Archive for October, 2009
Weekend Links
- How cap-and-trade is like ritual self-flagellation.
- The Senate Finance Committee’s version of health care reform is definitely a step up from all of the other versions of the bill. But that’s still a pretty low bar.
- Change? The president cuts another deal for special interest lobbyists at the expense of American families.
- Why free trade is a boon to the environment.
Frozen Minds on the Medicare Part B Premium Freeze
This week, Sen. Tom Coburn (R-OK) blocked an attempt by Sen. Max Baucus (D-MT) to move — without a recorded vote or CBO score – H.R. 3631, legislation to freeze Medicare Part B premiums. These premiums are automatically deducted from the Social Security checks of seniors, almost all of whom are enrolled in the Medicare Part B (Supplemental Medical Insurance) program.
Social Security recipients will not receive a COLA increase in their monthly checks beginning January 2010 because inflation between October 2008 and September 2009 was negative. But if Part B premiums increase, the dollar amount of their Social Security checks will decrease beginning in January 2010.
What would happen if the Part B premium were frozen for 2010? Seniors would get a double benefit. First they are gaining from a zero reduction in their Social Security checks even though inflation in 2008-2009 was negative. That means the purchasing power of their Social Security checks will be larger (assuming inflation remains low during the 4th quarter of this year).
On top of that, a frozen Part B premium would provide them with more generous Part B coverage because health care prices became more expensive during 2009 relative to other goods and services.
Senator Coburn’s action in blocking the premium freeze is courageous and correct. In a small but important way, it combats the busting of the federal budget by already generous Medicare Part B benefits that seniors receive — three-quarters of which are funded out of federal general revenues (that is, financed out of taxes paid by younger workers).
For Obama, Peace in the Morning, War in the Afternoon
Hours after thanking the world for the Nobel Peace Prize this morning, President Obama will gather with his war advisers to ponder sending 60,000 more troops into a country where our national security objectives are unclear at best.
Instead of embracing General McChrystal’s proposal for a substantial increase in the U.S. military presence — or even adopting a “McChrystal-Light” strategy — the Obama administration should begin a phased withdrawal of troops over the next 18 months, retaining only a small military footprint relying on special forces personnel. Otherwise, America will be entangled for years — or decades — in pursuit of unattainable goals.
We need to “define success down” in Afghanistan. That means abandoning any notion of transforming ethnically fractured, pre-industrial Afghanistan into a modern, cohesive nation state. It also means reversing the drift in Washington’s strategy over the past eight years that has gradually made the Taliban (a parochial Pashtun insurgent movement), rather than al Qaeda, America’s primary enemy in Afghanistan. A more modest and realistic strategy means even abandoning the goal of a definitive victory over al Qaeda itself.
Instead, we need to treat the terrorist threat that al Qaeda poses as a chronic, but manageable, security problem. Foreign policy, like domestic politics, is the art of the possible. Containing and weakening al Qaeda may be possible, but sustaining a large-scale, long-term occupation of Afghanistan and creating a modern, democratic country is not.
More here:
Peace? The Promise of Peace? Eh, Close Enough
Worse choices have been made than Barack Obama for the Nobel Peace Prize.
There was Woodrow Wilson in 1919, an award that rates as one of history’s more grotesque international jokes. Wilson promised to keep us out of war and promptly got us into it, meanwhile laying the ideological and geopolitical foundations for 90 years of war-nationalism, war-liberalism, and war-socialism. To say nothing of saddling us with the terrible idea of world government. Among those who weren’t Nazis or communists, Wilson may have done more than any other individual to promote human suffering in the last hundred years.
So yes, there have been worse choices. (Next to Wilson, I’d have to give Al Gore and Yasser Arafat both honorable mentions. We could go on, of course.) But still, Barack Obama? Seriously? I doubt the committee has any idea how badly their choice will be mocked in the United States.
Over here, the prize will be a disappointment to the anti-war left, the anti-war right, and, of course, the pro-war right. The only contingent I can see taking pride in it over here is the establishment left, which hasn’t had much time lately for substantive work on peace, but which is always happy to make speeches and receive awards. Sometimes, the American image abroad is just that important.
Rather than piling on in what is sure to be a bipartisan laugh-fest, let’s think about what Barack Obama actually could have done for world peace. And weep.
House Approves Hate Crimes Measure
Last night, the House of Representatives approved a defense spending measure that included a totally unrelated bill that would ban so-called “hate crimes.”
I’ve testified twice against federal hate crimes proposals. Here’s the case against the law (in brief):
First, the federal hate crime law is unconstitutional because it is beyond the powers of Congress.
Second, the law will not prevent violent crime. Anyone already inclined to kill or beat up another human being is not going to reverse course because Congress passes a new law against violence motivated by bias.
Third, the law does take the state too close to the realm of thought crimes. In order for a prosecutor to prove the “hate” aspect, detectives have to dig into a person’s life, thoughts, writings, conversations, etc., to gather the “evidence.” There’s no good reason to go there because — let’s remember — violent acts are already against the law!
There Is No Peace for the Uninsured
President Obama wants to put people in jail if they don’t buy health insurance. Give that man a peace prize.
A Bankrupt FHA: It’s Only Money, Part XXVI
Think the bailouts are over? Think again! The Federal Housing Administration could become the next Fannie Mae.
Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.
Running questions about the F.H.A.’s future — underscored by interviews with policy makers, analysts and home buyers — came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.
But he acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency’s finances.
We’ve already spent about $13 trillion bailing out banks, financial institutions, automakers, insurance companies, and most everyone else. So what’s another few billion dollars among friends? As they say, it’s only money!
