January 2012

Don’t go “lite,” shrink the state, says Smith

by Fran Smith on November 11, 2009

in Deregulate to Stimulate, Nanny State

CEI’s president Fred Smith is featured today in a video interview with InstaPundit’s Glenn Reynolds – now appearing on Reason’s blog.  Fred talks about “moving government out of the way” as impediments to innovative approaches to issues.  The interview was based on his recent article in The American Thinker, “GOP should grow the Party, grow the economy, and shrink the state.”  As Fred says, GOP must resist pressure to go “Democrat-lite.”

Insurance Industry Stung By Health Care Deal

by Greg Conko on November 11, 2009

in Culture, Health and Illness, Healthcare, Insurance, Legal, Personal Liberty, Regulation, Zeitgeist

With much of the health care reform debate still focused on the wisdom of including a government-run, “public” health insurance “option,” too many opponents are neglecting a far more insidious feature of the Democratic proposals:  the mandatory purchase requirement.  Under each of the bills moving through Congress, every person living in the United States would be required by law to have health insurance.  And, if your employer doesn’t provide you with it, you’ve got to buy it yourself or pay a monetary penalty.

What’s more, the proposals would make it more difficult to get some of the options that are available now — particularly the low-cost insurance plans that cover only catastrophic health events and have substantial cost-sharing features.  And, depending on which bill would eventually be enacted into law, Congress, state insurance commissioners, and/or a federal Health Choices Commissioner would get to dictate what benefits have to be covered in every policy, and would be empowered to determine whether any given plan even qualifies as health insurance.  The end result will be considerably higher costs for almost every person living in the country.

On the other side of the equation, the Democratic proposals would mandate that every insurance company has to issue a policy to anyone who wants to enroll, and would forbid premiums from being based on the enrollee’s health status.  The expectation is that healthy young people would subsidize the health care costs of those who are older or sicker.  But states that have enacted these guaranteed issue and community rating mandates see premiums rise and healthy individuals drop their coverage.  After all, if insurers must issue a policy to all comers, why not wait until after you get sick to sign up?

Early on in the health care debate, the insurance industry agreed to support guaranteed issue and community rating, but only if Democrats would implement the mandatory purchase requirement.  That made Democrats happy because the number of uninsured Americans would fall if being uninsured were made illegal.  And the insurance industry was happy because more people would be forced to buy their products, hyper-inflated prices or not.

Trouble is, in all of this back-door finagling, someone forgot about ordinary Americans.  It turns out that most people don’t like the idea of being fined for choosing not to buy health insurance.  In turn, Democrats were forced to lower the penalty on people who choose to go without it.  And that means there will be fewer healthy people in the system to subsidize the rest.  All of which leaves the insurance industry holding the bag.

Janet Trautwein, CEO of the National Association of Health Underwriters, has an op-ed in today’s Wall Street Journal whining that a weak individual purchase mandate is bad for everyone, and insisting that Congress give people less choice, not more.  It’s unfortunate, to be sure, that hundreds of millions of Americans will face higher health insurance premiums generated by ill-considered legislation.  But, no one should feel bad for those in the health insurance industry who tried to cut this lousy deal and came out losers.  The better solution is not to double-down on the individual purchase mandate, but to scrap the other regulations that will put health insurance and health care out of reach for millions of Americans.

Someone should tell Janet Trautwein that, if you lie down with dogs, you might get fleas.

Get more doctors — get rid of H-1B visa cap

by Fran Smith on November 11, 2009 · 2 comments

in Health and Illness, Healthcare, Mobility

CEI’s champion of letter-writing, Alex Nowrasteh, has a letter to the editor in the Wall Street Journal today advocating removing the cap on H-1B visas to encourage more doctors to practice in the U.S.  As Alex points out:

In 2005, a paltry 7,218 medical and health-care professionals earned H-1B visas, while many were denied. A cap on the number of doctors and medical professionals entering the U.S. discourages health-care access and raises costs. The H-1B visa cap should be removed along with other barriers to the migration of foreign-born doctors and medical professionals. Training more American doctors is important for tomorrow, but looking abroad can help lower medical costs and improve access today.

Also worth noting is the succinct letter following Alex’s by Harry Deloidian:

Convert all law schools to medical schools. That would solve more than one problem.

Cell Phones, Cancer, and Certainty

by Ryan Young on November 10, 2009

in Nanny State, Precaution & Risk, Tech & Telecom, Zeitgeist

CNN reports: “Last summer, Dr. Ronald Herberman, then director of the University of Pittsburgh Cancer Institute, issued a warning to about 3,000 faculty and staff, listing steps to avoid harmful electromagnetic radiation from cell phones.”

