Tag: New York Times

Bootleggers & Baptists, Sugary Soda Edition

Here’s a poor, unsuccessful letter that impressed the relevant New York Times reporters, but not their editorial overlords:

It may seem counter-intuitive that bleeding-heart anti-hunger groups and “Big Food and Big Beverage” would ally to oppose Mayor Bloomberg’s request to prevent New Yorkers from using food stamps to purchase sugary sodas [“Unlikely Allies in Food Stamp Debate,” October 16].  Yet the “bootleggers and Baptists” theory of regulation explains that this “strange bedfellows” phenomenon is actually the norm, rather than the exception.

Most laws have two types of supporters: the true believers and those who benefit financially.  Baptists don’t want you drinking on the Lord ’s Day, for example, while bootleggers profit from the above-market prices that Blue Laws enable them to charge on Sundays.  Consequently, both groups support politicians who support Blue Laws.

Baptists-and-bootleggers coalitions underlie almost all government activities. Defense spending: (neo)conservatives and defense contractors.  President Obama’s new health care law: the political left and the health care and insurance industries. Ethanol subsidies: environmentalists and agribusiness. Education: egalitarians and teachers’ unions. The list goes on.

It’s easier to illustrate the theory (and sexier) when the bootleggers are non-believers who cynically manipulate government solely for their own gain.  Yet one can be both a Baptist and a bootlegger. The Coca-Cola Company may sincerely believe that society benefits when the government subsidizes sugary sodas for poor people.  Even so, a bootlegger-cum-Baptist can still rip off taxpayers.

This morning, NPR reported on another bootleggers-and-Baptists coalition: anti-immigration zealots and the prison industry.

KFF/HRET Survey, Part III: Employers Can’t Shift to Workers a Cost that Workers Already Bear

In a previous post, I promised to address the negative spin that the Kaiser Family Foundation put on its annual Employer Health Benefits Survey, released this month.  I do so in an op-ed that ran today at the Daily Caller.  An excerpt:

The Kaiser Family Foundation recently issued its annual survey of employer-sponsored health benefitsdeclaring: “Family Health Premiums Rise 3 Percent to $13,770 in 2010, But Workers’ Share Jumps 14 Percent as Firms Shift Cost Burden.” That’s half-right — but the other half perpetuates a myth about employee health benefits that stands in the way of real health care reform….

[Y]ou pay the full cost of your health benefits: partly through an explicit $4,000 premium and partly because your wages are $9,770 lower than they otherwise would be.

Kaiser therefore claims the impossible when it says that firms are shifting costs to workers.  Employers cannot shift to workers a cost that workers already bear. Yet this year, as in past years, the Associated PressBloombergCNNKaiser Health NewsThe Los Angeles TimesThe New York TimesNPRThe Wall Street Journal, and The Washington Post uncritically repeated the cost-shifting myth.

The bolded sentence is Cannon’s Second Rule of Economic Literacy.  (Click here for the first rule.)

I have also collected a series of excerpts from past Kaiser Family Foundation surveys showing this is a persistent issue.  Here are a few:

1998: “Workers in small firms bear a much larger share of the financial burden for health benefits than employees of larger firms.”

2005: “The average worker paid $2,713 toward premiums for family coverage in 2005 or 26% of the total health premium.”

2007: “Annual Premiums for Family Coverage Now Average $12,106, With Workers Paying $3,281”

The folks at the Kaiser Family Foundation were exceedingly gracious when I approached them to discuss this issue.

Brooks: Let the Bad Times Roll

I hope you missed David Brooks’ New York Times column recently extolling the virtues of excruciating pain.  The op-ed, entitled, “A Case for Mental Courage,” is Brooks at his depressing, neocon worst.  He starts out by describing in way too much detail the agony Fanny Burney, a early 19th century novelist, experienced when she had a mastectomy without anesthesia.  “I then felt the Knife rackling against the breastbone…” and so on.  Thanks for sharing, David, but, really, why?  Well, because it turns out that heroism is to be found “in the ability to face unpleasant thoughts.”  Hmmm.  The underlying major problem that afflicts our nation, says Brooks, is that capitalism has undermined the idea that people are “inherently sinful.”  Our culture “places less emphasis on the need to struggle against one’s own mental feebleness.”

