Topic: General

Political Entrepreneurship

From the Washington Post:

[Kevin] Schieffer is trying to persuade the Federal Railroad Administration to give him a $2.5 billion loan for the project [to build a 1000-mile rail line from Wyoming to Minnesota], among the largest in history.

If it succeeds, it could be a boon to farmers – and Schieffer.

The project would cut transportation costs for coal, corn and ethanol, and would make Schieffer what Fortune magazine calls “America’s first self-made railroad baron since the days of Teddy Roosevelt.”…

“He’s talking about using eminent domain out here and just wiping out 110 or 120 farms and ranches out here,” [rancher Paul] Jensen said.

Schieffer received help from an old friend, someone he admired as a South Dakota basketball legend years ago: Sen. John Thune (R), who defeated Senate Majority Leader Thomas A. Daschle (D) in 2004.

Despite opposition from the White House, Thune helped persuade Congress last year to increase the amount of the program from $3.5 billion to $35 billion. Thune, who received campaign contributions from Schieffer and who earned $220,000 as DM&E’s chief lobbyist in the 18 months before joining the Senate, is promoting the project to lure jobs. The law would allow Schieffer to put down no collateral and to make no payments for up to six years. [Sen. Mark] Dayton and other critics fear that taxpayers would be on the hook if the project were to fail.

He’s no James J. Hill.

A Telling Analogy

From the Washington Post:

“At this point, it seems like the war on drugs in America,” added Spec. David Fulcher, 22, a medic from Lynchburg, Va., who sat [in a barracks in Baghdad]. “It’s like this never-ending battle, like, we find one IED, if we do find it before it hits us, so what? You know it’s just like if the cops make a big bust, next week the next higher-up puts more back out there.”

Hey, GOP: Combat Anti-worker Image by Being Pro-worker!

Any real concern House Republicans may have for low-wage workers is apparently evaporating in the heat of the midterm elections.

Here’s the GOP political calculus, as reported by the New York Times:

Republican moderates used a closed party meeting on Thursday to make their case for a vote, saying it was crucial for helping to dispel the party’s antiworker image. The moderates ran into opposition from conservatives who said the wage proposal could turn off campaign contributors with the elections looming and drive away the party’s business base. But some lawmakers said opponents also recognized the political necessity of giving moderates some political cover, a prospect more appealing than potentially losing their majority in the House.

Perhaps there was a “compassionate conservative” somewhere in the room who thought to mention that a national minimum wage hike is likely to harm low-wage workers, especially young urban workers trying to gain some experience and start on a path to economic independence. But, as far as I can tell, the conclusion was that it is better to be actually anti-worker than to have a false “antiworker image.”

If House Republicans wish to get out from behind false perception and stand up for the real interests of workers, they should take a look at this good overview of recent empirical work on the minimum wage by James Sherk at Heritage. And here is Cato adjunct scholar and George Mason economics chair Don Boudreaux on why we should expect government-mandated price floors to harm workers. If the vaunted rightwing messaging machine is so amazing, why can’t it do more to explain why reducing opportunities for low-wage workers is not pro-worker?

Hmm. Students Are Leaving… Maybe We Should Improve?

This headline and story, ladies and gentlemen, is what market education reform is all about:

School board, staff to address student exodus

Saying it’s time to take a direct role in addressing parents’ concerns about district schools, the Columbus Public Schools Board of Education pledged to create a vision statement to guide policies that will strengthen the city schools and keep students from leaving.

At the same time, administrators and staff members promised to work together on ways to make the the district better.

Board members held a special meeting last Thursday, along with administrators and members of the district’s employee unions, to discuss a survey that said one in nine parents plans to withdraw their child from CPS this year.

That, in a district that has lost nearly 7,000 students to charter schools over the past several years, and stands to lose more because of private school vouchers this fall….

Want Electronic Medical Records? Fix the Incentives

Suppose you are traveling, and needed to visit a doctor, who says he’d like to do an MRI. You had one done just two weeks ago at home, but your personal doc would have to snail mail the image to the new doc. The new doc needs to have a look inside you, but another MRI would be expensive.

Now think: in what kind of health care system are you more likely to get electronic medical records, where doctors can send MRI results to each other instantly:

  • A health care system where you are on the hook for the cost of the second, unnecessary MRI, or
  • A system where someone else (Medicare, your employer, etc.) is going to pay for it?

Thanks to government subsidies and the federal tax code, Americans are less sensitive to the price of medical care than even Canadians, whose government is supposed to pay for everything. As a result, most providers still keep patients’ medical records on paper, essentially because the government lets them get away with it. Some providers have started using electronic medical records, but those systems are in their infancy and are unable to talk to each other. That means lots of wasteful spending, plus treatment delays and medical errors.

When Katrina hit Louisiana, thousands (millions?) of medical records were destroyed. But when the World Trade Center went down in a fiery blaze, there was no hue and cry about the loss of financial records, because those were secured, electronically, in various sites. Why the asymmetry? My guess is that the financial services industry has customers who demand value, including responsiveness and security, because they bear the cost. Health care providers that do have price-sensitive customers, such as services like MinuteClinic and TelaDoc, do offer electronic medical records. But most of the health care industry does not have price-sensitive customers, and we have Congress to thank for that.

So when House Republicans plan to vote this week on legislation that would spend your tax dollars to encourage the creation of electronic medical records, it seems like a classic case of one fouled-up government intervention begetting another. Congress has spent the last 60 years doing little in health policy but insulating patients from the costs of paper medical records. But don’t worry, because now they’re going to throw $40 million of the taxpayers’ money at health information technologies (HIT) that create interoperable medical records.

