Topic: Cato Publications

WSJ Weighs in Against ‘REAL Bad ID’

This morning’s Wall Street Journal opinion page blasts Republicans for passing the REAL ID Act.  [subscription required] 

Keyed to a recent report showing the costs of compliance at $11 billion, the piece notes that all Americans will have to reapply for their drivers’ licenses and ID cards if states go along with this unfunded federal surveillance mandate.  It also addresses whether a national ID protects against terrorism or provides effective immigration control and finds REAL ID wanting on both counts.  My book Identity Crisis shows why.

Sooner rather than later, Congress will recognize its error in passing the REAL ID Act.  Most likely it will try to kick the can down the road.  Look for a quiet attempt to change the deadline for getting a national ID in everyone’s hands. 

But that is not the solution.  If Congress wants a national ID, it should have hearings, markup and pass legislation, then fund and implement a national ID itself. 

Congress didn’t have a single hearing or up-or-down vote on the REAL ID Act.  This much exposure would kill a national ID plan, of course.

Medicaid & the Free-Market Movement

This weekend, something pretty important happened, at least with regard to how the free-market movement approaches Medicaid and medical care for the needy. 

Saturday was the final day of the State Policy Network’s 14th annual meeting in Milwaukee. The State Policy Network provides guidance to 48 state-focused free-market think tanks in 42 states. Part of the annual meeting was a panel on Medicaid, the joint federal-state program originally created to provide medical care to the truly needy. 

Of course, Medicaid has swelled well beyond that goal. The program now covers 52 million people even though there are only 36 million U.S. residents below the poverty line. Medicaid also destroys private markets for health insurance and medical care, and induces low-income Americans to become dependent on government. For example, policymakers universally acknowledge that a welfare check induces dependence on government. Yet average Medicaid benefits for the program’s least expensive enrollees (the non-elderly) are worth twice as much as the average welfare check. Moreover, there are 10 times as many people who receive Medicaid benefits.

For years, several market-oriented groups have advanced Medicaid reforms that, in the name of empowering Medicaid enrollees or improving their quality of care, would expand enrollment and make Medicaid’s problems even worse. Principally, the reforms involve introducing health savings accounts and vouchers into Medicaid. Those groups have fed the rest of the free-market movement a steady diet of those bad ideas, often with some success. A few states have even experimented with those reforms.

On Saturday, I sat on a panel with one of the leading advocates of those proposals. We each presented our side to an audience comprised of the leaders of dozens of state-focused think tanks. I think one audience member probably spoke for many in the room when he said he felt conflicted. My paraphrase: “Part of me wants to improve Medicaid, but that would increase enrollment. And part of me wants to blow it up, but that’s a tough sell politically.” 

He’s right. That is a tough political sell. But it would be substantially easier were the free-market movement to abandon the fool’s errand of trying to improve the program and instead educate the public about the full range of harms Medicaid causes:

  • A per-capita tax burden that is currently over $1,100 and growing
  • An annual deadweight economic loss of some $70 billion
  • Crowd-out of private efforts to provide medical care for the poor, including private insurance, private charity, and self-help
  • Increased dependence on government
  • Higher prices for private health coverage and medical care, which makes Medicaid dependence more likely
  • Lower-quality care than is provided through private markets
  • The indignity of states having to beg Washington for permission to spend their own money as they wish

(For what it’s worth, free-market think tanks should acknowledge that Medicaid does a lot of good: it provides medical care to many who desperately need it. Yet that fact will hardly carry the day, considering that researchers have difficulty finding where Medicaid has any positive overall effect on health.)

Only after we prepare the ground will we be able to achieve serious reform, which should emphasize three things: block grants, block grants, and block grants. Replacing Medicaid with a system of block grants was a component of the 1996 welfare reform law until President Clinton insisted on its removal. Nowadays, no politicians are talking about block-granting Medicaid, largely because free-market groups have abandoned the field. (Until we get block grants, state-level reforms will not make much difference, though free-market groups should oppose those that make Medicaid more attractive and support those that make it less attractive.)

In short, this emperor has no clothes. If the free-market movement does not carry that banner, no one will. 

This weekend’s SPN meeting should be the start of a debate within the movement over how to approach Medicaid. (More details on my approach can be found here.) Thanks to Tracie Sharp of SPN and Mary Katherine Stout of the Texas Public Policy Foundation for getting the ball rolling.

Who Shall Live? Who Shall Die?

DETROIT–Over at Cafe Hayek, Russell Roberts looks at the ethics of distributing flu vaccines amid an artificial shortage and does a good job of cutting to the core question: why the hell is there a shortage? Roberts lays the blame at the feet of politicians — particularly state attorneys general — who have interfered with the market’s ability to make vaccines (like shoes, oranges, etc.) plentiful.

The ethical problems created by the artificial shortage of vaccines are like those created by the artificial shortage of transplantable organs (also a creature of government interference).  Once the shortage exists, and the state controls distribution, there’s really no good way — no “most ethical” way — to decide who should receive them. In other words, there’s no good way to decide who shall live and who shall die. If it’s ethics you’re interested in, try this: Don’t interfere with the market’s ability to supply vaccines and transplantable organs.

But as long as we’ve got these artificial shortages, my two cents is this: the politicians should be last in line.

