An Eminent Domain Injustice

“My name is Susette Kelo, and the government stole my home.”

That was how former New London, Connecticut resident Susette Kelo, who lost her home in one of the most troubling legal battles against eminent domain abuse, began her talk at the Cato Institute in January.

The court ruled that Susette Kelo’s little pink house in New London, and the homes of her neighbors could be taken by the government and given over to a private developer based on the mere prospect that the new use for her property could generate more taxes or jobs.

At this time, the property is still empty.

In this new mini-documentary produced by Austin Bragg and Caleb Brown, those who fought on Kelo’s behalf tell her story.

For an in depth look at Kelo’s case, read Little Pink House: A True Story of Defiance and Courage by Jeff Benedict.

For more videos like this one, subscribe to Cato’s YouTube channel.

More Reasons Not to Nationalize Health Care

Advocates of a government takeover of the health care system routinely offer up horror stories of American medicine, and no system yet has found a way around the problem of human imperfection, especially when operating in a system with such distorted incentives–most from ill-considered government policies.  Yet the horror stories in nationalized health care systems are manifold and tend to be more intractable since they result from government policy.

For instance, consider the quality of care delivered by hospitals in one region in Great Britain (with a hat-tip to Philip Klein of the American Spectator for finding this story).  According to the Daily Telegraph:

Sir Ian Kennedy, chairman of the Healthcare Commission, said the report is a ‘shocking story’ and that there were failures at almost every stage of care of emergency patients. “There is no doubt that patients will have suffered and some of them will have died as a result,” he said.

The investigation of the trust now called the Mid-Staffordshire NHS Foundation Trust, found overstretched and poorly trained nurses who turned off equipment because they did not know how to work it, newly qualified doctors left to care for patients recovering from surgery at night, patients left for hours in soiled bedclothes, reception staff expected to judge how seriousness of patients arriving at A&E, patients left without food or drink, others who received the wrong medication or none at all, blood and faeces left on lavatories and floors, and doctors diverted away from seriously ill patients in order to treat minor ones who were in danger of breaching the four hour waiting time target.

When high mortality rates triggered questions, the trust board of directors ‘fobbed off’ investigators by saying the rates were a result of statistical errors but the Healthcare Commission found this was not that case.

The report said there was a ‘reluctance to acknowledge or even consider that the care of patients was poor’.

The trust was more concerned with hitting targets, gaining Foundation Trust status and marketing and had ‘lost sight’ of its responsibilities for patient care, the report said.

Sir Ian said: “The resulting report is a shocking story. Our report tells a story of appalling standards of care and chaotic systems for looking after patients.”

While Britain tends to be near the bottom in terms of health care system in industrialized states, there are plenty of horror stories elsewhere.  Socialism doesn’t work, whether in health care or elsewhere.  As Investor’s Business Daily reminds us:

The Swedish government system is no better. It also refuses to provide some expensive medication and, inhumanely, refuses to let patients buy the drugs themselves. Why? According to a Journal of American Physicians and Surgeons article, bureaucrats believe doing so “would set a bad precedent and lead to unequal access to medicine.”

Like Canadians, Swedes are subjected to long waits. They also have denial-of-care problems that sometimes lead to death.

A reasonable person would see the record of repeated failures in government-run medicine as evidence that such a system is not sustainable. Yet every central planner thinks he or she — or his or her immediate group — is smart enough to correct the flaws of socialist programs and therefore has the moral authority to force others to participate in his experiments. It is the same thinking that will move a person to say we are the ones we’ve been waiting for.

The Obama administration seems determined to waste a lot of money “stimulating” the economy.  We can replace money lost.  But if the administration succeeds in nationalizing the medical system directly or indirectly, the damage may prove irreversible–and deadly.

Slow Learners in Corporate America

They just figured this out? During the bruhaha surrounding bonuses paid by AIG,  reports the Washington Post:

The attack by lawmakers on AIG pay has provoked renewed complaints from some financial company executives that federal involvement in business decisions is making it difficult for struggling firms to return to profitability. In particular, executives say they need to offer bonuses to keep and motivate their most valuable employees and are already seeing an exodus of talent.

Duh, how could anyone in business not expect federal interference?  The government constantly meddles even when it is not bailing out everyone hither and yon.  But if it’s paying the corporate bills, how could anyone expect it not to get involved?

I have a novel idea.  Maybe business should stop going to Uncle Sam hat-in-hand asking for taxpayer alms.

Who’s Going to Buy All the U.S. Treasuries?

With Uncle Sam having to sell trillions of dollars worth of treasuries to finance all of the bailouts, stimuli, and normal wasteful spending, no one is sure whether foreign demand will continue.  The Chinese have bluntly questioned the safety of their U.S. holdings, and foreign demand has fallen in recent months.  Writes Brad Setser:

I wanted to highlight one trend that I glossed over on Monday, namely that foreign demand for long-term Treasuries has disappeared over the last few months. Consider a chart showing foreign purchases of long-term Treasuries over the past 3 months. Incidentally, the split between private and official purchases in this data should largely be ignored. The revised (i.e. post-survey) data generally have attributed nearly all the flow from 2003 to the official sector.

The rolling 3m sum bounces around a bit, but foreign demand for long-term Treasuries in November, December and January was as subdued as it has been for a long-time. Among other things, that fall in foreign demand for long-term Treasuries after October suggests — at least to me — that the big Treasury rally late last year (and subsequent sell-off this year) doesn’t seem to have been driven by external flows. Foreigners weren’t big buyers of long-term Treasuries back when ten year Treasury yields fell to around 2%.

