October 6, 2006 8:23AM

Crisis of Abundance in the New York Times

A number of reports purport to show that the U.S. health care sector lags behind those of other nations. I’d be the last to argue that our health care sector should be a model for the rest of the world. But those supposedly objective reports are often based on subjective value judgments about which people will differ. They also tend to overlook objective strengths of the U.S. health care sector.

For example, New York Times columnist Tyler Cowen writes today about how the United States leads the world in medical innovation. We spend far more on medical research than other nations, which increases our level of health expenditures. But the benefits of all that spending are not confined to our borders; they help keep the “ferriners” alive longer, too.

Cowen also draws a lesson from Arnold Kling’s book Crisis of Abundance:

The American system also produces benefits that are hard to find in the numbers. The economist Arnold Kling in his “Crisis of Abundance: Rethinking How We Pay for Health Care” (Cato Institute, 2006) argues that the expected life span need increase by only about half a year for the extra American health care spending to be cost‐​effective over a 20‐​year period. Given that many Americans walk less and eat less healthy food than most Europeans, the longevity boost from health care in the United States may be real but swamped by the results of poor lifestyle choices. In the meantime, the extra money Americans spend to treat allergy symptoms, pain, depression and discomfort contributes to personal happiness.

Those interested can purchase Crisis of Abundance here, or click here to watch the Cato book forum featuring the author, Sebastian Mallaby of The Washington Post, and Jason Furman of NYU.

October 6, 2006 8:20AM

The Weaknesses of Watch‐​Listing

"Watch-listing" — the practice of putting bad people's names on a list and treating them differently at places like airports — is fraught with difficulty. 

As to sophisticated threats, it's a Maginot line. Easy to evade, it provides no protection against people who haven't yet done anything wrong, who haven't come to the attention of security officials, or who have adopted an alias. Terrorist planners are nothing more than inconvenienced by having to use people with "clean" records.

Paying to inconvenience any such terrorists are (taxpayers, of course, and) all the people wrongly treated as suspects because they have the same or similar names as listed people. 

On its website, CBS News is previewing its upcoming 60 Minutes story on watch-listing, and they've assembled a large group of Robert Johnsons to attest to their experience with watch-listing. They share the same name as a Robert Johnson that someone deemed appropriate to put on a list.

Watch-listing has a deeper flaw, though.  It does not fit with our system of law enforcement.

Read the rest of this post »
October 5, 2006 4:56PM

Extremism in Defense of Liberty

Michael Cannon, Mike Tanner, and other libertarian health care gurus may appreciate this. I recently came across an intriguing quote by Founding Father Benjamin Rush, surgeon general of the Continental Army and signer of the Declaration of Independence. So I did what everyone does these days and went to Wikipedia. There I learned that:

Rush believed that Americans should enshrine the right to medical freedom in their Constitution, much as the right to freedom of religion is expressly guaranteed in that document.

Rush is reported to have argued that “Unless we put Medical Freedom into the Constitution, the time will come when medicine will organize into an undercover dictatorship … to restrict the art of healing to one class of men, and deny equal privilege to others, will be to constitute the Bastille of Medical Science. All such laws are un‐​American and despotic and have no place in a Republic … The Constitution of this Republic should make special privilege for Medical Freedom as well as Religious Freedom.”

(Of course, if you read a little further, you learn that some of his medical theories were not so hot). 

Rush was also a rabid antimilitarist who proposed in 1792 that two captions be painted “over the portals of the Department of War”: “An office for butchering the human species” and “A Widow and Orphan making office” – though that’s an idea that would probably be even less popular today. 

October 5, 2006 3:31PM

Another Warning That Will Go Unheeded

In a speech to the Economic Club of Washington yesterday, Federal Reserve Chairman Ben Bernanke became the latest top policymaker to warn that we will face an economic crisis if Social Security and Medicare are not reformed. Unfortunately, Bernanke’s warning is unlikely to become part of the political debate. So far this election season, Democrats have been demagoguing the issue, while Republicans run away from it. Meanwhile, because Congress failed to act last year, Social Security’s unfunded liabilities increased by another $550 billion.

October 5, 2006 2:30PM

Don’t Embarrass the State

Here are the "core values" of the Federal Bureau of Investigation, which is a division of the Department of Justice:

• Rigorous obedience to the Constitution of the United States;
• Respect for the dignity of all those we protect;
• Compassion;
• Fairness;
• Uncompromising personal integrity and institutional integrity;
• Accountability by accepting responsibility for our actions and decisions and the consequences of our actions and decisions; and
• Leadership, both personal and professional.

Good stuff. 

So what happens when a man comes forward and claims that the bureau violated his constitutional rights and subjected him to abuse?  Does a friendly FBI lawyer rush into court and say, "We checked this out and we really messed up.  We apologize and we hope you will accept monetary compensation?" 

Not exactly.

In fact, according to a report in today's New York Times, the legal representatives of the federal government are of the view that even if all of the factual allegations are true, FBI officials are immune from legal liability.  Here is how the Times describes what happened in court:

In sharp questioning, a three-judge panel yesterday challenged arguments by federal officials seeking dismissal of a Pakistani man’s suit charging that because of his religion, race or national origin, he, like others, was held for months after 9/11 in abusive solitary confinement before being cleared of links to terrorism and deported.

