Tag: Matt Yglesias

‘Letting the Sick Die on the Street’

Blogger Matt Yglesias has described my CNN op-ed on health care as follows:

Meanwhile, in Harvard economist and Cato Institute senior fellow Jeffrey Miron’s dystopia, if your parents wind up with no money through bad luck or poor decision-making and then you get sick you’ll just die on the street for lack of money.

Did I really say such an outrageous thing? Well, I did not use exactly those words (as Matt makes clear), but yes, that is the logical implication of my position.

And I stand by it. Here’s why.

First, my assessment is that even with no government health insurance, hardly anyone would die on the street for lack of health care. The poor would use their income transfers to buy some health care or insurance. The poor would receive private charity. And health care would be far less expensive due to elimination of the distortions caused by government health insurance.

Second, my position is that government provision of health insurance is enormously inefficient: it means worse health care for everyone, and it wastes resources that can be put to other uses. So the negative of having a few people suffer without government health insurance must be balanced against the good of having better medical care for all and against the good that can be accomplished with those saved resources.

That good might be lower taxes for everyone, or more government spending on education, or greater public health spending to combat HIV in poor countries. Whatever the alternate uses turn out to be, one cannot escape the fact that a tradeoff exists between protecting the poor and other goals.

C/P Libertarianism, from A to Z

The New Republic and Guilt by Association

I watched with interest the J Street debate between Matt Yglesias and The New Republic’s Jonathan Chait over the question “what it means to be pro-Israel.”  Matt’s a very efficient thinker, and Chait’s a particularly sharp debater.  I witnessed him slug it out at length in a debate with David Boaz a while back, not something I’d like to do.

Chait made a straightforward argument: to be pro-Israel, someone has to accept two premises.  First, one has to believe that historically, Israel is the more sympathetic party in the Middle East.  Second, one has to believe that the U.S. should not be even-handed in the Middle East, but rather should be on Israel’s side.

But what was most interesting about his argument was his accusation of guilt by association against J Street.  It was a problem, Chait argued, that J Street had been embraced by people who did not meet his definition of pro-Israel.  Chait rang the alarum that “The American Conservative magazine, which was founded by Pat Buchanan, …has been saying nice things about J Street.”  In addition, “the famous Walt and Mearsheimer have been saying extremely nice things about J Street — embracing J Street.”

This is a pretty straightforward guilt-by-association argument: The American Conservative doesn’t meet Chait’s definition of pro-Israel, therefore, for that magazine to praise J Street tarnishes its pro-Israel bona fides.  Same story with John Mearsheimer and Steve Walt.

First, the person at TAC who’s been praising J Street has a name: Scott McConnell.  Scott has a PhD in history from Columbia, and is the current editor-at-large (previously the editor) of the magazine.  I don’t know in great detail Scott’s views on Israel, but I think it’s fair to say that he thinks it’s very important for America, for Israel, and for the Palestinians to get a two-state solution set up, and sooner rather than later.  He also believes, I think, that in order for this to happen, Washington will have to put pressure on both Israel and the Palestinians to give up things they don’t want to give up.  The same view is held by Mearsheimer and Walt.  So the allegedly guilty parties’ view is certainly less zero-sum than Chait’s (would Chait characterize himself as “anti-Palestinian,” I wonder?), maybe even positive-sum.  But I don’t think that receiving praise from a person with such views on the matter necessarily should serve to taint J Street’s pro-Israel bona fides.

But beyond this, is guilt-by-association really something that Chait wants to engage in at all?  For instance, Chait’s boss at The New Republic, Martin Peretz, wrote last March that Mexican people suffer from “congenital corruption” and possess “near-tropical work habits.”  (The piece is no longer available on TNR‘swebsite, but the passage in question can be found here.)  Should we be asking what Chait’s views on Mexicans are, since he is a writer at TNR under Mr. Peretz?  When Peretz suggested two days ago that President Obama’s views on foreign policy are infused with an ideological narrative, and “Obama’s narrative is assumedly third world, maybe just by dint of his skin complexion,” should we be asking Chait to clarify his views on African-Americans?  Finally, although I’m no expert on Mr. Peretz’s views on Arab people, those who’ve paid closer attention make a good case that he has said some reasonably provocative things about them, as well.  Should Chait be brought in for questioning on these matters?

If people only wrote for magazines every word of which they agreed with, few people would write for magazines.  Even if people took the much more modest step of steering clear of writing for magazines that regularly publish offensive material like the above, consumers of magazines like The New Republic would suffer.  But the fact that Chait doesn’t feel the need to distance himself from Mr. Peretz’s various racial foibles ought to raise either questions about his views on Mexicans, blacks, and Arabs, or else questions about his standing to level charges of guilt by association.

