Milk Madness

You don’t have to be a libertarian to be amazed at the way the government’s many tentacles often work at cross-purposes. The Wall Street Journal reports today on the U.S. milk industry:

Federal regulators are investigating allegations that the nation’s largest dairy cooperative, Dairy Farmers of America, has manipulated milk and cheese prices … the Commodity Futures Trading Commission is looking into whether DFA sought to drive up the price of milk….

Manipulating milk and cheese prices! Driving up prices! It’s a good thing that we have the government to help protect us from such abuses.

Oh, wait a minute. The federal Department of Agriculture runs an extensive array of marketing orders, import controls, and other programs to squelch dairy competition and keep prices artifically high.

Unaffordable Promises at All Levels of Government

USA Today reporter Dennis Cauchon is an expert at distilling complex data about governments down to bite-size pieces. Today he finds that:

Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That’s nearly $500,000 per household.

When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.

Kudos to USA Today for running such hard-data stories on the front page. Too many newspapers opt for the ”human interest” angle when reporting on government economic policy.

Cauchon’s data raises many questions. For one, how could governments have gotten away with imposing $62 trillion of unfunded obligations on young Americans?

At the state and local level, taxpayers have been sleeping as union-backed politicians have jacked-up compensation levels for the nation’s 16 million state and local workers

The Washington Post pointed to an example of state and local irresponsibly yesterday. The paper lambasted Montgomery County, Maryland, for its “staggeringly generous” compensation increases for county workers, increases that will add to the $62 trillion total and likely push up county taxes down the road.  

REAL ID Update From the Upper Midwest

The upper Midwest is where the REAL ID action is these days. Our national ID law is getting its airing in the lands of lutefisk and cheese.

In Minnesota, Governor Tim Pawlenty (R) vetoed an entire transportation bill to spike anti-REAL ID provisions that the legislature had included. The legislature turned around and passed a free-standing anti-REAL ID bill with a veto-proof majority.

Now Pawlenty is seeking to make patsies of the legislature. Along with vetoing the new bill, he issued an executive order that would prevent Minnesota’s full compliance with the federal Real ID program before June 1, 2009 unless the legislature approves. That sounds good - until you realize that the Department of Homeland Security’s current deadline for even pledging to comply is October 11, 2009.

Pawlenty’s executive order conceded nothing to his state’s legislators, whom he’s treating as dupes.

Turning to Wisconsin, Rep. Jim Sensenbrenner’s (R) advocacy for REAL ID has garnered himself an opponent in the state’s September 9 Republican primary. Jim Burkee, an associate professor of history at Concordia University Wisconsin, has published a thorough piece on REAL ID, titled “‘The Sensenbrenner Tax’ Abandons True Conservatism.”

Rep. Sensenbrenner reportedly soured the Wisconsin Republican Party’s convention by trashing fellow Republicans over their reluctance to go along with the national ID law. A week ago, he leveled a shrill attack on the Wisconsin governor when Governor Doyle (D) announced plans to take more than $20 million out of the state’s REAL ID account and transfer it into the state’s general fund.

Watch this space for more interesting developments.

Medicare Advantage for All

The Church of Universal Coverage is whipping itself into a fervor over the Healthy Americans Act (S.334), a piece of legislation originally introduced by Sen. Ron Wyden (D-OR) that promises “affordable, guaranteed private health coverage that will make Americans healthier and can never be taken away.”  Wyden has enlisted seven Republican senators as cosponsors, including such conservatives as Lamar Alexander (TN), Bob Bennett (UT), Mike Crapo (ID), and Judd Gregg (NH). 

That guarantee and that bipartisan support have generated opeds in major newspapers, a web site, journal articles, a preliminary scoring by the Congressional Budget Office, and much twittering among the left-wing blogocracy that this could be the vehicle for achieving universal coverage.  There’s even a clever video that, come to think of it, supporters of market-based health care reforms could emulate in selling their own ideas.

