World Cup Soccer’s Real Top Rivals: Nationalism versus Globalism

SoccerBall_200It’s hard to overestimate the importance of the FIFA World Cup, which on June 12 kicked off its 20th tournament, this time in Brazil. Every four years this event captures the hearts and minds of hundreds of millions of soccer fans around the globe. And like the Pied Piper of Hamelin, flags and national anthems align the masses behind their countries’ respective teams.

As in the Olympic Games, the athletes’ individual names and surnames will give way to national affiliations. No longer will the individual player who won the medal, dribbling the ball skillfully down the field or scoring the winning goal, get his due credit. Instead, a collectivist mindset will co-opt the victory by celebrating, not the achievement of talented individuals, but the reflected glory of a winning team’s home country.

Don’t mistake me for an enemy of soccer; I’m not. I believe that most of the time it’s a healthy and fun pastime. But when it triggers primitive, nationalistic feelings, an ugly side emerges.

The World Cup often unfolds more like a battle than a game. Thirty-two national teams fight it out on the playing field using high centering passes and penalties in place of mortars and missiles. The enemy is: a different country, a different language, a different set of customs, a different group of people with a different look. It is exactly the same mentality that erects border fences and requires mandatory passports.


The Problem with Open Enrollment

open_enrollmentAustin Frakt and Amitabh Chandra propose a common-sense idea at the New York Times:

If [health insurance] plans could compete on the basis of the therapies they cover, consumers could decide what they wish to pay for. This sounds complicated, but it need not be.

Health plans could define themselves at least in part by the value of technologies they cover, an idea proposed by Professor Russell Korobkin of the U.C.L.A. School of Law. For example, a bronze plan could cover hospitalizations and visits to doctors for emergencies and accidents; genetic diseases; and prescription drugs that keep people out of hospitals. A silver plan could cover what bronze plans do but also include treatments a large majority of physicians find useful. A gold plan could be more inclusive still, adding coverage, for instance, for every cancer therapy shown to improve patient outcomes (no matter the cost) as long as it was delivered at a leading cancer center. Finally, a platinum plan could cover experimental and unproven cancer therapies....

This proposal encounters an immediate problem: people become sick, they will prefer plans that cover more treatments, including experimental ones. As sick people disproportionately choose more generous plans, their expenses and premiums will have to rise. This phenomenon, known as adverse selection, is familiar in most health insurance markets, including those for employer-sponsored plans, private plans that participate in Medicare and in the Affordable Care Act’s new marketplaces. One common way to address it is to permit individuals to switch plans only once per year, during an open enrollment period. This locks people into their choice for some time, so they can’t suddenly upgrade their plan after getting sick. If a once-per-year enrollment period proves insufficient in this case, a longer period could be imposed.

This demonstrates the inferiority of open enrollment versus another alternative, health-status insurance (also known as insurance against becoming uninsurable). For example, one area of current conflict between health plans and pharmaceutical companies is the price of specialty drugs such as Sovaldi, for Hepatitis C, which costs $84,000 for a twelve-week course.

Current open enrollment usually happens annually. Obamacare’s open enrollment period ended on March 31. Suppose someone signed up for the cheapest Bronze plan, thinking he was healthy, and then was diagnosed with Hep C in April? Under current Obamacare rules, he has to wait until November 15, 2014, to choose a better plan for January 1, 2015. And current Obamacare Gold plans would still offer skimpy coverage of Sovaldi. Under Professors Frakt’s and Chandra’s proposal, I suppose the Gold plans would offer Sovaldi for reasonable co-pays, but they would be even more nervous about adverse selection. So, they might limit open enrollment to every two years, for example.

Obviously, the person diagnosed with Hep C in April is in a much worse position than someone who remains healthy until November (in either 2014 or 2015) and can switch immediately to a plan with better coverage. This hardly seems just. Under health-status insurance, the insured person can switch plans whenever he wants, and the previous health plan pays a sum to his new health plan that is appropriate to his new health status. Of course, he pays for this optionality with a slightly higher premium initially, but the advantages far outweigh the cost.

