked Sebelius whether the $110 million would be a one-time investment, she said, “This is a multiyear strategy to actually build a 21st century information and data system.”
“Should we anticipate that you will be coming back up here to continue to move toward adequate resources to sustain this project over the years?” Dingell asked.
Sebelius said she would see the project through and later added the department has a new information officer, who is not directly connected to CMS, who is assisting with project supervision. She assured Dingell that HHS would provide proper oversight of vendors and federal employees working on the project.
Dingell’s candor is refreshing, and it serves as a reminder that government officials always promise to “fix” problems if they just get new technology and more money. Instead, the “fix” often ends up getting bogged down in bureaucracy and cost overruns due to poor oversight of contractors.
The fundamental problem with giant government healthcare programs is simple: when you have a giant pot of honey, you attract ants. And when that honey is guarded by someone who didn’t pay for the honey, there’s little incentive for that person to guard it as it were their own.
This difference in incentives was evident when the CEO of a private insurer spoke at the summit. The CEO, James Roosevelt of Tufts Health Plan, pointed out that the chief priority for Medicare/Medicaid is to pay claims as quickly as possible. Public programs lack the capabilities of their private sector counterparts to not only stop improper payments from being made, but also detecting such payments after the fact. Moreover, private insurers aren’t encumbered by the massive bureaucracy and congressional meddling that inhibits the government’s ability to adapt and react to ever evolving fraud schemes.
See this essay for more on fraud and abuse in government programs. See here for recent examples of fraud and abuse in government healthcare programs.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Senate Health Bill May Violate First Amendment
Today, the Cato Institute released “Scientific Misconduct: The Manipulation of Evidence for Political Advocacy in Health Care and Climate Policy,” by George Avery of Purdue University.
Avery points to a troubling provision of the Senate-passed health care bill that Democrats are trying to get through the House:
In a section creating a new Patient-Centered Outcomes Research Institute to conduct comparative-effectiveness research, the bill allows the withholding of funding to any institution where a researcher publishes findings not “within the bounds of and entirely consistent with the evidence,” a vague authorization that creates a tremendous tool that can be used to ensure self-censorship and conformity with bureaucratic preferences….As AcademyHealth notes, “Such language to restrict scientific freedom is unprecedented and likely unconstitutional.”
He warns that government bureaucrats aren’t likely to let that power go unused.
In July 2007, AcademyHealth, a professional association of health services and health policy researchers, published results of a study of sponsor restrictions on the publication of research results. Surprisingly, the results revealed that more than three times as many researchers had experienced problems with government funders related to prior review, editing, approval, and dissemination of research results. In addition, a higher percentage of respondents had turned down government sponsorship opportunities due to restrictions than had done the same with industrial funding. Much of the problem was linked to an “increasing government custom and culture of controlling the flow of even non-classified information.”
Avery observes that such power enables bureaucrats to engage in “data manipulation to cover inconvenient findings,” much as the scientists at the Climate Research Unit at the University of East Anglia appear to have done. Indeed, he points to evidence of U.S. Environmental Protection Agency officials suppressing an, ahem, inconvenient internal debate.
Filed under: Cato Publications; Energy and Environment; General; Health, Welfare & Entitlements
‘I Keep My Core Beliefs Written on My Palm for Easy Reference.’
Somehow I was reminded of this cartoon today.
NRA Shoots Itself in the Foot
I previously blogged about the NRA’s misbegotten motion, which the Supreme Court granted, to carve 10 minutes of oral argument time away from the petitioners in McDonald v. Chicago. Essentially, there was no discernable reason for the motion other than to ensure that the NRA could claim some credit for the eventual victory, and thus boost its fundraising.
Well, having argued that petitioners’ counsel Alan Gura insufficiently covered the argument that the Second Amendment should be “incorporated” against the states via the Fourteenth Amendment’s Due Process Clause, the NRA has now filed a brief that fails even to reference the four biggest cases regarding incorporation and substantive due process. That is, the NRA reply brief contains no mention of Washington v. Glucksberg (1997), Benton v. Maryland (1969), Duncan v. Louisiana (1968), or Palko v. Connecticut (1937). (The NRA did cite those cases in its opening brief.) What is more, it also lacks a discussion of Judge O’Scannlain’s magisterial Ninth Circuit opinion in Nordyke v. King (2009), which the Supreme Court might as well cut and paste regardless of which constitutional provision it uses to extend the right to keep and bear arms to the states!
