Archive for July, 2009
The Price of Universal Coverage Just Went Up
Since at least February, President Obama and other elders of the Church of Universal Coverage have labored to create the impression that universal coverage is inevitable, because a sense of inevitability reduces its cost. If interest groups think this train is leaving the station, they are less likely to stand in its way. Lobbyists are more likely to cut whatever deal they can if their clients believe, “It could have been much worse.” That’s why Obama has demanded haste: the longer the process, the harder it is to maintain a sense of inevitability.
Here’s a sampling of today’s health care headlines from the non-partisan Bulletin News, which summarizes news media coverage:
- Senate, Obama Back Off Healthcare Reform August Deadline.
- Obama Rakes In Cash For DNC, Criticizes Media Coverage Of Healthcare Debate.
- Obama’s Performance At Wednesday’s Press Conference Comes Under Fire.
- President’s Media Strategy Raises Eyebrows.
- House Democrats Consider Sidestepping Committee.
- Democratic Caucus Holds “Contentious” Meeting.
- Black Caucus Blasts Blue Dogs; AARP, Unions Also Criticize Group.
- Freshmen Senators Ask Baucus To Hold Costs Down, Praise His Efforts.
- More Criticism Of Obama.
Now that reform seems less inevitable, interest groups will be less likely to settle for a bad deal. Instead, they will be more likely to demand higher payoffs than before, because their clients believe the expected cost of alienating Church elders has moved away from “getting punished” and toward “the status quo ante.”
So, good luck paying for this thing.
Debating the Individual Mandate
Mark Pauly is usually an ally of those who support free-market health care reform. But, occassionally, he strays off the reservation. Recently, he and I debated the merits of an individual mandate for health insurance on publicsquare.net. Click here to listen.
More Anti–PowerPoint Catharsis
In relation to the story that prompted my moaning and wailing about abuse of PowerPoint, “Starbuck” at the Small Wars Journal has posted a follow on. In it, s/he passes along the following story:
In January 2009, a military-oriented site, “Company Command”, asked current Army commanders and platoon leaders in Iraq what they spent most of their time doing. One officer, Lt. Sam Nuxoll, answered flat-out: “Making PowerPoint slides”.
When pressed, the lieutenant continued:
“I’m dead serious, guys. The one thing I spend more time on than anything else here in combat is making PowerPoint slides. I have to make a storyboard [a PowerPoint slide] complete with digital pictures, diagrams and text summaries on just about anything that happens. Recon a water pump? Make a storyboard. Conduct a key leader engagement? Make a storyboard. Award a microgrant? Make a storyboard.”
In addition, the PowerPoint slide that was to have conveyed the “Phase IV” (reconstruction and stabilization) plan in Iraq has been the topic of much discussion, but Starbuck actually posts the final slide:
Education Reform’s Moon Shot Moonshine
In today’s Washington Post, education secretary Arne Duncan describes the administration’s $4.5 billion “Race to the Top” fund as “education reform’s moon shot” — a watershed undertaking that will transform the way children learn and dramatically improve outcomes. No doubt he believes that. But since he also seems to believe that he brought about dramatic academic gains in Chicago — something that I and others have shown is not the case — the secretary’s beliefs should be taken with a grain of salt.
“Race to the Top” funds will be used to reward states that pursue education policies favored by Duncan and President Obama, and, by extension, to punish states that don’t. It is obedience training writ large. States that Duncan felt were going in the wrong direction in recent weeks, like Rhode Island, were rapped on the nose: keep it up, and we’ll withhold millions in education funding kibbles, they were told. States like Colorado have already been brought to heel. “We all know Colorado needs this money,” Lt. Gov. Barbara O’Brien told the Washington Post, and she and other state officials have poured over Duncan’s every word to ensure that they follow his commands to the letter.
And what commands Duncan and Obama are giving! High on their agenda is bringing the nation’s schools into lock step when it comes to standards and testing. They promise, with little evidence, that this will drive educational excellence. Meanwhile, just this month, British schools secretary Ed Balls terminated that nation’s decade-long national math and reading strategies, saying that: “I think the right thing for us to do now is to move away from what has historically been a rather central view of school improvement through national strategies.” If central planning were a panacea for education, why are the Brits — who have years of experience with it — turning away from it?
