Archives: 07/2010

More on Justin Amash

I wrote yesterday about a candidate for the House of Representatives who offered an interesting and critical look at his experience as a state legislator in Michigan. This candidate, Justin Amash, both reads the bills he votes on and posts explanations for his votes on his Facebook page. Here are two of his explanations:

Justin Amash just voted no on HBs 6038 and 6226, which impose stiff penalties and prison sentences on individuals who possess or use two synthetic drugs: one that mimics the effects of ecstasy and another that mimics the effects of marijuana. I have never possessed or used illicit drugs, nor should anyone. But this legislation is more about sensationalism than actual public protection. HB 6038 passed 105-1. HB 6226 passed 104-1.

Justin Amash just voted no on HR 294, which “recognize[s] the perfect game pitched by Armando Galarraga of the Detroit Tigers on June 2, 2010, against the Cleveland Indians.” Congrats to Mr. Galarraga for his outstanding performance and achievement, but I’m not the commissioner of Major League Baseball, and this resolution is not an appropriate legislative matter. It passed 101-5.

If he keeps this up, I may stop being cynical about politics which would be a problem because I don’t know any other way to be, having living in DC for 18 years. But I’m willing to give it a try.

You can have a look at his other explanations for his votes here. (Make sure you go down to the older posts on his wall to get his explanations).

Argentina Sets an Example of Equality Before the Law for Latin America

Nowadays, it’s hard to find an instance where Argentina sets a positive example for the rest of Latin America. However, last night’s vote in that country’s Senate that legalizes same-sex marriages must be praised as that. Argentina has now become the first country in Latin America to recognize marriage equality for all couples.

The fight for marriage equality is just beginning in Latin America. Outside of Argentina, only Mexico City grants gay couples the right to marriage. Uruguay has granted civil union rights to same-sex couples since 2008, and last year in Colombia the Constitutional Court ruled that same-sex couples can be recognized as de facto unions, which enjoy all the rights of marriage. In December, Costa Rica might hold a referendum on this issue. While the referendum is promoted by opponents of gay civil unions, the vote could end up in a big upset victory for the gay community.

Latin America, with its deep-seated conservative Catholic tradition, is not fertile soil for the cause of gay equality. That is one more reason to applaud last night’s brave vote in Buenos Aires.

Dear Health Care Journos, There’s Nothing Free about ObamaCare

The Obama administration announced yesterday its plans for implementing ObamaCare’s mandate that consumers purchase first-dollar coverage for preventive services.  The press release reads (emphasis added):

Administration Announces Regulations Requiring New Health Insurance Plans to Provide Free Preventive Care

Of course the administration would emphasize that consumers will pay nothing for these services at the moment of service, and elide the fact that this mandate will increase their health insurance premiums. The administration’s use of the word “free” is what we call spin.

What’s surprising–and more than a little disappointing–is that journalists and headline writers at major media organizations would repeat the administration’s spin, as if the government really is giving away free stuff:

  • New York Times: “Health Plans Must Provide Some Tests at No Cost…free coverage…free screenings…free preventive services…”
  • Los Angeles Times: “Healthcare law offers preventive care at no cost”
  • Politico: “New rules: Free preventive care…free under new federal guidelines.”
  • Reuters: “Healthcare overhaul mandates free preventive care…no extra cost to consumers…Medicare patients will have access to free prevention services…”
  • Wall Street Journal: “White House Unveils Free Preventative Services…services that will be free to consumers…free preventive care…free preventive care…”

Each use of “free” and “no cost” in these excerpts is false, even within its original context.  There’s no such thing as a free lunch. Everything has a cost.  No government can change that.  Mandating that insurers cover certain services does not magically make them free.  Consumers still pay, just in the form of higher health insurance premiums and lower wages.

