A recent story in the Arizona Republic describes the rising practice of using “registered agents” to take care of the paperwork associated with the E-Verify system, which is mandatory for employers in Arizona. Registered agents know how to navigate this system, which requires employers to submit information about their new hires to the federal government for an immigration-status background check. Registered agents are there to step in and reap the rewards when employers throw up their hands.

The story reports that registered agents charge from $7.50 to $10.00 per new hire. There are about 50,000,000 new hires per year in the country (according to Labor Department statistics), and let’s assume that average employer is a little more efficient than those who use a registered agent - so make it $5.00 per new hire. That’s $250,000,000 per year, just on basic administration of the E-Verify system.

There are plenty of other costs to electronic employment elgibility verification, which I wrote about in my recent paper, “Franz Kafka’s Solution to Illegal Immigration.”

At a recent hearing, Representative Ken Calvert (R-CA) reportedly said, “There are certain interests that simply do not want employment verification.” He was referring to an internecine fight with a human resources group. But I found in my paper that “successful internal enforcement of federal immigration law requires an overweening, unworkable, and unacceptable identity system.”

Freedom-loving Americans do not want employment verification. They think it’s doubly or triply foolish to spend taxpayer dollars and burn employers’ time on policies that reduce our economic growth.

Last year, the federal Medicare program announced that — after 40 years of financially rewarding providers who harm patients – it would no longer pay the added costs of treating patients who fell victim to a list of medical errors known as “never events.”  In other words, the providers — doctors, hospitals — will have to eat the costs of their own mistakes. 

As they often do, private health insurance companies are following Medicare’s lead.  WellPoint, Cigna, and other fee-for-service plans have announced that they too will stop paying the added costs that come from “never events.”

In the race to improve health care quality, is government beating the market?  Hardly.

As noted health economist Alain Enthoven and I explain in a recent oped, the market long ago developed payment mechanisms that punish medical errors:

If anything, government prevents markets from improving patient safety. A raft of government interventions favor fee-for-service medicine and inhibit competition by plans with greater incentives to reduce errors. Medicare, the nation’s largest purchaser of medical services, is almost entirely fee-for-service. Federal and state tax laws give larger tax breaks to people or groups that choose more costly care, and favor employer-based coverage, which usually denies workers the ability to choose their health plan.

Government regulation of health insurance and medical professionals further inhibit competition by such plans.

If you want to know why medicine isn’t better, cheaper, and safer, look no further than your own government.

Inspired by the promotional brochure I recently came across, I’ve taken a look at L-1 Identity Solutions in a new Cato TechKnowledge. Though it has better options, L-1 and its new acquisition, Digimarc ID Systems, seem likely to continue lobbying for the REAL ID Act. My concluding line: “A corporate lobbying operation can do as much harm to liberty as any government agency or official.”

Cato Unbound’s May edition discusses the resource curse. Numerous studies confirm that countries rich in natural resources tend to be poor in property rights, individual liberty, and the rule of law. Is this just a deep, and deeply depressing, feature of the world we live in? Or can wealthier countries (which make up the market for most of these resources) and international institutions somehow intervene to alleviate or even lift the resource curse?

Philosopher Leif Wenar opens up the discussion by charging that you — yes you — are almost certainly the recipient of stolen goods, resources that clearly shouldn’t have belonged to the dictators who first sold them. Wenar then offers a simple but provocative solution to the resource curse, one that will hold kleptocracies responsible for their thefts.

The discussion will feature Cato senior fellow Andrei Illarionov, the former chief economic advisor to Vladimir Putin;  journalist and historian John Ghazvinian, author of Untapped: The Scramble for Africa’s Oil; and Washington University political philosopher Christopher Wellman, an expert in matters of international justice.  Could Wenar’s proposal succeed?  What are the obstacles along the way?  What else, if anything, can developed countries do to end the resource curse?  Be sure to check out Cato Unbound throughout the week, as discussion develops over one of the most pressing humanitarian issues of our time.

I’ve got an oped in today’s Orange County Register on congressional efforts to smother health savings accounts (HSAs) in the cradle:

In April, House Democrats passed legislation that would impose onerous and unnecessary reporting requirements on people with tax-free health savings accounts . . . what really bothers them is the fact that HSAs let workers control their own money.

