Category: Politics – Politicians – Government in Action

Throw the Rascals In

The outcome of yesterday’s elections can be summed up in the phrase “throw the rascals in.” That’s, of course, an ironic variation on the usual expression of voter dissatisfaction with incumbents, which is to “throw the rascals out.”

A marginal minority of voters having “thrown the rascals in,” all Americans now face at least two years of Democrat control of the House (and probably the Senate), from which will emanate efforts to

  • raise taxes
  • “solve” the nature-made problem of global warming
  • “solve” the non-existent “crisis” in health care by passing measures that will drive health-care providers out of business and deter drug companies from investing in research and development
  • duck the very real crisis in entitlement spending
  • otherwise try to legislate and regulate the conditions of our existence in ways that penalize hard work, law-abidingness, entrepreneurship, and the accidents of having been born white and/or male and/or straight and/or of American-born parents —
  • all while trying to surrender to our enemies by giving up the fight abroad and by granting them the same constitutional rights as the very Americans whom they are trying to kill.

The only silver lining in this very dark cloud is that President Bush can — if he is willing — wield the veto pen. Two years of gridlock would indeed be a blessing, for the federal government might actually do less to screw up our lives and the lives of our progeny. But I do fear for the war effort, especially because our enemies undoubtedly have been emboldened by the prospect of a Congress that is controlled by an anti-war faction. And I also fear that President Bush, facing a hostile Senate, will be unable to appoint constitutionalists to succeed Justices John Paul Stevens and Ruth Bader Ginsburg, both of whom are likely to postpone retirement in the hope that Bush is succeeded by a Democrat.

I am as worried about the future of the country as I was — justifiably — when Jimmy Carter won the election of 1976. My only hope is that the Leftist agenda of congressional Democrats will frighten Americans and induce an electoral backlash that brings pro-defense, small-government Republicanism to power in 2008. All we need are some small-government Republicans.

Median Household Income and Bad Government

Remember this map?


It appeared in the Detroit Free Press on August 30, and it was picked up quickly by the Left-blogosphere because it seems to discredit President Bush’s economic policies. (For example, Kevin Drum (Political Animal) got the map from the Freep, John Campanelli at Daily Kos got it from Drum, and Benj Hellie at Leiter Reports linked to Campanelli’s post.)

In case you missed it, Stuart Buck and Megan McArdle, in a September 14 piece at the DCExaminer, describe the map and discredit it — as have other savvy observers. As Buck and McArdle explain,

the Detroit Free Press published a horrifying map showing huge losses in household income across America. Horrifying and totally wrong, that is.

According to the map, between 1999 and 2005 median household income had fallen in 46 states, sometimes by double digits, plunging by 6 percent in the U.S. as a whole.

We knew incomes had fallen slightly since the peak of the technology bubble. . . . But the declines shown on the map were shocking. The Free Press claimed that nine states, with a total of 75 million citizens, had seen median incomes plummet by roughly 10 percent.

More surprisingly, these figures didn’t match those in the Census Bureau’s Current Population Survey, or CPS, which showed that median household income in the US had fallen only 2.8 percent — and had risen in around 20 states, not four. Where, we wondered, had they gotten their figures?

An e-mail exchange with the journalists gave us the answer: They had taken their 2005 numbers not from the CPS, but from the American Community Survey, a new research product that is scheduled to replace the detailed “long form” census collected every decade. But they hadn’t taken the 1999 figures from the ACS — in fact, the ACS is so new that it didn’t even publish nationwide data for 1999. Instead, the journalists had taken the 1999 income figures from the official 2000 census.

Some statisticians already will be shaking their heads in dismay; different surveys, taken at different times and asking slightly different questions, often produce very different pictures of the economy. If the journalists had checked the helpful section of the Census Bureau Web site called “Using the Data”, they would have discovered this warning: “Users should exercise care when comparing income figures from the American Community Survey with those of Census 2000.”

They might also have found another Census Web page warning that “[E]stimates from any one survey will almost never exactly match the estimates from any other (unless explicitly controlled), because of differences such as in questionnaires, data collection methodology, reference period, and edit procedures.” Or had they Googled “Comparing the ACS and the Census,” they’d have discovered a helpful document on the comparison problems, available from multiple state governments. It calls the two income numbers “not comparable.”

