Archives: 05/2008

More Strategic Brilliance from Our Friends at the Weekly Standard

Here’s Michael Goldfarb:

As to whether Bush is a recruiting tool for terrorists–who cares? Al Qaeda was recruiting before Bush was in office and they will continue to do so after he’s gone. The important thing is that we keep killing those recruits. Eventually, one side will give up.

Do they edit this stuff before putting it up? By this logic, why don’t we airdrop a bunch of copies of Penthouse Letters into the Kabaa? After all, al Qaeda will continue recruiting whether we do it or not. Or maybe we could declare war on all of Islam. After all, al Qaeda was recruiting before we declared it. Or maybe we could send Senator McCain’s “moral compass and spiritual guide” onto al Hurra to tell Muslims that “America was founded, in part, with the intention of seeing this false religion destroyed.” After all, it’s not like al Qaeda’s not recruiting today.

Eternal Vigilance, Inc.

The Style section of today’s Washington Post features a terrific article about the National Security Archive, the nonprofit group dedicated to unearthing goverment secrets. The privately funded group, about 35 strong, uses the Freedom of Information Act to collect about 75,000 documents a year, which staffers analyze and then post on the website. The Archive’s greatest hits (see, e.g., here and here) demonstrate that as Patrick Henry put it, one should “never depend on so slender a protection as the possibility of being represented by virtuous men.” Don’t trust: verify.

One of my favorite documents on the site is the Operation Northwoods Memo, prepared by the Pentagon in the wake of the Bay of Pigs disaster:

titled “Justification for U.S. Military Intervention in Cuba” [the memo] was provided by the JCS to Secretary of Defense Robert McNamara on March 13, 1962, as the key component of Northwoods. Written in response to a request from the Chief of the Cuba Project, Col. Edward Lansdale, the Top Secret memorandum describes U.S. plans to covertly engineer various pretexts that would justify a U.S. invasion of Cuba. These proposals - part of a secret anti-Castro program known as Operation Mongoose - included staging the assassinations of Cubans living in the United States, developing a fake “Communist Cuban terror campaign in the Miami area, in other Florida cities and even in Washington,” including “sink[ing] a boatload of Cuban refugees (real or simulated),” faking a Cuban airforce attack on a civilian jetliner, and concocting a “Remember the Maine” incident by blowing up a U.S. ship in Cuban waters and then blaming the incident on Cuban sabotage.

Sounds like tinfoil-hat stuff, I know, but thanks to FOIA and the National Security Archive, you can check for yourself [.pdf]. But if Dick Cheney and Donald Rumsfeld had had their way, you couldn’t. As top aides to Gerald Ford 34 years ago, they urged the president to veto amendments strengthening FOIA (he did, and Congress overrode his veto). The Archive has the documents on that too.

(cross-posted on

More, Um, Praise for Medicare Meets Mephistopheles

Nearly two years after its release, David Hyman’s satire Medicare Meets Mephistopheles is still generating reviews – and controversy. 

In the April 2008 issue of the Michigan Law Review, Michigan law professor Jill Horwitz raves:

Hyman is extraordinarily knowledgeable about health care regulation and his exposition is succinct. The book is filled with informative and accurate summaries of Medicare’s complicated program design and related laws. The summaries of fraud and abuse law, for example, make my heart sing. I’ve seldom seen such an accessible and accurate primer.

It would be a stretch, however, to claim that Horwitz and Hyman see eye-to-eye.  Horwitz concludes her 19-page review thus:

Medicare Meets Mephistopheles is a terrific overview of a troubled system, but a missed opportunity to help reform Medicare. Providing health care fairly and efficiently is a complicated process that necessarily involves a heavy dose of government. Libertarian railing against big government, regulation, and all lefty foolishness that market proponents despise doesn’t get one very far in determining how to get health care to 300 million people. In the end Hyman doesn’t offer any realistic alternative to this government-regulated muddle because, God knows, his plans are unacceptable anywhere but in hell.

Ay caramba!

Politics Corrupts Everything

The president of West Virginia University, Michael Garrison, is hanging on after the school’s faculty voted 77 to 19 to demand his resignation. Faculty members are outraged that Garrison retroactively awarded an MBA to a friend, who is the daughter of Gov. Joe Manchin III. The Washington Post reports:

Garrison’s critics note that he is a former classmate of Bresch’s. He once worked as a lobbyist for Mylan Inc., where Bresch is an executive and whose chairman is one of WVU’s biggest donors. They also note that Garrison was chief of staff for former West Virginia governor Bob Wise (D).

The Post failed to add the detail that Garrison served on Manchin’s transition team when he succeeded Wise. So yes, when you hire a lobbyist and political operator to run a university, you can expect some favors for politically connected friends.

Philly Cops on Tape

A TV News helicopter filmed Philadelphia police officers as they repeatedly kick three suspects as they lay on the ground.  Go here to see the video clip.

