Archive for March, 2010
A Confession from the CBO Director
The Congressional Budget Office recently estimated that the so-called stimulus generated jobs and growth. I addressed some of the profound shortcomings in CBO’s Keynesian model in a previous post, pointing out that the model is structured to produce certain results regardless of what happens in the real world.
Interestingly, the Director of the CBO, Doug Elmendorf, basically agrees with me. In a recent speech, recorded by C-SPAN, he was asked during the question-and-answer session whether the model simply spits out pre-determined numbers. After some hemming and hawing and a follow-up question, he confessed “that’s right” when asked if the model would be unable to detect whether the stimulus failed. The relevant exchange begins around the he 39-minute mark of this recording, and Elmendorf’s confession takes place shortly after the 40-minute mark (I selflessly watched the entire thing so you wouldn’t have to suffer waiting for the key moment).
I’m not sure whether this admission is good news or bad news. It is a sign of progress, I suppose, that CBO’s Director is now on the record acknowledging that the model is useless (at least for purposes of measuring the effectiveness of more government spending). But it is perhaps an even more troubling indication of what’s wrong in Washington that nobody is concluding that the time has come to junk Keynesian analysis. This is either an updated version of The Emperor’s New Clothes or a perverse form of the joke about the drunk looking for his keys under the streetlight because there’s light, even though he lost them someplace else.
Tufts Academic Gives Two Thumbs Down to Cheap Food
I suspect I may be falling into a publicity trap here, but nonetheless I am unable to resist blogging about an email I received this morning from the Global Development and Environment Institute at Tufts University. The email contained this teaser:
How does cheap food contribute to global hunger? GDAE’s Timothy A. Wise, in this recent article in Resurgence magazine, explains the contradictory nature of food and agriculture under globalization. He refers to globalization as “the cheapening of everything” and concludes:
“Some things just shouldn’t be cheapened. The market is very good at establishing the value of many things but it is not a good substitute for human values. Societies need to determine their own human values, not let the market do it for them. There are some essential things, such as our land and the life-sustaining foods it can produce, that should not be cheapened.”
This sort of stuff could only be written by someone on full academic tenure and who has never had to worry about feeding his family.
It would take many hours to rebut all of the idiocies contained in the full article, but for now I will just say: Yes, it is true that U.S. government subsidies for corn, for example, cause environmental damage in the Gulf of Mexico (Cato scholars have in fact covered this before as part of our ongoing campaign to eliminate farm subsidies). And yes, poor farmers abroad have suffered because of government intervention in food markets. But those are problems stemming from government intervention, not the free market.
Obama’s Populism a Hoax: ObamaCare Is a Sop to Big PhRMA
From the invaluable Tim Carney:
The Obama team regularly dismisses opponents as industry lackeys. The Democratic National Committee blasted out e-mails this week warning that “for every member of Congress, there are eight anti-reform lobbyists swarming Capitol Hill” and “Congress is under attack from insurance lobbyists.”
But drug industry lobbyists, according to Politico, spent the weekend “huddled with Democratic staffers” who needed the drug lobby to “sign off” on proposals before moving ahead. Meanwhile, we learn that the drug lobby is buying millions of dollars of ads in 43 districts where a Democratic candidate stands to suffer for supporting the bill. The doctors’ lobby and the hospitals’ lobby are also on board with the Senate bill.
So the battle at this point is not reformers versus industry, as Obama would have you believe. Rather, it is a battle between most of the health care industry and the insurance companies.
(And the insurers are not opposed to the whole package. On the bill’s central planks — limits on price discrimination, outlawing exclusions for pre-existing conditions, a mandate that employers insure their workers and a mandate that everyone hold insurance — insurers are on board. They object mostly that the penalty is too small for violating the individual mandate.)
Conservatives and Afghanistan
Tomorrow, the Cato Institute will be holding a half-day conference titled, “Escalate or Withdraw? Conservatives and the War in Afghanistan.”
One of the many speakers at tomorrow’s conference will be Rep. John Duncan (R-TN). On the House floor this week, he explained why “there is nothing conservative about the war in Afghanistan.”
Watch:
In the interest of full disclosure, I am not a conservative, and neither are many of my Cato colleagues. This event is intended to highlight that leaving Afghanistan is far beyond Left vs. Right, and that anti-war sentiment is not “owned by peaceniks and pacifists.”
You can come to the event, or watch it live online.
House Procedure–and Transparency in Collapse
Over on the WashingtonWatch.com blog, I’ve laid out in the simplest terms I could what’s going on in terms of procedure with health care overhaul legislation. The post, called “What is Deeming, Anyway?“, comes in at a mere 900 words… If you’re a real public policy junkie, you might like it.
But what about the transparency oriented processes that President Obama and leaders like Speaker Pelosi promised the public? Recall that the Speaker promised to post the health care bill online for 72 hours before a vote back in September.
