Contrarian libertarian economist (and Reason contributor) Bryan Caplan says that economic logic tells us education is oversupplied pretty much everywhere, the Third World as well as the wealthy West. His reasoning:
Education's a good like any other. If people refuse to spend their own money for more education, then it's presumably just not worth it, right? This is especially clear because governments habitually subsidize education. Libertarians should believe that there's an oversupply of education for the same reason they believe there's an oversupply of sport stadiums: The status quo is desperately dependent on government funding.
Note further: This analysis holds in the Third World as well as the First. The fact that Nigerians and Bolivians don't spend more of their hard-earned money on education is a solid free-market reason to conclude that additional education would be a waste of their money.
Most people will naturally treat these conclusions as yet another reductio ad absurdum of libertarianism. We can argue about whether the First World is overeducated; but how can libertarians deny that lack of education condemns the Third World to poverty?....If subsidizing domestic automobiles, semi-conductors, and movies doesn't make poor countries rich, why would subsidizing domestic education be any more effective? Maybe people in primitive agricultural societies get little education because it's a costly investment that fails to noticeably raise agricultural productivity.
Of course, if Third World countries improved their policies and opened up to the outside world, workers might suddenly notice a higher return to education and crack open the books.
In Los Tiempos de Nueva
York, the economist formerly known as Pauly Krugnuts recalls
his 2008
warnings that the United States economy would follow the
pattern Japan's economy followed during its post-1980s recession.
Most of the stimulative nostrums Paul Krugman prescribed back then
have since been tried (though he believes the dosages have been too
low), and nothing got better.
So without admitting any wrongdoing, Krugman has changed the question. Previously the Nobel laureate claimed that the failure of Tokyo central planners to provide more expensive stimulus caused Japan's recovery to relapse into recession. Now, however, he accepts Japan's two-decade recession as force majeure, and says that D.C. central planners should be acting more like their Tokyo counterparts:
Why not? For all its flaws, Japanese policy limited and contained the damage from a financial bust. And the question in America now is whether we’ll do the same — or whether we will take a hard right turn into economic disaster.
In the 1990s, Japan conducted a dress rehearsal for the crisis that struck much of the world in 2008. Runaway banks fueled a bubble in land prices; when the bubble burst, these banks were severely weakened, as were the balance sheets of everyone who had borrowed in the belief that land prices would stay high. The result was protracted economic weakness.
The fable of the near-recovery foiled by insufficient stimulus comes up repeatedly in Krugman's theology. It's his version of Xenu's genocide.
But now Krugman is willing to claim -- without evidence -- that Japan's feeble stimulus has left that great nation with an economy that is "grayish rather than pitch black," "depressed, but...not in a depression," and "disappointing but not disastrous."
Krugman also notes that while stimulus fails in reality it works in theory: "The government propped up employment with public works programs, but its efforts were never focused enough to start a self-sustaining recovery."
The rest of his column is political speech and unworthy of note. The above is all the intellectual content, and it is very shabby.
Are the administration’s promises about the new health care law empty? Ezra Klein offers a series of rejoinders to some of the points that I made in my article examining promises made about the new health care law.
For example, I wrote that the president’s promise that the bill would cost “around $900 billion” was undercut by the fact that, in addition to the $940 billion official score, the CBO later added $115 billion in discretionary spending. Klein responds that the bulk of that spending—about $86 billion—is not new spending. I’d make two points about this: First, part of the question is how we define what constitutes the cost of the law. Is it the cost of the new spending? Or is it the full cost to get it up and keep it running over ten years, regardless of whether that spending is new? Typically, when we think about a new program, or a replacement program, we think about its entire cost, even if some of that cost already existed. If it’s the full cost, then the entire $115 billion figure is fair game. But let’s say it’s not, and we only add $29 billion to the official $940 billion price tag. We still end up with a $969 billion total. Calling that “around $900 billion” is, at the very least, a stretch. (It’s also worth noting that the $940 billion price tag only covers the cost of the coverage provisions.)