And if the president and his education secretary really cared about evidence-driven education reform, they would not have decided to kill the D.C. opportunity scholarships program that gives low income families in the nation’s capital access to private schools. Children in that program for three years read two grade levels ahead of their peers who remained in public schools. And that’s according to Duncan’s own Department of Education.
Obama and Duncan may well train state education leaders to follow their commands, but there’s no reason to believe those commands will improve American schools.
Wrong, Wrong, Wrong, Wrong, WRONG!!
The Pittsburgh Tribune-Review quotes Republican National Committee chairman Michael Steele on how Congress should go about reforming health care:
Having Congress reshape health care puts “the wrong people at the table,” Steele said. He said stakeholders — “doctors, lawyers, health care employees, insurance companies” — should develop a solution and present it to Congress, rather than the other way around.
Steele needs to brush up on his Adam Smith:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
Like I said, Jonathan Chait was on to something.
Timeless Wisdom from Walter Williams
Back in the 1980s, the irreplaceable Walter Williams produced a documentary based on one of his more controversial books, The State Against Blacks. Someone has done a great service and posted the documentary on youtube. Everything Walter said back then is true today – and just as applicable. The only discordant note is that when Walter refers to “welfare reform,” it is important to understand that he is talking about the expansion of handouts and centralization in the 1960s and 1970s, not the pro-market welfare reform of the 1990s:
Reporting the Minimum Wage
Economists generally agree that minimum wage laws tend to put low-skilled workers out of work. (Even economists who support minimum wage laws for reasons of politics or “justice” don’t really argue that the laws don’t raise unemployment.) But that message hasn’t really reached journalists. Today’s stories on the mandated rise in the minimum wage take one of two forms: Assuming that the raise is “good news” for low-paid workers, or quoting one economist on each side. The latter is certainly better, but it does convey the sense that “economists disagree about the effects of minimum wage laws,” which doesn’t really reflect the state of economic knowledge.
NPR used both versions. Some of its hourly newscasts led with “The minimum wage hike means 70 cents more per hour for low-income workers.” But some also noted, ”That’s supposed to be good news for low-income workers, but economists disagree about whether it will help or hurt the economy.” NPR did a somewhat balanced story yesterday.
Many journalists went with the easy, mostly wrong, “good news” approach, as these headlines and first sentences illustrate:
- ABC News: Relief for Workers at Bottom: Minimum Wage Goes Up
- Time: With the U.S. trillions of dollars in the hole, 70 cents an hour sounds like chump change. But it’s a big boost for the millions of workers who earn that much extra as of July 24.
- Philadelphia Inquirer: Minimum-wage workers to get a pay bump today
- WFMY (Greensboro, NC): Starting today, minimum wage workers will see extra cash in their pay checks.
- News on 6 (Tulsa): Thousands of Oklahoma workers will receive a pay raise on Friday when a new federal minimum wage takes effect.
But some did at least acknowledge the controversy:
- AP: Minimum wage hike could threaten low earners’ jobs
- USA Today: The third minimum wage increase in three years, effective Friday, is a moneymaker and a money-taker: Millions of workers soon will see pumped-up paychecks, while many already-struggling businesses face the burden of increased payroll costs.
- CNN: Minimum wage hike: More money or fewer jobs?/On Friday the federal minimum wage jumps to $7.25 an hour from $6.55. Economists differ as to whether that will hurt or help low-income workers.
- Kansas City Star: The federal minimum wage rises today from $6.55 to $7.25 an hour, bringing with it controversy about whether the increase is good or bad for the economy.
The New York Times gets the prize for its stark decline in economic understanding. Its editorial today begins, in a triumph of hope over economic reasoning:
The Productivity Challenge: Is Health Care as Bad as Education?
Catherine Rampell, editor of the NYTimes Economix blog, has kindly relayed my challenge to her readers: “name a field with a productivity collapse worse than that in education.”
Ms. Rampell, like several Cato@Liberty readers, suggests health care as a possible “winner.” I haven’t yet spent enough time with the data to be absolutely sure one way or the other, but so far I have to disagree.