What’s most interesting about all this is that so many conservative Republicans are acquiescing to a sweeping government takeover of the health care sector.  The Healthy Americans Act wouldn’t go quite so far as to enact the Left’s long-sought dream of “Medicare for All,” where government would dictate the terms of coverage for all Americans, set the prices, and cut checks to the doctors.  Rather, it would throw us all into a Medicare Advantage-like program, where government would dictate the terms of coverage, set the prices, and cut checks to … insurance companies.  Call it “Medicare Advantage for All.”  I have more to say about how the Healthy Americans Act would operate in this podcast

The conservative group Americans for Tax Reform claims the Act would constitute “the largest tax increase in history.”  Former Republican House Majority Leader Dick Armey accuses the bill’s GOP supporters – in particular Sen. Chuck Grassley (R-IA), the ranking Republican on the Senate’s committee of jurisdiction – of “signing on with the government-run health-care Democrats.” 

So why would conservative Republicans sign on to such a bill?  In particular, why Bennett, who has done an admirable job as a member of the Joint Economic Committee of trying to explain free-market concepts to his fellow senators? 

Given the general lack of health-policy literacy on the Right, it seems plausible that these conservatives just didn’t know what they were doing – or that their understanding of the legislation was sufficiently dim that any resistance could be overcome just by dangling the words “health savings accounts” in front of them.

A more troubling prospect is that these conservative senators and their staffs knew exactly what they were supporting, but made the calculation that their immediate political needs are more important than their fellow citizen’s health and freedom.

I Knew We should Have Used the Cone of Silence!

Kevin Carey of Ed Sector blogged yesterday that he has intercepted a communication revealing “what extremist libertarians say when they think they’re talking to one another.”  He is referring to this month’s issue of the highly classified Cato newsletter. I knew we should have used the Cone of Silence instead of 3rd class mail!

The title of Carey’s post proclaims: ”Cato Renounces School Vouchers.” This would be difficult, since Cato has never advocated vouchers, or, for that matter, anything else. The Cato Institute does not take policy positions, its scholars do.

Carey also suggests that I am personally “abandoning vouchers,” citing an interview in our newsletter in which I explain one of the advantages education tax credits enjoy over vouchers. As it happens, I have been pointing to that and other advantages of tax credits for the last decade: in my 1999 book Market Education: The Unknown History, in the 2001 Cato paper  “Toward Market Education: Are Vouchers or Tax Credits the Better Path,” in the 2002 Independent Review essay “Giving Credit Where It’s Due: Why Tax Credits are Better than Vouchers,” and more recently.

Vouchers have many redeeming qualities when compared to both conventional government-run schools and charter schools, but since I concluded, while researching Market Education, that tax credits have important advantages over vouchers, I have recommended credits. 

The most puzzling part of Carey’s post is its conspicuous self-contradiction. On the one hand, Carey claims that tax credits ”only help people who make enough money to pay taxes.” On the other, he quotes my advocacy of tax credits for donations to non-profit scholarship funds serving low-income families. Since such programs already exist and are growing in several states, and are serving people who pay little or nothing in taxes, Carey’s post disproves itself.

Hmm. Is this some devious strategy to undermine “extremist libertarians” by doing our jobs for us, thereby putting us out of work?

Rep. Tom Davis, Republican Brand Mangler - Er, Manager

In the opening segment of this week’s Washington Week on PBS, Representative Tom Davis (R-VA) commented on the viability of the Republican party in the upcoming elections: “The Republican brand name - if you were to put this on a dog food - the owners would just take it off the shelf because nobody’s buying it.”

Davis has more than a little responsibility for these circumstances. He’s been a consistent cheerleader of the REAL ID Act, for example, the moribund national ID law. He has consistently pressed and promoted REAL ID. He claimed that imposing $17 billion in costs on state governments is not an unfunded mandate, and pretended like shaking $50 million in federal money loose made any difference. Davis saluted the final regulations when they were issued earlier this year.

In a REAL ID story including Davis, Federal Computer Week saw fit to note that he “represents a Northern Virginia district heavily populated by federal employees and government contractors.”

P.J. O’Rourke comments in the most recent Cato’s Letter: “It took a Democratic majority in the House of Representatives 40 years—from 1954 to 1994—to get … corrupt and arrogant, and the Republicans did it in just 12.” Being wrong on liberty, even in service to your district’s government contractors, is not good for your party’s brand, Mr. Davis.