Archive for December, 2009
Health Reform: Blame Mitt
If — and it is still a big “if — Democrats pass a health bill, that bill will owe as much to former Massachusetts governor Mitt Romney as to Nancy Pelosi and Harry Reid. In fact, with the so-called “public option” out of the Senate health bill, the final product increasingly looks like the failed Massachusetts experiment. Consider that the final bill will likely include:
- An individual mandate
- A weak employer-mandate
- An Exchange (Connector)
- Middle-class subsidies
- Insurance regulation (already in place in Massachusetts before Romney’s reforms)
As to why this will be a disaster for American taxpayers, workers, and patients, I’ve written about it here, and my colleague Michael Cannon has covered it here and here.
Gee, thanks, Mitt.
New HUD Same as Old
U.S. Department of Housing and Urban Development Secretary Shaun Donovan recently gave a speech in New York in which he spoke of a “new direction in housing.” If there’s one constant with cabinet secretaries, it’s that they all promise that their department will be new and improved. The following are a few of Donovan’s lines that deserve comment.
The Federal Housing Administration is providing another critical bridge to economic stability…And with nearly half of first-time buyers using FHA loans, it is clear that the FHA has been central to recovery.
Thanks to his predecessor, Alphonso Jackson, who was “absolutely emphatic about winning back our share of the market,” the FHA’s willingness to pick up the subprime lending slack when the housing bubble burst has opened the door for a potentially huge taxpayer bailout. In fact, the government hasn’t just come to dominate the housing finance market — it practically is the housing finance market. Thus, there are plenty of doubts as to whether the housing “recovery” Donovan speaks of is sustainable without the government crutch.
In crisis comes enormous opportunity for change — as Rahm Emanuel says, ‘a crisis is a terrible thing to waste.’ Ensuring we don’t starts with getting the government back into the business of building and preserving affordable housing. Homeownership is incredibly important. But if this crisis has taught us anything, it’s that it is long past time we had a balanced, comprehensive national housing policy – one that supports homeownership, but also provides affordable rental opportunities, and ensures nobody falls through the cracks.
Like his boss, Donovan’s use of the word “change” is just a euphemism for bigger government. His contention that the government needs to get “back” into affordable housing is laughable. When did it leave?
This crisis has illustrated that only the Federal government has the scale and mechanisms to deal effectively with some of the forces that caused it.
It was the federal government’s “scale and mechanisms” that helped cause the crisis! Only powerful institutions with national “scale” such as the Federal Reserve, Fannie and Freddie, and HUD had the power and potential to create such a nation-wide bubble, bust, and recession. Donovan wants the arsonist to put out the fire.
The Federal government can be a key partner in helping communities foster the kinds of synergies between housing, education, public safety, and health you’ve helped nurture at the neighborhood level.
Words like “synergy”, “nurture”, and “foster” are vacuous bureaucratic rhetoric. They are supposed to imply that the federal government can turn decaying urban centers into utopias with gobs of taxpayer money and bureaucratic meddling. That’s just bunk.
In my recent paper on three decades of scandals, mismanagement, and policy failures at HUD, I show that little has changed at HUD other than the individuals occupying the throne. The history of Shaun Donovan’s tenure is yet to be written, but his speech makes me pessimistic.
Strange Bedfellows?
Jon Walker at FireDogLake says I’ve got the wrong smoking gun:
The smoking gun was a manual put out by the CBO in May…It spelled out exactly how much regulation was “too much” regulation. It explained what was the magical threshold that would cause [CBO director] Doug Elmendorf to declare some private market part of the government budget. Now, I’m angry about this for different reasons than the Cato Institute. I think it is insane that there could be any level of regulation that would make the private market part of the federal budget. Either the money is going through the federal treasury or it is not. I don’t think the the CBO director should have the power to see gray areas on this issue…There is no real logic to it, he simply decided what he thought was enough regulation to make something part of the budget.
To be sure, Walker and I have different ideas when it comes to (1) health care reform. (Not that you asked, but here are my ideas.) We likewise disagree that (2) the CBO’s May 27 paper was the smoking gun. That paper laid out the CBO’s (vague) criteria for including “private” financial transactions in the federal budget (and I duly linked to it in my ‘smoking gun’ post). But the December 13 memo is the first documented instance of Democrats gaming those criteria. And I disagree that (3) this was all Elmendorf’s decision, (4) the federal budget should reflect only money that passes through the Treasury (instead of all the money that the feds control), and (5) there’s no logic behind the CBO’s criteria.
All that said, there are a couple of areas where Walker and I agree. For one, he writes:
More importantly, I don’t think something as important as regulation should be written to trick the CBO. It should be written to produce the best heath care system possible, not the best looking CBO score possible.