I should add that the petitioners’ reply brief does cite all of those aforementioned cases (as well as the “Keeping Pandora’s Box Sealed” law review article I co-authored with Josh Blackman). I leave it to the reader to determine whether it is Alan Gura or the NRA who is better positioned to argue substantive due process — or any other part of the McDonald case.
For more on the rift between the McDonald petitioners and the NRA, see this story in today’s Washington Post (in which I’m quoted, full disclosure, after a lengthy interview I gave the reporter last week).
(Full disclosure again: Alan Gura is a friend of mine and of Cato, and I suppose I should also say that I’ve participated in NRA-sponsored events in the past.)
Filed under: Government and Politics; Law and Civil Liberties
Happy Birthday Ronald Reagan
Ronald Reagan was born 99 years ago. To remember what made him special, here are a couple of videos.
Filed under: Government and Politics; Political Philosophy; Tax and Budget Policy
Tom Palmer on Life, Liberty, and Moral Relativism
Cato senior fellow Tom Palmer is profiled in the Washington Examiner’s Sunday “Credo” column. He talks about the meaning of freedom and about people who have risked their lives to protect the rights of others, and offers some interesting thoughts when asked about “moral relativism”:
You say that for many people, the idea of right and wrong has been degraded in our culture. Why? When did that happen?
The growth of moral relativism is an interesting thing to chart. Allan Bloom at the University of Chicago argued that it was an unintended consequence of a positive development, which was the integration of different races and religions. As that happened, it became the easiest way to tell schoolchildren not to fight by saying, “Everyone and everything is as good as everything else.” It is an easier route to say that there are no moral truths, but the outcome is not more mutual respect. It undermines the foundation of mutual respect.
Moral relativism was a lazy shortcut for a pluralistic society. A better approach is to say you should respect others because they’re human beings, and because they have rights.
Find the whole article here or see it in newspaper-page format on page 34 of the digital edition.
And buy Tom Palmer’s Realizing Freedom: Libertarian Theory, History, and Practice here.
Nozick in the News
Charles Krauthammer writes about “liberal expressions of disdain for the intelligence and emotional maturity of the electorate” and the conceit that “Liberals act in the public interest, while conservatives think only of power, elections, self-aggrandizement and self-interest.” He has plenty of contemporary examples, but he also recalls one from a few years ago:
It is an old liberal theme that conservative ideas, being red in tooth and claw, cannot possibly emerge from any notion of the public good. A 2002 New York Times obituary for philosopher Robert Nozick explained that the strongly libertarian implications of Nozick’s masterwork, “Anarchy, State, and Utopia” “proved comforting to the right, which was grateful for what it embraced as philosophical justification.” The right, you see, is grateful when a bright intellectual can graft some philosophical rationalization onto its thoroughly base and self-regarding politics.
Nozick, of course, was a libertarian, not a conservative, as the more insightful obituary by the philosopher Alan Ryan in the British Independent notes: the book’s ”criticism of social conservatism is at least as devastating as its criticism of the redistributive welfare state.” But Krauthammer is right to note the casual assumption by the New York Times that conservatism desperately needed ”philosophical justification.”
Sunday’s Washington Post contains a related article by political scientist Gerard Alexander: “Why are liberals so condescending?”
Law Students: Use Your Deferment to Work for Liberty!
Many law firms continue to ask their incoming first-year associates to defer their start dates (from a few months to a full year) and are offering stipends to these deferred associates to work at public interest organizations. The Cato Institute has been running a successful deferred associates program and we always consider applications on a rolling basis.
We invite third-year law students and others facing firm deferrals to apply to work at our Center for Constitutional Studies. This is an opportunity to assist projects ranging from Supreme Court amicus briefs to policy papers to the Cato Supreme Court Review. Start and end dates are flexible. Interested students and recent graduates should email a cover letter, resume, transcript, and writing sample, along with any specific details of their deferment (timing, availability of stipend, etc.) to Jonathan Blanks at jblanks@cato.org.
Please feel free to pass the above information to your friends and colleagues. For information on Cato’s programs for non-graduating students, contact Joey Coon at jcoon@cato.org.
Jay Greene on Barack Obama on Education
In the current City Journal, political scientist Jay Greene observes that “the test that seems to guide the Obama administration’s education priorities is not whether a policy works, but whether it serves a political constituency.”
The president’s actions have forced me to conclude the same thing.
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- Will Obama’s deficits turn out to be as low-balled as Bush’s?
- Obama blames Bush for his problems, but his new budget is worse.
- Obama’s budget would kill the Constellation program, but his budget still goes to the moon.
- The Federal Housing Administration bailout watch continues.