Putting Private Insurance Out of Business

Over at Think Progress, Matt Yglesias takes me to task for saying that the so-called public option in the House’s health care bill “would all but eliminate private insurance and force millions of Americans into a government-run system.”

Yglesias apparently still buys into the myth that the public option is, well, an option.

For people who receive health insurance through their employers, which is to say the vast majority of the Americans who currently have health insurance, the House bill would change very little. Or, rather, the biggest change would simply be the confidence that if, in the future, you cease to get health insurance from your employer (maybe you’ll lose your job or want to change jobs) that you’ll still be able to get health care. What’s more, of the minority of Americans who would be getting health care through the new “exchange,” the majority will probably sign up for private health insurance and everyone will have the option of doing so. If the government-run public plan is, for whatever reason, vastly more appealing than the private options then it will dominate. But if you believe the government can’t run health care well, there’s no reason to think that will happen. Whatever you think of that, though, the basic fact is that even if the public option does dominate the exchange most people will still have private employer-provided insurance.

That might be true if the new government-run program were going to compete on anything close to a level playing field.  But, because the public option is ultimately supported by the taxpayers, the playing field can never be level.   True, the bill does say that the new program is supposed to be self-sustaining, covering administrative and benefit costs entirely out of premium revenues.  But remember that Medicare Part B was originally supposed to support 50 percent of its costs through premiums.  That has shrunk to the point where premiums pay for less than 25 percent of the program’s cost.

And the government has a myriad of ways to prevent the true cost of the program from showing up in premium prices.  For example, the government-run plan will not have to pay state or federal taxes, and unlike private insurance plans, who can be sued in state courts, the government-run plan could only be sued in federal court.

At the very least, the program carries with it an implicit guarantee against future losses.  Suppose the public option prices its products too low and loses money.  Can you imagine that Congress is simply going to let it go bankrupt, go out of business?  Would a Congress that has bailed out banks and automobile companies because they are “too big to fail” resist subsidizing the government’s insurance plan if it began to lose money?   Even without the actual bailout, such an implicit guarantee has a value. For example, the implicit guarantees behind Fannie Mae and Freddie Mac were estimated to have saved those institutions $6 billion per year.

All of this means that the government-run plan would be significantly cheaper than private insurance, not because it would out-compete private insurance or because it was more efficient, but because it had unfair advantages.  The lower cost means that businesses, in particular, would have every incentive to dump workers from their current health insurance plan into the government plan.  And, if other provisions of the bill make insurance more expensive, as is likely, the incentive for employers to shift workers to the government plan would be even greater.   Estimates suggest that nearly 90 million workers could eventually be forced into the government plan.

As Robert Samuelson, dean of economic columnists, writes in the Washington Post, “a favored public plan would probably doom today’s private insurance.”

Samuelson is right.  There is nothing “optional” about a public option.  And that is just the way the Left wants it.

Neoconservatism and Militarism

Matt Yglesias identifies a puzzle, comparing Cold War/Irving Kristol neoconservatism to today’s Weekly Standard Wilsonianism:

[E]ven though the high-level theoretical content of the realpolitiker 70s version of neoconservatism and the Wilsonian 2000s version of neoconservatism seem very different, the operational content is extremely similar. You have support for higher defense budgets, a tendency toward threat-inflation and hysteria, a belief in an aggressive military posture and extensive saber-rattling, hostility to negotiations, and hostility to international law both in theory and in practice. This was initially presented to the world as a “realistic” alternative to lefty critiques of US support for anti-communist dictators and more recently appeared as an “idealistic” critique of lefty reluctance to launch wars, but the continuity between the views is enormous.

What Matt doesn’t say is why the policy outcomes stayed largely the same despite shifting theoretical sands.  I think this piece by Brian Schmidt and Michael Williams can help shed some light on the problem.

Irving Kristol's Medal of Freedom Award (Paul Hosefros/The New York Times)Irving Kristol’s Medal of Freedom Award (Paul Hosefros/The New York Times)

A social order based purely on narrowly egoistic interests, neoconservatives argue, is unlikely to survive — and the closer one comes to it, the less liveable and sustainable society will become. Unable to generate a compelling vision of the collective public interest, such a society would be incapable of maintaining itself internally or defending itself externally. As a consequence, neoconservatism regards the ideas at the core of many forms of modern political and economic rationalism — that such a vision of interest can be the foundation for social order — as both wrong and dangerous. It is wrong because all functioning polities require some sense of shared values and common vision of the public interest in order to maintain themselves. It is dangerous because a purely egoistic conception of interest may actually contribute to the erosion of this sense of the public interest, and the individual habits of social virtue and commitment to common values that sustain it.

