Medicare Meets Mephistopheles: “Damnably Funny”

The blogger David in DC describes himself as a “Knee-Jerk Bleeding-Heart Liberal-Progressive With a Hyphenation Problem.”  He nevertheless offers his praise for David Hyman’s book Medicare Meets Mephistopheles:

O.K., how often do you suppose you’re gonna get a recommendation from me for a book published by the Cato Institute (a libertarian think tank) and denouncing one of the most important legacies of LBJ’s “Great Society” program?…

This book has charts, graphs and endnotes. It’s a scholarly work.

But it’s also damnably funny.

Check it out.

It’s a nice review.  But I think his mom put him up to it.

Anti-Money Laundering Laws Impose Heavy Costs, yet Do Not Hinder Crime and Terrorism

The Associated Press reports that financial institutions in North America are paying 71 percent more over the past three years to comply with government anti-money laundering rules and regulations. Even supporters of the current approach admit that the costs are enormous, totaling about $7 billion yearly (and that estimate is three years old). This steep burden might be worthwhile if it led to a reduction in crime and/or terrorism, but as I have explained elsewhere, there is scant evidence that anti-money laundering laws reduce underlying criminal/terrorist behavior. Indeed, because law enforcement resources are being used to spy on everybody rather than targeted at those who want to harm the country, it is possible that the misallocation of resources required by anti-money laundering policy actually makes America less safe:

Complying with anti-money laundering laws has been much more expensive than banks anticipated, and some still aren’t meeting all requirements, a new survey says. …Among the six regions surveyed, North American banks saw the highest percentage cost increase, with costs rising 71 percent over the last three years. …Many governments require that banks take steps to prevent money laundering. Money laundering involves making certain financial transactions to hide the source, nature or destination of illegal funds. The United States has the Bank Secrecy Act, which was passed in 1970 and amended by the USA Patriot Act of Oct. 26, 2001. It has since been used increasingly to stop the flow of financing to terrorist organizations.

How Schooling Affects Culture

Cato’s Brink Lindsey has a good essay in today’s WSJ on how cultural differences between communities (from child-rearing to views and expectations on education) widen America’s socioeconomic gap. The one point where I diverge from Brink is that I am far more sanguine about the feasibility of reducing the cultural gaps that exacerbate the socioeconomic gap. The key is to understand that our educational institutions actually shape our culture.

Our monopoly school system has gradually marginalized parents, removing from them any significant responsibility for deciding where, what, how, when, and by whom their children are taught. This usurpation of traditional parental responsibilities has not only facilitated but fomented an unprecedented level of disengagement from their children’s education. Responsibilities breed responsibility. Powerlessness breeds apathy and disengagement.

When parents are actively involved in choosing their children’s schools, and when they have some measure of financial responsibility for their children’s education, they take a more active role, they are more satisfied with their children’s education, and their children’s achievement and attainment goes up. The most dramatic findings come from the areas most in need of improvement: our inner cities. University of Chicago economist Derek Neal has shown that urban black students attending Catholic schools are far more likely to graduate from high-school, be accepted to college, and graduate from college than similar students who attend government schools. That and other relevant research is digested and linked to here.

Replacing our dependency-producing school monopoly with a free education market that requires all parents to choose their children’s schools, and requires all parents to contribute something to the cost of their own children’s education (in kind rather than cash, where necessary), would not simply minimize the damage done by America’s culture gap. It would significantly shrink that gap, because it would compel parents to once again take a more active role in their children’s education. “Free” monopoly schooling isn’t merely inefficient, it is socially destructive.

Brink Lindsey on “The Libertarian Center”

The July issue of Cato Unbound hits virtual newsstands this morning with Cato VP for research Brink Lindsey’s new essay elaborating his argument in The Age of Abundance: How Prosperity Transformed America’s Politics and Culture that the culture wars are over and a vaguely libertarian consensus is the result. While recognizing that principled libertarianism doesn’t have a significant constituency, Lindsey argues that the soft libertarian synthesis constrains the Democrats and Republicans as they seek to cobble together working political majorities. Keep your browsers pointed to Cato Unbound: Jonah Goldberg of National Review has first whack at Brink on Wednesday.

Gordon Brown’s Finance Minister Defends UK’s Status as Tax-Haven

The United Kingdom has extremely favorable rules for “non-domiciled” residents, a policy that enables highly productive people to live in London while avoiding most taxes on capital income and foreign-source income. The left in Europe hates this policy, especially since entrepreneurs and investors are escaping high-tax nations to live in London, but the new Chancellor of the Exchequer seems content to leave well enough alone. The Observer reports:

London, the great global financial centre, has another claim to fame: it has become the fastest growing destination for international tax avoiders. The world’s super-rich and an elite cadre of financiers working in the Square Mile are increasingly using non-domicile tax status to sidestep paying tax on their fortunes. …Those benefiting from non-dom status have rocketed over the last five years. The Treasury…confirmed that 112,000 individuals indicated non-dom status in their self-assessment returns in the tax year to April 2005. This is a 74 per cent increase over 2002’s figures. …Unlike UK citizens, non-doms escape tax on income from property or capital gains. It is not only the international jet set who claim non-dom status; it is also available to some of the most powerful figures in the City. …Non-domicile status is self-assessed. Forms are easy to download from the web and there are just 19 questions. One tax expert says it is easy to convince the Revenue that a claimant is based overseas, whether it is through a relative or a series of overseas investments. In addition, the Revenue makes very few checks on status. Many senior City figures qualify for non-dom tax exemptions, including Dominic Murphy, the UK boss of private equity giant KKR. And it is widely thought that the Chancellor’s City adviser Sir Ronald Cohen and a large collection of Labour Party donors do too.  …Earlier this week, new Chancellor Alistair Darling made it clear that nothing must harm the international pre-eminence of the City and he warned against ‘knee jerk’ reactions to calls to amend the regulation.

