Archive for February, 2010
Fisking Pawlenty
Having fisked Newt Gingrich’s and John Goodman’s “best” health care reform ideas, I probably should do the same for Minnesota Gov. Tim Pawlenty’s similar oped in the Washington Post. Pawlenty makes five recommendations:
- “Incentivize patients to be smart consumers.” Setting aside his use of the grating word incentivize (down with suffix creep!), Pawlenty is on the right track. But he’s so vague as to leave (himself?) room for mischief. “Make quality and costs more transparent”? “Incentivize smarter health-care decisions”? A pol could claim to be doing those things while falling far short of what he should be doing: letting Americans — rather than employers or government — control their health care dollars and choose their own health plan. If that’s what Pawlenty means, heck, say it.
- “Congress should pass reforms that allow people to stop paying for procedures and start paying for results.” Pawlenty appears to think government should find the “right” payment system, rather than allow for competition between different ways of paying health care providers — between fee-for-service, capitation, and everything in between. Such competition promotes all dimensions of quality. Government isn’t equipped to define and pay for performance, and bad things happen when it tries.
- “Liability reform.” To recap: federal limits on med mal liability unconstitutional; Republicans unprincipled.
- “Interstate health-care insurance.” Pawlenty doesn’t seem to get that the point of letting individuals and employers purchase health insurance across state lines is to force regulators to compete. His “interstate purchasing pool with strict standards” idea makes it sound like he doesn’t get it.
- “Modernize health insurance.” Again, with the vagueness. If Pawlenty means he wants to let individuals control their health care dollars and choose their own health insurance — see here for how — then terrific. But when he recommends that we should “make health insurance transferable so employees can keep their coverage if they switch jobs” and “prohibit insurance companies from discriminating against individuals whose preexisting conditions were covered under insurance they lost through no fault of their own,” it sounds like he thinks regulation is the solution.
Hotel Afghanistan: We Can Check Out but Never Leave
The U.S. remains stuck in Iraq, as the country moves toward a potentially messy and not so democratic (lots of disqualified parliamentary candidates, etc.) election. Iran’s refusal to back away from its nuclear program has intensified calls for an American military strike — which, Sarah Palin assures, would even help the president politically. North Korea unsurprisingly is showing reluctance to rejoin international talks over its nuclear program: renewed proposals for a U.S. military build-up in South Korea and even war against the North are likely to follow. And then there is Afghanistan.
Even though President Barack Obama talks about deadlines and drawdowns, there is little in present policy to suggest that the U.S. will be able to leave Afghanistan in even the mid-term. Afghan President Hamid Karzai certainly doesn’t think so. He figures on U.S. military support for at least another decade, with continuing international financial support for years after that.
Afghan President Hamid Karzai warned Thursday that foreign troops must stay in his country for another decade, as world powers agreed on an exit map including a plan to persuade Taliban fighters to disarm in exchange for jobs and homes.Divisions emerged between the U.S. and its partners over Kabul’s willingness to offer peace to Taliban leaders who once harbored al-Qaida, instead of the more limited deal for lower-ranking fighters emphasized by the Americans.
All agree that reconciliation means bringing on board what Mark Sedwill, NATO’s newly appointed civilian chief in Afghanistan, called “some pretty unsavory characters.”
The conference was called to help the U.S. and its allies find a way out of the grinding Afghan war amid rising U.S. and NATO casualties and falling public support. NATO has agreed to accelerate the training of Afghan security forces and gradually transfer more combat responsibility to them.
“With regard to training and equipping the Afghan security forces, five to 10 years will be enough,” Karzai told the BBC. “With regard to sustaining them until Afghanistan is financially able to provide for our forces, the time will be extended to 10 to 15 years.”
It sounds a bit like the Afghan equivalent of the Eagles’ Hotel California. Defeat or bribe the Taliban and keep Karzai in power, and we will have “won” — but we still won’t be able to leave. And the Afghan government, assuming it achieves a modicum of honest competence, will still have little incentive to meet even President Karzai’s distant check-out date. Who in Kabul will want to do without abundent Western cash 10 or 15 years from now?
