Two articles in the Washington Post sparked these two poor, unsuccessful letters to the editor. First this:

I’m no Republican, but “‘Innovation advisers’ chosen for ideas to improve health care, cut costs” [Jan. 21] gives short shrift to those who oppose the new health care law’s Center for Medicare and Medicaid Innovation when it reports, “Some Republicans have questioned the value of investing in experimentation to produce results at a time of limited resources.”

If some critic of the law actually said, “Resource limitations prevent us from investing in innovations that stretch resources further,” please do print it. I could use the laugh. But that’s not why critics oppose the Center.

The argument against the health care law’s efforts to promote innovation is that they won’t work. The Congressional Budget Office recently reported that out of dozens of supposed Medicare innovations, only one met its goal of saving taxpayers money. That pilot program ended 16 years ago. Medicare has yet to adopt it program-wide.

This is an important debate. Readers deserve to hear both sides, not caricatures.

And then this:

Recent coverage of the new health care overhaul [“‘Innovation advisers’ chosen for ideas to improve health care, cut costs,” Jan. 21; “Center for Medicare and Medicaid Innovation aims to cut health-care costs,” Jan. 26] let defenders make outlandish claims about government efficiency, but gave short shrift to critics.

Government is not more innovative than private health insurance. It was private health plans that developed important innovations like prepayment, bundled payments, pay-for-performance, and penalties for medical errors. Government adoption typically lags private insurers by decades. In the rare instance where Medicare successfully tests an innovation (read: bundled payments for heart bypass surgery), it goes nowhere. If Thomas Edison had to submit his innovations to Medicare, you would be reading this by candlelight.

We don’t need more pilot programs to tell us that Medicare blocks innovation. What we need is a little skepticism when presented with the latest Bureau of Government Efficiency.

In a blog post I wrote about two years ago, I said “Usually when I hear that a policy proposal has bipartisan support, I instinctively check for my wallet.” At that time I was lauding a bipartisan proposal to shut the USDA’s market access program (although it seems that idea didn’t get much traction) under the heading “When Bipartisanship Is Good News.”

I should have trusted my instincts; i.e., that “bipartisanship” is code for either:

(a) “we’ve just renamed a post office”;

(b) “cough up, because we’ve agreed to spend more of your money”;

(c) “brace yourself, because we’ve agreed to violate more of your liberties”; or

(d) both b and c (see, e.g., the Department of Homeland Security).

Last night we were treated to an example of (b), when the U.S. Senate in a 78 to 20 vote elected to follow the House’s lead (330 to 93, in that case) to re-authorize, with a bigger budget, the Export-Import Bank of the United States until 2014. (Please do click on the previous two links to the roll-calls so you can see how your friendly Representative or Senator voted on this taxpayer-funded slush fund for the biggest corporations in America, by the way). The bill will now go to the President for his signature.

Allow me a few comments. First, this is incredibly disappointing. One would think that this is an excellent time to shut down the Ex-Im Bank, what with bailout-fatigue, trillion dollar deficits and all. But this bill “had the backing of business and labor groups,” as this Washington Post article makes clear, and despite all of the rhetoric from both sides, it seems that Congress and the President loves them some special interest group pleadings.

Second, the fairly easily debunked talking points of Ex-Im supporters obviously resonated. Ex-Im Bank president Fred Hochburg (who one can hardly expect to do anything other than protect his job) showed an excellent ear for PR when he said “there are no Democratic or Republican exports. There are exports that create jobs. Good, middle-class jobs.” Exports! Jobs! Middle class! What’s not to love? And in the interest of non-partisanship, here’s a quote from Senator Lindsey Graham (R‑SC) in response to the arguments made by what the WaPo article called “tea party conservatives”: 

“I live in the real world and the real world is that these financing mechanisms have to be available to American manufacturers to have a share of the overseas market”

Actually, Senator, I’m glad you raised “the real world”. Because in “the real world” stuff costs money, money that isn’t manna from heaven but taken from other people. And in the real world, regulations or other market interventions distort the economy, reallocating resources from their most productive uses as identified by volunteers putting their own money at risk and towards uses directed by political entities, responding to lobbying and other features of public choice. In the real world, there is nothing special about manufacturing per se, with lots of middle class (or “upper class” jobs, if the class system is something that matters to you) created in the service sector. Also in the real world? Private finance. Lots of it, as you would know if you spoke with any of the folks producing the 98 percent of U.S. exports that don’t rely on Ex-Im.