Hear, hear. Yet congressional Democrats have been doing just that, gaming the CBO’s rules to hide the implicit subsidies their legislation would provide to large private insurance companies.
For another, he and I both agree that that legislation is little more than a bailout of large private insurance companies and would be worse than doing nothing.
My question for Walker, and for Howard Dean, and for Markos Moulitsas is: will they join me in calling for the Senate to obtain a CBO cost estimate of the off-budget part of the insurance-industry bailout (i.e., the individual and employer mandates)? Do they think Senate Majority Leader Harry Reid should at least be up front with his base about what he’s asking them to swallow? Do they think that We, the People deserve to know the whole truth about this bill?
New Study: Hadley Center and CRU Apparently Cherry-picked Russia’s Climate Data
Yesterday, the Moscow-based Institute of Economic Analysis (IEA), of which I am President, issued a study (in Russian), “How Warming Is Being Made: The Case of Russia.” The report, prepared by IEA director Natalya Pivovarova, suggests that the Hadley Center for Climate Change based at the headquarters of the British Meteorological Office in Exeter (Devon, England) and the Climate Research Unit of the University of East Anglia (CRU) in Norwich (England) apparently cherry-picked Russian climate data.
The IEA report shows that Russian meteorological-station data in the last 130 years did not substantiate the rate of warming on Russian territory suggested by the Hadley Climate Research Unit Temperature (HadCRUT) database, which has now been partially released.
IEA analysts point out that Russian meteorological stations cover most of the country’s territory, while the HadCRUT used data from only 25% of such stations in their calculations. Over 40% of Russian territory was not included in their global temperature calculations even though there was no lack of meteorological stations and observations. The data of stations located in areas not listed in the HadCRUT survey often shows slight cooling or no substantial warming in the second part of the 20th century and the early 21st century.
The HadCRUT database includes specific stations providing shorter observations and incomplete data highlighting the warming process, rather than stations providing longer and uninterrupted observations not demonstrating significant warming. On the whole, HadCRUT specialists use the incomplete findings of meteorological stations far more often than those providing complete observations. IEA analysts found that the climatologists used the data of stations located in large populated centers that are influenced by the “urban heat effect” more frequently than the unbiased data from the stations located in less populated places.
The IEA authors calculated that the scale of actual warming for the Russian territory in 1877-1998 was probably exaggerated by 0.64°C. Since Russia accounts for 12.5% of the world’s land mass, such an exaggeration for Russia alone should have an impact on the IPCC claim that the global temperature in the last century has risen by 0.76°C.
If similar procedures have been used for processing climate data from other national data sources, the impact on the rate of change in global temperature would be considerable.
The IEA report concludes that it is necessary to recalculate all global temperature data in order to assess the real rate of temperature change during the last century. Global temperature data will have to be modified because the calculations used by Copenhagen Conference on Climate Change analysts are based on HadCRUT research.
Don’t You Mean Financial Illiteracy?
According to a story out yesterday, the federal government is starting a new campaign to promote financial literacy among high school students. That’s right, federal politicians, who have given us Fannie, Freddie, the Community Reinvestment Act, endless pork binges, and a national debt surpassing $12 trillion have the absolutely staggering hubris to think that they somehow have what it takes to teach your kids about sound financial practices!
This would actually be pretty funny (for instance, it reminds me of this classically trite PSA) were the complete unshackling of the federal leviathan of which it is a symptom not, potentially, utterly devastating. Unfortunately, we simply can’t afford, either literally or figuratively, to laugh at absurdities or patently unconstitutional overreaching like this anymore.
Are You a Conservative Yet?
Cato senior fellow Johan Norberg writes on his blog:
14:49 – A LIBERTARIAN WITH A DAUGHTER:
A Swedish conservative columnist recently expressed surprise – she found it strange that I am still a classical liberal even though I have discovered family happiness and love my son. But she hoped that I would change my mind if I got a daughter: “A conservative is a libertarian with daughters.”
Well, we are about to find out. Because this weekend, my wife gave birth to the cutest little girl I’ve ever seen. They’re both in great condition and so far Alexander is just happy and curious about the little gift we brought from the maternity hospital.
Obviously, I will focus on the family in the coming weeks, so my activity here and elsewhere will be reduced. So any conservative symptoms yet? Well, preliminarily I can only say that I am delighted that she is born into a part of the world and in an era when women have greater freedoms and more equality than they have ever had anywhere else, as a result of liberal reforms over the last 150 years – reforms that conservatives objected to.
Congratulations, Johan and Sofia. And remember: the best conservatives are the ones who embrace and defend the advances that libertarians (liberals) fought for.