In this context consider the worshipful treatment of men like Teddy Roosevelt and Rudy Giuliani by neoconservatives, and neoconservatives’ utter contempt for libertarians and individualism.  For neocons, the higher defense budgets and militarism, the aggressive military posture and extensive saber-rattling, the nationalism, were in some sense ends in themselves rather than rationally calculated means to defend the country.  Without an enemy and a grand national project — note in the article to which Matt points Kristol’s admonition that “statesmen should, above all, have the ability to distinguish friends from enemies” — the society would descend into a variety of individual pursuits — family, profit, local community, learning — that provide no unifying politics.  Again, for Kristol, “a nation whose politics turn on the cost of false teeth is a nation whose politics are squalid.”  A grand national project, be it a global proxy war against the Soviet Union, a crusade to end terrorism, or even a recurring fetish for space travel, provides unifying substance for the country.

The trouble, as Matt rightly observes, is that you can’t explicitly just go around glomming onto whatever rationale provides the best argument for militarism and nationalism today. The citizens of the country seem unlikely to support costly and destructive policies based on the idea that it’s all for their own good.  I am reminded of Ed Crane and Bill Niskanen’s apt reference to neoconservatism as “a movement with a head but no body,” meaning that it lacked indigenous support at the grassroots level.  So the obvious play for neocons was to sew the neoconservative head onto the conservative nationalist body.  To justify endless war, the idea of “real America” being under siege by both an insular and tweedy academy (in Schmidt and Williams’ story, the scientific-rationalist realists) and an array of foreign devils allowed a group of radical ideas to strike a conservative pose:

In foreign policy as in domestic policy, neoconservatism claims to represent the majority of real Americans, to speak on their behalf, and to defend the validity of their beliefs in their virtues and values (and their place as the basis for the national interest of the United States), just as vociferously as it has represented those values against the depredations of elites in the culture wars. Although a high proportion of neoconservatives are intellectuals — and are often part of what would be considered an academic elite by any standards — they are able to represent themselves as outsiders shunned and victimized by liberal (and realist) intellectuals in precisely the same way that real people are, and for the same reasons — for expressing what the people really know in an elite cultural environment dominated by self-interested, self-righteous, and yet culturally decadent liberal elites.

In this reading, trying to ground the policy outcomes in a coherent theory of international politics is bound to be fruitless.  The policy outcomes themselves are designed to provide a centripetal counter to the polity’s natural tendency to fly apart.  On this point Schmidt and Williams cite Midge Decter (“domestic policy was foreign policy, and vice-versa”) and Robert Kagan (“there can be no clear dividing line between the domestic and the foreign”).  I think there’s something to this.

Are Living Standards Higher in Denmark or the United States?

The left loves Scandinavia, but for the wrong reason. Nations such as Denmark and Sweden have much to admire, particularly their open markets, low levels of regulation, sound money, and honest governments. Indeed, if fiscal policy is removed from the equation, both Denmark and Sweden are more laissez-faire than the United States according to Economic Freedom of the World (as I noted in this recent video).

But fiscal policy is where the Scandinavians have serious problems. Taxes are confiscatory, punishing people who work, save, and invest. High levels of government spending, meanwhile, reduce economic growth by diverting resources from the productive sector of the economy and funneling them into the stifling welfare state.

Not surprisingly, this is the reason why statists admire Scandinavian nations. Matthew Yglesias, for instance, recently expressed his great admiration for Denmark. And I suppose I would agree with him if asked to pick the world’s best welfare state. I’ve been to the country several times and there is no question that laissez-faire policies in areas other than fiscal policy have helped the nation remain relatively prosperous.

But Yglesias is a bit lovestruck about the Danes (an understandable impulse for non-economic reasons), and it leads him to make some rather strange assertion — presumably because he wants us to believe that Denmark’s good points are because of (rather than in spite of) an onerous fiscal burden. What jumped out at me was his claim that Danes enjoy a “higher average material standard of living” than Americans. I’m not sure where he gets that, since the World Bank, CIA, United Nations, and IMF all show that the United States has more per-capita economic output.

To be fair, measures of per-capita gross domestic product are not a  perfect measure, even if they are adjusted for purchasing power parity. So let’s take a look at other statistics that try to compare living standards. The two that I found (perhaps Yglesias found others, in which case I look forward to his identifying the source) are from the Organization for Economic Cooperation and Development and, coincidentally, the Danish Finance Ministry.

The OECD, many of you already know, is not my favorite organization. The bureaucracy’s anti-tax competition campaign is a reprehensible attempt to hinder the flow of jobs and capital from high-tax nations to low-tax jurisdictions. So surely nobody will claim that the OECD is a collection of market fundamentalists trying to manipulate statistics to make high-tax nations look bad. So let’s now look at this chart, which is based on the OECD’s calculations of average individual consumption per capita, pegged against an average for member nations of 100. It certainly appears that living standards in the United States are much higher.