“Electromagnetic radiation” is a fancy way of saying light waves.

Herberman has been on his cell phone crusade for a while now; I diagnosed him with a severe case of The Certainty last year.

Still, let’s assume he’s right that cell phones cause tumors. What actions should be taken? I present the following CDC data on leading causes of death as a way to guide our priorities:

Heart disease: 631,636
Cancer: 559,888
Stroke (cerebrovascular diseases): 137,119
Chronic lower respiratory diseases: 124,583
Accidents (unintentional injuries): 121,599
Diabetes: 72,449
Alzheimer’s disease: 72,432
Influenza and Pneumonia: 56,326
Nephritis, nephrotic syndrome, and nephrosis: 45,344
Septicemia: 34,234

Deaths from cancer attributable to cell phone use? Zero. There is an important lesson to be learned here.

Think of it like this: every dollar and every hour of researchers’ time spent investigating cancer risks from cell phones is money and time not spent curing heart disease. Or cancer itself. Or stroke. These “big three” combine to end more than a million lives each and every year.

Which is a better use of limited research resources? Herberman, by bringing funding and attention to a non-issue, is quite possibly costing lives that could otherwise be saved.

The Certainty has very high costs. In Herberman’s case, measurable in lives.

Sen. Amy Klobuchar Criticizes Verizon, Ignores Wireless Industry Realities

by Elizabeth Jacobson on November 10, 2009

in Tech & Telecom

Senator Amy Klobuchar (D-MN) is once again proving that she has no understanding of either the wireless phone industry, the rationale behind contract law, or basic economics. Verizon Wireless announced last week that it was changing its early contract-termination fee for smartphone customers from a flat $175 to a pro-rated $350 that decreases $10 for every month that contract is in effect. Sen. Klobuchar sent complaints to both FCC Chair Julius Genachowski and Verizon CEO Lowell McAdam. From her letter:

I remain concerned that ETFs – especially at these high prices – unfairly penalize consumers, bear little to no relationship to the cost of the handset device, and are anti-consumer and anti-competitive.  In fact, Verizon Wireless’ decision underscores the need for Congress to act and to pass the Cell Phone Consumer Empowerment Act.

Sen. Klobuchar – a vocal critic of the wireless industry – obviously doesn’t understand that wireless carriers subsidize the cost of handsets for customers in exchange for a fixed-duration service contract. $500 upfront for an internet-capable handset is prohibitively expensive for most consumers, and so the popular business model has been below-cost phones + two-year (give-or-take) contracts. No wireless company could stay in business offering subsidized phones without requiring customers to sign service contracts. Moreover, having a brand new shiny gadget – near or below cost – is neither a right nor an entitlement for any consumer. Verizon’s response stated that if a customer absolutely cannot wait two years to get a new high-tech cell phone, then they have the option of going contract-free and upgrading – at full retail price – whenever they desire.

The government should not be in the business of regulating service charges and contract fees. A clever commenter in the Star Tribune article (cited above) exemplifies the madness of Sen. Klobuchar’s complaint best: “I got charged four bucks for a movie late fee the other day. I believe that fee unfairly penalized me and bears little relationship to the price of the movie.”

Baucus wants border measures in climate bill

by Fran Smith on November 10, 2009

in Energy, Environment, Global Warming, International, Nanny State, Trade

Uh-oh.  Senator Max Baucus (D-Montana) is raising the stakes on a U.S. climate bill by endorsing the idea of some sort of tariff on goods from countries that haven’t taken steps to suppress fossil fuel use.  According to Reuters, Baucus, Chairman of the Senate Finance Committee, yesterday said:

“We must push our trading partners to do their part to curb harmful emissions and we must devise a border measure, consistent with our international obligations, to prevent the carbon leakage that would occur if US manufacturing shifts to countries without effective climate change programs.”

Currently the Senate Environment and Public Works Committee, chaired by Senator Barbara Boxer, has rushed through its own bill without minority input to try to catch up with the House, which passed its cap-and-trade bill – H.R. 2454 — on June 26, 2009. The House bill contains a border tax adjustment measure, while the Senate bill does not.  At least, yet.  But Baucus’ comments are a strong signal that the Senate bill will also include tariffs or border “adjustments,” i.e., taxes.

This unfortunate idea is gaining greater traction among global warming advocates as a way to maintain U.S. competitiveness for industries, such as steel and cement, that would be facing higher costs if an energy suppression bill to address global warming is passed.  Proponents of “border measures” also see this as a way to curtail so-called leakage of carbon-intensive industries and related jobs to other countries without similar constraints. Of course, the common justification for those who want to hobble their competition is the refrain: “Level the playing field.”  In Washington politics, that usually means bringing your competitors down to your level.  Check out this article for some possible consequences.

These endorsements could portend a carbon tariff push in Copenhagen when world climate pukkas gather on December 7, 2009. Luckily for people in the U.S., it’s not likely that a newly minted global warming bill will be in their pockets.

Pfizer to Close Facility Behind Kelo Case

by Marc Scribner on November 10, 2009 · 1 comment

in Economy, Legal, Personal Liberty, Politics as Usual, Zeitgeist

Yesterday, Pfizer announced it was closing its research and development facility in New London, Connecticut. This is the same complex that was at the center of the redevelopment plan at issue in Kelo v. New London. From the Castle Coalition:

This was the same bogus development plan that five justices of the U.S. Supreme Court refused to question when the property owners of New London pleaded to have their homes spared from the wrecking ball.  Justices mentioned that there was a plan in place, and that so long as lawmakers who are looking to use eminent domain for someone’s private gain had a plan, the courts would wash their hands.  Now, more than four years after the redevelopment scheme passed constitutional muster—allowing government to take land from one private owner only to hand that land over to another private party who happens to have more political influence—the plant that had been the magnet for the development is closing its doors and the very land where Susette Kelo’s home once stood remains barren to all but feral cats, seagulls and weeds.

This turn of events underscores the argument, often employed by eminent domain opponents, that government-sponsored development corporations lack the economic foresight to efficiently make long-term development investment decisions. Those decisions are best made by economic actors in an open marketplace, not by bureaucrats hungry for additional tax revenue and rent-seeking private developers who have no problem promising the moon to said tax-dollar-sign-eyed officials.

The poorly-reasoned Kelo decision did do some good in galvanizing a nation-wide property rights movement, which resulted in the majority of states enacting additional property protections. While the movement has lost a little steam recently, Texas voters just approved a constitutional amendment (with 81 percent support) that will outlaw several more egregious development takings practices.

For more on moving forward on the eminent domain front, see my previous post which outlines four practical reforms for curtailing eminent domain abuse.

Unemployment Skyrockets: “U.S. now beating European unemployment rates”

by Hans Bader on November 10, 2009 · 15 comments

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, Healthcare, Insurance, International, Legal, Personal Liberty, Politics as Usual, Regulation, Stimulus to Nowhere

Unemployment is now higher in the U.S. than in Europe,  reports the Washington Post.  “The official U.S. unemployment rate, reported last Friday, now stands at 10.2 percent,” compared to “9.7 percent” in Europe.   This is the highest rate in more than 26 years, and marks a huge change from the recent past, in which unemployment was double the American rate in much of Europe, such as in France.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

Regulation of the Day 70: Combustible Dust

by Ryan Young on November 10, 2009 · 1 comment

in Nanny State, Regulation of the Day

OSHA has published a proposed rule to regulate one of the greatest threats to mankind: combustible dust.

It is defined as “all combustible particulate solids of any size, shape, or chemical composition that could present a fire or deflagration hazard when suspended in air or other oxidizing medium.”

Maybe it speaks well of workplace safety if OSHA has made combustible dust one of its highest priorities.

A pessimist might counter that OSHA, having regulated everything else, has been reduced to regulating obscurities in its never-ending search for something to do, and for someone to command.

Poor Ford – They Thought They Were Operating in the Market

by Fred Smith on November 9, 2009

in Bailout Watch, Deregulate to Stimulate, Economy, Mobility, Regulation, Stimulus to Nowhere

The Washington Times, “Greedy Autoworkers,” editorializes the overwhelming rejection of the UAW’s proposed labor agreement.  Unlike GM and Chrysler, Ford elected to reject the bailout money and benefited from the consumer distrust of our newly nationalized auto sector.  Yet, Ford actually went into the black this past quarter. GM and Chrysler, operating as GSEs, are safe from strikes because the government takeover agreement forbids the UAW to strike.   Big Government is willing to discipline Big Labor.  In the market, odds shift and it may well be that Ford will pay a penalty for daring to go on its own.  How can the Obama Administration retain its Eagle Scout status, businesses insist on crossing the street on their own?

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