Gordon Tullock used to taunt anarchists by asserting that if the USA abolished its government, people would not have to worry about the Russians taking over the country because “the Mexicans would get here first.”

This little story actually incorporates a common objection to anarchy—namely, the idea that because, if a country abolished its government, other countries would not necessarily follow suit, the governments of those other countries would be free to, and would, simply take over the country that, lacking a government, also lacked an effective means of defending itself against takeover by a foreign power.

This thinking presumes at least two critical ideas: first, that defense of a population requires a government that rules that population; and, second, that if a government has the power to take over another country, it will do so.

AHIP, the trade association for health insurers, has a nifty infographic answering the question: “Where does your premium dollar go?”

Obviously designed to defray accusations that health insurers earn too much profit, the infographic shows “net margin: of only three percent. A full 80 percent of our premium dollar goes to paying medical, hospital, and prescription claims.”

Fair enough. However, the elephant in the infographic is the 18 percent of premium that goes to “operating costs.” Lest you think that’s a synonym for “overhead” or “bureaucracy,” AHIP helpfully explains: “Operating costs include consumer-centric activities such as communicating with members, running customer service operations, quality reviews, and data analysis, among other activities.”

Well, readers have to judge how “consumer-centric” those operations are.

In 2015, average premium for a single worker in an employer-based plan was $6,251. So, $1,125 of that contributed to the insurer’s “operating costs.” How much health spending did the average insured person in an employer-based plan incur? $5,141, of which $813 was out of pocket. In other words, insurers’ “operating costs” added 22 percent to actual spending on health care.

Local governments produce lots of services that people value: schools, police protection, water and sewer services, and more.  Who are the producers of these services accountable to, and who determines the characteristics of the services local governments provide?

Ideally, the people who live in the jurisdictions of those local governments would be the people who would determine the characteristics of the services they provide, but more than one-third of local government expenditures are financed by intergovernmental transfers, and those higher-level (federal and state) governments send that money with strings attached.  To get the money, local governments have to spend the money the way the higher level governments want.

In large part, the demanders of local government services are higher level governments.  They tell local governments what they want with the money they spend.

The result is that we get policies like No Child Left Behind, which comes with federal mandates and guidelines that direct local government education spending.  Teachers “teach to the test” because federal funding demands it.  We get militarized local police forces because the federal government provides grants and equipment to arm local police department with military vehicles and military weapons.

Imagine that you learned a government agency built its own office furniture, HVAC, or telephones. Even if there were a massive amount of corruption in government purchasing, it would be remarkable if a bureaucracy could do a better job building than buying.

Yet, for decades, the Veterans Health Administration has tried to do that with its Electronic Health Record (EHR). I cannot think of another health system that has built its own EHR, rather than buy it from a vendor. It makes as little sense as a health system manufacturing its own MRI machines.

Finally, the new VA Secretary has confirmed he will throw in the towel on the VA’s home-brew system, VISTA, and buy a commercial EHR.

The tendency of the USA to have a negative balance of trade (more accurately known as a negative balance on current account) played a prominent role in the recent U.S. presidential campaign. Donald Trump criticized this tendency repeatedly and promised that if elected he would take various actions to reduce or eliminate it. Like most members of the public, Trump views this negative balance as a highly undesirable, economically damaging condition. Despite the prominence of discussions of the negative balance of trade in recent times, however, it is likely that few people really understand much if anything about the system of international payments accounts from which it derives.

Fortunately, interested parties can learn what they need to know about the international payments accounts by studying the documents that accompany the Bureau of Economic Analysis’s presentation of the data or by reading almost daily commentary on this topic by first-rate economists. My own go-to source of sound economic interpretation of this subject is the commentary by Donald J. Boudreaux at the blog Cafe Hayek.

I place the balance of international payments data in the class of statistics for which the world would have been a happier place had the data never been devised, popularized (in a rough way), and used by policy makers. This last aspect is the crux of the matter because the balance-of-trade data in particular can scarcely help but serve as a rationale for pernicious policies, such as export subsidies and tariffs, quotas, and other official restrictions on imports. In short, the data help the government establish and maintain policies that enrich the privileged few at the expense of the unconnected many, including consumers in general and producers who rely on imported raw materials and components, as many do these days.

