Archive for July, 2009
French Folly
Following the dubious example set recently by U.S. legislators, French politicians have informally proposed slapping punitive tariffs on goods from countries who refuse to curb greenhouse gas emissions. The German State Secretary for the Environment has, quite rightly, called foul:
There are two problems — the WTO (World Trade Organization), and the signal would be that this is a new form of eco-imperialism,” Machnig said.
”We are closing our markets for their products, and I don’t think this is a very helpful signal for the international negotiations.”
I have a paper forthcoming on the carbon tariff issue, but in the meantime here’s a recent op-ed (written jointly with Pat Michaels) on climate change policy mis-steps.
Obama the Uniter
Senate Minority Leader Mitch McConnell (R-KY), commenting on President Obama’s health plan: “The only thing bipartisan about the measure so far is the opposition to it.”
Remembering Government at Its Worst
The 20th Century featured many examples of genocide, mass murder, brutality, and other forms of human horror at the hands of totalitarian governments. Perhaps none was worse — at least in terms of the proportion of the population slaughtered and resulting impact on the survivors — than Cambodia.
The commandant of the notorious S-21, or Tuol Sleng, is currently on trial. The proceedings offer a stark reminder of what monstrosities cruel social engineers with guns can wreak. Reports Reuters:
A senior Khmer Rouge prison guard on Thursday told a war crimes tribunal he was forced to send thousands of detainees to an execution site, where they were brutally killed and their bodies thrown into mass graves.
Him Huy, 54, a guard at Phnom Penh’s notorious S-21 prison, said he was ordered by Pol Pot’s chief jailor to transport prisoners to a rice field where they were stripped naked and beaten with clubs as they bled to death.
“All prisoners were blindfolded so they did not know where they were taken and their hands were tied up to prevent them from contesting us,” Huy told the joint United Nations-Cambodian tribunal.
“They were asked to sit on the edge of the pits and they were struck with stick on their necks,” he said, his voice breaking as he gave his harrowing account of the Choeung Ek executions.
“Their throats were slashed before we removed their handcuffs and clothes, and they were thrown into the pits.”
Huy was testifying against S-21 chief Duch, whose real name is Kaing Guek Eav, the first of the five indicted former Khmer Rouge cadres to face trial.
I’ve visited both Tuol Sleng and the so-called Killing Fields. The experience is incredibly depressing and moving. These sites should be mandatory viewing for anyone tempted to surrender his or her liberty, even to the most supposedly well-meaning politicians, bureaucrats, and activists.
(H/t to Paul Chesser, who has been blogging regularly on the trial.)
Why a “Public Option” Is Hazardous to Your Health
President Obama and other leading Democrats have proposed creating a new government health insurance program as an “option” for Americans under the age of 65. In a new study, Cato scholar Michael F. Cannon shows that government programs cost more and deliver lower-quality care than private insurance. “If Congress wants to make health care more efficient and increase competition in health insurance markets, there are far better options,” argues Cannon.
Fannie Med? Why a "Public Option" Is Hazardous to Your Health, Cato Policy Analysis No. 642
What’s A Dollar Worth?
It’s not just Americans worried about the flood of dollars from the Fed. The Chinese and now the Malaysians also are wondering if they should keep dealing in greenbacks.
Reports the Wall Street Journal:
Malaysia’s prime minister said China and his country are considering conducting their trade in Chinese yuan and Malaysian ringgit, joining a growing number of nations thinking of phasing out the dollar.
“We can consider whether we can use local currencies to facilitate trade financing between our two countries,” Malaysian Prime Minister Najib Abdul Razak told reporters at a briefing Wednesday after meeting with China’s premier, Wen Jiabao.
“What worries us is that the [U.S.] deficit is being financed by printing more money,” Mr. Najib said. “That is what is happening. The Treasury in the United States is printing more notes.”
The dollar won’t easily be displaced as the world’s principal reserve currency. But Washington appears to be doing everything possible to hasten that day.