As for the price of insurance, Klein points to the CBO’s projection that premium prices in the individual market will go down. But as I noted in a post linked from the article, the price most consumers will pay only goes down after you factor in subsidies. The average pre-subsidy price, though, is going to rise, and if you accept the the CBO’s projections, nearly half—about 43 percent—of those in the individual market won’t get subsidies. According to the CBO, the rise will result from a combination of new mandatory benefits and individuals choosing to buy more expensive plans thanks to the subsidies. The total rise is estimated to be between 27 and 30 percent, but that rise would be partially offset by 1) rule changes in the non-group market and 2) an expected increase in the number of younger, healthier individuals buying insurance. The end result, according to the report: “CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.” Klein’s argument that people are getting extra benefits in exchange for the higher premiums ignores the question of who pays for the subsidies—ie: taxpayers, including, over time, some of the taxpayers who take the subsidies. So those benefits aren’t free. And as I’ve said before, mandatory new benefits may or may not provide value to the folks getting them, but they definitely impose new costs.
What about the employer market? Klein says that the CBO “reported that costs in the employer markets, which serve 150 million, would go down slightly.” But that’s not quite right. Rather, the CBO projects very little change—possibly, as he says, a slight drop (about 2 percent) or, as he doesn’t mention, a very slight hike (about 1 percent). Either may well turn out to be true. But many employers, at least, believe the law will ultimately result in higher health costs—and not without any reason, either.
Klein agrees with me that the administration engages in double-counting when it claims the law extends the solvency of Medicare. Which is important, because the claims made by the administration that Medicare is healthier as a result of the PPACA rely on a combination of double counting and cuts to Medicare advantage. But as to whether the law ultimately puts the program on better fiscal footing, he raises the question of whether IPAB—the new Medicare cost-control board—will be effective. He points to his column on why the GOP ought to stop opposing the board. I agree with Klein that a lot of the Republican rhetoric about the board is overblown. It’s not a government takeover, nor is it likely to directly lead to one. But as I wrote earlier today, given its limitations and the political challenges it faces, I’m not terribly convinced it will lead to the cost-savings supporters hope for. And neither, for that matter, are CBO head Doug Elmendorf or Richard Foster, Medicare’s chief actuary. But no matter what, the administration’s specific claim that the law extends Medicare’s solvency by 12 years is based on double counting, and incorrect.
Klein also takes issue with my argument that the law is paid for mostly by raising new revenue—i.e., by raising taxes—rather than by shifting around existing spending. According to the CBO, the law increases taxes by $525 billion over the next decade, and argues that I’m suggesting “that we're not spending money on the tax exclusion for employer-provided health insurance.” He explains:
Most analysts put that tax break at about $250 billion a year, and the excise tax begins to pare it back. In effect, that's taking money from a federal subsidy for employer-provided insurance and putting it into health-care reform and deficit reduction, just the same that cutting Medicare Advantage reimbursements shifts money from subsidizing private insurance in Medicare and puts it towards health-care reform.
That’s one way of thinking about it, but I don’t think it’s a common one. Klein is reframing the $250 billion that we would be collecting if we taxed employer insurance as “spending.” But it’s not. It’s money that the government doesn’t collect, which isn’t the same thing. To think of it as Klein does, we’d have to think of every business tax break or personal deduction as a form of government spending. But I don’t think most people do. That also reframes the excise tax—the mechanism used to collect some of that $250 billion—as, well, not a tax. That’s probably not the most obvious way to think about it, although his post implies it is.
Moreover, the excise tax doesn't actually start the process of ending the tax subsidy for employer health care, as Klein says. Instead, it touches expensive plans that cost more than an arbitrary amount with a tax rate that is higher than either the corporate or personal income tax rates.
As a wrap up, Klein argues that a key difference between critics and supporters of the law is that critics think it’s all bad, “all the promises are lies, etc.” In fact, I think very, very few (and perhaps none) of the promises made about the law were lies, which is why I didn’t use the word in the piece. Instead, I get the sense that the various promises represent a combination of overly optimistic thinking, exaggeration (some intentional, some not), and, mostly, the desire to sell the public on what the law’s backers ultimately believe will be beneficial while papering over some of the law’s messier political compromises.
American Idol runner-up Crystal Bowersox gained national acclaim belting out her style of folksy blues on the popular TV show.
But some of the attention the Toledo-area singer received back home in Ohio was unflattering, as police and others improperly checked to see if she had a criminal record or blemishes on her driving record.
From computers with access to personal information in confidential state databases, employees of five police agencies and a municipal court rummaged through Bowersox's background.
And in Columbus, an Ohio Bureau of Motor Vehicles clerk examined vehicles registered in the performer's name, and the home computer of an assistant city prosecutor was used to check on the newly minted star....