With good reason. A 2003 report by census staff indicated that median incomes from the ACS were much lower than those from the 2000 census: 4.4 percent lower for the United States.

What does this mean? Simple: If you start with income from the 2000 census, and then compare it to income from the 2005 ACS, which we know tends to be much lower because of survey differences — you’ll find a much greater decline than really was the case. Much of the reported 6 percent drop — probably more than half — comes from comparing apples to oranges.

There’s more to be said, however, and I said it on September 5 in a comment on a post at AnalPhilosopher. Here are the key points of my comment, which I have edited to focus on the issues at hand:

The use of the period 1999 to 2005 amounts to cherry-picking the data. (The use of incompatible data sets, of which I was unaware at the time of my comment, merely compounded the cherry-picking.) Specifically, real median household income in the U.S. declined from 1999 — while Bill Clinton was president — through 2004, then rose in 2005, though the 2005 level was below the 1999 level. (To see what I am talking about, open this Census Bureau report and go to Figure 1, which I have reproduced below.)

The 1999-2004 decline is typical of a long-standing pattern, one that the figure below depicts only as far back as 1967. Even in the relatively brief period since 1967 there have been dips in real median household income more severe than that of 1999-2004. There is nothing at all unusual about a temporary dip in real median household income; it is part of the natural cycle of long-term economic growth. (Leftists like to imagine that there’s an alternative to such cycles, which involves the counter-productive fine-tuning of the economy by an omniscient Left-wing government or the even more destructive practice of income redistribution.)

The fact that some States (e.g., Michigan) fared worse than others during the recent downturn can be attributed to Michigan’s particularly benighted economic policies (e.g., high taxation and unionization), which have been impoverishing Michiganders for decades.

“The Sick Man of the Midwest: Michigan — a liberal failure,” by Rich Lowry at NRO, confirms my point about Michigan. Lowry reports:

According to the free-market Mackinac Center for Public Policy’s analysis of United Van Lines data, Michigan is now the No. 1 state in the continental United States for outbound traffic. An estimated 65 percent of the moving company’s Michigan interstate traffic is families moving out of the state, headed to more economically open and vital destinations. As an official in Wyoming put it, “Michigan has been very good for us.” . . .

Michael LaFaive of the Mackinac Center calls Michigan “the France of North America.” Economically competitive states might have a personal income tax, or corporate income tax, or sales tax — Michigan has all three. It has long been the only state with a European-style, value-added tax — the Single Business Tax. A company can be in bankruptcy and still have a tax liability, making Michigan a bad state even to lose money in. In a 2002 filing for relief from the tax, General Motors explained that it would operate at a loss, but one of its projects would still create a $7 million-a-year tax liability. . . .

Meanwhile, unions make the state an inhospitable place to do business. A company can be bankrupt in Michigan and still face threats of a strike, as Northwest Airlines and the auto-parts maker Delphi have learned. Michigan’s unionization rate of 21.8 percent is much higher than the national average of 13.5 percent. This accounts for it having the second-highest unit-labor cost in the nation, according to the Mackinac Center. States with right-to-work laws, and consequently less unionization, experience more growth and create more jobs, at the expense of troglodytes like Michigan.

It used to be that unions could force unnaturally high wages and benefits on U.S. manufacturers, and the costs would be passed along to consumers. Those were the days prior to globalization when the U.S. auto industry had a lock on the domestic market and experienced little international competition. It was inevitable that Michigan would find the new competition disruptive, but not that it would react to it so poorly.

The way to thrive in a globalized environment is to create a low-tax economy without the rigidities that come with heavy unionization and regulation. For those who disagree, Michigan beckons.

Addendum: See also this post at The Club for Growth blog.

Here’s the figure from the Census Bureau report:

See also:
Your Labor Day Reading
Status, Spite, Envy, and Income Redistribution

A Democrat House?

Many conservative/libertarian voices are saying that a Democrat-controlled House of Representatives would be a good thing. (See this and this, for example.) It’s the gridlock theory, you see. With a divided Congress, the GOP’s recently found big-spending ways will be stymied. Moreover, voters’ rejection of the GOP will send a message to the GOP: stop your big-spending ways.

