Universal Coverage Is the Health of the State

California’s health care sector is as bloated and inefficient as the rest of the country’s, meaning that it already bleeds the taxpayers dry.  But that’s just not good enough for Gov. Arnold Schwarzenegger (R). 

He and Assembly Speaker Fabian Nuñez (D) have cobbled – and the state Assembly has approved – a package of health care reforms that would further kneecap the taxpayers, march them down to Death Valley, and bury them up to their necks to be eaten alive by special-interest fire ants.  But perhaps I understate.

Unless the Senate or the voters stop the plan, it will carve up taxpayers by regulating health insurance to protect favored insurers from competition; regulating employee benefits to protect favored employers from competition; imposing enormous taxes on young and healthy Californians; creating taxes and subsidies that seem deliberately designed to keep low-income Californians poor; imposing on all Californians the sort of punitive mandates that never have achieved universal coverage and never will; and fraudulently foisting part of the cost onto taxpayers in other states.  And all in the face of a $14 billion deficit.

Just goes to show what Republicans and Democrats can do when they work together toward a common disaster like universal coverage.

Krugman’s Populist Fantasies

Paul Krugman’s transformation into a Howard Beale wannabe continues to (take your pick) astound/amuse/sadden. In today’s column, Krugman blasts Barack Obama for his “naïve” refusal to demonize those with whom he disagrees on public policy issues. Siding instead with John Edwards, he endorses the view that “America needs another F.D.R. — a polarizing figure, the object of much hatred from the right, who nonetheless succeeded in making big changes.”

Hmm, who’s the one being naïve here? Let’s recall that F.D.R. won the presidency in the depths of the worst economic cataclysm in American history – public blame for which fell squarely on his partisan and ideological opponents. Consequently, F.D.R. entered the White House with 313 fellow Democrats in the House and 61 in the Senate. Under the circumstances, it is entirely understandable that he didn’t worry too much about maintaining bipartisan good feeling.

But does anybody think that the political environment in 2009 will be remotely similar to that of 1933? Even assuming that a Democrat wins the White House and Democratic majorities in both houses of Congress are maintained, how likely is it that “big changes” are going to occur without some significant level of Republican support?

Based, no doubt, on the direct line to vox populi afforded him by his twin perches at the New York Times and Princeton University, Krugman is convinced that the hour of the angry populist is at hand. “[T]here’s every reason to believe,” he writes, “that the Democrats can win big next year if they run with that populist tide.” Krugman cites as confirming evidence CNN and FoxNews focus groups that declared Edwards the winner of the most recent Democratic debate. He’s curiously silent, however, about all the other polls that show Edwards trailing badly behind the more centrist Hillary Clinton and Obama.

At the end of his column, Krugman accuses those who long for a less vitriolic politics of “projecting their own desires onto the public.”

That’s funny.

[cross-posted from www.brinklindsey.com]

Big Money Lurches Left

Last Friday, the Federal Election Commission ruled that money raised for John Edwards’ presidential bid by an organization called ActBlue was not eligible for matching funds from taxpayers. ActBlue is registered as a federal political action committee which means its fundraising cannot be matched by the presidential taxpayer financing program. The loss is not trivial for Edwards. ActBlue’s fundraising composed 15 percent of his total fundraising.

The facts of this case and the FEC’s technical ruling are not especially important. Edwards was unlikely to become the Democratic nominee, and this turn of events will not change the race for the presidency.

But the world is changing. The traditional story about money in politics goes like this. Rich people and corporations – overwhelming conservative and Republican – contribute almost all the money candidates need to run, thereby tilting the government toward their interests. Noble “reformers” enact campaign finance restrictions to limit the power of business and the rich. Then the little guy (that is, the Democratic party and especially its left wing) can rule in pursuit of everyone’s interest, a category that does not include the interests of the rich, the conservative, and the non-liberal, all of whom have no legitimate standing in a democracy.

Now the “little guy” has become Big Money. ActBlue and the Democratic party in general are raising money hand over fist. Republicans are far behind and appear to have little idea how to catch up. But the old rules which were designed to harm the “bad guys” reached out and harmed John Edwards, populist extraordinaire. This is not a new irony. The struggle over regulating the Internet in 2005 saw the left opposing campaign finance strictures. The left used 527 groups to work around campaign finance rules that threatened their political activities. And so on.

The traditional story about money in politics is starting to lose credibility. When reality has completely undermined the traditional story, how long before campaign finance deregulation becomes politically correct?

Big Government Guy Backs McCain

Sen. Joseph Lieberman, the 2000 Democratic nominee for vice president, has endorsed Republican Sen. John McCain for president. It’s a coup for McCain, struggling to reignite his once frontrunning campaign. And looking over the rest of the field, libertarian voters might even conclude that McCain has a pretty good record on a lot of economic issues.

But the Lieberman endorsement will remind those libertarian voters of all the positions that pushed them away from McCain in the first place. Lieberman and McCain are perhaps the two leading supporters of the Iraq war in the Senate. They are coauthors of a bill to impose costly new regulations to fight global warming. They both support restrictions on political speech.

