Archive for September, 2009
Climate Change and Health Care: Free Lunches?
In the debate over health care reform, advocates of expanded government health insurance suggest we can pay for this by making Medicare and Medicaid more efficient.
In Paul Krugman’s most recent column, he makes a similar claim about reducing greenhouse gas emissions:
The evidence suggests that we’re wasting a lot of energy right now. That is, we’re burning large amounts of coal, oil and gas in ways that don’t actually enhance our standard of living — a phenomenon known in the research literature as the “energy-efficiency gap.” The existence of this gap suggests that policies promoting energy conservation could, up to a point, actually make consumers richer.
Both claims of a “free lunch” are heroic, at best.
In the case of health insurance, Medicare and Medicaid are inefficient, but to make them more efficient we have to reduce government subsidy for health insurance, not expand it.
In the case of energy efficiency, more energy-efficient practices exist (e.g., replacing incandescent light bulbs with CFLs), but they are expensive: if they actually made consumers richer, most would be using them already.
Now the fact that expanded government health insurance and increased energy efficiency would cost more, not less, does not prove they are bad ideas (that’s a separate discussion). But it means society must evaluate a tradeoff, not just assert we can have something for nothing.
Under Current Law, Can the Government Ban Books?
The Citizens United case currently before the Supreme Court may radically reshape campaign finance law for years to come. Former FEC commissioner Bradley A. Smith spoke at a forum on the case a day before the rehearing before the high court.
According to Smith, who is also the founder of the Center for Competitive Politics, under current law, the government does have the power to ban certain books if those books are published by a corporation, as ruled by the Supreme Court in 1990.
Watch:
Now We See the Violence Inherent in the System
In case you’re wondering how Congress and President Obama plan to enforce their little compulsory health insurance schemes, here’s a note explaining their strategy from the head of Congress’ non-partisan Joint Committee on Taxation to Sen. John Ensign (R-NV).
Yeah, but . . . it’s not like it’s . . . you know . . . a tax or anything. Oh, wait.
The Video Is Creepy, But the Public-Schooling Song Remains the Same
You’ve probably already seen it, but I thought I’d post it anyway. For those who haven’t yet watched it, below is the video of kids at the B. Bernice Young Elementary School — a public school in Burlington, New Jersey — belting out a little diddy about Barack Obama and all the wonderful things he’s declared. According to the school district, this Presidential Idol performance was put on as part of a Black History Month celebration.
In case you couldn’t make out everything the kiddos were singing, here are the lyrics:
Song 1:
Mm, mmm, mm!
Barack Hussein ObamaHe said that all must lend a hand
To make this country strong again
Mmm, mmm, mm!
Barack Hussein ObamaHe said we must be fair today
Equal work means equal pay
Mmm, mmm, mm!
Barack Hussein ObamaHe said that we must take a stand
To make sure everyone gets a chance
Mmm, mmm, mm!
Barack Hussein ObamaHe said red, yellow, black or white
All are equal in his sight
Mmm, mmm, mm!
Barack Hussein ObamaYes!
Mmm, mmm, mm
Barack Hussein Obama
Another Chance to See Bill Cosby and Ben Chavis
In case you missed the MSNBC education townhall event featuring Bill Cosby and star charter school principal (and author) Ben Chavis and others, it will re-air this coming Sunday from noon to 2:00pm.
‘Course, you can’t ask your television set questions (not with a reasonable expectation of satisfactory answers, at any rate). So why not plan to stop by the Cato Institute on Friday, October 2nd at noon, and meet Ben Chavis in person along with Washington Post columnist Jay Mathews? We’ll be reserving plenty of time for questions — and it should be a mighty interesting event: “America’s Top Models: Can the Nation’s Best Charter Schools Be Brought to Scale?”
Hope to see you there.
Keep Dreaming, Mr. Vice President
According to The Hill, in a conference call yesterday with the nation’s governors, Vice President Joe Biden said that “In my wildest dreams, I never thought it would work this well.” The “it” would be the administration’s $787 billion so-called “stimulus” package.
At the same time, USA Today reported:
Nearly $10 billion in stimulus aid to repair the nation’s tattered highways has largely bypassed dozens of metropolitan areas where roads are in the worst shape, a USA TODAY analysis shows… The problem is a byproduct of a stimulus package designed to spend as fast as possible to revive the economy. Many roads are in such bad shape that repairs would take too long and cost too much to qualify for funds, says John Barton, head of engineering for Texas’ Department of Transportation. The result is that counties with the worst roads won’t get much more repair money than counties with better roads. The 74 counties with half of the nation’s bad roads will split $1.9 billion, records show; counties with no major roads in bad shape will split about $1.5 billion.
