Archive for the ‘Cato Publications’ Category
Free Deirdre McCloskey E-Book from University of Chicago Press
Every month, the University of Chicago Press offers a free e-book from its catalog of thought-provoking titles. This month it’s Deirdre McCloskey’s The Bourgeois Virtues: Ethics for an Age of Commerce (2006).
We discussed her follow-up volume, Bourgeois Dignity: Why Economics Can’t Explain the Modern World (2010), in last month’s Cato Unbound. Back in 2006, Cato Policy Report gave a short summary of McCloskey’s argument in The Bourgeois Virtues.
Her argument as I understand it is that commerce and virtue can be mutually reinforcing. Obviously they aren’t always so, but this positive feedback loop has governed much of world history in the modern era, helping to create the world we see around us today. I’d encourage anyone who takes interest in the intersection of markets, virtue, and modernity to take a look. And best of all, it’s free.
Bootleggers & Baptists, a Welcome Correction
In my recent “Bootleggers & Baptists, Sugary Soda Edition” post, I wrote that environmentalists and agribusiness team up to support ethanol subsidies. An alert Cato@Liberty reader writes to my colleague Jerry Taylor:
[Cannon] is no doubt right that environmentalists and agribusiness worked together to promote government subsidies to ethanol through about 2006. But by 2007 (when the ethanol mandate was doubled) the environmentalists had dropped out of the pro-ethanol coalition, to be replaced by national-security hawks! If you run into him, please tell him to stop blaming environmentalists for current biofuels policies!
If environmentalists have recently dropped their support for ethanol subsidies, they deserve credit for that. Mea culpa.
I would rather have been completely wrong about the environmentalists’ support for ethanol subsidies. But I’ll settle for being partly wrong.
The Tea Party’s Other Half
Emily Ekins and I have an op-ed in today’s Politico pointing out that while the Tea Party is united on economic issues, there is a split virtually right down the middle between traditional social conservatives and those who think government should altogether stay out of the business of “promoting traditional values.” Candidates and representatives hoping to appeal to the Tea Party, we argue, need to focus on a unifying economic agenda that takes into account this strong libertarian undercurrent.
We conducted a survey of 639 attendees at the October 9, 2010 Tea Party Convention in Virginia, one of the larger state Tea Party gatherings of its kind to date. We included the same questions from Gallup and the American National Election Studies that David Boaz and I have used to identify libertarians in our previous studies, “The Libertarian Vote” and “The Libertarian Vote in the Age of Obama.”
In our new survey, we found libertarians were 48 percent of Tea Partiers, versus 51 percent who held traditional conservative views. We defined traditional conservatives as agreeing that “the less government the better,” and that “the free market can handle these problems without government being involved,” but also believing that “the government should promote traditional values.” Tea Party libertarians agreed that less government is better, and prefer free markets, but believe that “the government should not favor any particular set of values.”
These findings help refute the assumption that the Tea Party is just another conservative group, both fiscally and socially. The data should also caution Republicans not to over-interpret potential midterm gains in the House and Senate as a mandate for social as well as fiscal conservatism.
Our survey replicated the methodology of a Politico/Targetpoint survey from a Tea Party rally in April, which also revealed an even split between libertarians and conservatives. At the time, journalist David Weigel criticized this finding because it sampled a tea party rally that featured Ron Paul. No surprise, Weigel reasoned, that the survey “skewed” libertarian because Ron Paul’s supporters “were out in force.”
This Tea Party Convention in Virginia also featured Ron Paul—as well as Lou Dobbs, Rick Santorum and Ken Cuccinelli. With this more wide-ranging speaker line up, it would be harder to argue that the crowd skewed libertarian. If anything, we might have expected the sample to skew conservative.
While ours and Politico’s surveys sampled local tea party events, add to this a new national survey from The Washington Post/Kaiser/Harvard on the role of government. It found respondents who support or lean toward the tea party split on the social issues: 42 percent moderate-to-liberal, 57 percent conservative or very conservative. These three data points, taken together, suggest that our findings would likely hold up if we repeated the survey at other tea party events nationwide.
