How Is LeBron James like Medicare?
Speaking to some 500 libertarian students at the International Students for Liberty Conference last weekend, Cato adjunct scholar Tyler Cowen noted:
Rep. Paul Ryan gave an alternative State of the Union address without mentioning Social Security or Medicare. That’s like discussing the Miami Heat without mentioning LeBron James, Dwayne Wade, or Chris Bosh.
ObamaCare’s Threat to Free Speech
On Friday, I blogged about HHS Secretary Kathleen Sebelius’ letter to the health insurance lobby, in which she attempts to stifle political speech by using the new powers that ObamaCare grants her to threaten health insurance companies that claim ObamaCare’s coverage mandates are one cause behind rising premiums. (Never mind that the insurers’ estimates — which project that ObamaCare will increase premiums in 2011 by as much as 9 percent — are in line with those put forward by HHS.)
Here’s a smattering of reactions from others.
- The Wall Street Journal: “The Health and Human Services secretary…warned that ‘there will be zero tolerance for this type of misinformation and unjustified rate increases.’ Zero tolerance for expressing an opinion, or offering an explanation to policyholders? They’re more subtle than this in Caracas.”
- Chicago Tribune: “President Obama’s health care reform plan, enacted in March, is not terribly popular with the American people…The administration can’t tell the public to stop grousing. It can, however, try to silence health insurers who have the nerve to say out loud what basic economic theory indicates…Apparently, harsh punishment is in store for anyone who refuses to parrot the administration line. But there is every reason to think this alleged libel is true.”
- Tyler Cowen: “Nowhere is it stated that these rate hikes are against the law (even if you think they should be), nor can this ‘misinformation’ be against the law…[The letter] is worse than I had been expecting.”
- Ed Morrissey: “Rarely have we heard a Cabinet official tell Americans to stay out of political debates at the risk of losing their businesses. It points out the danger in having government run industries and holding a position where politicians can actually destroy a business out of spite.”
- Michael Barone: “Sebelius is threatening to put health insurers out of business in a substantial portion of the market if they state that Obamacare is boosting their costs…The threat to use government regulation to destroy or harm someone’s business because they disagree with government officials is thuggery. Like the Obama administration’s transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government.”
- Eugene Volokh: “even if such action would be constitutionally permissible, it would be quite troubling, as would threats that seem to hint as such action: It would involve the Administration’s deliberately trying to suppress criticism of its policies, under a ‘misinformation’ standard that sounds highly subjective and politically contestable. (Consider [Sebelius'] reference ‘to our analysis and those of some industry and academic experts’ — what about the analysis of other industry and academic experts?) Perhaps I’m missing some important context here. But my first reaction is that this is ominous behavior on the Administration’s part, and seems to have both the intent and effect of suppressing criticism of the Administration’s policies — including criticism that simply expresses opinions the Administration dislikes, and makes estimates that it disagrees with, and not just criticism that contains objectively demonstrable ‘misinformation.’”
In The Wall Street Journal, economist Russ Roberts recently explained one of the main themes of Friedrich Hayek’s The Road to Serfdom:
When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak, and write. Economic control becomes political control.
One need not agree with all of Hayek’s conclusions to see how ObamaCare is threatening political freedom.
Free Parking and the Geography of Cities
Unlike Randal O’Toole, I was delighted by Tyler Cowen’s New York Times article on the high cost of free parking. And indeed, if I’m reading O’Toole’s post right, it sounds like Cowen and O’Toole don’t actually disagree on the policy issue: both agree that business owners should be free to decide how much parking to supply.
The debate so far has focused on whether parking mandates push the price of parking below the market rate. But I think the more important effect is on the geography of cities. Parking mandates (and other regulations) preclude developers from catering to people who want to live in pedestrian-friendly neighborhoods.
Parking mandates necessarily mean that every large building is surrounded by a large parking lot. And for someone who doesn’t own a car, a parking lot is just a nuisance: a big, empty space he must walk across to get anywhere. Regulations that effectively require a parking lot around every store and restaurant almost guarantees that walking to them won’t be practical.