Read all about it here.

Read about letting workers control all their health care dollars here.

A couple of weeks ago, I wrote about a legal permanent resident who was arrested because he shared a common name with a suspected illegal immigrant. It illustrated how the E-Verify program would foul things for legal workers, a prominent subject of this paper.

Here’s another story of legal permanent resident mistreatment. This illustrates how overblown terror fears can cloud officials’ judgments and foul things for . . . well, everyone.

It seems that a woman in Florida asked her relatives in Monterrey, Mexico to ship her the birth certificates of two relatives who want to apply for their Mexican passports at the consulate in South Miami. At the behest of U.S. Customs and Border Security, the envelope is being held by the United Parcel Service in Louisville, Kentucky until she identifies herself further.

Asked to explain, a CBP spokeswoman in Washington asserted the U.S. government’s right to examine everything entering or exiting the country and said, “Identity documents are of concern to CBP because of their potential use by terrorists.”

This is a terrific example of poorly generated suspicion. In our paper on predictive data mining, Jeff Jonas and I wrote about how suspicion is properly generated in the absence of specific leads: “[T]here must be a pattern that fits terrorism planning . . . and the actions of investigated persons must fit that pattern while not fitting any common pattern of lawful behavior.”

(more…)

Nearly two years after its release, David Hyman’s satire Medicare Meets Mephistopheles is still generating reviews — and controversy. 

In the April 2008 issue of the Michigan Law Review, Michigan law professor Jill Horwitz raves:

Hyman is extraordinarily knowledgeable about health care regulation and his exposition is succinct. The book is filled with informative and accurate summaries of Medicare’s complicated program design and related laws. The summaries of fraud and abuse law, for example, make my heart sing. I’ve seldom seen such an accessible and accurate primer.

It would be a stretch, however, to claim that Horwitz and Hyman see eye-to-eye.  Horwitz concludes her 19-page review thus:

Medicare Meets Mephistopheles is a terrific overview of a troubled system, but a missed opportunity to help reform Medicare. Providing health care fairly and efficiently is a complicated process that necessarily involves a heavy dose of government. Libertarian railing against big government, regulation, and all lefty foolishness that market proponents despise doesn’t get one very far in determining how to get health care to 300 million people. In the end Hyman doesn’t offer any realistic alternative to this government-regulated muddle because, God knows, his plans are unacceptable anywhere but in hell.

Ay caramba!

Consider the following:

1. Research suggests the federal Medicare program spends as much as $100 billion per year on medical care that makes seniors neither healthier nor happier.
2. Medicare’s payment system continues to reward low-quality and even harmful medical care.
3. The trustees of the Medicare program have issued yet another annual report containing dire warnings about Medicare’s financial sustainability, including an unfunded liability of $86 trillion.
4. According to economist and former Medicare trustee Tom Saving, Medicare alone will require tax rates to rise by 25 percent within a generation, and to double within 75 years, absent reform.  
5. The picture is far worse than it was when politicians were developing fundamental Medicare reforms 10 years ago.

You would think that Medicare reform would be a high priority for politicians.  You would be wrong. The president has proposed reforms that would barely slow the program’s growing dependence on general revenues — a proposal that Congress has largely ignored. The leading presidential candidates advocate tweaks — such as reducing payments for private plans and prescription drugs, or tying payments to quality measures — rather than fundamental reforms.

To help get the politicians focus on this crucial issue, the Cato Institute will host a policy forum on Thursday, May 15, titled, ”Whatever Happened to Medicare Reform?”  Tom Saving, the Commonwealth Fund’s Stuart Guterman, and I will discuss the current state of the Medicare program, and how the program needs to be reformed.  The forum will run from 12pm to 1:30pm. 

Click here to register.

Market-oriented health-care wonks have proposed various ways of reforming the tax treatment of health insurance that would level the playing field between job-based coverage and coverage that consumers purchase directly (i.e., on the “individual” market).  The key to those proposals is that they would let workers control money their employer now controls, and generally would allow workers to spend those earnings on the mix of medical care and health insurance that meets their needs. 