It’s difficult to accurately predict future demand.  But U.S. borrowing will be truly staggering in coming years.  If international demand is down, the Treasury will have to rely on American investors.  Whether the domestic market can easily absorb so much debt – and particularly, to what extent federal debt offerings will crowd out private investment during what we hope will be a recovery – are questions that our spendthrift leaders have not bothered trying to answer.

American Prospect Strikes Mother Lode of Falsehood

Dana Goldstein of the American Prospect blogs that “research clearly shows that students using vouchers perform no better academically than their socio-economically similar peers in public schools.” This is flamboyantly false.

I recently reviewed the literature comparing public, private, and truly free market school systems, and an expanded version of that study is forthcoming in the Journal of School Choice. The JSC version tabulates the findings of 65 scientific studies (including every U.S. and foreign voucher study I am aware of), collectively reporting 156 comparisons of educational outcomes. What does the research “clearly show”? It shows this:

Summary of Findings Comparing Private and Government Schooling,
by Result and Outcome Category

 

Total

Ach

Eff

Sat

Ord

Fac

Ear

Att

Int

Sig Priv. Advantage

106

46

25

11

5

2

5

11

1

Insignificant

37

28

1

0

0

0

5

3

0

Sig. Gov’t Adv.

13

10

3

0

0

0

0

0

0

 

The above table summarizes the results of the scientific literature, showing the number of findings favoring the private sector by a statistically significant margin, the number that are insignificant, and the number favoring the public sector by a statistically significant margin. It does this for all eight available outcome measures: academic achievement, efficiency (achievement per dollar spent per pupil), parental satisfaction, the orderliness of classrooms, the condition in which facilities are maintained, the later earnings of graduates, the highest school grade or degree completed, and effect on measured intelligence. And it incontrovertably shows that private sector outperforms the public sector in education across all of those measures.

But there’s more. As I note in the conclusion: “It is in fact the least regulated market school systems that show the greatest margin of superiority over state schooling.” When the above results are winnowed down so that we compare only free markets of private schools that are funded at least in part directly by parents to public school monopolies like those of the United States, the findings are even more starkly divided:

Summary of Findings Comparing Market and Gov’t Monopoly Schooling,
by Result and Outcome Category

 

Total

Ach

Eff

Sat

Ord

Fac

Ear

Att

Sig Mkt Adv.

59

20

17

6

4

1

3

8

Insignificant

13

7

0

0

0

0

3

3

Sig. Gov’t Adv.

4

4

0

0

0

0

0

0

 

Note the staggering overall results. Findings favoring free market school systems outnumber contrary findings by a margin of 15 to 1. They also outnumber the combined insignificant findings and the findings favoring monopolies by more than 3 to 1. Most tellingly, when we look at efficiency we find that there are NO results in the literature that favor government schooling and NO results that are statistically insignificant. EVERY study that compares academic achievement per dollar spent per pupil between market school systems and public school systems finds a significant market advantage.

Goldstein and The American Prospect should obviously print a retraction. But if they are interested in the truth, they might want to do something more. They might want to ask themselves why they continue to cling to a monopoly system that has been overwhelmingly discredited in the scientific literature….

Tuesday Podcast: “Labor Relations, Collective Choice and ‘Card Check”’

Congress introduced the “Employee Free Choice Act” last week, which would end the secret ballot system currently in place for workers who vote on whether to start a union.

The bill could have disastrous effects on companies and would throw another wrench in U.S. labor relations, says University of Chicago law Professor and Cato Adjunct Scholar Richard A. Epstein in Tuesday’s Cato Daily Podcast:

It would be a major transformation of the American labor force, all for the worse as far as I’m concerned. Because it would mean that the monopoly model of the labor statutes that were intro under the Wagner Act would now become gov policy to the extent that a card check could allow a union essentially to contain partial ownership rights over the management and prerogatives of the firm.

A worse piece of legislation I cannot imagine, with respect to this field.

Epstein offers a more detailed look at the card-check legislation in the Spring issue of Cato’s magazine Regulation, which will be released March 26.

Oh C’mon, NYT!

C@L readers know that I’m a fan of the NY Times’s news and business reporting. If you want depth and detail (especially today, when papers increasingly read like Tweets), the NYT’s news coverage is about as good as it gets.

The opinion page, sadly, is another matter.

Case in point, last Friday’s lead editorial chastising Japan and Europe for not adopting large fiscal stimulus plans. The lede:

The world economy has plunged into what is likely to be the most brutal recession since the 1930s, yet policy makers in Europe and Japan seem to believe there are more important things for them to do than to try to dig the world, including themselves, out.

That’s actually OK — the editorial board is free to believe (and espouse) that massive fiscal stimulus is the best policy for dealing with the current recession. But to use an old saying, they’re entitled to their own opinion, but not their own facts. Ignoring that admonition, the ed led off its final graf with this howler:

In a recent speech, Christina Romer, another of President Obama’s economic advisers, pointed out some lessons [sic] from the Great Depression: fiscal stimulus works.

If you follow the economic history literature, this is a stunner; some of Romer’s most important academic work demonstrates the opposite, namely that fiscal stimulus did little to get the United States out of the Depression [$] and subsequent U.S. recessions [$]. Has she rejected her own findings?

I tracked down the speech transcript and found out that, nope, she hasn’t; in fact, she was explicit that “fiscal policy was not the key engine of recovery in the Depression.”

Romer did go on to say that she strongly supports the Obama stimulus plan, believing it will be effective and worthwhile. But this belief is rooted in one school of economic thought (or ideology, to borrow from NYT columnist Paul Krugman), not history. Whatever the merits of Romer’s belief, the NYT’s line about the Depression proving that “fiscal stimulus works” is just plain horseradish.

In recent years, the NYT editorial board has repeatedly chastised non-progressives, claiming they put ideology over objective fact. Will the ed board scold itself?