Tag: the economist

How Your Government Deceives You, ‘Social Insurance’ Edition

From my former Cato colleague, Will Wilkinson:

The trick to weaving an effective and politically-robust safety net for those who most need one is designing it to appear to benefit everyone, especially those who don’t need it. The whole thing turns on maintaining the illusion that payroll taxes are “premiums” or “insurance contributions” and that subsequent transfers from the government are “benefits” one has paid for through a lifetime of payroll deductions. The insurance schema protects the main redistributive work of the programme by obscuring it. As a matter of legal fact, payroll taxes are just taxes; they create no legal entitlement to benefits. The government can and does spend your Social Security and Medicare taxes on killer drones. But the architects of America’s big social-insurance schemes, such as Frances Perkins and Wilbur Cohen, thought it very important that it doesn’t look that way. That’s why you you see specific deductions for Social Security and Medicare on your paycheck. And that’s why the government maintains these shell “trust funds” where you are meant to believe your “insurance contributions” are kept.

Alas, like Social Security and Medicare themselves, the deceptions that protect these entitlement programs cannot go on forever.

Generally, liberals are profoundly conservative about the classic Perkins-Cohen architecture of America’s big entitlement programmes, which they credit for their remarkable popularity and stability. Yet that architecture offers very few degrees of freedom for significant reform. Crunch time is coming, though, and sooner or later something’s got to give.

If Wilkinson’s overlords at The Economist demand that he misspell program, they should be consistent and allow him to abandon the American convention of mislabeling leftists as liberals.

Economist Debate: ‘Governments Must Do Far More to Protect Online Privacy’

I’m at the mid-point of an online debate hosted by the Economist.com on the proposition: “This house believes that governments must do far more to protect online privacy.”

I’m on the “No” side. In my opening statement, I tried to give some definition to the many problems referred to as “privacy,” and I argued for personal responsibility on the part of Internet users. I even gave out instructions for controlling cookies, by which people can deny ad networks their most common source of consumer demographic information if they wish. Concluding, I said:

Government “experts” should not dictate social rules. Rather, interactions among members of the internet community should determine the internet’s social and business norms.

In the “rebuttal” stage, which started today, I dedicated most of my commentary to documenting how governments undermine privacy—and I barely scratched the surface.

Along with surveillance program after surveillance program, I discussed how government biases protocols and technologies against privacy, using the Social Security number as an example. I don’t know what syndrome causes many privacy advocates to seek protection in the arms of governments, which are systematic and powerful privacy abusers themselves.

Nonetheless, I’m opposing the “free lunch” argument, which holds that a group of government experts can come up with neutral and balanced, low-cost solutions to many different online problems without thwarting innovation. Right now the voting is with the guy offering people the free lunch, not the guy arguing for consumer education and personal responsibility.

You can vote here.

Prominent Economists Debate Trade Deficits

Following Dan’s and David’s recent posts on the trade deficit and its (ir)relevance, allow me to draw readers’ attention to the Economist’s “By Invitation” blog, where invited prominent economists debate topical economic issues.

One of their current questions is: Should governments take any steps to boost exports? That’s an important topic, and an especially timely one given the Obama administration’s ‘National Export Initiative,’ a five-year plan to double U.S. exports. All of us here at Cato’s trade center have previously expressed skepticism about the feasiblity and/or wisdom of that plan, and Dan Ikenson blogged earlier today about the administration’s apparent incoherence in pursuit of that goal

The Economist’s debate talks about industrial policy and export promotion in the abstract, rather than the NEI per se, but I recommend checking it out. Scott Sumner and Laurence Kotlikoff make especially good sense.

The Economist: “Efforts to Challenge Obamacare Are Gaining Momentum”

From a recent news item in The Economist:

[M]illions of Americans…think that Barack Obama’s health-insurance laws must be overturned…[P]olls suggest that many Americans still dislike them…

At the federal level Republican leaders in Congress have jumped on every bit of negative news—for example, a recent report from the Congressional Budget Office suggesting that the reforms will cost more than originally forecast—as just cause for overturning them…

The real action is outside Washington, though. Virginia, Utah and Idaho have outlawed the new individual mandate, which will require everyone to purchase health cover, and other states are looking at similar measures. Elsewhere, opponents have taken to the ballot box. Missouri will hold a referendum in August on the matter. Perhaps half a dozen other states may see a constitutional amendment blocking Obamacare on the ballot in November.

