Archive for August, 2009
More ‘Success’ for the Massachusetts Model
The Boston Globe reports that Massachusetts now has the highest insurance premiums in the nation. The average family premium for plans offered by employers in Massachusetts was $13,788 in 2008, 40 percent higher than in 2003. Over the same period, premiums nationwide rose an average of 33 percent. And, according to the Commonwealth Fund, an annual family premium in Massachusetts is expected to hit $26,730 by 2020. Meanwhile CNN hails Romneycare as the model for the nation…
Entrepreneurship for Good
At last week’s Mont Pelerin Society meeting in Stockholm, Deirdre McCloskey argued that it was important for society to affirm entrepreneurship. How right she is.
The economic benefits of the new technologies and processes constantly created by people with new economic ideas is obvious. But the social benefits of such inventions also are enormous.
Consider James C. Marsters, who helped end the isolation of the deaf around the world. The Wall Street Journal reported on his death:
As an orthodontist, a licensed pilot and a sometime-professional magician, James C. Marsters mastered fields challenging for anyone, even more so for a profoundly deaf person such as himself.
His greatest feat was to conjure the text telephone, or TTY, which for the first time gave deaf people independent access to the telephone via teletype machines. It was the first in a string of technologies that help deaf people communicate.
Mr. Marsters, who died July 28 at 85 years old, defied the isolation many deaf people of his generation experienced. He willed himself into the mainstream long before there were technologies and programs to help deaf people do so.
People like Marsters exemplify how the market encourages people to do good while doing well. Markets are not perfect, nor are the entrepreneurs who drive them. But then, human beings are not perfect. However, human liberty — in the form of economic freedom in this context — is the best environment in which to foster a society that is both prosperous and good.
Allies Looking for Afghan Exits
The U.S. is looking increasingly friendless in Afghanistan. Our allies are searching for the exits.
For instance, the Conservative Party defense spokesman, Liam Fox, long a strong advocate of close trans-Atlantic ties, is pushing to bring home his nation’s troops:
Liam Fox, the Tory defence spokesman, is calling for Britain to shorten its deployment in Afghanistan by setting clear targets for military success and sending more troops to train the Afghan army.
His words will be seen as moving towards a more populist emphasis on disentangling the UK from a conflict which increasingly lacks public support, as Cameron condemns the ‘scandal’ of UK helicopter shortage in Afghanistan.
The German Foreign Minister and Social Democratic candidate for Chancellor Frank-Walter Steinmeier said much the same thing:
German Foreign Minister Frank-Walter Steinmeier, who is bidding to oust Angela Merkel as chancellor of Germany in an election next month, said he wanted a timetable for a military pull-out from Afghanistan. Steinmeier, a member of the Social Democrats (SPD) who share power with Merkel’s conservatives, said once it became clear who would lead Afghanistan after last Thursday’s election there, talks should begin over how long foreign troops should stay.
The Dismal Politics of Legislative Transparency
Economics has been called the dismal science, and recognizing that politicians are economic actors leads to the conclusion in this good article: Would You Ask Turkeys to Mandate Thanksgiving? The Dismal Politics of Legislative Transparency
Powerful Evidence for School Choice
The mayor of Stockholm gave some brief remarks at the closing dinner of the Mont Pelerin Society meeting and mentioned that the number of students in private schools had skyrocketed after the implementation of Sweden’s school choice program. Intrigued, I emailed the folks at one of the nation’s research organizations to ask for some details.
The figures are impressive. The number of students attending private high schools has jumped from 1.7 percent in 1992 to 19.5 percent in 2008. Not surprisingly, the quality of education is high. Indeed, researchers have looked at the data and concluded, “Our findings support the hypothesis that school results in public schools improve due to competition.”
Why Future Net Negative Impacts of Global Warming Are Overestimated: Response to Conor Clarke, Part IV
This post responds to the last of Conor Clarke’s comments on my study, “What to Do About Global Warming,” published by Cato. This series started with the imaginatively titled, Response to Conor Clarke Part I, and continued with Cherry Picking Climate Catastrophes and Do Industrialized Countries Have a Responsibility for the Well-Being of Developing Nations?
CONOR said:
I think Goklany is a bit picky and choosey with the evidence. … I also like the Goklany paper a lot. [THANK YOU!! I'll take whatever I get.] But in this case it’s hard to resist. [Emphasis in original.]
To take one example (of several), Goklany’s hunger estimates rely heavily on those published by Global Environmental Change (GEC), which he uses to make the argument that “the world will be better off in 2085 with respect to hunger than it was in 1990 despite any increase in population.” But the GEC produced two estimates of hunger and climate change — one that assumes the benefits of CO2 fertilization and one that does not. Goklany picks the former estimate (I have no idea why), despite the fact the GEC says the effects of climate change “will fall somewhere between” the two. … [I}f you embrace anything other than the most Pollyanish CO2 fertilization estimate -- the one that Goklany uses in his Cato paper -- we will be living in a world in which climate change puts tens of millions of additional people at risk of starvation by 2085.