Third, and this is somewhat parenthetical, not one — NOT ONE — Democrat in either chamber voted against corporate welfare. Interestingly, according to the roll call for the 2002 re-authorization of the Ex-Im Bank, 26 democrats voted against re-authorization 10 years ago. So there was some opposition back when President Bush was in charge, but now that President Obama (as opposed to Candidate “The Ex-Im Bank is little more than corporate Welfare” Obama) is supportive, apparently taxpayer guarantees for big business are ok. The following Democratic members switched their vote from “Nay” in 2002 to “Yea” (or should that be “Yay!”?) in 2012: Andrews, Baldwin, Conyers, deFazio, Jackson (IL), Kaptur, Matheson, Nadler, Owens, Pallone, Peterson (MN), Stark, and Waters (with Kucinich not voting in 2012, but voted “Nay” in 2002). I’d be curious to hear about what caused the change of heart.

Yesterday, countless newspapers published a really disappointing story by Noam Levey that the Los Angeles Times ran under this title:

Global push to guarantee health coverage leaves U.S. behind; China, Mexico and other countries far less affluent are working to provide medical insurance for all citizens. It’s viewed as an economic investment.

The article is little more than a puff piece for the hotly contested idea of universal coverage. It gives zero space to the competing strain of thought that the less the government does for the poor, the sick, and the vulnerable, the better off they will be.

It quotes “Dr. Julio Frenk, a former health minister in Mexico and dean of the Harvard School of Public Health” as saying, “As countries advance, they are realizing that creating universal healthcare systems is a necessity for long-term economic development.” A necessity? Gosh. It’s a wonder the United States ever became the world’s largest economy.

It speaks of such government guarantees as being popular, when what it really means to say is that people are dependent on the government for their health care and frightened to death that someone might take it away.

It laments the fact that the United States is an “outlier” because it fails to guarantee access to health care for all citizens, which “stands in stark contrast to America’s historic leadership in education…Long before most European countries, the United States ensured access to public schooling.” Yet it makes no mention of how U.S. students fare poorly in comparison to those in other advanced countries.

It devotes no time to the costs of such guarantees, other than to say that they are sometimes “more than twice what was expected.” But don’t worry, those costs are borne by the government. It does not say where governments get all that money. I guess we’ll never know.

Speaking of taxes, it makes no mention of how taxes suppress economic development. Evidently, unlike other taxes, those that support government-run health care systems do not incur the deadweight loss of taxation.

But the article was at its most ridiculous when it suggested that the health care sectors in poor countries like Rwanda and Ghana might possibly be ahead of the United States in any way whatsoever. As I have written about Rwanda:

The United States generates many of the HIV treatments currently fighting Rwanda’s AIDS epidemic, as well as other medical innovations saving lives there and around the world. More than any other nation, we create the wealth that purchases those and other treatments for Rwandans and other impoverished peoples. The United States is probably closer to providing universal access to medical care for its citizens — and, indeed, the whole world — than Rwanda. Rwanda’s “universal” system leaves 8 percent of its population uninsured. Though official estimates put the U.S. uninsured rate at 15.4 percent, the actual percentage is lower; and again, uninsured Americans typically have better access to care than insured Rwandans. The real paradox is here that Rwandan elites think the United States is doing something wrong.

Unfortunately, it’s not just the Rwandan elites. For my thoughts on how sensible people can make such insensible comparisons between the United States and other nations, read the rest of my post on Rwanda.

Richard Thaler writes in the New York Times:

Justice Scalia is arguing that if the court lets Congress create a mandate to buy health insurance, nothing could stop Congress from passing laws requiring everyone to buy broccoli and to join a gym…Can anyone imagine Congress passing a broccoli mandate law, much less the court allowing it to take effect?

Yes annnnd…yes. Next question.

Surely, the justices have the conceptual resources to draw a distinction between the health care market and the market for broccoli. And even if they don’t, then all the briefs, the zillions of blog posts and a generation’s worth of economic literature can help them.

If drawing a constitutionally meaningful distinction between the markets for health insurance and broccoli is child’s play for Thaler, he should school all the brief- and blog-post-writers who so far have failed. That would have been a more productive use of his thousand words than his build-up to this thesis:

If you are opposed to a policy, state your case based on the merits — not on the imagined risk of what else might happen down the road. The path of that road is so unpredictable that it may even produce a U‑turn.