It also turns out that America is too “geared toward pleasuring consumers, not putting them on some arduous character building regime.”  In the good old days, Brooks intones, “this meant conquering mental laziness with arduous and sometimes numbingly boring lessons.  It meant conquering frivolity by sitting through earnest sermons and speeches.  It meant conquering self-approval by staring straight at what was painful.”  Sign me up, David, you neocons look like a fun bunch.  How is it that Mencken defined a Puritan?  Someone who lives in constant fear that someone, somewhere is having a good time?

And therein lies the disconnect between most neoconservatives and America.  Thomas Jefferson (someone who always liked to have a good time, if you get my drift) put it right there in the Declaration:  We are going to be a nation that recognizes the unalienable right to “Life, Liberty and the Pursuit of Happiness.”  Mastectomies sans anesthesia would not seem to fall into the category of the pursuit of happiness.

We should celebrate the fact that the pursuit of happiness is primarily an individualistic pursuit – something that rubs against the grain of neoconservatism.  Some years back, Brooks wrote, “ultimately American purpose can find its voice only in Washington…individual ambition and willpower are channeled into the cause of national greatness.  And by making the nation great, individuals are able to join their narrow concerns to a larger national project.”  That philosophy, of course, was tried a couple of times in the 20th century and found a bit wanting.  Especially if you count the tens of millions of human beings who died because of it.  On the other hand, they did suffer.

President Obama’s Speech Czar

President Obama’s Secretary of Health and Human Services Kathleen Sebelius is still threatening to bankrupt insurance companies who tell their customers that ObamaCare’s mandates will increase premiums by more than 2 percent, even though her department’s projections show that, starting this week, just one of the law’s new mandates will increase some premiums by nearly 7 percent.

In a CBS News story last week, Sebelius tried to defend those indefensible threats:

But don’t the insurance companies have a right to make their own analyses and claims to their customers?

“Absolutely, they have a right to communicate with their customers,” replied HHS Secretary Kathleen Sebelius. “We just want to make sure that communication is as accurate as possible.”

The government can and should police fraud – but that’s not what Sebelius is doing.  She is suppressing legitimate differences of opinion in the pursuit of political gain.

What if the government had said, “Absolutely, CBS News has a right to communicate with its customers – we just want to make sure that communication is as accurate as possible”?  Should the government be able to put CBS News out of business if it decides those communications are not as accurate as possible? How about the National Rifle Association?  Should the next Republican administration be able to put the Center for American Progress, the SEIU, or The New York Times out of business if it decides their communications are not as accurate as possible?

You don’t have to oppose ObamaCare to see the danger here.

Egg Farming and the Salmonella Recall

The New York Times invited me to contribute to its “Room for Debate” feature on the big egg recall and here is an excerpt from my reply:

…Advocates cite the current outbreak, at last report limited to two related Iowa egg farms, as reason to enact pending legislation that would intensify federal regulation of food-making in the name of safety. Large food and agribusiness companies have generally signed off on most of the new proposals as acceptable. Many smaller producers, on the other hand, suspect there will be less room for them, and for local variety generally, in this reassuring new world of business and government cooperation.

I go on to cite the CPSIA debacle, in which a safety enactment devastated small producers of children’s goods while entrenching some of the dominant industry players.

Read the full New York Times post here. Some other perspectives worth checking out: Ronald Bailey, Ira Stoll, Ann Althouse.

New York Times Seeks Higher Taxes on the ‘Rich’ as Prelude to Higher Taxes on the Middle Class

In a very predictable editorial this morning, the New York Times pontificated in favor of higher taxes. Compared to Paul Krugman’s rant earlier in the week, which featured the laughable assertion that letting people keep more of the money they earn is akin to sending them a check from the government, the piece seemed rational. But that is damning with faint praise. There are several points in the editorial that deserve some unfriendly commentary.

First, let’s give the editors credit for being somewhat honest about their bad intentions. Unlike other statists, they openly admit that they want higher taxes on the middle class, stating that “more Americans — and not just the rich — are going to have to pay more taxes.” This is a noteworthy admission, though it doesn’t reveal the real strategy on the left.

Most advocates of big government understand that it will be impossible to turn America into a European-style welfare state without a value-added tax, but they don’t want to publicly associate themselves with that view until the political environment is more conducive to success. Most important, they realize that it will be very difficult to impose a VAT without seducing some gullible Republicans into giving them political cover. And one way of getting GOPers to sign up for a VAT is by convincing them that they have to choose a VAT if they don’t want a return to the confiscatory 70 percent tax rates of the 1960s and 1970s. Any moves in that direction, such as raising the top tax rate from 35 percent to 39.6 percent next January, are part of this long-term strategy to pressure Republicans (as well as naive members of the business community) into a VAT trap.

