Topic: Government and Politics

Elite Panic

By
Jim Harper

Prior to the bombing and manhunt in Boston last week, Bruce Schneier pointed to an interesting interview with Rebecca Solnit, author of the book: A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster. She talks of a concept called elite panic.

The term “elite panic” was coined by Caron Chess and Lee Clarke of Rutgers. From the beginning of the field in the 1950s to the present, the major sociologists of disaster — Charles Fritz, Enrico Quarantelli, Kathleen Tierney, and Lee Clarke — proceeding in the most cautious, methodical, and clearly attempting-to-be-politically-neutral way of social scientists, arrived via their research at this enormous confidence in human nature and deep critique of institutional authority. It’s quite remarkable.

Summarizing her research, Soltis found a portrait elites paint of the public, to which they respond in times of crisis:

Part of the stereotypical image is that we’re either wolves or we’re sheep. We’re either devouring babies raw and tearing up grandmothers with our bare hands, or we’re helpless and we panic and mill around like idiots in need of Charlton Heston men in uniforms with badges to lead us. I think we’re neither, and the evidence bears that out.

There’s no denying the importance and value of investigating and capturing the perpetrators of the bombing, and I do not do so here, but elite panic seems to have been at play in Boston. The lockdown—technically voluntary, but tell that to the guy in the tank (HT: Bovard)—treated the public variously as suspects, sources of interference, or targets for display of governmental authority.

Who are the elites? How does their panic manifest itself? “Elite panic” is not a tight enough concept to declare affirmatively that Boston is its examplar, but the concept is worth having in mind. The resources and resourcefulness of civil society are great and entirely accessible in times of peril. They should not be pushed aside at these times—certainly not at the business end of a gun.

Topics: 
Foreign Policy and National Security, Government and Politics

Unexpected Praise for Australia’s Private Social Security System

By
Daniel J. Mitchell

As part of my “Question of the Week” series, I said that Australia probably would be the best option if the United States suffered some sort of Greek-style fiscal meltdown that led to a societal collapse.*

One reason I’m so bullish on Australia is that the nation has a privatized Social Security system called “Superannuation,” with workers setting aside 9 percent of their income in personal retirement accounts (rising to 12 percent by 2020).

Established almost 30 years ago, and made virtually universal about 20 years ago, this system is far superior to the actuarially bankrupt Social Security system in the United States.

Probably the most sobering comparison is to look at a chart of how much private wealth has been created in Superannuation accounts and then look at a chart of the debt that we face for Social Security.

To be blunt, the Aussies are kicking our butts. Their system gets stronger every day and our system generates more red ink every day.

And their system is earning praise from unexpected places. The Center for Retirement Research at Boston College, led by a former Clinton Administration official, is not a bastion of laissez-faire thinking. So it’s noteworthy when it publishes a study praising Superannuation.

Australia’s retirement income system is regarded by some as among the best in the world. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government.

Since I wrote my dissertation on Australia’s system, I can say with confidence that the author is not exaggerating. It’s a very good role model, for reasons I’ve previously discussed.

Here’s more from the Boston College study.

The program requires employers to contribute 9 percent of earnings, rising to 12 percent by 2020, to a tax-advantaged retirement plan for each employee age 18 to 70 who earns more than a specified minimum amount. …Over 90 percent of employed Australians have savings in a Superannuation account, and the total assets in these accounts now exceed Australia’s Gross Domestic Product. …Australia has been extremely effective in achieving key goals of any retirement income system. …Its Superannuation Guarantee program has generated high and rising levels of saving by essentially the entire active workforce.

The study does include some criticisms, some of which are warranted. The system can be gamed by those who want to take advantage of the safety net retirement system maintained by the government.

Australia’s means-tested Age Pension creates incentives to reduce one’s “means” in order to collect a higher means-tested benefit. This can be done by spending down one’s savings and/or investing these savings in assets excluded from the Age Pension means test. What makes this situation especially problematic is that workers can currently access their Superannuation savings at age 55, ten years before becoming eligible for Age Pension benefits at 65. This ability creates an incentive to retire early, live on these savings until eligible for an Age Pension, and collect a higher benefit, sometimes referred to as “double dipping.”

Though I admit dealing with this issue may require a bit of paternalism. Should individuals be forced to turn their retirement accounts into an income stream (called annuitization) once they reach retirement age?

