Archive for June, 2011
That’s Not Healthy: Even Krugman Admits Medicare Is a Lousy Program
From today’s health care news:
- Paul Krugman gets Medicare vouchers all wrong, but at least he begins with the premise that Medicare is a lousy program.
- The invaluable web site HealthNewsReview.org dings the World Health Organization for announcing that cell phones may cause cancer without simultaneously releasing the evidence on which they base that conclusion.
- Ryan Lizza thinks RomneyCare’s health insurance Exchange is a “deregulated online marketplace.”
Government Control of Language and Other Protocols
It might be tempting to laugh at France’s ban on words like “Facebook” and Twitter” in the media. France’s Conseil Supérieur de l’Audiovisuel recently ruled that specific references to these sites (in stories not about them) would violate a 1992 law banning “secret” advertising. The council was created in 1989 to ensure fairness in French audiovisual communications, such as in allocation of television time to political candidates, and to protect children from some types of programming.
Sure, laugh at the French. But not for too long. The United States has similarly busy-bodied regulators, who, for example, have primly regulated such advertising themselves. American regulators carefully oversee non-secret advertising, too. Our government nannies equal the French in usurping parents’ decisions about children’s access to media. And the Federal Communications Commission endlessly plays footsie with speech regulation.
In the United States, banning words seems too blatant an affront to our First Amendment, but the United States has a fairly lively “English only” movement. Somehow, regulating an entire communications protocol doesn’t have the same censorious stink.
So it is that our Federal Communications Commission asserts a right to regulate the delivery of Internet service. The protocols on which the Internet runs are communications protocols, remember. Withdraw private control of them and you’ve got a more thoroughgoing and insidious form of speech control: it may look like speech rights remain with the people, but government controls the medium over which the speech travels.
The government has sought to control protocols in the past and will continue to do so in the future. The “crypto wars,” in which government tried to control secure communications protocols, merely presage struggles of the future. Perhaps the next battle will be over BitCoin, an online currency that is resistant to surveillance and confiscation. In BitCoin, communications and value transfer are melded together. To protect us from the scourge of illegal drugs and the recently manufactured crime of “money laundering,” governments will almost certainly seek to bar us from trading with one another and transferring our wealth securely and privately.
So laugh at France. But don’t laugh too hard. Leave the smugness to them.
Unanimous Supreme Court Vindicates Market-Based Fees for Civil Rights Claims
It hasn’t happened that much under my watch, but it’s gratifying when the Supreme Court overwhelmingly endorses Cato’s position in a given case. Not a 5-4 split dependent on what Justice Kennedy had for breakfast or some narrow “win” that doesn’t reach the issues we care most about, but a solid across-the-board victory for our first principles.
But such was the case in Justice Kagan’s (!) opinion for a unanimous Court in Fox v. Vice, in which Cato filed a brief last December that I discussed here:
Private lawsuits challenging government violation of civil rights are notoriously difficult and expensive to bring and win. To address such impediments to the vindication of civil rights, Congress passed a law that, among other things, awards attorneys’ fees to the prevailing parties in certain cases. As noted by the House Judiciary Committee, this was necessary because “a vast majority of the victims of civil rights violations cannot afford legal counsel, they are unable to present their cases to the courts …. [the law at issue, 42 U.S.C. § 1988] is designed to give such persons effective access to the judicial process.” Congress thus harnessed market principles, creating an economic incentive for citizens to vindicate their civil rights directly rather than relying exclusively on enforcement actions by the federal government itself.
In the case of Fox v. Vice, however, the Fifth Circuit ruled that an unsuccessful result on a threshold or procedural matter relating to part of a lawsuit could justify a court order requiring the plaintiff to pay all of the defendants’ attorney’s fees — even those expended to address other, meritorious claims. Such a rule departs from the market-oriented legal structure Congress designed and, if allowed to stand, would significantly harm the ability of plaintiffs to bring private civil rights claims.
Today the Supreme Court essentially agreed 9-0 with our view that (1) the Fifth Circuit’s decision imposes prohibitive costs on civil rights enforcement of civil rights; (2) by prematurely deeming a suit frivolous and ordering the plaintiff to pay the defendant’s fees, the lower court imposed penalties that would shut down legitimate lawsuits midstream; and (3) the Court should not permit fee awards in situations where a plaintiff dismisses a federal claim in order to secure a remand of related state-law claims to state court, contrary to the law’s purpose here.