Shifting to other assertions, the editorial claims that “more revenue will be needed in years to come to keep rebuilding the economy.”  That’s obviously a novel assertion, and the editors never bother to explain how and why more tax revenue will lead to a stronger economy. Are the folks at the New York Times not aware that both economic growth and living standards are lower in European nations that have imposed higher tax burdens? Heck, even the Keynesians agree (albeit for flawed reasons) that higher taxes stunt growth.

The editorial also asserts that, “Since 2002, the federal budget has been chronically short of revenue.” I suppose if revenues are compared to the spending desires of politicians, then tax collections are - and always will be - inadequate. The same is true in Greece, France, and Sweden. It doesn’t matter whether revenues are 20 percent of GDP or 50 percent of GDP. The political class always wants more.

But let’s actually use an objective measure to determine whether revenues are “chronically short.” The Democrat-controlled Congressional Budget Office stated in its newly-released update to the Economic and Budget Outlook that federal tax revenues historically have averaged 18 percent of GDP. They are below that level now because of the economic downturn, but CBO projects that revenues will climb above that level in a few years - even if all of the 2001 and 2003 tax cuts are made permanent. Moreover, OMB’s historical data shows that revenues were actually above the long-run average in 2006 and 2007, so even the “since 2002” part of the assertion in the editorial is incorrect.

On the issue of temporary tax relief for the non-rich, the editorial is right but for the wrong reason. The editors rely on the Keynesian rationale, writing that, “low-, middle- and upper-middle-income taxpayers…tend to spend most of their income and the economy needs consumer spending” whereas “Tax cuts for the rich can safely be allowed to expire because wealthy taxpayers tend to save rather than spend their tax savings.”

I’ve debunked Keynesian analysis so often that I feel that I deserve some sort of lifetime exemption from dealing with this nonsense, but I’ll give it another try. Borrowing money from some people in the economy and giving it to some other people in the economy is not a recipe for better economic performance. Economic growth means we are increasing national income. Keynesian policy simply changes who is spending national income, guided by a myopic belief that consumer spending somehow is better than investment spending. The Keynesian approach didn’t work for Hoover and Roosevelt in the 1930s, it didn’t work for Japan in the 1990s, and it hasn’t worked for Obama.

And it doesn’t matter if the Keynesian stimulus is in the form of tax rebates. Gerald Ford’s rebate in the 1970s was a flop, and George W. Bush’s 2001 rebate also failed to boost growth. Tax cuts can lead to more national income, but only if marginal tax rates on productive behavior are reduced so that people have more incentive to work, save, and invest. This is an argument for extending the lower tax rates for all income classes, but it’s important to point out that the economic benefits will be much greater if the lower tax rates are made permanent.

Last but not least, the editorial asserts that, “The revenue from letting [tax cuts for the rich] expire — nearly $40 billion next year — would be better spent on job-creating measures.” Not surprisingly, there is no effort to justify this claim. They could have cited the infamous White House study claiming that the so-called stimulus would keep unemployment under 8 percent, but even people at the New York Times presumably understand that might not be very convincing since the actual unemployment rate is two percentage points higher than what the Obama Administration claimed it would be at this point.

Weakonomics

An anonymous contributor to the NY Times Freakonomics blog asks “How much does school choice matter?” And answers in much the way you might expect:

Probably less than you think, as [economist Stephen] Levitt has previously argued. Now, in an analysis of seven years of test-score data from 6,000 Los Angeles teachers, the L.A. Times and the Rand Corp. have found teacher effectiveness to be three times more influential than [choice of] school… on student performance.

The author of this posting makes no effort to differentiate between “public school choice” and actual free education markets, and in the process grossly misrepresents what is known and has been repeatedly shown: that the freest and most market-like education systems overwhelmingly outperform monopolisitic school systems such as we have in the United States.

To his credit, Stephen Levitt did make this distinction in the 2007 posting linked in the blockquote above. But even Levitt refered to the evidence on this subject as “hard to find.” Should anyone else be experiencing difficulty in finding this evidence, they are encouraged to click on the link immediately above, where they will find a peer-reviewed paper digesting the results of 65 studies on this subject.