Author Archive
What’s Another Taxpayer Liability?
Today’s New York Times includes an excellent article — the first of a series — on the underfunding of state and local government pension plans. Different calculations of the nationwide unfunded liability — which ultimately is the taxpayers’ burden — range from $375 billion to $800 billion.
Times reporter Mary Williams Walsh nicely summarizes the dynamic that creates this liability:
[Public pension plans] are governed by boards that often include municipal labor leaders, whose duty to represent their workers’ interests can easily conflict with their fiduciary duty to represent the plan itself. And even the most exemplary pension boards can be overruled, in many cases, by politicians whose priorities may be incompatible with sound financial management.
In other words, politicians and labor leaders who need political help today make grand promises of future benefits to special interests. But the politicians don’t want to anger taxpayers with the cost of those benefits, so they underfund the promises — after all, the bill won’t come due for years or decades. Between then and now, I suppose we’ll hide under some coats and hope that somehow everything will work out.
On a related note, Jagadeesh Gokhale and Kent Smetters calculate that the present value of the fiscal imbalance for Social Security stands at more than $8.4 trillion and Medicare stands at more than $63.4 trillion.
The Unseen Sighted in Western Maryland
For supporters of limited government, Bastiat’s What Is Seen and What Is Not Seen summarizes our fundamental lament:
When a government official spends on his own behalf one hundred sous more, this implies that a taxpayer spends on his own behalf one hundred sous the less. But the spending of the government official is seen, because it is done; while that of the taxpayer is not seen, because—alas!—he is prevented from doing it.
This difference leads to bigger government because the electorate is lulled into believing that big government offers great benefits to society while limited government and private decisionmaking offer little. If it were not for government, the thinking goes, people could not respond to emergencies, or the poor and unfortunate would have no protection and assistance, or there would be no economic development and community life.
But once in awhile, we can see what usually goes unseen. Credit my hometown of Washington County, Maryland, for a recent example.
Belated Thoughts on “Libertarian Democrats”
In early June, Markos Moulitsas roiled the political blogosphere with a provocative post prophesizing the rise of the libertarian Democrat. My Cato colleagues Gene Healy, Will Wilkinson, and Radley Balko offered replies on Cato@Liberty, and the DailyKos logged some 900 responses to the post. Clearly, Kos had struck a nerve.
After a month of ruminating and at the risk of being too late to the party, here are a few additional thoughts:
All good classical liberals would eagerly agree with Kos about the threat that “government and other individuals” pose to liberty. Good libertarians would be captivated by his paean to the Bill of Rights, including the Second Amendment (and — can we hope? — the Ninth and Tenth). Classical liberals would also join him in rebuking government’s impositions in “our bedrooms and churches” and its ongoing evolution into Big Brother. And good libertarians of all political stripes (not just Blue) would agree with him about the threat that corporations pose to individual liberty, including their pushing externalities onto others. After all, my job at Cato is to manage the institute’s 64-page quarterly criticism of rent-seeking weasels.
Up to this point, all good classical liberals, libertarians, free-market liberals, et al., would be cheering Moulitsas. If there were any hesitation, it would be over his determination to promote libertarian Democrats instead of any office-seeker who is libertarian. If a voter values individual liberty, wouldn’t that person support any candidate who shares that value, and not just candidates who have an “R” or “D” after their names? I assume Kos and all lovers of liberty — and, indeed, all politically thoughtful people — would not be so base as to view candidate party affiliation as either a necessary or sufficient condition for gaining their votes.
But, as Gene and Will both point out, further reading of Kos’s post suggests that his brand of libertarianism may be quite illiberal. Read the rest of this post »
FCC Fading into Irrelevancy
A fun news item for free-marketers who enjoy watching technology make government regulation (and justification for regulation) obsolete: Today’s Washington Post reports that the Internet has so altered media conglomerates’ business models as to make the Federal Communications Commission’s broadcast media ownership limits irrelevant.
Few people know that the FCC has strict rules limiting broadcast media firms’ ownership of various outlets in both local and national markets. A firm that owns TV stations is barred from owning enough stations to broadcast to a majority of the U.S. population, and a firm that owns the largest newspaper in a local market cannot also own the most-watched TV station in that market.
Michael Powell’s FCC tried to relax those rules in 2003, and with good reason. But the courts and Congress stamped out that effort. As the WP explains, media firms have subsequently taken a second look at Internet communications, shaking off Time Warner’s bad experience with AOL and Disney’s with the go.com network.
