We don’t know for certain that controversial DC Schools Chancellor Michelle Rhee will depart DC when her boss’s term ends — and it will end soon — but it seems very likely. Assuming she does leave, there is a big education lesson to be learned from Adrian Fenty’s re-election loss: Relying on crusading politicians to successfully and permanently reform a government schooling monopoly is a recipe for crushed hopes. Politics is simply too volatile — and enacting tough reforms too politically risky — for even good reforms to be sustained. It’s just another reason that the key to truly sustainable reform is school choice, in which parents control education funds, educators have to compete and perform for business, and children are no longer buffeted back and forth by the ever-changing winds of politics.
Cato at Liberty
Cato at Liberty
Email Signup
Sign up to have blog posts delivered straight to your inbox!
Topics
Government and Politics
Attacking Rand Paul
Kentucky attorney general Jack Conway went on TV Tuesday with an ad attacking Rand Paul for … endorsing freedom. The ad shows a clip from a 2008 panel show in which, according to the Louisville Courier-Journal, there was a “wide-ranging discussion that involved such things as the wisdom of motorcycle helmet laws, the lottery and expanding gambling. In response to a question about whether he favors more gambling, Paul said he opposes ‘legislating morality’ and then added: ‘I’m for having … laws against things that are violent crimes, but things that are non-violent shouldn’t be against the law.’ ”
The ad features that last sentence and then cuts rapidly to uniformed sheriffs criticizing Paul’s position. But note that they never really criticize what Paul actually said. His comment came in the context of a discussion of motorcyle helmet laws, gambling, and the state lottery. The sheriffs suggest that Paul wants to legalize selling drugs to a minor, mortgage fraud, burglary, theft, and promoting prostitution — and they say that we should “treat criminals like criminals.” But of course, of the activities mentioned, “promoting prostitution” is the only one that a libertarian would be likely to legalize. (Paul has never said he would do that.) Burglary, theft, fraud, and selling drugs to children are clearly crimes, and it’s dishonest to suggest that Rand Paul would change those laws. Conway may be a slick Louisville lawyer, but he may find that Kentucky voters won’t find such claims credible.
Paul might have been been wiser to use a term like “victimless crimes” or “actions that don’t violate anyone’s rights” in discussing “things that … shouldn’t be against the law.” Obviously burglary and theft violate rights and have victims, while gambling and riding a motorcycle without a helmet don’t. And libertarian legal theorists might question the wisdom of putting nonviolent offenders in jail; it would often make more sense to demand restitution and fines for economic crimes, for instance, rather than putting the offenders in expensive and overcrowded prisons.
But Rand Paul was making sense in 2008 when he said that a free society shouldn’t punish people who aren’t harming other people. And the attorney general of the Commonwealth of Kentucky should be embarrassed to broadcast such a dishonest twisting of Paul’s statements. If Conway thinks people should be imprisoned for gambling and riding a motorcycle without a helmet — the issues Paul was discussing — let him put up an ad saying so. And then see whose side the people are on in an honest debate.
It’s actually striking that in a conservative state, Conway did not mention any of the normal “victimless crimes” — not gambling or helmetless riding, not pot smoking, not even pornography. He apparently thought he could only win this issue by claiming that Rand Paul held the ridiculous position that burglary, theft, and fraud shouldn’t be illegal. Let’s give two cheers for the social progress that his decision reveals.
ObamaCare: a Downward Spiral of Rising Costs and Deteriorating Quality
Here’s my contribution to a “one-minute debate” on ObamaCare in the Christian Science Monitor:
The new health-care law’s mandates are already causing health insurance premiums to rise 3 to 9 percent more than they otherwise would. Its price controls are pushing insurers to abandon the market for child-only coverage and will soon begin rationing care to Medicare patients, partly by driving nearly 1 in 6 hospitals and other providers out of the program.
Starting in 2014, when the full law takes effect, things will get really ugly. ObamaCare’s “individual mandate” will drive premiums even higher – assuming the courts have not declared it unconstitutional, as they should. Because the penalty for violating the mandate is a fraction of those premiums, healthy people will wait until they are sick to buy coverage, driving premiums higher still. This is already happening in Massachusetts, which enacted a nearly identical law in 2006. ObamaCare’s price controls will force insurers to cover sick patients at artificially low premiums, guaranteeing that insurers will avoid, mistreat, and dump the sick, because that’s what the price controls reward. ObamaCare’s private health-insurance subsidies will expose low-wage workers to implicit tax rates higher than 100 percent, potentially trapping millions in poverty.
