Archives: 10/2009

More Supreme Court Review on the Road

As an update to an earlier post about my speaking schedule this fall, here are my remaining public events through Thanksgiving.  All these events, other than the one on Nov. 3, are sponsored by the Federalist Society (and in some cases co-sponsored by other organizations) and all are open to the public.  As always, if you decide to attend one of the presentations after learning of it from this blog post, please feel free to ishapiro [at] cato [dot] org (drop me a line) beforehand, and do introduce yourself after the event.

Event info after the jump.

Oct. 26 at 12:00pm -  Florida International University Law School (Miami) - Use of Foreign Law in Constitutional Interpretation

Oct. 27 at 12:30pm - University of Miami Law School - Use of Foreign Law in Constitutional Intepretation

Oct. 28 at 12:30pm - University of Dayton Law School - Hillary Clinton and the Emoluments Clause

Oct. 29 at 12:00pm - Northern Kentucky University Chase College of Law - October Term 2009 Overview

Nov. 3 at 12:00pm - Environmental Law Institute (Washington) - Panel on Stop the Beach Renourishment and Judicial Takings

Nov. 4 at 12:00pm - Yeshiva University Cardozo Law School (NYC) - Immigration and the Constitution

Nov. 4 at 3:00pm - Seton Hall University Law School - Debate on the The Chrysler Bankruptcy

Nov. 5 at 12:00pm - Columbia University Law School - Debate on the Use of Foreign Law in Constitutional Interpretation

Nov. 16 at 12:00pm - St. Louis University Law School - Use of Foreign Law in Constitutional Interpretation

Nov. 17 at 12: 00pm - Washington University (St. Louis) Law School - The Looming Danger of Transnational Progressivism

One Nation Under Double Jeopardy

The Senate is about to vote on Defense Department funding with an expanded federal “hate crimes” bill. This well-intentioned piece of legislation threatens to make violations of the fundamental right against Double Jeopardy a routine practice, as federal courts will now have the power to re-prosecute defendants for what are traditionally state crimes.

The House removed language that the Senate put in place to ensure that the “hate crimes” provisions did not stretch to encompass free speech, threatening to attach criminal liability to core rights of free expression.

This expansion of federal jurisdiction guarantees that high profile cases will be retried until a guilty verdict is obtained to satisfy political factions. This politicization of justice will only harm our courts and our freedoms. The Senate should vote down this threat to the fundamental rights of all Americans.

Now for some quick background reading:

A Globalized Reading List

If you are looking for a good book on globalization and trade, an excellent source of ideas is the book review section of the Yale Center for the Study of Globalization. The site features excerpts and reviews of the latest books covering all aspects of the subject.

I have an understandable soft spot for the latest posting, on my new Cato book titled Mad about Trade: Why Main Street America Should Embrace Globalization.

Nothing Good about The Higher Ed Pricing Game

On Tuesday I noted that the College Board had released its annual reports on college prices and student aid. At the time I wrote the post I hadn’t yet been able to download the reports, but was planning to provide a rundown of their major findings once I’d read them. I’ve now done the latter, but it turns out that Ben Miller over at the Quick and the ED has already posted a pretty good summary of the most important findings. Go there if you want the highlights. Don’t go there, though, if you want to know what the highlights mean, at least for anyone other than students. For that, you’ll have to read on here….

The big news is that net college prices – what students pay after aid– have actually decreased over the last 15 years. While sticker prices were rising much faster than incomes and inflation, what students were actually paying dropped. The implication of this is so obvious that Mr. Magoo couldn’t mistake it: Student aid, much of which comes through taxpayers, enables schools to charge ever-higher prices with near impunity.

Back to the Quick and the ED. To some degree, Miller sees declining net price as a triumph for federal aid, making college more affordable even as prices explode:

This story should be encouraging for legislators that fought hard to win Pell Grant increases over the last few years. The steepest decreases in net price occur beginning in the 2007-2008 academic year, the same time Congress began passing legislation that boosted the maximum Pell Grant award several times. This at least suggests that the money spent on the program did play some role in lessening the financial burden for students and was not completely eaten up by sticker price increases.

