Topic: Cato Publications

Hopelessly Devoted to HIM?

SMU Biblical studies professor Mark Chancey has just penned a study of Bible teaching in Texas Public Schools (.pdf). The report concludes that “the public school courses currently taught in Texas often fail to meet minimal academic standards for teacher qualifications; curriculum, and academic rigor; promote one faith perspective over all others; and push an ideological agenda that is hostile to religious freedom, science and public education.”

Chancey’s most damning charge: “Most Bible courses are taught as religious and devotional classes that promote one faith perspective over all others.” If true, that, of course. would be unconstitutional. (Nadine Strossen, call your office.)

Here’s a thought: Rather than forcing all Americans to pay for a one-size-fits-few government monopoly that inevitably creates legal and cultural conflict over the curriculum, why not institute a school system that would give both parents and other taxpayers real educational choice? This could easily be done by combining and enlarging the existing personal use and scholarship donation tax credit programs that exist in states like Pennsylvania and Arizona. A short exposition of the idea appears here, and a more comprehensive one is available here.

Cato’s Neal McCluskey will be publishing a study of the endless school wars caused by our state-run education monopolies later this year. Stay tuned.

New at Cato Unbound: Veronique de Rugy on Anti-terrorism Spending

In today’s installment of Cato Unbound, AEI resident scholar (and Cato adjunct scholar) Veronique de Rugy argues that the $271.5 billion devoted by the federal government to homeland security since 9/11 has not been well spent.

“Not only are we over-investing in homeland security,” de Rugy argues, “but most times we spend too much money in the wrong way and on the wrong things.”

The consequence is that we are no safer. “Bad security is often worse than no security at all,” de Rugy writes. “By trying, and failing, to make ourselves more secure, we make ourselves less secure.”

Doublespeak and the War on Terror

Last week, Cato published my paper “Doublespeak and the War on Terrorism.” Of course, this has not kept President Bush from using doublespeak. 

In his televised address this week, Mr. Bush said that all members of the U.S. military are “volunteers.” Not so. We do not have the large-scale conscription of civilians, but we do have “stop-loss” orders from the White House, which means soldiers that have fulfilled the terms of their enlistment contracts may not leave military. The men and women who wanted to return to civilian life after serving their term of service are not “volunteers.”  In military circles, the stop-loss order is known as the “backdoor draft.”

Fortunately, more people are calling attention to such misuse of language by government. Go here for a column by Eugene Robinson of the Washington Post. Go here for a column by Dick Meyer of CBS News.

We’ll never be able to stop the government from engaging in doublespeak because the government is constantly engaging in mischief. But if we’re vigilant about it, we can keep the government in check.

Regulation News Pegs!!

In the public relations racket, they’re called “news pegs” — current events that can be used to promote your research. As editor of Regulation, I sometimes get the complaint that my publication is “interesting, but it doesn’t have a lot of news pegs.”

So how about this — two Regulation news pegs in one day!

Peg 1: Should we tax nonprofit hospitals?

Decades ago, Congress awarded tax-exempt status to private nonprofit hospitals in return for the hospitals agreeing to treat indigent patients who would otherwise rely on taxpayer-provided healthcare services. But this “grand bargain” is now under Capitol Hill scrutiny following the discovery that for-profit, non–tax exempt hospitals provide roughly the same amount of free medical care to the poor. Today’s NPR program Marketplace discusses the congressional hearings.

All of this should come as no surprise to readers of Regulation. In the summer issue, Guy David of Penn and Lorens Helmchen of Illinois-Chicago lay out this very problem and ask (pdf), why is the government giving one type of tax treatment to some hospitals and another type to others?

Peg 2: Soft Paternalism

For several years I’ve believed that one of the most important intellectual challenges to libertarian ideas is behavioral economics — the empirical field of study that suggests people often do not act rationally and thus markets do not maximize public welfare.

The current issue of the New Yorker contains an article by John Cassidy on behavioral and neuroeconomics that confirms my view. In the article, Cassidy writes that “most economists agree that, left alone, people will act in their own best interest, and that the market will coordinate their actions to produce outcomes beneficial to all.  Neuroeconomics potentially challenges both parts of this argument.”

The regulatory prescriptions that follow from this research are often described as “soft” or “libertarian” paternalism.  The basic notion is that government should require certain behaviors as a default rule (for example the purchase of health insurance or particpation in 401k saving plans) but allow people to opt out if they prefer.

But government actors appear to be no more rational than economic actors — and it is quite possible that soft paternalism could be more detrimental to public welfare than the private choices studied by behavioral economics. Harvard economics professor Ed Glaeser states this case (pdf) in the summer issue of Regulation.

New at Cato Unbound: Clark Ervin Replies to John Mueller on Terrorism

In today’s installment of Cato Unbound, Clark Kent Ervin, former Inspector General of the Department of Homeland Security and author of Open Target: Where America is Vulnerable to Attack, strongly disagrees with John Mueller’s provocative lead essay, “Some Reflections on What, if Anything, “Are We Safer” Might Mean,” in this month’s issue devoted to “9/11 Five Years After: Reassessing Homeland Security and the Terrorist Threat.”