Many still mistake the tea party as one large group, sharing common interests, which our research shows is incorrect. For instance, Washington Post columnist Harold Meyerson made this mistake, in an widely circulated op-ed earlier this week, asserting that the Tea Party has “the worldview of the American right — and the polling shows conclusively that that’s who the Tea Party is that.” As the chart below shows, libertarian and conservative Tea Partiers agree on economic issues, but libertarians are less concerned about social issues.
Both groups are extremely concerned about the recently passed health care reform, cutting federal government spending, and reducing the size of government. However, Tea Party libertarians are less concerned than conservatives about the moral direction of the country, gay marriage, immigration, job outsourcing, “the Mosque in NYC,” and abortion. While these differences may seem subtle, given the question wording we used, small changes are statistically significant.
It is important to recognize that these groups are not necessarily consistently ideological on all fronts. For example, we shouldn’t expect Tea Party conservatives to reflect all the views of William F. Buckley, Jr., nor Tea Party libertarians to reflect all the views of John Stossel or scholars at Cato. Nevertheless, the two groups were unified on economic issues but were different on social and cultural issues at a statistically significant level.
One finding surprised me. While we know the word “libertarian” remains unfamiliar to many who hold libertarian beliefs, the word may be gaining traction. On surveys, most libertarians identify themselves as independent, moderate or, reluctantly, conservative. However, in our survey we included an option for respondents to self-identify as “libertarian.”
Surprisingly, 35 percent of respondents who hold libertarian views self-identified as such. In previous surveys, we’ve found only 2 to 3 percent self-identify as “libertarian” nationally. To the extent that Tea Partiers talk to their neighbors and friends, perhaps we will begin to see the word “libertarian” catch on. This would certainly be good news for the “libertarian brand,” and a possible trend worth exploring in future research.
Emily and I will be writing up our findings as part of a longer study. And Emily’s more extensive research on the Tea Party, including her widely circulated analysis on Tea Party signs, will be part of her doctoral dissertation for UCLA. In the meantime, here is our survey questionnaire, and some charts showing further break down between libertarians and conservatives. Please let us know if you have additional data questions.
NPR Story Was Hardly Biased, but the Headline?
Today’s NPR story, “Health Law Hardly At Fault For Rising Premiums,” was much fairer than its headline (and the sub-heads, if that’s what we call them). ObamaCare is “hardly at fault for rising premiums?” Really? The story quotes an insurance-industry flack who well establishes what the Obama administration’s own regulations confirm: ObamaCare will be a major driver of premium increases for some health plans. A sub-head calls such claims “misinformation.” Oh? The article does more to bolster those claims than the administration’s flack does to knock them down. A more accurate headline would have been, “Health Law at Fault for Rising Premiums? In Some Cases, Yes.”
One wonders whether, in some posh Versailles salon, there’s an editor who already knows what the headline should be — never mind what the article says.
Filed under: Cato Publications; General; Government and Politics; Health Care
Reform for Senate Elections?
People inside the Beltway seem to think that the only things worth being said and written are said and written in Washington. John David Dyche’s column today makes a good case for the quality of commentary outside the all-knowing capital.
While most everyone in DC is calling the stretch run of the horse race, Dyche steps back and wonders whether the Kentucky Senate race would have been better for citizens if the U.S. Constitution had not been changed to direct election of senators. He thinks it would be.
I am not so certain. As Dyche notes, James Madison thought the representative or indirect aspects of American constitutional democracy would improve public choice. As times has passed, I wonder more and more about the quality of people drawn to all legislatures, including state bodies. Madison thought indirect election wold “refine and enlarge the public views by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations.” Should we still rely on the wisdom of that medium? And yet, what is the alternative? (Todd Zywicki has an informative article on the origins and demise of indirect election of senators).