The political Left typically protests that if workers had the freedom to spend their earnings however they want, the multiplying villainies of the market would swarm upon the sick, leaving them with no insurance coverage.  For example, Elizabeth Edwards and others chide Sen. John McCain because, they claim, people with chronic conditions could not obtain health insurance in an unregulated individual market.  Edwards even wrote: “The insurance company makes money when it doesn’t have to pay for our health care. (I suspect that if they could, they would write obstetrical-only policies for nuns.)”

An economist at the University of Pennsylvania named Mark Pauly spends much of his time collecting evidence — I repeat, evidence — that this view does not reflect the reality of unregulated health insurance markets.  Pauly and his colleagues have found:

[A]ctual premiums paid for individual insurance are much less than proportional to risk, and risk levels have a small effect on obtaining coverage. States limiting risk rating in individual insurance display lower premiums for high risks than other states, but such rate regulation leads to an increase in the total number of uninsured people. The effect on risk pooling is small because of the large amount of risk pooling in unregulated individual insurance.

and

[T]here was substantial cross-subsidization of high-risk by low-risk persons in the individual insurance market in a period in which there was only minimal state regulation. Premiums do rise with risk, but the increase in premiums is only about 15 percent of the increase in risk. Premiums for individual insurance vary widely, but that variation is not very strongly related to the level of risk.

A new Health Affairs Web Exclusive by Pauly and colleague Robert Lieberthal offers further evidence that a freer market would provide high-cost patients more protection than today’s government-created employment-based system.  Pauly and Lieberthal write:

[A] young high-risk male who initially had small-group coverage faces a 44 percent chance of becoming uninsured in the next period—a risk nearly twice as great as it would be if he initially had individual insurance.  Somewhat ironically, the usual blame for such a person’s lacking coverage will be laid at the door of the medically underwriting individual insurer, which quotes a high premium, rather than being referred in part to the group insurance system that plunged this person into such a vulnerable situation in the first place.

Thus, it is not true that more freedom would mean no health insurance for people with costly medical conditions.  Provided consumers insure while they are still healthy, individual-market coverage offers as much or more protection to high-cost patients than they have now.

In the transition to a level playing field between employer-sponsored and individual-market coverage, there may be some people with high-cost conditions who lose their existing coverage, and cannot obtain subsequent coverage.  If that occurs, most Americans will want to offer some form of subsidy to those hard cases — a group that does not include wealthy people like Elizabeth Edwards, John McCain, or Jay Cutler.  

When fashioning those subsidies, policymakers should bear two things in mind.  First, as Pauly’s work suggests, this is likely to be a temporary problem; markets can and will cover tomorrow’s high-cost patients.  Second, policymakers should not try to force insurance markets to provide the desired subsidies; that would undo the substantial good that unregulated insurance markets can achieve.

Bill Eilberg, a Club for Growth member who attended Cato University last year, sent this review into the Club blog:

I’m not one who easily sits through lectures, but at Cato University, I can honestly tell you that my attention span was at its highest level, as I listened more intently than I ever had done in college or law school.

I note that Rob McDonald is on the faculty again this year. Rob is one of the most talented speakers one will ever hear. His discussions on American history are positively riveting. I will never forget listening to his poignant account of how George Washington quelled a potential revolt by his officers, taking out his reading glasses to quote from a text (it is a story you may have heard already, but Rob is a master at retelling it). If I had the opportunity, I could listen to him for hours.

Bill is certainly right. Cato University gets rave reviews every year. Once again this July, it will be held at the beautiful Rancho Bernardo Inn near San Diego. Speakers will include Tom Palmer, Peter Van Doren, Gene Healy, and Michael Cannon of Cato. Reporting from around the world will be former Putin adviser Andrei Illarionov, German economist Karen Horn, elcato.org editor Gabriela Calderon, and Zimbabwean opposition leader Rejoice Ngwenya. And reporting from 1776, the aforementioned Professor McDonald.

Sign up now.

