The War of Ideas

battle of ideasWriting popular press pieces, you open yourself up to a lot of criticism. If you write about economic topics, you might as well be waving a red flag in front of a bunch of Spanish bulls. Without a doubt, I’ve received my fair share of critical commentary, been accused of pushing all kinds of agendas and being the worst of both political parties. Some comments, though, are pretty creative. Some of my personal favorites include,

“The author probably isn’t smart enough to tie her shoes.”

“The author is clearly a socialist.” (I was writing a piece which, in fact, was highly critical of socialism.)

“Someone forgot her meds this morning.”

I am not alone in my experience. Though these types of comments are often worthy of a smirk or occasional chuckle, some aren’t as amusing. I was once discussing reactions to popular pieces with another colleague who writes a regular column for a popular outlet. He stated that most comments don’t bother him. The exception was one commenter who, in responding to a policy piece, stated he hoped my colleague’s wife and children would die in a car wreck.


CBO: Repealing ACA Would Grow U.S. Economy; Reduce Number of Insured by 10 Million

health_costsI have asked, and the Congressional Budget Office has answered. Well, not really.

Although, I have been urging the CBO to do a comprehensive estimate of all the effects of the Affordable Care Act, effectively for the first time since 2012. It did so last week. The main takeaway is that “repealing the ACA would increase GDP by about 0.7 percent in the 2021–2025 period, mostly because provisions of the law that are expected to reduce the supply of labor would be repealed.”


Donald Boudreaux’s The Essential Hayek

EssentialHayekReaders who want to get a flavor for the ideas of Friedrich Hayek will find an excellent introduction in Donald Boudreaux’s The Essential Hayek. The book can be downloaded free by clicking here.

Each chapter begins with a quotation from Hayek, but the book’s chapters explain Hayek’s ideas in Boudreaux’s words. Those ideas come from various works by Hayek, so the book is not a summary or discussion of specific works by Hayek, but rather an overview of Hayek’s ideas on the economy, on law, and on social organization more generally.

The book provides an excellent discussion of the advantages of free markets and limited government, and on the way that institutions can arise spontaneously without anyone planning them out, as a result of human action but not of human design.

The book is not a study guide to Hayek’s work, or a summary of his work, because, outside of the quotations that open each chapter, there are no references to the specific works of Hayek from which Boudreaux develops the chapter’s ideas. The book does end with suggestions for further reading, which can help guide those who want to know more.

Boudreaux’s discussion is insightful, clearly written, and provides an excellent introduction to the ideas of limited government. Rather than read what I have to say about it, read it yourself. It’s a free download.

Obamacare’s Shrinking Revenues: Medical Device Excise Tax

The House of Representatives voted today to repeal Obamacare’s medical device excise tax, the 2.3 percent tax levied on medical devices sold in the United States. The tax is certainly harmful. Whether it deserves the highest priority in repealing Obamacare, we’ll leave to discuss another day.

Although, repealing the medical device excise tax does nothing to repeal Obamacare. It just gives us a deficit-financed Obamacare. This is the second time the Republican-majority Congress has voted to increase deficit spending on health care this year, without winning any meaningful reform to any program.

With 46 Democrats joining the Republican majority, the votes in favor added up to 280, just 8 short of the number needed to override the promised presidential veto. We’ll see how it does in the Senate.


Which Countries Prefer Capitalism?

liberty_for_latin_america_180x270A survey conducted by the Pew Research Center gauges the opinion among citizens of various countries of the free market. They were asked if they agreed that under such a system the majority is better off even though some are rich and some are poor. The results invite interesting conclusions.

People in emerging countries have more faith in the market than those in developed societies. Among the latter, between 60 and 70 percent of respondents agree with the survey’s statement, but the proportion is greater among the former—between 70 and 80 percent. There are significant differences, however, between Asians and Latin Americans. With some exceptions, support among Latin Americans ranges from 50 to 60 percent depending on the country. The region’s brand of populism, which emerged in the 1930s, comes across as a more or less permanent ideological (some would say cultural) trait.

There are interesting exceptions. In three countries governed by various types of left-wing populism—Venezuela, Nicaragua, El Salvador—support for the market is between 10 and 15 points higher than in Latin American societies governed by non-populist rulers. The lesson here is that the best cure against populism is actually experiencing its consequences.


Just How Bad Has Post-9/11 America Become? Some Insights from Eritrea

abuseBy Christopher J. Coyne and Abigail R. Hall

Eritrea, a small African country east of Sudan and north of Ethiopia, is probably not a place you would like to visit, let alone reside. A small country with a population of about six million, Eritrea is incredibly poor, with a 2013 GDP per capita of approximately $700. In addition to widespread poverty, the government of Eritrea has one of the worst human rights records on the planet. In fact, during the first ten months of 2014, the number of refugee-seeking Eritreans nearly tripled compared to the previous year, with about 40,000 people seeking asylum in Europe alone.


Pennsylvania, Delaware to Identify as State-Based Obamacare Exchanges

Healthcare_costs_small1There seems to be a trend in the United States of people formerly identifiable with one set of easily recognized characteristics deciding that they “identify” as having another set of characteristics.

This is also happening with Obamacare exchanges.