The Wall Street Journal (in paragraph six), The New York Times (paragraph seven), Reuters (paragraph 16), and the Los Angeles Times (paragraph 19 or so) do mention that consumers will pay for this mandate in the form of higher premiums–but that doesn’t make the untrue stuff true.  It just makes the article internally inconsistent.  Moreover, the Los Angeles Times incorrectly suggests that the higher premiums would be offset by lower out-of-pocket spending.  (The change in premiums will be larger due to moral hazard and administrative costs.)  And Reuters mentions higher premiums only vaguely, and as if insurers would bear that cost.  Each article also repeats the administration’s spin that spending more on preventive care would reduce health care costs, without mentioning that the Congressional Budget Office and other health care researchers dispute that claim.

Journalists need to be very careful with terms like “free” and “no cost.”

Unleashing an Internet Revolution in Cuba

By now the name of Yoani Sánchez has become common currency for those who follow Cuba. Through the use of New Media (blog, Twitter and YouTube) Yoani has challenged the Castro regime in a way that various U.S. government-sponsored efforts have  failed to do before, earning the respect and tacit admiration of even those who continue to sympathize with the Cuban regime. As my colleague Ian Vásquez put it a few months ago, Yoani keeps speaking truth to power.

Although she’s a remarkable individual, Yoani is not alone in fighting repression with technology. Other bloggers are making their voice heard, and that makes the Castro dictatorship nervous. As Yoani wrote in a paper recently published by Cato, despite the many difficulties and costs that regular Cubans face when trying to access Internet,

… a web of networks has emerged as the only means by which a person on the island can make his opinions known to the rest of the world. Today, this virtual space is like a training camp where Cubans go to relearn forgotten freedoms. The right of association can be found on Facebook, Twitter, and the other social networks, in a sort of compensation for the crime of “unlawful assembly” established by the Cuban penal code.

As recent events in Iran and elsewhere have shown, once a technology becomes pervasive in a society, it is extremely difficult for a totalitarian regime to control it. A new paper published today by the Cuba Study Group highlights the potential of technology in bringing about democracy and liberty to Cuba. The document entitled “Empowering the Cuban People through Technology: Recommendations for Private and Public Sector Leaders,” also recommends lifting all U.S. restrictions that hinder the opportunities of companies to provide cell phone and Internet service to the island. For example, the paper reviews the current U.S. regulatory framework on technology investment in other repressive regimes such as Iran, Syria, Burma and North Korea, and finds that “the U.S. regulations governing telecommunications-related exports to Cuba are still some of the most restrictive.”

By removing these counterproductive restrictions, Washington could help unleash an Internet revolution in Cuba. More Yoanis will certainly bring about more change in the island than 50 years of failed U.S. trade and travel bans.

Obamanomics and my Seven Steamy Nights with the Gals from Victoria’s Secret

The White House is claiming that the so-called stimulus created between 2.5 million and 3.6 million jobs even though total employment has dropped by more than 2.3 million since Obama took office. The Administration justifies this legerdemain by asserting that the economy actually would have lost about 5 million jobs without the new government spending.
 
I’ve decided to adopt this clever strategy to spice up my social life. Next time I see my buddies, I’m going to claim that I enjoyed a week of debauchery with the Victoria’s Secret models. And if any of them are rude enough to point out that I’m lying, I’ll simply explain that I started with an assumption of spending -7 nights with the supermodels. And since I actually spent zero nights with them, that means a net of +7. Some of you may be wondering whether it makes sense to begin with an assumption of “-7 nights,” but I figure that’s okay since Keynesians begin with the assumption that you can increase your prosperity by transferring money from your left pocket to your right pocket.
 
Since I’m a gentleman, I’m not going to share any of the intimate details of my escapades, but I will include an excerpt from an editorial in today’s Wall Street Journal about the Obama Administration’s make-believe jobs.