There was debate about whether she stuck to her promise then. And it was probably a one-time promise. It’s almost certain that she will not do so now. If she lines up the votes to pass the bill, the vote will happen. Right. Then.
What about President Obama’s promise to put health care negotiations on C-SPAN? The daylong roundtable debate on health care was an engaging illustration of what happens when you do transparent legislating. Voters got a clearer picture of where each side stands—and perhaps saw that there actually is some competence on both sides of the aisle. Some competence.
The health care negotiations going on right now are the ones that matter. This is when the most important details are being hammered out. This is when the bargaining that draws the public’s ire is happening. But I’m not seeing it on C-SPAN.
President Obama’s promise may have been naive, but that doesn’t excuse breaking it. The inside negotiations going on this week represent an ongoing violation of the president’s C-SPAN promise.
And there’s good reason to anticipate that the president will violate his Sunlight Before Signing promise as well. This was his promise to post bills online for five days after he receives them from Congress before signing them into law. Read the rest of this post »
Will Kucinich’s Vote Help ObamaCare?
Whether Rep. Dennis Kucinich’s (D-OH) “aye” vote will help pass ObamaCare depends on whether he asked for something in return.
Jane Hamsher of FireDogLake reports, “Kucinich told Obama that he wants a full ERISA waver [sic] and a public option in exchange for his vote.” If he gets either of those things in the reconciliation “fixer” bill, then that will trigger a backlash. His “support” could undermine the whole process.
It really depends on what kind of a negotiator Kucinich is. If he’s a good negotiator, it hurts ObamaCare. If he’s a lousy negotiator, it helps.
AP: Obama Misleads Voters about ObamaCare’s Effects on Premiums
Buyers, beware: President Barack Obama says his health care overhaul will lower premiums by double digits, but check the fine print…
The [Congressional Budget Office] concluded that premiums for people buying their own coverage would go up by an average of 10 percent to 13 percent, compared with the levels they’d reach without the legislation…
“People are likely to not buy the same low-value policies they are buying now,” said health economist Len Nichols of George Mason University. “If they did buy the same value plans … the premium would be lower than it is now. This makes the White House statement true. But is it possibly misleading for some people? Sure.”
Nichols’ comments are also misleading — which makes the president’s statement not just misleading but untrue.
Under ObamaCare, people would not have the option to buy the same low-cost plans they do today. That’s the whole problem: under an individual mandate, everybody must purchase the minimum level of coverage specified by the government. That minimum benefits package would be more expensive than the coverage chosen by most people in the individual market. Their premiums would rise because ObamaCare would take away their right to choose a more economical policy.
Note also that the CBO predicts premiums would rise by an average of 10-13 percent in the individual market. Consumers who currently purchase the most economic policies would see larger premium increases.
Finally, the Obama plan would also force millions of uninsured Americans to purchase health insurance at premiums higher than current-law premium levels, which they have already rejected as being too high. Their premium expenditures would rise from $0 to thousands of dollars. Yet the CBO counts that implicit tax as reducing average premiums, because those consumers are generally healthier-than-average. Only in Washington is a tax counted as a savings.
The Census Asks Too Much
Everyone in America, I presume, has just received a letter from the U.S. Census Bureau urging us to fill out our Census forms. Seems like a very expensive way to tell us to watch for the form to arrive in the mail. But I’m particularly interested in why they say we should promptly fill out the form:
Your response is important. Results from the 2010 Census will be used to help each community get its fair share of [federal] government funds for highways, schools, health facilities, and many other programs you and your neighbors need. Without a complete, accurate census, your community may not receive its fair share.
Obviously this is a zero-sum game. If my neighbors and I all fill out the form, then you and your neighbors will get less from the common federal trough. But at least we’ll be getting our “fair share,” as the letter tells us twice in three sentences.
But where does the government get the authority to ask me my race, my age, and whether I have a mortgage? In fact, the Constitution authorizes the federal government to make an “actual enumeration” of the people in order to apportion seats in the House of Representatives. That’s all. Not to define and count us by race. Not to ask whether we’re homeowners or renters. Just to ask how many people live here, so they can apportion congressional seats.
I’m not interested in getting taxpayers around the country to pay for roads and schools and “many other programs” in my community. All the government needs to know from me is how many people live in my house. And I will tell them.
More on the census and the Constitution here.
Questions for Thoughtful ObamaCare Supporters, Part III
I’ve already posted two series of such queries. But every day brings new questions to mind. So here are a few more:
- What does it say that pharmaceutical-industry lobbyists are meeting with House Democrats to write this legislation behind closed doors? Or that the pharmaceutical industry is preparing to spend millions of dollars on advertisements in support of the legislation?