- There’s nothing “fiscally responsible” about Sen. Kent Conrad.
- The government is creating jobs — federal government jobs.
Grading Agencies’ High-Value Data Sets
I wrote here a few weeks ago about the “high-value data sets” — three per agency — that the federal government would soon be releasing at Data.gov. They were released on January 22nd, and we’ve been poring over them ever since. More on that below.
Tomorrow, agencies are supposed to have their “open government” sites put up — sites where they make their data feeds available and easily findable for the public. There are a couple of different sites monitoring when those sites are going up.
Data, data, data — that means more direct oversight of the government by more people. We talked about all this at our December 2008 policy forum, Just Give Us the Data!
When I wrote recently about the release of agencies’ high-value data sets, though, I worried:
Rather than substantive insight into government management, deliberations, and results, we might get a lot of data-oriented play-toys… [P]ublic choice economics predicts that the agencies will choose the data feeds with the greatest likelihood of increasing their discretionary budgets or the least likelihood of shrinking them.
So I decided to grade them:
To help focus agencies on releasing the data that is high-value for genuine government transparency, I plan to examine the three data-streams each agency releases and grade the agencies on whether their releases provide insight into agency management, deliberations, or results.
With the help of Cato interns Solomon Stein and Sasha Davydenko, I assigned three points to each feed that had to do with management, deliberation, or results. The resulting numerical scores — 9, 6, 3, or 0 — translate into grades: A, B, C, or D respectively. F was reserved for agencies that didn’t produce feeds.
The results follow these few comments:
Filed under: Government and Politics; Telecom, Internet & Information Policy
Is Obama Failing? The Rebuttals
At the Economist’s online debate, Elaine Kamarck and I have posted rebuttals to the opening statements. I say, among other things:
One question here is how do you measure a politician’s failure. Is it, for instance, a failure to get his policies enacted, or his success in enacting bad policies? Surveys of historians always give high marks to presidents who expanded government or fought wars. Washington’s most-quoted political scientist, Norman Ornstein, recently defended the productivity of the current Congress; his article illustrated that to the Washington establishment the very definition of a productive Congress is the spending of more taxpayers’ money, the creation of new agencies and bureaucracies, and the concentration of more power in the hands of federal regulators. Citizens might prefer a government that kept us out of war, let the economy grow, and left us alone…
Some analysts note that Ronald Reagan had low ratings at this point in his term, and a bad midterm election, but came back strong. As it turns out, tax cuts, spending restraint, deregulation and sound money tend to create strong economic recoveries. Threats of tax hikes, unprecedented levels of deficits, a wave of new regulations and fears about Fed monetisation may not.
Has Mr Obama failed, a year into his term? Of course not. But that’s the direction he’s headed.
The vote is now 53 percent against the proposition that Obama is failing. If you agree with the proposition “This house believes that Barack Obama is failing,” I encourage you to cast your vote.
The Government IS Creating Jobs
Federal government jobs that is. According to the president’s new budget, federal civilian employment in the executive branch will be 15 percent higher in 2011 than it was in 2007:
*I subtracted out the Department of Commerce because it’s temporary hiring of workers for the 2010 Census skews the chart.
Private sector unemployment remains high despite the the administration’s claim that massive deficit spending was necessary to return the economy to health. Instead of fostering private sector growth, the administration is fostering government growth at the expense of the private sector.
Political Alchemy, Part I: Turning Spending Increases into Tax Cuts
Politicians in Washington have come up with something far more impressive than turning lead into gold or water into wine. Using self-serving budget rules, they can increase the burden of government spending and say they are cutting taxes instead.
This bit of legerdemain is made possible, thanks to the convolutions of the personal income tax, by adopting or expanding refundable tax credits. But in this case, “refundable” does not mean the government is returning money to taxpayers. Instead, it means that money is being redistributed to people who do not earn enough to be subject to the income tax.
This is hardly a trivial issue. According to the Congressional Budget Office, the amount of income redistribution being laundered through the tax code is now so large that the bottom 40 percent of the population has a negative “effective” income tax rate. In simple terms (though perhaps with profound political implications), the income tax is a revenue generator for a big share of the population.
And the problem is going to get worse if the President’s budget is approved. Buried in the fine print, on pages 188-189 of the Analytical Perspective of the Budget, you will see that the President is proposing to increase this hidden form of spending by more than $152 billion over the next 10 years.