The Bowersox checks are reminiscent of a case two years ago, when The Dispatch reported that state computers were improperly tapped for personal information on Samuel Joseph Wurzelbacher, also known as "Joe the Plumber." Conducting a background check for an unauthorized purpose is illegal.
This sure makes you feel comfortable about the gummint having more and more of your life in their databases, doesn't it? The punishments against the malefactors ranged from two weeks' suspensions to written reprimands. That'll teach 'em!
Hat Tip: recidivist commenter Citizen Nothing.
The great journalist and literary critic H.L.
Mencken was an atheist, an individualist, and a classical liberal
of extreme Jeffersonian tendencies. Whether he was attacking
alcohol prohibition, Southern racism, Christian fundamentalism, or
Woodrow Wilson’s war on free speech, one theme remained constant:
individual liberty versus the tyranny of the majority. And as
Associate Editor Damon Root writes, many of Mencken’s best efforts
appeared in the six-volume series he aptly titled
Prejudices.
My town is plastered with billboards advertising the Tiffany Network's upcoming crime series Hawaii Five-0, a remake of the legendary Leonard Freeman policier Hawaii Five-O, which ran on CBS from the 1960s to the 1980s.
I have not seen this new show. I'm a mid-to-upper-range Hawaii Five-O fanatic but take a catholic view of "reboots" and "reimaginings" -- though in this case I would have cast Angela Bassett as the new McGarrett.
What strikes me is that this new cast seems to be following a diet completely free of poi and kalua pig. In the last 40 years, plasma-screen television and carb-reduction have reversed the evolution described in Sunset Boulevard: The picture is much bigger; it's the actors who got small.
Old and new comparisons:
McGarretts
Dannos
Chin-Ho Kellys
Konos
I wish I could make more direct comparisons, but Kam Fong and Gilbert Francis Lani Damian Kauhi "Zulu" were two men so large they could rarely be captured full-body in a single frame of film.
But the
results are clear: In terms of horizontal displacement, only New
Danno may have a slight edge on his predecessor, and most of that
is muscle weight. (Swoon!)
Is this just more thin dreaming by a nation that, according to the Centers for Disease Control [pdf], grew one inch taller and nearly 25 pounds heavier between the 1960s and the 2000s?
Possibly. But the Gallup-Healthways Well-Being Index awards the Aloha State first place in its well-being state rankings [pdf], with astonishingly high marks in physical health and healthy behavior. (Somebody explain again why New Frikking Hampshire was picked for the Free State Project?)
Or maybe this is a step up from the fat-Hawaiian and rolly-polly-Chinese stereotypes used in a series that featured such Asian and Pacific Island greats as wily Japanese Ricardo Montalban and Mongol mastermind Kenneth "Khigh Alx Dhiegh" Dickerson. All else equal, younger and hotter is always a trade up. (In total fairness, on an episode-by-episode basis original Five-O was probably the most multicultural non-sports programming of its time, and it remains watchable in part because it often takes an interest in the look and feel of Hawaii -- where it was always "filmed entirely on location.")
And even if you posited the bogus connection between entertainment options and public health, would this vestigial spasm from network television even matter? Five-0 may promote unrealistic body types, but Too Fat For 15 will bring it all back home. Be here, Aloha.
Writing at the National Law Journal’s Supreme Court Insider, the Manhattan Institute’s Marie Gryphon challenges the conventional wisdom that says criminal defendants do worse when they come before conservative judges:
The Court's decisions during this past year undermine the common claim that its Republican appointees decide criminal cases based on the identity of the parties rather than the content of the law. In the nine criminal cases the Court decided last term that raised questions of statutory rather than constitutional interpretation, Justice Antonin Scalia, Chief Justice John Roberts Jr. and Justice Anthony Kennedy were among the most "liberal" on the Court: They sided with the criminal defendants in these cases eight out of nine times. The only justice with a more pro-defendant record on these cases last term was John Paul Stevens.
The opinions in these cases demonstrate why Scalia and Roberts, both "textualist" judges, so often side with criminal defendants. Scalia and Roberts take the same literal approach to interpreting federal statutes that they take to interpreting constitutional provisions. In neither case are they inclined to expand the meaning of a provision beyond its clear terms in order to effectuate some overarching policy goal. Although Kennedy is less wedded to a textualist interpretive approach in general, he also prefers to read criminal statutes narrowly.
Read the whole thing here.
To take the original meaning of the Fourteenth Amendment seriously is to take economic liberties seriously," says George Thomas, an associate professor of government at Claremont McKenna College.
