Archives: March, 2008

John McCain, Determined to Fight al Qaeda Wherever It Isn’t

Matt Yglesias links to this astonishing gaffe from the presumptive Republican nominee:

Speaking to reporters in Amman, the Jordanian capital, McCain said he and two Senate colleagues traveling with him continue to be concerned about Iranian operatives “taking al-Qaeda into Iran, training them and sending them back.”

Pressed to elaborate, McCain said it was “common knowledge and has been reported in the media that al-Qaeda is going back into Iran and receiving training and are coming back into Iraq from Iran, that’s well known. And it’s unfortunate.” A few moments later, Sen. Joseph Lieberman, standing just behind McCain, stepped forward and whispered in the presidential candidate’s ear. McCain then said: “I’m sorry, the Iranians are training extremists, not al-Qaeda.”

Yet another lesson that talk can be simultaneously straight and wrong. The persistence of this sort of unified field theory of terrorism is truly remarkable. Anyone who’s reading the newspapers knows that Iran is, of all countries in the region, most supportive of the Iraqi government. Don’t take my word for it: ask Iraqi President Jalal Talabani, who referred to President Ahmadinejad on his recent victory lap visit to Iraq as a “brother.” And then there’s al Qaeda in Iraq, which is not so supportive. It can be difficult to keep all this straight, but the man’s running for president on the basis of his *ahem* peculiar expertise in fighting terrorism, after all.

Tuesday Trade Links

A couple of interesting tidbits on trade:

  • Here’s a great video of our friend, Rep. Jeff Flake (R, AZ), speaking about the decades-long embargo on Cuba and restrictions on the freedom of Americans to travel there. Congressman Flake spoke at a Cato event (scroll to about half way down the page) on Capitol Hill last year along with Congressman Charlie Rangel (D, NY). Cato’s Center for Trade Policy Studies has long argued for an end to the failed embargo on Cuba.
  • The U.S. Department of Commerce yesterday released the 2007 trade deficit figure: $738.6 billion or 5.3 percent of GDP. It will no doubt come as a relief to the current account deficit (CAD) hawks to know that the CAD is down 9 percent on 2006, primarily due to higher export earnings (thanks, cheaper dollar) and an economic slowdown. More on the link between economic growth and the deficit here.

Epstein on Health Disparities

At the Health Affairs blog, Cato adjunct scholar Richard A. Epstein critiques the usual remedies for eliminating racial, income-based, and other disparities in health outcomes:

[T]he only way to eliminate disparities in health outcomes is to equalize services outside the health care area. Health depends on the education we have, the food we eat, the cars we drive, and the friends we make. Equalization in all these areas sends us once again down an egalitarian sinkhole…

The great failing of [the mandate-and-subsidize] approach is that it takes as given the huge regulatory apparatus that now places a hammerlock on the sensible provision of health care. Better it be started at the other side of the problem, by asking which of our myriad forms of regulation are justified on efficiency grounds. Our state-based medical licensing system imposes sharp restriction on the free flow of labor across state lines. The Health Insurance Portability and Accountability Act (HIPAA) imposes numerous restrictions on the use and transfer of information that drive up the cost of medical care in the name of the protection of patient privacy. A costly and unreliable medical malpractice system leads to the closure of desperately needed facilities that serve marginal communities. Medicare offers huge subsidies for affluent seniors on the backs of people with a fraction of those affluent seniors’ come. Most importantly, perhaps, constant barriers are thrown in the path of nonmedical firms entering the market to supply health care. Why not let people pay for their own health care at a Walgreens clinic instead of waiting in an emergency room, which is the worst place to provide medical care for indigent patients?

The first order of business in my view is to resist any plea for a direct attack on disparities in health care. Put any consideration of new schemes of redistribution last. Put first a relentless reexamination of every single regulatory structure now in place, in the hope that it could be either shrunk or dismantled.

Supreme Court Hears Second Amendment Case Today

This morning the Supreme Court will be hearing oral arguments in the landmark Second Amendment case, DC v. Heller. People started getting in line last night. (HT: Volokh Conspiracy). Here’s the story from today’s Washington Post. An audio of the argument will be released around 11:30 am EST for those of us who could not attend the live event. The attorneys who present the arguments must be prepared for three scenarios. Scenario I is a “cold bench” – which means few questions. In that scenario, the attorney must be ready to speak persuasively for about 30 minutes. Scenario II is the “hot bench” – which means lots of questions. In that scenario, the attorney must be ready for a barrage of questions and just hope that he/she can make a strong opening and closing without interruption. Scenario III is somewhere in between the two extremes. Everyone expects a hot bench today. Should be very interesting.