It is worth noting that proponents argue that it is OK to classify this new spending as tax cuts because it somehow offsets other tax payments, especially the payroll tax. I’m sympathetic to lower taxes on everybody, including the poor, but surely it is better to be honest and simply cut the taxes that people pay. The current methodology, by contrast, is open to abuse. Heck, I’m surprised politicians don’t classify other forms of spending as tax cuts. Maybe corporate welfare can be reclassified as a corporate tax cut. (I better stop lest I give the political class any ideas.)
Defenders also assert that some so-called refundable tax credits, particularly the earned income tax credit, are designed to encourage work. That is partly true, but credits like the EITC are withdrawn as income climbs, and this means poor people face punitive marginal tax rates, so the overall effect on hours worked may be negligible.
The right approach, of course, is to get the federal government out of the racket of redistributing income.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Obama’s Big Tax Hike on U.S. Multinationals Means Fewer American Jobs and Reduced Competitiveness
The new budget from the White House contains all sorts of land mines for taxpayers, which is not surprising considering the President wants to extract another $1.3 trillion over the next ten years. While that’s a discouragingly big number, the details are even more frightening. Higher tax rates on investors and entrepreneurs will dampen incentives for productive behavior. Reinstating the death tax is both economically foolish and immoral. And higher taxes on companies almost surely is a recipe for fewer jobs and reduced competitiveness.
The White House is specifically going after companies that compete in foreign markets. Under current law, the “foreign-source” income of multinationals is subject to tax by the IRS even though it already is subject to all applicable tax where it is earned (just as the IRS taxes foreign companies on income they earn in America). But at least companies have the ability to sometimes delay when this double taxation occurs, thanks to a policy known as deferral. The White House thinks that this income should be taxed right away, though, claiming that “…deferring U.S. tax on the income from the investment may cause U.S. businesses to shift their investments and jobs overseas, harming our domestic economy.”
In reality, deferral protects American companies from being put at a competitive disadvantage when competing with companies from other nations. As I explained in this video, this policy protects American jobs. Coincidentally, the American Enterprise Institute just held a conference last month on deferral and related international tax issues. Featuring experts from all viewpoints, there was very little consensus. But almost every participant agreed that higher taxes on multinationals will lead to an exodus of companies, investment, and jobs from America. Obama’s proposal is good news for China, but bad news for America.
Filed under: General; Government and Politics; International Economics and Development; Tax and Budget Policy
Kent Conrad and Fiscal Federalism
Senator Kent Conrad (D-ND) has a reputation for being a “deficit hawk.” But the bar is apparently so low in Washington that merely paying lip service to “fiscal responsibility” is enough to earn you the hawk title in the press. In reality, Conrad is a tax and spender as a story in today’s Wall Street Journal demonstrates.
These examples illustrate Sen. Deficit Hawk’s commitment to deficit reduction and fiscal responsibility:
- “Like many in Congress, he is conflicted. He boasts a 23-year record of looking after North Dakota voters with ample farm subsidies, aid for drought-hit ranchers, defense spending and scores of pet projects. He has done little to help rein in Medicare and Social Security expenses—the U.S.’s biggest budget busters.”
Thursday Links
- Why the Tea Partiers should not date the GOP: “This movement is simply saying: ‘We are fine without you, Washington. Now for the love of God, go attend a reception somewhere, and stop making health care and entrepreneurship more expensive than they already are.’”
- Why President Obama should be open to cutting military spending: “A real test of a leader’s wisdom and strength would recognize that more spending does not equal greater security.”
- A growing disconnect: “A nasty spat has erupted between Washington and Beijing over the Obama administration’s arms sales to Taiwan….The bulk of the evidence suggests that storm clouds are building in the US-China relationship.”
- Podcast: “Obama’s Permanent Bailouts” featuring Mark Calabria.
Filed under: Foreign Policy and National Security; General; Government and Politics
Obama Ringing the Pell
As part of his ill-considered credentialing-to-compete initiative, President Obama wants to greatly increase both the size and availablity of Pell Grants. Under his proposed FY 2011 budget, the total pot of Pell aid would rise from $28.2 billion in 2009 to $34.8 billion in 2011; the maximum award would go from $5,350 to $5,710; and the number of students served would rise by around 1 million.
A critical question, of course, is whether increasing Pell will ultimately make college more affordable or self-defeatingly fuel further tuition inflation. The New York Times took that up in yesterday’s Room for Debate blog.
Economist Richard Vedder has long educated people about the inflationary effect of student aid, and does so again with great clarity. It’s higher-ed analyst Art Hauptman, however, whom I think best captures what likely occurs when Pell is combined with all the cheap loans and other aid furnished by Washington, states, and schools themselves:
Read the rest of this post »
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