Archive for August, 2009
How and Why Government Spending Diminishes Economic Performance
In a new mini-documentary released by the Center for Freedom and Prosperity, I explain several of the ways that government spending hinders economic growth.
Co-ops: A ‘Public Option’ By Another Name
Politico reports that the so-called “public option” provision could be dropped from the highly controversial health care bill currently being debated throughout the country:
President Barack Obama and his top aides are signaling that they’re prepared to drop a government insurance option from a final health-reform deal if that’s what’s needed to strike a compromise on Obama’s top legislative priority…. Obama and his aides continue to emphasize having some competitor to private insurers, perhaps nonprofit insurance cooperatives, but they are using stronger language to downplay the importance that it be a government plan.
As I have said before, establishing health insurance co-operatives is a poor alternative to the public option plan. Opponents of a government takeover of the health care system should not be fooled.
Government-run health care is government-run health care no matter what you call it.
The health care “co-op” approach now embraced by the Obama administration will still give the federal government control over one-sixth of the U.S. economy, with a government-appointed board, taxpayer funding, and with bureaucrats setting premiums, benefits, and operating rules.
Plus, it won’t be a true co-op, like rural electrical co-ops or your local health-food store — owned and controlled by its workers and the people who use its services. Under the government plan, the members wouldn’t choose its officers — the president would.
The real issue has never been the “public option” on its own. The issue is whether the government will take over the U.S. health care system, controlling many of our most important, personal, and private decisions. Even without a public option, the bills in Congress would make Americans pay higher taxes and higher premiums, while government bureaucrats determine what insurance benefits they must have and, ultimately, what care they can receive.
Obamacare was a bad idea with an explicit “public option.” It is still a bad idea without one.
Give Me Liberty or Give Me Death Panels
“Death panels” are a dominant motif in the debate over health care regulation, a fact that spins off political flares like a roman candle.
Extremists on both sides have taken their extreme positions: Some literally fear President Obama and his health regulation plans; others are outraged that anyone could possibly feel that way.
Charges of special-interest organizing meet counter-charges of unfairness and false accusation. Good video from town hall meetings and volleys of “Nazi” and “socialist” give cable news networks another short reprieve from their long slow decline. It’s all manna for the writers at Comedy Central.
But let’s talk substance: Health care is a scarce good, so it will always be rationed. The core question is whether government should take the dominant role in health care rationing over from insurance companies, or whether reform should restore rationing decisions to patients advised by doctors.
Though they would never have the name or the form, the “death panel” label roughly (and unfairly) describes what would happen if health decisions were turned over to government bureaucrats under the leading proposals today. The bureaucracy would do exactly what “reform” asks it to do(!): prioritize cost savings and efficiency over the unique, individual interests of patients and their families.
The bureaucracy would serve its own interests too. Bureaucracies are subject to capture by special interests, of course, and they can be corrupted. These things are easier when the people who might die look like statistics.
Many people feel very strongly that problems with health care today indicate the need for President Obama’s and Congress’ health care plans. But what’s wrong with health care doesn’t mean that these proposals would make things better. Because they would move control of health care in the wrong direction, they would make things worse.
Everyone has a personal story about health care, and I have one too. On the day my mother passed away, my family and I were called to the hospital and met by a social worker. He showed us to a small anteroom at the entrance to the intensive care unit, where he guided us through a lengthy conversation about my mother’s wishes and the family’s circumstances. He then called in the doctors to offer their prognosis and advice, which we took.
It was a death panel. It was our death panel — because my parents had fully prepared for this eventuality by buying insurance.
Just like health care will always be rationed, there will always be death panels. The question is who runs them. To the extent our public policy drives people away from financial responsibility for their own health care, it sets them up for death panels that are administered by government bureaucrats, not by loved ones and doctors.
Political debate is rollicking and unfair and full of inaccuracy. And in the terms of today’s health care debate, we don’t want “rationing” — meaning we don’t want government rationing. And we don’t want death panels — meaning we don’t want government death panels, because government death panels will deny people and their families an essential dignity of life: choosing how it ends.
In that sense I say with apologies to Patrick Henry: Give me liberty or give me death panels.
Time to Leave Iraq
Afghanistan has become the new battleground, with fighting and casualties on the upsurge. As my colleague Malou Innocent has detailed, the outlook is not good.
