Who’s the Bigger Witch Doctor? Gerald Friedman or Paul Krugman?

VoodooDollConflict has erupted among left-progressive economists over a study touting the alleged benefits of Bernie Sanders’s proposals. Specifically, the Sanders campaign was happily citing UMass at Amherst economist Gerald Friedman’s 53-page analysis (released on January 28) that projected the eccentric candidate would deliver amazing economic performance–especially for the middle class and poor–over the first ten years.

On February 17, former Council of Economic Advisor chairs for Democratic presidents (Laura D’Andrea Tyson, Christina Romer, Austan Goolsbee, and Alan Krueger) published an open letter to Prof. Friedman and the Sanders campaign, scolding them for their unsupportable promises. Here is a flavor of their upbraiding:

We are concerned to see the Sanders campaign citing extreme claims by Gerald Friedman about the effect of Senator Sanders’s economic plan—claims that cannot be supported by the economic evidence. Friedman asserts that your plan will have huge beneficial impacts on growth rates, income and employment that exceed even the most grandiose predictions by Republicans about the impact of their tax cut proposals.

As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes. Making such promises runs against our party’s best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic. These claims undermine the credibility of the progressive economic agenda and make it that much more difficult to challenge the unrealistic claims made by Republican candidates.

Fear and Trembling in Phoenix: A Common Core Cautionary Tale, Part I

36861172_MLArizona is widely hailed as the national leader in school choice. It is also one of a growing number of states turning against Common Core. But you wouldn’t know it from what’s going on inside the Capitol these days.

Proposed legislation affirming parents’ basic rights over their children’s education is being held or amended within an inch of its life in the House and Senate Education Committees—all in spite of an existing explicit statutory Parents’ Bill of Rights affirming their inalienable liberty over their children’s education and upbringing (see here and here).

As more states fight back against federal contamination of classrooms, Arizona offers an important lesson about extinguishing Common Core for good—so it doesn’t keep rising from the dead in one infectious form or another.

About a year ago Arizona Governor Doug Ducey urged a “review and revise” placebo instead of a “repeal and replace” antidote for Common Core. Last fall at the urging of the state’s elected pro-parental choice/anti-Common Core Superintendent of Public Instruction Diane Douglas, a majority of the State Board of Education voted to sever ties with it—but the board left the Common Core-influenced standards and the reviled AzMERIT state assessment in place.

Drug Companies’ Pricing Firewall Is Melting

32838075_MLA recent Kaiser Family Foundation Tracking Poll brings dire news for innovative drug companies: 83 percent of the survey’s respondents favor a policy “allowing the federal government to negotiate drug prices for Medicare beneficiaries.” That includes 93 percent of Democrats and 74 percent of Republicans.

There is no point discussing the rationality of this proposal. If we were to debate the consequences of government-dictated prices on drugs, and I made the case that artificially low prices would dry up capital investment, innovation, and the development of better drugs with fewer side effects, I would have—at best—a 50/50 chance of winning the debate.

If, on the other hand, someone (e.g., Bernie Sanders) proposed the U.S. Department of Transportation should “negotiate” prices of automobiles for every senior, and I made the case that this policy would result in seniors having a very limited choice of sub-standard cars, and would dramatically slow the rate of innovation in new automotive technology, I would surely win the debate immediately.

Despite dramatic headlines about pharmaceutical price increases, they have been in line with price increases for other health goods and services. Medicare payments to doctors and hospitals have been negotiated by government for over half a century, without containing costs.

Keep the Immigrants, Dump Trump’s Immigration Policies

trump_565x475Regardless of whether you find him remarkable or repulsive, there is no denying that the political machine known as Donald Trump has gone further than pretty much anyone anticipated. From winning key early races, to garnering a massive number of general election voters, there is the real possibility that Trump could be the GOP presidential nominee.

While supporters offer many reasons for backing Trump, many cite his stance on immigration reform as a key issue. That is, Trump proposes to make immigration policies much more strict. The following is directly from his campaign website.