As Jane Jacobs pointed out, pedestrian traffic is highly sensitive to density. Even a modest reduction in the density of a neighborhood can have a big effect on pedestrian traffic. And as the number of pedestrians falls, so too will the number of businesses that cater to pedestrians. So it’s probably true, as O’Toole says, that charging for parking spaces wouldn’t dramatically reduce the amount of driving people do. But this is partly because the proliferation of parking lots has made walking impractical. Fewer free parking spaces wouldn’t just raise the price of car ownership; it would make car non-ownership more pleasant and convenient.
Government regulations often have subtle unintended consequences. Parking regulations have been on the books so long that the results have come to seem perfectly natural to us. But free markets are unpredictable. If developers had the freedom to decide how much parking to supply, the results might surprise us.
A Value-Added Tax Is Not the Answer…Unless the Question Is How to Finance Bigger Government
While admitting that spending restraint is the ideal approach, Tyler Cowen of Marginal Revolution asks whether a value-added tax (VAT) might be the most desirable of all realistic options for dealing with an unsustainable budget situation.
Read his post for yourself, but I think a fair summary is that he is basically saying that a) there will be a crisis if we don’t do something about future deficits, b) a crisis will result in very bad policy, and c) if we support a VAT now, we will at least be able to extract concessions from the other side.
I have no idea whether there will be a future crisis, but I think the rest of Tyler’s argument is wrong.
But before explaining my position, let’s start by stating what I assume to be our mutual objective, which is to control the size of government. We all agree that there is a problem because government is too big now, and it is projected to get even bigger because of the built-in growth of entitlement programs. One symptom of growing government is deficits, which are very large today and will be even bigger in the near future as more and more baby boomers retire and push up costs for Social Security, Medicare, and Medicaid.
Average vs. Marginal Effects of Health Insurance
I have to thank Ezra Klein. I have for some time been trying, without success, to spark a debate about whether expanding health insurance coverage would actually save any lives. Even my bet with Karen Davenport seemed to go nowhere. But when Klein accused Sen. Joe Lieberman (I-CT) of being “willing to cause the deaths of hundreds of thousands of people” because Lieberman was jeopardizing passage of legislation that would expand health insurance to 30 million people, Klein made a debate possible.
Following on my first response to Klein that the evidence supporting his claim is remarkably thin, others have joined the discussion. Matt Yglesias of the Center for American Progress rose to Klein’s defense. Megan McArdle (in The Atlantic magazine and her blog) and Tyler Cowen (at Marginal Revolution) both argue that we don’t really know if Klein’s claim is true.
Today, Yglesias poses the following question on his Twitter page:
Do rightwingers really believe that US health insurance has no mortality-curbing impact?
I see two problems. First, there are no right-wingers in this debate. McArdle, Cowen, and I all support gay marriage, for example.
Second, Yglesias sets up a straw man. He asks whether health insurance on average has a positive impact on mortality, when the debate is actually over the effect of health insurance at the margin. In other words, would covering the uninsured save lives?
I don’t know anyone who thinks health insurance has zero effect on mortality overall. Yet it is entirely possible for the average effect to be positive and the marginal effect to be zero. One reason may be that the uninsured do benefit from the human and physical capital that health insurance makes possible. It may also be the case that when the uninsured do obtain health insurance, the additional medical care they receive is more likely to harm them than to help them. The researchers behind the RAND Health Insurance Experiment make essentially the same point.
If the marginal effect of health insurance on health is zero, it raises other interesting questions. Would it also have zero effect on health outcomes if we were to reduce the number of people with health insurance? What is the size of the margin over which health insurance has zero impact? (Robin Hanson suggests it may be very, very large.)
Klein recently declined an invitation to debate these issues at Cato. Too bad. This is worth pursuing.