In 2001 the U.S. had a simple, important, and achievable mission in Afghanistan: disrupt al-Qaeda and oust the Taliban. American military forces succeeded. Alas, we’ve spent the succeeding eight years attempting to build a nation state where none exists. It’s time to draw down our forces and again focus on combatting terrorists.
Switzerland’s Strong Human Rights Laws Should Be Emulated, not Persecuted
In a rational world, Switzerland would be a role model for other nations. It is quite prosperous thanks largely to a modest burden of government. There is remarkable ethnic and religoius diversity, but virtually no tension because power is decentralized (sort of what America’s Founders envisioned for the United States). Yet despite these — and many other — attractive features, Switzerland is being persecuted because of strong human rights laws that protect financial privacy. Money-hungry politicians from other nations resent Swtizerland’s attractive policies, and they would rather trample Swiss sovereignty rather than fix their own oppressive tax laws. An official from the Swiss Bankers Association provides some background in a New York Times column:
In Switzerland, this tradition of treating a client’s financial affairs in confidence became law in 1934 when it was codified in Article 47 of the country’s first-ever federal banking act as a contemporary reaction to the economic crisis, various domestic political considerations and well-publicized cases of espionage involving France and Germany. …Banking secrecy…reflects the very high degree of trust that exists between the Swiss state and its citizens and it has strong democratic foundations. …The Swiss are proud of their system and they reward it with a high level of taxpayer honesty. It works because the Swiss vote their own taxes, they have a high degree of control over the way tax revenues are spent and over all they believe their tax system to be reasonable, comprehensible, transparent and fair. …Doesn’t Switzerland hear the snapping jaws and cracking whips of foreign finance ministers, tax collectors, O.E.C.D. bureaucrats, cash-dispensing government agents and other denizens of the encroaching real world as they circle round Mother Helvetia intent on biting huge chunks out of her banking secrecy, if not swallowing it whole? …In March last year the Swiss announced they would give up the evasion-fraud distinction for foreign bank clients and adopt the O.E.C.D. standards on information exchange in tax matters. …However, requests for assistance must be made with regard to a specific individual, and “fishing expeditions” — any indiscriminate trawling through bank accounts in the hope of finding something interesting — remain ruled out. …Switzerland demonstrates to the world that it is possible for a state to collect taxes with a high degree of taxpayer honesty and without the authorities being corroded with suspicion about the financial activities of their citizens. Citizens in a democracy would never allow their police force to have an automatic right of forced entry into their homes just on the off-chance of finding some stolen goods, so why on earth should the state have an automatic right of forced entry into citizens’ banks accounts just on the off-chance of discovering some tax evasion? There must be a limit to the extent to which respect for an individual’s privacy is sacrificed on the altar of international cooperation in tax matters.
Sadly, the United States is part of the effort to create a global tax cartel. An “OPEC for politicians” would be terrible news for taxpayers, though, much as a cartel of gas stations would be bad for driviers. So-called tax havens play a valuable role in curtailing the greed of the political class. Ask yourself a simple question: Would politicians be more likely or less likely to raise tax rates if they knew taxpayers had no escape options?
Is Madonna Eminent? Or Is This Just “Celebrity Domain”?
The AP reports:
In a land dispute pitting Madonna against African villagers, Malawi’s government has sided with the pop star who has pumped millions into the impoverished Southern African country and adopted two of its children.
Villagers have been refusing to move from a plot of land near the capital, Lilongwe, where Madonna wants to build a $15-million school for girls. The government, however, says it had originally planned to develop the plot, and only allowed the villagers to live there until a project was identified.
Lilongwe District Commissioner Charles Kalemba, accompanied by other government officials and representatives from Madonna’s Raising Malawi charity, on Thursday met with about 200 villagers and told them they would have to move. The villagers have been offered other government land.
“Government allowed you to occupy this land because there was no project yet. But now that Madonna wants to build you a school you have to give way,” Kalemba told the villagers. “You are lucky that Madonna has compensated you for your houses, gardens and trees.”…
Headman Binson Chinkhota urged residents to move, saying the school would benefit their children. But Amos Mkuyu said the $1 500 in compensation he received from Madonna for mango trees and three homes was not enough. He said his family had been living on his three-hectare plot for three generations.