When politicians talk about “immigration reform” they mean: amnesty, cheap labor and open borders. The Schumer-Rubio immigration bill was nothing more than a giveaway to the corporate patrons who run both parties.

From here, the website provides a laundry list of proposed reforms to tighten immigration. Trump suggests “making” Mexico pay for a border wall, “requiring” businesses to hire American workers first, increasing the prevailing wage for H-1B visas (in an effort to price immigrant labor out of the market), tripling the number of ICE officers, and changing the law so illegal immigrants are automatically deported.

Any economist (or anyone vaguely familiar with how a budget or politics works) should look askance at any number of these policies. It’s doubtful that many of these policies could ever be successfully implemented.

An Interstate Compact for Health Insurance

6761569_MLIn a recent Forbes column, I noted the very positive news that House Speaker Paul Ryan has appointed six task forces, comprised of congressional committee chairmen, to develop a governing agenda. One of those tax forces has a mandate to develop (finally) the Republican alternative to Obamacare.

Two of the members, Dr. Tom Price (Chairman of the Budget Committee) and Mr. Fred Upton (Chairman of the Energy & Commerce Committee), have already sponsored health reform bills that would replace Obamacare, and contain tax credits for individual health insurance. My column concludes that Dr. Price’s version is superior, both in administrative simplicity and economic effect.

However, Mr. Upton’s bill (which is sponsored in the Senate by Sen. Orrin Hatch and Sen. Richard Burr) includes a good idea that is absent from Dr. Price’s bill: an interstate compact for health insurance.

An interstate compact is (effectively) a treaty between the states, which is approved by Congress. For health insurance, it would solve a dilemma for Republicans who want a national market for health insurance, but without federal regulation of health insurance. The traditional proposal for creating a national market is federal law compelling states to allow “selling health insurance across state lines.”

Apple vs. the FBI: Three Reasons to Side with Apple

46768344_MLWhen the story about the FBI wanting Apple to provide it with software to unlock the phone of the San Bernardino killers came out, I considered blogging about it but decided against it.  The case was too clearly in Apple’s favor, I thought.  Nobody would side with the government.  But now I see that popular opinion leans toward the government.  Perhaps I should say a few words in support of Apple.

One argument is that the FBI isn’t just asking Apple to turn over information it has.  This is nothing like a search warrant.  They want Apple to write new software to unlock the phone.  They want to force Apple to help them search for information that neither party has.  The government has no right to force anybody to provide it services against their will.

Second, does the FBI really want to argue that governments have the right to force companies to write software code that will help those governments obtain people’s personal information?  Today it is the US government, but what ground could Apple stand on if tomorrow it was the Chinese government that said they wanted Apple to help them the same way?  For that matter, how could the US government object if the Chinese government wanted to do the same thing?

Third, I’ve seen the argument that Apple is taking the stand it is on business grounds, to protect the value of its brand name.  Let’s say this is completely true.  Should the government be in a position to force a company to engage in activities that erode the value of its brand?

This third argument is related to the argument that creating a back door into the phone would be bad for most people because it would compromise their security, but it’s not the same argument.  Whether or not a back door into the phone would be a problem, it’s wrong for the government to force Apple to produce software that will damage its brand name.

I’m surprised that when asked, a majority of Americans side with the FBI on this.

The Hot-Air Barrier: A Major Reason for the Infeasibility of Representative Government

Between the would-be, public office-holder on the one hand and the citizen in general and voter in particular on the other, lies a huge barrier that precludes the establishment of any rational connection. Think of genuine “representative government” on anything other than a very small scale as a practical impossibility. Many reasons explain the existence of this barrier, including the logical impossibility of an agent’s accurately representing each member of a group of principals who do not agree among themselves, but certainly one of the most fundamental factors is that the office seekers often lie to the public, or at least obfuscate and hedge about their statements in a way that makes them de facto lies.