Iraq has been largely forgotten along the way. But far from being a grand success, it illustrates why even the good news isn’t that good, and certainly doesn’t justify a continued U.S. military presence. Conservative columnist Diana West provides a surprisingly critical view:
This is not to say the U.S. military failed. On the contrary, the U.S. military succeeded, as ordered, to bring a measure of security and aid to a carnage-maddened Islamic society. Given U.S.-won security, surge architects promised us, this same Islamic society was supposed to then respond by coming together in ‘national reconciliation.’ They were wrong. Not only did Iraqis fail to coalesce as a pro-American, anti-jihad bulwark in the Islamic world (the thoroughly delusional original objective), they have also failed to form a minimally functional nation-state. And the United States is now poised to do the same thing all over again in Afghanistan.
I write this as the volume of talk of an Afghanistan ‘surge’ is getting louder, drowning out the quiet undercurrent of eye-opening reports now emerging on post-surge Iraq. Late last month, for example, the New York Times reported on a bluntly revealing memo written by Col. Timothy Reese, an adviser to the Iraqi military’s Baghdad command. In it, Reese urgently argues that the United States has ‘reached the point of diminishing returns’ in Iraq due, among many other things, to endemic corruption (“the stuff of legend”), laziness, weakness and culture of ‘political violence and intimidation.’
Reese considers Iraqi Security Forces (ISF) ‘good enough’ — just — to keep the Iraqi government from toppling. That’s reason enough, he writes, to leave early, by August 2010 instead of December 2011. Reese describes a ‘fundamental change’ in the U.S.-Iraq relationship since the June 30 handover — a ‘sudden coolness,’ lack of cooperation, even a ‘forcible takeover’ by ISF of a checkpoint. While Iraq will still ‘squeeze the U.S. for all the “goodies’ that we can provide,” he writes, tensions are increasing and “the potential for Iraqi on U.S. violence is high now and will grow by the day.’
And that’s the good news. The Washington Times this week reported on an even more dire prognostication to be published by National Defense University written by Najim Abed Al-Jabouri, a former Iraqi police chief and mayor. Al-Jabouri focuses on problems within the ISF, where, he writes, the divided loyalties of what is essentially a series of militias beholden to competing “ethno-sectarian” political factions could easily drive Iraq to civil war. He writes: ‘The state security institutions have been built upon a foundation of shifting loyalties that will likely collapse when struck by the earthquake of ethnic and sectarian attacks. Iraq’s best hope for creating a long-term stable democracy will come from an independent national security force that is controlled by the state, and not by political parties competing to control the state.’
Al-Jabouri insists the United States should exert its ‘leverage’ to revamp the ISF, which, given Reese’s evidence of plummeting U.S. influence in Iraq, seems farfetched even if it were a good idea. Which it is emphatically not. An infidel nation cannot fight for the soul of an Islamic nation — a truism that, in a more rational (non-PC) world, might bring surge enthusiasts to their senses.
The original neoconservative plan for Iraq–as an advanced military post for Washington to use in imposing its will throughout the Middle East–always was a fantasy. Whether Iraq can create a reasonably peaceful, stable, and democratic society remains very much up in the air. But its success will depend on its own efforts. It is time for the U.S. military to depart.
Rx for High Health Care Costs: Stop Protecting Inefficient Providers
To cope with the growing cost of Massachusetts’ health reforms, some suggest government should block competition by new producers. Here’s a poor, unsuccessful letter to the editor of the Boston Globe highlighting the flaw in that approach:
The Public Health Council is wrong to claim that requiring government approval for new outpatient clinics and ambulatory surgical centers will contain the costs of Massachusetts’ health-care reforms [“State toughens rules for building new clinics,” Nov. 14]. According to University of Alabama health economist Michael Morrisey, economic studies of such “certificate-of-need” (CON) requirements “find virtually no cost-containment effects…If anything, CON programs tended to increase costs.”
Morrisey suggests the real reason for such barriers to market entry is protectionism: “A reasonably large body of evidence suggests that CON has been used to the benefit of existing hospitals…Prices and costs were higher in the presence of CON…The continued existence of CON and, indeed, its reintroduction and expansion despite overwhelming evidence of its ineffectiveness as a cost-control device suggest that something other than the public interest is being sought.”
If the Commonwealth wants to reduce health-care costs, it should stop protecting inefficient providers.
Camille Paglia on Obama & Health Reform
Wow:
Obama’s aggressive endorsement of a healthcare plan that does not even exist yet, except in five competing, fluctuating drafts, makes Washington seem like Cloud Cuckoo Land. The president is promoting the most colossal, brazen bait-and-switch operation since the Bush administration snookered the country into invading Iraq with apocalyptic visions of mushroom clouds over American cities.