Perhaps Americans should consider keeping their wealth in yuan or even ringgits. At least they might retain their value even as the Fed and Treasury attempt to inflate and spend the U.S. economy into oblivion.
Time to Cut Back Boondoggle Embassy in Iraq
The Bush administration has many legacies. One is the more than $700 million U.S. embassy, set on 104 acres, only slightly smaller than the Vatican’s land holdings, in Baghdad. It was an embassy designed for an imperial power intent on ruling a puppet state.
It turns out that Iraq’s Prime Minister Nouri al-Maliki doesn’t plan on being anyone’s puppet. U.S. troops have come out of the cities and will be coming home in coming months. Provincial reconstruction teams also will be leaving. The Bush administration’s plan for maintaining scores of bases for use in attacking Iran or other troublesome Middle Eastern states is stillborn. And Prime Minister Maliki isn’t likely to ask for Washington’s advice on what kind of society U.S. officials want him to create.
So just what should the Obama administration do with this White Elephant on the Euphrates? Cut it down, says the State Department’s own Inspector General.
The U.S. Embassy in Baghdad — the United States’ largest and most costly overseas diplomatic mission, with 1,873 employees — is overstaffed and must be reduced to a size more in keeping with the evolving U.S.-Iraq relationship and budget constraints, government auditors said in a report issued Wednesday.
The State Department’s inspector general said that although the U.S. presence in Iraq will become more civilian as the military withdraws over the next two years, the embassy “should be able to carry out all of its responsibilities with significantly fewer staff and in a much-reduced footprint.” The reduction “has to begin immediately,” the report said, before Foreign Service officers complete their next assignment bidding cycle and other employees are extended or hired.
The U.S. should be preparing to have a normal relationship with Iraq. That includes maintaining a normal embassy.
Maybe Europe Isn’t Lost to Islamic Terrorism
Europe has come into a lot of criticism lately. Much of it is justified. For instance, cutting military forces while expecting the U.S. to maintain security guarantees is more than little irritating for Americans facing trillions of dollars in deficits and tens of trillions of dollars in unfunded liabilities for various bail-outs and social programs.
However, predictions of a radical Islamic takeover of Europe look less realistic these days. Forecasting the future is always risky. Nevertheless, the feared growing population of Islamic extremists hasn’t appeared. Reports the Guardian:
A district of derelict warehouses, red-brick terraces, and vibrant street life on the canals near the centre of Brussels, Molenbeek was once known as Belgium’s “Little Manchester”. These days it is better known as “Little Morocco” since the population is overwhelmingly Muslim and of North African origin.
By day, the scene is one of children kicking balls on busy streets, of very fast, very small cars with very large sound systems. By night, the cafes and tea houses are no strangers to drug-dealers and mafia from the Maghreb.
For the politically active extreme right, and the anti-Islamic bloggers, Molenbeek is the nightmare shape of things to come: an incubator of tension and terrorism in Europe’s capital, part of a wave of “Islamisation” supposedly sweeping Europe, from the great North Sea cities of Amsterdam and Rotterdam to Marseille and the Mediterranean.
The dire predictions of religious and identity-based mayhem reached their peak between 2004 and 2006, when bombs exploded in Madrid and London, a controversial film director was shot and stabbed to death in Amsterdam, and angry demonstrators marched against publication of satirical cartoons about the Prophet Muhammad.
For Bruce Bawer, author of While Europe Slept, the continent’s future was to “tamely resign itself to a gradual transition to absolute sharia law”. By the end of the century, warned Bernard Lewis, the famous American historian of Islam, “Europe will be Islamic”. The Daily Telegraph asked: “Is France on the way to becoming an Islamic state?” The Daily Mail described the riots that shook the nation in the autumn of 2005 as a “Muslim intifada”.
Yet a few years on, though a steady drumbeat of apocalyptic forecasts continues, such fears are beginning to look misplaced. The warnings focus on three elements: the terrorist threat posed by radical Muslim European populations; a cultural “invasion” due to a failure of integration; and demographic “swamping” by Muslim communities with high fertility rates.