Susette Kelo vs. Madonna — that would be a great battle. As usual, the government has a beneficent purpose in taking these people’s land. They took Kelo’s home for a development that would yield “new jobs and increased tax revenue.” They’re taking Amos Mkuyu’s home for a school. But stealing land is not beneficent; it is not an act of kindness and charity.
In this case the Malawian government says that the villagers are living on government land. But Mkuyu says his family has been there for three generations. Sounds like they thought it was theirs. For a discussion of collective and traditional property inspired by the movie “Avatar,” click here. Hernando de Soto, author of The Mystery of Capital, has spent a career showing how the lack of well-defined property rights hurts the poorest people in the world.
Thoughts on the New Brookings School Choice Report
A new Brookings Institution report suggests ways for the federal government to promote school choice. On the eve of its release, I voiced some practical and constitutional objections to the idea. Now that the report is out, contributing author Jay Greene asks if I’m still apprehensive. The short answer is yes.
Brookings assembled an impressive group of scholars to write the report, and their education policy recommendations deserve serious consideration. Their goal of ensuring more and better access to more and better educational choices is one that I share, and I hope the following comments will help advance that goal.
Good policy, like good science, is grounded in concrete evidence. Only where evidence is lacking is it wise to fall back on theory. The Brookings report relies on theory in a couple of important areas where extensive evidence is available to show us the way. In particular, the authors acknowledge that U.S. experience with alternative school systems is minimal, but (with a single exception — see below) they do not discuss the vast wealth of evidence from other nations that have more extensive and longer-running experience with school choice systems.
Some have argued that we can learn little about school governance from other nations because cultural and economic factors affect educational outcomes too greatly. This criticism does not apply to within-country comparisons of alternative school systems — and virtually all of the literature comparing alternative school systems is within-country. A comparison of government-run, government-funded private, and parent-funded private schools within India, for instance, is not muddied by cultural or economic differences between India and the United States.
Average vs. Marginal Effects of Health Insurance
I have to thank Ezra Klein. I have for some time been trying, without success, to spark a debate about whether expanding health insurance coverage would actually save any lives. Even my bet with Karen Davenport seemed to go nowhere. But when Klein accused Sen. Joe Lieberman (I-CT) of being “willing to cause the deaths of hundreds of thousands of people” because Lieberman was jeopardizing passage of legislation that would expand health insurance to 30 million people, Klein made a debate possible.
Following on my first response to Klein that the evidence supporting his claim is remarkably thin, others have joined the discussion. Matt Yglesias of the Center for American Progress rose to Klein’s defense. Megan McArdle (in The Atlantic magazine and her blog) and Tyler Cowen (at Marginal Revolution) both argue that we don’t really know if Klein’s claim is true.
Today, Yglesias poses the following question on his Twitter page:
Do rightwingers really believe that US health insurance has no mortality-curbing impact?
I see two problems. First, there are no right-wingers in this debate. McArdle, Cowen, and I all support gay marriage, for example.
Second, Yglesias sets up a straw man. He asks whether health insurance on average has a positive impact on mortality, when the debate is actually over the effect of health insurance at the margin. In other words, would covering the uninsured save lives?
I don’t know anyone who thinks health insurance has zero effect on mortality overall. Yet it is entirely possible for the average effect to be positive and the marginal effect to be zero. One reason may be that the uninsured do benefit from the human and physical capital that health insurance makes possible. It may also be the case that when the uninsured do obtain health insurance, the additional medical care they receive is more likely to harm them than to help them. The researchers behind the RAND Health Insurance Experiment make essentially the same point.
If the marginal effect of health insurance on health is zero, it raises other interesting questions. Would it also have zero effect on health outcomes if we were to reduce the number of people with health insurance? What is the size of the margin over which health insurance has zero impact? (Robin Hanson suggests it may be very, very large.)
Klein recently declined an invitation to debate these issues at Cato. Too bad. This is worth pursuing.
Congress Goes After Citizens United
Snowstorm notwithstanding, Sen. Charles Schumer and Rep. Chris Van Hollen introduced legislation in response to the Citizens United decision. A summary of their effort can be found here.
