The Mitt-Hillary “Connection,” Part V

Washingtonpost.com’s “Fact Checker” cites yet another knowledgeable observer on the similarities between the health care reforms that Mitt Romney enacted while governor of Massachusetts, and those proposed by Romney’s fellow presidential candidate Hillary Clinton:

According to MIT economics professor Jonathan Gruber, who advised Romney on his health care reform law and has also advised Clinton, the Massachusetts law has a lot in common with the Clinton plan. Both plans mandate universal health care coverage and subsidize health care for people on low incomes. The main difference is that Clinton’s proposal permits people to switch to a Medicare-type plan and increases taxes at higher income levels.

In a previous post on this topic, I wrote:

The Cato Institute was the first to note the similarities between RomneyCare and the 1993 Clinton health plan. The New Republic ($) and The Washington Post soon followed.

I wonder who will be next?

The answer: a well-respected advisor to Gov. Romney, who also advised Sen. Clinton.

Get Middle-Class Mediocrity for Record-High Prices!

Expensive homes mean an expensive, but not necessarily a good education.

The Wall Street Journal reports on a great new book from the Pacific Research Institute, Not as Good as You Think: Why the Middle-Class Needs School Choice. It’s packed with great statistics on under-performing, over-priced schools in some of the wealthiest California districts and case studies on fiscal mismanagement normally associated with big city schools. The findings are eye-opening, as the WSJ reports:

At Dos Pueblos High School in ritzy Santa Barbara, only 28% of high school juniors tested college-ready for English in 2006, slightly better than the 23% of students who did so at San Marin High School in Marin County, where the median home price recently hit $1 million.

That’s just a taste of the dirt they dug up with widely available information. And other state think-tanks can get a lot of mileage with the same model.

Kudos to PRI for advancing the argument for school choice with the middle class and up … that’s where the battle for educational freedom will be won or lost, and the school choice movement has largely failed to speak to middle-class concerns like the rising tide of mediocrity and skyrocketing property taxes that support over-funded and horribly inefficient and under-performing suburban school districts.

PRI’s not-much-bang-per-buck argument is particularly likely to resonate with the crucial two-thirds of the electorate that doesn’t have school-aged children but gets slammed in taxes for the schools. This constituency is typically left out of parent-centric arguments for school choice, but non-parents are the key to expanding school choice.

Rudy: ‘Freedom is about authority.’

Here’s a disturbing excerpt from a speech that Giuliani delivered in 1994:

What we don’t see is that freedom is not a concept in which people can do anything they want, be anything they can be. Freedom is about authority. Freedom is about the willingness of every single human being to cede to lawful authority a great deal of discretion about what you do.

This statement is consistent with the Giuliani record. (For more, read this.)

Giuliani and Hillary share an authoritarian worldview.  And since they’re the frontrunners in their respective parties, that means freedom is in jeopardy.

For more talk about how freedom means state power, go here.

A Layered Conundrum in Iraq

There’s been much discussion of the relationship between security and political progress in Iraq. Until about a year ago, the thinking was largely that advances on the political front would iron out wrinkles in the security environment. Since the fighting was fueled by competition over power and resources (the basis of politics), once the political problems were resolved, there would be fewer flashpoints to fight over. Then, with the advent of Surgeism, the thinking became that once the security environment was stabilized, political leaders would take advantage of the relative calm to make peace among themselves. The thinking was that it was hard for to make deals with other leaders whose followers were busy killing your followers.

These are oversimplifications, and there is some merit in both arguments. The relationship goes both ways. But in two comments, yesterday and today, you can see how the question of our staying indefinitely affects the security environment and the political environment in different ways. Here’s Maj. Gen. Rick Lynch describing the prerequisite for sustaining the tamping down of violence, particularly in Sunni areas:

“They have to be convinced that we’re not leaving. That’s the issue. If they were to think we’re leaving we’d have also [sic] sorts of trouble,” Lynch said, clambering over a makeshift earthen bridge across the canal.

There’s a perfectly intelligible logic here. If people think you’re leaving, they’re going to start hedging their bets, and making deals with centers of power outside the national government that have large enough constituencies to influence a post-America Iraq. So from a tactical level–trying to control violence in a particular region, say–the point is to convince the Iraqis that we’re not going anywhere.

But then you take that to the strategic level: forcing political factions who don’t like each other into cooperating and compromising on sharing power at the national level. Tom Friedman describes the situation this way:

As one U.S. official in Baghdad pointed out to me last week, “at no point” since the testimony by General Petraeus and Ambassador Ryan Crocker “have you had the four key Iraqi leaders in the same country at the same time.” They saw the hearings as buying them more time, and so they took it.

“We have created a real case of moral hazard in Iraq,” said Marc Lynch, a Middle East specialist at George Washington University. “Because all the key players think the Americans are going to bail them out, they have no incentive to make any real concessions to one another.”

So if we’re not staying forever, we won’t get cooperation in leveraging local and regional forces into deals like the “Anbar Awakening” and they’ll start hedging their bets. If we are staying forever, the Iraqi national leadership says “What’s the hurry? Let’s see what’s happening in Tehran…” Something that’s helpful at one level is destructive at the other. And the two levels are closely interrelated.

