Health Plan Hubris

Jacob Hacker writes:

[E]very legal resident of the United States who lacks access to Medicare or good workplace coverage would be able to buy into the “Health Care for America Plan,” a new public insurance pool modeled after Medicare. This new program would team up with Medicare to bargain for lower prices and upgrade the quality of care so that every enrollee would have access to either an affordable Medicare-like plan with free choice of providers or to a selection of comprehensive private plans.

It seems to me that if a plan “bargains for lower prices,” then many providers would prefer not to participate. In that case, “free choice of providers” would require forcing doctors to join.

I was pointed to this plan by Matthew Yglesias, who praised it. I got to Yglesias via Tyler Cowen, who is more skeptical.

I am very pessimistic about the outlook for health care policy. It seems to me that wonks are engaged in a bidding war for politicians, in which the guy with the most hubris (Great health care for all! At half the cost!) wins. 

I think that the best that libertarians can hope for is to see some of these ideas tried in state laboratories and have their outcomes measured against their promises. My fear is that we will get the former but without the latter.

Subsidies Fail to Save French Farms

French farmers harvest billions of euros every year in government support through the Common Agricultural Policy (CAP). Yet those lavish subsidies and trade barriers have failed to achieve one of their primary objectives: saving the French family farm.

According to a study just released by the French Statistical Institute (INSEE), and reported in today’s Financial Times, an average of 100 French farms have gone out of business EVERY DAY for the past 50 years. The number of farm workers in France has dropped by two-thirds in the past 25 years. France’s farm exports have been declining by 3.4 percent per year since 1999, and farm household income has actually fallen during the past decade, while the incomes of non-farm households in France have been going up.

The decline of the French farm has occurred despite, or perhaps because of, the generous support of the CAP. France’s farmers receive the equivalent of $11.6 billion a year in handouts, more than one fifth of total European Union spending on agriculture. Those subsidies have arguably kept French farms from becoming more competitive and thus contributed to their long-term decline.

When the EU’s farm commissioner, Mariann Fischer Boel, warned that French farmers should seek second incomes outside the farm sector to survive, the French farm minister denounced her comments as “an insult to the social model to which European citizens are profoundly and legitimately attached.”

Is an agricultural “social model” that costs billions of euros a year and only adds to the decline of the French farm worth holding on to?

‘Net Wars

It’s a politician’s dream:

Congress is about to embark on new policymaking that will make some of America’s largest and wealthiest corporations into big financial winners and others into big losers. Given the money at stake, firms are dispatching lobbyists, armed with perks and campaign contributions, to D.C. to ensure that their clients end up on the good side of the legislation.

Making the dream even more wonderful is that the issue is obscure and complex. Most Americans will be affected, but few Americans will understand the issue and thus be able to hold politicians accountable for bad policymaking.

Welcome to the Net Neutrality fight.

To understand the fight, think of how the Web is increasingly making use of video and audio content, e.g., YouTube’s video streams, Internet radio’s audio streams, even Cato’s webcasts and podcasts. And now, on the technological horizon, is the ability to receive whole movies over the Internet. The flow of all of that data places considerable strain on high-speed Internet service providers (ISPs), who have to maintain and upgrade their portions of the Internet in order to keep the streams moving quickly.

Notice the economic asymmetry that results: content providers benefit from the upgrades, but high-speed ISPs like Comcast and AT&T pay the cost. Such asymmetries open the way for consumer-harming inefficiency and mischief.

The ISPs have responded to this situation by threatening to charge content providers for priority access. That is, a modest, text-driven website like Cato@Liberty, which doesn’t use much bandwidth, would likely go uncharged because it wouldn’t need priority service, but YouTube, with its bandwidth-consuming media streams, would need priority service and thus have to pay fees to the high-speed ISPs.

The content providers would prefer to avoid those fees, of course. They’re asking Congress to prohibit the ISPs’ proposal, and instead mandate “net neutrality” — ISPs giving equal priority to all Internet content, regardless of uneven bandwidth demand.

The New York Times nicely summarizes this fight:

Beyond the debate, the fight over net neutrality is, like most regulatory political battles, a fight over money and competing business models. Companies like Google, Yahoo and many content providers do not want to pay for the kinds of faster Internet service that will enable consumers to more quickly download videos and play games.

There are interesting arguments for both neutrality and non-neutrality. For a good argument for neutrality, read this article [pdf] by Stanford Law School’s Larry Lessig that appeared in the Fall 2005 issue of Regulation. Lessig’s Stanford colleague Bruce Owen makes a good argument for non-neutrality in this article [pdf] from the Summer 2005 issue.

Why Support for the Minimum Wage Persists in Congress: A Thought Experiment

It might seem obvious why support for the minimum wage persists in Congress. Politicians always want to be seen as helping the little guy. So they would naturally support an increase of the minimum wage to $7.25, as is currently being proposed.

