Undeterrable

The subhead to Joshua Muravchik’s “Operation Comeback,” a strategy memo for his fellow neocons that appears in the current issue of Foreign Policy magazine, reads:

Neoconservatives have the president’s ear, but they also have lots of baggage. To stay relevant, they must admit mistakes, embrace public diplomacy, and start making the case for bombing Iran.

Which I might ordinarily chalk up to mischief by a smartass editor, but in this case it’s a fair summary of the piece.

First among the mistakes Muravchik says neoconservatives need to own up to? “We are guilty of poorly explaining neoconservatism.” Apparently it’s the packaging, not the product, that has led the American public to reject perpetual war aimed at “transform[ing] the political culture of the Middle East from one of absolutism and violence to one of tolerance and compromise.”

There’s no need to give up on that dream, says Muravchik. We can get ‘er done with a bigger army, and by repairing America’s public diplomacy apparatus abroad. That problem with the packaging? Leave it to the folks who designed the product–they’ll fix it: “No group other than neocons is likely to figure out how to [repair public diplomacy]. We are, after all, a movement whose raison d’etre was combating anti-Americanism in the United States. Who better, then, to combat it abroad?”

Wasn’t this the movement that once styled itself as “liberals mugged by reality”? Somewhere along the line they really learned how to fight back.

Peace with Paganism

The street I live on in Northern Virginia is like the United Nations. My neighbors are from Vietnam, Russia, Iran, El Salvador, Hungary, Morocco, and Virginia. And thus perhaps a mix of Christians, Muslims, Buddists, and atheists. My wife is Jewish.

Last night, as we went trick-or-treating with our kids, we noticed that every house was participating in the Halloween rituals of costumes, decorations, and candy hand-outs.

It was peace, harmony, and smiles all around—there were no politicians present, and thus no one to sour the mood or tell anyone what to think. I guess it wasn’t like the UN at all.

Topics:

Why Not Mandate This?

There are two beliefs that animate government R&D policy in the energy arena.

Belief #1: If you subsidize it, it will come. Wanting technology x to succeed in the market is a simple matter of throwing government money at technology x.

Belief #2: Politicians have every right to tell market actors what to invest in and what to buy. George Bush’s preferences for what Detroit ought to build (engines powered by hydrogen-powered fuel cells) and his preferences for what we ought to put in our fuel tanks in the meantime (200 proof grain alcohol, which goes by the moniker “ethanol”) should rule the day.

OK then, why not both subsidize the creation of – and mandate the production of – cars run by air? It’s doable. It’s carbon-free. And what possible environmental complaint might anyone have? Sure, it might be costly, and the car might not perform all that well, but government dough is like magic – all will be made right.

The Great Crocodile Dies

P. W. Botha, who was prime minister of South Africa as the struggle against apartheid reached its climax, has died at 90. In 1988, I attended a conference organized by South African libertarians in neighboring Swaziland. When I arrived at the conference and approached the registration table, the first thing I saw was a stack of bumper stickers reading “I ♥ PW.” I was appalled – libertarians proclaiming their support for the boss of the apartheid state?

Then I got closer and realized it wasn’t a heart, it was a tomato, as in “I PW.” Why a tomato? My hosts explained to me that the bumper sticker expressed solidarity with a protester who had thrown a tomato at the State President. Well, that’s better, I thought.

Botha was pushed out of power soon after that by F. W. de Klerk, who freed Nelson Mandela from jail and negotiated the end of apartheid.

The Upside of Nature’s Wrath

Fourteen months after Katrina devastated large swaths of the Gulf Coast, the Commerce Department has finally gotten around to promulgating new regulations that could relax antidumping and countervailing duty restrictions for a temporary period after the next national emergency.

In the weeks following Katrina, some observers (including this one) pointed to the absurdity of maintaining restrictions on foreign cement, lumber, and steel when the costs of those crucial building materials comprised a substantial chunk of the projected reconstruction bill.  Of course, trade restrictions raise the cost of production to U.S. businesses and the cost of living for U.S. citizens everyday.  But the effects of the hurricane provided an extreme example of the lunacy of trade restrictions, which is what was necessary to get the Commerce Department to acknowledge that its protectionist trade policies carry real costs.

The scope of circumstances that will trigger temporary lifting of trade remedy restraints prospectively is a bit unclear, but it requires the president to authorize Commerce “to permit the importation of supplies for use in ‘emergency relief work’ free of antidumping and countervailing duties.”  Considering that emergencies are typically met with a costly (and often mismanaged) federal response, a regulation that actually mandates loosening the federal noose is welcome news indeed.