I believe none of it. First, if Democrats control the House the bills passed there will be even more profligate than the ones now being passed by a GOP-controlled chamber. Second, the Senate — which is dominated by Democrats and RINOs — will gladly move in the direction of greater profligacy. Third, I don’t expect President Bush to start brandishing the veto pen that he has wielded only once in almost six years.

Don’t Get Your Hopes Up

The good news, via Captain’s Quarters:

Senator Tom Coburn’s office has announced that the Senate has just passed a new bill to replace the language of the original S.2590, which establishes an on-line searchable database for federal spending. This action will expedite the legislative process and may put the bill on President Bush’s desk by tomorrow:

The Senate just passed an amended version of the Coburn-Obama database bill based on our agreement with the House. Following House passage of the bill the measure will go to the president for his signature. Tonight’s action in the Senate means the Senate will not need to revisit the measure as the House will vote on this identical measure tonight or tomorrow.

The Senate, under Bill Frist’s guidance, simply took the modified language under consideration in the House and passed it themselves first, apparently by acclamation. This eliminates the need for a conference committee and avoids any delay after the adoption of the bill in the House. . . .

UPDATE: The bill passed the House tonight, and the bill is on its way to the White House for Bush’s signature already.

The bad news: S. 2590 as I read it, extends only to contracts and not to the operations of the federal government, itself, which will remain shrouded in the arcana of government budgeting. Moreover, the database on contract awards “shall be updated not later than 30 days after the award of any Federal award requiring a posting [emphasis added].” Can you say “barn door closed after horse has left”?

The so-called Federal Funding Accountability and Transparency Act of 2006 falls well short of accountability and “transparency.” The only effective way to make the federal government accountable is to elect members of Congress who make themselves accountable to the Constitution and the limited powers that it bestows on Congress (see Article I, here).

While I’m being an old curmudgeon, I must add that I simply hate the buzz-word “transparency,” which has come into wide use in the past 10-15 years. What is really meant by “transparency” isn’t transparency. Something that is transparent cannot be seen because it can be seen through. What is really meant by “transparency” is visibility: the property of being able to be seen. We want to see what the government is up to (except where it would damage the war effort), and we want to see it before it becomes a fait accompli. I want a government whose operations and budgets are visible to me, not a government whose operations and budgets are invisible because they are transparent.

One Small Blow for Freedom of Speech

First, the bad news:

Andy Roth of The Club for Growth posts a roundup of reactions to McCain-Feingold Iron Curtain Day. As David Keating explains in a followup post,

our free speech rights disappeared at 12:00:01 AM this morning.

It is now illegal for virtually all nonprofit groups to run any radio or TV ad that merely mentions the name of a congressman. Even a 10 second spot that simply had a congressman’s photo and no audio could land you in jail.

David goes on to quote “Former FEC Chairman Brad Smith [who] explains the ‘reform’ today and asks”:

In exchange for surrendering our First Amendment rights, what have we gained? Do you feel Congress is more ethical than before? Less attuned to special interests? Do you feel more empowered, or less empowered, than you did four years ago, when the law passed? Can you name any tangible benefit from these prohibitions?

Absolutely none. Not a one. The only benefit accrues to McCain, Feingold, and the other hypocrites on Capitol Hill who have used their power to immunize themselves from criticism and to perpetuate their incumbency.

Well, I’m mad as hell about it, and I’m going to do something about it.

So, here’s the good news:

This is an open invitation to the supporters of any U.S. House or Senate candidate who has opposed McCain-Feingold, and who is running against an incumbent who voted for it. Send me the links to your candidate’s web site and to his or her statements about McCain-Feingold. If your candidate has indeed opposed McCain-Feingold and his or her opponent did indeed vote for it, I will publicize those facts right here on this blog.

UPDATE (12/09/06): No one has yet taken up my offer. Sad.

Democrats: The Anti-People People

From a story by Jim Kouri at The National Ledger:

The continuous demonizing and vilifying of Wal-Mart Stores by Democrat Party officials is not working to turn Americans against the enormously successful US retailer, according to a recent poll. It may actually be hurting some Democrat politicians who are trying to hide their liberal-left agenda.

