The Pittsburgh Tribune-Review quotes Republican National Committee chairman Michael Steele on how Congress should go about reforming health care:

Having Congress reshape health care puts “the wrong people at the table,” Steele said. He said stakeholders — “doctors, lawyers, health care employees, insurance companies” — should develop a solution and present it to Congress, rather than the other way around.

Steele needs to brush up on his Adam Smith:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Like I said, Jonathan Chait was on to something.

Back in the 1980s, the irreplaceable Walter Williams produced a documentary based on one of his more controversial books, The State Against Blacks. Someone has done a great service and posted the documentary on youtube. Everything Walter said back then is true today — and just as applicable. The only discordant note is that when Walter refers to “welfare reform,” it is important to understand that he is talking about the expansion of handouts and centralization in the 1960s and 1970s, not the pro-market welfare reform of the 1990s:

Economists generally agree that minimum wage laws tend to put low-skilled workers out of work. (Even economists who support minimum wage laws for reasons of politics or “justice” don’t really argue that the laws don’t raise unemployment.) But that message hasn’t really reached journalists. Today’s stories on the mandated rise in the minimum wage take one of two forms: Assuming that the raise is “good news” for low-paid workers, or quoting one economist on each side. The latter is certainly better, but it does convey the sense that “economists disagree about the effects of minimum wage laws,” which doesn’t really reflect the state of economic knowledge.

NPR used both versions. Some of its hourly newscasts led with “The minimum wage hike means 70 cents more per hour for low-income workers.” But some also noted, “That’s supposed to be good news for low-income workers, but economists disagree about whether it will help or hurt the economy.” NPR did a somewhat balanced story yesterday. 

Many journalists went with the easy, mostly wrong, “good news” approach, as these headlines and first sentences illustrate:

• ABC News: Relief for Workers at Bottom: Minimum Wage Goes Up
• Time: With the U.S. trillions of dollars in the hole, 70 cents an hour sounds like chump change. But it’s a big boost for the millions of workers who earn that much extra as of July 24.
• Philadelphia Inquirer: Minimum-wage workers to get a pay bump today
• WFMY (Greensboro, NC): Starting today, minimum wage workers will see extra cash in their pay checks.
• News on 6 (Tulsa): Thousands of Oklahoma workers will receive a pay raise on Friday when a new federal minimum wage takes effect.

But some did at least acknowledge the controversy:

• AP: Minimum wage hike could threaten low earners’ jobs
• USA Today: The third minimum wage increase in three years, effective Friday, is a moneymaker and a money-taker: Millions of workers soon will see pumped-up paychecks, while many already-struggling businesses face the burden of increased payroll costs.
• CNN: Minimum wage hike: More money or fewer jobs?/On Friday the federal minimum wage jumps to $7.25 an hour from $6.55. Economists differ as to whether that will hurt or help low-income workers.
• Kansas City Star: The federal minimum wage rises today from $6.55 to $7.25 an hour, bringing with it controversy about whether the increase is good or bad for the economy.

The New York Times gets the prize for its stark decline in economic understanding. Its editorial today begins, in a triumph of hope over economic reasoning:

An estimated 2.8 million employees will get a raise on Friday, as the federal minimum wage rises from $6.55 an hour to $7.25. Another 1.6 million whose hourly pay hovers around $7.25 are also expected to get a boost as employers adjust their pay scales to the new minimum. The raise is badly needed. It is also wholly inadequate.

But for decades the Times’s editors knew better. Sure, Henry Hazlitt wrote some of their editorials back in the 1930s. But that doesn’t explain the paper’s continuing criticisms of the minimum wage into the 1990s. Richard McKenzie wrote a short book in 1994 called Times Change: The Minimum Wage and the New York Times. Bruce Bartlett reported some of the history in 2004:

For decades, that paper had carefully and consistently editorialized against the minimum wage. But 5 years ago, for no apparent reason, it reversed a policy dating back to 1937 and suddenly endorsed a higher minimum wage. Its latest editorial on this topic appeared on July 24, in which legislators in Albany were urged to agree on a “much-needed increase in the minimum wage” for New York State.

When I first began clipping Times editorials on the minimum wage back in the 1970s, they were unambiguous in their condemnation of it as misdirected, inefficient, and having negative consequences for most of those it was supposed to help. For example, an August 17, 1977, editorial stated, “The basic effect of an increase in the minimum wage … would be to intensify the cruel competition among the poor for scarce jobs.” For this reason, it said, “Minimum wage legislation has no place in a strategy to eliminate poverty.”

In the 1980s, the Times became even more aggressive in its denunciations of the minimum wage. Rather than simply argue against increases, it actively campaigned for abolition of the minimum wage altogether. Indeed, a remarkable editorial on January 14, 1987, was entitled, “The Right Minimum Wage: $0.00.”