Let’s assume that everyone who supports an increase in the minimum wage also knows – and perhaps even agrees with – the fundamental economic insight that such an increase would lead to either lower-skilled workers being laid off or prices for goods going up or both. It’s conceivable that someone could still support a minimum wage increase after being convinced of that. It’s a price worth paying, they might say. Or they could argue, as some supporters of the current proposal do, that an increase to $7.25 – phased in over three years, no less! – won’t do that much damage. After all, it’s not a $15 increase.

Now let’s try a little thought experiment. Assume support for a minimum wage increase is conditional and dependent upon the proposal offered. A call for a $20 minimum wage, for instance, would arguably be greeted with much less enthusiasm. Evidence of this is the fact that even supporters of the minimum wage aren’t willing to go so far as to propose such a thing.

What follows, then, is a workable assumption about the politics of this issue: How adversely affected by the policy a congressman’s district would be is the main determinant, all other things being equal, of that congressman’s enthusiasm for a minimum wage increase. A congressman representing a rural district with many small businesses that the proposed minimum wage would burden most heavily would be a less enthusiastic supporter than one from a big city with many large businesses, the employees of which make far more than the minimum wage.

But the cost of living differs dramatically in different parts of the country, too: $7.25 doesn’t buy the same amount of stuff in Manhattan as in Kansas City. And there’s the rub. It’s easy for a congressman from Manhattan to support a $7.25 minimum wage since it might have only imperceptible economic effects in his district. In Kansas City, however, the effects would be relatively greater.

Now consider what might happen if Congress were required to adjust the federal minimum wage by the cost of living in each congressional district. In areas where the cost-of-living is close to the national average, the minimum wage would be around $7.25. In Manhattan – where it costs twice as much to live when compared to other areas, like Kansas City – the minimum wage would be at least $14.

This would set off all sorts of protests from congressmen in districts in which the upward adjustment is greatest. Now the businesses in their districts would feel a pinch they wouldn’t feel under a non-adjusted minimum wage. Those formerly enthusiastic congressmen might even start to question why it’s the federal government’s business to meddle in the often complex process – going on all around the country within hundreds of companies and cities, each of which are faced with vastly different economic situations – by which an employer and employee come to their own agreement on compensation for employment. And isn’t that the sort of debate we should be having?

“Working Through a Lot of Psychological Issues”

Byron York has an illuminating piece on President Bush’s decision to escalate the war in Iraq. York says that in a meeting with conservative columnists in November last year, Bush

described the period in early 2006, after the Iraqi elections but before the formation of the government, as the White House waited — and waited and waited — for the Iraqis to get their act together. “It was just an agonizing period,” Bush said. But the administration had no choice but to be patient with Iraqis who weren’t used to trying to create a multi-party government. “Part of this is a brand new experience for these guys,” the president explained. “We are working through a lot of serious issues, kind of psychological issues with these folks, as well as what it means to actually build consensus.”

It’s Not Just About Nifong, Part I

Last month, District Attorney Michael Nifong announced that he will not be bringing rape charges against the Duke University lacrosse players. (Other criminal charges are still pending). Nifong himself is under fire for his handling of the case. Conservative scholar Thomas Sowell says Nifong should be removed from office and disbarred. Fox’s Bill O’Reilly goes further and says Nifong should be jailed. (For details on this case, start here).

Nifong’s actions should be scrutinized and he should be held accountable for any wrongs he has committed. However, since this criminal case is receiving national attention, it is important that this matter be placed in its proper context. It would be a mistake for any observer to sigh and say, “It’s so unfortunate that these young men were unlucky enough to be (a) falsely accused and (b) find themselves in the jurisdiction of a ‘rogue’ prosecutor.” That’s only part of the picture. The case is not just about Nifong. The laws and policies that are in place too often allow miscarriages of justice to take place.

Today, I will examine the law concerning speedy trials in North Carolina.

The criminal charges against the Duke students are based upon allegations arising from a party on the night of March 13-14, 2006. It will be a year before the criminal trial gets underway–so laypeople may be curious to know how the speedy trial protection comes into play. Unfortunately, this constitutional “guarantee” has lost its vitality.

Four years ago, the Supreme Court of North Carolina decided a case called State of North Carolina v. Henry Bernard Spivey. It is quite a story, which I will summarize below. (For those interested in reading the full legal opinion, go here. The legal citation is: 579 S.E.2d 251 (2003).)

The case began in October of 1994 when police officers arrested Henry Bernard Spivey, locked him up, and charged him with a crime. After that, no action was taken.

Weeks and weeks go by–no action.

Then months and months pass–no action.

After a full year goes by, Spivey, who has no formal education, writes out his own rudimentary legal motion to the court which he titles “Requesting a Prompt and Speedy Trial.” In this motion, Spivey explains that nothing is happening on his case. Prosecutors are not doing anything. His own court-appointed lawyers are not doing anything. Spivey basically says the Constitution says that he is supposed to “enjoy” a right to a speedy trial … I have been locked up for a year and I would like my trial.

Spivey’s motion is totally ignored.