Virginia DMV and Taxi Unions versus Consumers

Screen Shot 2014-06-12 at 12.06.07 PMCompetition always has been, and always will be, disagreeable to those who are affected by it. Thus we see that in all times and in all places men try to get rid of it.” —Frédéric Bastiat

Last week, the Virginia Department of Motor Vehicles (DMV) sent cease-and-desist letters to app-based, ride-sharing services Uber and Lyft for operating without proper permits. With its decision, Virginia has joined a growing number of states and localities that have taken action against the two popular ride-sharing services.

I personally have the Uber app installed on my iPhone and have used it with great satisfaction. For those unfamiliar, here’s a basic explanation on how it works: In a city where the service operates, you can request one of their drivers to pick you up. The prices are transparent and clearly listed. The app allows you to select the closest driver, see the estimated arrival time, track the driver en-route, and immediately get informed when the driver arrives. Once you reach your destination, you will also receive an opportunity to review the driver and service. There’s no need to fumble for cash or your credit card during payment—the receipt for the ride comes in the form of a text (your payment information is already stored in the initial registration).


Soaring Pension Costs Devour School Budgets in California

CalSTRS_lobbyThe revised budget unveiled in May by California Gov. Jerry Brown seeks to increase the amount of money that public school districts and their teachers would pay into the teacher pension fund going forward. The legislature must approve a budget by June 15 or legislators forfeit their pay until a budget is passed.

The amount that school districts would pay into the California State Teachers Retirement System (CalSTRS) would jump from 8.25 percent of teachers’ salaries to 19.1 percent, based on the governor’s budget plan. Rates would ramp up to the full 19.1 percent over a seven-year period.

Teachers’ contributions to CalSTRS would also increase, from 8 percent of their salaries to 10.25 percent, and take three years to reach the 10.25 percent rate. The State of California—meaning state taxpayers—would also pay more into CalSTRS.

For Alameda Unified School District (AUSD), for example, the district’s share of pension costs would rise from $3.9 million to $9.6 million by 2020, according to the district’s chief business officer, Robert Clark. This would be nearly a 150 percent increase in just six years.

Alameda’s teachers would also be expected to increase their pension contributions, about $500 to $600 a month, depending on each teacher’s salary. But according to one news report, the teacher union president in Alameda, Audrey Hyman, insists “school districts should increase teachers’ compensation to help them meet their rising pension costs if the proposal is approved by lawmakers.”

In other words, union officials want the school district to pay for the teachers’ share of any future pension-cost increases, not the teachers themselves who will benefit from the pensions. This perk, known as “pension pick-up,” is unfair and encourages teachers to “shoot for the moon” when lobbying for higher pension benefits because they know they won’t be stuck paying any of the additional cost. Chicago’s budget has suffered greatly from this “go for broke” teacher response.

All of the additional money needed by AUSD and its teachers for CalSTRS will be grabbed from other parts of the budget. Alameda parents need to realize that if their local school building is crumbling and classrooms are starved for resources, generous teacher pensions are a major cause, swallowing up money that would otherwise fund classroom instruction. This diversion of money to pensions will happen in school districts across the state.

Long term, state taxpayers should not be forced to contribute anything into CalSTRS. Public school teachers are hired by school districts. They are employees of those school districts. They are not state employees. And teachers negotiate pay and benefits with school districts. State taxpayers are not seated at the bargaining table.

It is immoral to make state taxpayers backfill CalSTRS’ deficits. Long term, state taxpayers should be relieved of any obligation to fund public teacher pensions. School districts and teachers should fund their own pensions. Gov. Brown and the nonpartisan Legislative Analyst’s Office have each made statements generally supportive of this change.

A serious reassessment of California’s public employee pension systems is long overdue. If changes are not made, schools and other public services will continue to suffer as more money is poured into pensions, leaving less money for traditional public services such as police, firefighters, libraries, roads, and schools.

Non-Hospital Healthcare Jobs Are Growing Fast

Jobs in health care, especially in outpatient settings, continue to rally. Of 217,000 nonfarm civilian jobs filled in May, 34,000 were in health care. This was twice the average monthly gain over the previous twelve months.