For additional background, go here and here.

Large Health Savings Accounts, Unveiled

This week, the journal Forum for Health Economics & Policy publishes a paper of mine on “large” health savings accounts, a novel proposal to reduce government control over the U.S. health care sector. 

Government exempts employer-sponsored insurance (ESI) from income and payroll taxes, which seems like a tax cut.  But it operates more like a tax increase because it strips workers of control over their earnings.  Oh, and it drives up health insurance premiums too.

Large HSAs would replace the tax exclusion for ESI with an exclusion for money contributed to a Large HSA, which the worker would own.  The same tax exclusion would be available to all workers, regardless of where or whether they purchase health insurance.

Altering the tax exclusion that way would force employers to shift the money they now use to purchase health benefits – on average almost $4,000 for individuals and $9,000 for families – into workers’ cash wages.  Individuals could then contribute, say, up to $8,000 annually to a Large HSA.  Families could contribute up to $16,000. 

Workers could use those funds to purchase medical care and health insurance, from any source, tax-free.  For example, they could hand the money right back to their employer and stay on the company plan.  Anything the worker doesn’t spend grows tax-free.

Large HSAs have a number of advantages over other tax-based health care reform proposals, including Sen. John McCain’s proposal to provide tax credits for health insurance.  Large HSAs would eliminate the tax code’s influence over consumers’ health care decisions to a greater extent, and with fewer economic and political downsides, than Sen. McCain’s tax-credit. 

One downside of McCain’s tax credit proposal, as well as other reform proposals, is that they discriminate against the uninsurable.  A tax break for health insurance is only valuable if you can obtain health insurance.  Tying a tax break to insurance automatically excludes a lot of very sick people.  In contrast, Large HSAs offer the same tax break to the uninsurable, who arguably need it most.

To read more about Large HSAs, click here (free download).

Who Serves the Public Interest?

The Washington Post refers to Ralph Nader’s Public Citizen as “a public-interest group” in an article on costly federal regulations that the group is defending. So I wondered: Does the Post think federal regulation is always in the public interest? Or that groups that defend regulation are really acting “in the public interest”? What about groups that work to reduce the burden of government on consumers or taxpayers? Are they “public interest groups”? Certainly, as a member of the public, I don’t really see bigger, costlier government and more expensive products as being in my interest.

So I went to Nexis to investigate. Sure enough, in the past year the Post has used the phrase “public interest group[s]” 41 times. In every case (except one Associated Press story), the groups were on the political left. They demanded more spending or regulation by the federal government, actions that some but not all people would say are in the public interest.

I don’t always disagree with these “public interest groups.” For instance, one story quoted the Media Access Project. They almost always support more regulation of media companies, except when the question is regulation of obscenity or profanity. In this story MAP, “a public interest group,” applauded a court ruling striking down an FCC ruling that the use of profanity on a Fox News broadcast was indecent. Hear, hear. Now if only MAP would defend the rights of media companies to make their own decisions on non-obscene broadcasting.

But how about the National Taxpayers Union, which works to eliminate wasteful spending and reduce the burden of government? Was it a public interest group? Not in the Post. How about the Competitive Enterprise Institute, which works for competition and more choice for consumers? Not a public interest group.

The Post seems to have a very consistent but arguably wrong-headed view about just what is in the public’s interest.

McCain Joins Anti-Universal Coverage Club

It’s official.  From the CBS News story following Sen. John McCain’s appearance on 60 Minutes:

“Senator Clinton says that providing universal healthcare is quote ‘a moral responsibility.’ Do you agree?” [60 Minutes correspondent Scott] Pelley asked.

“Well, I think that’s one of the big differences we have about the role of government. If you think that the government should mandate anything to the American people than besides a safety net, and I don’t view it as a safety net. I view Medicare and Medicaid as a safety net,” McCain said. “But to mandate that all Americans are required to do something then that’s just not within the fundamental philosophy that I have about the role of government in America.”

I think that earns him membership in the club.