A few weeks ago I was driving on I-70 somewhere around Washington, PA 
and got stuck in a traffic jam over what appeared to be a small bridge maintenance job. A sign, also funded by taxpayers, proudly declared that the maintenance was made possible by the “stimulus” legislation. What irritated me more than the traffic jam was the fact that the stretch of I-70 I was on is a notoriously white-knuckle ride. The pavement is old and the two lanes are squished between cement dividers, leaving little room for error. A reasonable person might conclude that fixing I-70 would be a priority. But reasonable and Congress go together like wolves and sheep. To me it was further evidence of the inefficient, politicized nature of federal infrastructure spending. (It also brought to mind former pork-barrel congressman Bud Shuster’s lightly traveled I-99 in central PA.)
In a different article USA Today also reported:
The $787 billion economic recovery package also is stimulating growth in the federal government as agencies hire thousands of workers and spend millions of dollars to oversee and implement the package, according to government records and spokesmen… That’s helped fuel the continued growth of the federal government, which increased by more than 25,000 employees, or 1.3%, since December 2008, according to the latest quarterly report. During that time, the ranks of the nation’s unemployed increased by nearly 4 million, Labor Department statistics show.
Apparently for VP Biden, “stimulus” success means inefficient infrastructure spending and more federal employees.
David Brooks Is Confused about Counterinsurgency
Would you buy a state-building mission from this man?
Today David Brooks (in the role of Teddy Roosevelt) debates George Will (as Edmund Burke) on the subject of Afghanistan without citing him. This debate marks a high point of conservative politics where neoconservative ideology appears in concrete clarity.
First, Brooks makes clear that he is not interested in merely managing the problem of terrorism, but rather in “prevailing” in the war in Afghanistan. He argues that “only the full counterinsurgency doctrine offers a chance of success,” but then proceeds to absurdly define population-centric counterinsurgency doctrine as one in which “small groups of American men and women are outside the wire in dangerous places in remote valleys, providing security, gathering intelligence, helping to establish courts and building schools and roads.”
Either Brooks is being cute here or demonstrating his ignorance. With one word — “small” — Brooks has utterly mischaracterized what counterinsurgency is all about.
Population-centric counterinsurgency is all about large numbers of American men and women, not small numbers. The promoters of COIN in Afghanistan have recently taken to including the Afghan National Army in the count of counterinsurgents, but the textbook — and as a result, obviously oversimplified — number of counterinsurgents you’d want in a place with a population, dysfunctional national government, and geography like Afghanistan pushes well up to around half a million. It is an extraordinarily resource- and labor-intensive endeavor. If you don’t believe me, perhaps you’ll take David Petraeus or David Kilcullen as authorities on the matter.
Brooks pushes his argument further, declaring that we possess only two choices in Afghanistan: “surrender the place to the Taliban or do armed nation-building.” One paragraph later, Brooks writes of the fight against terrorism that “we shouldn’t pretend we understand how this conflict will evolve.” That Brooks does not recognize the conflict between these views is telling. See Rory Stewart for more on the swashbuckling certainty like what Brooks is displaying.
The Zazi Case: Spread the Good News!
As has been widely reported, federal authorities believe an Aurora, Colorado man named Najibullah Zazi was preparing to commit acts of terrorism in the United States. Ben Friedman has provided some insight into the charge against him.
I don’t know how the case will come out, of course. I take it for what it is: an alleged terror plot. Terrorism is an acute security challenge because people who look like nincompoops to us might be activated by a capable leader and used as “muscle” in a real attack. If authorities act too early, it looks like there was never a threat. If they act too late, they might fail to prevent an attack.
Putting aside the merits, the press reaction to this case seems different from many past cases. Take this story from yesterday’s Wall Street Journal. Along with reporting the possibility of this being the first Al Qaeda cell in the United States since 9/11, it says:
Hundreds of terrorism-related prosecutions, many for far more serious charges than lying to investigators, have been filed by U.S. authorities since the 9/11 attacks. On numerous occasions, U.S. officials have made startling allegations about terrorism suspects, only to later significantly dial back their rhetoric.
I was interested also by the tone of this USA Today story which focused as much on the U.S. government’s issuance of terror alerts as on their number and validity. “Since the Sept. 11, 2001, attacks, the FBI and DHS have issued hundreds of similar bulletins,” the story said. It’s easy to see a reporter’s skepticism in that sentence, and his signal to readers that they shouldn’t get too agitated.
My sense — and it is only impressionistic — is that the media are starting to get their feet under them. After eight years of parroting official fear-mongering, serious reporters (I say mostly to exclude cable “news”) are prepared to question what officials tell them. That can only be good. The press plays an important role in digesting information and equipping society to address terrorism along many dimensions, including girding against unnecessary fear and overreaction.
Michael Moore’s Billionaire Backers
I wrote in Libertarianism: A Primer, “One difference between libertarianism and socialism is that a socialist society can’t tolerate groups of people practicing freedom, but a libertarian society can comfortably allow people to choose voluntary socialism.” (In the final section, “Toward a Framework for Utopia.”)