As previously observed, most of these jobs are in ambulatory settings. Two thirds of the gains (23,000) were in physicians’ offices, outpatient-care centers, and home health care. Hospitals added only 7,000 jobs from April.

Table 1 shows the seasonally adjusted changes over the past twelve months. It continues to become apparent that the hospital sector is undergoing a transformation: Care is being increasingly delivered outside hospitals. Although they still account for one-third of employment in health services, job growth in hospitals is anemic. Although outpatient-care centers employ only 715,000 workers, they continue to add jobs rapidly.

Hopefully, this indicates a shift to more productive ways of delivering care. However, the perverse incentives in Obamacare (which cut hospital payments bluntly) caution against optimism.


Taxpayers Are Shocked to Discover That When They Vote for Government Services, They Have to Pay for Them

TANSTAAFLTaxpayers in Austin, Texas, are upset that their property tax bills are rising. This article reports that taxpayer Gretchen Gardner is “at the breaking point” because of her increasing property taxes.

Gardner says, “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore.” It appears that Gardner strongly supports more government spending, as long as someone else pays the cost.

She is going to protest her tax assessment.

She goes on to say, “Someone needs to step in and address the big picture.” As I see it, the big picture is that our country has too many voters like Gardner who keep asking for more government spending without thinking that somebody has to pay for it.

Remembering Tiananmen Square, 25 Years Later

One free man will say with truth what he thinks and feels amongst thousands of men who by their acts and words attest exactly the opposite. It would seem that he who sincerely expressed his thought must remain alone, whereas it generally happens that every one else, or the majority at least, have been thinking and feeling the same things but without expressing them. And that which yesterday was the novel opinion of one man, to-day becomes the general opinion of the majority. And as soon as this opinion is established, immediately by imperceptible degrees, but beyond power of frustration, the conduct of mankind begins to alter.” —Leo Tolstoy

Twenty-five years ago, on June 4, 1989, the Chinese government launched a brutal military crackdown on student-lead demonstrations assembled in Beijing’s Tiananmen Square. For seven weeks prior, protestors swelled into the hundreds of thousands (over a million at the height of the protests, according to some reports) and called for freedom of speech, freedom of press, government accountability, and an end to cronyism and corruption. Although the fledgling Chinese Democracy Movement was composed of many factions with many different agendas, broadly speaking, it aimed for liberal reforms.

Dissension permeated inside the People’s Liberation Army and even some of the upper echelons of the Chinese Communist Party sympathized with protestors, but in the end, hardliners won out. Orders were given to use military force to clear the Square. To this day, government censorship, obfuscation, and denial have made details of the resulting massacre’s death toll difficult to verify, with some estimates as low as 200 to others over 2,500.

One of the most iconic photographs of the 20th century, “Tank Man,” was taken during the military crackdown and has since become an enduring symbol of the individual versus State oppression.


Sadly, it seems that this famous image and the events of June 4, 1989 have largely faded from the collective consciousness of the Chinese people due to an Orwellian campaign of official repression and self-imposed censorship. Here’s how a Chinese millennial describes the current situation: “We’re just walking dead... We’ve been brainwashed.” One disturbing documentary captures the sociopolitical atmosphere:

Many foreign observers discover themes of mass ignorance and apathy: “Chinese students are so apolitical, so focused on jobs and wealth, that they’re not even aware of their own powerful history.” Another story reports a similar message: “After years of enforced silence, many young people have little idea if any of [the rumored details of the massacre] took place. Others have come to believe that the crackdown was inevitable or even necessary for the sake of stability.” A Chinese journalist in Beijing laments “even those who are well-aware of the state’s meddling make little effort to seek truth and push for change.”

Nevertheless, it is impossible to completely rewrite history and enforce ideological silence in a country with more than one billion people. Many who lived through the events of 1989 are still alive in China today, and dissidents in Hong Kong, Taiwan, and elsewhere overseas have not forgotten. Perhaps it is not surprising that the Chinese government has launched its strongest censorship campaign to date on the 25th anniversary of the Tiananmen Square massacre. Even commemorations held in private are prohibited. Britain’s Sky News reports that central Beijing is currently in a state of “lockdown.” According to NPR reporter Anthony Kuhn, “There are police at every downtown intersection, and lots of security checkpoints and bag-checks around the square itself. Police kept foreign reporters, myself included, out of the square... online, even the most indirect references to June fourth and Tiananmen Square are blocked or deleted.”