The Supreme Court will soon announce its decision in King v. Burwell, resolving the question of whether Obamacare tax credits can be paid in states using the federal exchange ( or only in states with their own exchanges. Some states with federal exchanges are trying to “identify” them as state exchanges.


Render unto Caesar: Obama Preaches to Catholic Health Association

Obama_CatholicsLast Tuesday, President Obama gave a speech on healthcare to the Catholic Health Association (CHA), which was celebrating its 100th anniversary. The president recycled his campaign speech, making many claims about the cost of care, medical bankruptcy, and uninsurance, all of which we have debunked countless times in this blog.

He also asserted that Obamacare created jobs, claiming the health law was responsible for job growth since 2010. In fact, quality job growth coming out of the Great Recession has been remarkably slow in comparison with previous recessions, as I discussed in a previous blog post.

The most depressing part of the speech was his cheering the CHA for its role in passing Obamacare: “We would not have succeeded, if it had not been for you.” He got that right. The hospital lobbyists were critical in dragging Obamacare over the line, and the CHA comprises the largest denominational trade association of hospitals.

The CHA posts an interesting, short article about its history, noting that “between 1884 and 1915, Catholic hospitals in the United States had nearly tripled from some 200 to almost 600.” What a great history of growth, all achieved without federal intervention in health care! Some might even describe it as a blessing.

The late Pat Rooney, a pioneer of Health Savings Accounts and faithful Catholic, was a relentless critic of Catholic hospitals that gouge the uninsured with high prices. I wonder what the Catholic leaders, lay and religious, who founded America’s Catholic hospitals in the 19th century, would have to say about their descendants’ utter dependence on the federal government to carry out their mission.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.

Government’s Demonstrated Security Incompetence Warrants Abolishing Its Powers

Most-Powerful-Intelligence-AgenciesThe pro-surveillance state narrative says that 9/11 resulted from U.S. security agencies’ “Failure to connect the dots.”

Apparently this “failure” stemmed from there being too few agencies and/or their having too-limited powers, because its “correction” necessitated the creation of the new Department of Homeland Security (is the purpose of the Defense Department—which failed to defend even its own headquarter building on 9/11—to defend something other than “the homeland”?), the federalization of American airport security and the creation of the TSA, and the passage of the USA PATRIOT Act, providing security agencies extra-Constitutional powers to collect data on U.S. citizens suspected of no wrongdoing.

Today, advocates for the surveillance state are decrying the expiration of the PATRIOT Act and its replacement by the USA FREEDOM Act as now preventing the security agencies “from collecting the dots, to put them together,” declaring opposition to the PATRIOT Act to be a “war against intelligence.”

Mass collection of all electronic data on all Americans, in this narrative, “just replaces what a lot of agents used to do by hand... it gives you faster profiles.”

Let’s take a look at these contentions.

First of all, 9/11 could indeed be characterized as an “intelligence failure:” how difficult should it have been been to connect these dots:

Two months before the hijackings, FBI agents in Phoenix reported their suspicions about Arab students at a Phoenix flight school, and directly referred to the possibility of a connection to bin Laden.

In a memo from the Phoenix FBI to headquarters, the agents recommended an urgent nationwide review of flight schools “for any information that supports Phoenix’s suspicions” of a terrorist connection. The memo reportedly cited Osama bin Laden by name.

FBI higher-ups paid no attention to its agents.

While the current CIA Director claims that the data collection programs under the USA PATRIOT Act have “really helped stop attacks,” he offers no evidence that they have in fact done so. And what we know from reality is that the two attempts to blow up planes since 9/11 were stopped by their fellow passengers—civilians, not government agents.

Meanwhile, TSA can’t even connect its own internal “dots.”

On the front lines: TSA failed to stop undercover agents from smuggling weapons and explosives past checkpoints 67 times out of 70 attempts—an astounding 96% fail rate.

And behind the scenes,TSA missed 73 airline industry workers on terrorism-related watchlists—approving them for employment by airlines, airport vendors, and other airport employers.

And according to a member of the Senate’s Homeland Security and Governmental Affairs Committee, “The publicly available facts are disturbing, but the classified details are even worse.”

So, if U.S. intelligence agencies’ ability to provide security is the same regardless of any expansion of their sizes, numbers, budgets, and powers—is there any reason not to reverse the expansion of their sizes, numbers, budgets, and powers?

Government Charges Hastert with “Crime” of Withdrawing His Own Money

DennisHastertDennis Hastert, former Speaker of the US House of Representatives, has been charged with lying to the FBI about the reason he was withdrawing money from bank accounts. Should what Hastert did be illegal, or any of the government’s business? Let’s look at the facts.

From the charges, it appears that Hastert (1) withdrew $3.5 million of his own money from banks to (2) pay an individual “to cover up past misconduct” and (3) lied to the FBI about the reason he was making the withdrawals. It appears that the past misconduct was (4) molesting a student when Hastert was a high school teacher and wrestling coach. Let’s look at each of these four things to see whether the charges are warranted.

I’m going to wait to discuss (4), but will state the obvious up front. It’s not acceptable for teachers to molest their students, and it is also against the law. I’ll discuss this at the end of the post, because Hastert is not being charged for this.