A new poll by Gallup, one of the most comprehensive to date, shows that the feared mass radicalisation of the EU’s 20-odd million Muslims has not taken place. Asked if violent attacks on civilians could be justified, 82% of French Muslims and 91% of German Muslims said no. The number who said violence could be used in a “noble cause” was broadly in line with the general population. Crucially, responses were not determined by religious practice – with no difference between devout worshippers and those for whom “religion [was] not important”.
“The numbers have been pretty steady over a number of years,” said Gallup’s Magali Rheault. “It is important to separate the mainstream views from the actions of the fringe groups, who often receive disproportionate attention. Mainstream Muslims do not appear to exhibit extremist behaviour.”
Obviously, the future is uncertain. Terrorism will remain a threat to both America and Europe. However, we must reduce the number of those hostile to the the U.S. and allied countries as well as stop those already determined to do us ill. So far, thankfully, the news from Europe in this regard appears to be good.
Government Health Care Trade-Offs: Death or Treatment?
Uwe Reinhardt has made the argument that health care rationing is health care rationing. It’s inevitable, so there’s no big deal about the government exerting more control. I argued earlier that this ignores the question 0f who is doing the rationing, us or the government? Since resources are finite but desires are infinite, we all engage in “rationing” in most every aspect of our lives. But we do so based on our needs, wants, wishes, and dreams, not those of politicians or bureaucrats.
Who makes the decision especially matters when the issue is life and death. There was a recent report on RedState.com that a Democratic congressional aide was overheard suggesting that expanded Hospice care would help solve the cost problem for health care:
And, for the crowning glory, the aide feels that “probably the best part of the bill is the increase in Hospice care which will solve the prolonging of life issue.”
One has to be careful dealing with second-hand reports of overheard conversations. Nevertheless, RedState’s Erick Erickson pointed to Oregon’s health program, which seems to trend the same way. As Fox News detailed:
Some terminally ill patients in Oregon who turned to their state for health care were denied treatment and offered doctor-assisted suicide instead, a proposal some experts have called a “chilling” corruption of medical ethics.
Since the spread of his prostate cancer, 53-year-old Randy Stroup of Dexter, Ore., has been in a fight for his life. Uninsured and unable to pay for expensive chemotherapy, he applied to Oregon’s state-run health plan for help.
The Attempted Murder of HSAs
There may be nothing that more scares advocates of government-controlled health care than giving patients control over their medical treatment. Thus, it should come as no surprise that the current versions of health care “reform” would kill off Health Savings Accounts (HSAs).
Explains John Fund in the Wall Street Journal:
Eight million Americans, according to the Treasury Department, are covered by plans with low-cost premiums and high deductibles that are designed for large, unexpected medical costs. Money is also set aside in a savings account to cover the deductibles, and whatever isn’t spent in one year can build up tax-free. Nearly a third of new HSA users, according to Treasury figures, previously had no insurance or bought coverage on their own.
These policies will be severely limited. The Senate plan says a policy deemed “acceptable” must have insurance (rather than the individual) pay out at least 76% of the benefits. The House plan is pegged at 70%. That’s not the way these plans are set up to work. Roy Ramthun, who implemented the HSA regulations at the Treasury Department in 2003, says the regulations are crippling. “Companies tell me they could be forced to take products off the market,” he said in an interview.
This level of micro-management is a good argument in principle against the sort of “reform” currently being promoted on Capitol Hill. But the proposed rules likely were drafted in order to eliminate HSAs as an option. Explains Ryan Ellis of American Shareholders:
If an insurance plan must pay for 70 or 76 percent of all health care costs, it would be next to impossible for it to qualify as a high-deductible health plan. No HDHP, no HSA contribution.