My RESPONSE:
First, let me elaborate on my selection of the set of studies that I used in my paper. Essentially, the selected set of studies (published in Global Environmental Change) was the only one that had estimated global impacts using detailed process models in conjunction with the IPCC’s latest scenarios, and were peer reviewed. Moreover, they come with a provenance that people who may be unhappy with my results cannot impugn. [This is important only because many people arguing about global warming seem to be more concerned about who did the study and whether the results bolster their predilections, than how the study was done.] Specifically, virtually all the authors were intimately connected with the IPCC. The senior author of the hunger study was also the co-chairman of the IPCC’s Work Group II, which was responsible for compiling the portion of the IPCC’s latest assessment that dealt with impacts, vulnerability and adaptation. The authors of the water resource and coastal flooding studies were the lead authors of corresponding chapters in that IPCC report. An earlier version of the same set of impact studies was the basis for the claim by Sir David King, erstwhile science advisor to Her Majesty’s Government, that global warming was a more serious threat than terrorism (see here). The Stern Review also drew quite heavily from these studies (see below).
Why Government Rationing Ain’t a Good Deal
When government is paying the medical bill, it inevitably has to “ration” care. Choices obviously have to be made by whoever is paying, but there’s good reason not to leave government with the dominant decision-making power, as in Great Britain.
There’s no need to demonize British care. All one has to do is point out how government fiscal objectives so often run against good patient treatment. And how most people have no exit to a better alternative.
Consider this rather amazing story from the Daily Telegraph:
Doctors have launched a campaign on behalf of a war hero who has been told he must go blind in one eye before he can receive NHS treatment and accused Gordon Brown of “incompetence” in managing the health service.
More than 120 doctors have sent £5 cheques to Downing Street, made out to the Prime Minister, in the hope of shaming him into helping former RAF bomber Jack Tagg. The 88-year-old was recently diagnosed with age-related macular degeneration, the leading cause of blindness in Britain, which affects an estimated 500,000 people.
Mr Tagg has the treatable, but most aggressive “wet” form of the disease, which can lead to the loss of central vision in as little as two months.
But he has been told that the NHS will only fund the injections which could save his sight, after he has lost the vision in one eye.
… “They told me there were three choices: let nature take its course and go blind, try to seek funding, or pay for immediate treatment. Time is of the essence, so we opted to pay up and fight for funding.
“This is happening to literally millions of people. It’s appalling and something has got to be done about it.”
The American medical system needs reform. But that should be accomplished by promoting patient-directed care, with individuals and families, rather than government, deciding how best to use scarce resources when it comes to medical treatment.
Cash for Clunkers: Dumbest Program Ever?
As the Cash for Clunkers program begins to wind down, I nominate it as the dumbest government program ever. Here is what the program will have accomplished:
- A few billion dollars worth of wealth was destroyed. About 750,000 cars, many of which could have provided consumer value for many years, were thrown in the trash. Suppose each clunker was worth $3,000 at a guess, that would mean that the government destroyed $2.25 billion of value.
- Low-income families, who tend to buy used cars, were harmed because the clunkers program will push up used car prices.
- Taxpayers were ripped off $3 billion. The government took my money to give to people who will buy new cars that are much nicer than mine!
- The federal bureaucracy has added 1,100 people to handle all the clunker administration. Again, taxpayers are the losers.
- The environment was not helped. See here and here.
- The auto industry received a short-term “sugar high” at the expense of lower future sales when the program is over. The program apparently boosted sales by about 750,000 cars this year, but that probably means that sales over the next few years will be about 750,000 lower. The program probably further damaged the longer-term prospects of auto dealers and automakers by diverting their attention from market fundamentals in the scramble for federal cash.
Farm subsidies are unjust. Trade restrictions are counter-productive. Energy regulations have done great damage. Housing policies helped cause the financial crisis. But for pure dumbness, Cash for Clunkers takes the cake.
An Alternative Strategy for Afghanistan
Bernard Finel, a senior fellow at the American Security Project, has an excellent piece on forging an alternative strategy in Afghanistan.
I believe the United States should begin a relative rapid withdrawal of combat forces from Afghanistan. It is not that I don’t think they can be locally effective. It is just that I question the cost/benefit calculus of extending the commitment. I think that many supporters of escalation fail to consider the potential consequences if we do fail to achieve our goal of largely defeating the Taliban and pacifying Afghanistan. [Emphasis mine]
Finel brings up a critical point. From former national security adviser Henry Kissinger to Council on Foreign Relations scholar Stephen Biddle, many prominent opinion leaders concede that the war in Afghanistan will be long, expensive, and risky, yet claim it is ultimately worth waging because a withdrawal would boost jihadism globally and make America look weak. But what happens if what we’ve invested in falls apart whether we withdraw tomorrow or 20 years from now? And wouldn’t trying to stay indefinitely — while accomplishing little — appear even worse? Trying to pacify all of Afghanistan, much less hoping to do so on a permanent basis, is a losing strategy.