Now, all we need is a president who will consider it “emergency relief work” to educate policymakers about the predictable impact of constrained supply on price. 

Income Data Misquoted and Fundamentally Flawed

An op-ed in the Washington Post on Sunday included data purporting to show that the rich are grabbing an increasing amount of the income earned in this country.

Jacob Hacker of Yale University cites data from economists Thomas Piketty and Emmanuel Saez supposedly showing that “the share of national income held by the richest 1 percent of Americans–stable at about 32 percent throughout the middle decades of the 20th century–began to rise sharply in the 1970s and by 2002 had surpassed 40 percent.”

Actually, the Piketty Saez data show that it is the top 10 percent whose share supposedly rose from 32 to 40 percent.

More importantly, a forthcoming Cato paper by Alan Reynolds shows that the Piketty-Saez data, based on federal tax return information, is a deeply flawed source for such income “distribution” analyses.

For example, because of tax law changes since the 1970s, a huge share of business income that used to be reported on corporate returns is now reported on individual returns. Reynolds finds that much of the supposed rise of the share of income at the top is simply a result of this paper shuffling regarding where business income is reported.

This Piketty-Saez data has been frequently misused by Paul Krugman, the Economist magazine, and many other news outlets to draw grand conclusions about how the gains of U.S. economic growth have supposedly only gone to the those at the top. Reynolds study shows that that is probably not true. At least, his findings show that reporters and pundits should be very careful in using any data that claims to show changes in income shares over time.

Certainly, they should not use sloppy language like Hacker’s phrase ”income held by the richest.” Income data shows an annual flow–it is not “held” like wealth. Note that “richest” also refers to wealth holdings, not annual income flows.   

Health Care Involves Non-Monetary Costs, Too

The Fraser Institute of Vancouver, B.C., has released its 16th annual “Waiting Your Turn” report on waiting times for health care in Canada’s state-run Medicare system.  The median wait for surgical and therapeutic services increased slightly over the 2005 median to less than one day shy of their all-time high of 17.9 weeks in 2004.  Throwing more money at the system doesn’t seem to make a difference; the Frazer Institute has documented that waiting times often increase with increased spending on Canada’s Medicare program.

This year’s report had special significance for me.  Four Sundays ago, I tore my ACL playing soccer.  The following Tuesday, I saw an orthopedic surgeon.  On Wednesday, I had an MRI.  (As a cash-paying patient, I had people offering to cut their MRI list price in half.)  The next Tuesday, I saw the orthopedist again.  He diagnosed the torn ACL and recommended surgery, which he could schedule as early as November 9th.  That’s 4.6 weeks after injury, 3.3 weeks after diagnosis. 

Nadeem Esmail, the lead author of the Fraser report, helped me work out how I would have fared in Canada.  Esmail estimates that, “not counting issues actually getting the referral to a specialist from a GP in the first place,” a typical Canadian could expect to wait:

  • 16.2 weeks to see an orthopedic surgeon,
  • 10.3 weeks for an MRI, and then another
  • 16.5 weeks for ACL reconstruction surgery.

All told, that’s 43 weeks; I could expect to have my ACL reconstructed in early August 2007.  And with a six-month recovery time, I’d be good as new by February 2008.

As it turns out, I’m not having the surgery done on the earliest possible date.  I’m able to walk without too much pain, so I’m taking some time to strengthen my knee, and to research procedures, surgeons, and prices.  Not all waits are problematic. 

But it’s nice to have the choice.  Were I forced to wait until next August for surgery, that would impose significant costs on me and on others.  I would be living in pain, with limited mobility, and might further injure my much-weakened knee.  My wife would have to endure nine additional months of complaining.  Plus, think of all the games my soccer team might lose. 

America’s health care sector is full of waste, but when people say that Canada’s system is cheaper, they’re leaving out some very real non-monetary costs.  Canada’s Supreme Court acknowledged those non-monetary costs in a 2005 opinion that struck down Quebec’s ban on private insurance:

Dr. Eric Lenczner, an orthopaedic surgeon, testified that the usual waiting time … for patients who require orthopaedic surgery increases the risk that their injuries will become irreparable… . [He] also stated that many patients on nonurgent waiting lists for orthopaedic surgery are in pain and cannot walk or enjoy any real quality of life.

The ban on private health insurance effectively kept people from spending more money on health care to reduce health care costs.  (The story of the man who defeated that ban can be found here.) 

Only the individual patient can tally those non-monetary costs and weigh them against the cost of treatment.  If we’re really interested in lowering health care costs, we need to give the patients the money, and let them choose the lowest-cost option.