As I’ve noted before, some Republicans think no issue matters except doubling down on the floundering war effort, so they consider Lieberman an ally, even a man who should be a heartbeat from the Oval Office in the next Republican administration. But you have to ignore Lieberman’s entire career to see him as an ally of conservatives.

As Robert Novak pointed out back when Republicans were endorsing Lieberman for reelection,

Lieberman followed the liberal line in opposing oil drilling in ANWR, Bush tax cuts, overtime pay reform, the energy bill, and bans on partial-birth abortion and same-sex marriage. Similarly, he voted in support of Roe vs. Wade and for banning assault weapons and bunker buster bombs. His only two pro-Bush votes were to fund the Iraq war and support missile defense (duplicating Sen. Hillary Clinton’s course on both).

Lieberman’s most recent ratings by the American Conservative Union were 7 percent in 2003, zero in 2004 and 8 percent in 2005.

I actually agree with him on a couple of those votes, though I wouldn’t expect that conservatives would. The National Taxpayers Union said that he voted with taxpayers 9 percent of the time in 2005, worse than Chris Dodd or Barbara Boxer. Maybe because of all the Republican love in 2006, he soared to a 15 percent rating.

In a previous speech, Lieberman called for a tax increase so that we could continue the war without “squeezing important domestic programs, as we have been doing”–his view of a period during which federal spending rose by one trillion dollars:

During the Second World War, our government raised taxes and we spent as much as 30 percent of our Gross Domestic Product to defeat fascism and Nazism. During the war in Korea, we raised taxes and spent fourteen percent of GDP on our military…Today, in the midst of a war against a brutal enemy in a dangerous world, we have cut taxes and are spending less than five percent of GDP to support our military…It is not an acceptable answer to push the sacrifice of this war against terrorism onto our children and grandchildren through deficit spending, as we have been doing. And it is not an acceptable answer to pay the costs of this war by squeezing important domestic programs, as we have been doing.

Lieberman may help McCain with Republican hawks, but he’s not likely to help with New Hampshire’s growing contingent of disaffected libertarian, centrist, and independent voters, the ones who swung the state firmly into the blue zone last fall.

Swiss Canton Voters Overwhelmingly Adopt 1.8 Percent Flat Tax

More than 90 percent of voters in the Swiss Canton of Obwalden have voted for a flat tax of just 1.8 percent. This is positive news for tax competition within Switzerland, and it doubtlessly will put even more pressure on Europe’s welfare states to reform oppressive tax regimes. Presumably voters in other Cantons will now petition for a chance to vote for low-rate flat tax systems, and maybe it is just a matter of time ‘til one of them decides to completely eliminate the income tax. Swissinfo reports:

Obwalden has become the first Swiss canton to adopt a flat income tax rate, with more than 90 per cent of the electorate voting in favour of the move. The decision, announced by the authorities after a vote on Sunday, comes after a court ruled the canton’s previous degressive tax model unfair. From next January Obwalden will impose a rate of 1.8 per cent on all categories. The new model also exempts the first SFr10,000 ($8,700) of income from taxation, a measure designed to benefit those on lower incomes the most. …In Switzerland there is high competition among the cantons to set the lowest tax rates to attract wealthy individuals and companies. …European neighbours have frequently expressed outrage that their rich citizens are opting to empty their pockets into Swiss coffers rather than their own. But Switzerland has defended its position as providing healthy competition.

Rudy, Hillary, and Power

I have some thoughts in last Tuesday’s New Hampshire Union Leader about Senator Clinton, Mayor Giuliani, and the use and abuse of power:

Clinton, always eager to wield power on behalf of her vision of the public good, has just endorsed new government mandates on health care and energy along with a $50 billion spending program for global AIDS. Meanwhile, revelations about Giuliani’s secretive use of New York City police and his refusal to allow the city comptroller to audit his security spending reflect his lifelong affinity for using and abusing power.

Clinton calls herself a “government junkie.” She says, “There is no such thing as other people’s children” and promises to work on “redefining who we are as human beings in the post-modern age.”…

Giuliani seems much less committed to any particular vision of government’s role. Rather, throughout his career Giuliani has displayed an authoritarian streak that is deeply troubling in a potential President who would assume executive powers vastly expanded by President Bush….

Giuliani wants power concentrated in whatever position he holds at the time, and Clinton wants the federal government to have vast powers to do good as she sees it. Not a happy choice for the voters in a free country.

Bulgaria Now an Official Member of the Flat Tax Club

The Sofia News Agency reports that a 10 percent flat tax has cleared a final hurdle in the Bulgarian Parliament. The article notes that the new tax system requires a signature from the President, but this is expected to be a formality. So it’s time to play the unofficial theme song of the global flat tax revolution and welcome the 23rd jurisdiction to the club:

Bulgaria’s parliament passed on second reading on Monday the amendments introducing a flat tax rate in the country. …The amendments are final and only a veto from president Georgi Parvanov can stop them from becoming law, although he has given no indication he plans to do so. …The leaders of the three parties in Bulgaria’s ruling coalition have agreed in summer on the tax reform, with a flat rate of 10%, the lowest in Europe, replacing the progressive taxation system with three brackets. Since Estonia introduced a flat tax system in 1994, enjoying stable GDP growth, eastern European countries have been attracted to the flat tax that promises to attract foreign investments and increase transparency.