Last week, Minnesota Governor Tim Pawlenty (R) vetoed a transportation bill that included a provision objecting to the federal REAL ID Act. The bill would have required the federal government to pay 95 percent of the cost of issuing national IDs before Minnesota would participate. Claiming political machinations were afoot, Pawlenty said that he preferred “something more reasonable like 50 or 60 percent.” One wonders what principle of federalism, liberty, or privacy could possibly support his willingness to accept a 50% unfunded surveillance mandate.

A much clearer vision will be on display next week when Governor Mark Sanford (R-SC) joins Senator Jon Tester (D-MT) here at the Cato Institute to discuss the REAL ID Act. South Carolina has barred itself from participating in the national ID system created by the Act, and Governor Sanford defiantly refused to ask the Department of Homeland Security for an extension of the compliance deadline earlier this year.

Senator Tester represents a state that has been similarly defiant. He is an original cosponsor of legislation that would repeal the REAL ID Act and restore the identification security provisions of the Intelligence Reform and Terrorism Protection Act, which REAL ID repealed.

The event is called The REAL ID Rebellion: Whither the National ID Law?, next Wednesday, May 7th, at noon, and it will be Webcast.

Arizona’s law requiring employers to use the federal government’s “E-Verify” system to check workers’ immigration status has employers there “confused by the law’s requirements and ‘terrified’ at the prospect of losing their business licenses if they run afoul of its provisions,” according to a local chamber of commerce official.

My recent paper on electronic employment verification calls it “Franz Kafka’s solution to illegal immigration.”

Former U.S. Senate Majority/Minority Leader Tom Daschle (D-SD) says no way, Jose. 

In a recent interview about his new book, Daschle stressed:

Congress is just not capable of being the manager of a health care system and yet it’s largely Congress today that has that responsibility. It hasn’t worked for the last 50 years. It’ll work even less in the next 50.

Thus Daschle advocates creating a Federal Health Board to manage this $2 trillion chunk of the U.S. economy. 

Where does he look for a model of this type of centralized planning agency?  Quoth Daschle:

I believe that the connector idea is really the Massachusetts version of the Federal Health Board. I like a lot of what the connector is all about.

At a recent health policy forum in Washington, D.C., noted health economist and wit Uwe Reinhardt shed some light on that question:

[T]he following can be said: the United States Congress has absolutely no interest in reducing . . . dubious Medicare expenditures. Let me repeat that. The United States Congress has no interest whatsoever in reducing dubious Medicare expenditures . . .

So the interesting and intriguing question for all, for journalists too, [is]: why is the Congress so disinterested in cost containment when it constantly whines about having to restructure Medicare? That is to me a huge mystery.

Obviously, Prof. Reinhardt hasn’t read this.

Writing in The Wall Street Journal, Arizona Gov. Janet Napolitano (D) recently complained that the Bush administration is abandoning federal spending commitments, “cost-shifting to the states,” and creating budget deficits in states like Arizona.

In companion letters to the editor of today’s The Wall Street Journal, the Goldwater Institute’s Darcy Olsen and I inquire as to the color of the sky on planet Napolitano.

Olsen writes, in part:

Like most of the southwest, Arizona has been rolling in cash thanks to historic economic expansion. Three of the past five years saw double-digit percentage budget growth. But instead of reducing the tax burden or saving for a rainy day, state government ballooned 40% in real terms. Arizona now finds its per capita state spending on a par with Massachusetts.

Only 21 states went into the red this year, and Arizona led the way with the largest budget deficit of any state on a per-capita basis.

States can unilaterally opt out of some federal programs, like No Child Left Behind. Most governors can also reduce agency spending through executive action. Arizona did none of these things.

Meanwhile, I tackle Napolitano’s argument that restraining federal Medicaid and SCHIP spending amounts to “cost-shifting”:

Medicaid and SCHIP allow Arizona politicians to subsidize Arizona residents (and Arizona health-care providers), while shifting most of the cost to taxpayers in other states.

Gov. Napolitano opposes the administration’s policy not because it would increase cost-shifting, but because it would reduce her ability to shift those costs to other states.

Medicaid and SCHIP: socialism for state politicians.

I recently had the opportunity to conduct a pair of briefings for congressional staff regarding electronic employment eligibility verification. A pair of bills are vying for the attention of Congress these days. I suggested in my recent paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” that Congress should ignore both. Indeed, it should eliminate “internal enforcement” of immigration law entirely.

