Archive for July, 2010
RomneyCare Advocates: We Swear, This Time Centralized Planning Will Work
You know things aren’t going well in Massachusetts when supporters of RomneyCare write “there’s some evidence that the reforms signed into law by Mitt Romney in 2006 are struggling.” That’s how The Washington Post‘s Ezra Klein puts it in a post defending RomneyCare. The New Republic‘s Jonathan Cohn offers a similar defense.
Klein mentions only a few of the difficulties confronting Massachusetts. Here are a few more:
- The Commonwealth Fund reports that even though Massachusetts already had the highest health insurance premiums in the nation, premiums rose faster post-RomneyCare than anywhere else; 21-46 percent faster than the national average.
- A recent study estimates that RomneyCare has so far increased employer-sponsored health-insurance premiums by an average of 6 percent.
- The success that Klein sees in Massachusetts’ individual market — which accounts for just 4 percent of the private market — is merely the product of shifting costs to workers with job-based coverage.
- Contrary to Klein’s post hoc spin that RomneyCare “was never an attempt to control costs,” Romney himself promised that “the costs of health care will be reduced.”
- Aaron Yelowitz and I find evidence suggesting that uninsured Massachusetts residents are responding to the individual mandate not by obtaining coverage but by concealing their insurance status. Coverage gains may therefore be less than official estimates suggest.
- Evidence is mounting that, despite stiffer penalties than ObamaCare will impose, increasing numbers of people are gaming the individual mandate by only purchasing health insurance when they need medical care. Such behavior could ultimately cause the “private” insurance market to collapse.
Nevertheless, the Klein/Cohn thesis is basically that costs have been climbing and employers have been dropping/curtailing health benefits for decades. So you can’t blame that stuff on RomneyCare. We should instead be thankful that Massachusetts enacted a new raft of government price controls, mandates, and subsidies to protect residents from those features of “the American health-care system.”
The only problem is that “the American health-care system” is the product of the old raft of government price & exchange controls, mandates, and subsidies. The largest purchaser of medical care in the country (and the world) is Medicare. Medicaid is second. The Left complains so much about fee-for-service medicine fueling rising health care costs and reducing quality, you’d never know that their beloved Medicare program is the primary reason for its dominance. Likewise, the reason why employers are dropping and curtailing coverage is that the government turned the private health insurance market into an unsustainable employment-based system that is doomed to unravel. Cohn’s book documents the inhumanity of that system so well, you’d think it would sour him on the sort of centralized planning that created it. I could go on…
RomneyCare and its progeny ObamaCare are attempts by the Left’s central planners to clean up their own mess. If Klein and Cohn want to defend those laws, pointing to the damage already caused by their economic policies won’t do the trick. They need to explain why government price & exchange controls, mandates, and subsidies will produce something other than what they have always produced.
Cato Fellow Defends Your Right to Gamble
My friend and Cato media fellow Radley Balko is currently participating in an online debate on the Economist website, the motion being that “This house believes there should be no legal restrictions on gambling.” Radley is, of course, defending the motion. The first round of arguments is up and voting (and commenting) is open.
Radley was leading by a landslide this morning, but there has been a curious development. Reports Radley:
Interesting. Support from my side went from 85% to 46% in a little over three hours, during which no new arguments were posted. Wondering if a Baptist convention just let out.
The debaters will close their arguments on Wednesday, with the winner announced Friday. Please show your support for civil liberties and for Radley by voting.
Also, the Economist had a terrific special report on gambling last week. Their leader article made a good case for legalizing online gambling in America, but curiously (for a newspaper proudly associated with the free trade cause) did not mention the compelling trade-related reasons to allow Americans to gamble freely online.
The National Standards Delusion
As Massachusetts nears decision time on adopting national education standards, the Boston Herald takes state leaders to task for their support of the Common Core standards, which some analysts say are inferior to current state standards. But fear not, says Education Secretary Paul Reville. If the national standards are inferior, the Bay State can change them. “We will continue to be in the driver’s seat.”
If only national standardizers — many of whom truly want high standards and tough accountability — would look a little further than the ends of their beaks.