Reid Won’t Even Tell His Base What He’s Asking Them to Swallow
Here’s my answer to today’s “Big Question” on The Hill‘s Congress Blog:
Now that the “public option” is dead, both the Left and the Right should be able to agree: the Senate bill is nothing but a $450 billion bailout of the private insurance companies.
In fact, the bailout may be several multiples of that figure.
That $450 billion just represents checks that the Treasury would write to private insurance companies. The Reid bill would also force nearly every U.S. citizen to fork over cash to the private insurance companies — no matter how lousy a deal they offer. A recent CBO memo reveals that Reid has been meticulously working behind closed doors to conceal the full cost of his private-insurer bailout.
The Left and the Right should insist that Reid produce a complete CBO score that reveals the full cost of his bill’s private-insurer bailout — in particular, the cost of the individual and employer mandates.
Left-wing Democrats will follow their own consciences when deciding how to vote. But they should force Reid to be honest about what he’s asking them to swallow.
How to Fix County Budget Problems
I’m wrapping up a paper on the real cost of public education, the total price tag per student, not just the stripped down version they typically trot out to show voters. One of the districts is Arlington, VA, which is the one I happen to live in.
Though the district is an unusually big spender, their most recent budget, for fiscal year 2010, contains hand-wringing typical for school districts across the country. “FY 2010 will present unique challenges and hardships for staff, however as stated earlier, these reductions are taken so that there is minimal impact on classroom instruction.”
Arlington is planning to spend over $23,000 per student this year according to the Washington Area Boards of Education (WABE). That’s a 33 percent increase in constant dollars since 2000.*
And yet the county is still talking about tax increases to cover the expected $80-$100 million shortfall the county expects next year.
Here’s a great alternative; fund the schools at 2000 levels and we’re left with an extra $108 million. Voila, no tax increases!
* The WABE listed per-pupil figure leaves out some k-12 spending and provides a number that is significantly less than that in more comprehensive, but older, state records or that can be compiled from district budgets, so I’ve divided the total expenditures listed on p.23 by the enrollment to get real total per-pupil spending.
Baucus: No Senator Understands This Health Care Bill
So yes, enacting the Obama health plan would be an historic achievement. But its supporters don’t know if it would be a good historic achievement or one of those bad historic achievements — like slavery, unequal suffrage, Jim Crow, etc.
Oh, and they don’t care.
Perceptions of Government Pay
A new poll by Rasmussen finds that the general public has an accurate assessment of government worker pay.
Compared to the average government worker, most Americans think they work harder, have less job security and make less money.
In fact, 59% of Americans say the average government worker earns more annually than the average taxpayer, according to the latest Rasmussen Reports national telephone survey. Just 15% don’t believe that to be true, while another 26% are not sure.
Among those who have close friends or relatives who work for the government, the belief is even stronger: 61% say the average government worker earns more than the average taxpayer.
Feeding that belief is the finding that 51% of all adults think government workers are paid too much. Only 10% say they are paid too little, while 27% say their pay is about right.
Bureau of Labor Statistics data indeed shows that government workers work fewer hours in a year and have much higher job security than private sector workers. And I’ve argued that they are generally overpaid, and by increasing amounts.
For more, check out:
The Audacity of Hypocrisy
In his ongoing effort to micromanage the U.S. economy President Obama used his Dec. 12 weekly radio address to promote his proposed Consumer Financial Protection Agency. It will be filled with bureaucrats second-guessing entrepreneurs and is sure to improve the performance of our financial institutions — much in the manner of the SEC’s bureaucrats alertly nailing Bernie Madoff just 30 years into his Ponzi scheme. Never mind that the federal government had much more to do with the financial meltdown than the banks did, the real knee-slapper in his address was his claim that the CFPA “would bring new transparency and accountability to the financial markets…” This, from a man demanding passage of a 2000-page health care reform bill that no one, including Mr. Obama, has read. So much for transparency and accountability.
Disappointing Start for Immigration Reform
The good news is that a bill has been introduced in the House this week under the broad heading of immigration reform. Even during a recession, Congress should be working to change our immigration system to reflect the longer-term needs of our economy for foreign-born workers.
The bad news is that the actual bill put in the hopper by Rep. Luis Gutierrez, D-IL, on Tuesday would do nothing to solve the related problems of illegal immigration and the long-term needs of our economy.
As I argued in a recent blog post and a Washington Times op-ed, immigration reform must include expanded opportunities for legal immigration in the future through a temporary worker visa.
Any so-called reform that is missing this third leg will be doomed to fail. We will simply be repeating the mistakes of the 1986 Immigration Reform and Control Act, which granted amnesty to 2.7 million illegal workers and ramped up enforcement, but made no provision for future workers. Rep. Jeff Flake, R-AZ, agrees.
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