Thus, Mr. Blowhard promises that if you elect him, he will do X. After he is elected, however, he does not do X, but offers an endless litany of excuses for his misfeasance or malfeasance in office. In any case, the essential reality is that no one can hold the successful office seeker to account for his infidelity in carrying out his promises. Everyone is stuck with him until the next election, in anticipation of which he will spew out another ridiculous series of lies and worthless promises.

The office-seekers’ lies cover pretty much the whole ground of their speech. Of course, they are not forthcoming about past defalcations, de jure and de facto bribe takings, and personal peccadilloes. They almost invariably misrepresent their true reasons for seeking office, putting the shiniest possible public-service gloss on their raw ambition and lust for power. And they rarely if ever reveal truthfully the actual coterie to which they will be ultimately beholden, normally the largest and most influential supporters in their electoral campaign. Instead, they ludicrously declare that they will invariably “serve all the people.”

Increasing Medicaid Dependency Does Not Reduce “Uncompensated” Care

12943214_MRobert Lazsewski is a leading health insurance expert whom I often cite (see, for example, here and here). Unfortunately, in a recent article praising Ohio governor John Kasich he has made a serious error. Gov. Kasich is one of only three Republican governors who took federal Obamacare money to expand Medicaid dependency. According to Mr. Laszewski:

On Medicaid, the Kasich administration helped 650,000 people whose uncovered health-care costs were being shifted onto and burdening employers and individuals struggling to pay their already-high health insurance costs. The administration enrolled them into a new Ohio Medicaid system that made 38 different reforms over five years. In 2015 alone, it saved Ohio taxpayers $1.9 billion compared with the original state-budget target. It held the program’s per capita cost growth below 3 percent while cutting the state’s uninsured rate in half.

The idea that people who cannot pay their hospitals bills are the major problem in driving American health costs is evidence-free. According to a September 2014 report promoting Obamacare’s benefits, the Affordable Care Act would reduce so-called “uncompensated care” by $5.7 billion in 2014. Health spending in 2014 was $3 trillion, so $5.7 billion is less than one-fifth of one percent of national health spending!

Obama’s Supreme Court Appointment

Republicans have already said they will try to block any attempt by President Obama to have his nominee replace Antonin Scalia on the Supreme Court.  The president has less than a year left in office, so blocking his nominee may be easy.  But the Republicans may be playing right into the president’s hands.  Who would Obama most like to see take that Supreme Court seat?  He’d like to occupy that seat himself.

He could pull it off, but it would be tricky.  First, he has to get the timing right.  He should wait long enough so there will not be enough time for a second nomination, but he should not wait until Fall, to prevent the Republicans from waiting until after the election for hearings.  If the Republicans won the presidential election, there is no way they would confirm an Obama nominee.  But if the Democrats won they might, which would prevent the next president from nominating Obama.  And, he needs to nominate the right candidate, but that should be easy.

The president is already consulting with Republicans and Democrats in Congress to find out who might be acceptable.  The easy part is nominating an unacceptable candidate.  Of course, the Republican Senate will not approve the nominee, opening the door for the next president to nominate Obama.

Then, of course, Obama needs the Democrat to win the presidential election.  Sanders would be more likely to nominate Obama, but Clinton might also come through for him if she is elected.  If the Democrats have a big enough win that the Senate goes Democratic,  the new president can nominate Obama to the Supreme Court, to be confirmed by the Democratic Congress.

Why should Obama try to fight it out with the Republicans to get a nominee with the clock ticking toward the end of his presidency, when an alternative strategy increases his chances that he will be appointed to be the next Supreme Court justice?

The “Bern” Unit

According to the American Burn Association, approximately 486,000 burn injuries are treated every year.

Chances are you’ve experienced a burn or two in your life. From touching a pan that was too hot, to forgetting to make sure the electricity was shut off before some DIY house work, to being particularly inept with a curling iron (voice of experience there), anyone who has ever had a burn can tell you they aren’t fun. First degree burns, the least severe type of burn, are incredibly painful and can take days to heal. Second degree burns cause blisters, take several weeks to heal, and may scar. Third degree burns destroy every layer of skin.

  • Catalyst
  • Beyond Homeless
  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org