In short, when a plaintiff’s lawsuit is for both frivolous and non-frivolous claims, a court may grant reasonable fees but only for the costs that a defendant would not have incurred but for the frivolous claims — so no fee awards even for work that goes towards both frivolous and non-frivolous claims. You can read the opinion here.
Thanks to our pro bono counsel at WilmerHale and to the organizations who joined us on our brief: the Liberty Institute, the Independence Law Center, the Institute for Justice, and the James Madison Center for Free Speech.
Obama’s Spending and Palin’s Stumbling
At the Britannica Blog I note Sarah Palin’s misstatement about President Obama’s record on the national debt, and then ask whether that’s the real problem:
Sarah Palin and Michelle Bachmann have both said in recent days that, as Palin put it, ”Look at the debt that has been accumulated in the last two years. It’s more debt under this president than all those other presidents combined.” And they’ve both been rapped by journalistic fact-checkers….
So what’s the real problem here? Is it Bachmann’s and Palin’s exaggeration of Obama’s record on deficits and debt? Or is it President Obama’s unsustainable spending?
Diamond Down
Today Nobel Prize-winning economist Peter Diamond announced he is withdrawing his nomination to the board of governors of the Federal Reserve System.
Professor Diamond, in the pages of New York Times, blames the opposition to his nomination on both partisan politics and what he sees as a misunderstanding of the relationship between unemployment and monetary policy. Mr. Diamond, however, is the one with a fundamental misunderstanding. We all know unemployment is an important issue and needs to be addressed. The question is whether it can be addressed with loose monetary policy. Mr. Diamond apparently believes it can. There are many who believe it cannot. If all our labor market problems could be solved with loose money, then we’d already be at full employment. In case Mr. Diamond didn’t notice, we aren’t. We also have gone down this path too many times before. The belief in a long-run trade-off between unemployment and inflation has the been source of considerable economic harm.
It is interesting that Mr. Diamond does not address the legal obstacles to his nomination. The foremost is that there can only be one board member from the same Fed district at any one time. As Mr. Diamond notes he has been at MIT “since 1966″ and not living in Chicago, as the White House claims. Whatever his academic qualifications, by law he is prohibited from serving on the Fed Board. If congressional Democrats don’t like the law, they can try to change it, but we should not just ignore it. Such only breeds a contempt for the law and a belief that the laws only apply to the masses and not the elite.
So to answer Mr. Diamond’s compaint that ” Nobel isn’t enough,” I would answer: Exactly. A Nobel does not place one above the law. Sorry, Professor, you’re going to have to live with the same rules that apply to the rest of us.
Broken Windows All Over
It reminds us of the need to repeat, and repeat, and repeat the same messages. Tornadoes, diseases, and wars are not good for “the economy.” They may be good for hardware stores, doctors, and military contractors, but not for the rest of us. Still, the New York Times couldn’t help but tell us on the front page that “Reconstruction Lifts Economy After Disasters.”
Frederic Bastiat exploded the fallacy long ago. Here’s a modern (and shorter) retelling:
Congress Debates the Libya War
Better late than never.
The House of Representatives today debated two different resolutions purportedly aimed at forcing the Obama administration to comply with its statutory and constitutional obligations to secure formal authorization for the ongoing military campaign in Libya.
I say “purportedly” because it seems quite clear that the real intent of House Speaker John Boehner’s resolution was to lure away a sufficient number of Republicans who otherwise would have been inclined to vote for Rep. Dennis Kucinich’s (D-OH) measure. Whereas the Kucinich resolution would have compelled the Obama administration to withdraw from all military operations in Libya within the next 15 days, Boehner’s resolution bars the administration from deploying ground troops, but allows current operations to continue. The resolution stipulates that the administration must explain what the U.S. military is actually doing, and calls on the president to justify his decision to launch the campaign without first obtaining congressional approval. Massachusetts Democrat Jim McGovern suggested that a strongly worded press release would have the same effect. Others noted that similar language has already been written into the defense authorization passed late last week.