Wal-Mart spokeswoman Sarah Clark on Friday released the following statement on a new poll conducted by the Pew Research Center for the People & the Press:

“This poll is the latest proof that politicians will turn off most voters by attacking Wal-Mart and that the attacks themselves are not working. America’s working families want to decide for themselves where to work and where to shop.

“The numbers make it clear that America’s working families value Wal-Mart’s job opportunities, savings, and the benefits we provide the communities we serve. By attacking Wal-Mart, politicians show they are out of touch with working families.

“Working families support Wal-Mart because the company creates tens of thousands of jobs each year, provides health care for as little as $11 per month, and because economic studies verify that Wal-Mart saves American families $2300 a year.”

Here’s the moral, in a nutshell, for those Democrats who are open to reason: Wal-Mart provides jobs for low-income families; Wal-Mart offers low prices to low-income families. When politicians hurt Wal-Mart, they hurt low-income families. Get it? Republicans do.

Related: See this post by Donald Boundreaux, whom I sometimes chide for his radical libertarianism. When sticks to economics he is first rate.

Remembering Katrina

It is au courant to observe the first anniversary of Hurricane Katrina’s landfall in Louisiana and Mississippi. But there is more to the observance than the recounting of a natural disaster and its attendant human and material cost. Katrina has been translated from a natural phenomenon to a political one. Katrina has become the weapon of choice for those who willingly embrace government as “big brother” (except when it legitimately seeks to defend them against foreign enemies), and those who like to characterize their political opponents as “uncaring” and “bigoted.” (But I repeat myself.)

Well, my way of remembering Katrina is to link to the several posts that the weaponizing of Katrina caused me to write:

Katrina’s Aftermath: Who’s to Blame? (09/01/05)
“The Private Sector Isn’t Perfect” (09/02/05)
A Modest Proposal for Disaster Preparedness (09/07/05)
No Mention of Opportunity Costs (09/08/05)
Whose Incompetence Do You Trust? (09/10/05)
An Open Letter to Michael Moore (09/13/05)
Enough of Amateur Critics (09/13/05)

An Opportunity for Libertarian Relevance

Republicans should do the wise thing and back the Libertarian Party’s candidate for Tom DeLay’s seat, as Don Luskin suggests. Such a move — if successful, or nearly so — might encourge the LP to follow some sage advice and back those major-party candidates who are closest to their views, instead of wasting time and money by running LP candidates, who are almost always doomed to defeat. A Republican-LP rapprochement would be good for the libertarian cause, in that it would push the Republican Party back toward its limited-government tradition. Only die-hard libertarian purists could object.

The Feds and "Libertarian" Paternalism

President Bush today signed into law the Pension Protect Act of 2006. Why the federal government — or any government in the U.S. — is in the business of regulating and insuring pension plans is another whole story, as they say. (See this for a general treatment of the erosion of the Constitution’s meaning. See this about liberty of contract, which applies to the States.)

In reading McGuireWoods’s detailed summary of the act, I am especially struck by this:

The Internal Revenue Service (“IRS”) has permitted automatic enrollment of employees in 401(k) plans since 1998. The PPA adds a number of provisions to the Code and ERISA to facilitate and encourage automatic enrollment.

A victory of sorts for “libertarian paternalists.” A defeat for liberty and, in particular, liberty of contract and the right to make decisions and learn from their consequences.

Related post: Another Voice Against the New Paternalism (with links to several other related posts)

Slopes, Ratchets, and the Death Spiral of Liberty

In describing the baneful influence of state action on the general welfare, I sometimes invoke the slippery slope, which is

an argument for the likelihood of one event or trend given another. Invoking the “slippery slope” means arguing that one action will initiate a chain of events that will lead to a (generally undesirable) event later. The argument is sometimes referred to as the thin end of the wedge or the camel’s nose.

That is to say, once a polity becomes accustomed to relying on the state for a particular thing that could be done better through private action, it becomes easier for that polity to ask the state to do other things that could be done better through private action.

Another metaphor for the rising path of state power is the ratchet effect,

the commonly observed phenomenon that some processes cannot go backwards once certain things have happened, by analogy with the mechanical ratchet that holds the spring tight as a clock is wound up.