Palmer and Cowen on the Nature of Liberty
Two leading libertarian thinkers, Tom Palmer and Tyler Cowen, discussed Palmer’s new book, Realizing Freedom: Libertarian Theory, History, and Practice, at a recent Cato Book Forum. You can see the video or download a podcast here.
Two years ago, Cowen and Palmer were among the contributors to a Cato Unbound colloquy on the past and future of libertarianism. Cowen was interviewed for Cato’s Daily Podcast and expressed a more critical view of the concept of “negative liberties” than classical liberals typically do. A few days later, in another Daily Podcast, Palmer took on what he considers the coercive confusions of “positive liberty” and defended the necessity of “negative liberty” to a free society.
Listen to them both and buy the book.
Update: Here’s a portion of Palmer’s talk that focuses on the rule of law:
Palmer and Cowen on Libertarianism
On Tuesday I hosted a Book Forum for Tom Palmer’s new book, Realizing Freedom: Libertarian Theory, History, and Practice. You can see the video here. I thought Tyler Cowen’s comments were very astute, so I reproduce an abridged version here:
The first question is, “What do I, as a reader, see as the essential unity or unities in the book?” And I see really two. The first is I see this as a construction and articulation of a vision of what I call reasonable libertarianism. I think we’re in a world right now that is growing very partisan and very rabid, and a lot of things which are called libertarian in the Libertarian Party, or what you might call the Lew Rockwell / Ron Paul camp, are to my eye not exactly where libertarianism should be, and I think Tom has been a very brave and articulate advocate of a reasonable libertarianism. And if I ask myself, “Does the book succeed in this endeavor?” I would say, “Yes.”
The second unity in the book, I think, has to do with the last thirty years of world history. I know in the United States now there is less liberty. But overall, the world as a whole, over the last thirty years, has seen more movement towards more liberty than perhaps in any other period of human history. And I suspect most of these movements toward liberty will last. So there have been these movements towards liberty, and they have been motivated, in part, by ideas. The question arises, which are the ideas that have been the important ones for this last thirty years? And I view Tom’s book, whether he intended it as such or not, as a kind of guide to which have been the important ideas driving the last thirty years. And a lot of the book goes back into history pretty far – the eighteenth century, the Levellers, debates over natural rights – and I think precisely because it takes this broader perspective it is one of the best guides – maybe the best guide – to what have been the most important ideas driving the last thirty years (as opposed to the misleading ideas or the dead-end ideas). So that’s my take on the essential unities.
Another question you might ask about a collection of essays is, “Which of them did I like best?” I thought about this for a while, and I have two nominations. The first one is “Twenty Myths about Markets,” which is the essay on economics. I don’t know any piece by an economist that does such a good job of poking holes in a lot of economic fallacies and just laying out what you hear so often. You would think an economist would have written this long ago, but to the best of my knowledge, not.
The other favorite little piece of mine is called “Six Facts about Iraq,” which explains from Tom’s point of view – and Tom has been there a number of times – what’s going on in Iraq and why. It is only a few pages long, but I felt that I got a better sense of Iraq reading this short piece than almost anything else I’ve come across.
I’m not sure exactly what’s the common element between the two I liked best – they both start with a number – but I think the ones I liked best reminded me the most of Tom when he is talking. I had the sense of Tom being locked in a room, and forced to address a question, and not being allowed to leave until he had given his bottom line approach. And I think what he’s very good at through out the book is just getting directly to the point.
There’s more to Tyler’s comments, and lots more from both of them in response to questions, so check out the video.
Tuesday Links
- Dear members of Congress: If you’re not going to read the bills you pass, at least read the Constitution. Don’t fret; it’s short and written in plain English.
- Richard Rahn: Pay members of Congress more. (Or less, depending on their performance.)
- NYC: “The city that never smokes.” A proposal to ban lighting up in New York’s parks has exposed the puritanical agenda behind the crusade against smoking.
- Tyler Cowen: With health care costs high and rising, government mandates to buy insurance would make many people worse off.
- Podcast: “Pay Czar Cuts Checks“
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