One of my co-briefers provided staffers with some interesting information pertaining to the idea of building a regulatory contraption for automatic nationwide verification of workers’ identity and immigration status. He was a representative of SSA workers from the American Federation of Government Employees, National Council of SSA Field Operations Locals.

The programs slated to go national under these proposals would compare data about new workers (and in some cases, existing workers) with databases at the Social Security Administration and the Department of Homeland Security. When the data didn’t match, workers would receive what is called a “tentative nonconformation.” With the 4.1% error rate in SSA files (as found by its Inspector General), that’s a lot of tentative nonconfirmations going even to law-abiding American citizens. A higher percentage of the time, naturalized citizens would get them, too, as government data about them is even more error-prone. Bad government data is just one source of error.

Anyway, when a tentative nonconfirmation is issued, employers are supposed to communicate this to the employee (not all do) and the worker is supposed to report to a Social Security Administration office or the Department of Homeland Security to clear the problem up. This is where the interesting new information comes in.

What would the process be like? Well, try calling your local SSA field office to find out. The SSA worker rep reported that 50% of those calls aren’t answered because field offices are too busy. Calls to the SSA’s national 800-number don’t go through 25% of the time.

It’s not just a phone problem. The agency currently has a backlog of 752,000 on disability rulings. That’s three quarters of a million people who aren’t getting an answer from SSA. It takes 530 days – a little under a year and a half – to get a disability ruling out of SSA.

In my paper, I wrote about the experience American workers would get at the Social Security offices when they went to clear up their tentative nonconfirmations:

Disputes of tentative nonconfirmations would not happen in lushly carpeted offices with marble columns, hot coffee, and friendly, attentive staff. The experience of American workers when they sought permission to work would be much more like their trips to the nation’s departments of motor vehicles, post offices, and dentists—long lines, unfriendly service, and painful procedures.

The SSA union rep assures me that SSA workers are friendly. Any perception of unfriendliness is due to overwork. Fair enough; I may have been slapdash in my writing about SSA employees. But a national electronic employment eligibility verification system would result in 3.6 million new visits to these folks, overworking them and eroding their courtesy even more. These visits, and administering tentative nonconfirmations at SSA, would cost $1 billion, according to the union rep.

Of course, an SSA employee union rep would happily take the money and add workforce to do whatever Congress wants. My preference is to save the money. Enforcement of our abnormally restrictive immigration law causes us to spend taxpayer money on undermining the productive economy. That shouldn’t make sense to anyone.

The Supreme Court has rendered its decision in Crawford v. Marion County Election Board. This is the case challenging Indiana’s voter ID requirement.

Briefly, the plaintiffs in the case did not establish sufficient proof of the burden on voting that the ID requirement would have. This was a facial challenge to the statute, and there was no plaintiff who had actually been dissuaded or prevented from voting. Sayeth the court:

[O]n the basis of the record that has been made in this litigation, we cannot conclude that the statute imposes “excessively burdensome requirements” on any class of voters.

There was also no evidence that Indiana has ever been victimized by impersonation at the polling place, which a voter ID requirement would help thwart, but in a facial challenge to a law like this, courts will defer to the state’s interests in deterring and detecting voter fraud, and in safeguarding voter confidence.

Advocates of voter ID will interpret this as a ringing endorsement, but it’s an unsurprising result. Hopefully, they won’t pursue a national voter identification requirement. In a recent TechKnowledge column inspired by the case, “Voter ID: A Tempest in a Teapot that Could Burn Us All,” I wrote:

A national registration system for voting would quickly be repurposed and used for many other kinds of regulatory control. There is no shortage of proposals for national registration and control of citizens. Should the voter ID tempest in a teapot boil over, the tiny specter of voter fraud could thrust a mandatory national ID into the hands of law-abiding citizens.

The Constitution gives Congress power to regulate the elections that select its members and, to a lesser degree, the president. But Congress does not have to use that power to its fullest extent. States recognize their own interests in fair elections, and they should experiment among themselves with ways to secure elections while making sure the vote is available to all qualified people.