As people become accustomed to a certain level of state action, they take that level as a given. Those who question it are labeled “radical thinkers” and “out of the mainstream.” The “mainstream” — having taken it for granted that the state should “do something” — argues mainly about how much more it should do and how it should do it, with cost as an afterthought.

Perhaps the best metaphor for the phenomenon I’ve been discussing is the death spiral. Reliance on the state creates more problems than it solves. But, having become accustomed to relying on the state, we then rely on the state to deal with the problems caused by our previous decisions to rely on the state. That only makes matters worse, which causes us to rely further on the state, etc., etc. etc.

More specifically, unleashing the power of the state to deal with matters best left to private action has diminished the ability of private actors to deal with problems and to make progress, thereby fostering the false perception that state action is inherently superior. At the same time, the accretion of power by the state has created dependencies and constituencies, leading to support for state action in the service of particular interests. Coalitions of such interests resist efforts to diminish state action, while supporting efforts to increase it. Thus the death spiral.

Can we pull out of the spiral? Not unless and until resistance to state action — especially in the domestic sphere — becomes much stronger than it is. It cannot be merely intellectual; it must be conjoined to political power. Which brings me back to my advice to the Libertarian Party:

Don’t run LP candidates for office — especially not for the presidency. Throw the LP’s support to candidates who — on balance — come closest to espousing libertarian positions. Third parties — no matter how they’re packaged — just don’t have staying power, given the American electoral system. The LP’s only hope of making progress toward libertarian ideals is to “sell” its influence to the highest bidder.

Cato Institute’s Bill Niskanen has offered similar advice. Libertarians must heed it.

We will not pull liberty out of its death spiral simply by shouting “halt.” This is no time for fastidiousness. The “best” cannot be attained until we pass through “better,” “much better,” and “very good.” The time to start is now, before the death spiral becomes irreversible. If it’s not already too late.

About Stem-Cell Research and Vetoes

Putting aside the pro-life and humanitarian aspects of embryonic stem-cell research, I have this to say:

The federal government has no business funding research of any kind, except that which is intended to foster the common defense.

Regardless of the reasons for President Bush’s veto of a bill to provide federal funds for embryonic stem-cell research, he was right to veto it. Now that Bush has found his veto pen, perhaps he will use it more often and on measures of greater fiscal import.

Parsing the Vote on the Flag-Burning Amendment

The U.S. Senate yesterday failed, by one vote, to adopt S.J. Res. 12, which proposed this amendment to the Constitution: “The Congress shall have power to prohibit the physical desecration of the flag of the United States.” The House already had passed the same “flag burning amendment,” and so it would have gone to the States for ratification had one Senator voted “yea” instead of “nay.”

I am against any statute (e.g., campaign-finance “reform”) or amendment to the Constitution that limits freedom of speech. (I might favor a law making it treasonous to publish, knowingly, classified information pertaining to the conduct of an on-going war, which is not speech as the Framers understood it.) I am therefore against any amendment to the Constitution that limits symbolic speech, such as flag-burning. Let the flag-burners and their ilk be known for the post–patriotic, post-Americans that they are.

That said, I wonder what motivated the 34 senators who voted against the flag-burning amendment:

Akaka (D-HI)
Bennett (R-UT)
Biden (D-DE)
Bingaman (D-NM)
Boxer (D-CA)
Byrd (D-WV)
Cantwell (D-WA)
Carper (D-DE)
Chafee (R-RI)
Clinton (D-NY)
Conrad (D-ND)
Dodd (D-CT)		 Dorgan (D-ND)
Durbin (D-IL)
Feingold (D-WI)
Harkin (D-IA)
Inouye (D-HI)
Jeffords (I-VT)
Kennedy (D-MA)
Kerry (D-MA)
Kohl (D-WI)
Lautenberg (D-NJ)
Leahy (D-VT)
Levin (D-MI) 		Lieberman (D-CT)
McConnell (R-KY)
Mikulski (D-MD)
Murray (D-WA)
Obama (D-IL)
Pryor (D-AR)
Reed (D-RI)
Sarbanes (D-MD)
Schumer (D-NY)
Wyden (D-OR)

Those who undoubtedly voted nay to defend freedom of speech are easy to identify. They are the two conservative Republicans who broke ranks with their party: Bennett of Utah and McConnell of Kentucky.