Some parts of the proposal are simply pandering to anti-foreign bias (corporations with shareholding by foreigners are prohibited from funding speech) and anger about bailouts (firms receiving TARP money are banned from funding speech). Government contractors are also prohibited from independent spending to support speech. We shall see whether these prohibitions hold up in court. The censorship of government contractors and TARP recipients will likely prove to be an unconstitutional condition upon receiving government benefits.
Despite Citizens United, Congress will try to suppress speech by other organizations. Schumer-Van Hollen relies on aggressive disclosure requirements to deter speech they do not like. CEOs of corporations who fund ads will be required to say they “approve of the message” on camera at the end of the ad.
Citizens United upheld disclosure requirements, but it also vindicated freedom of speech. The two commitments may prove incompatible if Schumer-Van Hollen is enacted. This law uses aggressive mandated disclosure to discourage speech. We know that members of Congress believe this tactic could work. Sen. John McCain said during the debate over McCain-Feingold that forcing disclosure of who funded an ad will mean fewer such ads will appear. In other words: more disclosure, less speech. Just after Citizens United, law professor Laurence Tribe called for mandating aggressive disclosure requirements in order to “cut down to size” the impact of disfavored speech.
During the next few months the critics of Citizens United may well show beyond all doubt that the purpose of its disclosure requirements are to silence political speech. In evaluating the constitutionality of Shumer-Van Hollen, the Court could hardly overlook such professions of the purpose behind its disclosure requirements.
One other part of Schumer-Van Hollen is probably unconstitutional. They would require any broadcaster that runs ads funded by corporations to sell cheap airtime to candidates and parties. Several similar attempts to equalize speech through subsidies have recently been struck down by the Court. This effort would share a similar fate.
All in all, Schumer-Van Hollen is a predictable effort to deter speech by disfavored groups. Congress is reduced to attacking foreigners and bailout recipients while hoping that mandated disclosure will discourage speech. The proposal law suggests a comforting conclusion. For most Americans, Citizens United deprived Congress of its broadest and most effective tools of censoring political speech.
If the So-Called Stimulus Was an Unsung Hero, I’d Hate to Meet a Singing Enemy
The White House recently released the Economic Report of the President. In a post at the White House blog, Christina Romer brags that the stimulus legislation was a big success.
This Act is the great unsung hero of the past year. It has provided a tax cut to 95 percent of America’s working families and thousands of small businesses. It has meant the difference between hanging on and destitution for millions of unemployed workers who had exhausted their conventional unemployment insurance benefits. It has kept hundreds of thousands of teachers, police, and firefighters employed by helping to fill the yawning hole in state and local budgets. And, it has made crucial long-run investments in our country’s infrastructure and jump-started the transition to the clean energy economy. All told, the Recovery Act has saved or created some 1½ to 2 million jobs so far, and is on track to have raised employment relative to what it otherwise would have been by 3.5 million by the end of this year.
Let’s set aside some of the disingenuous components of her post, such as categorizing income redistribution as tax relief, and focus on her claim that the legislation created at least 1.5 million new jobs when total employment has dropped by 3 million. Romer is not bad at math. Instead, she is saying that the economy would have lost 4.5 million jobs if it were not for the $787 billion increase in government spending. This what-might-have-been analysis is completely legitimate, assuming that there is good theory and evidence to back the assertion. Unfortunately (at least for the White House’s credibility), Ms. Romer and another colleague last year prepared a supposedly rigorous what-might-have-been report, where they estimated that the so-called stimulus would keep the unemployment rate at 8 percent and that failure to increase the burden of government spending would drive the unemployment rate to 9 percent. Yet as this chart from their paper indicates, when we add in the data for what actually has happened, in turns out that bigger government is not only theoretically misguided, but it also doesn’t work in the real world.
Stimulus Hypocrisy and the Tea Partiers
The Washington Times recently used the Freedom of Information Act to obtain letters sent to the U.S. Department of Agriculture by numerous Republican lawmakers seeking stimulus money for their constituents. All of these Republicans had publicly criticized the stimulus and voted against it.
