Archives: October, 2008

Cult of the Vice Presidency

If you read the papers, “all of them,” like Sarah Palin, you may have seen this, but today’s New York Times features questions for the aspiring veeps. My contribution:

The claim by Dick Cheney that he was exempt from certain disclosure requirements because the vice president was a “legislative officer” has been greeted with outrage. But the main power the Constitution grants the vice president is a legislative one — breaking a tie vote in the Senate.

So, Governor Palin, Senator Biden, doesn’t Mr. Cheney have a point?

But, then, if the vice president is a legislative officer, how can he wield the vast executive powers that Mr. Cheney has exercised, including orchestrating and supervising a warrantless wiretapping program?

Can the vice president shift between branches at his convenience? If not, what, in your view, is the constitutional status of the vice presidency?

— GENE HEALY, the author of “The Cult of the Presidency: America’s Dangerous Devotion to Executive Power

Giving credit where it’s due, I should mention this smart, short law review article by Glenn Reynolds, “Is Dick Cheney Unconstitutional?”

Friend and former Cato colleague Radley Balko has a good one for Joe Biden:

Senator Biden, you’ve been one of the Senate’s most ardent drug warriors. You helped create the office of “drug czar”; backed our failed eradication efforts in South America; encouraged the government to seize the assets of people merely suspected of drug crimes; pushed for the expanded use of racketeering and conspiracy laws against drug offenders; advocated the use of the military to fight the drug war; and sponsored a bill that holds venue owners and promoters criminally liable for drug use by people attending concerts and events.

Today, illicit drugs are as cheap and abundant as they were decades ago. Would you agree that the anti-drug policies you’ve championed have failed? If not, how have they succeeded?

— RADLEY BALKO, a senior editor at Reason magazine

Hot Air in the Senate Bailout

What does global warming have to do with the liquidity “crisis?” Nothing!  But not according to the Senate, whose bill includes a provision, Section 117,  directing the National Academy of Sciences to “undertake a comprehensive review of the Internal Revenue Code of 1986 to identify the types of and specific tax provisions that have the largest effect on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects.”  For this, The National Academy  is appropriated $1.5 million.

In other words, somehow the government’s purchase of bad loans is related to global warming? This is a naked attempt by environmental extremists to use people’s fears of financial collapse as an excuse to ultimately skew the tax code in such a way that it makes energy even more expensive. Some bailout! 

Bloomberg’s Banana Republic

Michael Bloomberg has decided to run for an additional term as mayor of New York. He will do so despite a law limiting mayors to two terms in New York.

Here’s some history. The voters twice endorsed the term limits law in 1993 and 1996. In 1993, the law passed by a margin of 59 percent to 41 percent. In 1996, the City Council tried to change the law to extend term from 8 to 12 years. The initiative making that change lost.

Of course, elected officials predicted disaster. Some agreed then but not now. John Mollenkopf, a well-known political scientist at the City University of New York said: “My initial reaction to the term limits was negative, but the experience of how they have worked has changed my mind. On balance, I think this feature of government does create openings for fresh thinking and new leadership.”

Bloomberg does not plan to put the change in term limits before the voters. Instead, he will try to get the City Council to extend his term. A New York Times survey of City Council members in early September found that a majority might support changing the term limits law. Perhaps that’s not surprising: two thirds of the City Council will be turned out of office in 2009 under the current law. If the mayor’s term can be extended, it will be easier to change the law for City Council members.

New Yorkers are not rolling over for Bloomberg. Gene Russianoff, a spokesman for the New York Public Interest Research Group, said of Bloomberg’s power grab: “Sadly, the move is worthy of ‘democracy’ in a banana republic.” Susan Lerner, executive director of Common Cause/NY, called the mayor’s stance “profoundly undemocratic and deeply disquieting.” Even Establishment types are opposing him, according to the New York Times.

Before his ambition got the best of him, Bloomberg himself “called for the need for restraints on elected leaders, dismissed the notion that anyone is indispensable, and once called an effort to revise the limits ‘disgusting.’”

Let’s see if New Yorkers agree with the mayor.

Treasury Can Only Spend $50 Billion Per Month

So why give them $700 billion?

Representative Spencer Bachus (R-AL) is before the House Rules Committee arguing that the Treasury Department can’t even use all of the $700 billion that the bailout legislation would authorize. Congress can allow Treasury some of the money, take a look later at a couple of months of the program, and see how well it’s being used.

His colleagues are beating him up for it, but it makes simple sense. The right answer is not to bail out Wall Street at all - and for heaven’s sake do away with the government-sponsored enterprises that got us here - but a compromiser would let the program run for a few months, with the new Congress in January taking a look at how it’s working.

Perhaps One of the Stupidest Laws, Ever

According to an article in today’s New York Times, a new law in California will require private insurance companies to pay for routine tests to screen patients for the human immunodeficiency virus (the HIV).  Routine HIV testing may well be very valuable, but this may be one of the stupidest laws ever. 

The law requires private insurers – but not the state’s MediCal program, which provides health insurance to the poor – to cover the cost of the test.  The test costs less than $30.  Since the law only applies to those with private insurance, it forces insurers to pay for the test on behalf of those who are most able to afford it themselves. 