Here’s the reality: Massachusetts will not be in the drivers seat in the future. Indeed, states aren’t in the driver’s seat right now, because it is federal money that is steering the car, and many more DC ducats will likely be connected to national standards when the Elementary and Secondary Education Act is eventually reauthorized. And this is hardly new or novel — the feds have forced “voluntary” compliance with its education dictates for decades by holding taxpayer dollars hostage.
With that in mind, let’s stop focusing on whether the Common Core standards right now are good, bad, or indifferent, and talk about their future prospects, which is what really matters. Oh, wait: Most national standardizers avoid that discussion like the plague because they know that the overwhelming odds are the standards will end up either dismal, or at best just unenforced. Why? Because the same political forces that have smushed centralized standards and accountability in almost every state — the teacher unions, administrator associations, self-serving politicians, etc. — will just do their dirty work at the federal rather than state level. Indeed, those groups will still be the most motivated and effectively organized to control education politics, but they will have the added benefit of one-stop shopping!
The tragic flaw in the thinking of many national-standards supporters is not the desire to create high bars for students to clear, but the utter delusion, or maybe just myopia, that allows them to assume that they will control the standards in a monopoly over which, by its very nature, they almost never hold the reins. It’s fantastical thinking that would actually be pitiable were it not for the fact that, to realize their delusional dreams, they have take us all down with them.
Judiciary Committee Approves Big-Government Advocate
Elana Kagan has just sailed through the Senate Judiciary Committee on a party-line vote (except Lindsey Graham, of course, who maintained his respectable but — to my mind – overly deferential “elections have consequences” line). This vote comes as no surprise to anyone who’s been keeping half an eye on the Kagan nomination. The only senator whose position wasn’t obvious after the confirmation hearings was Arlen Specter, who continued his self-serving ways in criticizing the nominee for the majority of an op-ed before announcing that her approval for televised Supreme Court hearings and Thurgood Marshall constituted “just enough” to win his vote. (This is clearly an attempt to curry favor with the administration and become an envoy to Syria—call it a conversion on the road to Damascus.)
The statements made by those opposing Kagan show that this opposition is based not on petty partisanship or the politics of personal destruction but on principled concerns over the nominee’s being a rubberstamp for any assertion of congressional authority. Senator Hatch particularly stands out as someone who’s struggled with the choice before him and honorably decided that Elena Kagan was a bridge too far. Senator Coburn also continued the sound line of reasoning that led his “fruit-and-vegetable” questioning to be the highlight of the confirmation hearings.
Kagan is eminently qualified but it is not at all clear that she sees any constitutional limits on government power.
The Information Economy Stops Evolving Today
That would be the message if a bill introduced in Congress this week were to pass. H.R. 5777 is the “Building Effective Strategies To Promote Responsibility Accountability Choice Transparency Innovation Consumer Expectations and Safeguards Act” or the “BEST PRACTICES Act.” If acronyms were a basis for judging legislation, it should be widely hailed as a masterwork.
But its substance is concerning, to say the least. The bill’s scope is massive: Just about every person or business that systematically collects information would be subject to a new federal regulatory regime governing information practices. By systematic, I mean: If you get a lot of emails or run a website that collects IP addresses (and they all do), you’re governed by the bill.
There’s one exception to that: The bill specifically exempts the government. What chutzpah our government has to point the finger at us while its sprawling administrative data collection and surveillance infrastructure spiral out of control.
Reviewing the bill, I found it interesting to consider what you get when you take a variety of today’s information “best practices” and put them into law. Basically, you freeze in place how things work today. You radically simplify and channel all kinds of information practices that would otherwise multiply and variegate.
I spoke about this yesterday with CNet News’ Declan McCullagh:
Harper says it reminds him of James C. Scott’s book, “Seeing Like A State.” Governments and big corporations “radically simplify what they oversee to make it governable,” he said. “In things like forestry and agriculture, this has had devastating environmental effects because ecosystems don’t function when you eliminate the thousands of ‘illegible’ relationships and interactions. This is Seeing Like a State for the information economy.”