New England Journal of Medicine Reviews Crisis of Abundance

Arnold Relman reviews the Cato Institute’s latest health policy book, Crisis of Abundance by adjunct scholar Arnold Kling, in the latest issue of the New England Journal of Medicine. Dr. Relman is a former editor of the NEJM and an advocate of socialized medicine. Nonetheless, he compares Kling favorably to other economists who write about health care:

[Kling] has done a much better job than most of his colleagues. His book is clear, concise, and eminently readable; he writes in straightforward English prose, not economic jargon; he is modest, posing questions more often than he answers them; and he considers alternatives to most of the policy options he discusses.

Many readers will know that I am a longstanding critic of the economic approach to health care policy, but I liked this little book and can recommend it highly…

I was attracted by a certain freshness and directness in much of Kling’s argument, and I found myself agreeing with many of his observations…

[Kling] intends only to “raise the level of understanding of the realities, issues, and tradeoffs pertaining to health care policy.” I think he succeeds pretty well at that, so I warmly recommend his book to general readers who want to understand what economics has to say about health care.

NEJM subscribers can click to the full review from here. We expect to be able to link to the full review soon from http://www.cato-at-liberty.org/ and http://www.cato.org/.

Crisis of Abundance is available for purchase here.

GAO Report on HSAs

I just received an e-mail notice from the GAO about a report issued last month on health savings accounts. From my cursory read, the report doesn’t seem to contain anything unpredictable or earth-shattering. Corroborating that impression is the fact that I cannot find where Sen. Max Baucus (D-MT) — a longtime HSA opponent who commissioned the study from the GAO — has released any statement on it. (The GAO doesn’t release its reports until a couple of weeks after it delivers them to the congress-critter who made the request. That lets congress-critters be the first to spin release any GAO report.)

In all, the report brings to mind an observation by the Congressional Research Service that I included in a recent paper on HSAs:

Some less healthy people may find HSA plans attractive because they enable them to circumvent the restrictions of managed care plans. Conversely, some healthy people may find them unattractive because they are very risk-averse; they would prefer to pay more for comprehensive insurance with low deductibles. Older people may find HSA plans attractive because of the tax advantages: being in higher tax brackets (since average earnings increase with age until people are in their 50s), their tax savings from contributions would be greater. People who are 55 but not yet 65 years of age would also be attracted by the additional catch-up contributions they may make. By the same token, younger people with low incomes may consider the HSA tax advantages inconsequential.

The GAO seemed to find that HSAs worked for some people, and not for others. In their current incarnation, HSAs may not be for everyone. But the GAO’s findings hardly tracked the fear-mongering of HSA opponents. Some quotes from the report:

  • “HSA-eligible plans constitute a small but growing share of the private health insurance market.”
  • “[A] 2005 national employer health benefits survey reported HSA-eligible plan premiums that were, on average, 35 percent less than traditional plan premiums for single coverage and 29 percent less for family coverage.”
  • “[A] 2005 national employer health benefits survey reported HSA-eligible plan premiums that were, on average, 35 percent less than traditional plan premiums for single coverage and 29 percent less for family coverage.”
  • “The HSA-eligible plans offered by the three employers we reviewed covered the same broad categories of health care services as did traditional plans in 2005, including preventive, diagnostic, maternity, surgical, and emergency services, and also used similar provider networks.”
  • “HSA-eligible plan enrollees generally had higher incomes than comparison groups, but data on age differences were inconclusive.”
  • “IRS data…suggest that the average age of tax filers who reported HSA contributions was about 9 years higher than the average age of all tax filers under age 65 in 2004…. In contrast, data from several employer groups indicate that the average age of HSA-eligible plan enrollees, excluding retirees, was 2 to 6 years lower than that of other groups of enrollees.”
  • “While focus group participants enrolled in HSA-eligible plans understood the key attributes of their plan, such as low premiums, high deductibles, and the mechanics of using the HSA, they were confused about certain other features. For example, many participants were unsure what medical expenses qualified for payment using their HSA.”
  • “Few participants researched the cost of hospital or physician services before obtaining care, although many participants researched the cost of prescription drugs.”
  • “Most participants reported satisfaction with their HSA-eligible plan, but said they would not recommend these plans to everyone. Participants said they would recommend HSA-eligible plans to healthy consumers, but not to people who use maintenance medication, have a chronic condition, have children, or may not have the funds to meet the high deductible.”

I have argued that requiring people to have a rigidly defined high-deductible health plan in order to qualify for an HSA is unnecessary, and probably does more than anything to make HSAs unattractive to many consumers. 

I have also recommended expanding HSAs to give workers control over every one of their health care dollars, and to allow workers to purchase any type of health insurance they wish.