Georgia Rep. John Linder wrote on his website in October that recent unemployment figures “only reinforce the fact that the $787 billion ‘stimulus’ signed into law eight months ago has done nothing for job growth in this country.” But just two weeks earlier the congressman had sent a letter to Agriculture Secretary Tom Vilsack on behalf of a foundation in his district seeking stimulus funds in which he claimed “the employment opportunities created by this [foundation’s] program would be quickly utilized.”
Remember South Carolina Rep. Joe Wilson who infamously shouted “You lie!” during President Obama’s speech to Congress in September? Here’s what he had to say in a letter to Secretary Vilsack on behalf of a foundation in his district:
“We know their endeavor will provide jobs and investment in one of the poorer sections of the Congressional District.”
According to his spokeswoman, Rep. Wilson opposed the stimulus as a “misguided spending bill,” but wanted to make sure his constituents “receive their share of the pie.” That’s pretty much the same excuse the rest of the GOP lawmakers gave: the stimulus is bad but my constituents deserve their “fair share.”
So much for principles.
The Federal Government Is Bribing States to Create More Welfare Dependency?!?
If you want to get depressed or angry, the New York Times has an article celebrating the effort by politicians at all levels of government to lure more people into the food stamp program. New York City is running ads in foreign languagues asking people to stick their snouts in the public trough. The City is even signing up prisoners when they get out of jail. The state of New York, meanwhile, actually set up quotas for enrolling new recipients. And on the federal level, there apparently is a program that gives states “bonuses” for putting more people on the dole. No wonder one out of every eight Americans is receiving food stamps. By the way, this is not just the fault of Democrats. The ranking Republican on the Agriculture Committee is a big defender of the program, in part because of the sordid pact among urban and rural politicians to support each other’s handouts. And President George W. Bush’s food stamp administrator actually had the gall to assert “food stamps is not welfare.” No wonder the burden of federal spending skyrocketed during the reign of so-called compassionate conservatism. The correct policy, of course, is to get the federal government out of the welfare business. If Mayor Bloomberg thinks it is a “civic duty” to expand food stamps, he should see whether New York City voters agree with him – and want to foot the bill.
A decade ago, New York City officials were so reluctant to give out food stamps, they made people register one day and return the next just to get an application. The welfare commissioner said the program caused dependency and the poor were “better off” without it. Now the city urges the needy to seek aid (in languages from Albanian to Yiddish). Neighborhood groups recruit clients at churches and grocery stores, with materials that all but proclaim a civic duty to apply — to “help New York farmers, grocers, and businesses.” There is even a program on Rikers Island to enroll inmates leaving the jail. “Applying for food stamps is easier than ever,” city posters say. …These changes, combined with soaring unemployment, have pushed enrollment to record highs, with one in eight Americans now getting aid. “I’ve seen a remarkable shift,” said Senator Richard G. Lugar, an Indiana Republican and prominent food stamp supporter. “People now see that it’s necessary to have a strong food stamp program.” …The program has commercial allies, in farmers and grocery stores, and it got an unexpected boost from President George W. Bush, whose food stamp administrator, Eric Bost, proved an ardent supporter. “I assure you, food stamps is not welfare,” Mr. Bost said in a recent interview. Still, some critics see it as welfare in disguise and advocate more restraints. …The federal government now gives bonuses to states that enroll the most eligible people. …In 2008, the program got an upbeat new name: the Supplemental Nutrition Assistance Program — SNAP. …Since Mayor Michael R. Bloomberg took office eight years ago, the rolls have doubled, to 1.6 million people… Albany made a parallel push to enroll the working poor, setting an explicit goal for caseload growth. “This is all federal money — it drives dollars to local economies,” said Russell Sykes, a senior program official. But Mr. Turner, now a consultant in Milwaukee, warns that the aid encourages the poor to work less and therefore remain in need. “It’s going to be very difficult with large swaths of the lower middle class tasting the fruits of dependency to be weaned from this,” he said.
President Palin?
“Take Sarah Palin seriously,” David Broder writes in the Washington Post. ”In the present mood of the country, Palin is by all odds a threat to the more uptight Republican aspirants such as Mitt Romney and Tim Pawlenty — and potentially, to Obama as well.” Palin’s own Captain Ahab, Andrew Sullivan, wrings his hands that she’s the “leader of the opposition” and a real threat to be president. Time‘s Joe Klein goes even further: “Is Sarah Palin the favorite to win the Republican nomination and therefore someone to be taken absolutely seriously? You betcha.”