It’s true that health care costs have risen dramatically over the past 40 years. The CDC has a great digest of health statistics that puts per capita health care spending at $356 in 1970 and $7,026 in 2006 (table 124). Adjusting the earlier figure for inflation it comes to $1,851, meaning that per capita health spending has gone up by a factor of 3.6. Public school spending per pupil has gone up by about 2.3 times from 1969-70 to 2005-06. But while educational outcomes at the end of high school are stagnant and the graduation rate has declined, we’ve enjoyed incredible medical advances. After spending an hour or two with Google and the CDC stats book, here’s what I find:
- Neonatal mortality was cut by 2/3 between 1970 and 2005, from 20 to 6.87 per 1,000 births
- Fetal mortality rate (miscarriage) was cut by more than half: from 14 in 1970 down to 6.2 in 2003 (per 1,000 live births plus fetal deaths)
- Life expectancy at birth was raised by 7 years
- Limitation of activity caused by chronic conditions: 13.3 % in 1997, 11.6% in 2006
- There’s now a nearly 90% cure rate for a childhood leukemia
- Depression is far more treatable
- Fertility treatments are greatly advanced
- Prosthetics are dramatically better
- Lasik eye surgery was invented
- Gastric bypass surgery is now available for the morbidly obese
- Joint replacements are far more common and effective
- Reconstructive surgery is greatly advanced
- We now have vaccines for rubella, pneumonia, hepatitis A and B, chicken pox, lyme disease, and meningitis
- Smallpox was eradicated
- Numerous technological advances have made diagnostic and surgical procedures less painful and easier to recover from, including: arthroscopy, laparoscopy, MRIs, CTs, SPECT and PET scans
It’s also important to consider that Americans have chosen to lead lives that seem more likely to engender health problems over the past four decades. Though we’ve cut down on smoking, which should make us healthier, Americans today are both less physically active and more gluttonous. Not surprisingly, obesity has more than doubled, rising from 14.6 to 34.1 percent of the population. You’d think that heart disease would have gone off the charts as a result, but it’s actually been more than cut in half, from 493 to 211 deaths per 100,000, thanks, presumably, to medical advances that have more than compensated for our couchpotatofication. [And lest anyone assume that students have become harder to teach over the past 40 years, the evidence seems to point in the opposite direction.]
So far at least, the evidence doesn’t seem to support the notion that the health care sector has suffered a productivity collapse quite like education. It still looks as though schooling, and only schooling, has gotten both worse and substantially more expensive since 1970.
Overcriminalization
Yesterday, I was invited to testify on Capitol Hill. The subject was the Overcriminalization of Conduct & Overfederalization of Criminal Law. Long overdue subject for Congress to address.
My fellow witnesses included former Attorney General Richard Thornburgh, as well as two victims of federal bullying — Kathy Norris (relating what happened to her husband) and Krister Evertson. Their stories are vivid reminders of how the legal deck is presently stacked against us all. That is, when an innocent person sits down in a quiet room to assess his options following a federal arrest and indictment, you soon learn that you’ll be broken financially if you choose to fight and go to trial. The pressure to plead guilty — even if you are innocent — is enormous. If we had a small and sensible criminal code where the rules were clear and objective, the costs of defending yourself from bogus (or trumped up) charges would be sharply reduced. My testimony can be found here.
Prof. Stephen Saltzburg made the case against mandatory minimum sentencing and Prof. James Strazzella made the case against the Overfederalization of Criminal Law. All in all a good hearing.
And, while I’m at it, here’s a terrific piece that appeared in the Washington Post this week. For additional Cato scholarship, go here and here.
Obama’s Press Conference: Rush to Judgment
At the Politico I write:
It’s easy to find, as Gallup just did, that majorities of the public want everything — guaranteed health insurance, that covers all possible problems, that lets you choose your own doctor and the treatments you need, that lets you keep your current plan — and they want it cheap. Or they’re OK with letting someone else pay. So when President Obama promises health care that does all those things, he can find a receptive audience. Still, when you ask people whether they really believe the federal government can provide more health care to more people, and save money in the process, most of them don’t. And that’s the problem Obama faces. And the reason he’s so insistent on doing it NOW is that he fears that the longer people mull that conundrum, the more they will realize the unlikelihood of a vast new federal program bringing down the cost of anything.
Obama also said that his administration “inherited an enormous deficit….have not reduced it as much as we need to and we would like to.” That’s a half-truth at best. The Bush administration and the Republican Congress spent like drunken sailors. But driving the deficit into the stratosphere is Obama’s decision. If he thought the deficit was too high, he didn’t have to push a $787 billion stimulus bill and a $3.6 trillion budget. If he thinks the effects of the stimulus are worth the enormous, unprecedented, unimagined deficits, then let him stand up and say so instead of pretending that he’s been trying to “reduce it.”
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