Realizing Freedom
Last month, I talked with Reason senior editor Michael C. Moynihan on Reason.tv about my book Realizing Freedom: Libertarian Theory, History, and Practice.
Are Living Standards Higher in Denmark or the United States?
The left loves Scandinavia, but for the wrong reason. Nations such as Denmark and Sweden have much to admire, particularly their open markets, low levels of regulation, sound money, and honest governments. Indeed, if fiscal policy is removed from the equation, both Denmark and Sweden are more laissez-faire than the United States according to Economic Freedom of the World (as I noted in this recent video).
But fiscal policy is where the Scandinavians have serious problems. Taxes are confiscatory, punishing people who work, save, and invest. High levels of government spending, meanwhile, reduce economic growth by diverting resources from the productive sector of the economy and funneling them into the stifling welfare state.
Not surprisingly, this is the reason why statists admire Scandinavian nations. Matthew Yglesias, for instance, recently expressed his great admiration for Denmark. And I suppose I would agree with him if asked to pick the world’s best welfare state. I’ve been to the country several times and there is no question that laissez-faire policies in areas other than fiscal policy have helped the nation remain relatively prosperous.
But Yglesias is a bit lovestruck about the Danes (an understandable impulse for non-economic reasons), and it leads him to make some rather strange assertion — presumably because he wants us to believe that Denmark’s good points are because of (rather than in spite of) an onerous fiscal burden. What jumped out at me was his claim that Danes enjoy a “higher average material standard of living” than Americans. I’m not sure where he gets that, since the World Bank, CIA, United Nations, and IMF all show that the United States has more per-capita economic output.
To be fair, measures of per-capita gross domestic product are not a perfect measure, even if they are adjusted for purchasing power parity. So let’s take a look at other statistics that try to compare living standards. The two that I found (perhaps Yglesias found others, in which case I look forward to his identifying the source) are from the Organization for Economic Cooperation and Development and, coincidentally, the Danish Finance Ministry.
The OECD, many of you already know, is not my favorite organization. The bureaucracy’s anti-tax competition campaign is a reprehensible attempt to hinder the flow of jobs and capital from high-tax nations to low-tax jurisdictions. So surely nobody will claim that the OECD is a collection of market fundamentalists trying to manipulate statistics to make high-tax nations look bad. So let’s now look at this chart, which is based on the OECD’s calculations of average individual consumption per capita, pegged against an average for member nations of 100. It certainly appears that living standards in the United States are much higher.
Baucus Bill’s Spending Cuts Won’t Stick
Why? Just ask Sen. Evan Bayh (D-IN):
You can sort of see this coming. The savings from the pharmaceutical companies and the insurance industry, you can kind of count on that because they’re not very popular.
The hospitals are a different story. People, you know, like their hospitals; they tend to trust their hospitals. The hospitals have pledged big savings. I can easily forecast at some point in the not-too-distant future the hospitals coming in and saying, “You know what, this isn’t working exactly the way we expected. Please spare us from this,” and them getting a good hearing in [Congress].
The same thing goes for physicians.
The Baucus “Failsafe” Is a Failsure
To reassure us all that Baucus 2.0 would not increase the deficit, its author Sen. Max Baucus (D-MT) included a “failsafe” provision: if the OMB director determines that the Baucus bill would increase the deficit in the following year, that determination would trigger automatic cuts in the bill’s health insurance subsidies.
Sooooo, would those automatic cuts operate more like the failed Gramm-Rudman-Hollings automatic cuts, or the failed sustainable-growth-rate automatic cuts? Automatic spending cuts never work because today’s Congress cannot bind future Congresses.
The CBO estimates that, if the failsafe were to work, it would require 15-percent cuts in the bill’s new health insurance subsidies from 2015 through 2018. But the agency essentially says the mechanism would be unworkable.
The failsafe is a failsure. Baucus 2.0 would increase the deficit.
“Read the Bill” = Deliberative Process, Please
The debate about whether members of Congress and senators should read bills has been getting highly literal lately. It’s capped off by Angie Drobnic Holan’s article, “Speed-Reading the Health Care Reform Bill?, on Politifact (a St. Petersburg Times site) this morning.
Faced with a 1,000-or-so-page health care reform proposal, “a person could conquer the bill in seven to 13 hours.”
There you have it! That’s what it takes if you want ‘em to read the bill!
Of course, the “read-the-bill” concept is a stand-in for others:
One is simply having a more deliberative process in Congress. It’s dawning on the American public that bad things happen when Congress operates in haste—the derivatives debacle, for example. Oh, and also, government takeovers. Oh yeah, and spending orgies.
But “read the bill” is also about power.
“Waiting periods . . . tend to disperse power to people who might otherwise be at the margins of the debate,” reports Holan. “Centrist Democrats in the Senate, for example, have asked for waiting periods after amendments and conference reports.”
It goes beyond that, too. Letting the public read finalized bills before they become law allows the public to second-guess Washington, D.C. and transfers power back home. People want to use the Internet to have more say in governance.
And there is far more knowledge, sense, and brain-power out there in the land than on Capitol Hill (I say as a former legislative staffer). Given a regular process for doing so, the people (and lawyers) faced with implementing proposed federal laws would examine and critique proposals in Congress much more than they do now. This would help improve results, though Members of Congress would surely chafe at being overseen by the lowly public.
Speaking of waiting periods, recall that President Obama promised to post the bills coming out of Congress for five days before he signs them. Let’s take a look at how he’s done with this promise so far: Read the rest of this post »
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