- Does it trouble you that a former federal judge writes, “Under Article I, Section 7, passage of one bill cannot be deemed to be enactment of another“?
- Does it trouble you that Speaker Pelosi says of the proposed “deeming” strategy, “I like it because people don’t have to vote on the Senate bill“? (Emphasis added.)
- What does it say that left-of-center The Washington Post editorializes that the Democrats’ endgame seems “dodgy” and “threatens to turn into something unseemly and, more important, contrary to Democrats’ promises of transparency and time for deliberation”?
- What does it say about the feasibility of the Obama health plan that Speaker Pelosi is drawn to the “deeming” strategy, which she once opposed in a court of law?
The Bill Is Deemed Passed
Today’s question at Politico Arena is:
Should Democrats be worried that health care could be subject to a successful court challenge?
My response is:
I’m the first in my family not to be a lawyer. But Mike McConnell’s article seems compelling to me. As he notes, Article I, Section 7, of the Constitution requires that a bill must pass both houses of Congress to become a law. Duh. And for those who have trouble with that concept, he goes on: “As the Supreme Court wrote in Clinton v. City of New York (1998), a bill containing the ‘exact text’ must be approved by one house; the other house must approve ‘precisely the same text.’”
So the “deemed passed” rule doesn’t seem to be constitutional. Then the interesting question is, Will the Supreme Court strike down a major piece of welfare-state legislation just because Congress didn’t dot all the i’s and cross all the t’s. After all, some of us think the Supreme Court has failed to strike down legislation whose substance violates the Constitution. Would it be more forthright on a procedural issue? Would it dare to tell the political branches that they can’t have the health-care program they worked on for 14 months, negotiating careful and complicated compromises in both houses?
But then, the reason that Democrats are contemplating such an audacious scheme is precisely that they can’t find a bill that a majority of the House will vote for. So this wouldn’t be like the Supreme Court striking down Franklin Roosevelt’s Agricultural Adjustment Act, which passed Congress quickly and overwhelmingly in May 1933. It would not involve the Supreme Court standing up to the unified political branches. Rather, it would only require the Court to tell Congress that they have to actually pass bills before they become law, which apparently a majority of the House is not prepared to do.
Massachusetts Treasurer Blasts RomneyCare and, Equivalently, ObamaCare
Massachusetts state treasurer and recent Democrat Timothy Cahill has harsh words for the health plan foisted on his state and the identical plan that President Obama is trying to foist on the nation. From The Boston Globe:
“If President Obama and the Democrats repeat the mistake of the health insurance reform here in Massachusetts on a national level, they will threaten to wipe out the American economy within four years,” Cahill said in a press conference in his office.
Echoing criticism leveled by congressional Republicans in recent weeks, Cahill said, “It is time for the president, the Democratic leadership, to go back to the drawing board and come up with a new plan that does not threaten to bankrupt this country.”
[T]he state’s health insurance law…Cahill said, “has nearly bankrupted the state.”
Cahill said the law is being sustained only with the help of federal aid, which he suggested that the Obama administration is funneling to Massachusetts to help the president make the case for a similar plan in Congress.
“The real problem is the sucking sound of money that has been going in to pay for this health care reform,” Cahill said. “And I would argue that we’re being propped up so that the federal government and the Obama administration can drive it through” Congress.
Commonwealth Connector, the independent state agency established to help residents find the health insurance, has “totally failed,” to create competition and connect people with affordable insurance, Cahill said, pointing out that 68 percent of the residents it serves receive subsidized care.
“We haven’t done anything about driving down costs,” Cahill said. “We haven’t helped small business. We haven’t changed the way we pay for health care and the way we deliver it.”…
Asked for solutions today, Cahill said he would seek to “level the playing field” between hospitals that charge different rates for similar procedures, seek to increase competition by allowing health insurance companies plans to sell plans across state lines, and would slash benefits mandated under state law.
For more on the Massachusetts health plan, see “The Massachusetts Health Plan: Much Pain, Little Gain.”
How to Prevent a Fort Hood Shooting
I wrote some posts a few months ago (1, 2, 3) about the difficulty of discovering and preventing essentially random events like the Fort Hood shooting. I was pleased by the compliment security guru Bruce Schneier paid them in his recent post, “Small Planes and Lone Terrorist Nutcases.” (Such happy subject matter we get to write about!)
Now comes Radley Balko with a great column illustrating what you get when authorities try to “get ahead” of this problem. “Pre-Crime Policing” tells the story of a gun buyer who had been tagged with the adjective “disgruntled.” A SWAT team appeared on his property, police tricked him into surrendering for a mental evaluation, they illegally entered his home, and they seized his guns.
Says the victim of these invasions, “South Oregon is big gun country. If something like this can happen here, where just about everyone owns a gun, it can happen anywhere.”
Especially if we ask law enforcement to prevent random violence.
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