Yes, well, I’m old enough to remember that Newsweek prepared six covers for the week of the 1968 election (I was very precocious), and one of them proclaimed “President-elect George Wallace.” Wasn’t gonna happen. Nor is this. As for those who compare Palin to Ronald Reagan, yes, there are some similarities. They both lived in the West, they’re both “conservative” in some sense, and they were both dismissed by effete East Coast intellectuals. But I see just a few differences:
- Reagan served eight years as governor of a very large state; he didn’t quit after half a term.
- Reagan had spent a long time developing a real political philosophy, one that had changed a great deal during his adult life. In his time as president of the actors’ union, 1947-52, he was known as a liberal, anti-communist Democrat. A long life of watching the world, paying taxes, and reading moved him to the libertarian right. Palin couldn’t name any newspapers she reads. Reagan told Rowland Evans in an interview, “I’ve always been a voracious reader — I have read the economic views of von Mises and Hayek, and … Bastiat…. I know about Cobden and Bright in England — and the elimination of the corn laws and so forth, the great burst of economy or prosperity for England that followed.” Reagan thought a lot about what he believed, and his deep understanding of a set of political principles was perhaps his most notable characteristic when he emerged on the political stage.
- Reagan was smart and could articulate his views on public policy. One of the standard defenses of Palin is “liberals said Reagan was dumb.” Yes, they did, even after he out-debated Bobby Kennedy in an internationally televised debate just months after he became governor. Democratic mandarin Clark Clifford, who didn’t realize that the bank he chaired was run by actual criminals, famously called Reagan an “amiable dunce.” But now that Reagan’s hand-written radio commentary scripts have been published, no one really makes this claim any more. Read Reagan in His Own Hand, read the commentaries he wrote on yellow pads while being driven from Los Angeles to Santa Barbara, and ask yourself: Could Sarah Palin do that?
Sarah Palin can be a dazzling performer. But she’s still capable of saying that Obama could improve his chances for reelection if he ”played the war card … decided to declare war on Iran.” Her articulation of political ideas remains remarkably thin. The Republican bench may be weak, but I don’t think it’s that weak.
The Census and the Constitution
The Washington Post profiles Daniel Weinberg, assistant director of the Census, who says:
“Since the decennial census is in our Constitution, it is the most important task a government statistician can undertake. The census is key to our democratic society by making sure that our congressional districts are equal in size so that we have representative democracy. To be involved in something that is central to our democracy is pretty exciting.”
Good point. The census is indeed in the Constitution, Article I, Section 2. The Constitution provides that every ten years an enumeration of the population of each state shall be made in order to allocate members of the House of Representatives.
Unfortunately, the census has been loaded down with intrusive questions not authorized in the Constitution and bearing no relation to the constitutional necessity of reapportionment. This year the Census Bureau is boasting of “one of the shortest forms in history,” which is all to the good. Still, it does ask respondents to list their race, which really should be irrelevant to government. And to tell whether they own their home or have a mortgage, in order “to administer housing programs and to inform planning decisions.” (That’s worked out well!) And of course they need age and sex data, in order to facilitate various government programs and mandates and to assist “sociologists, economists, and other researchers who analyze social and economic trends.”
Through the American Community Survey, the Census Bureau continues to ask Americans many more questions, from whether you’re on food stamps to how many bathrooms you have. All very interesting to sociologists and planners, of course, but hardly what Madison anticipated when he and his colleagues provided for an “actual enumeration” of the constituents of Congress.
Writing in Slate back in 2000, Tom Palmer complained that the Census Bureau was selling the census as a kind of Super Lotto: You can’t win if you don’t play! “The numbers are used to help determine the distribution of hundreds of billions of dollars in federal and state funds. We’re talking hospitals, highways, stadiums and school lunch programs.” Come on! Get your piece of other people’s tax dollars!
In 1990 David Kopel reviewed the Census Bureau’s promise of confidentiality.
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