You can keep your doctor; you can keep your insurance, if you’re happy with it, Obama keeps assuring us in soothing, lullaby tones. Oh, really? And what if my doctor is not the one appointed by the new government medical boards for ruling on my access to tests and specialists? And what if my insurance company goes belly up because of undercutting by its government-bankrolled competitor?…
I just don’t get it. Why the insane rush to pass a bill, any bill, in three weeks? And why such an abject failure by the Obama administration to present the issues to the public in a rational, detailed, informational way? The U.S. is gigantic; many of our states are bigger than whole European nations. The bureaucracy required to institute and manage a nationalized health system here would be Byzantine beyond belief and would vampirically absorb whatever savings Obama thinks could be made. And the transition period would be a nightmare of red tape and mammoth screw-ups, which we can ill afford with a faltering economy…
[S]omehow liberals have drifted into a strange servility toward big government, which they revere as a godlike foster father-mother who can dispense all bounty and magically heal all ills. The ethical collapse of the left was nowhere more evident than in the near total silence of liberal media and Web sites at the Obama administration’s outrageous solicitation to private citizens to report unacceptable “casual conversations” to the White House. If Republicans had done this, there would have been an angry explosion by Democrats from coast to coast. I was stunned at the failure of liberals to see the blatant totalitarianism in this incident, which the president should have immediately denounced. His failure to do so implicates him in it.
U.S. Boots NOT on Congo Ground
Michael O’Hanlon has an op-ed in today’s Washington Post that proposes we create a volunteer “peace operations division” to deploy to third-world crisis spots, particularly to stabilize Congo. O’Hanlon spent time in Congo a generation ago in the Peace Corps, and believes that there is a moral imperative to fix the situation.
O’Hanlon probably realizes that the significant number of American troops still in Iraq and increasing commitments in Afghanistan mean that Congo is far down on the Obama administration’s list of priorities. He probably expects someone to respond in impolite terms that this is an unnecessary and unwise deployment of Americans into harms way in a potential quagmire with no discernable national security interest, allowing him to take the moral high ground and speak of how our military should make the world a better place for everyone.
Okay, I’ll bite. I haven’t spent any time in the Congo or in the Peace Corps, but my time in the Infantry and Special Forces tells me that this is exactly the kind of idea we should avoid.
Let’s go by the numbers.
The notion is this: Ask for volunteers to join a peace operations division for two years. They would begin their service with, say, 12 weeks of boot camp and 12 weeks of specialized training and then would be deployable. They would receive the same compensation and health benefits as regular troops, given their age and experience. Out of a division of 15,000 troops, one brigade, or about 3,000 to 4,000 soldiers, could be sustained in the field at a time.
Creating a force of amateurs trained at a level far below that of the all-volunteer force is asking for American blood to be spilt unnecessarily. The career officers and NCO’s in today’s force mean that experienced leaders keep troops alive and doing their job. Military service isn’t service in the Peace Corps; let’s not confuse the two. Either you are in for following the lawful orders of the Commander-in-Chief and the officers appointed above you, or you aren’t. Don’t sign up for politically correct missions. Sign up because you want to be in the military – or not at all.
California’s Prison/Union Problem
Any reader interested in state fiscal policy, particularly California’s, should read this excellent piece of journalism from NPR on the state’s prison predicament. (Actually, folks interested in reading why anti-drug policies and some “get tough on crime” efforts are counterproductive should also check this out.)
California’s prison system is a costly, overcrowded, criminal-spawning mess, and the chief culprit is the state’s prison employee union. But this isn’t just another story about public employee unions extracting exorbitant salaries and benefits at the expense of taxpayers:
In three decades, the California Correctional Peace Officers Association has become one of the most powerful political forces in California. The union has contributed millions of dollars to support “three strikes” and other laws that lengthen sentences and increase parole sanctions. It donated $1 million to [former Governor Pete] Wilson after he backed the three strikes law. And the result for the union has been dramatic. Since the laws went into effect and the inmate population boomed, the union grew from 2,600 officers to 45,000 officers. Salaries jumped: In 1980, the average officer earned $15,000 a year; today, one in every 10 officers makes more than $100,000 a year.
[Former CA Dept. of Corrections & Rehabilitation Secretary Roderick] Hickman says the union was able to control the department’s policy decisions, including undermining efforts to divert offenders from prison and reduce the prison population. “Maybe I was just impatient,” he says, “or it wasn’t going to go fast enough, but [the department] is still in the same place I left it, with an over $8 billion budget. Now it’s over $10 billion.” Today, 70 percent of that budget goes to pay salaries and benefits to the union and staff. Just 5 percent of the budget goes to education and vocational programs — the kind of programs that study after study in the past 10 years has found will keep inmates from returning to prison.
This activity strikes me as downright criminal.