With real reforms like Medicare vouchers and large health savings accounts, and letting consumers purchase health insurance across state lines, a free market would reduce costs and improve quality through innovations such as integrated health systems, nurse-practitioner-staffed primary care clinics, telemedicine, and insurance that offers even sick patients a total satisfaction guarantee.
But until Congress or the courts discard ObamaCare’s mandates, price controls, and new entitlement spending, there is literally nothing that can arrest this downward spiral of rising costs and deteriorating quality.
The above link will also take you to a counter-point by Kavita Patel of the New America Foundation.
Related Tags
Personal Accounts for Social Security an Election Killer — Not Quite
You can tell its election season because Democrats are once again attacking Republican’s for daring to propose reforms to Social Security. These attacks come despite the fact that Social Security is already running a temporary deficit, and that deficit will turn permanent in just five years. Overall, the amount the system has promised beyond what it can actually pay now totals $18.7 trillion.
But the latest Pew Poll suggests that attacking Republicans for wanting to “privatize” Social Security might not be such an effective tactic after all. According to the poll, Americans support proposals to “allow workers younger than age 55 to invest a portion of their Social Security taxes in personal retirement accounts that would rise and fall with the markets” by 58 – 28 percent. Younger voters supported personal accounts my an astounding 70–14 percent margin, but every age group except seniors was supportive. Seniors split evenly. Independents, widely believed to be the key to the upcoming election, supported personal accounts by 61–27, and even Democrats favored the idea by 50–36.
Maybe this will finally give the Republicans some courage on the issue.
Related Tags
The ‘Tea Party’ Smear
One sign of the tea party movement’s success is that the term “tea party” is becoming an all-purpose smear term for any more-or-less right-wing person or activity that the writer doesn’t like. In fact, I think “Tea Party” is replacing “neocon” as an all-purpose word for “the people I hate.”
Take a look at this article, teased on the cover of Newsweek as “France’s Tea Party” and online as “What a Tea Party Looks Like in Europe.” When I saw the cover on the newsstand, I thought, “A tax revolt in France? Cool! And about time!” But what is the article actually about? It’s about the National Front party of Jean-Marie Le Pen, who
for decades has played on the inchoate fears, xenophobia, knee-jerk racism, and ill-disguised anti-Semitism of many of his supporters.
Is that Newsweek’s view of the “tea party”? The article went on to explain that at 82 Le Pen is yielding party leadership to his daughter, who is “a passionate advocate of its core message: strong French nationalism, relentless Euro-skepticism, and a lot of hard-nosed talk about fighting crime and immigration.” And lest that you think that such culturally conservative and unsavory attitudes simply go hand in hand with a belief in lower taxes and smaller government, the authors point out that
she’s also a big believer in the state’s ability and obligation to help its people. “We feel the state should have the means to intervene,” she says. “We are very attached to public services à la française as a way to limit the inequalities among regions and among the French,” including “access for all to the same level of health care.”
That combination of nativism and welfare statism seems very different from the mission of the tea party movement. The Tea Party Patriots website, the closest thing to a central focus for tea party activists, lists their values as “Fiscal Responsibility, Limited Government, Free Market.” In fact, I note that writers Tracy McNicoll, Christopher Dickey, and Barbie Nadeau never use the term “tea party” in the body of the article. So maybe we should only blame Newsweek’s headline writers and front-page editor.
In another example, the Guardian newspaper of London wrote sensationally about “Lobbyists behind the rightwing Tea Party group in the US” arriving in London for “an event organised by the UK’s controversial Taxpayers’ Alliance.” (Why is it controversial? Apparently because it agitates for lower taxes.) These groups, it is said, have “close links to the billionaire brothers David and Charles Koch” and “have lobbied … to maintain tax breaks for the rich” — and for everyone else, a point that author Phillip Inman inadvertently omitted. And, contrary to the article, Cato didn’t sponsor a taxpayers’ conference in London; we cosponsored the venerable European Resource Bank, a networking conference for free-market think tanks across Europe.
Inman writes, “The Cato Institute, which promotes its views on Fox News and other rightwing media, is one of the Tea Party’s main backers.” That’s sort of true, except for the point that our scholars have appeared more often on CNBC than on Fox. And that we don’t back any political or grass-roots movements, though many of our scholars have written generous — and sometimes more cautious — articles about the tea party movement.