I’m sure that many of the Democrats voted nay for the same valid reason as that of Senators Bennett and McConnell. But many others, I am equally certain, voted the way they did for one or both of these reasons:

  • They can no longer find it in themselves to believe that America, in spite of its faults and mistakes, is better than its enemies.
  • Their partisanship so consumes them that they oppose the Republican president’s efforts to defend America — of which the flag is a reminder.

I won’t name names. That’s an exercise for the reader.

What about the 66 senators who voted for the flag-burning amendment? The lineup on the yea side consists of yahoos and panderers — patriotic though they may (or may not) be. The yahoos are those who sincerely believe in restricting freedom of speech. (John McCain, take a bow.) The panderers are those who voted yea to placate “the base” or to take a stand that might help them win re-election in the fall.

What might have happened if the proposed amendment had gone to the States? A look at Senate votes by State offers a clue. The States that probably would have gone against the amendment are California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New York, Rhode Island, Vermont, Washington, and Wisconsin. That’s 12 States, one shy of the number required to block ratification of the amendment.

In other words, the flag-burning amendment might well have been ratified had the Senate approved it. One senator’s vote averted national embarrassment. I hope it was cast by a senator who believes in freedom of speech, but I fear it was not.

Starving the Beast: Readings

I have written here, here, and here about the concept of starving the beast, which is to cut taxes in order to force reductions in government spending. I consider the concept valid. And I find that the present administration is no more (and no less) profligate than other administrations post-Great Society, when the profligacy ushered in by the New Deal became a permanent fixture of federal spending.

Several related items have come to my attention:

“Starving the Beast” Just Does Not Work, by Bill Niskanen (Cato@Liberty), repeats the arguments that I dealt with in the first and third of the above-linked posts.

Nick Schulz, writing at NRO in Tax Cuts = More Spending?, takes on three pundits whose perverted reading of Niskanen suggests (to them) that tax cuts actually cause spending increases.

Chris Edwards of Cato@Liberty writes in Starving and Feeding the State Beast about

a new report by the National Association of State Budget Officers [that] indicates a clear Starve the Beast pattern at the state level. (See Table 2 on page 3.)

In years when revenue growth was slow — early 1980s, early 1990s, and early 2000s — state legislators moderated their spending increases (they are generally required to balance their budgets each year).

Finally, and perhaps conclusively, there is a long-forgotten article by Henning Bohn, which appeared in the Journal of Monetary Economics (Volume 27, Issue 3, June 1991, Pages 333-359): “Budget balance through revenue or spending adjustments? Some historical evidence for the United States.” This is from the abstract:

The paper provides a historical perspective on the issue of whether budget deficits are typically eliminated by increased taxes or by reduced spending. By examining U.S. budget data from 1792–1988, I conclude that about 50–65% of all deficits due to tax cuts and about 65–70% of all deficits due to higher government spending have been eliminated by subsequent spending cuts, while the remainder was eliminated by subsequent tax increases.

Virginia Does It Right

Virginia does it right (from the law firm of McGuireWoods):

The leaders of the Virginia General Assembly have agreed to a 2006-08 state budget, with which the Virginia estate tax (often called the “death tax”) will be repealed for the estates of all Virginians who die on or after July 1, 2007. Since 2002, with the phaseout of the dollar-for-dollar federal credit for state death taxes, the state taxes remaining in some 20 states have been both an additional burden and a complication for citizens of those states and others owning property in those states. As of July 1, 2007, this will no longer be true of Virginia, if this budget agreement is given final approval by the General Assembly as expected, and Governor Kaine signs it into law as he has said he would do.

Good Advice for the Libertarian Party

I offered my advice to the LP here. Now, Bill Niskanen of the libertarian Cato Institute offers his, which is similar to mine; for example:

The Libertarian Party’s effectiveness in promoting their policy positions is often counter-productive when running a candidate, reducing the vote for the most preferred of the major party candidates. A disciplined group that is prepared to endorse one or the other major party candidate in a close election, however, can have a substantial effect on the issue positions of both major party candidates. . . .