Dyche works as an attorney in Louisville, Kentucky, and has written a nice biography of Mitch McConnell. His column is worth a regular read, especially if Rand Paul comes to Washington as a U.S. Senator. Dyche would be a good guide to how Paul’s libertarian tendencies are playing out politically back home.
Fear Can Affect Thinking, But Not This Time
In his Washington Post op-ed this morning, “Obama Underappreciation Syndrome,” Charles Krauthammer mocks President Obama’s latest explanation for his, and his party’s, low popularity. “[W]e’re hard-wired not to always think clearly when we’re scared. And the country is scared,” explains the president.
This is rich loam for derision. “Opening a whole new branch of cognitive science — liberal psychology — Obama has discovered a new principle: The fearful brain is hard-wired to act befuddled, i.e., vote Republican.”
Krauthammer rightly takes the campaigning president to task. But he scopes his critique a bit broadly. It’s pretty close to uncontroversial that the logic centers of the brain shut down when certain stimuli produce a fright response. That’s good. Leaping at the sight of a snake was an important part of surviving in the thousands of years before ambulances and anti-venom.
But not all stresses produce this response, and President Obama is misapplying the fright response to the current climate of unemployment, expanded government control of society, and galloping spending and debt. The fear response doesn’t explain Democrats’ unpopularity.
But it does explain other parts of our policy discourse. There is at least a good argument—one we featured in our book Terrorizing Ourselves—that fear preempts careful, rational cogitation about some risks. The existence of another human animated to kill you in ways you can’t predict can interfere with the mental responses we need to secure both ourselves and the blessings of liberty. There may be chronic fear-based habits; the brain grows to meet the demands of its host.
But none of this relates to the economic and political stresses of today or the related woes of the Democratic Party. Rather, it is economic and political conditions that voters are responding to, in a manner that is by no means illogical or pathological.
This Just In: People Engaged in Politics!
The New York Times devotes major space today to a story disclosing campaign spending by the U.S. Chamber of Commerce. They have uncovered some pretty shocking stuff. Apparently the Chamber of Commerce is raising money from businesses to fund campaign ads. The Times has the goods:
[A] review of the nearly 70 chamber-produced ads found that 93 percent of those that have run nationwide that focus on the midterm elections either support Republican candidates or criticize their opponents.
What is the world coming to? An organization can raise money and use it to support or criticize candidates for office? It’s almost like we have freedom of political speech in the United States. Shocking stuff.
The New York Times may not like freedom of speech much for those who disagree with its editorial line, but I am happy we have freedom of the press as well as of speech. The freedom of the press means I can get additional information about the funding of the current election.
The Wall Street Journal reports that the American Federation of State, County and Municipal Employees (AFSCME), a leading union of government employees, has raised and will spend the most money on the mid-term election. More shocking stuff!
AFSCME is spending money to support Democrats who in turn will be expected to tax and spend to add or to save … jobs for public employees! I thought businesses were the only organizations that engaged in self-interested politics. Apparently not.
But AFSCME has the right to raise and spend the $90 million, and so did George Soros, and so does every misguided and hapless person and organization that for some reason disagrees with me about everything. Freedom of speech does not mean the “freedom” to agree with me or the New York Times.
In sum, the silly season is upon us as election day looms. Be prepared for more “news reporting” about the demons that are “undermining our democracy.” And give thanks that we don’t have to depend on just one source of news or speech in coming to judgment on those who hold political power.
Cost-Slashing? No, Cost-Shifting.
Here’s a poor, unsuccessful letter I sent to the editor of the Los Angeles Times:
Three and a half million Californians may become eligible for subsidized private health insurance in 2014 under ObamaCare [“3.5 million Californians would be eligible for healthcare tax credits, study finds,” October 6], but those subsidies will not “slash the cost” of their health insurance. As ObamaCare causes health insurance premiums to rise by as much as 30 percent, the private-insurance subsidies will shift those costs to taxpayers. A bipartisan majority of Americans opposes ObamaCare in part because such shell games increase costs rather than reduce them.