A new study of past-due medical debt, by Michael Karpman and Kyle J. Kaswell of the Urban Institute, shows that the expansion of health insurance coverage subsequent to the Affordable Care Act is associated with a reduction in the proportion of adults with past-due medical debt.

In 2012, 29.6 percent of U.S. adults had past-due medical debt, versus just 23.8 percent in 2015. The study does not define “past-due” nor the average amount of medical debt that is past-due. However, an earlier Urban Institute study defines credit card debt as past-due if it is over 30 days late. That study also reported 35.1 percent of adults in 2014 had debt in collection (that is, more than 180 days past-due)! The average amount was $5,178, or 7 percent of average household income of $72,254. The first study cites research that almost half of debt in collections is owed to hospitals and other providers.

What to make of this? Although health insurance is supposed to protect us from such a situation, it often does not. And it is not clear what effect Obamacare has had. Among insured people, 26.6 percent had past-due medical debt in 2012, versus 22.8 percent in 2015. Among uninsured people, 39.8 percent had past-due medical debt in 2012, versus 30.5 percent in 2015.

Liberal intellectuals may be finally getting around to confronting the illiberal behavior of fellow liberals, particularly the recent episodes on American college campuses. Writing at The Atlantic, Peter Beinart examines the physical attacks at Middlebury College against Charles Murray and his faculty host and (liberal) interlocutor Allison Stanger. Hopefully, this introspection will prompt them and others to take a fresh look at Can We Take a Joke?, a documentary released in 2016 that highlighted the rising tide of anti-free speech sentiment among college students that now appears to be coalescing into a mass movement.

The film, produced by Korchula Productions and directed by veteran documentarian Ted Balaker, uses comedy, particularly stand-up comedy, to show how campuses have become less and less tolerant of free speech. The film frames its discussion using clips of pioneer stand-up comic and social critic Lenny Bruce, whose sexually explicit jokes led to his arrest on obscenity charges and a landmark free speech case. Bruce’s comedy would be considered benign by current standards, however, and so the film spends most of its time on contemporary artists such as Gilbert Gottfried, Lisa Lampanelli, Penn Jillette, Karith Foster and Adam Carollla.

Can We Take a Joke? uses the real-world experiences of these mostly liberal comedians to show the rise of intolerance against non–politically correct social commentary. Comedians are the proverbial canary in the coal mine, typically among the first wave of victims of intolerance or government oppression. This is because they are often on the front lines of social commentary and social change, as Brookings Institution scholar Jonathan Rauch points out in the film.

Indeed, Lenny Bruce may be one of the best examples of the place comedy holds on the cusp of social change. He was dishonorably discharged (later reversed) from the U.S. Navy during active service in World War II, after his commanders took offense at his comedy routine featuring a performance in drag. Today stand-up comics use offensive material to draw attention to a wide range of social issues, from LGBT prejudice to body image to drug abuse to boorish behavior among the rich. Indeed, as several comedians in Can We Take a Joke? emphasize, their intent is often to either spark or contribute to a public discussion on these and other social and political issues.

When the film was released in 2016, its free speech message was not universally well received. Critics might give Roger and Me a pass on its distortions of facts to suit Michael Moore’s point, but Can We Take a Joke? was derided for its unapologetic defense of free speech. According to one reviewer, the film represented the “brief for the defense” but, in the interests of balance and justice, should have explored the other side of the argument. As the New York Times critic wrote in his review:

The documentary “Can We Take a Joke?,” a one-sided look at a multisided issue, does a fine job of defending a comic’s right to perform incendiary material. It would be better if it also at least acknowledged the possibility that some jokes ought not be told.

In other words, free speech is a matter of taste, no longer a fundamental principle of public discourse. Notably the Times review (and others) failed to mention that almost all stand-up comedy is performed in closed venues requiring tickets or admission, whether in private clubs or on public university campuses.

