Regulatory Madness

In researching my new bulletin, Milk Madness, the weirdest document I came across was this 2003 note from then New York Attorney General, Eliot Spitzer.

Spitzer was going after retailers of milk for “price gouging,” or charging prices that were “excessive.”

Talk about regulatory chutzpah. The federal government runs a milk cartel system, called “marketing orders,” which has the direct goal of raising prices. A federal price support program and import barriers are designed to raise milk prices. It has been federal policy for 70 years to screw milk consumers for the benefit of milk producers.

And the government of New York is going after retailers for overcharging? 

Hillary the Neocon

Don’t miss Ed Crane in today’s Financial Times: “Is Hillary Clinton a neocon?” (Subscribers only, alas; you may have to run out and buy a copy.) Here’s a taste:

“You know, when I ask people, ‘What do you think the goals of America are today?’ people don’t have any idea. We don’t know what we’re trying to achieve. And I think that in a life or in a country you’ve got to have some goals.” Senator Hillary Clinton, MSNBC, May 11 2007

Senator Hillary Clinton’s worldview, as formulated above, is starkly at odds with that of America’s founders. The idea that the American nation had “goals”, just as individuals do, would have been wholly alien to them. For them the whole undertaking of government was to protect our “self-evident” rights to life, liberty and the pursuit of happiness. This emphasis on the primacy of the individual is the essence of true American exceptionalism.

National goals are a euphemism for concentrated national political power. The “Old World” was full of nations with goals, almost all pernicious. The concept of national goals is not so much un-American as it is non-American. But Mrs Clinton persists in promoting the concept, saying at a recent campaign speech in New Hampshire that rather than an “ownership society” she would “prefer a ‘we’re all in it together’ society”. She frequently invokes the notion that Americans want “to be part of something bigger than themselves”.

She has an unusual ally in this. The one other powerful political force in the US today that shares her frustration over the lack of national goals is neoconservatism.  …

UPDATE: Read the whole piece here.

German Corporate Tax Cut is Now Official

Now that the German Senate has given its approval, the corporate tax rate will drop to less than 30 percent beginning next January. Not surprisingly, tax competition was the motivating force. The Tax-news.com story also reveals that Germany will be implementing a lower-rate tax on capital income. The 25 percent rate on interest, dividends, and capital gains will still be too high, but it is an improvement over the current system, which has rates as high as 42 percent:

German lawmakers have given their approval to a key corporate tax reform that will reduce the overall corporate tax burden on companies in Germany by almost 10%, placing the country in the middle of the European corporate tax league table. …

In urging the lawmakers to approve the bill, Peer Steinbrueck, German Finance Minister, argued that the tax cut represents “an investment in Germany as a business location”, making domestic and foreign investments more attractive. …

Germany currently has one of the highest corporate tax burdens in the world, and the business community has long called for rates to be reduced to help breathe life into Germany’s stagnating economy. The new law effectively cuts the corporate tax rate from the current 38.65% to 29.83%. …

The ruling coalition parties have also agreed to introduce a 25% capital gains tax from January 1, 2009. This will replace the current system, whereby capital gains are subject to personal income tax, which can be as high as 42%. This will apply to income from earned interest and dividends, and private investors’ share sales.

The Mitt-Hillary “Connection,” Part III

A news article in today’s Washington Post – about which Michael Tanner also blogs here – notes the similarities between (1) the 1993 Clinton health plan, (2) the Mitt Romney-Heritage Foundation plan that Massachusetts enacted last year, and (3) the health plans of the leading Democratic presidential candidates:

To move toward universal coverage, [Senators] Edwards, Clinton and Obama have approaches that borrow from the Massachusetts model. That plan, regarded as one of the nation’s most innovative, took key elements of the 1993 Clinton plan and made them practical politically – so practical that the plan was enacted in 2006 by a Democratic legislature with support from a Republican governor, 2008 presidential candidate Mitt Romney…

All three Democrats support a provision similar to another part of the Massachusetts plan that would require businesses either to offer insurance to their employees or pay a tax. Fourteen years ago, a similar proposal helped drive opposition to Bill Clinton’s heath-care plan…

Republican presidential candidates, wary of large plans that call for tax increases, have depicted the Democratic proposals as “socialized medicine.” Romney is among them, even though the law he signed as governor of Massachusetts has been a model for Clinton, Edwards and Obama…

When Edwards released his plan in February, [bioethicist Ezekiel Emanuel] blasted it in an e-mail to one of the candidate’s aides, saying it was hard to figure out why someone seeking the Democratic nomination was backing a health-care approach crafted by Romney, a Republican.