Washington State Regulator Can’t Prevent ObamaCare from Destroying Child-Only Market
ObamaCare has touched off a battle between Regence Blue Cross Blue Shield and Washington State Insurance Commissioner Mike Kreidler. From the commissioner’s press release:
Kreidler orders Regence BlueShield to cover children
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler ordered Regence BlueShield this morning to stop illegally denying insurance to children, effective immediately.
“Regence is in clear violation of state law that prohibits insurers from denying insurance to people on the basis of age,” said Kreidler. “I was shocked and deeply disappointed when Regence announced its decision last week to stop selling insurance to kids.”
The Affordable Care Act requires all health plans to cover kids with pre-existing conditions…
Regence Blue Shield, the largest health insurer in the individual market, notified Kreidler on Sept. 27 that, effective Oct. 1, it would no longer sell individual health insurance policies to kids.
From Regence’s press release:
We were shocked by the Commissioner’s action and press statement this morning. This gross politicization of such a complex regulatory problem does not help address the very real economic challenges of providing coverage to Washingtonians seeking individual insurance policies, especially children.
Over the past several months, we have had at least five separate conversations with the Commissioner and his staff regarding planned changes to how we would cover children under age 19. Our goal in those discussions was and continues to be a solution that would allow us to serve all of our individual members – including children – without exacerbating costs and increasing coverage risks for the entire pool. Never once did the Commissioner or his staff express any concern that these changes might violate state law. We’re disappointed that the Commissioner appears to have suddenly changed his perspective…
We’ve been very clear that we will insure kids during open enrollment periods when the child is not the sole subscriber — and we will do so regardless of health status. Dozens of carriers across the country have found it necessary to adopt similar policies.
We disagree with the Commissioner’s action today and will consider how it might impact our ability to offer coverage to all individuals across the state. While more than ten carriers have deserted Washington’s individual market — leaving three today — Regence has continued to insure these members despite losses of more than $33 million in the last three years. While we remain committed to our individual members, we simply cannot expose our broader membership to greater risk. Therefore, we believe the changes we made are in the best interest of the nearly one million Washingtonians we serve today.
Washingtonians want and need an equitable, stable insurance market that people can afford. We want to avoid the mistakes of the 1990′s when a small minority was allowed to game the insurance system by purchasing insurance only when they were sick, which led to rate spikes and the collapse of the individual market.
Either way, the child-only market is toast.
Filed under: Cato Publications; General; Government and Politics; Health Care
A Less-Than-Rigorous ObamaCare Fact Check
Kaiser Health News and The Washington Post have posted a piece titled “Campaign Claims: Health Law Myths And Facts,” which examines these common criticisms of ObamaCare:
- “The law amounts to a ‘government takeover’ of health insurance and health care.” The article’s conclusion: “it falls far short of a government takeover.” That conclusion rests largely on the fact that “Medical care will be provided by private hospitals and doctors.” But as I explain in this study, “it is irrelevant whether we describe medical resources (e.g., hospitals, employees) as ‘public’ or ‘private.’ What matters—what determines real as opposed to nominal ownership—is who controls the resources.” Obama health official Jeanne Lambrew acknowledges as much: “the government role in socialized medicine systems [can include] public financing of private insurance and providers.” And as I concluded in this study, “Compulsory ‘private’ health insurance would give government as much control over the nation’s health care sector as a compulsory government program.” I wonder if the article’s authors spoke to anyone who raised this perspective.