Still, online activists have shown ingenuous creativity in dodging the authorities and getting the message out, including with the use of Legos, playing cards, rubber ducks, confetti, and even a pornographic video.

Let us not forget the events of this tragedy and join the efforts of people across world in commemoration. As Tolstoy noted, it takes only a single act of courage from one freethinking individual to create a ripple that will become a tidal wave. Even as we deal with overzealous economic regulations and see ominous signs of the growing police state in the United States, we should keep in mind that many people across the world have it much worse. The message of liberty carries universal appeal, and we should always stand together against government attempts at oppression no matter where they happen to be.

* * *

In 1999 for the 10th anniversary, the Independent Institute hosted a Policy Forum with several distinguished experts to discuss the actual story behind the Tiananmen events and the future of China. See here for the transcript. Much of what was discussed remains highly relevant today.

Is the NDAA Notification Requirement Unconstitutional?

indexIf Obama is right about the NDAA, he should start releasing far more prisoners from Guantánamo. A firestorm has erupted over the Obama administration’s release of five Guantánamo captives in exchange for the Taliban’s release of American soldier Bowe Bergdahl. Putting aside all the rest of the strategic, moral, and practical arguments, I want to focus on the legal side. Many of Obama’s critics say that his move violated the NDAA notification requirement, signed by Obama (who issued a signing statement suggesting he thought it was unconstitutional). The requirement mandates that the president inform Congress of Guantánamo releases.

Now, as an aside, I don’t think signing statements are valid as line-item vetoes. If part of a law is unconstitutional, the president shouldn’t sign the law if he wants to abide by the Constitution.

But was the president correct that the notification requirement violates the Constitution? I think he was. I do not think Congress has the authority to restrict the executive branch’s authority to release war captives.

See here for some of the relevant arguments on both sides by Ilya Somin and Michael Ramsey.

Here’s my argument. A lot of the disagreement pertains to controversy over the meaning of Congress’s constitutional authority to “make Rules for the Government and Regulation of the land and naval Forces.” Everyone agrees there are limits to this authority: Congress can’t micromanage every tactic undertaken at battle. Most everyone agrees there is substance strength to this authority: Congress can ban torture and establish certain rules for military tribunals.* (Of course, during the Bush administration many conservative theorists argued that Congress had almost no role in regulating detentions and military trials at all, but that’s another story.)

It seems clear to me that the president has the plenary authority to release war captives, people captured by the executive branch itself. It would be perverse indeed if the president could set up a military prison at Guantanamo, round up prisoners in the theaters of operation of his choice (as legitimized generally by AUMF and other authority) and stick them in that prison, but then couldn’t release them.

Of course, most of the hundreds of Guantánamo detainees were released by executive prerogative. Most of the tens of thousands of war captives in the Iraq war were also released that way.

But here’s what makes it all the more obvious to me: The president has, except in cases of impeachment, plenary pardon authority. He can release anyone, except in cases of impeachment, from any federal detention at any time and for any reason.

It would be twisted indeed if this power did not apply to the captives the president himself is most directly responsible for detaining as part of a war. The implication would be that if somehow he decided to transfer these prisoners to civil judicial hearings, or if Congress decided to to so, and a grand jury indicted the detainees, and a jury of citizens convicted the detainees, and the detainees lost all their appeals and habeas corpus pleas, then at that point, somehow, the president could pardon and release the prisoners as casually as a turkey in a Thanksgiving White House celebration, but when he was most directly responsible for the detention authority, he could not.

In short, if the president can release any non-impeachment related federal prisoner, even one convicted by a jury, surely he can release his own military war captives. There is nothing I see in the Constitution that allows Congress more authority to stop prisoner releases at Guantánamo than at Rikers.