Two more years pass! Then, Spivey’s court-appointed attorneys wake up and make a formal legal motion to dismiss the case because his right to a speedy trial has been violated.

No one is in any hurry to respond to this legal motion. Eight more months roll by until the court schedules a hearing on the speedy trial motion.

At this hearing, the judge listens to the arguments from the defense and the prosecution. The judge concludes that he needs further briefing on the legal issues and documentation from the court records to verify Spivey’s claims.

At this juncture, one would think that the court would reconvene in a week, check the documentation, and resolve the issue before the court. It did not happen. Another entire year goes by until the case is reheard by a different judge. At this hearing, prosecutors admit that the prisoner, Spivey, has now been in jail for four and a half years without a trial. They admit that, but they do not concede that the prisoner has been denied a speedy trial.

The attorneys representing the State of North Carolina say Spivey has not proven any “wilful misconduct” by the government. And besides, the courthouse is clogged with cases and there are staffing shortages. Under these circumstances, delays are inevitable. Thus, there is no speedy trial violation.

The trial judge agrees with the state’s argument. Spivey’s constitutional argument is rejected.

Spivey’s attorneys appeal, but the trial court is affirmed. Spivey’s attorneys then take the case to the Supreme Court of North Carolina, but that court also affirms the ruling of the trial court.

Two justices dissent from the ruling. The dissenters point out that the idea behind the speedy trial guarantee goes all the way back to Magna Carta. They said the prosecutors in this case either did not recognize the problem that they were creating for themselves–or they ignored it. Either way, a crowded court docket cannot justify a delay of four years. The justices said they doubted whether a single citizen in the state would find the delay acceptable if it concerned a spouse–or a son or daughter who was waiting for their day in court. The dissenters also wondered about the ramifications of the ruling. What if the backlog of cases continues–or gets even worse? In the year 2020, will seven year delays become an accepted norm? The majority of the North Carolina Supreme Court did not respond to those questions.

State of North Carolina v. Spivey established a legal precedent in North Carolina for resolving speedy trial disputes.

That was 2003. Now speed up to the Duke University case. One of the accused students, confident of his innocence, requested a speedy trial. Prosecutor Nifong responds by saying that he does not want to have a quick trial. He would rather wait a year and try all of the students together. The judge must decide this dispute. The judge checks the precedents and denies the motion for a speedy trial. And his decision is legal and constitutional because of the Spivey precedent.

Practical result: Prosecutors in North Carolina have the power to drag a person’s name through the mud for a long time before they have to prove their allegations in court.

False Fordham Hopes

For a moment yesterday, I thought that the Thomas B. Fordham Institute, arguably the nation’s foremost neo-con education think tank, had gotten the message that the federal government can’t create education policies that work for parents and children rather than politicians and bureaucrats. Sure, I hadn’t had much success when I tried to make this point to Fordham vice president Mike Petrilli for a solid week last April, but maybe something had changed.

Why’d I think that? Yesterday, Petrilli had a surprising op-ed on National Review Online denouncing the No Child Left Behind Act, which set off my fleeting hopes. Indeed, Petrilli suggested that getting the feds out of education completely might actually be a better option than sticking with NCLB:

Into the “Don’t Do it At All” bucket goes everything else. No more federal mandates on teacher quality. No more prescriptive “cascade of sanctions” for failing schools. No more federal guarantee of school choice for children not being well-served. The states would worry about how to define and achieve greater teacher quality (or, better, teacher effectiveness). The states would decide when and how to intervene in failing schools. The states would develop new capacity for school choice. These are all important, powerful reforms, but they have proven beyond Uncle Sam’s capacity to make happen.
 

Could it be that Petrilli had come to realize that federal policies are doomed because the bureaucrats and policymakers that Washington promises to hold “accountable” have all the lobbying power, while parents have little to none? Is it possible that he went even further than that, realizing that the key to innovation and progress in education is the same as the key to innovation and progress in all other endeavors: Letting individuals freely pursue their own interests – in the case of education, through universal school choice – rather than government pulling their strings through rules, regulations, and standards?

Alas, no. The very day I read Petrilli’s NRO piece, I attended a New America Foundation event on Senator Chris Dodd’s (D-CT) new proposal to create national science and math standards. There I saw the Thomas B. Fordham Institute listed right above the National Education Association on a roster of organizations endorsing Dodd’s idea, and Petrilli himself spoke in favor of the proposal.

But I really didn’t need to go to the panel discussion to see that my hopes were unfounded. Petrilli’s piece itself reveals that he and Fordham still haven’t gotten the message. For one thing, it fails to explain that the only way to make schools really accountable is to enable all parents to remove their kids – and their money – from schools that don’t work and put them into schools that do. Moreover, at the same time Petrilli acknowledges that NCLB has been a failure – just like all federal involvement before it – he states that among many “powerful” ideals underlying the law that he still supports is the notion “that improving education is a national imperative, and that the federal government can and should play a constructive role.”

What a disappointment.