- “The law will gut Medicare by cutting more than $500 billion from the program over 10 years; seniors will lose benefits and won’t be able to keep their doctors.” Conclusion: “The gutting of Medicare claim goes too far…What this means for seniors is a bit murkier.” True enough: even if ObamaCare’s implausible Medicare cuts take effect, they clearly would not “gut” Medicare. (BTW, click here or here for a politically sustainable way to restrain Medicare spending.) The authors also note that Medicare Advantage enrollees would lose some benefits. But when the article claims that ObamaCare will not eliminate any “basic” Medicare benefits, it neglects to mention that Medicare’s chief actuary estimates that the law could cause 15 percent of hospitals, home health agencies, and other providers to stop accepting Medicare patients. If your hospital no longer accepts your Medicare coverage, is that not a benefit cut?
- “The law will cause 87 million Americans to lose their current coverage.” Conclusion: “How true is it? Partly, at best. But evidence is limited.” The House Republicans’ Pledge to America claims that ObamaCare “will force some 87 million Americans to drop their current coverage.” The word drop is a bit strong; it’s more accurate to say that many Americans will have to switch to another plan, even if it’s just a more-expensive version of their current plan. Indeed, HHS estimates that 69 percent of employer plans will have to do so by 2013. Yet some people are being dropped from their current health insurance. When Principal Financial Group leaves the market, its nearly 1 million enrollees will lose their current health plan. Industry analysts expect more such departures. Why no mention of that?
- “The law is driving up costs and premiums and will continue to do so over the next several years.” Conclusion: “There may be very small increases initially.” Here the article is kinder to ObamaCare than even ObamaCare’s supporters are. May be? Even ObamaCare’s supporters admit the law will increase premiums for some people. Very small increases? Even HHS estimates that the requirement that consumers purchase unlimited annual coverage could increase premiums for some by 7 percent. (There’s no mention of Blue Cross and Blue Shield of Connecticut, which says ObamaCare will increase premiums for some of its customers by nearly 30 percent.) And why only initially? Do the authors expect that there will be no premium increases when HHS eventually stops issuing waivers? Or when HHS sets a minimum level of coverage that Americans must purchase in 2014? Or that ObamaCare has solved the tragedy of the commons? For support, the article claims, “the Obama administration, citing [various] estimates…says the law isn’t responsible for any increase greater than 1 to 2 percent.” Actually, that’s not what the administration says — it’s what they want you to think they’re saying. Read this letter and other administration utterances carefully. They say “1-2 percent” when speaking of ObamaCare’s average effect on premiums, and “minimal” when speaking of anything other than the average effect. (The administration’s threshold for “minimal” is presumably somewhere north of 7 percent.)
- “The law’s expansion of Medicaid will put massive pressure on state budgets at a time when many are already in crisis.” Conclusion: “The impact will probably be small, but it’s hard to say for sure.” The article only cites figures generated by supporters of the law, who say the impact will be small. Why just mention that there are figures from the other side? Why not include them?
- “The new law uses tax dollars to pay for abortions.” Conclusion: “Open to interpretation.” This was a missed opportunity to examine two crucial questions. First, would federal insurance subsidies truly be segregated from the separate premiums that consumers in ObamaCare’s exchanges would have to pay for elective-abortion coverage? Or would this just be an accounting gimmick? What would happen, for example, if there were more abortions than an insurer anticipated, and those separate premiums proved insufficient to pay for them? How would you keep one side of the ledger from spilling over into the other? Second, would the availability of federal subsidies for health insurance plans that make elective-abortion coverage available as a rider increase enrollment in those plans? If so, wouldn’t that implicitly subsidize elective abortions? Rather than examine those questions, the article punted.
On the whole, I’d say this fact check may have been very kind to the new law.
National Research Council Takes Biometrics Down a Notch
Late last month, the National Research Council released a book entitled Biometric Recognition: Challenges and Opportunities that exposes the many difficulties with biometric identification systems. Popular culture has portrayed biometrics as nearly infallible, but it’s just not so, the report emphasizes. Especially at scale, biometrics will encounter a lot of challenges, from engineering problems to social and legal considerations.