The result? According to the WP, media firms are finding so many profitable outlets on the Internet that they’re hardly interested in Congress’s and the FCC’s new receptiveness to the idea of relaxing the ownership rules.
AMA Curing Competition, Part Deux
I’ve received a couple of thoughtful e-mails from Dr. Thomas Davis (the Missouri physician, not the legendary basketball coach) concerning my earlier post criticizing the American Medical Association for wanting to rein in the emergence of retailer-based health care clinics. With Dr. Davis’s permission, I’m posting a few of his comments for readers’ consideration.
First, lest anyone want to straw man Dr. Davis as a pro-regulation, anti-market, rent-seeking weasel, he writes:
I would prefer a world where a patient can get any medication over the counter without a prescription, where doctors are not licensed, there is no insurance and patients paid cash at the time of service. Health care would be far more efficient and transparent in such a world.
Foolishness High as an Elephant’s Eye…
Kudos to the New York Times for Sunday’s article critically examining the United States’ dubious infatuation with ethanol. A sample:
For all its allure, though, there are hidden risks to the boom. Even as struggling local communities herald the expansion of this ethanol-industrial complex and politicians promote its use as a way to decrease America’s energy dependence on foreign oil, the ethanol phenomenon is creating some unexpected jitters in crucial corners of farm country.
A few agricultural economists and food industry executives are quietly worrying that ethanol, at its current pace of development, could strain food supplies, raise costs for the livestock industry and force the use of marginal farmland in the search for ever more acres to plant corn. . . .
But many energy experts are also questioning the benefits of ethanol to the nation’s fuel supply. While it is a renewable, domestically produced fuel that reduces gasoline pollution, large amounts of oil or natural gas go into making ethanol from corn, leaving its net contribution to reducing the use of fossil fuels much in doubt.
The article is not without its faults; for instance, it gives an uncritical airing of the opinion that American agriculture should be used for “food first, then feed” for livestock, “and last fuel.” (If the economics are such that demand for ethanol is more intense than the demand for corn chips, then why shouldn’t U.S. corn go to ethanol? Of course, that’s an enormous “if.”) Still, the NYT article is a very welcome departure from the claptrap on ethanol offered by other media.
AMA: We’ll Cure Those Market Forces
It should have been an invigorating story for free-marketers.
Saturday’s New York Times describes how competition from health care clinics in retailers such as Wal-Mart and CVS is pushing traditional doctor offices to be more responsive to customer needs:
Professional societies for family doctors and internists are urging their members to break with tradition by making it easier to schedule appointments — or even making appointments unnecessary in the case of walk-in patients who need immediate attention.
“It’s a big trend,” said Amanda Denning, a spokeswoman for the American Academy of Family Physicians, which has about 94,000 members.
The academy is spending $8 million on consultants who visit doctors nationwide to suggest improvements in patient care. The advice is meant to “keep them from going to an in-store clinic,” Ms. Denning said, while also benefiting doctors by making office procedures more efficient.
Speedier appointments for patients who need immediate attention, more efficient office operations, and (the article later states) increased doctor office revenues as more (satisfied) patients are treated. American health care would certainly benefit from such a shot-in-the-arm.
So, naturally, the American Medical Association wants to perform a competition-ectomy. The Times goes on to report:
At its annual meeting this month, the American Medical Association called on the clinics to accept a list of principles that would limit their scope to simple services and ensure that a physician oversees the operations.
“Patients want quick and easy access to health care services, but they shouldn’t have to worry about the safety and quality of care provided in these clinics,” said Dr. Rebecca J. Patchin, an A.M.A. board member.
Once again, the AMA is making sure health care providers will do no harm . . . to AMA members’ bottom lines.
Mencken Fellows Penn & Teller Take Over TCM Tonight!
Need a cure for a bad case of the Mondays? Tune into Turner Classic Movies tonight, when Cato H.L. Mencken Research Fellows Penn Jillette and Teller take over as special guest programmers.
A quick look at what Penn & Teller have spooled up:
- 8 PM—The Marx Bros.’ underappreciated 1939 film At the Circus
- 9:30 PM—Orson Welles’ controversial 1976 documentary F for Fake, about the brilliant forger Elmyr de Hory
- 11:15 PM—MGM’s disturbing and highly controversial 1932 film Freaks
- 12:30 AM—Neil Simon’s 1975 Vaudeville tribute The Sunshine Boys, starring Walter Matthau and George Burns (with then-little-known F. Murray Abraham in a supporting role).
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