How does the attack on Charles Murray factor into this? Unlike Milo Yiannapolis, who is a professional provocateur, Murray is a serious researcher and scholar, with a sincere interest in provoking a civil public discussion on critical social issues of our times (see his CV here). He earned his Ph.D. in political science from the Massachusetts Institute of Technology, spent six years in Thailand engaged in development assistance and program evaluation, and served seven years at the American Institutes of Research, eventually becoming its chief political scientist. Murray’s pathbreaking book Losing Ground: American Social Policy from 1950 to 1980 became one of the principle critiques leading to bipartisan welfare reform in 1996. In person, he is remarkably humble, soft spoken, and respectful to his critics.

Some of his later works were more controversial, particularly The Bell Curve, co-authored with Harvard psychologist Richard J. Herrstein, a serious attempt to present a wide range of scholarly research and data that showed intelligence was connected to American class structure in society, politics, and the workplace. It’s The Bell Curve that critics have rallied behind to oppose his public speeches, including the talk at Middlebury College (which was on a different subject). The outrage directed against Murray’s heresies is so great, however, that other respected academics can claim publicly and without accountability that this particular scholar, who has shaped national policy, has been thoroughly discredited (he hasn’t), can’t do math (he can), and lacks any conceivable merits worthy of offering him a speaking invitation. 

Can We Take a Joke? is a far-reaching documentary that is more relevant now than when it was released in 2016. For those who champion free speech, individual rights, and civil liberties, it should be a centerpiece for brokering public discussions on college campuses. The core sentiment underneath the attack on comedy is a harbinger of intolerance toward ideas more generally. If the film can open more eyes to the dangers of this anti-intellectualism masking as social justice, it is certainly worth the price of admission. Of that I have no doubt.

Venezuela’s dictatorship has tried to turn the fourth anniversary of Hugo Chávez’s death into a mystical experience of sorts—and a dose of much-needed political oxygen. Not a simple task in a country with inflation predicted to run at 1,600 percent, an economic growth rate of negative ten percent, a painful shortage of the most basic stuff, the highest crime rate in the world (120 murders for every 100,000 residents), and three-quarters of the people telling pollsters they repudiate the government.

That said, it is certainly an accomplishment for Mr. Nicolás Maduro, Chávez’s chosen heir, to have remained in power this long after his predecessor’s passing.

What has happened? Two things. One, the military, which was reorganized with Cuban help, has remained loyal to the Maduro regime, due to a combination of mafia-style complicity in crime and common fear of the punishment the Chavista hierarchy would face after relinquishing power. Two, the unity of the opposition, that is, of the MUD (the Spanish acronym for the Democratic Unity Roundtable), has been severely hurt by the naiveté of certain leaders who believed that the regime’s periodic invitations to hold a dialogue (always coincident with its worst crises) could lead to a democratic transition.

The last such maneuver took place late last year, when the most effective leaders of the opposition were pushing for a recall referendum to which they were constitutionally entitled. The Maduro government, with the help of three former heads of state (José Luis Rodríguez Zapatero of Spain, Leonel Fernández of the Dominican Republic, and Martín Torrijos of Panama) plus the Vatican, invited the MUD to partake in what turned out to be a predictable charade rather than a meaningful negotiation. Maduro’s sole purpose was to gain time since he knew that, according to the Chavista constitution, the government’s removal in a recall referendum was possible only in 2016. If he managed to survive into 2017, Maduro had nothing to fear. And survive he did, with the help of part of the MUD’s leadership.

An interesting research article at the Health Affairs blog last week asserts there is no relationship between high U.S. prescription drug prices and drug companies’ research and development budgets. The point of the article is to debunk the argument that research-based drug companies must earn high profits if they are going to reinvest in R&D. While the data are correct, the article misunderstands the nature of capital markets.

As the authors point out, U.S. prices for patented prescription drugs are significantly higher, in real dollars, than prices in other developed countries. (Most observers claim this is because foreign governments impose price controls. I think it is more attributable to price differentiation due to variation in national income per capita.)