Boehner’s gambit worked, for now. His resolution carried, with overwhelming GOP support. The House failed to adopt the Kucinich measure, although more Republicans than Democrats voted for the bill. The detailed vote totals for both measures signal a growing willingness on the part of even many Republicans to question the country’s many wars.
Indeed, many were prepared to go beyond merely voting for the measure; about a dozen House Republicans (including resolution co-sponsor Dan Burton of Indiana) spoke out in favor of the Kucinich resolution. Many of these House members seemed quite eager to reassert their authority and to defend the principle of legislative control over the war power, even if that meant allying with one of the most liberal members of Congress.
At one level, it shouldn’t surprise that a number of Republicans voted for the Kucinich resolution. The war is unpopular with the American people, and their elected representatives are reflecting that sentiment. A number of speakers this morning made this point explicitly. But leaving public opinion aside, and conceding that the constitutional question has been practically rendered moot by the parade of presidents and Congresses who have summarily ignored its clear intent, there are ample opportunities for questioning the Libya war on strategic grounds, and not many solid arguments that prove the war to be serving a vital national interest.
ACO Debacle Exposes Obamacare’s Fatal Conceit
That’s the title of my latest Kaiser Health News column. Excerpts:
Obamacare‘s number-one idea for improving health care quality and reducing costs is to promote something called “accountable care organizations” in Medicare. That effort is sinking like a stone, because it – like the rest of this sweeping law – is premised on the fatal conceit that government experts can direct the market better than millions of consumers making their own decisions…
The only way to improve quality while reducing costs is to give patients the incentive and the power to say “no” to inefficient providers. The Medicare reforms that passed the House don’t go as far as they should, but they are a good start.
For one thing, they would do a better job of promoting [accountable care organizations]. The House reforms build on Medicare Advantage, which already gives one fifth of Medicare enrollees the freedom to choose their own health plan. Kaiser Permanente CEO George Halvorson says the new law’s ACO program “is not as good as” Medicare Advantage when it comes to promoting accountable care.
And he should know something about that.
Curricula with an Agenda? It Ain’t Just Big Coal
Today the Washington Post has a big story on efforts by the coal industry to get public schools to teach positive things about — you guessed it — coal. The impetus for the article is no doubt a recent kerfuffle over education mega-publisher Scholastic sending schools free copies of the industry-funded lesson plan “The United States of Energy.” Many parents and environmentalists were upset over businesses putting stealthy moves on kids, and Scholastic eventually promised to cease publication of the plan.
Loaded curricula designed to coerce specific sympathies from children, however, hardly come just from industry, as the Post story notes. Indeed, as I write in the new Cato book Climate Coup: Global Warming’s Invasion of Our Government and Our Lives, much of the curricular material put out at least on climate change is decidedly alarmist in
nature, and is funded by you, the taxpayer. In other words, lots of people are trying to use the schools to push their biases on your kids, which is an especially dangerous thing considering how unsettled, uncertain, and multi-sided so many issues are.
In light of the huge question marks that exist in almost all subjects that schools address, the best education system is the one that is most decentralized, in which ideas can compete rather than having one (very likely flawed) conclusion imposed as orthodoxy. And it would be a system in which no level of government — either district, state, or federal — would decide what view is correct, or what should be taught based on the existence of some supposed consensus, as if “consensus” were synonymous with “absolute truth.” What is truth should not be decided by who has the best lobbyists or most political weight, nor should children be forced to learn what government simply deems to be best.
Of course, there are some people who will decide that they are so correct about something that it would be abusive not to have government force children to learn it. If their conclusion is so compelling and obvious, however, no coercion should be necessary to get people to teach it to their children — it should be overwhelmingly clear. More importantly, if there is controversy, efforts to impose a singular view are likely to fail not just with the children of unbelievers, but for many of the children whose parents share the view. As significant anecdotal evidence over the teaching of human origins has stongly suggested — and new empirical work has substantiated — when public schools are confronted with controversial issues, they tend to avoid them altogether rather than teach any side. In other words, efforts at compulsion don’t just fail, they hurt everyone.
Educational freedom, then, is the only solution to the curricular problem. If you want full power to avoid the imposition of unwanted materials on your children, you must be able to choose schools. And if you want to ensure that your kids get the instruction you think every child should have, everyone else must have that ability, too.