Again, the entire article is worth a read, especially with state politicians currently attempting to scare taxpayers into supporting tax increases in order to continue their profligate spending through the recession. Kudos to NPR’s Laura Sullivan for digging into a state’s operations before writing a piece bemoaning its alleged budget woes.
H/T: Reason’s Leonard Gilroy
Governor Daniels: “Disingenuous” About ID Requirements
The Journal Gazette in Fort Wayne, Indiana takes Governor Mitch Daniels (R) to task for claiming that the burdensome identification requirements he’s implementing in the state are required by federal law.
Many states across the country have refused to participate in the REAL ID Act, preserving their citizens’ privacy and tax dollars. Not Governor Daniels, and in a recent press release he misstated federal identification requirements while acting as if he’s helpless to do anything about them.
Says the Journal Gazette: “[B]laming the federal government for non-existent requirements is disingenuous. If the governor wants Hoosiers to take extra steps to prove their identity, he should say so himself.”
The Case Against National Standards
President Obama, ed. secretary Duncan, and the nation’s governors and schools superintendents are almost unanimous in supporting uniform grade-by-grade national standards. In a recent letter to the editor of Education Week (HT: Bill Evers), a literature prof. criticizes this process on the grounds that no lit professors or high school language-arts teachers were included in the relevant standards-drafting panel.
As I write in today’s NY Daily News, that objection is small potatoes compared to a much more fundamental problem: all 12-year-olds do not learn every subject at the same pace. If you tie standards to school grades, you tie them to chronological age. But kids of the same age are all over the map when it comes to how fast they can progress through various subjects. One-size-fits-few.
I offer a better solution for improving American education in my NYDN piece. And as for the lit. professor’s objection, she writes:
we see a problem in the failure to include (as far as we can determine) not even one faculty member of a college literature or humanities department or high school English teacher on the English-language-arts standards-writing committee itself.
“The failure to include not even one….” Ouch. Now you know why I didn’t hotlink that letter.
Burma’s Agony Continues
The trial of Nobel laureate and Burmese democracy advocate Aung San Suu Kyi has concluded as expected: with an extension of her term of house arrest. The official offense was an unauthorized visit by American John Yettaw, but the regime would have found another excuse had Yettaw, who was sentenced to seven years in prison, not made his unexpected appearance.
The Burmese military junta, which styles itself the State Peace and Development Council, is one of the worst governments on earth, having promoted war and prevented development as a matter of state policy. The regime continues to imprison Ms. Suu Kyi to better enable it to control the elections scheduled next year. But the poll will be a farce without the participation of Ms. Suu Kyi, who won the last free ballot two decades ago.
The junta also continues its brutal war in the east against ethnic groups, such as the Karen, which have long sought autonomy from the central government. Millions of people have been displaced within Burma (also called Myanmar) and hundreds of thousands of refugees have been driven across the border into Thailand by the conflict.
America’s options are limited. The U.S. and European Union already have applied economic sanctions against Burma, including controls targeted against regime elites and cronies. Unfortunately, China has exhibited no similar scruples, becoming the junta’s strongest backer. Other nations throughout the region also engage in substantial investment in and trade with Burma.
Any attempt to expand general sanctions is likely to fail and, even if successful, would hurt Burma’s vulnerable population more than regime elites. Instead, the U.S. and Europe should press India, the ASEAN states, and Japan and South Korea to adopt limited sanctions targeted against junta leaders and their economic allies. Moreover, Washington should engage Beijing over the issue, indicating that promoting political reform in Burma would enhance its international reputation and claim to global leadership.
Finally, the U.S., along with its Asian and European friends, should offer a positive package of economic and diplomatic benefits should the Burmese junta improve human rights and open Burmese society. Washington’s expectations should be limited: the regime is not likely to yield power irrespective of the inducements offered. However, the junta might decide that the benefits from more limited reform are worth the risks of change.
Presidential Sales Job on Health Care Falling Short
It’s not working. The president enjoys the use of the executive branch’s bountiful resources, control of Congress by his party, and aid of a sympathetic media. Yet support for expanding government control over health care is falling the more people learn about it.
According to a USA Today/Gallup poll, 69 percent of Americans are closely following news of town hall meetings on health care reform. Thirty-four percent say protests against the plan at the meetings have made them more sympathetic to the critics’ views, and 21 percent say the protests make them less sympathetic, according to the poll. Thirty-six percent say the protests have made no difference.
A separate USA Today/Gallup poll reported that 49 percent of Americans disapprove of Obama’s handling of health-care policy while 43 percent approve.
At least President Barack Obama isn’t whining (yet) about the terrible disadvantages that he is laboring under. As did President Bill Clinton, when he blamed his failure to push through health care reform on groups like Cato, whose activities put him at a great disadvantage, he claimed.
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