My colleague Aaron Powell suggests that that many left-liberals, including many journalists, have a Manichean worldview that posits a fundamental conflict between corporations and government. And so if you dislike corporations, you perforce stand on the side of government. And when it’s energy corporations, like the Kochs, then anything they touch becomes The Enemy. And “Tea Party” is now, to some people, the generic name for The Enemy.
For more sensible views of the tea party movement from journalists, see this John Judis article that I praised before and a new analysis from Jonathan Rauch in National Journal.
Related Tags
What If Cuccinelli Had Sent that Letter to Planned Parenthood?
The following analogy may help to explain why everyone should be troubled by HHS Secretary Kathleen Sebelius’ efforts to intimidate insurance companies who say unflattering things about ObamaCare.
Last month, Virginia Attorney General Ken Cuccinelli (R), issued an opinion that state regulatory boards already have the authority to impose additional regulations on abortion clinics. Critics pounced, claiming that the measure could shut down 17 of the state’s 21 clinics. What if Cuccinelli responded with a letter threatening to investigate clinics that “misinform” the public about the costs of such regulation?
Related Tags
Keynes Was Wrong on Stimulus, but the Keynesians Are Wrong on Just about Everything
Dana Milbank of the Washington Post wrote this weekend that critics of Keynesianism are somewhat akin to those who believe the earth is flat. He specifically cites the presumably malignant influence of the Cato Institute.
Keynes was right, and in this case it’s probably for the better: Keynes didn’t live to see the Republicans of 2010 portray him as some sort of Marxist revolutionary. …These men get their economic firepower from conservative think tanks such as the Cato Institute… What’s with the hate for Maynard? Perhaps these Republicans don’t realize that some of their tax-cut proposals are as “Keynesian” as Obama’s program. There’s a fierce dispute about how best to respond to the economic crisis — Tax cuts? Deficit spending? Monetary intervention? — but the argument is largely premised on the Keynesian view that government should somehow boost demand in a recession. …With so much of Keynesian theory universally embraced, Republican denunciation of him has a flat-earth feel to it. …There is an alternative to such “Keynesian experiments,” however. The government could do nothing, and let the human misery continue. By rejecting the “Keynesian playbook,” this is what Republicans are really proposing.
Milbank makes some good points, particularly when noting the hypocrisy of Republicans. Bush’s 2001 tax cuts were largely Keynesian in their design, which is one of the reasons why the economy was sluggish until the supply-side tax cuts were implemented in 2003. Bush pushed through another Keynesian package in 2008, and many GOPers on Capitol Hill often erroneously use Keynesian logic even when talking about good policies such as lower marginal tax rates.
But the thrust of Milbank’s column is wrong. He is wrong in claiming that Keynesian economics works, and he is wrong is claming that it is the only option. Regarding the first point, there is no successful example of Keynesian economics. It didn’t work for Hoover and Roosevelt in the 1930s. It didn’t work for Japan in the 1990s. It didn’t work for Bush in 2001 or 2008, and it didn’t work for Obama. The reason, as explained in this video, is that Keynesian economics seeks to transform saving into consumption. But a recession or depression exists when national income is falling. Shifting how some of that income is used does not solve the problem.
This is why free market policies are the best response to an economic downturn. Lower marginal tax rates. Reductions in the burden of government spending. Eliminating needless regulations and red tape. Getting rid of trade barriers. These are the policies that work when the economy is weak. But they’re also desirable policies when the economy is strong. In other words, there is no magic formula for dealing with a downturn. But there are policies that improve the economy’s performance, regardless of short-term economic conditions. Equally important, supporters of economic liberalization also point out that misguided government policies (especially bad monetary policy by the Federal Reserve) almost always are responsible for downturns. And wouldn’t it be better to adopt reforms that prevent downturns rather than engage in futile stimulus schemes once downturns begin?
None of this means that Keynes was a bad economist. Indeed, it’s very important to draw a distinction between Keynes, who was wrong on a couple of things, and today’s Keynesians, who are wrong about almost everything. Keynes, for instance, was an early proponent of the Laffer Curve, writing that, “Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget.”
Keynes also seemed to understand the importance of limiting the size of government. He wrote that, “25 percent taxation is about the limit of what is easily borne.” It’s not clear whether he was referring to marginal tax rates or the tax burden as a share of economic output, but in either case it obviously implies an upper limit to the size of government (especially since he did not believe in permanent deficits).
If modern Keynesians had the same insights, government policy today would not be nearly as destructive.