Give people remedies when they’re harmed by information practices, and then leave well enough alone. There’s no place for a list of “must-do’s” and “can’t-do’s” that choke our nascent information economy—especially not coming from a government that doesn’t practice what it preaches.
Abortion, Third-Party Payer, and the Cost of Health Care
A major problem with America’s health care system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining health care. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of health care expenditures. But even a majority of supposedly private health care spending is financed by employer-provided policies that are heavily distorted by a preference in the tax code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of health care costs are financed directly by consumers. And since consumers almost always are buying health care with somebody else’s money, it should come as no surprise that this system results in rising costs and inefficiency. This is why repealing Obamacare is just the first step that is needed if policymakers genuinely want to restore a free market health care system (all of which is explained in this 4-minute video).
Unfortunately, many people think that market forces don’t work in the health care system and that costs will always rise faster than prices for other goods and services. There are a few examples showing that this is not true, and proponents of liberalization usually cite cosmetic surgery and laser-eye surgery as examples of treatments that generally are financed by out-of-pocket payments. Not surprisingly, prices for these treatments have been quite stable — particularly when increases in quality are added to the equation.
I just ran across another example, and this one could be important since it may resonate with those who normally are very suspicious of free markets. As the chart from the Alan Guttmacher Institute shows, the price of an abortion has been remarkably stable over the past 20-plus years. Let’s connect the dots to make everything clear. Abortions generally are financed by out-of-pocket payments. People therefore have an incentive to shop carefully and get good value since they are spending their own money. And because market forces are allowed, the cost of abortions is stable. The logical conclusion to draw from this, of course, is that allowing market forces for other medical services will generate the same positive results in terms of cost and efficiency.
None of this analysis, by the way, implies that abortion is good or bad, or that it should be legal or illegal. The only lesson to be learned is that market forces control costs and promote efficiency and that more government spending and intervention exacerbate the third-party payer crisis.
Last Stand in Massachusetts?
As national education standards continue their hushed and rushed adoption process, there may be only one chance left to significantly slow them down: Massachusetts.
The Bay State is seen by national-standards supporters as having the toughest mathematics and language arts standards in the nation, and if Mass refuses to adopt the Common Core standards on the grounds that they’re not up to the state’s high snuff, then national standards will lose a very high profile state. It certainly wouldn’t be the end of the line for national standards — lots of federal money coercing adoption will see to that — but it would be a relatively high-profile, and maybe even attention-grabbing, loss.
Unfortunately, Massachusetts is on the same eye-blink adoption schedule as every other state trying to get Race to the Top bucks, and its Board of Elementary and Secondary Education will be voting on the standards Wednesday. That’s left almost no time for Bay Staters to imbibe the proposed standards, much less analyze them and absorb the analyses. The Pioneer Institute, though, is doing all it can to shed light on the Common Core standards despite the impossible timeline. Today, it published its analysis of the language arts standards, finding that the extant standards of Massachusetts and California are appreciably higher. Tomorrow, it will dissect mathematics.
The sad reality, though, is that Pioneer is likely fighting a stacked, losing battle. As Pioneer executive director Jim Stergios weaves together in a recent blog post, despite the appearance of objective deliberation, the powers-that-be in Massachusetts have been on the national standards bandwagon from the get-go, and they’ve got everything in line to adopt the Common Core. Real debate and deliberation, disappointingly, was probably never in the cards.
At least, though, Pioneer has been able to fire off some shots. With a little luck, maybe they’ll even get a hit on this hyper-sonic target.
ObamaCare Is Unpopular: a Response to Maggie Mahar
The Century Foundation’s Maggie Mahar is one of the Left’s more knowledgeable and insightful health policy wonks. Today, she blogs about my colleague Michael Tanner’s claim — made in his recent white paper, “Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law” — that ObamaCare, which became law in March, “remains deeply unpopular. Recent polls show substantial majorities support repealing it.” To support that claim, Tanner cites a May poll showing support for repeal at 63 percent.