Read the rest of this post »

Topics: 
General, Government and Politics, International Economics and Development, Social Security, Tax and Budget Policy

Scapegoating ObamaCare

By
Michael F. Cannon

Here’s how Ezra Klein spins Sen. Max Baucus’ (D-MT) preditions of an ObamaCare “train wreck”:

The GOP can try and keep the implementation from being done effectively, in part by refusing to authorize the needed funds. Then they can capitalize on the problems they create to weaken the law, or at least weaken Democrats up for reelection in 2014.

In other words, step one: Create problems for Obamacare. Step two: Blame Obamacare for the problems. Step 3: Political profit!

It never ceases to amaze me how people who want government to plan our lives are horrified when government then interferes with their plans. Here’s one way to summarize Klein’s attempt to blame ObamaCare’s opponents for ObamaCare’s failures:

Step one: Pass a law the public opposes.

Step two: Act surprised when the public continues to oppose it.

Step three: Blame the public for the law’s failures. 

Or:

Step one: Enact an immense law requiring lots of implementation funding.

Step two: Don’t include any implementation funding.

Step three: Blame opponents for not funding the implementation. 

Ooh, this is fun:

Step one: Give government new powers.

Step two: Express frustration when those powers fall into the hands of your political opponents.

Step three: Put your political opponents in camps.

I wonder if Mike Pompeo will pen a letter to Klein, too.

Topics: 
General, Government and Politics, Health Care

Press Release from Union Seeking Repeal of ObamaCare

By
Michael F. Cannon

From the Wall Street Journal:

WASHINGTON, April 16, 2013 /PRNewswire-USNewswire/ – United Union of Roofers, Waterproofers and Allied Workers International President Kinsey M. Robinson issued the following statement today calling for a repeal or complete reform of President Obama’s Affordable Care Act (ACA):

“Our Union and its members have supported President Obama and his Administration for both of his terms in office.

But regrettably, our concerns over certain provisions in the ACA have not been addressed, or in some instances, totally ignored. In the rush to achieve its passage, many of the Act’s provisions were not fully conceived, resulting in unintended consequences that are inconsistent with the promise that those who were satisfied with their employer sponsored coverage could keep it.

These provisions jeopardize our multi-employer health plans, have the potential to cause a loss of work for our members, create an unfair bidding advantage for those contractors who do not provide health coverage to their workers, and in the worst case, may cause our members and their families to lose the benefits they currently enjoy as participants in multi-employer health plans.

For decades, our multi-employer health and welfare plans have provided the necessary medical coverage for our members and their families to protect them in times of illness and medical needs. This collaboration between labor and management has been a model of success that should be emulated rather than ignored. I refuse to remain silent, or idly watch as the ACA destroys those protections.

I am therefore calling for repeal or complete reform of the Affordable Care Act to protect our employers, our industry, and our most important asset: our members and their families.”

The United Union of Roofers, Waterproofers and Allied Workers, based in Washington, D.C., has 22,000 members participating in 9 regional district councils across the United States

www.unionroofers.com 

Topics: 
General, Government and Politics, Health Care

Pompeo to Baucus: You Wrote this ‘Train Wreck’

By
Michael F. Cannon

Rep. Mike Pompeo (R-KS) is having none of Sen. Max Baucus (D-MT) trying to dodge responsibility for the coming ObamaCare “train wreck.” Here’s a letter Pompeo sent to Baucus yesterday:

Dear Senator Baucus,

     I was stunned, and also saddened, to read of your complaint that Health and Human Services Secretary Kathleen Sebelius is doing an insufficient job informing the public about the Patient Protection and Affordable Care Act (PPACA), otherwise known as Obamacare.  My shock wasn’t because I disagreed: You’re right to say this legislation has led to great uncertainty for hard-working Americans, small business owners, and families.  No, I was shocked because you wrote this bill.  I was saddened because your acknowledgement of the harm caused by PPACA has come so late.

     Unlike you, the American people have opposed this law from the moment it was first introduced in Congress.  How hard was it to see that even the smartest government bureaucrats can’t competently plan something as complicated as America’s health-care sector?

     President Obama’s proposal to rescind the Medicaid disproportionate share hospital payments for 2014 is an admission that this law will not work as written.  The IRS is violating the clear language of this law by planning to spend more than half a trillion dollars and tax millions of employers and individuals without congressional authorization.

     No one in the country bears more responsibility for the complexity of this law than you.  When your supermajority couldn’t pass the bill using normal procedures, you and your Senate colleagues rammed through the final legislation by using parliamentary gimmickry.  Then, in the House, Speaker Pelosi cheerfully urged members to pass the legislation “in order to find out what’s in it.”

     This was not good policy-making, and now we’re seeing the consequences.