President Obama’s chief economist announced that the plan had “created or saved” between 2.5 million and 3.6 million jobs and raised GDP by 2.7% to 3.2% through June 30. …We almost feel sorry for Ms. Romer having to make this argument given that since February 2009 the U.S. economy has lost a net 2.35 million jobs. Using the White House “created or saved” measure means that even if there were only three million Americans left with jobs today, the White House could claim that every one was saved by the stimulus. …White House economists…said the unemployment rate would peak at 9% without the stimulus (there’s your counterfactual) and that with the stimulus the rate would stay at 8% or below. In other words, today there are 700,000 fewer jobs than Ms. Romer predicted we would have if we had done nothing at all. If this is a job creation success, what does failure look like? …All of these White House jobs estimates are based on the increasingly discredited Keynesian spending “multiplier,” which according to White House economist Larry Summers means that every $1 of government spending will yield roughly $1.50 in higher GDP. Ms. Romer thus plugs her spending data into the Keynesian computer models and, presto, out come 2.5 million to 3.6 million jobs, even if the real economy has lost jobs. To adapt Groucho Marx: Who are you going to believe, the White House computer models, or your own eyes?

Emergency Spending

A recent paper by Veronique de Rugy examines how policymakers use various budgeting gimmicks to increase spending and obscure liabilities. One particularly abusive mechanism is the designation of supplemental spending as an “emergency.” The emergency designation makes it easier for policymakers to skirt budgetary rules, particularly “pay-as-you-go” (PAYGO) requirements.

The following chart from the paper shows how supplemental spending, most of which was designated as “emergency,” has taken off in the last decade:

As the chart notes, much of the increase is attributable to supplemental appropriations for the wars in Iraq and Afghanistan. The Bush administration was rightly criticized by analysts across the ideological spectrum for funding the wars outside of the standard budget process.

However, with the Democrats in control, the emergency designation is now being abusively applied to domestic spending. Congressional Research Service data obtained by the office of Senator Tom Coburn (R-Okla.) finds that emergency spending has increased deficits by almost $1 trillion since the 111th Congress was seated in January 2009.

The biggest chunk came with passage of the $862 billion “emergency” stimulus bill in February 2009. The Obama administration insisted that the emergency spending legislation was necessary to jump-start the economy and keep unemployment below 8 percent. Oops.

Congress has since passed additional multi-billion dollar “emergency” bills to extend supposedly simulative activities like unemployment benefits. The latest “emergency” extender bill that is bogged down in the Senate would add another $57 billion in debt.

What is Congress allowed to designate as emergency spending? Keith Hennessey, a former economic advisor to George W. Bush, offers the best definition: “it’s whatever you can get away with labeling as an emergency.”

However, Hennessey points out that there was originally a test with a fairly high bar created by the Office of Management and Budget in 1991 under the first President Bush. According to Hennessey, all five of these conditions had to be met:

  1. Necessary; (essential or vital, not merely useful or beneficial)
  2. Sudden; (coming into being quickly, not building up over time)
  3. Urgent; (requiring immediate action)
  4. Unforeseen; and
  5. Not permanent.

Hennessey says the definition was included in congressional budget resolutions during Bush II’s administration and that the president proposed codifying it in law. But that doesn’t seem to be the policy that the Bush II administration actually followed. With perhaps the exception of initial hostilities, there was nothing “unforeseen” about Bush’s “emergency” war spending in Iraq and Afghanistan. It seems that Bush’s inability to abide by his own proposal is another sad reminder that his fiscally reckless tenure helped pave the road to Obama.

Return of the Principal-in-Chief

According to a Fort Worth Star-Telegram report, President Obama plans to reprise last year’s hotly debated role as Principal-in-Chief to help kick off the coming school year.

Will he have the Department of Education once again put out leading and Obama-aggrandizing study guides? Will he again take personal credit for getting computers and other goodies into your kids’ schools? Will this address look as much like a campaign event as the last one? Will he tell all the kids that the really noble thing to do is get government jobs?

We don’t know the answers to these pressing questions yet, but we do know one thing: If he really does plan to play Principal – or maybe Motivational-Speaker – in-Chief again, it will be both unconstitutional, and unacceptable to a whole lot of people.

For a refresher on last year’s spectacle, by the way, check out this terrific “Cato Weekly Video” installment on it: