Topic: General

Free Speech and the University of Cape Town

Cato adjunct scholar Flemming Rose who recently won the 2016 Friedman Prize for Advancing Liberty has been disinvited from speaking at the University of Cape Town in South Africa. The academic freedom committee of the university had asked Rose to give the annual TB Davie Academic Freedom Lecture. The Vice Chancellor of the university rescinded the invitation. He argued that Rose’s lecture might divide the campus leading to protests and even violence. He also said having Rose “might retard rather than advance academic freedom on campus”. The last statement will remind many people of Doublespeak.

Fortunately, this injustice has prompted several principled defenses of free speech.

Kenan Malik, an English writer and broadcaster, who gave the TB Davie lecture last year, makes the case for open debate and defends Rose.

Nadine Strossen, a former ACLU president and current law professor at New York University, quickly provided a comprehensive critique of the decision. Professor Strossen adds her comments about Flemming Rose that she gave at the Friedman Prize dinner.

Ronald K.L. Collins, a law professor at the University of Washington who runs the First Amendment News blog, has challenged an administrator at the University of Cape Town to reply to these critiques. Collins has done the right thing: a bad decision has led to critical speech which now invites a response.

Finally, Flemming Rose himself has replied, citing his recent defense of free speech for radical imams: “A more diverse society needs more free speech, not less.” He continues:

It’s really a sign of poor judgment and bad academic standards to disinvite me on the basis of what other people say about me, when I have published a book that covers my own story, which tells how my views on politics were formed and analyses the history of tolerance and free speech. The book is not only focusing on Islam. I write about the Russian Orthodox’ Church silencing of criticism, Hindu-nationalists attacks on an Indian Muslim artist and so on and so forth. Why use second-hand sources when you can read the primary source in English and make up your mind?

Why not indeed? Rose’s book, The Tyranny of Silence: How One Cartoon Ignited a Global Debate on the Future of Free Speech published by Cato in 2014 may be found here or at your local bookseller.

 

On Baltimore’s Economic Plunge

After Monday’s acquittal of Lt. Brian Rice in the ongoing Freddie Gray saga, lead prosecutor Marilyn Mosby is batting a perfect 0-4. The three previous defendants were similarly acquitted, with two (and perhaps three) more officers to take the stand in the future. 

It appears that Marilyn Mosby’s prosecutions have been politically motivated and without foundation. The big problem, however, is that Freddie Gray has taken the focus off of Baltimore’s long and painful economic plunge – a plunge that can be laid squarely at the feet of Charm City’s long embrace of anti-market economic policies.

My colleague, Prof. Stephen J.K. Walters, and I wrote about this in the Investor’s Business Daily on April 22, 2016: “One Year After: Freddie Gray and ‘Structural Statism’.”

Here is some of what we wrote about how the path of structural statism has contributed to Baltimore’s poverty and associated problems.

“When Freddie Gray was born in 1989, Baltimore hosted 787,000 residents and 445,000 jobs. By the time his fatal injuries in police custody provoked riots last April, the city’s population had fallen by one fifth, to 623,000, and its job base had shrunk by one quarter, to 334,000.

Little wonder that throughout his life, Mr. Gray had never been legally employed. Nevertheless, friends and family considered him “a good provider,” according to The Baltimore Sun.

This was because he worked in the drug trade, which filled his city’s economic vacuum. An average day on the corner can yield take-home pay ten times that available in the low-skill warehousing or service jobs sometimes available to high-school dropouts like Gray.

The catch, of course, is that such rewards carry two great risks. The lesser of these is regular involvement with the justice system. Gray was arrested 18 times and served three years behind bars in his tragically brief life.

Far more dangerous is how competition works in illegal markets. When selling contraband, one does not pursue market share by advertising high quality or low prices. Sales are increased by acquiring territory from rivals, often violently.

For Baltimore’s drug cartels, the post-riot disequilibrium provided an opportunity for market expansion. Inevitably, each strategic assassination produced reprisals and collateral damage.

As a result, 2015 saw the highest homicide rate in Baltimore’s history, at 55 per 100,000 residents — over 13 times New York’s rate. This horrific suffering was concentrated in the African-American community: 93% of victims were black, of which 95% were male and 65% aged 18 to 34.

In Freddie Gray’s demographic, then, the homicide rate was 450 per 100,000 — higher than the peak U.S. combat death rates recorded in the wars in Iraq and Afghanistan.

The prevailing narrative is that all this is a by-product of structural racism and exemplifies a society “built on plunder” (according to the celebrated black radical Ta-Nehisi Coates). This is a myth.

It is not that racism doesn’t exist but rather that it is relatively constant. When explaining variations in economic and social outcomes, constants have little power.

It’s the application of destructive public policies that explain why neighborhoods like Gray’s Sandtown-Winchester are deprived. If one had to put a label on this malignant force, it might be structural statism: an addiction to market-unfriendly governmental approaches to every problem.”

Stay tuned: with several trials still to come, we’re bound to hear more about the Freddie Gray Sideshow, even as Baltimore’s plunge into poverty – and its causes – goes unnoticed.

Topics:

Want to End War? Privatize the VA.

A while back, the Cato Institute’s vice president for defense and foreign policy studies and director of health policy studies took to the pages of the New York Times to explain why privatizing the Veterans Health Administration would lead to less war and better health care for veterans. 

Today in The Hill, I discuss why this proposal has enduring relevance:

As Britain Tries to Learn from Iraq Mistakes, So Should the U.S. — by Privatizing the VA

[…]

Many Democrats remain angry with their presumptive presidential nominee Hillary Clinton for voting as a U.S. senator from New York to authorize the Iraq invasion in 2002. Clinton later wrote, “I had acted in good faith and made the best decision I could with the information I had … But I still got it wrong.”

There is a reform that could have given Clinton and other policymakers better information about the costs of invading Iraq – information that could conceivably have prevented the invasion altogether or at least shortened the U.S. occupation.

Read the whole thing.

The Six Most Important Takeaways from CBO’s New Long-Run Fiscal Forecast

The Congressional Budget Office has just released the 2016 version of its Long-Term Budget Outlook.

It’s filled with all sorts of interesting data if you’re a budget wonk (and a bit of sloppy analysis if you’re an economist).

If you’re a normal person and don’t want to wade through 118 pages, you’ll be happy to know I’ve taken on that task.

And I’ve grabbed the six most important images from the report.

First, and most important, we have a very important admission from CBO that the long-run issue of ever-rising red ink is completely the result of spending growing too fast. I’ve helpfully underlined that portion of Figure 1-2.

And if you want to know the underlying details, here’s Figure 1-4 from the report.

Once again, I’ve highlighted the most important portions. On the left side of Figure 1-4, you’ll see that the health entitlements are the main problem, growing so fast that they outpace even the rapid growth of income taxation. And on the right side, you’ll see confirmation that our fiscal challenge is the growing burden of federal spending, exacerbated by a rising tax burden.

And if you want more detail on health spending, Figure 3-3 confirms what every sensible person suspected, which is that Obamacare did not flatten the cost curve of health spending.

Medicare, Medicaid, Obamacare, and other government health entitlements are projected to consume ever-larger chunks of economic output.

Now let’s turn to the revenue side of the budget.

Figure 5-1 is important because it shows that the tax burden will automatically climb, even without any of the class-warfare tax hikes advocated by Hillary Clinton.

And what this also means is that more than 100 percent of our long-run fiscal challenge is caused by excessive government spending (and the Obama White House also has confessed this is true).

Let’s close with two additional charts.

We’ll start with Figure 8-1, which shows that things are getting worse rather than better. This year’s forecast shows a big jump in long-run red ink.

There are several reasons for this deterioration, including sub-par economic performance, failure to comply with spending caps, and adoption of new fiscal burdens.

The bottom line is that we’re becoming more like Greece at a faster pace.

Last but not least, here’s a chart that underscores why our healthcare system is such a mess.

Figure 3-1 shows that consumers directly finance only 11 percent of their health care, which is rather compelling evidence that we have a massive government-created third-party payer problem in that sector of our economy.

Yes, this is primarily a healthcare issue, especially if you look at the economic consequences, but it’s also a fiscal issue since nearly half of all health spending is by the government.

P.S. If these charts aren’t sufficiently depressing, just imagine what they will look like in four years.

We’ve Been over the Huge Price of “Free” College before

Hillary Clinton will be introducing a plan today that would enable students from families eventually making up to $125,000 not to have to pay tuition at in-state colleges or universities. This is a jump in college subsidization from her previously announced plan, which focused on debt-free tuition, and more in line with what Bernie Sanders has proposed. Presumably, it is going to be paid for by the federal government offering states more money for higher education in exchange for states saying they’ll increase their own spending, to a point of making tuition largely free.

We’ve been over how costly “free” college really is–massive overconsumption, credential inflation, big opportunity costs for taxpayers, etc.–which you can read about here and here. I won’t rehash it all now. But the political calculus hasn’t changed: People like getting things for free, especially when the ultimate costs are hidden. And the more people who think they’ll benefit–the estimate is 8 out of 10 for Ms. Clinton’s new proposal–the better.

Costs Skyrocket for Air and Space

Smithsonian leaders have revealed that renovating the Air and Space museum in Washington, D.C. will cost almost $1 billion. That’s the equivalent of an army of 10,000 workers earning $100,000 each for a year to fix it up. Geez, government projects are expensive!

My letter in the Washington Post today proposes that rather than hitting taxpayers, museum visitors should pay for the renovation:

Regarding the June 23 Style article “Estimate for Air and Space facelift closes in on $1 billion”:

About $250 million of the ballooning makeover costs for the National Air and Space Museum will come from private donations, leaving a $750 million bill for taxpayers.

But rather than burdening taxpayers, how about charging visitors? The Post noted that the museum gets 7 million visitors a year, so a modest $5 fee would raise $35 million a year and pay back the makeover costs over 21 years.

Aside from the greater fairness of charging users rather than taxpayers, fees would limit demand and thus improve the visitor experience at the overcrowded institution. User fees for Air and Space — and other Smithsonian museums — would also help level the playing field with private D.C. museums, such as the International Spy Museum.

There is one more advantage of user pays. The Post notes that the estimated cost of the renovation has already skyrocketed from earlier figures of $250 million and $600 million (a common pattern). If the museum were required to fully cover renovation costs through voluntary donations and user fees, Smithsonian executives would have a strong incentive to find design savings and control construction costs.  

House Republican Health Plan Might Provide Even Worse Coverage For The Sick Than ObamaCare

WASHINGTON, DC - JUNE 22: House Speaker Paul Ryan (R-WI) discusses the release of the House Republican plank on health care reform at The American Enterprise Institute for Public Policy Research on June 22, 2016 in Washington, DC. (Photo by Allison Shelley/Getty Images)

After six-plus years, congressional Republicans have finally offered an ObamaCare-replacement plan. They should have taken longer. Perhaps we should not be surprised that House Republican leaders* who have thrown their support behind a presidential candidate who praises single-payer and ObamaCare’s individual mandate would not even realize that the plan cobbled together is just ObamaCare-lite. Don’t get me wrong. The plan is not all bad. Where it matters most, however, House Republicans would repeal ObamaCare only to replace it with slightly modified versions of that law’s worst provisions.

Here are some of ObamaCare’s core private-health insurance provisions that the House Republicans’ plan would retain or mimic.

  1. ObamaCare offers refundable health-insurance tax credits to low- and middle-income taxpayers who don’t have access to qualified coverage from an employer, don’t qualify for Medicare or Medicaid, and who purchase health insurance through an Exchange. House Republicans would retain these tax credits. They would still only be available to people ineligible for qualified employer coverage, Medicare, or Medicaid. But Republicans would offer them to everyone, regardless of income or where they purchase coverage.
  2. These expanded tax credits would therefore preserve much of ObamaCare’s new spending. The refundable part of “refundable tax credits” means that if you’re eligible for a tax credit that exceeds your income-tax liability, the government cuts you a check. That’s spending, not tax reduction. ObamaCare’s so-called “tax credits” spend $4 for every $1 of tax cuts. House Republicans know they are creating (preserving?) entitlement spending because they say things like, “this new payment would not be allowed to pay for abortion coverage or services,” and “Robust verification methods would be put in place to protect taxpayer dollars and quickly resolve any inconsistencies that occur,” and that their subsidies don’t grow as rapidly as the Democrats’ subsidies do. Maybe not, but they do something that Democrats’ subsidies don’t: give a bipartisan imprimatur to ObamaCare’s redistribution of income.
  3. As I have tried to warn Republicans before, these and all health-insurance tax credits are indistinguishable from an individual mandate.  Under either a tax credit or a mandate, the government requires you to buy health insurance or to pay more money to the IRS. John Goodman, the dean of conservative health policy wonks, supports health-insurance tax credits and calls them “a financial mandate.” Supporters protest that a mandate is a tax increase while credits—or at least, the non-refundable portion—are a tax cut. But that’s illusory. True, the credit may reduce the recipient’s tax liability. But it does nothing to reduce the overall tax burden imposed by the federal government, which is determined by how much the government spends. And wouldn’t you know, the refundable portion of the credit increases the overall tax burden because it increases government spending, which Congress ultimately must finance with additional taxes. So refundable tax credits do increase taxes, just like a mandate.

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