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Cato Dispatch for August 28, 2009

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

Second Term for Bernanke

President Obama nominated Ben Bernanke to a second term as head of the Federal Reserve on Tuesday. Bernanke's nomination will have to be confirmed by the Senate.

Cato scholar Mark A. Calabria has been critical of Bernanke's role in the recent financial crisis, saying:

In re-appointing Bernanke to another four year term as Fed chairman, President Obama completes his embrace of bailouts, easy money and deficits as the defining characteristics of his economic agenda…. The actors at institutions such as the Federal Reserve bear considerable responsibility for the current state of the economy. Re-appointing Bernanke sends the worst possible message to both the American public and to government in general: not only will failure be tolerated, it will be rewarded.

Writing in National Review Online in July, Calabria explained why the president should have looked for someone else to fill the role:

[Bernanke's] pandering to the Left on misguided "consumer protections," and the absence of any debate over the Fed's role in the housing bubble, raise serious questions as to whether Bernanke understands the causes of the current financial crisis. We cannot hope to avoid the next financial crisis without a Fed chairman who understands the current one.

For more on Bernanke's appointment, listen to Thursday's Cato Daily podcast.

Dispelling Health Care Myths

An entire summer of debating Obama's health care bill has failed to yield a clear picture of what the legislation will resemble when Congress decides to hold a vote. Under the current bill, one thing is very clear, says health care expert Michael D. Tanner: If you like your current health care plan, be prepared to kiss it goodbye.

Despite President Obama's oft-repeated promise that "If you like your private health insurance plan, you can keep your plan," the actual contents of the bill paint a very different picture. Writing in the Orange County Register, Tanner explains point-by-point why the bill will remove Americans from their current health care plan. "Any way you look at it," says Tanner, "under the bills currently before Congress, millions of Americans will be forced out of their current health insurance plan, even if they are happy with it. Period."

Advocates of a government takeover of the health care system often claim that the reason reform is needed so quickly is because of the nearly 50 millions Americans who lack health insurance. But, like so many statistics, this number is highly misleading.

"The reality is that most people without health insurance are uninsured for a relatively short period of time," writes Tanner. "Only about 30 percent of the uninsured remain so for more than a year, approximately 16 percent for two years, and less than 2.5 percent for three years or longer. About half are uninsured for six months or less. Notably, because health insurance is too often tied to employment, the working poor who cycle in and out of the job market also cycle in and out of health insurance."

For more on the "50 million uninsured" read Tanner's op-ed in The Philadelphia Inquirer.

Cato Quick Hits

• Watch Cato scholars tackle more of Obama's claims about health care reform.
• Cato executive vice president David Boaz offers an idea for a new book: Tax Tips for Democrats.
• Was "Cash for Clunkers" the dumbest government program of all time?
• New study reveals how immigrants actually raise economic prosperity.

Chris Moody, editor, cmoody@cato.org