The 2008 Milton Friedman Prize for Advancing Liberty has been awarded to Yon Goicoechea. Goicoechea was a key leader of the Venezuelan student movement that rallied the country to vote down Hugo Chavez’s referendum on a constitutional change that would have turned Venezuela into a socialist dictatorship. More on Yon here, as well as information on the gala May 15 dinner in New York at which the Prize will be presented.

It’s interesting to reflect on the diversity of the first four recipients of the Prize. The first Prize in 2002 went to Peter Bauer, presumably in recognition of his lifelong scholarship on development economics and the sources of wealth. (I say “presumably” because the Selection Committee doesn’t formally explain its decisions. But the announcement of the award referred to “his pioneering work in the field of development economics, where he stood virtually alone for many years as a critic of state-led development policy with its emphasis on central planning and external foreign aid.”)

The second Prize went to Hernando de Soto, an author of two books on economics but more importantly a tireless crusader and activist on behalf of poor people and their need for property rights.

The third Prize, in 2006, went to Mart Laar, the youngest prime minister in the history of Estonia, who led his country out of the Soviet Union and into the European mainstream. He slashed taxes and transfer payments, privatized state agencies, liberalized international trade, and created one of the fastest-growing economies in the world, dubbed the “Baltic Tiger.”

And this year the Prize goes to a young man who is not–not yet, at least–a scholar, an author, or an elected official. He’s just a law student who stood up when others wouldn’t and helped to create a movement that prevented a strongman from becoming a dictator.

I think the diversity of the recipients reflects the many ways in which liberty must be defended and advanced. People can play a role in the struggle for freedom as scholars, writers, activists, organizers, elected officials, and many other ways. Some may be surprised that a Prize named for a great scholar, a winner of the Nobel Prize in Economics, might go to a political official or a student activist. But Milton Friedman was not just a world-class scholar. He was also a world-class communicator and someone who worked for liberty in issues ranging from monetary policy to conscription to drug prohibition to school choice. When he discussed the creation of the Prize with Cato president Ed Crane, he said that he didn’t want it to go just to great scholars. The Prize is awarded every other year “to an individual who has made a significant contribution to advance human freedom.” Friedman specifically cited the man who stood in front of the tank in Tiananmen Square as someone who would qualify for the Prize by striking a blow for liberty. Yon Goicoechea not only stood in front of the tank, he stopped it. Milton Friedman would be proud.

I notice that the Prize has gone each time to someone almost a generation younger than the previous recipient. I’d guess that trend won’t continue, unless President Obama’s daughter convinces him to privatize Social Security.

According to HealthLeaders Media:

South Carolina-based Companion Global Healthcare added three Singapore hospitals to its network. The deal now allows Americans access to medical and surgical services at ParkwayHealth operated hospitals at pre-negotiated, in-network rates lower than those of U.S. hospitals…

David Williams, consultant and cofounder of MedPharma Partners LLC[, notes,] “It may be a bit of a wake-up call to the local hospitals in South Carolina, putting them on notice that they are facing a broader set of competitors.”

More than one million members of Blue Cross Blue Shield and BlueChoice HealthPlan of South Carolina now have access to the three Singapore hospitals—Mount Elizabeth, Gleneagles, and East Shore—at preferred network rates. The hospitals are accredited by the Joint Commission International, the affiliate of The Joint Commission.

Competition is healthy.  (You know what?  That’s catchy.)

Prepare for more of this if electronic employment eligibility verification goes national. Reports Dianne Solís of the Dallas Morning News:

Federal immigration agents executing arrest warrants for workers at the Pilgrim’s Pride poultry plant in Mount Pleasant arrested the wrong Jesus García at his home near the plant – despite his repeated assurances that he was a legal permanent resident.

Immigration and Customs Enforcement agents targeted workers at Pilgrim’s plants in Texas and four other states, and by Thursday, had arrested 311 workers on identity fraud charges or immigration violations.

. . .

“We think it is a case of mistaken identity,” said Fernando Dubove, Mr. García’s attorney. “It is the wrong Jesus García. It is really tough when you have a common name.”