On the flip side, Miller at least acknowledges that:

The net price figure also lessens the pressure on schools to actually take proactive steps to lower their costs. If the price you list isn’t actually what you charge, then why should anyone care what the listed price is and how high it gets? Net price thus serves as a kind of smokescreen that gets colleges at least partially off fo[r] charging an arm and a leg.

So what’s wrong with this analysis? 

Most important is that Miller softpedals the aid effect, suggesting that the main negative consequence of  ever-increasing assistance is that it bleeds off a bit of the pressure for schools to lower costs. But it likely has a much more destructive effect than that, not just curbing efficiency pressures, but enabling schools to constantly charge and spend more.  It’s a likelihood that student-aid defenders try to dispel by citing studies that cover very short periods of time, or that simply pronounce that we don’t know that it happens. That it probably happens, however, has been borne out empirically, and it’s readily ackowledged by prominent higher educators including former Harvard president Derek Bok, former Stanford vice president William F. Massy, and former University of Iowa president Howard Bowen. Indeed, the latter’s “law” couldn’t be more blunt: “Universities will raise all the money they can and spend all the money they raise.”

Miller’s other major failing is that he completely ignores that all this aid has to come from somwhere, and that “somewhere” is largely taxpayers. (OK, first it’s China.) Just to give you a sense of the impact on taxpayers, College Board data show that between the 1998-99 and 2008-09 academic years, total federal aid – including grant money recipients don’t have to pay back, and loans they (sometimes) do – rose from $61.1 billion to $116.8 billion. Add state aid to that, and the total goes from $66.6 billion to $126.2 billion.

And what are some of the major downsides of these forced third-party payments? Miller mentions a few pricing difficulties for students, but makes no mention of the potentially huge negative consequences for the nation: Encouraging lots of people to attend college who simply aren’t prepared for it; cranking out many more degrees than the job market demands; and potentially slowing economic growth by taking funds from productive uses and giving it to efficiency-averse colleges and students. 

The big finding in the latest College Board data, which the Quick and the ED nails, is that net college prices have been going down. The important story, however, is that this is bad news for the country. Unfortunately, the Quick and the Ed misses that almost completely.

“Why Don’t We Fix the Two Public Options We Have Now instead of Creating a Third One?”

That sensible – and hopefully not rhetorical – question was posed by Democratic Senator Mary Landrieu (D-LA) on National Public Radio, according to The Hill.

Regarding recent polling that shows that a new Fannie Med (my term) commands majority support among the public, Landrieu quipped, “I think if you asked, ‘Do you want a public option, but it would force the government to go bankrupt?’, people would say no.”

Real health care reform wouldn’t bankrupt taxpayers or the government.

Yes, Mr. President, a Free Market Can Fix Health Care

At his White House forum on health reform back in March, President Barack Obama offered:

If there is a way of getting this done where we’re driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way.

In a new Cato study titled, “Yes, Mr. President, a Free Market Can Fix Health Care,” I take up the president’s challenge and explain that markets are indeed the only way to achieve those goals.  I also explain how Congress can remove the impediments that currently prevent markets from doing so:

  1. Give Medicare enrollees a voucher (adjusted for their means and health risk) and let them purchase any health plan on the market,
  2. Reform the tax treatment of health care with “large” health savings accounts, which would give workers a $9.7 trillion tax cut (without increasing the deficit) and free them to purchase secure coverage that meets their needs,
  3. Free consumers and employers to purchase health insurance across state lines (i.e., licensed by other states), which could cover up to one third of the uninsured,
  4. Make state-issued clinician licenses portable, which would increase access to care and competition among health plans, and
  5. Block-grant Medicaid and the State Children’s Health Insurance Program, just as Congress did with welfare.

Unlike the president’s health care proposals (which, as Victor Fuchs explains, would merely shift costs), these reforms would reduce costs, expand coverage, and improve health care quality – without new taxes, government subsidies, or deficit spending.

Would a free market be nirvana?  Of course not.  But fewer Americans would fall through the cracks than under the status quo or the government takeover advancing through Congress.

There is a better way.

(Cross-posted at Politico’s Health Care Arena.)