In a further demonstration that Congress is wasting its time (isn’t there a war on?), this week Microsoft announced plans to start producing interoperable electronic medical records. Maybe the fact that the private sector is trying to muster to the task – in spite of Congress’ past meddling – will persuade Congress not to compound its past mistakes. Perhaps Congress will instead look at ways to restore the incentives that encourage providers to offer such cost-saving innovations. One can always hope.

Chicago City Council to Low-wage Workers and Poor People: Eat Dirt!

The Chicago City Council has proved beyond doubt its aggressive hostility to the welfare of low-wage workers and low-income consumers by its approval of an ordinance that would forbid Chicagoans from legally entering into agreements to work for less than $10 an hour and $3 in benefits—even if they want to—with retailers with $1 billion in annual sales and stores of at least 90,000 square feet.

By prohibiting job-seekers from accepting terms of employment to their and potential employers’ mutual benefit, the City Council has effectively requested that major employers like Wal-Mart and Target open fewer new stores in Chicago, and make available fewer (and possibly no) new jobs. Additionally, the Council has asked Chicago’s low-income consumers, who would benefit most from more discount retail outlets, to forgo significant increases in their quality of life.

As NYU economist Jason Furman wrote in Slate by way of crushing Barbara Ehrenreich in a debate about the effect of Wal-Mart on America’s working class:

A range of studies has found that Wal-Mart’s prices are 8 percent to 39 percent below the prices of its competitors. The single most careful economic study, co-authored by the well-respected MIT economist Jerry Hausman, found that grocery sales by Wal-Mart and other big-box stores made consumers better off to the tune of 25 percent of food consumption. That doesn’t mean much for those of us in the top fifth of the income distribution—we spend only about 3.5 percent of our income on food at home and, at least in my case, most of that shopping is done at high-priced supermarkets like Whole Foods. But that’s a huge savings for households in the bottom quintile, which, on average, spend 26 percent of their income on food. In fact, it is equivalent to a 6.5 percent boost in household income—unless the family lives in New York City or one of the other places that have successfully kept Wal-Mart and its ilk away.

Why does the Chicago City Council insist on harming workers by denying them their moral right to enter into work agreements on terms they find acceptable? Why does the Chicago City Council want to keep things from getting better for its city’s poor?

“Precipitous” Withdrawal Defined

Former National Security Adviser Zbigniew Brzezinski has never been shy about voicing his opinions. But while his comments on the current crisis in Lebanon before a small group of Washington insiders hosted by Steve Clemons and the New America Foundation has elicited some media coverage, I was most struck by his comments on Iraq.

Brzezinski was an early advocate of a relatively swift military withdrawal from Iraq. In January 2005, he laid out the choices in Iraq in stark but simple terms:

we will never achieve democracy and stability [in Iraq] without being willing to commit 500,000 troops, spend $200 billion a year, probably have a draft, and [impose higher taxes].

As a society, we are not prepared to do that….even the Soviet Union was not prepared to [take equivalent steps in Afghanistan] because there comes a point in the life of a nation when such sacrifices are not justified.

(The full transcript can be found here.)

One year later, Brzezinski made his case again, this time on the op-ed page of the Washington Post:

The real choice that needs to be faced is between:

An acceptance of the complex post-Hussein Iraqi realities through a relatively prompt military disengagement [or]

An inconclusive but prolonged military occupation lasting for years while an elusive goal is pursued.

It is doubtful, to say the least, that America’s domestic political support for such a futile effort could long be sustained by slogans about Iraq’s being “the central front in the global war on terrorism.”

In contrast, a military disengagement by the end of 2006, derived from a more realistic definition of an adequate outcome, could ensure that desisting is not tantamount to losing.

Such talk has been widely panned by the Bush administration’s defenders, who typically dismiss any talk, of any timetable – six months, one year, or ten years – as “cutting and running”.

But Brzezinski remains undeterred. During last week’s meeting he said “We [should] start talking to the Iraqis of the day of our disengagement. We say to them we want to set it jointly, but in the process, indicate to them that we will not leave precipitously.”

He then went on to say “I asked [U.S. Ambassador to Iraq Zalmay] Khalilzad what would be his definition of precipitous and he said four months.”

Four months.

Four months is tantamount to immediate. 130,000 troops cannot be extracted from any country, even under the best of conditions, in a matter of weeks. Doing so in a hostile environment requires that additional measures be taken to ensure troop safety, and this can add weeks or even months to the project. I don’t believe that U.S. troops could be safely withdrawn from Iraq over a period of less than four months, given the conditions on the ground.

However, I have long advocated (e.g. here, here, and here) that the U.S. military’s mission in Iraq be terminated in an expeditious fashion. And I’m hardly alone. Today’s New York Times reports that 56 percent of respondents in their most recent poll favor a timeline for withdrawal; and, according to the most recent Gallup/USA Today poll, 50 percent of Americans favor a troop withdrawal within the next 12 months, while only 8 percent favor sending more troops.

It may be that Khalilzad was speaking out of turn. And it is never wise to base decisions on second-hand information, even from a source as credible as Brzezinski. However, if the Bush administration defines precipitous as less than four months, then we might be onto something.

A military withdrawal from Iraq, conducted over, say, a 12-month period, would provide ample time to coordinate with Prime Minister Nouri al-Maliki’s government on the handover of security responsibilities, and already enjoys support among the American public, and, increasingly, on Capitol Hill. That would hardly be “precipitous” and it certainly is better than our current open-ended policy.