This is probably just coincidence, but were an electronic employment eligibility verification system in place, illegal immigrants would affirmatively pursue this as a strategy, deepening the simple identity frauds they commit now to get ‘legal’ employment. They would acquire proof of identification as good or better than the true holder of a given identity.

In my recent paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” I discussed what would happen when mistaken identity/identity fraud situations arose in the EEV systems now being debated on Capitol Hill:

[L]aw-abiding citizens would regularly stand accused of identity fraud. The SSA and DHS would not know which user of a name-SSN pair was the genuine person and which was using a false identity. EEV would tentatively nonconfirm all users of that name-SSN pair. The “true” individuals attached to fraudulently used identities would learn of identity fraud in their names when they were refused work by EEV and plunged into a bureaucratic morass.

Luckily, these victims of the system would just be denied employment and not arrested - if that’s your idea of luck . . .

I was pleased a couple of months ago to point out where presidential candidate Senator Barack Obama (D-IL) had distinguished himself and gotten it right on whether driver licensing should be linked to immigration status. The use of driver licensing for immigration enforcement is a major impetus behind the national ID system that our country should rightly avoid.

Such pleasures don’t last. The senator published an opinion piece in the Charlotte Observer this week calling for a “mandatory electronic system that enables employers to verify the legal status of their employees within days of hiring them.”

It is very hard to hold both positions. As I pointed out in my recent paper on electronic employment verification, it is nearly impossible to “strengthen” internal enforcement of immigration law through EEV without creating a national identification system:

[T]he things necessary to make a system like this really impervious to forgery and fraud would convert it from an identity system into a cradle-to-grave biometric tracking system. Almost no way exists to do national EEV that is not a step down that road.

Perhaps Senator Obama would implement an EEV system with a federally issued national ID card rather than the driver licensing system. (That’s not a good option either.) Perhaps he’s devised a credentialing system that allows people to prove eligibility to work under current immigration law without a national ID. (Such things are possible.) Most likely, the senator has expressed two pretty much irreconcilable positions.

My colleagues Gene Healy and Justin Logan catalogue some of Sen. John McCain’s less admirable policies below, but at the risk of being the skunk at the dinner party, today I have released a paper arguing that John McCain’s trade policy position is much preferable to that of either of the Democratic candidates.

Over his career in the Senate, McCain has been a consistent free trader, voting against increases in trade barriers 88 percent of the time, and against subsidy increases 80 percent. Senators Clinton and Obama, on the other hand, have only managed 31 (Clinton) and 36 (Obama) on tariffs and 14 (Clinton) and zero (Obama) on subsidies. (For all congresscritters’ trade votes, see here).

To his credit, Senator McCain has also avoided the easy and politically tempting practice of railing against trade deals on the campaign trail, including in Michigan where the political prize probably required it. Both the Democratic candidates, however, turned to an unseemly debate on who hated NAFTA the most in Ohio, and may be tempted to do so again while campaigning in Pennsylvania.

Expect the Democratic candidates’ rhetoric on trade policy to degenerate, by the way, as economic conditions worsen.

. . . strips away privacy before it goes to work.

Here’s a nice, discrete example: S. 2485, introduced in the U.S. Senate last week, would require asset verification of participants in State Medicaid programs, exposing the personal information held by financial institutions to government access.

This privacy loss is a natural outgrowth of entitlement programs. It’s nearly mandated by the simple and warranted effort to reduce waste, fraud, and abuse.

My 2004 Policy Analysis, “Understanding Privacy - and the Real Threats To It,” explored how entitlement programs almost always carry with them a significant privacy-cost:

To provide benefits and entitlements—and, of course, to tax—governments take personal information from citizens by the bushel. Nearly every new policy or program justifies new or expanded databases of information—and a shrunken sphere of personal privacy.

Before and after Gov. Mitt Romney (R) signed into law the Massachusetts health care reforms of 2006, Cato scholars predicted that this attempt at central planning would fail.  Both Michael Tanner and David Hyman predicted that the cost of the reforms would exceed projections.  The Boston Globe recently reported:

The subsidized insurance program at the heart of the state’s healthcare initiative is expected to roughly double in size and expense over the next three years - an unexpected level of growth that could cost state taxpayers hundreds of millions of dollars or force the state to scale back its ambitions. 