“[N]o biometric characteristic, including DNA, is known to be capable of reliably correct individualization over the size of the world’s population,” the report says (page 30). As with analog, in-person identification, biometrics produces a probabilistic identification (or exclusion), but not a certain one. Many biometrics change with time. Due to injury, illness, and other causes, a significant number of people do not have biometric characteristics like fingerprints and irises, requiring special accommodation.
At the scale often imagined for biometric systems, even a small number of false positives or false negatives (referred to in the report as false matches and false nonmatches) will produce considerable difficulties. “[F]alse alarms may consume large amounts of resources in situations where very few impostors exist in the system’s target population.” (page 45)
Consider a system that produces a false negative, excluding someone from access to a building, one time in a thousand. If there aren’t impostors attempting to defeat the biometric system on a regular basis, the managers of the system will quickly come to assume that the system is always mistaken when it produces a “nonmatch” and they will habituate to overruling the biometric system, rendering it impotent.
Context is everything. Biometric systems have to be engineered for particular usages, keeping the interests of the users and operators in mind, then tested and reviewed thoroughly to see if they are serving the purpose for which they’re intended. The report debunks the “magic wand” capability that has been imputed to biometrics: “[S]tating that a system is a biometric system or uses ‘biometrics’ does not provide much information about what the system is for or how difficult it is to successfully implement.” (page 60)
“Biometric Recognition: Challenges and Opportunities” is a follow-on to the 2003 National Research Council report, “Who Goes There?: Authentication Through the Lens of Privacy.” That was one of few resources on identification processes and policy when I was researching my book, Identity Crisis: How Identification is Overused and Misunderstood. (Mine is quite a bit more accessible than this new book, so if you’re interested in the field, you might want to start there.)
There is nothing inherently wrong with biometrics. They will have their place, and they will make their way into use. But the dream of a security silver bullet in biometrics is not to be. Identity-based security—using the knowledge of who people are for protection—is valuable and useful in day-to-day life, but it does not scale. National or world ID systems would not secure, but they would carry large costs denominated in both dollars and privacy.
GAO: HHS Imposed an “Unusual” Prior Restraint on Speech during ObamaCare Debate
During the debate over ObamaCare, the Centers for Medicare & Medicaid Services took issue with some of the things that some of the insurers participating in the Medicare Advantage program were telling their enrollees about the legislation. The Government Accountability Office has just released a review of CMS’s conduct in that episode:
Although CMS’s actions generally conformed to its policies and procedures, the September 21, 2009, memorandum instructing all MA organizations to discontinue communications on pending legislation while CMS conducted its investigation was unusual. Officials from the MA organizations and CMS regional offices that we interviewed told us they were unaware of CMS ever directing all MA organizations to immediately stop an activity before CMS had determined whether that activity violated federal laws, regulations, or MA program guidance. When asked about this directive, officials from CMS’s central office stated that, given the degree of potential harm to beneficiaries, the action was appropriate for the circumstances….
HHS expressed concern that our description of the September 21, 2009, memorandum as “unusual” makes it appear as though their suspension of all MA organizations’ communications on pending health reform legislation was inappropriate. It noted that directing an MA organization to immediately stop an activity while the agency determined whether violations had occurred was infrequent but not unprecedented…. We believe that the example provided—wherein CMS put its data collection activities on hold until the agency resolved concerns with interpretation of its own regulations—is not comparable to CMS instructing all MA organizations to stop sending information about health reform proposals to beneficiaries while it investigated potential violations. Moreover, our characterization of CMS’s action as unusual is based on discussions with MA organizations and CMS staff. They told us that they could not recall a previous example where CMS told all plans to stop an activity after a potential violation was discovered and prior to the completion of an agency investigation.
For the record, CMS lacked (and still lacks) a Senate-confirmed administrator. It’s worth asking whether this prior restraint placed on speech critical of the administration came from Secretary of Health and Human Services Kathleen Sebelius, who is making quite a name for herself as an enemy of free speech.
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