The only hope a plan would have would be to do the following:
- Have a deductible no higher than the HDHP minimum ($1150 single, $2300 family in 2009)
- The out of pocket limit would have to be an identical amount
- The plan would have to cover all allowable preventive care on a first-dollar basis (annual physical, prenatal and well-child, immunizations, smoking cessation, weight loss programs, and early screening services)
Any HDHP which is this generous would have very little premium savings relative to a tradtional health insurance plan. If the typical HDHP today shaves about 33 percent off your premium, a plan like this might only shave off about 10 percent. There would be very little incentive to get an HSA-qualified insurance plan.
HSAs are an imperfect vehicle, an attempt to deal with the perverse incentives created by Washington’s favorable tax treatment of employer-provided health care. But the limitations inherent to HSAs should impel us to expand, not eliminate vehicles to enhance consumer choice. The more we find out about health care “reform,” the more obvious it is that patients would be the biggest losers.
Brainstorming for (Your) Dollars
The Wall Street Journal reports [$]:
President Barack Obama’s health-care plan is in jeopardy because of serious concerns that costs will spin out of control. As much as anyone, it’s White House budget director Peter Orszag’s job to save it…
After his TV appearances, he went straight to the Senate Finance Committee, where he spent three hours with committee aides brainstorming about how to pay for the trillion-dollar legislation. At one point, they flipped through the tax code, looking for ideas.
Note, of course, that finding new sources of tax revenue doesn’t do anything about cost concerns. But for those “fiscal conservatives” who worry more about the deficit than about the government ending up with all our money, new revenue to match new spending may alleviate their concerns. (By the way, this WSJ article also has interesting vignettes about Orszag’s encounters with libertarian writer Virginia Postrel and my former colleague Andrew Biggs.)
For a review of some of the ideas Orszag and his friends have found as they flipped through the tax code — such a charming metaphor for the reality of the ruling class looking for opportunities to extract more of the money we earn — click here.
Race to the Takeover
With the federal takeover of health care stalled, President Obama was able to enjoy a little feeling of success today at an event celebrating the “Race to the Top Fund,” a $4.35 billion kitty of education money created under the economic “stimulus” law. Not much actually happened today — the draft state application for fund dollars was released — but that was enough to produce a full-on, Department of Education dog-and-pony show topped off with a speech by the president. The administration even had a bit of a media blitz leading up to the show, with numerous articles appearing in major papers, a Washington Post op-ed by Secretary Duncan, and the president participating in a lengthy Post interview.
Unfortunately, there’s nothing about the Race to the Top Fund actually worth celebrating. Despite rhetoric by the president about “evidence-based policymaking” and promises that “politics won’t come into play” with fund money, this is just another escalation of politicized, destructive, federal education interference. It pours more taxpayer ducats into the edu-abyss, and with new data-collection requirements and money for national (read: federal) standards and tests, further tightens Washington’s grip on our schools. And don’t expect any of this to translate into better outcomes: The people employed by government schools, who have the greatest incentive and ability to control education policy, will still be calling the shots in a soon-to-be even tighter monopoly. Heck, just ask American Federation of Teachers president Randi Weingarten and National Education Association president Dennis Van Roekel. Both were in attendance at today’s big event, and both were singled out for praise by Secretary Duncan and President Obama.
The race to the federal takeover just keeps getting faster.
55% Duties on Chinese Tires Would Be Plain Stupid in Every Respect
Last month, I posted about the upcoming decision confronting President Obama on the question of whether or not he should impose trade restrictions (55% duties) on passenger tires from China, as recommended by the U.S. International Trade Commission.
I am in the process of finishing a short paper on the issue, explaining why doing so would be disastrous for the economy and foreign relations, but am taking a break to share this brilliant op-ed that appeared in today’s Detroit News. Ross Kogel, Jr., president of Tire Wholesalers, really hits the nail on the head, articulately and succinctly, explaining that there is no upside, only misery, in the proposed tariffs.
Michigan could sure use several more Ross Kogel and far fewer of the business-as-usual pols and union leaders who have run the state into the abyss.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