Thomas notes that, for most of our nation's history, there wasn't a rigid distinction between civil and economic liberties. The Bill of Rights treated them all as fundamental rights, and, as can be seen in the famous passage, the Fourteenth Amendment continued this tradition: "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."
Thomas explains that the separation between civil and economic liberties began during the Franklin Roosevelt era, when various economic liberties seemed to be written out of the Constitution. He shows how recent Supreme Court decisions, such as in Kelo v. City of New London, which granted governments wider economic domain powers, and McDonald v. Chicago, which extended the Second Amendment right to "keep and bear arms" to states and localities, figure in to how America defines and protects fundamental rights and economic liberties.
Approximately 10 minutes.
Interview by Sam Corcos. Shot and edited by Hawk Jensen.
Go to Reason.tv for HD, iPod, and audio versions of this and all our videos, and subscribe to Reason.tv's YouTube channel to receive automatic notification when new material goes live.
Reason has been celebrating (or at least
chronicling) the life and times of journalist, literary critic,
curmudgeon, and all-around interesting proto-libertarian gal Isabel
Paterson with a cartoon series in the print edition drawn by our
own Peter
Bagge. (The exciting conclusion will appear in the next issue
of the print edition, subscribe today!) If you
haven't come across her before, think Ayn Rand, but with Dorothy Parker's
sense of humor and sharp tongue, plus a pinch of deism.
Purely coincidentally, I happen to find myself at a conference on Paterson's most famous book, about which Ayn Rand said: The God of the Machine "does for capitalism what DasKapital does for the Reds and what the Bible did for Christianity." I.M.P. isn't much read these days, but there are some real gems in the book. Originally published in 1943, there's one passage that's astonishingly relevant today:
At any time when finance is under attack through the political authority, it is an infallible sign that the political authority is already exercising too much power over the economic life of the nation through manipulation of finance, whether by exorbitant taxation, uncontrolled expenditure, unlimited borrowing, or currency depreciation.
How's that for a Friday Fun Link?
Health care reform advocates are now pointing out that yesterday’s CMS report projects that after the initial coverage expansion, the health care cost-curve does begin to bend very slightly. That’s true. But that projection relies on some rather unlikely assumptions. The first, as I’ve noted, is that Congress allows a major reduction in doctor payments at the end of this year, which is not at all likely. Next is that the so-called “Cadillac tax”—an excise tax on expensive health plans—is allowed to go into effect. Given that, under significant union pressure, the law’s authors already delayed the start of the provision until near the end of the decade, I’m not sure we can count on that either. It’s not impossible, but Congress isn’t known for its eagerness to allow new taxes that would negatively affect politically influential constituencies.
It also relies on the assumption that IPAB, the new board responsible for keeping Medicare growth in check, will be effective in its mission. But as James Capretta argued in May, the board is somewhat limited in terms of how it can achieve those cuts:
In the past, to hit budget targets, Congress has always preferred to impose across-the-board payment rate reductions to provisions which would punish or reward providers based on some measure of quality or efficient performance. Tellingly, that was also true in the bill Congress just passed. The big savings comes from arbitrary cuts in payment updates for institutional providers of care.
The CBO, in its careful evenhanded way, also thinks there’s a reasonably good chance the board won’t save money. Last summer, director Doug Elmendorf told Congress that "in CBO's judgment, the probability is high that no savings would be realized...but there is also a chance that substantial savings might be realized.” In other words, it’s not impossible that some savings could be achieved. But the high probability is that it won’t work.
Even Medicare’s chief actuary is skeptical of the board’s chances at meeting its optimistic spending targets, writing in April that “in general, limiting cost growth to a level below medical price inflation alone would represent an exceedingly difficult challenge” and noting that "the Board’s efforts would be further complicated by provisions that prohibit increases in cost-sharing requirements and that exempt certain categories of Medicare expenditures from consideration."
So fair enough: If the new health care law is implemented without minimal hiccups, and all of the cost-cutting measures work as well as planned, it has a chance to bend the curve very, very slightly during the final half of the upcoming decade. On that, health reform advocates are correct. I can't speak for anyone else, but betting that a decade-long coordination of a trillion-dollar program between bureaucrats in Washington, legislators in Congress, and policymakers in fifty different state governments will somehow go exactly as hoped doesn’t seem like a very good wager to me.