The Anti–Universal Coverage Club Is Rolling Along

I started the Anti–Universal Coverage Club in part to make a point, but also because I was curious to see how many people agreed with its basic premises

I’m pleased to report that such people do exist. As of today, I count 86 club members.  Rather than list them all, I’ll run through just those who might be recognizable to the policy community. Affiliations are provided for identification purposes only and do not imply that any of those organizations agree with us. At all. Unless I list an organization by itself.

Nathan Benefield
Director of Policy Research
Commonwealth Foundation

Greg Blankenship
President
Illinois Policy Institute

David Brown
Editor
Laissez Faire Books Blog

Joseph Coletti
Health Care Policy Analyst
John Locke Foundation

Karla Dial
Managing Editor
Health Care News

Paul Gessing
President
Rio Grande Foundation

John Graham
Director, Health Care Studies
Pacific Research Institute

Curly Haugland
Republican National Committeeman
North Dakota

Carla Howell
President
Center For Small Government

Arnold Kling
Economist/Blogger
Cato Institute/Library of Economics & Liberty

Frayda Levy
President
Moving Picture Institute

Mark Litow
Consulting Actuary
Milliman, Inc.

Montana Liberty Project

National Review

Michael Ostrolenk
Director of Government Affairs
Association of American Physicians and Surgeons

Tom Patterson
Chairman
Goldwater Institute

Jared Rhoads
Director
Lucidicus Project

James Rottet
Legislative Specialist
The Heartland Institute

Herbert Rubin
Professor
UCLA School of Medicine

Thomas Saving
Professor of Economics
Texas A&M University

Greg Scandlen
Founder
Consumers for Health Care Choices

Greg Schneider
Health Care Fellow
Flint Hills Center for Public Policy

Jeffrey Singer
Contributing Editor
Arizona Medicine

Henry Stern
Blogger
Insure Blog

Mary Katherine Stout
Vice President
Texas Public Policy Foundation

Andrew Sullivan
Journalist
The Atlantic Online

The club has received a fair number of favorable mentions from blogs I had heard of (Coyote Blog, MooreWatch.com, SPN Blog, and Wisdom From Wenchypoo’s Mental Wastebasket) and some I had not (Blog of Bile, Chaos From Order, A Chequer-Board Of Nights & Days, Con Law Geek, DeadBeef.com, Health Care BS, I Was The State, and JasonPye.com).

Not everyone had a favorable reaction. Neil Versel’s Healthcare IT Blog described our one recruitment email as “unbelievably shocking.”  Ezra Klein of The American Prospect wished us well in recruiting members, I think because he’s happy to have someone else compile his enemies list for him. Matthew Yglesias of The Atlantic Online congratulated me for starting the club but then deftly missed the point when he wrote, “I’m fairly certain that, politically, ‘we don’t care if you can’t afford health insurance’ is a losing slogan.”

Some members (not listed above) asked that I not use their real names because they feared giving offense — or even receiving offense, in the form of professional reprisals.  Some think my name is spelled “Canon.” Others think my name is spelled “Tanner.”  That’s fine. I’m just happy to have them aboard.  I especially love that we have a Curly.

Not bad considering how little effort I’ve put into this.

The New Deal Was a Success — at Creating Dependency

Drawing from Amity Shlaes’ excellent new book The Forgotten Man, George Will notes that FDR’s policies were an economic failure but a political success.

It is particularly galling that Roosevelt’s statist policies were so harmful (as Chris Edwards has succinctly explained), yet he is portrayed as the man who saved the nation from unbridled capitalism:

Franklin Roosevelt’s success was in altering the practice of American politics. This transformation was actually assisted by the misguided policies — including government-created uncertainties that paralyzed investors — that prolonged the Depression. This seemed to validate the notion that the crisis was permanent, so government must be forever hyperactive.

…Roosevelt, however, made interest-group politics systematic and routine. New Deal policies were calculated to create many constituencies — labor, retirees, farmers, union members — to be dependent on government.

…Roosevelt implemented the theory that (in [Shlaes’] words) “spending promoted growth, if government was big enough to spend enough.” In only 12 months, just one Roosevelt improvisation, the National Recovery Administration, “generated more paper than the entire legislative output of the federal government since 1789.” Before Roosevelt, the federal government was unimpressive relative to the private sector. Under Calvin Coolidge, the last pre-Depression president, its revenue averaged 4 percent of gross domestic product, compared with 18.6 percent today. …In 1936, for the first time in peacetime history, federal spending exceeded that of the states and localities combined.

…[A]s Roosevelt demonstrated and Shlaes reminds us, compassion, understood as making the “insecure” securely dependent, also makes the state flourish.