In response to Andrew Sullivan: all liberals understand free markets. 

It’s the leftists that are the problem.

Neither appears to have been persuaded by the principles of the Anti-Universal Coverage Club. Here’s my short take on HillaryCare II. And according to USA Today:

Clinton unveiled her plan as Health and Human Services Secretary Mike Leavitt said President Bush wants to achieve universal health care before he leaves office.

Leavitt told the USA TODAY editorial board that Bush will veto a Democratic plan emerging from Congress that would add $35 billion in taxpayer subsidies to the Children’s Health Insurance Program over five years. In doing so, Leavitt said, Bush will urge Congress to join him in seeking coverage for all Americans.

“He’d like to see the larger debate begin,” Leavitt said. “The very best opportunity we have may well be in the next 15 months.”

Maybe Dubya will steal the issue from Democrats, much like he stole Medicare prescription drugs. Heck, with Republicans like this, who needs Democrats?

So claims Jared Bernstein of the left-leaning Economic Policy Institute. 

Bernstein is an ambitious fellow, picking this fight with the Bush administration. And the Congressional Budget Office. And the Robert Wood Johnson Foundation. And that notorious right-winger Jonathan Gruber.

Summarizing data from the Urban Institute on the State Children’s Health Insurance Program, Bernstein shows a near-complete misunderstanding of the dynamics of crowd-out:

Most SCHIP enrollees (72%) were not covered by private coverage six months before enrollment in the public program. Another 14% lost coverage within a six month period prior to SCHIP enrollment, due to a lost job, an employer dropping coverage, or change in family structure that led to the child’s coverage being dropped (as in a divorce, separation, or death of covered spouse). 

This leaves only 14% of SCHIP cases that substituted the public program for private coverage. But the Urban Institute’s study points out that more than half of these cases (8%) cited an inability to afford private coverage as the reason for shifting over to SCHIP. That is, the cost of the family premium through their job was prohibitively high.

Bernstein appears to be under the impression that crowd-out occurs only when someone enrolls in a public program on the very day that person dropped private coverage. In fact, crowd-out also occurs:

• When workers (or their employers) drop coverage in response to the worker becoming eligible for a public program — even if the worker doesn’t enroll until seven months later;
• When eligibility for a public program encourages workers to leave a job with health benefits for a job that pays higher cash wages;
• When workers’ eligibility for a public program encourages employers to drop health benefits entirely, or encourages employers to increase the “employee portion” of the premium so that eligible workers will decline that benefit.

Most importantly, crowd-out does not require (and empirical studies of crowd-out do not assume) that the same people who drop private insurance are enrolling in public programs. If a Medicaid or SCHIP expansion increases the cost of private insurance, and that leads someone to drop their private coverage and go without, that too is crowd-out.

A story in the Kansas City Star reveals that millions of Americans are moving to states without income taxes. Not surprisingly, politicians and revenue bureaucrats from high-tax states are monitoring escaping taxpayers in hopes of retaining the ability to seize a portion of their income:

No-income-tax states such as Florida, Nevada and Texas are looking increasingly attractive to people getting ready for retirement. …But before you move to a tax haven, it’s important to pay attention to the fine print of how to move. It’s easy to make seemingly minor mistakes that can trigger a painful audit — and a hefty bill — from the high-tax jurisdiction you thought you had left behind. …Some relatively high-tax states are increasingly cracking down on individuals who claim to have moved out of state, but still maintain strong connections to their former homes. Massachusetts plans to hire additional tax examiners in the next few months, some of whom will be assigned to a special “domicile unit” as part of its tax-audit program. … state income tax rates can run as high as 10.3 percent in California and 8.97 percent in New Jersey. Besides Florida, Nevada and Texas, other states with no state income tax for individuals include Washington, Alaska, South Dakota and Wyoming. New Hampshire and Tennessee don’t have a broad wage-based income tax but do tax interest and dividends. …from April 2000 through June 2006, there was a net migration of 2.3 million people moving from states with income taxes to states with no income taxes, an average of more than 1,000 people moving per day, says Richard Vedder, an economics professor at Ohio University in Athens, Ohio, based on an analysis of census data.

The Wall Street Journal reports that the former Chairman of the Federal Reserve Board strongly criticizes President Bush and congressional Republicans for wasting so much money on ill-conceived government programs:

In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to which he has belonged all his life deserved to lose power last year for forsaking its small-government principles. In “The Age of Turbulence: Adventures in a New World,” published by Penguin Press, Mr. Greenspan criticizes both congressional Republicans and President George W. Bush for abandoning fiscal discipline. …Mr. Greenspan, who calls himself a “lifelong libertarian Republican,” writes that he advised the White House to veto some bills to curb “out-of-control” spending while the Republicans controlled Congress. He says President Bush’s failure to do so “was a major mistake.” Republicans in Congress, he writes, “swapped principle for power. They ended up with neither. They deserved to lose.” …“Little value was placed on rigorous economic policy debate or the weighing of long-term consequences,” he writes.

Though he often disagrees with libertarians and other free-marketeers, Kinsley is one of the few critics who appears to understand the argument for free markets and who acknowledges that there’s something to it:

Student loans are the clearest example of the common Republican confusion between free-market capitalism and business. Capitalism is an economic system that is held, with some justification, to be the best guarantor of prosperity. Business can be capitalism in action, or it can be something entirely different. There is very little about the student loan program that has anything to do with free-market capitalism. Yet whenever the student loan system comes under criticism, lobbyists, “industry” leaders and supportive politicians haul out the same old cliches, as if they were defending Adam Smith’s famous pin factory itself.

I would add, however, that many on the Left likewise confuse government activism with “power to the people.” Typically, government activism just ends up giving power to business. 

Either way, business wins!

From the cover story in the September 3rd Weekly Standard:

The fascists are coming! Or rather, they’re already here, installed in the White House, planning like mad to subvert the Constitution and extend their reign in perpetuity, having first suppressed and eviscerated all opposition and put all of their critics in jail. Thus goes the rant of America’s increasingly unhinged left. If only, sigh many Bush partisans, wondering when this administration will get out of the fetal position and show some fighting spirit. [Emphasis in original.]

Now of course the Weekly Standard writer is kidding here. I’m sure of it. The folks at the Standard get a kick out of playing off the left’s caricature of neoconservatives as warmongering fanatics who think civil liberties are for sissies. This 2002 Weekly Standard piece, “The Case for the Empire,” is a classic of the genre. The writer is clearly having us on when he explains that, in the Star Wars movies, Darth Vader is actually the good guy:

the truth is that from the beginning, Lucas confused the good guys with the bad. The deep lesson of Star Wars is that the Empire is good.…

the most compelling evidence that the Empire isn’t evil comes in “The Empire Strikes Back” when Darth Vader is battling Luke Skywalker. After an exhausting fight, Vader is poised to finish Luke off, but he stays his hand. He tries to convert Luke to the Dark Side with this simple plea: “There is no escape. Don’t make me destroy you.… Join me, and I will complete your training. With our combined strength, we can end this destructive conflict and bring order to the galaxy.” It is here we find the real controlling impulse for the Dark Side and the Empire. The Empire doesn’t want slaves or destruction or “evil.” It wants order.

Funny stuff, and entirely tongue-in-cheek. Right?… Right?