Good grief. Slippery-slope arguments are about principles. As in, “If you concede this principle because you don’t mind the result here, you will no longer have it to protect you against that bad result there.” Thaler’s thesis would lead, for example, to all manner of civil-liberties violations by the state because there simply isn’t enough political support to protect all the civil liberties of various minorities. But Thaler doesn’t want us to think about things like consequences or the future.

The potential for U‑turns makes no more sense as an argument against invoking slippery slopes principles, because principled arguments can help generate the U‑turn that opponents of, say, ObamaCare want to see.

I take silly arguments like this to be evidence that ObamaCare supporters are in complete panic mode.

Yesterday I asked: If JPMorgan Chase’s loss of $2 billion shows the need for more bank regulation, what should the federal government’s $1.3 trillion deficit tell us? And Michael Cannon pointed out that in the private sector, people who make big mistakes tend to lose their jobs, unlike the public sector.

Today another theme is being heard, at the Wall Street Journal, on NPR, and many more places including even here at Cato@Liberty: banks like JPMorgan, which has annual revenue of $100 billion, are just “too big to manage.”

And again I have to wonder: if large banks are too big to manage, what should we think about the federal government? The federal government is the largest landowner, the largest insurer, the largest employer, the largest banker in the country. It operates everything from a judiciary to the most complex armed force in history to numerous health insurance programs to a retirement system to a highway system to a peanut subsidy program.

If JPMorgan is too big to manage, can we possibly expect competent management of such a massive operation that doesn’t even face the feedback of profit and loss?

While perhaps more identified with eating than drinking, New Jersey Governor Chris Christie — who headlined Cato’s recent Milton Friedman Prize Dinner — signed a law in January that allowed out-of-state winemakers to sell directly to in-state consumers and retailers. This wasn’t a spontaneous bit of New Year’s bonhomie — the U.S. Court of Appeals for the Third Circuit had ruled in Freeman v. Corzine that the previous rules benefiting in-state wineries was unconstitutional (that pesky Commerce Clause again) — but still it was a positive sign: even Wine Spectator took note.

More importantly, the district judge in charge of the nine-year lawsuit challenging that earlier law recently approved the consent decree whereby New Jersey’s new law remedied the claims brought by the out-of-state wineries. The agreement creates an out-of-state plenary winery license (good luck saying that after having consumed too much of the the vintage) under which “foreign” wine can compete on an equal playing field with good ol’ New Jersey stock. Specifically, the new law grants this license to out-of-state applicants, including those who sell their wares over the internet, who do not produce more than 250,000 gallons of wine per year and are duly licensed in another state.

The upshot is that the new law takes effect as of this month.

This all still seems like a bit too much regulation to me, but at least everyone is now subject to the same rules. I may have to take advantage of this newfound freedom when I travel up to the Garden State for my college reunion in a few weeks.

For my previous writings on booze and the Commerce Clause, read this and listen to this.

When, late last month, Great Britain slipped back into recession, New York Times’ Paul Krugman saw it as a vindication of his neo-Keynesian policies. According to Krugman, Britain failed to return to growth, because David Cameron’s government stepped on the fiscal break instead of infusing the British economy with more borrowed funds. My colleagues Juan Carlos Hidalgo from Cato and Veronique De Rugy from the Mercatus Center have already pointed out that austerity in Europe is something of a chimera. Spending cuts have been small, while tax increases have been large (a bad combination, in my view). Not to beat a dead horse, but here is a take on the British situation from, so to speak, the horse’s mouth:

Tullett Prebon, a bond trader, said that “public expenditures have hardly been reduced at all” and that claims of a “big cut in public spending is bare-faced deception”.

Figures highlighted by the firm show that public spending actually rose during 2010-11 and fell by just 1.5 percent last year.

Government spending is more than £22 billion higher than it was in 2008 when the financial crisis erupted.

The majority of extra money required by ministers to fill the black hole in the finances caused by the recession is being raised from extra taxes rather than cuts in Government spending.

Dr. Tim Morgan, the global head of research at Tullett Prebon, said: “It’s high time that this mendacity was exposed for what it is. Government has done very little about its spending, has appropriated three-quarters of all gains in economic output for its own use, has carried on piling up debt – and has tried to pass all this off as ‘responsible austerity’.

“The motivation for government spin is obvious enough. On the one hand, rises in market interest rates could be a disaster, given the extent to which British households are leveraged. On the other, implementing the real cuts required to back up a genuine austerity package have proved politically unpalatable.”

Dr. Morgan warned that it seemed “improbable” that the bond markets would “continue to fall for this spin-job” and would “sooner rather than later” call the Government to account.