This is a strategy to increase the approval of libertarian policy positions rather than the usually counter-productive effort to increase the number of votes for Libertarian candidates. Maybe it is better to term the organization that I have described as a libertarian political action group, not a libertarian party.

Precisely.

The Romney Plan: Part II

I wrote a few weeks ago about the new health-care scheme in Massachusetts. It’s worse than I thought. Arnold Kling, writing at Cato-at-liberty, quotes

Betsy McCaughey [who] digs into some of the details on the effects on business of Massachusetts’ brave, new health insurance experiment:

Say, for example, you open a restaurant and don’t provide health coverage. If the chef’s spouse or child is rushed to the hospital and can’t pay because they don’t have insurance, you — the employer — are responsible for up to 100% of the cost of that medical care. There is no cap on your obligation. Once the costs reach $50,000, the state will start billing you and fine you $5,000 a week for every week you are late in filling out the paperwork on your uncovered employees (Section 44). These provisions are onerous enough to motivate the owners of small businesses to limit their full-time workforce to 10 people, or even to lay employees off.

What else is surprising about this new law? Union shops are exempt (Section 32).

The next step should be the repeal of the Massachusetts plan because it is bad medicine for the people of Massachusetts. It will cut employment and wages, while driving up the cost of health care. Most of the intended beneficiaries of the plan will suffer as a result.

Given the perverse political climate of Massachusetts, the next step probably will be the State’s seizure of health-care services. The State will disclaim responsibility for the failure of its plan. Instead, it will pin the blame on the private sector, and the gullible public will swallow the story. The State will then declare itself the single payer of health-care costs, effectively creating a State-run health-care system. Welcome to Canada.

Related posts:
Fear of the Free Market — Part I
Fear of the Free Market — Part II
Fear of the Free Market — Part III
Free-Market Healthcare
Where’s Substantive Due Process When You Need It?
The Romney Plan

"Dangerous Dan" McCain

My reference is to the title character of Robert Service’s poem, “The Shooting of Dan McGrew.” But John McCain is far more dangerous than any Klondike gunslinger, because McCain would use (and has used) the power of government to suppress speech in the name of “clean government.”

Many bloggers have picked up on McCain’s latest outrageous utterance:

He [Michael Graham] also mentioned my abridgement of First Amendment rights, i.e. talking about campaign finance reform….I know that money corrupts….I would rather have a clean government than one where quote First Amendment rights are being respected, that has become corrupt. If I had my choice, I’d rather have the clean government.

But no blogger whom I have read has gone to the heart of “Dangerous Dan” McCain’s twisted agenda. When speech is suppressed in the name of “clean government,” the essential element of “clean government” — namely, competition for control — is removed.

McCain and his ilk like to pretend that money “buys” politicians. Money may buy criminal acts — such as those committed by Duke Cunningham — but those acts are easilty dealt with as matters of criminality. In the main, money only “buys” politicians to the extent that it helps to elect those politicians whose views are already attuned to the views of their contributors.

Incumbents already have been “bought” in the sense that their success has been abetted by like-minded supporters. The best way to keep incumbents “honest” is to ensure that they face strong challenges at election time. But the power of incumbency requires that challengers have access to more money than incumbents. McCain will have none of that because his real agenda is to make it difficult for challengers to raise enough money to defeat incumbents. It’s a power-grab, pure and simple.

It should be obvious to anyone who thinks about it for more than a nanosecond that “Dangerous Dan” McCain — that arrogant hypocrite — is opposed to free speech and “clean government.” His twisted agenda is to suppress potential challenges to the power of incumbency.

The Romney Plan

Massachusetts has a new health-care panacea, which the Commonwealth’s governor, Mitt Romney, outlines and defends in a recent OpinionJournal op-ed. Cutting through all the bleeding-heart rhetoric and pseudo-economics, here’s the bottom line:

  • The already over-burdened taxpayers of Massachusetts now face a heavier burden, in the form of subsidies to persons who don’t need health insurance.
  • Persons who don’t need health insurance will be forced to carry it. And having it, they will probably try to get their “money’s worth” out of it — thus driving up the cost of health care.
  • Businesses will be taxed if they don’t contribute to employees’ health-insurance premiums. That tax will be paid by workers in the form of lower wages, and by consumers in the form of higher prices.

