Cato Daily Dispatch for December 12, 2005
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Hong Kong's Example: Free and Open TradeIraq's Elections: 'Last Best Hope' for Withdrawal on Our Terms
Setting Serious Goals for Medicaid
Hong Kong's Example: Free and Open Trade
"Several thousand protesters from around the world took to the streets peacefully here this afternoon as trade ministers began flying in for negotiations that appear increasingly likely to focus on commerce with the world's poorest nations," The New York Times reports.
"Pascal Lamy, the director general of the World Trade Organization, and John Tsang, the chairman of the W.T.O. ministerial conference, who is also Hong Kong's trade minister, have both called with increasing emphasis in the last several days for a detailed agreement eliminating all barriers to exports from the world's 32 poorest countries."
Daniel Griswold, director of Cato's Center for Trade Policy Studies, is attending the World Trade Organization's Sixth Ministerial Conference, and comments from Hong Kong: "WTO members could not have picked a more fitting place for their latest biannual ministerial conference. ... This gleaming city built on trade disproves virtually everything claimed by the thousands of anti-trade, anti-WTO protestors descending on the city this week.
"A common refrain leading up to the conference has been that it is unfair to expect poor countries to liberalize their markets as long as rich countries maintain trade barriers against farm imports. That has not been the Hong Kong way. In an official brochure distributed to those attending the conference, Hong Kong's government states, 'Free and open trade is the lifeblood of Hong Kong. It is crucial to our continued economic growth and to the well-being of our people.' Note the brochure did not say free and 'fair' trade. Hong Kong's policy makers did not whine about the high barriers in other countries, but instead chose to virtually eliminate its own barriers for the sake of its own prosperity."
Iraq's Elections: 'Last Best Hope' for Withdrawal on Our Terms
"Patients, soldiers and prisoners began voting Monday in parliamentary elections, a few days ahead of the general population, while insurgent violence killed at least 12 people and wounded more than two dozen, police said," the Associated Press reports.
In "U.S. Should Call It a Wrap after Iraq Elections," Chris Preble, director of foreign policy studies at the Cato Institute, writes: "The elections represent the last best hope, a narrow -- and closing -- window of opportunity, to leave Iraq on our terms. The United States got rid of Saddam Hussein's government, the Iraqis drafted and ratified a constitution, and in December they will elect a parliament under that constitution. The next political benchmark may not come along for years; as currently written, the Iraqi constitution does not require the government to hold another parliamentary election until near the end of 2009.
"Now is the time to chart a new course. The first step should be a firm pledge to begin the withdrawal of American troops soon after the December 2005 elections. The Bush administration should further commit to have all U.S. troops out of Iraq by the end of 2007 at the latest. By taking these steps to end the U.S. military presence in Iraq, we will reaffirm that the elections are the culmination of a political process that Americans started, but that Iraqis must finish."
Setting Serious Goals for Medicaid
"Members of Congress will soon plunge into battle over the future of Medicaid as House and Senate negotiators try to resolve huge differences in legislation that would allow states to cut benefits and increase charges for millions of low-income people, including many children," The New York Times reports.
In "Medicaid's Unseen Costs," Michael F. Cannon, director of health policy studies at the Cato Institute, argues that Congress should reform Medicaid the same way it reformed aid to families with dependent children in 1996. Cannon shows how Medicaid has grown from a health care program for the truly needy to one that covers many who could obtain coverage elsewhere. Medicaid also encourages dependence and discourages work and saving: "Because eligibility depends on one's income and assets...the prospect of losing Medicaid benefits can deter individuals from entering the workforce or increase their earning." Likewise, Cannon continues, "individuals who are not poor may allow themselves to fall into poverty to obtain medical subsidies."
Healthy Competition, a new book published by the Cato Institute, provides a blueprint for re-invigorating America's troubled health care sector. Michael F. Cannon and Michael D. Tanner, Cato's director of health and welfare studies, show how encouraging market competition can lower the cost of public health programs and improve government regulation of health care. Cannon and Tanner recommend spurring greater competition in the private sector by expanding health savings accounts (HSAs). The authors propose creating "large HSAs" that would give workers control over all their health benefits, rather than just a portion as HSAs now do. At the same time, states should encourage private competition by returning their Medicaid programs to their original mission of providing medical care to the truly needy.
Kristen Kestner, editor, kkestner@cato.org