Everything in that editorial is still true today. “There’s a virtual consensus among economists that the minimum wage is an idea whose time has passed,” it said. “Raise the legal minimum price of labor above the productivity of the least skilled workers and few will be hired,” it correctly observed. In conclusion, “The idea of using a minimum wage to overcome poverty is old, honorable — and fundamentally flawed. It’s time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.”

Even in the 1990s, the Times remained skeptical about the value of raising the minimum wage. An April 5, 1996, editorial conceded that a proposed 90 cent increase in the minimum wage would wipe out 100,000 jobs. It said that Republican critics of the minimum wage as a “crude” antipoverty tool were right.

By 1999, however, the nation’s newspaper of record had completely reversed itself. In a September 14 editorial, it endorsed a sharp increase in the minimum wage, arguing that it would have no impact whatsoever on unemployment. “For millions of workers, a higher minimum wage means a better shot at self-sufficiency,” it stated.

Bartlett suggested that the Times ought to tell its readers why it changed a long-standing, well-grounded, and indeed correct editorial position.

At least, that was our preferred title…

Catherine Rampell, editor of the NYTimes Economix blog, has kindly relayed my challenge to her readers: “name a field with a productivity collapse worse than that in education.”

Ms. Rampell, like several Cato@Liberty readers, suggests health care as a possible “winner.” I haven’t yet spent enough time with the data to be absolutely sure one way or the other, but so far I have to disagree.

It’s true that health care costs have risen dramatically over the past 40 years. The CDC has a great digest of health statistics that puts per capita health care spending at $356 in 1970 and $7,026 in 2006 (table 124). Adjusting the earlier figure for inflation it comes to $1,851, meaning that per capita health spending has gone up by a factor of 3.6. Public school spending per pupil has gone up by about 2.3 times from 1969–70 to 2005-06. But while educational outcomes at the end of high school are stagnant and the graduation rate has declined, we’ve enjoyed incredible medical advances. After spending an hour or two with Google and the CDC stats book, here’s what I find:

• Neonatal mortality was cut by 2/3 between 1970 and 2005, from 20 to 6.87 per 1,000 births
• Fetal mortality rate (miscarriage) was cut by more than half: from 14 in 1970 down to 6.2 in 2003 (per 1,000 live births plus fetal deaths)
• Life expectancy at birth was raised by 7 years
• Limitation of activity caused by chronic conditions: 13.3 % in 1997, 11.6% in 2006
• There’s now a nearly 90% cure rate for a childhood leukemia
• Depression is far more treatable
• Fertility treatments are greatly advanced
• Prosthetics are dramatically better
• Lasik eye surgery was invented
• Gastric bypass surgery is now available for the morbidly obese
• Joint replacements are far more common and effective
• Reconstructive surgery is greatly advanced
• We now have vaccines for rubella, pneumonia, hepatitis A and B, chicken pox, lyme disease, and meningitis
• Smallpox was eradicated
• Numerous technological advances have made diagnostic and surgical procedures less painful and easier to recover from, including: arthroscopy, laparoscopy, MRIs, CTs, SPECT and PET scans

It’s also important to consider that Americans have chosen to lead lives that seem more likely to engender health problems over the past four decades. Though we’ve cut down on smoking, which should make us healthier, Americans today are both less physically active and more gluttonous. Not surprisingly, obesity has more than doubled, rising from 14.6 to 34.1 percent of the population. You’d think that heart disease would have gone off the charts as a result, but it’s actually been more than cut in half, from 493 to 211 deaths per 100,000, thanks, presumably, to medical advances that have more than compensated for our couchpotatofication. [And lest anyone assume that students have become harder to teach over the past 40 years, the evidence seems to point in the opposite direction.]

So far at least, the evidence doesn’t seem to support the notion that the health care sector has suffered a productivity collapse quite like education. It still looks as though schooling, and only schooling, has gotten both worse and substantially more expensive since 1970.

Yesterday, I was invited to testify on Capitol Hill. The subject was the Overcriminalization of Conduct & Overfederalization of Criminal Law. Long overdue subject for Congress to address. 

My fellow witnesses included former Attorney General Richard Thornburgh, as well as two victims of federal bullying — Kathy Norris (relating what happened to her husband) and Krister Evertson. Their stories are vivid reminders of how the legal deck is presently stacked against us all. That is, when an innocent person sits down in a quiet room to assess his options following a federal arrest and indictment, you soon learn that you’ll be broken financially if you choose to fight and go to trial. The pressure to plead guilty — even if you are innocent — is enormous. If we had a small and sensible criminal code where the rules were clear and objective, the costs of defending yourself from bogus (or trumped up) charges would be sharply reduced. My testimony can be found here.

Prof. Stephen Saltzburg made the case against mandatory minimum sentencing and Prof. James Strazzella made the case against the Overfederalization of Criminal Law. All in all a good hearing.

And, while I’m at it, here’s a terrific piece that appeared in the Washington Post this week. For additional Cato scholarship, go here and here.

At the Politico I write: