LINK: From the April issue of reason, Matt Welch addresses the ongoing topic of “liberalterianism” and how it’s doomed. The heart of his argument, which I agree with completely:
It is certainly no surprise that any party, let alone the Democrats, would want to use that fancy government once it held the awesome reins of power. Unified Republican governance this decade should disabuse even the most gullible from the notion that either of our two major parties is ever going to enact a small-government agenda, especially during a perceived crisis. But already during Obama’s first 100 days we’ve seen how quickly liberals will turn against libertarians once they’re no longer swinging at the same piñata.
Small-l libertarians will never find sufficient common ground with anyone interested in maintaining partisanship at the expense of ideas.
LINK: Also from reason Ronald Bailey discusses a free market approach to health care coverage proposed by University of Chicago economist John Cochrane.
So how does health-status insurance work? As Cochrane explains, “Market-based lifetime health insurance has two components: medical insurance and health-status insurance. Medical insurance covers your medical expenses in the current year, minus deductibles and copayments. Health-status insurance covers the risk that your medical premiums will rise.” Cochrane offers the example of a 25-year-old who will likely incur $2,000 in medical expenses in a year. His medical policy component would thus cost about $2,000 per year, plus administrative fees and profit. For purposes of illustration, Cochrane then assumes the 25-year-old has a 1 percent risk of developing a chronic medical condition that would increase his average medical expenses to $10,000 per year. In that case, he would be able to buy medical insurance for $10,000 per year—which is a big financial hit. That’s where health-status insurance comes in: It insures that you can be insured in the future.
I’m not fully convinced that this would work, but I’m not unconvinced, either. I don’t know enough. However, the idea seems to be based in personal responsibility. Life is unfair, so some of us get sick. There are costs involved. It’s unfortunate if medical costs cause financial distress. We should mitigate that, but provide individuals the options to do that for themselves. That is the right approach.
Mr. Cochrane also discusses how his plan would help separate health insurance from employer provision. That will be a feature of any responsible health care reform. (Transferring the incentive from employer to government does not qualify as that type of responsible reform.)
LINK: Harold Meyerson is an incurious propagandist:
But in the United States, conservatives have never bashed socialism because its specter was actually stalking America. Rather, they’ve wielded the cudgel against such progressive reforms as free universal education, the minimum wage or tighter financial regulations. Their signal success is to have kept the United States free from the taint of universal health care. The result: We have the world’s highest health-care costs, borne by businesses and employees that cannot afford them; nearly 50 million Americans have no coverage; infant mortality rates are higher than those in 41 nations — but at least (phew!) we don’t have socialized medicine.
Universal education is not “free”. The minimum wage costs jobs. Financial regulations overlooked obvious warnings of Bernie Madoff. “Nearly 50 million” uninsured is not true. Infant mortality is more complex than a quick comparison can demonstrate.
He also wrote this, so it’s clear that he’s interested in his narrative more than facts.
Take it from a democratic socialist: Laissez-faire American capitalism is about to be supplanted not by socialism but by a more regulated, viable capitalism. And the reason isn’t that the woods are full of secret socialists who are only now outing themselves.
We do not have laissez-faire capitalism. No amount of stating preferred explanations will make them true.
LINK: Steven Pearlstein defends President Obama’s budget in a way I don’t fully understand.
In the meantime, the federal government is one of the few entities that is still able to borrow in the current environment, and given the perceived safety of buying government bonds, the cost of that borrowing is about as low as it has ever been. From a purely cash-flow point of view, substituting 18 percent credit card debt with 3 percent Treasury bond debt is a positive development for the grandchildren.
The 18 percent credit card debt makes no sense here. Government borrowing isn’t replacing that. And my hypothetical grandchildren do not have any debt right now. Adding more, even at 3 percent, is hardly a positive development for them. The administration intends to grow the debt, not refinance it.
Refinancing costs are relevant, too. If the so-called positive development of new debt at 3 percent interest helps us, what will this new debt look like at 4, 5, or more percent when interest rates rise, as they will? Maintaining the apparently-permanent interest payments is a cost.
He continues with a bit about how infrastructure creates lasting economic value without defending it. Would the Bridge to Nowhere have justified its cost? Doesn’t matter, it seems. He reassures:
Strange as it may sound, there are times when it’s necessary to make things worse in order to make them better. Fighting a war to achieve a lasting peace. Making a patient sick to cure his cancer with radiation or chemotherapy. And, yes, taking on more debt to help get the country out of a debt-induced recession.
Unlike chemotherapy, where doctors eventually stop dosing a patient, what evidence do we have that politicians will ever believe we’ve reached the “ideal time for the government to deleverage and put its financial house in order”? The new deficit spending is permanent. The only open question once the budget passes is who will pay for it. Right now, the answer is “the rich” and the Chinese. Eventually, it will be the middle class, including all of our grandchildren.
LINK: Wanting an iPhone does not mean a consumer is entitled to an iPhone with the carrier of his choice.
The Consumers Union, the New America Foundation, and the Electronic Frontier Foundation, as well as software provider Mozilla and small wireless carriers MetroPCS (PCS) and Leap Wireless International (LEAP), are lining up in opposition not only to the Apple-AT&T partnership, but to all manner of arrangements whereby mobile phones are tethered exclusively to a single wireless service provider.
Apparently a voluntary contract between two parties means nothing if it means a consumer has to then make a choice that she doesn’t like. I want an iPhone with Sprint, but I can’t get it. My response is to decide which has more value and act accordingly, not whine to the government.