Ann Coulter of the Left: Jonathan Chait

For those who think that it’s just conservatives, such as Ann Coulter, who are mean-spirited, they should check out the new book by Jonathan Chait, a senior editor of the New Republic, entitled The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics.

I managed to get through the introduction and first chapter of Mr. Chait’s book. Alas, I could read no more. Here are some of Chait’s characterizations of supply-side economists and supply-side economics–from the 1970s to the present day–in those first 44 pages:

“Pseudo-economists”, “cult of fanatical tax-cutters”, “amateurs and cranks”, “patently ludicrous ideas”, “preposterous ideas”, “theological opposition to taxation”, “ideological fanatics”, “insane”, “detachment from reality”, “extremism of their agenda”, “triumph of the extreme”, “a cult”, “quasi-religious”, “totalistic ideology”, “crank doctrine”, “sheer monomania”, “plain loopy”, “magical”, “sheer loons”, “deranged”, “wingnuttery”, “utterly deluded”, “crackpot economic theories”, “lunacy”, “ludicrous,” etc.

You get the idea.

Interestingly, Chait ends the first chapter arguing that “Tax rates under 40 percent simply do not have much effect on economic behavior.” Thus, he seems to be admitting that all those crackpots back in the 1970s and 1980s who cut income tax rates from 70% to the pre-Bush 40% might have been right after all.

Of course it’s not correct that tax rates of less than 40% don’t affect behavior. The Wall Street Journal has a front-page story today on the big efforts of Wal-Mart to reduce its effective state income tax rate of just 3.5%.

Finally, note that for Chait’s supply-side conspiracy theory to work, the cult would have had to include governments of every major industrial nation, because they have all cut top marginal rates since the 1970s. The top individual income tax rate across the 30 OECD countries has plunged by 26 percentage points since 1980. If that’s wingnuttery, then I’m all for it.

Are Copyrights and Patents Property Rights?

The latest issue of Regulation magazine has a fantastic article by Peter Menell discussing the divisions in libertarian theory on copyright and patent issues. One one side is what Menel dubs the Property Rights Movement, of which Richard Epstein is a leading theoretician. They see intellectual property and more traditional property rights as fundamentally similar, and apply libertarian insights about the importance of strong property rights in tangible goods to debates over patent and copyright law. For theorists like Epstein, the need to reward the fruits of labor lie at the heart of the libertarian case for property rights, and as a consequence the argument for strong intellectual property rights is identical to the argument for tangible property rights.

The other camp sees copyright and patent law as fundamentally different from tangible property rights. It includes F.A. Hayek, many “cyberlibertarians,” and Menell himself. For this camp, the fundamental argument for property rights is not about rewarding creativity so much as managing scarcity. We need strong property rights in tangible property so people can make plans about the use of scarce resources. Since inventions and creative works are non-rivalrous once created, the argument goes, property-like restrictions on their use are at best a necessary evil.

As I’ve written before, my sympathies are with the latter camp. One difference that’s particularly important—and which Menell mentions only in passing—is the issue of clear boundaries. It’s almost always easy to determine who owns which parcel of land and where the boundary lies. In contrast, both copyright and patent law suffer from vexing line-drawing issues. For example, the legal principles governing what constitutes fair use of copyrighted materials is notoriously vague. The result is endless litigation that can hamper technological progress. Patent law can be even worse. Microsoft, for example, has vaguely hinted that the Linux operating system has infringed several hundred of its patents, but no one has been able to figure out which of Microsoft’s 6000 patents they might be referring to. It’s hard to imagine a company complaining that its competitor is trespassing on its land but refusing to give any specifics.

Ultimately, I think that lumping copyright and patent law together with traditional property law obscures more than it illuminates. There may very well be good arguments for expansive interpretations of copyright and patent law, but they’re likely to be rather different from the arguments for robust property rights in tangible goods. It makes more sense to debate those arguments on their own terms rather than confusing the issue by lumping together legal regimes that have relatively little in common.

Will Poland Become the Next Flat Tax Country?

Germany’s statist politicians must be a bit uneasy about the recent election results next door. While they are probably happy that the populist-oriented incumbent government - which periodically got into disputes with Germany - was defeated, they will be very dismayed if the victorious Civic Platform Party follows through on promises to implement a 15 percent flat tax. As the biggest “new” member of the European Union, Poland would add considerable fuel to the tax-competition fire if it adopted a simple and pro-growth tax system. The Financial Times reports on the election and the market-oriented reforms advocated by the nation’s new leaders:

Foreign leaders and Poland’s business community on Monday welcomed the victory of the liberal Civic Platform party in Sunday’s parliamentary elections, predicting the revival of contacts iced up under the previous government and the restart of much-delayed economic reforms. …With more than 99 per cent of ballots counted, Civic Platform had 41.4 per cent of the vote, translating into 209 seats in the 460-member parliament. …Civic Platform is likely to form a coalition with the smaller Peasants party, which will have 31 seats. …Some of the most specific comments, concerning the party’s economic policies, were made by Zbigniew Chlebowski, a potential economy minister. He talked of introducing a flat 15 per cent tax by 2009 and said the government would privatise more energetically than its predecessor.