It is possible that the Massachusetts plan will enable insurers to offer coverage with high deductibles and low premiums. But such a reform is unlikely to last very long in Massachusetts, where politicians thrive on big-brotherhood. The Massachusetts plan is otherwise a decided step backward because:

  • It adds a heavy burden of government bureaucracy to the Commonwealth’s already burdened health-care providers.
  • It reduces individual responsibility for health care, thus making it even less likely that health-care resources will be used sensibly.

What’s the difference between Democrats and Republicans in Massachusetts? Not a dime’s worth, as someone used to say.

Recommended reading:
What’s wrong with RomneyCare (an OpinionJournal article by Brendan Minter)
The Massachusetts Delusion (a TCS Daily article by Arnold Kling)
Romney and Kling on Massachusetts Health Care (an EconLog post by Arnold Kling)

Related posts:
Fear of the Free Market — Part I
Fear of the Free Market — Part II
Fear of the Free Market — Part III
Free-Market Healthcare
Where’s Substantive Due Process When You Need It?

The Real Thomas Jefferson

David N. Mayer of MayerBlog posted “Thomas Jefferson, Man vs. Myth” yesterday in observance of the 263rd anniversary of Jefferson’s birth. Mayer debunks a lot of bunk that’s been written — and believed — about Jefferson, including his standing as the “father of American democracy”:

Many people today – including historians, political scientists, and even Jefferson scholars – misunderstand Jefferson’s commitment to republicanism and particularly his advocacy of “self-government,” confusing it with democracy. But democracy is government by the majority of the people; republican government is government by the representatives of the people; and limited, constitutional, republican government – the American system – is government by the people’s representatives whose power is limited by various constraints imposed by the constitution. “Self-government,” as Jefferson understood it, meant, literally, individuals governing themselves, without the interference of government. Early in his presidency Jefferson wrote, “Our people in a body are wise, because they are under the unrestrained and unperverted operation of their own understandings.” He viewed the United States as the leading model to the world for “the interesting experiment of self‑government”; that it was the nation’s destiny to show the world “what is the degree of freedom and self‑government in which a society may venture to leave it’s individual members.” To “leave” them to do what? To be free – to govern themselves.

Mayer, who devotes a section of the post to a clear-eyed assessment of Jefferson (no idolator is Mayer), also writes about the Sally Hemings myth and several aspects of Jefferson’s belief system, including his deism and embrace of free markets. Read the whole thing.

Hillary’s Latest Brainstorm

Thirteen years ago Americans were saved from HillaryCare. Now the wannabe president-of-us-all wants to undermine one of the pillars of economic growth, which is capital investment. Larry Kudlow has the story; here’s his opening:

In a speech delivered in Chicago earlier this week, the New York Senator went on ad nauseam about all these alleged problems plaguing our booming American economy and how to fix them. She said “we cannot go on letting our basic infrastructure decay and failing to invest in new technologies if we expect America to maintain its economic leadership.”

Mrs. Clinton’s idea? She wants to see us put into place a “national investment authority.” This brilliant idea is based on a recent report by Felix Rohatyn and Senator Warren Rudman that would create some newfangled government institution to help “finance accelerated commitment to rebuilding our national infrastructure.” Read between the lines and all this means is just more intrusive meddling and spending from Washington. We know where that gets us.

Kudlow goes on to explain why Hillary’s latest brainstorm is yet another dangerous Clintonian fantasy. And yet, Ms. Rodham Clinton’s proposal will resonate with the intelligentsia, who like to believe that they are smarter than markets, and who certainly would like to tell us what to eat for breakfast (for starters).

One of the intelligentsia who probably applauds HillaryInvest is Nobel laureate Joe Stiglitz, who thinks he has proved the superiority of government over the private sector in the realm of R&D. I popped that thought balloon a while back, in this post, where I concluded that

[t]he true private rate of return to R&D is about 4 to 6 times that of the government rate of return. What else would one expect, knowing that the private sector responds to the signals sent by consumers while government just makes it up as it goes along?

But logic and facts will not daunt committed statists like Hillary Clinton and Joe Stiglitz.