Critics have also filed various lawsuits challenging the constitutionality of health reform. In the most prominent nearly two dozen states, almost all led by Republicans, have banded together. Their chief legal argument is that the new individual mandate is unconstitutional. On May 14th the National Federation of Independent Business, a trade group representing small companies (who worry especially about the costs of compliance with the new law), declared that it too would join in.

Repeal the bill.

Vote Now: Is Obama Failing?

Closing statements are posted at the Economist debate, “This house believes that Barack Obama is failing.” Currently, Obama leads in the voting by a bit less than the margin by which American voters oppose his health care plan. But there’s still time for a rally! So vote now.

I conclude my closing statement this way:

Has Mr Obama failed? Of course it’s too early to say that. But is he headed that way? Let’s go to the tape: His policies are bad for the country; they expand government, reduce freedom and slow the economic recovery. The policies that he cannot implement by executive order have become bogged down in Congress as public opposition mounts. Since he was elected, his party has lost three elections for governor and senator. Public opinion has shifted so sharply against him that last week pundits began speculating that the Republican Party might take back the Senate. Mere months after an outpouring of articles hailing the end of Reaganism and the return of activist government, he has caused the resurgence of small-government attitudes. He aspired to be a transformational president who would “remake this nation”. He may well be doing so in two ways: giving us a substantially larger government, and simultaneously reviving free-market, limited-government ideology among a broader public.

That doesn’t sound like success.

Since I wrote the statement, a few more items relating to Obama’s political decline: The Marist poll now finds that 57 percent of independents disapprove of his performance, sharply down even from December and a sign of his continuing decline among swing voters. A new Washington Post-ABC News poll shows voters trust Obama over congressional Republicans by 47 to 42 percent. Not so bad. Better to be five points ahead than five points behind the opposition. But as Byron York notes, “In November, in the same poll, Obama led by 15 points. Last July, he led by 23 points. And last February, he his lead was 55 points. So in the course of a single year, Obama’s lead over Republicans has shrunk from 55 points to five.

Vote here. Vote now. (Click on “Vote now or add your view,” and a voting box should appear. You’ll have to register, though.)

Topics:

Is Obama Failing? The Rebuttals

At the Economist’s online debate, Elaine Kamarck and I have posted rebuttals to the opening statements. I say, among other things:

One question here is how do you measure a politician’s failure. Is it, for instance, a failure to get his policies enacted, or his success in enacting bad policies? Surveys of historians always give high marks to presidents who expanded government or fought wars. Washington’s most-quoted political scientist, Norman Ornstein, recently defended the productivity of the current Congress; his article illustrated that to the Washington establishment the very definition of a productive Congress is the spending of more taxpayers’ money, the creation of new agencies and bureaucracies, and the concentration of more power in the hands of federal regulators. Citizens might prefer a government that kept us out of war, let the economy grow, and left us alone…

Some analysts note that Ronald Reagan had low ratings at this point in his term, and a bad midterm election, but came back strong. As it turns out, tax cuts, spending restraint, deregulation and sound money tend to create strong economic recoveries. Threats of tax hikes, unprecedented levels of deficits, a wave of new regulations and fears about Fed monetisation may not.

Has Mr Obama failed, a year into his term? Of course not. But that’s the direction he’s headed.

The vote is now 53 percent against the proposition that Obama is failing. If you agree with the proposition “This house believes that Barack Obama is failing,” I encourage you to cast your vote.

Debate: Is Obama Failing?

At the Economist website, I’m debating the question, “This house believes that Barack Obama is failing.” I’m taking the affirmative. Readers are allowed to vote, and the Economist’s typically left-leaning readers are voting for Obama by about the same margin that Americans are rejecting his health care plan. So feel free to mosey on over there, read both sides of the argument, and cast your vote. My bottom line:

When your policies aren’t working, the voters have noticed and your transformative ideological agenda is moving broad public opinion in the other direction, it’s safe to say you’re failing.

Rebuttals and closing statements will follow in a few days. But don’t delay! Visit today!