Table1

Now let’s look at numbers from the Danish Finance Ministry. The bureaucrats there, in response to a parliamentary request, put together figures on per-capita individual consumption and per-capita private consumption.

Table1

I suspect the Finance Ministry is not trying to make Denmark look bad compared to the United States, yet the data certainly suggest that Americans enjoy higher living standards than their Danish counterparts.

Why Is For-Profit Education So Difficult in the U.S.?

Matt Yglesias has a post up looking at the PISA scores, and he seems to imply that for-profit schooling has been tried and found wanting in Sweden and the U.S.:

The big difference is that many Swedish charters are run by for-profit firms. We’ve had some experiments with that in the U.S. and it hasn’t worked very well. Nobody’s really found a great way of making consistent profits running K-12 schools in America.

Of course even he notes that Sweden’s schools are highly regulated by the state.

And in the U.S., the difficulty of succeeding in for-profit education just might have something to do with that government monopoly on k-12 education and the $560 billion or so in tax revenues that fund it. Maybe.

Pervasive Illiteracy in the Afghan National Army

Afghan_SigmaMatt Yglesias has a lot of smart things to say about the pervasive illiteracy plaguing the Afghan National Army. Upwards of 75 to 90 percent (according to varying estimates) of the ANA is illiterate.

As Ted Galen Carpenter and I argue in our recent Cato white paper Escaping the Graveyard of Empires: A Strategy to Exit Afghanistan, this lack of basic education prevents many officers from filling out arrest reports, equipment and supply requests, and arguing before a judge or prosecutor. And as Marine 1st Lt. Justin Greico argues, “Paperwork, evidence, processing—they don’t know how to do it…You can’t get a policeman to take a statement if he can’t read and write.”

Yglesias notes:

This strikes me as an object lesson in the importance of realistic goal-setting. The Afghan National Army is largely illiterate because Afghanistan is largely illiterate…we just need an ANA that’s not likely to be overrun by its adversaries. But if we have the more ambitious goal of created [sic] an effectively administered centralized state, then the lack of literacy becomes a huge problem. And a problem without an obvious solution on a realistic time frame [emphasis mine].

Such high levels of illiteracy serves to highlight the absurd idea that the United States has the resources (and the legitimacy) to “change entire societies,” in the words of retired U.S. Army lieutenant colonel John Nagl. Eight years ago, Max Boot, fellow for National Security Studies at the Council on Foreign Relations, likened the Afghan mission to British colonial rule:

Afghanistan and other troubled lands today cry out for the sort of enlightened foreign administration once provided by self-confident Englishmen in jodhpurs and pith helmets…This was supposed to be ‘for the good of the natives,’ a phrase that once made progressives snort in derision, but may be taken more seriously after the left’s conversion (or, rather, reversion) in the 1990s to the cause of ‘humanitarian’ interventions. [emphasis mine]

But as I highlighted yesterday at the Cato event “Should the United States Withdraw from Afghanistan?” (which you can view in its entirety here), policymakers must start narrowing their objectives in Afghanistan, a point Yglesias stresses above. Heck, as I argued yesterday, rational people in the United States are having difficulty convincing delusional types here in America that Barack Obama is their legitimate president. I am baffled by people who think that we have the power to increase the legitimacy of the Afghan government. It’s also ironic that many conservatives (possibly brainwashed by neo-con ideology) who oppose government intervention at home believe the U.S. government can bring about liberty and peace worldwide. These self-identified “conservatives” essentially have a faith in government planning.

Yet these conservatives share a view common among the political and military elite, which is that if America pours enough time and resources—possibly hundreds of thousands of troops for another 12 to 14 years—Washington could really turn Afghanistan around.

However, there is a reason why the war in Afghanistan ranks at or near the bottom of polls tracking issues important to the American public, and why most Americans who do have an opinion about the war oppose it (57 percent in the latest CNN poll released on Sept. 1) and oppose sending more combat troops (56 percent in the McClatchy-Ipsos survey, also released on Sept. 1). It’s because Americans understand intuitively that the question about Afghanistan is not about whether it is winnable, but whether it constitutes a vital national security interest. An essential national debate about whether we really want to double down in Afghanistan has yet take place. America still does not have a clearly articulated goal. This is why the conventional wisdom surrounding the war—about whether we can build key institutions and create a legitimate political system—is not so much misguided as it is misplaced.

The issue is not about whether we can rebuild Afghanistan but whether we should. On both accounts the mission looks troubling, but this distinction is often times overlooked.