State projections obtained by the Globe show the program reaching 342,000 people and $1.35 billion in annual expenses by June 2011. Those figures would far outstrip the original plans for the Commonwealth Care program . . .

The state has asked the federal government to shoulder roughly half of the program’s cost from 2009 through 2011, but there is no guarantee of that funding. 

“The state alone cannot support that kind of spending increase,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded budget watchdog group. 

I predicted that shifting uncompensated care subsidies to insurance subsidies wouldn’t much reduce uncompensated care.  The Globe reports:

[Romney] has repeatedly suggested that the state could insure low-income residents largely by reallocating money paid to hospitals and health centers that serve the uninsured . . . As more uninsured residents were covered, the state had expected to shift hundreds of millions of dollars from free care to insurance subsidies, but the drop has been slower than predicted.

David Hyman noted that “the Massachusetts plan does nothing to control the cost of health care—and health care in Massachusetts is already pricey because of the heavy reliance on teaching hospitals and academic medical centers.”  I wrote, “An individual mandate would not fix our broken health care system.  It would simply pump more money into that system. ”  The Globe reports:

Even with federal backing, the state may not be able to afford the insurance initiative as designed, because the law did not make any attempt to trim wasteful health spending, said Alan Sager, a Boston University professor who specializes in healthcare costs.

The Globe also notes, “There has been no discussion of a tax increase to pay for the healthcare plan.”  So far.

Other states (and the District of Columbia) should take note.

Prof. Sherry Glied is chair of the Department of Health Policy and Management at Columbia University’s Mailman School of Public Health.  In this week’s New England Journal of Medicine, she gives a fair account of the difficulties of forcing people to purchase health insurance via an “individual mandate.”  Glied writes that an individual mandate “may require a degree of intrusiveness and bureaucracy that some will find unpalatable,” and, “The risks associated with individual mandates suggest that they are no panacea.”

Her closing observation, though, is novel and particularly noteworthy:

Perhaps the most important benefit of mandates is symbolic. By mandating the purchase of health insurance, governments signal to their citizens that coverage is critical. For many uninsured people as well as their families, communities, and elected representatives, this public commitment to coverage may lead to a reassessment of priorities. Although making mandates functional will be demanding, just passing a mandate may serve an important purpose by moving health insurance higher on the agendas of all these constituencies.

This illuminates a driving force behind mandates.  Advocates do not merely want to improve health and longevity.  They want to change other people’s values.  They want to make the uninsured value health and longevity more than the things that must be sacrificed to comply with the mandate — things like barhopping, education, starting their own business, etc.  And they are willing to use coercion (or the threat of coercion) to do so.  The debate over mandates is not just about how to reform health care.  It is also about who shapes your values.

No wonder there are so many people in the health care industry who support mandates.

In April of 1983, the Ronald Regan-appointed National Commission on Excellence in Education released a landmark study, “A Nation at Risk: The Imperative for Educational Reform,” which diagnosed the ills of American education and set forth a list of prescriptions for fixing what seemed to be flailing educational system. It’s been twenty-five years now since the report. So how are we doing? And what, if anything, should we be doing differently? These are the questions we’ll be asking in this month’s edition of Cato Unbound, “Can the Schools Be Fixed?”

This month’s lead essay comes from Richard Rothstein, a former national educational columnist for the New York Times and research associate of the Economic Policy Institute, who offers a fresh, critical assessment of “A Nation at Risk” and the lessons we can draw from its fate. The public schools aren’t as bad as many think, Rothstein argues, and the report oversold the importance of the education system for America’s economic competitiveness and success.

Today, Michael Strong, co-founder of FLOW, education entrepreneur, and former charter school principal, chimes in with a stirring brief for the freedom to innovate in education.

Stay tuned for contributions from Sol Stern, a senior fellow at the Manhattan Institute who recently made waves with his article “School Choice Isn’t Enough,” and from Frederick Hess, the director of Education Policy Studies at the American Enterprise Institute.

If that’s not enough for all you education reform junkies, be sure to tune in to next week’s Cato forum on “Markets vs. Standards: Debating the Future of American Education.” You’ll learn something.