The analysis examines the 15 companies that sell the top 20 drugs (by worldwide sales) and estimates the amount of revenues attributable to U.S. “premium” pricing. It finds that those revenues exceed the firms’ R&D budgets — $166 billion versus $66 billion, in 2015. It also lists the amounts by company. For example, Merck earns about $11 billion from U.S. “premium” pricing, which is 159 percent of its R&D budget.

One of the zanier features of American politics is the Senate’s filibuster rule. Long ago, the Senate, by a simple majority vote, ruled that a supermajority is required to get any business done, with the result that often nothing gets done at all.

On the positive side, however, the threat of a filibuster has given the Senate a reputation for being more deliberate in its actions than the House of Representatives. It has often saved the country from legislation being ramrodded through the way it frequently is in the House.

In 2013, the Democrat-controlled Senate voted, 52 to 48, to waive the supermajority rule for the confirmation of federal judges, though not for the Supreme Court. At that time, Senate Minority Leader Mitch McConnell threatened, “I say to my friends on the other side of the aisle, you’ll regret this. And you may regret it a lot sooner than you think.” (New York Times, 11/22/13)

Now that the Republicans are back in power, it is therefore just a matter of time until they reciprocate and eliminate the filibuster altogether, beginning perhaps with the confirmation of Judge Neil Gorsuch. This so-called “Nuclear Option” will push the Republican agenda through, but regrettably it will also abase the Senate to the same low level as the House.

However, there is a third option between the filibuster and immediately passing unread bills with a simple majority, that allows the Senate to mull over contentious bills and appointments without blocking its business entirely. Under this “Mullibuster” option, any bill or confirmation that failed to pass by a 3/5 margin would be subject to tabling for a period of say 2 weeks, at which time it would come back for a new vote. If at that time the bill was exactly the same, it would require only a simple majority to pass. But if it has been amended in the meantime, the revision would be subject to the same Mullibuster rule.

The two week delay would give Senators, their staffs, and the blogospheric public time to actually read the bill, to scrutinize it for flaws, and to rally support or opposition back home. Perhaps the Senate would make the Mullibuster automatic for all measures that failed to gain 3/5 support, or perhaps it would require the formal request of one or more of the dissenting Senators.

If the Senate does adopt the Mullibuster, the House might even be shamed into adopting a similar rule…

See also my Feb. 1 post, “Term Limits for Supreme Court Justices?”

Update 3/28/17:
In a March 20 post entitled The Filibuster: A Primer on the Cato Institute’s blog Cato at Liberty, Robert A. Levy argues that the filibuster rule should be retained, and even written into the Constitution, “especially for votes on significant expenditures and tax increases — and also for confirmation of federal judges, who have lifetime tenure on the bench. Unless and until we establish judicial term limits, it’s little enough to insist that lifetime appointees be approved by 60 senators.”

Levy, an attorney who is Chairman of the Board of Directors of the Cato Institute, clarifies that while it would be straightforward to change Senate rules by a simple majority at the beginning of a session, current Senate rules allow mid-session rule changes themselves to be filibustered, with a 2/3 threshold for cloture. The true “nuclear option,” invoked by Democrats in 2013, “is a point-of-order, upheld by the presiding officer, declaring that the 67-vote requirement is unconstitutional.”

In an earlier post on this blog, I’ve concurred with Levy that there should be term limits on judicial appointments, but I think this is a separate issue from the filibuster.

In another earlier post on this blog, I’ve argued for an “Improved Balanced Budget Amendment” that would restrain deficits by requiring a supermajority vote in both houses to raise a constitutional limit on the national debt, with an “Anti-Chicken Mechanism” that would require the President to impound whatever expenditures are necessary to stay within that limit. However, I would not require a supermajority vote on individual appropriation bills.

Levy suggests no middle ground between retaining the filibuster as is and abolishing it altogether. He concedes that the latter now appears to be inevitable.