Importantly, Sacramento politicians are happy to force insurers to pay for routine HIV testing for middle- and high-income residents.  But the politicians declined to require coverage for the poor, because the politicians would have to come up with the money themselves.  As Cato adjunct scholar David Hyman writes:

When regulators internalize the costs of their decisions, they suddenly become more sensitive to the associated trade-offs… most state legislatures displa[y] concern for the plight of [patients] only as long as state governments did not have to foot the bill to fix the problem.

There may be an externality argument here, which may or may not be persuasive.  But an externality argument would apply more to the poor than the non-poor.

Why do doctors support this law?  Do they not find the test valuable enough to provide it gratis?  Why can’t they persuade their privately insured patients to cough up $30?  Do they not want to be bothered?  If doctors can’t do so, what right does the state have to force those patients to pay for the test through higher insurance premiums?  According to the article, doctors routinely get around insurance-company limitations on coverage for HIV tests by fudging the records.  Should we be rewarding doctors – who admit to defrauding insurance companies – with the power to force those insurance companies to do things they don’t want to do?

And why didn’t the Times ask the insurance companies why they sometimes refuse to cover some HIV screening tests?  Insurers often have very good reasons for denying coverage.

Laissez-Faire and Corporatism

I’ve just read Steven Horwitz’s excellent “Open Letter to My Friends on the Left,” on the subject of the credit crisis. I highly recommend it, whether you’re on the left or not:

In the last week or two, I have heard frequently from you that the current financial mess has been caused by the failures of free markets and deregulation. I have heard from you that the lust after profits, any profits, that is central to free markets is at the core of our problems. And I have heard from you that only significant government intervention into financial markets can cure these problems, perhaps once and for all. I ask of you for the next few minutes to, in the words of Oliver Cromwell, consider that you may be mistaken. Consider that both the diagnosis and the cure might be equally mistaken.

Consider instead that the problems of this mess were caused by the very kinds of government regulation that you now propose. Consider instead that effects of the profit motive that you decry depend upon the incentives that institutions, regulations, and policies create, which in this case led profit-seekers to do great damage. Consider instead that the regulations that may have been the cause were supported by, as they have often been throughout US history, the very firms being regulated, mostly because they worked to said firms’ benefit, even as they screwed the rest of us. Consider all of this as you ask for more of the same in the name of fixing the problem. And finally, consider why you would ever imagine that those with wealth and power wouldn’t rig a new regulatory process in their favor.

The seemingly arcane difference between laissez-faire and corporatism is one of the most important in today’s public policy debates. Laissez-faire means the equality of all before the law, with the state neither helping nor hindering any market actor. Corporatism means offering special favors to those who’ve already succeeded. (Just for starters: “Too big to fail” is corporatism.)

If only this distinction were more clearly understood by lawmakers, journalists, and the general public. Too often all of these groups just use the vague word “capitalism,” which seems mostly intended to split the difference – or to obscure it. But laissez-faire and corporatism are directly opposed to one another, and if more people on the left understood this, they might be far more sympathetic to free markets. Even, perhaps, while keeping a healthy mistrust of corporations.

The Truth Isn’t out There

Because I work on federal education policy, I receive a steady stream of emails from the White House Office of Public Liaison (read: Office of Spin) suggesting that the No Child Left Behind Act is saving American education. Today, only moments after I’d read the story on the Washington Post’s website, the OPL folks sent me an “in case you missed it” copy of a Post report suggesting that thanks to NCLB, achievement scores for low-income kids in some DC suburbs have increased:

Since enactment of the No Child Left Behind law, students from poor families in the Washington area have made major gains on reading and math tests and are starting to catch up with those from middle-class and affluent backgrounds….The achievement gap between economic groups, long a major frustration for educators, has narrowed in the region’s suburban schools since President Bush signed the law in 2002, according to Maryland and Virginia test data.

It’s entirely possible, I should make clear, that achievement gaps on Virginia and Maryland tests have closed. The problem is, it’s not possible to attribute such changes to NCLB, because so many other factors than the law—changing demographics, state reforms, etc.—could have been at work. And that’s not the biggest problem with dubbing NCLB a savior. The biggest problem is that states have been changing their own tested populations, test content, cut scores, and other important testing variables throughout the NCLB era, rendering truly comparable scores a seriously threatened species.

For well-documented evidence of this, check out the Center on Education Policy’s compilation of state-testing policies and outcomes. CEP has files for every state, and to get through them all requires a fair amount of downloading and scrolling. Examining each state’s “major changes in testing system,” however, will reward the effort, as will taking in the trends of comparable results from year to year. Bottom line: You can tell almost nothing about outcomes under NCLB because so many state testing systems have been significantly altered—and re-altered, and altered again—during the NCLB era.

That said, there is a bit of good news for Maryland: The state has comparable data generally going back to 2004—a pretty abbreviated trend line, but not the shortest of any state—and the percentage of kids overall hitting “proficiency” seems to be going up. That might still reflect test questions getting easier, better test “gaming” by teachers, and other less-obvious changes than new cut scores or completely new tests, but at least it’s a few years of general comparability and improvement.

For Virginia, there is no NCLB Santa Clause: The state has only two years of comparable data, and while the percentage of kids hitting proficiency rose between 2006 and 2007, it’s not nearly enough info to identify any kind of a trend.

So here’s the overall NCLB story based on what can reliably be reported: When it comes to the law’s effectiveness, it seems the truth, no matter what is proclaimed, isn’t really out there.