Mr. Finel goes on to say further down, “we should recommit to doing everything in our power to revolve tensions between India and Pakistan. Pakistan has legitimate security concerns regarding its neighbor and that gives Pakistan mixed motives in dealing with Islamist radicals.”
This too is a crucial recommendation. People in the Beltway have neglected the extent to which leaders in Islamabad fear the rise of an India-leaning government coming to power in Kabul, and thus, their leaders (principally their military) have little incentive to stop allowing their territory to be used as a de facto safe haven for the original Afghan Taliban. Thus, the question must be asked, can Washington offer any number of incentives for their leaders to relinquish support for extremists with whom they have associated for the past 30 years? This question gets lost when people discuss the possibility of talks with the Taliban. The question for U.S. policymakers is not whether the Taliban militants we talk to are “moderate” enough, but whether they will simply lie in wait and reemerge from their cross-border sanctuary after the eventual withdrawal of U.S. and NATO forces.
Unless Washington addresses Pakistan’s existential fear of India, and their military leadership’s continued support for the Taliban in order to counter India’s influence in Afghanistan, U.S. and NATO troops could fight for decades, win every discrete battle, and never come close to eradicating the militancy.
State and Local Government Employment Up Since Recession’s Start
Yesterday, the Rockefeller Institute released a report on state and local government employment since the beginning of the recession. It found:
Private sector employment for the nation as a whole has fallen by 6.9 million jobs between the December 2007 start of the recession and July 2009. Over the same period, state and local government employment has risen by 110 thousand jobs or 0.6 percent, with increases in both state governments and local governments.
With a prolonged recession now forcing state and local governments to actually cut or furlough some employees, it’s important to remember that they were adding government jobs at a time when it was clear to the rest of the country that the air was out of the economic bubble. In other words, taxpayers should have no sympathy for posturing politicians and their apologists warning of Armageddon should taxes not be increased to facilitate the continuance of bloated state and local governments. Also, expect to hear claims that getting rid of government employees will somehow hinder an economic recovery. In fact, getting rid of government employees — and the programs they support — would be good for the long-run health of the economy.
A government employee is inherently parasitic because without the “host” — i.e., taxpayers — their job would not exist. One can debate the degree to which a government employee’s work benefits society, but the fact remains that any benefit comes at a cost to the economy given that productive individuals and businesses are taxed to pay for government jobs. This should be obvious. Unfortunately, it is not uncommon these days to hear intelligent people embrace increasing government employment during a recession to “make up” for job losses in the private sector. One need only spend some time working in government, as I have, to recognize that an economic resurgence will not be fueled by increasing the government employee-to-host ratio.
Will Uribe Betray Liberal Democracy in Colombia?
After months of speculation, the Colombian Senate approved a constitutional amendment that would allow President Alvaro Uribe to run for a second reelection next year. Obstacles remain, however, and the amendment still has to be voted on in the House of Representatives, pass a review process by the Constitutional Court, and be put to a popular referendum — where it’s likely to be approved given Uribe’s high popularity among Colombian voters.
None of these required steps are certain: the final vote in the House of Representatives is not assured; the Constitutional Court might find irregularities during the discussion of the bill in Congress; and time is running out for organizing a national referendum before next year’s election. However, these last-minute efforts to change Colombia’s constitution and Uribe’s blatant interest in running again are troublesome.
I’ve praised Alvaro Uribe’s record before in tackling crime and guiding Colombia out of the abysm it was in at the start of the decade. However, democracy must transcend the virtues of any leader. Just as it is ominous for Venezuela’s democracy that Hugo Chávez plans to perpetuate himself in office, it would be unhealthy for Colombia’s democratic institutions for Uribe to run for a third consecutive term.
The ultimate decision will likely be Alvaro Uribe’s. This is his chance to show the world whether he’s loyal to liberal democracy or to the power he has become accustomed to.
David Frum Analyzes Why ‘The Crazies’ Are Running the GOP
In a discussion on Bloggingheads, David Frum offers his thoughts on the sad state of the GOP these days:
He blames the predicament, in part, on the “conservative entertainment-industrial complex,” a term coined by Andrew Sullivan. In Frum’s telling, this complex has “distorted conservative dialogue to suit the wishes of the Fox audience.” He says that drawing on such a group, “you can get seriously rich out of that, but you can’t govern a country with that kind of voter base, it’s a tiny minority-within-a-minority.”
This is an interesting thesis. Frum was the coauthor of a seemingly successful, widely discussed foreign-policy book titled An End to Evil, which posited that terrorism posed a “threat to the survival of our nation,” and in foreign policy, “there is no middle way for Americans. It is victory or Holocaust.” Are these the sorts of carefully considered judgments on which the GOP is going to ride back into office?
It’s probably true that pushing the American nationalist button over and over from 2002 forward contributed to getting Bush reelected in 2004, but the results after then have been rather less encouraging. John Boehner colorfully remarked recently that the GOP “took it in the shorts with Bush-Cheney, the Iraq War, and by sacrificing fiscal responsibility to hold power.” I’m not sure that my preferred foreign policy is the key to political success, but I’m pretty sure that the zany world view that Frum has traded on isn’t the way forward either.
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