Mahar says Tanner is “cherry picking”:
Bad Medicine was released July 12. Why didn’t Tanner include June numbers? Instead, he hand-picked the one poll, over a seventeen week span, that shows support for repeal running as high as 63 percent…Indeed, the May 22 poll turned out to be a “bounce”—merely a blip on the screen. Over the next five weeks, the number of respondents who favored repeal fell, while opposition to killing the bill rose.
I’m not sure why Tanner didn’t include more recent numbers, but it may have been because it often takes 6 weeks for a paper to emerge from Cato’s publishing process.
More important, while Mahar is correct that the 63-percent figure is so far the high water mark for repeal, it was hardly “merely a blip.” She herself reports that support for repeal was 60 percent in the very next Rasmussen poll. Nor is it quite accurate to say that support for repeal fell over the next five weeks. Support for repeal reached 60 percent again on July 1, and at no point does Rasmussen show support for repeal falling below 52 percent. In fact, Rasmussen today reports that support for repeal climbed three points to 56 percent in its July 16-17 poll, while opposition to repeal fell by four points to 38 percent. It would be more accurate to say that Rasmussen finds opposition to repeal hovering between 32-42 percent, and support for repeal hovering between 52-63 percent, with no clear trend on either side. But Rasmussen does find far greater intensity on the pro-repeal side: in the July 16-17 poll, 47 percent “strongly favor” repeal, while only 25 percent are “strongly opposed.”
Mahar then selects her own polls to support the Left’s theme that the more Americans learn about ObamaCare, the more they like it. But when we take all available polls into account (as I did earlier today using Pollster.com), we see that opposition to ObamaCare still leads support and the trendline is not moving in the direction Mahar says it is. When we look only at polls of likely & registered voters, opposition to ObamaCare commands a slight majority and leads support by a consistent 9-point margin.
Tanner may have picked the most dramatic numbers, but he didn’t need to. ObamaCare remains deeply unpopular — in spite of Mahar and major media outlets misleading the public by claiming that the law makes preventive care (and other services) available to patients “free of charge.”
Public Transit: A Classic Example of Government in Action
Since 1970, the number of workers needed to operate America’s public transit systems has increased by 180 percent while the inflation-adjusted cost of operating buses, light rail, and heavy rail (the only modes whose costs are known back to 1970) increased by 195 percent. Yet ridership on those modes increased by only 32 percent.
Flickr photo by Bradlee9119.
Each transit worker produced 53,115 transit trips in 1970, but only 26,314 trips by all modes in 2008. The real cost per rider grew by 124 percent, while subsidies (fares minus operating costs) grew by more than 8 times. Though capital cost data prior to 1992 are sketchy, capital costs also grew tremendously, almost certainly by more than operating costs. By any measure, then, transit productivity has declined more than 50 percent. “It’s uncommon to find such a rapid productivity decline in any industry,” noted the late University of California economist Charles Lave.
(All transit data are from the 2010 Public Transportation Fact Book, tables 1, 12, and 38. 1970 dollars adjusted for inflation using the GDP deflator.)
The Washington Post Looks at “Top Secret America”
(Photo by Melina Mara: Washington Post)
Intel-watchers have been waiting with bated breath for the launch of the Washington Post‘s investigative series “Top Secret America,” the first installment of which appeared today, along with a searchable database showing the network of contractors doing top-secret work for the intelligence community. Despite the inevitable breathless warnings that the Post‘s reporting would somehow compromise national security, there’s nothing online as yet to justify such fears, as even the Weekly Standard notes: The information was vetted by intel officials before being posted, and a good portion of it was already in the public domain, if not necessarily collated in such a convenient form. Indeed, writers like Tim Shorrock, author of the invaluable Spies for Hire, have been reporting on the explosion of intelligence contracting for some time now—and in some instances the information you’ll find in Shorrock’s own contractor database is more usefully detailed than what the Post provides.