According to sketchy reports in the Danish media, a man has been arrested after failing to blow himself up at a Copenhagen hotel. The BBC has the (still sketchy) details:
Danish police have detained a man injured by a small blast at a Copenhagen hotel amid media reports he was a would-be suicide bomber.
He suffered slight injuries on his face and arms and was arrested in a park where he is believed to have fled after the blast at the Jorgensens Hotel.
Police told the Associated Press news agency the blast had occurred in a toilet of the hotel. The hotel is located about 90m (90 yds) from a busy railway station.
The hotel is also located on “Israel Square,” which is likely some sort of provocation—because everything is a provocation these days. Incidentally, many of the reports in the Danish media are conflicting—there were reports of a second explosion in a nearby park where the bomber was apprehended, and a more recent report that his bag didn’t contain explosives—so a certain amount of skepticism is warranted.
In other non-Florida pastor news, one of Denmark’s largest retail chains is refusing to carry the memoirs of Mohammad cartoonist Kurt Westergaard, claiming that the book won’t be a big seller. No, I can’t imagine anyone would be interested in such a boring story. You know, I don’t mind private companies exposing themselves as cowards, but why can’t they just be honest about their cowardice?
A Danish supermarket group says it has no plans to sell the upcoming memoirs of Danish cartoonist Kurt Westergaard, known for a caricature of the Prophet Mohammed with a bomb in his turban, reports said Friday.
Dansk Supermarked, which includes several chains of stores, among them discount supermarket group Netto, said it did not believe the book, due out in November, would sell sufficiently.
Westergaard, who this week was awarded a prize in Germany dedicated to the freedom of the press, said he was not surprised.
'I had expected it, and others will likely follow suit,' he was quoted as telling the online edition of the Jyllands-Posten daily.
In her latest Forbes column, Reason Foundation Senior Analyst Shikha Dalmia notes that a recent review of the Intergovernmental Panel on Climate Change (IPCC) in the wake of the GlacierGate scandal is a huge missed opportunity. Instead of asking the organization, whose assessment reports are like the papal encyclicals of the global warming movement, to do some genuine soul searching, the review recommends more bureaucracy and better PR. None of the suggestions address the IPCC’s fundamental problem: It has every incentive—financial and otherwise—to buttress the global warming orthodoxy and none to challenge it.
At a
White House press conference this morning, ABC News reporter Jake
Tapper
asked President Obama to respond to a study by the government’s
Center for Medicare and Medicaid services released yesterday
showing that, over the next ten years, total medical spending in
the U.S. would rise slightly. For the most part, the president
danced around the question, touting the law’s headline
benefits.
But eventually, he did note that, despite the projected increase, the average cost per family insured would drop. But as I noted yesterday, averages don’t tell the whole story. And accepting the study’s small cost-bump means accepting the dubious assumption that Congress would let physician’s Medicare payment rates drop by 23 percent in December.
The other problem with this response is that when the president and his advisers first started talking about bending the cost curve, they weren’t talking about average cost per family insured. They were talking about overall medical spending. “The only way I think we’re going to fix it is if we see those two problems in the broader context of bending the curve down on health care inflation,” the president told reporters in 2009. And if you look at the Commonwealth Fund’s influential 2007 report on options for bending the curve, you see that the term was used was used to describe ways “to lower health spending relative to projected trends.” Yesterday’s CMS report projected that, in total, over the next decade, health spending will rise slightly more than if the law had not been passed. This is not a surprising result, really. Subsidizing health insurance for tens of millions more individuals was bound to result in some sort of immediate bump in health spending. And to his (sort of) credit, the president admitted as much. “As a consequence of us getting 30 million additional people health care, at the margins that's going to increase our costs.” he told Tapper. “We knew that."
For half a century, Stewart Brand has
demonstrated a gift for prescience. He rode with Ken Kesey’s Merry
Pranksters when most Americans had never heard of hippies, ran the
cameras at the first public display of modern computer text editing
and graphics in 1968, and helped inspire Earth Day as an early
environmental activist. But Brand is chiefly famous for creating
the most important guidebook and self-help aid for the hippie
generation, the Whole Earth Catalog. From our October
issue, Senior Editor Brian Doherty talks libertarianism, the
environment, and the future with this freewheeling visionary.
Why is Obama proposing more stimulus? Is it likely to pass, or create jobs? Is the new health care law a liability for Democrats? On Bloggingheads, Reason Associate Editor Peter Suderman and The Washington Independent’s Annie Lowrey discuss these questions and more.
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