     Implementation is still going full steam ahead despite numerous problems—with your support.  Contrary to the legislation and the administration’s myriad promises, the SHOP exchanges have been delayed by a year.  Officials have admitted that they’ve gone from worrying over the color of fonts on a website to just making sure that the exchanges aren’t a “third world experience.”  Little to no information has been provided about how the exchanges will function.

     Each one of these problems results from legislation you authored and your colleagues supported.  And yet many Republicans, at every step of the process, issued warnings and condemnations based on exactly these inevitable problems. We warned that businesses would drop coverage. We warned that Americans would not be able to keep a doctor or plan that they liked. We warned that insurance premiums would increase.  

     Secretary Sebelius’s implementation of the law is certainly flawed, but the policy process produced a law that could not possibly be implemented successfully.  As legislators, it is our responsibility to write bills that clearly explain our meaning and have achievable goals.  By your own admission, this law is a disaster.

     Make no mistake.  Unless you act before it’s too late, the American people are going to hold you personally responsible for the failings of this law that negatively impact their jobs, their health, and their families.  You drafted it, you twisted arms to get it passed, and, until now, you have lauded it as a model for all the world.  Your attempts to pass the buck to President Obama’s team will not work, nor will they absolve you of responsibility for the harm that you have brought via this law.

     Republicans have repeatedly offered legislation to repeal PPACA and replace it with more sustainable reforms that would have bipartisan support.  Perhaps we can work together to fix this mess before it’s too late.  We stand ready to repeal the law and put forward legislation that will truly benefit patients and their doctors.

     I look forward to hearing from you.

     Sincerely,

     Mike Pompeo

     Member of Congress

     Kansas 4th District

Topics: 
Government and Politics, Health Care

Food Aid as Industrial Policy

By
Simon Lester

It’s understandable that Americans would see malnourished people in other countries and want to help. Despite our recent economic woes, we are still relatively wealthy, and our instinct is to make the world a better place if we can.

The role of the government in any such issue is debatable. But not surprisingly, once the government gets involved, the original purpose gets distorted. In practice, after becoming a government program, the idea of giving food to poor people has been turned into an industrial policy tool. Instead of simply giving money to people to buy food from the cheapest source, the U.S. government buys food from U.S. producers and requires that it be sent overseas on U.S. ships.

Thus, government turns aid for the foreign poor into a domestic jobs program. As a result, the percentage of food aid money actually spent on food for the hungry is significantly reduced, as some of that money is now diverted to subsidizing domestic agricultural and other interests. (That, of course, is the problem with all industrial policy: it reduces overall welfare in order to help a favored few.)

Hopefully, that may change soon.  From the Washington Post:

The Obama administration has proposed the first major change in three decades to the way the United States supplies food aid to impoverished nations, significantly scaling back the program that buys commodities from U.S. farmers and ships them to the needy overseas.

Under a proposal in the White House budget released Wednesday, nearly half of $1.4 billion in requested funds for the aid could instead be spent to purchase local bulk food in countries in need or to distribute individual vouchers for local purchases.

Reducing the government’s requirement to purchase U.S. food, most of which by law must be shipped on U.S.-flag vessels, will save enough money to feed an additional 4 million children, according to Rajiv Shah, administrator of the U.S. Agency for International Development (USAID).

…

Although the United States is the biggest provider of food assistance in the world, it is the only donor nation that continues to require national purchases and shipment. Government and academic studies in recent years have described the U.S. system as both wasteful and inefficient.

Topics: 
Foreign Policy and National Security, Government and Politics, Tax and Budget Policy, Trade and Immigration

Stabenow, Too, Admits ObamaCare Won’t Work

By
Michael F. Cannon
The president’s budget proposes to rescind ObamaCare’s cuts to Medicaid disproportionate share hospital payments in 2014. As I explain in a National Review Online op-ed, this proposal demonstrates that:
  1. ObamaCare is not likely to reduce uncompensated care in 2014.
  2. ObamaCare won’t reduce the deficit.
  3. Hospitals can stop crying poverty.
  4. States don’t need to expand Medicaid to protect hospitals.

Related to that, Sens. Debbie Stabenow (D-MI) and Roy Blunt (R-MO) have now introduced legislation (technically, an amendment) that would rescind those cuts, thereby increasing Medicaid spending. This reinforces the four points above, especially the part about states not needing to expand Medicaid.

Interestingly, both Stabenow and Blunt are flip-flopping and/or betraying their principles. Stabenow the Democrat is repealing part of ObamaCare, while Blunt the Republican is increasing government spending.

Topics: 
General, Government and Politics, Health Care

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