Archives: 06/2011

An Economic Policy That Also Causes Cavities

I nearly dropped my sugar bowl in my Froot Loops this morning when I saw that Senator Sheldon Whitehouse (D-RI) had introduced a bill to provide a temporary tax credit to firms hiring previously unemployed workers.

IANAE (I am not an economist), but even I know that if you drop the cost of hiring workers, you will get a few more workers hired until the cost of employing them rises again. The net result, after the tax credit expires, would be a return to unemployment for an equivalent number of workers.

Sure, letting businesses keep a bit more of the money they earn would provide a small stimulative effect, but that too would expire, and it’s nothing like the strengthening you’d get from a permanent tax reduction under which planning and investment could be based on lower tax rates/cost of labor.

It all left me headache-y and listless, or maybe that was the after-effect of my sugar-laden breakfast. Come to think of it, a temporary tax break and sugar cereals are similar. For whatever short burst of energy they produce, it’s followed by listless unease. Healthy food and lower taxes build strong people and economies.

The PA Senate, not House, Is Blocking the Expansion of School Choice

Republicans in Pennsylvania’s House, which has been reluctant to take up a controversial Senate voucher bill, have been on the receiving end of an intense lobbying campaign for vouchers.

I am all for grassroots groups putting pressure on lawmakers to do the right thing. But amidst all the sound and fury, those pursuing vouchers with such single-mindedness seem to have missed one very important fact; the House already did the right thing. They passed a massive expansion of the existing, successful, and uncontroversial education tax credit program by a massive margin (only 4 percent opposed).

The Educational Improvement Tax Credit program is vastly superior to all of the voucher bills under consideration. It has shockingly broad bipartisan support. It was easily expanded in the House. But for some reason, the Senate will not take it up.

There are good reasons for Republicans and Democrats in the House to oppose all of the voucher bills. There is no good reason for the Senate to refuse to expand the education tax credit program.

So, I have a few  questions for the activists pounding away for vouchers.

Why not melt the Senate phone lines instead of the House? Why is a new, inferior voucher program more important than expanding the better, less controversial, more cost-effective tax credit program?

Resurrect DC Choice, Bury the Lede

A Washington Post story from a couple of days ago touts survey results showing a majority of DC parents – 53 percent – finally giving the DC public schools a decent grade. That is, to be fair, a big story. But it certainly isn’t the most overwhelming finding in the survey. That you find mentioned deep in the article:

This year, Congress approved an extension of a federal program that provides vouchers to help students from some low-income D.C. families attend private or parochial schools. The survey found that nearly 70 percent of parents with children in the system support such tuition aid. Overall, nearly two-thirds of residents back vouchers, with positive sentiment higher among African Americans.

Perhaps even more interesting is that support for charter schools – the “it” choice reform because charters are still public schools – is downright tepid in comparison:

Residents remain ambivalent about the rapidly growing public charter sector, which serves 28,000 students. Forty-one percent consider the independently operated charters better than regular public schools; 42 percent say they are about the same. The favorable rating rises to a slight majority, however, among residents younger than 30.

The people of DC overwhelmingly want real, private-school choice. That’s the news about DC education that everyone should know!

Federal Jobs Programs Don’t Work

In a 1975 interview, Nobel prize-winning economist Milton Friedman said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”

In writing and editing essays on www.DownsizingGovernment.org, I see that mistake in department after department. It is an important reason why policymakers find it so hard to control their spending appetites. They want to believe that programs work, and so they internalize the bedtime stories sold to them by program advocates.

In Politico today, I examine federal employment and job training programs. From FDR to Obama, and from Reagan to Ryan, policymakers have wanted to “do something” to help labor markets. However, jobs programs are not a proper exercise of federal power under the Constitution, and they simply haven’t worked very well despite decades of renaming, retooling, and reinventing.

Sorrell vs. IMS Health: Not a Privacy Case

The Supreme Court’s decision in Sorrell vs. IMS Health is being touted in many quarters as a privacy case, and a concerning one at that. Example: Senator Patrick Leahy (D-VT) released a statement saying “the Supreme Court has overturned a sensible Vermont law that sought to protect the privacy of the doctor-patient relationship.” That’s a stretch.

The Vermont law at issue restricted the sale, disclosure, and use of pharmacy records that revealed the prescribing practices of doctors if that information was to be used in marketing by pharmaceutical manufacturers. Under the law, prescription drug salespeople—“detailers” in industry parlance—could not access information about doctors’ prescribing to use in focusing their efforts. As the Court noted, the statute barred few other uses of this information.

It is a stretch to suggest that this is a privacy law, given the sharply limited scope of its “protections.” Rather, the law was intended to advance the state’s preferences in the area of drug prescribing, which skew toward generic drugs rather than name brands. The Court quoted the Vermont legislature itself, finding that the purpose of the law was to thwart “detailers, in particular those who promote brand-name drugs, convey[ing] messages that ‘are often in conflict with the goals of the state.’” Accordingly, the Court addressed the law as a content- and viewpoint-oriented regulation of speech which could not survive First Amendment scrutiny (something Cato and the Pacific Legal Foundation argued for in their joint brief.)

What about patients’ sensitive records? Again, the case was about data reflecting doctors’ prescribing practices, which could include as little as how many times per year they prescribe given drugs. (They probably include more detail than that.) The risk to patients is based on the idea that patients’ prescriptions might be gleaned through sufficient data-mining of doctors prescribing records (no doubt with other records appended). That’s a genuine problem, if largely theoretical given the availability and use of data today. Vermont is certainly free to address that problem head on in a law meant to actually protect patients’ privacy—against the state itself, for example. Better still, Vermonters and people across the country could rely on the better sources of rules in this new and challenging area: market pressure (to the extent possible in the health care area) and the (non-prescriptive, more adaptive) common law.

Whatever the way forward, Sorrell vs. IMS Health is not the privacy case some are making it out to be, it’s not the outrage some are making it out to be, and it’s not the last word on data use in our society.