None of this, to be clear, should at all diminish the enormous achievement of Dana Priest and William Arkin here: The real threat of their damning exposé should be to the job security of intelligence officials and contractors. They paint a portrait of a sprawling intelligence-industrial complex drowning in data they’re unable to effectively process, and choked by redundancy:
Read the rest of this post »
Michael Gerson Calls on Republicans to Stick with Big Government
Last week Washington Post columnist and former George W. Bush speechwriter Michael Gerson took one of his periodic potshots at libertarianism. Tom Palmer and I responded in the Post’s letters column. Since the published letter was shortened for space, here’s a more complete version:
Michael Gerson, who wrote the words that created the George W. Bush administration and thus led to the sweeping Democratic victories in 2006 and 2008, once again warns Republicans to stick to big-government conservatism and avoid the siren song of small-government libertarianism.
This time he describes libertarianism as “a scandal” because it “involves not only a retreat from Obamaism but a retreat from the most basic social commitments to the weak, the elderly and the disadvantaged, along with a withdrawal from American global commitments.” That is, he charges libertarians with a “retreat” from a welfare-state philosophy that is at odds with the American tradition and with basic principles of limited government. Moreover, he charges us with wanting to change a set of policies that have not served the weak, the elderly and the disadvantaged well, because they have encouraged and promoted weakness and long-term dependence. Libertarians warn that to continue down the current road leads to the Greek crisis, in which the utter cruelty of making promises that can’t be kept is revealed. The state will soon have to retreat from the unsustainable commitments and promises that politicians and pundits are blithely making now.
Gerson also charges libertarianism with “rigorous ideological coldness.” He considers reason, arithmetic, and a realistic assessment of what those “commitments” really mean to be “cold.” That tells more about him than about libertarianism.
As for the “global commitments” that Gerson writes such beautiful words about, the real scandal here is that our soldiers have been put in harm’s way all over the world, fighting other people’s battles and deploying deadly force that inevitably kills the innocent, the “collateral damage” that advocates of “global commitments” so conveniently forget. And more broadly, we are all at risk when U.S. foreign policy involves America in foreign quarrels and encourages hatred and terrorism in response to our foreign interventionism.
Gerson’s warfare-welfare state philosophy has given America two wars, serious threats from terrorism, and a $106 trillion unfunded liability. It might be kinder and gentler to try the Founders’ vision, the libertarian vision, of a limited state that provides a framework in which we can all enjoy life, liberty, and the pursuit of happiness.
As we noted in the original draft, Gerson was the intellectual architect of Bush’s “compassionate conservatism,” which came to be better known as “big-government conservatism” — from Bush’s 1999 Indianapolis speech that Ed Crane criticized in the New York Times as “Clintonesque” (worse, he meant Hillary) to his unReaganesque inaugural address to his speeches advancing such triumphs as No Child Left Behind, the Medicare prescription drug program, subsidies to religious groups, the Iraq War, the Bush doctrine, and massive increases in foreign aid. Thus he can also be seen as an architect of the Democratic victories in 2006 and 2008, in which the ideas and policies that he helped to shape were rejected. Now he warns Republicans that they shouldn’t fall for small-government ideas just because their big-government agenda led to a Democratic White House and Congress.
Here’s a response to a previous Gerson attack on libertarianism.
For Gates and Buffett, the Deity’s in the Details
As I write in the San Jose Mercury News today:
Bill Gates and Warren Buffett want the world’s billionaires to donate half their wealth to charity. If they’re successful with just their American peers, they’ll raise about $600 billion — an amount U.S. public schools spend in a single year. And therein lies a problem.
The problem is that one of their chief goals, shared by many of their billionaire peers, is to improve American education — an institution whose ultimate outcomes have not improved in four decades despite the infusion of trillions of additional dollars.
Buffett blames some of our educational woes on a “distorted” market system that rewards great investors ”with sums reaching into the billions,” while it “rewards a great teacher with thank-you notes.”
But the problem is not that our market system is distorted, the problem is that education isn’t part of it.
If we want educational excellence to be replicated and scaled up the way it is in other fields, we have to structure it as we have structured those other fields. Make it possible for the greatest educators to become billionaires, make it necessary for the worst to find different work, and let the former be separated from the latter through the countless choices of individual families.
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