Harvard Lawyers Soon to Know Even Less

I’m fond of my law school (which wasn’t Harvard) and proud of having gotten a legal education, but I am keenly aware of what they didn’t tell me in school. My training was noticably light on constitutional doctrines like separation of powers and federalism — protections of liberty as important as the Bill of Rights. (I had to go and learn them myself. Got a little help from an outfit called the Cato Institute and papers like this one.)

Indeed, I recall a college pre-law class where I was taught the “swirl cake” theory of federalism. ”Sure, there are layers of government, but they mix and overlap in mysterious ways.” Utter claptrap. ”Swirl cake” federalism obscures the workings of government from the people, allows politicians to avoid accountability, and fertilizes the growth of over-large government at every level.

Now comes news (via the Volokh Conspiracy) that Harvard is going to “overhaul” the education first-year law students get. Rather than basics like contracts, torts, property, civil procedure, and criminal law, they’ll learn such things as policy and international law.

In other words, Harvard-trained lawyers will know more about politics and less about law. A step backward for the legal profession and probably for many Harvard lawyers themselves. 

As a law review editor-in-chief, I was aware that many top journals had wandered away from doctrinal work that actually advances law. Maybe the whole legal academy is following suit.

Crisis of Abundance in the New York Times

A number of reports purport to show that the U.S. health care sector lags behind those of other nations. I’d be the last to argue that our health care sector should be a model for the rest of the world. But those supposedly objective reports are often based on subjective value judgments about which people will differ. They also tend to overlook objective strengths of the U.S. health care sector.

For example, New York Times columnist Tyler Cowen writes today about how the United States leads the world in medical innovation. We spend far more on medical research than other nations, which increases our level of health expenditures. But the benefits of all that spending are not confined to our borders; they help keep the “ferriners” alive longer, too.

Cowen also draws a lesson from Arnold Kling’s book Crisis of Abundance:

The American system also produces benefits that are hard to find in the numbers. The economist Arnold Kling in his “Crisis of Abundance: Rethinking How We Pay for Health Care” (Cato Institute, 2006) argues that the expected life span need increase by only about half a year for the extra American health care spending to be cost-effective over a 20-year period. Given that many Americans walk less and eat less healthy food than most Europeans, the longevity boost from health care in the United States may be real but swamped by the results of poor lifestyle choices. In the meantime, the extra money Americans spend to treat allergy symptoms, pain, depression and discomfort contributes to personal happiness.

Those interested can purchase Crisis of Abundance here, or click here to watch the Cato book forum featuring the author, Sebastian Mallaby of The Washington Post, and Jason Furman of NYU.

The Weaknesses of Watch-Listing

“Watch-listing” — the practice of putting bad people’s names on a list and treating them differently at places like airports — is fraught with difficulty. 

As to sophisticated threats, it’s a Maginot line. Easy to evade, it provides no protection against people who haven’t yet done anything wrong, who haven’t come to the attention of security officials, or who have adopted an alias. Terrorist planners are nothing more than inconvenienced by having to use people with “clean” records.

Paying to inconvenience any such terrorists are (taxpayers, of course, and) all the people wrongly treated as suspects because they have the same or similar names as listed people. 

On its website, CBS News is previewing its upcoming 60 Minutes story on watch-listing, and they’ve assembled a large group of Robert Johnsons to attest to their experience with watch-listing. They share the same name as a Robert Johnson that someone deemed appropriate to put on a list.

Watch-listing has a deeper flaw, though.  It does not fit with our system of law enforcement.

In the U.S., people who have done something wrong are supposed to be arrested, taken to court and charged, then permitted to contest the accusation. If they are found guilty, they pay money or serve time in jail. 

Watch-listing follows no similarly familiar pattern. Law enforcement or national security personnel place a person on a list and then, wherever that list is used, treat the person (and other people with the same name) differently, stopping them, interrogating them, searching them, or whatever the case may be. This unilateral process is alien to our legal system.

Rather than watch-listing, people who are genuinely suspected of being criminals or terrorists should be sought, captured, charged, tried, and, if convicted, sentenced.  Watch-listing allows law enforcement to be very active and intrusive without actually doing what it takes to protect against crime and terrorist acts.  In Identity Crisis, I wrote that ”watch listing and identification checking [are] like posting a most-wanted list at a post office and then waiting for criminals to come to the post office.”

At the national border, watch-listing must be used — deftly — because we cannot reach wrongdoers worldwide. Those watch-lists allow us to be vigilant against bad people who may arrive on our shores. Domestically, though — in our free country — the practice should end.

Health Care Innovation

Tyler Cowen does two nice things in today’s economic scene column on health care spending.  First, he makes the case that the U.S. system is the leader in innovation:

[T]he American health care system may be performing better than it seems at first glance. When it comes to medical innovation, the United States is the world leader. In the last 10 years, for instance, 12 Nobel Prizes in medicine have gone to American-born scientists working in the United States, 3 have gone to foreign-born scientists working in the United States, and just 7 have gone to researchers outside the country.

The other nice thing is that he cites Crisis of Abundance:

The economist Arnold Kling in his “Crisis of Abundance: Rethinking How We Pay for Health Care” (Cato Institute, 2006) argues that the expected life span need increase by only about half a year for the extra American health care spending to be cost-effective over a 20-year period. Given that many Americans walk less and eat less healthy food than most Europeans, the longevity boost from health care in the United States may be real but swamped by the results of poor lifestyle choices. In the meantime, the extra money Americans spend to treat allergy symptoms, pain, depression and discomfort contributes to personal happiness.