This Week in Government Failure
A fierce storm from Mother Nature killed my Internet connection last Friday (I didn’t see any black helicopters, so I’m assuming it was her). Therefore, the following are issues we focused on over the last two weeks at Downsizing the Federal Government:
- Federal employees enjoy benefits that aren’t available to most private sector workers.
- A bottom-up approach to transportation policy would save taxpayers money and increase mobility.
- Trims to discretionary agriculture programs leads one congressman to channel his inner Harold Camping.
- Education policy: the Obama administration wants a race to the cradle.
- Only six other Republicans voted for Sen. Rand Paul’s plan to balance the budget in five years through spending cuts.
- Two key House Republicans want to halt Amtrak’s dream of high-speed rail in its tracks.
- Chris Edwards on tax cuts, loopholes, and the size of government.
- The federal government’s housing stimulus fails.
Follow Downsizing the Federal Government on Twitter (@DownsizeTheFeds) and connect with us on Facebook.
Friday Links
- “PBS used to ask, ‘If not PBS, then who?’ The answer now is: HBO, Bravo, Discovery, History, History International, Science, Planet Green, Sundance, Military, C-SPAN 1/2/3 and many more.”
- “The fiscal problem that is destroying U.S. economic confidence is not the fiscal balance, however. It is the level of government expenditures relative to GDP.”
- “The Pentagon’s first cyber security strategy… builds on national hysteria about threats to cybersecurity, the latest bogeyman to justify our bloated national security state.”
- “How ‘secure’ do our homes remain if police, armed with no warrant, can pound on doors at will and, on hearing sounds indicative of things moving, forcibly enter and search for evidence of unlawful activity?”
- National debt is driving the U.S. toward a double-dip recession:
Whitewashing the Auto Bailouts
With his appearance at a Toledo factory today, President Obama seems to want to make the auto bailout a campaign issue. Let’s welcome that. Americans should understand what transpired.
Fancying himself “Savior of the Auto Industry,” the president deserves credit only for choosing to insulate two companies (and the UAW) from the consequences of their decisions. But with that credit he must accept responsibility for sluggish U.S. business investment, limited job creation, and the anemic economic recovery, which is due in no small measure to the regime uncertainty that descends from his intervention in the auto industry.
The administration suggests that the entire cost of the auto bailout is captured by the outlays that haven’t or won’t be returned. Despite much smaller claims from the administration, that figure will be about $5.5 billion in Chrysler’s case (the administration is overlooking $4 billion written off when New Chrysler emerged from bankruptcy) and somewhere from $7 to $15 billion in GM’s case (depending on average share price for 500 million shares). Should that loss have to be reported to the FEC on a dollar-per-auto-worker-vote basis?
But the costs are much greater than these outlays.
The most compelling objections to the bailout were not rooted in the belief that the government couldn’t use its assumed power to help Chrysler and GM. On the contrary, the most compelling objections were over concerns that the government would do just that. It is the consequences of that intervention — the undermining of the rule of law, the confiscations, the politically driven decisions, and the distortion of market signals — that animated the most serious objections. Ford never publicly objected to the interventions to rescue its rivals. Do you think Ford may feel entitled to a future bailout if needed, having foregone the recent one? Does Ford think it has a pretty good insurance policy if it takes excessive risks that go awry? This is a cost that’s tough to measure, but an important cost nonetheless.
Any verdict on the outcome of the auto industry intervention must take into account, among other things, the billions of dollars in property confiscated from the auto companies’ debt-holders; the higher risk premium built into U.S. corporate debt as a result; the costs of denying the other, more successful auto producers the spoils of competition (including additional market share and access to the resources misallocated at Chrysler and GM); the costs of rewarding irresponsible actors (like the UAW) by insulating them from the outcomes of what should have been an apolitical bankruptcy proceeding; the effects of GM’s nationalization on production, investment, and public policy decisions; the diminution of U.S. moral authority to counsel foreign governments against market interventions that can adversely affect U.S. businesses competing abroad; and the corrosive impact on America’s institutions of the illegal diversion of TARP funds to achieve politically desirable outcomes.
Let’s make the auto bailout a campaign issue and see if we can’t reconcile all of its costs.
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