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October 5, 2006 1:43PM

The Extraterritorial Constitution: A Short Reading List

For blog readers who slogged through my brief discussion of the Military Commission Act, I should underscore that the post isn’t designed to take a position, but rather to give a necessarily very incomplete overview of the lay of relevant cases – although I am, as an initial matter, intuitively sympathetic to claims that due process requires an Article III court’s independent, do novo factual determination of citizenship status before alleged alien combatants held in Guantanamo are tried in military commissions.

One reason I hesitate to take a position is because the legal questions are deeply underarticulated in the cases and, frankly, in the Constitution itself. One of the most under‐​articulated questions, aside from the scope of “constitutional habeas” and the extent of the suspension power, is where, and to whom, the Constitution – particularly the Bill of Rights – applies. 

Here’s what I’m reading right now as I think about the question. I welcome suggestions of other articles:

1. Sarah H. Cleveland, Powers Inherent in Sovereignty: Indians, Aliens, Territories, and the Nineteenth Century Origins of Plenary Power over Foreign Affairs, 81 Tex. L. Rev. 1 (2002). This is a terrifically informative article that surveys (critically) the development of territoriality and citizenship limitations on the Constitution in cases ranging across the Indian Wars, the nineteenth century wars of colonial expansion, and the conflict over Mormonism and polygamy in the Utah Territory. A great place to get one’s bearings in a sea of very exotic constitutional history.

2. Gary Lawson, Territorial Government and the Limits of Formalism, 78 Calif. L. Rev. 853 (1990). Here, Lawson argues, in his typically careful but ambitious fashion, that the proper “formalist vision of a constitutional territorial regime is vastly different from the regime that has been in place for the past two hundred years.”

3. Gary Lawson & Guy Seidman, The Hobbesian Constitution: Governing without Authority, 95 Nw. U.L. Rev. 581 (2001). Here Lawson and Seidman examine the period of military government in California after the Mexican‐​American war, through the prism of the largely forgotten case (Cross v. Harrison), tracing, along the way, some of the “troubling” consequences of the Court’s disposition of that case “in subsequent legal and political events, most notably the … Insular Cases,” which loom in the background of the debate over the detainees held in Guantanamo.

October 5, 2006 12:03PM

The Real Scandal of ‘Tariff Suspensions’

Two weeks ago (yes, I know, an eternity in blog time, but I’ll explain in a moment), the Washington Post published a gotcha front‐​page expose on a long‐​established if little noted congressional practice of suspending miscellaneous tariff duties. The article, headlined “A Quiet Break for Corporations” (September 20, 2006), supposedly uncovered yet another pork‐​barrel scandal. The real scandal of the story, however, is not that U.S.-based producers seek relief from damaging tariffs, but that those tariffs exist in the first place.

For years, Congress has voted regularly on miscellaneous tariff bills that suspend a hodgepodge of duties on obscure products that often are not even made by companies in the United States. In those cases, the tariffs don’t even perform the dubious duty of “protecting” domestic producers. They only make it more expensive if not impossible for consumers and producers to import certain products.

The Post article emphasized the potential revenue lost to the government by suspension of the duties, while downplaying the costs to consumers and importing producers from the artificially higher prices imposed by the tariffs. Economics 101 teaches that with almost any tariff, the damage to the economy from higher prices and less efficient production will outweigh the duties collected by the government.

The story implied a scandal in the fact that some American companies would actually be hurt by suspension of tariffs on their foreign competition. But since when is it the duty of the government to protect certain producers against their competition? Should the same government that harasses U.S. companies with anti‐​trust laws be shielding other U.S. companies from the same competitive forces that anti‐​trust laws supposedly promote? If Americans can buy dog collars more cheaply from a foreign producer, the federal government should keep its nose out of the deal.

One example in the story involves the proposed suspension of duties on basketballs and volleyballs imported by the sporting‐​goods company Spalding. Again, the real scandal is why the government imposes any duties at all on such goods. The federal government should not be raising revenue with a special “basketball tax,” in the process making basketballs more expensive for American kids while hurting the sales of an American company.

Supposedly adding to the scandal is that fact that many of the “beneficiaries” of the suspended duties would be foreign‐​owned affiliates located in the United States, especially German and Swiss chemical companies. That fact does not make the special duties any less damaging to the U.S. economy. Foreign‐​owned affiliates in the United States employ nearly six million Americans (one out of eight manufacturing workers), pay domestic taxes, and serve American customers.

The story tried to clinch the scandal thesis by citing campaign donations and lobbying expenses by the companies seeking removal of the damaging tariffs. Again, the real scandal is not that these companies are trying to change laws that damage them, but that they need to seek specific relief in the first place.

Import duties invite corruption by giving the government power over a range of otherwise innocent and private transactions. A policy of free trade, without arbitrary duties aimed at punishing foreign producers and protecting domestic ones, would eliminate any need to lobby the government over the imposition or suspension of duties. The latest Economic Freedom of the World report shows that nations with relatively free and open economies are generally less corrupt than those with closed and government‐​dominated economies. (Check out the chart on page 26.)

By repealing targeted tariffs that damage our economy and that should never have been imposed in the first place, the proposed miscellaneous tariff bill would make our system a bit less corrupt, not more so.

P.S. So why am I blogging about all this two weeks after the fact? I did not want to jeopardize the chances of the Washington Post actually publishing an edited version of this critique in its letters to the editor section. My patience was rewarded this morning with publication of an edited version of my letter.