Now Ira Stoll notes the irony that it was very successful capitalists who put up the money that allowed Michael Moore to make his anti-market screed Capitalism: A Love Story:
The funniest moments of all in the movie, though, may just be in the opening and closing credits. We see that the movie is presented by “Paramount Vantage” in association with the Weinstein Company. Bob and Harvey Weinstein are listed as executive producers. If Mr. Moore appreciates any of the irony here he sure doesn’t share it with viewers, but for those members of the audience who are in on the secret it’s all kind of amusing. Paramount Vantage, after all, is controlled by Viacom, on whose board sit none other than Sumner Redstone and former Bear Stearns executive Ace Greenberg, who aren’t exactly socialists. The Weinstein Company announced it was funded with a $490 million private placement in which Goldman Sachs advised. The press release announcing the deal quoted a Goldman spokesman saying, “We are very pleased to be a part of this exciting new venture and look forward to an ongoing relationship with The Weinstein Company.”
So maybe I should add a corollary to my claim:
One difference between libertarianism and socialism is that a socialist society won’t put up the money for people to make libertarian movies, but in a capitalist/libertarian society the capitalists are happy to put up the money for anti-capitalist movies.
And if you doubt that a socialist society would discriminate against anti-socialist movies, you can either observe socialism in practice — in Cuba, China, the Soviet Union, East Germany, etc. — or read the chilling words of bestselling economist Robert Heilbroner in Dissent:
The Seat-Warming Senate
With Gov. Deval Patrick’s appointment of longtime Kennedy courtier Paul Kirk to Sen. Edward M. Kennedy’s seat in the U.S. Senate, there are now at least three close aides holding on to Senate seats while their states go through the formality of an election. The governor of Delaware appointed Joe Biden’s longtime friend and former chief of staff to fill the rest of his term in the Senate. Can you name him? It is generally thought that he is obligingly holding on to the seat until Biden’s son Beau gets back from National Guard service and is able to run to succeed his father. And in Florida, Gov. Charlie Crist named his former chief of staff to fill the seat of retiring Sen. Mel Martinez until the 2010 election in which Crist is running for the seat. There are more seat-fillers in the Senate than at the Oscars.
Of course, Kennedy himself took his seat when he attained the age of 30, after it was kept warm for him by family retainer Benjamin A. Smith III.
Meanwhile, as of 2005 there were 18 senators who gained office at least partly through their family ties – sons, daughters, wives, nephews of former senators, governors, presidents, and so on.
The Founders envisioned the Senate as an assembly of wise and accomplished men, chosen for their experience and judiciousness. Political campaigns that favor the handsome, the glib, the panderers, and the best fundraisers are bad enough. But a Senate full of legacies and seat-warmers is especially unfortunate.
Thursday Links
- Obama can twist words all he wants, but a government mandate to buy health insurance is still a tax. “Think of it this way: If the government took money directly from you, then turned around and gave it to an insurance company, everyone would agree that you’ve been taxed.” Nobody considers it a tax? Even his advisers call it a tax.
- More on the health care mandate: “Compulsory health insurance could require nearly 100 million Americans to switch to a more expensive health plan and would therefore violate President Barack Obama’s pledge to let people keep their current health insurance.”
- Why the U.S. slapped a trade tariff on Chinese tires: “President Obama’s decision was guided strictly by selfish, political considerations: He felt he owed American unions for their previous and continuing support, regardless of the economic and diplomatic fallout.”
- Vital data on climate change mysteriously disappear.
- Podcast: “Twenty Years Since the Fall of Communism” featuring Czech President Václav Klaus.
Geithner Ignores Bailout History
Perhaps the biggest problem with the Obama plan to “reform” our financial system is the impact it would have on the market perception surrounding “too big to fail” institutions. In identifying some companies as “too big to fail” holders of debt in those companies would assume that they would be made whole if those companies failed. After all, that is what we did for the debt-holders in Fannie, Freddie, AIG, and Bear. Both former Secretary Paulson and Geithner appear under the impression that moral hazard only applies to equity, despite debt constituting more than 90% of the capital structure of the typical financial firm.
Geithner believes he’s found a way to solve this problem – he’ll just tell everyone that there isn’t an implicit subsidy, and there won’t be a list of “too big to fail” companies. Great, why didn’t I think of that. After all, the constant refrain in Washington over the years that Fannie and Freddie weren’t getting an implicit subsidy really prepared the markets for their demise.
Even more bizarre is Geithner’s assertion that the government can force these institutions to hold higher capital, maintain more liquidity and be subjected to greater supervision, all without anyone knowing who exactly these companies are. Does the Secretary truly believe that these companies’ securities disclosures won’t include the amount of capital they are holding? Whether there is an official list or not is besides the question, market participants will be able to infer that list from publicly available information and the actions of regulators.
One has to wonder whether Geithner spent any of his time at the NY Fed actually watching how markets work. Before we continue down the path of financial reform, maybe it would be useful for our Treasury Secretary to take a few weeks off to study what got us into this mess. We’ve already been down this road of denying implicit subsidies and then providing them after the fact. Maybe it’s time to try something different.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