Police Commissioner Charles Ramsey says 5 officers have been taken off street duty because of their actions.   Why are those 5 not under arrest for battery?

Philadelphia authorities reportedly hope to identify the other police officers involved in the incident.  Hope?!    If the Commissioner can’t or won’t issue an order to come forward or face dismissal by the close of business, there are deeper problems with the police department.

Cato Forum: Whatever Happened to Medicare Reform?

Consider the following:

  1. Research suggests the federal Medicare program spends as much as $100 billion per year on medical care that makes seniors neither healthier nor happier.
  2. Medicare’s payment system continues to reward low-quality and even harmful medical care.
  3. The trustees of the Medicare program have issued yet another annual report containing dire warnings about Medicare’s financial sustainability, including an unfunded liability of $86 trillion.
  4. According to economist and former Medicare trustee Tom Saving, Medicare alone will require tax rates to rise by 25 percent within a generation, and to double within 75 years, absent reform.  
  5. The picture is far worse than it was when politicians were developing fundamental Medicare reforms 10 years ago.

You would think that Medicare reform would be a high priority for politicians.  You would be wrong. The president has proposed reforms that would barely slow the program’s growing dependence on general revenues – a proposal that Congress has largely ignored. The leading presidential candidates advocate tweaks – such as reducing payments for private plans and prescription drugs, or tying payments to quality measures – rather than fundamental reforms.

To help get the politicians focus on this crucial issue, the Cato Institute will host a policy forum on Thursday, May 15, titled, ”Whatever Happened to Medicare Reform?”  Tom Saving, the Commonwealth Fund’s Stuart Guterman, and I will discuss the current state of the Medicare program, and how the program needs to be reformed.  The forum will run from 12pm to 1:30pm

Click here to register.

Health Insurance: Individual Market Protects Sickies Better than Small-Group Coverage

Market-oriented health-care wonks have proposed various ways of reforming the tax treatment of health insurance that would level the playing field between job-based coverage and coverage that consumers purchase directly (i.e., on the “individual” market).  The key to those proposals is that they would let workers control money their employer now controls, and generally would allow workers to spend those earnings on the mix of medical care and health insurance that meets their needs. 

The political Left typically protests that if workers had the freedom to spend their earnings however they want, the multiplying villainies of the market would swarm upon the sick, leaving them with no insurance coverage.  For example, Elizabeth Edwards and others chide Sen. John McCain because, they claim, people with chronic conditions could not obtain health insurance in an unregulated individual market.  Edwards even wrote: “The insurance company makes money when it doesn’t have to pay for our health care. (I suspect that if they could, they would write obstetrical-only policies for nuns.)”

An economist at the University of Pennsylvania named Mark Pauly spends much of his time collecting evidence – I repeat, evidence – that this view does not reflect the reality of unregulated health insurance markets.  Pauly and his colleagues have found:

[A]ctual premiums paid for individual insurance are much less than proportional to risk, and risk levels have a small effect on obtaining coverage. States limiting risk rating in individual insurance display lower premiums for high risks than other states, but such rate regulation leads to an increase in the total number of uninsured people. The effect on risk pooling is small because of the large amount of risk pooling in unregulated individual insurance.


[T]here was substantial cross-subsidization of high-risk by low-risk persons in the individual insurance market in a period in which there was only minimal state regulation. Premiums do rise with risk, but the increase in premiums is only about 15 percent of the increase in risk. Premiums for individual insurance vary widely, but that variation is not very strongly related to the level of risk.

A new Health Affairs Web Exclusive by Pauly and colleague Robert Lieberthal offers further evidence that a freer market would provide high-cost patients more protection than today’s government-created employment-based system.  Pauly and Lieberthal write:

[A] young high-risk male who initially had small-group coverage faces a 44 percent chance of becoming uninsured in the next period—a risk nearly twice as great as it would be if he initially had individual insurance.  Somewhat ironically, the usual blame for such a person’s lacking coverage will be laid at the door of the medically underwriting individual insurer, which quotes a high premium, rather than being referred in part to the group insurance system that plunged this person into such a vulnerable situation in the first place.

Thus, it is not true that more freedom would mean no health insurance for people with costly medical conditions.  Provided consumers insure while they are still healthy, individual-market coverage offers as much or more protection to high-cost patients than they have now.

In the transition to a level playing field between employer-sponsored and individual-market coverage, there may be some people with high-cost conditions who lose their existing coverage, and cannot obtain subsequent coverage.  If that occurs, most Americans will want to offer some form of subsidy to those hard cases – a group that does not include wealthy people like Elizabeth Edwards, John McCain, or Jay Cutler.  

When fashioning those subsidies, policymakers should bear two things in mind.  First, as Pauly’s work suggests, this is likely to be a temporary problem; markets can and will cover tomorrow’s high-cost patients.  Second, policymakers should not try to force insurance markets to provide the desired subsidies; that would undo the substantial good that unregulated insurance markets can achieve.