Another implication of calling the president’s activities unlawful is to defend the Obama administration in having failed to release Guantánamo inmates in general. He and his defenders have claimed that the president’s hands are tied—that Congress won’t let him do what he promised.

Most of Obama’s detractors would probably agree with that, and indeed would not fault Obama for failing to release detainees nearly as frequently as Bush did. They are fine with the result: the continuing detention of many people at Guantánamo, including many who were cleared for release.

Now, I have consistently argued that this argument is bunk. Obama is morally and legally responsible for the continuing detention of people at Guantánamo, full stop. Anyone who wants to criticize him for this, using legal arguments, can’t also criticize him for supposedly breaking the law in releasing the five inmates.

On the other hand, Obama has shown the president can release who he wants, within his authority. And so those who actually care about his campaign promises to uphold human rights finally can point to the president’s own actions, and demand that he fulfill his promise by, at a very minimum, immediately releasing those cleared for release.

In short, the president is inconsistent, as is anyone who faults him for not unilaterally releasing Guantánamo prisoners while somehow blaming him for breaking the law here. To the contrary, his unilateral actions to release prisoners from Guantánamo should be repeated.

* If someone wants to know why Congress should be allowed to restrict interrogation procedures but not releases, well, maybe the Constitution has at least something of a presumption against certain awesome exercises of authority, such that checks and balances favor less government coercion rather than more in many contexts. We see this in a lot of areas. Either Congress or the president (except facing a supermajority) can kill most bills. Either the judiciary or president can release many detainees judicially authorized detentions. Checks and balances in many respects are meant to decrease government power, not enhance it, and releasing prisoners and not torturing them are both things that checks and balances should logically favor in any system supposedly bent toward protecting liberty at all.

Would Outlawing Food Stamps for Soda Pop Reduce Obesity?

9373868_SThat’s what scholars at Stanford University and University of California, San Francisco, concluded in an article in Health Affairs. The authors compare two policies: banning the use of food stamps for the purchase of soda pop, or giving an extra subsidy of thirty cents on the dollar for the purchase of fruits and vegetables. They conclude that the ban on soda pop would have a greater impact on obesity:

A ban on sugar-sweetened beverage purchases would be expected to reduce kilocalorie intake from these beverages by a net average of 24.2 kcal per person per day among SNAP participants (95% CI: 22.8, 25.5)—a 15.4 percent decline in calorie consumption from sugar-sweetened beverages, according to our model.

Given this decline in net kilocalorie intake, overall obesity rates declined over the simulated period.

When accounting for baseline type 2 diabetes rate differences among cohorts, our model estimated that the largest type 2 diabetes incidence decline would be expected among adults ages 18–65....

Here is where the ivory tower falls: The authors assume that food stamps are used only to buy food, and that if the government changes the relative prices of food available, consumption will change. However, in the real world, some share of food stamps are not used to buy food. Instead, they are converted into other currency, at very high exchange rates.


No Joke, Paul Krugman Praised Veterans Health System as National Model

Carl T. Hayden Veterans Affairs Medical Center in Phoenix

Phoenix Veterans Affairs HealthCare System

In 2011, New York Times columnist Paul Krugman wrote that the federal Veterans Affairs (VA) healthcare system is a “huge policy success story, which offers important lessons for future health reform.”

Let’s examine Krugman’s arguments for why the VA is a national model for healthcare in light of recent revelations:

1) Krugman says the VA has “led the way in cost-saving innovation.”

Denial of needed care is not an acceptable “cost-saving innovation,” but it’s how the VA has held down costs from its inception. The VA has a long history of providing inferior healthcare, as revealed by many news reports and studies over the years including Failure to Provide: Healthcare at the Veterans Administration (2010) by history professor and Independent Institute Research Fellow Ronald Hamowy.

And now we know that denial of care is worse than ever. According to a preliminary VA inspector general’s report released May 28, at least 1,700 sick veterans waiting to see primary-care doctors were never scheduled for an appointment or were placed on a secret waiting list for months at the Veterans Affairs Medical Center in Phoenix, raising the question of just how many more may have been “forgotten or lost” in the system. The average wait time was found to be almost four months.