Oh, I don’t think it’s that hard to figure out.

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?

Anti-Universal Coverage Club in National Journal

The Anti-Universal Coverage Club was written up in National Journal (subscription required) just nine days after it was launched.  The article notes that former Medicare trustee Tom Saving is among the club’s members.

It also notes that the club is “at odds not only with liberals but also with some conservatives.”  For example, it quotes Galen Institute president Grace-Marie Turner on why she does not plan to join:

It’s perception. If people think we’re against having everyone have health insurance coverage, what kind of statement is that?

Turner is right about those opposed to “universal coverage” facing a perception problem.  In my experience, the health policy community is characterized by:

  1. A pervasive opinion that the best way to protect people’s health is for government to pursue health insurance coverage for all, and
  2. A common perception that if you do not support universal coverage, you are an uncaring person

Another word for #2 is prejudice.  Which is bad enough by itself.  But if #1 is incorrect – and there is ample reason to suspect that it is – then #2 commits another sin by preventing people from questioning #1.

Turner values freedom and thinks that markets outperform government.  If such people believe that #2 is too difficult to overcome, that makes it even more important that the Anti-Universal Coverage Club challenge that prejudice.

Is England Becoming a Nation of Big-Government Snitches?

According to Tax-news.com, about 200,000 Brits have tattled on their neighbors to the tax authority. It is unclear whether this has generated more revenue for the
UK’s bloated public sector, but the more interesting aspect of this story is that the snitches do not get any reward. At least Russians who ratted out family members to the KGB might get a pair of jeans from the West. And Cubans who turn in their colleagues might get their meat ration upped to twice monthly:

Almost 200,000 Britons have shopped their friends, family and colleagues to the tax man in the year since HM Revenue and Customs set up a confidential hotline for taxpayers to inform on those they suspect of dodging their taxes. … However, it is difficult to gauge the effectiveness of the HMRC initiative, as the Treasury reportedly refused to divulge to the Times how many successful prosecutions had resulted from such informants, nor how much extra tax had been brought in. …informants in the UK receive no monetary rewards for shopping tax evaders. …HMRC has said that it needs additional powers and deterrents to extract money from non-payers, in order to reduce the cost and effort of pursuing around 200,000 people through the court system every year.

“Pragmatic” Health Care Reform?

The Washington Post has a story today gushing over how “pragmatic” and “moderate” Democratic presidential candidates are being in pursuit of universal health care. Moderate in comparison to Michael Moore maybe, but let’s look at what those candidates are actually proposing:

1) An individual mandate requiring every American to purchase a specific government-designed insurance plan or face financial penalties. (Edwards and Clinton). Such a mandate, however unenforceable in practice, is an unprecedented (except for Massachusetts) infringement on individual liberty and sets the stage for further regulation of the insurance industry.

2) A “play or pay” mandate on businesses, requiring them to provide employees with health insurance or pay additional taxes (Obama, Edwards, Clinton). Such a mandate would raise the cost of employment resulting in a loss of jobs and lower employee compensation.

3) A government-mandated minimum benefits package for insurance (Obama, Edwards, Clinton). Rather than true insurance—spreading catastrophic risk—the government would require a “Cadillac” policy, leading to a feeding frenzy for special interests representing providers and disease constituencies.

4) Community rating and guaranteed issue, raising the cost of insurance for young and healthy individuals. (Obama, Edwards, Clinton).

5) Price controls on insurance premiums (Obama) and prescription drugs under Medicare (Obama, Edwards, Clinton).

6) Huge tax increases, ranging from $65 billion per year (Obama) to more than $120 billion per year (Edwards).

7) Massive expansion of government health care programs like Medicaid (Obama, Edwards, Clinton). Edwards would also create a new government-run health care program like Medicare to compete with private insurance.

8) Managed-competition-style regional insurance pools or “connectors.” (Obama and Clinton).

The fact that Massachusetts governor Mitt Romney and the Heritage Foundation also support many of these proposals doesn’t make them any more moderate. These proposals would radically increase government control over one seventh of the US economy, would increase taxes, destroy jobs, and slow economic growth, and most importantly would lead to worse health care for millions of Americans.