“I document a large and mounting body of empirical research that shows that key market-based policies in health care have failed. Even if well intended, these policies have often not helped people make meaningful choices of medical care or insurance plans. And neither have they controlled spending, as experts promised.
In fact, they are doing exactly the opposite. They are setting people up to make poor choices and are scaffolding a massive, ineffective market bureaucracy.
One-third of people said they would rather file their taxes than read the terms of a health plan. And reams of studies summarized in my article affirm that people do not choose well among health insurance plan options, and these errors are hard to remedy with anything short of a strong default plan—in which case, one must ask whether “choice” even matters.
Likewise, even when people have to pay a large share of their own medical care and have easy access to price information, they still do not compare prices or choose the lowest-price options, even for services with little variation in quality. One partial explanation is that health care patients look to doctors—not price lists—to steer their care. Patients lack the desire, time, knowledge, and skills to navigate medical decisions as “consumers.”
The focus of the last several decades of health regulation has been to try to fix broken markets and flawed consumers through constant regulatory, technocratic tinkering—either to spur competition or to nudge consumers toward better choices. This tinkering has fallen short, and it has produced a massive market-based bureaucracy.
Thick layers of government regulations and regulators attempt to scaffold failing market-based policies. Plus, this scaffolding has deeply embedded private health care enterprises—with high profits and salaries—into the bureaucracy. As one example, the 2018 salary for the CEO of Blue Cross and Blue Shield of Michigan was recently reported to be $19 million, which is not an unusual sum among health care executives.
Because markets do not meaningfully enhance choice, do not avoid bureaucracy, and have certainly not solved cost problems, it is time to stop tinkering and to seek a better foundation for the next era of health policy and regulation.”
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“It is time to give up the false hope that health care markets and individual purchase decisions will produce a health care system that Americans want and, in the process, drive down spending. Policymakers have spent a half-century avoiding the hard questions about what values, objectives, and tradeoffs should guide health policy, by hoping that markets would magically answer these questions.
The reality is that the only way to build effective health policy—and, in turn, health regulation—is by engaging deeply in these hard questions and the challenging political battles they necessarily provoke.”
“What the city is actually doing is outsourcing responsibility for getting people vaccinated to private local businesses. Fines for failure to comply with the law fall not on the unvaccinated people attempting to get into restaurants and movie theaters, but on the businesses that fail to catch them. Fines start at $1,000 (beginning with the second violation) and can reach as high as $5,000 per citation.”
“While many answers to climate change require national and even international action, cities often have the unilateral power to craft local rules like building codes. But before the city of Tucson could even look at possible building reforms, the Republican-led state legislature took away its power to do so — by passing a state law that natural gas utilities are “not subject to further regulation by a municipality.”
Supporters of the Republican bill were trying to beat climate advocates to the punch and “preempt” restrictions on fossil fuels. “We wanted to get ahead of what we viewed as an economically damaging trend, and stop it before it could gain a foothold here,” says Garrick Taylor, a spokesperson for the Arizona Chamber of Commerce and Industry, one of the lobbying groups that supported the bill.
With those few lines of text, Arizona blocked a path for cleaning up a significant source of Tucson’s climate pollution — even as nations around the world are racing to transition to cleaner energy and slow disastrous climate change.”
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“Arizona was the first of many US states where “localities are cut off at the knees, because they’re in states where lawmakers are hostile” to these kinds of climate regulations, says Sheila Foster, a Georgetown University professor who specializes in urban environmental law.
Interest groups for the natural gas industry, worried about losing energy customers, have now promoted bills in half the country to strip cities of basic powers to set greener building codes and help phase out fossil-fuel pollution. These “preemption” laws have swept through 20 state legislatures; three more states have bills pending this year.”
“The Atlanta shooter—Robert Aaron Long—told police he struggled with sex addiction. He was a devout Christian who felt guilty about visiting sex workers at Asian spas, friends said. Were Long’s hateful acts really about race? Or were they more about misogyny—a man lashing out at women for inspiring lust in him? How significant is the fact that the victims were largely Asian women? Was his true bias against sex workers?
In one sense, none of this makes a difference. Eight lives were senselessly lost. Long’s acts were morally heinous whether driven by anti-Asian racism, general misogyny, resentment of sex workers, or total randomness. And hate crime or not, murder is a serious criminal offense, punishable in Georgia by life in prison, with the possibility of life without parole or even execution.
Yet if Long was motivated by anti-Asian or anti-female bias, this would be considered, under Georgia and federal law, a hate crime. If he was motivated by hatred of sex workers, it would not. This ambiguity perfectly encapsulates the tangled logic behind U.S. hate crime laws.”
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“Hate crime statutes generally do one specific thing: enhance criminal punishments for actions that are already against the law. They say that for whatever the underlying offense is—vandalism, harassment, theft, assault, murder—the sentence will be harsher if the offense was committed out of identity-based bias or prejudice instead of, say, pure greed or lust or non-specific anger.”
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“Hate crime statutes may make people feel like they’re doing something about a serious problem. But judged by their results, they’re likely to be harmless but ineffective at very best. At a 2018 U.S. Commission on Civil Rights briefing on hate crimes, none of the panelists could point to data, studies, or other evidence showing that designating something a hate crime deters, prevents, or reduces that crime or helps authorities catch perpetrators.
At worst, hate crime laws and their emphasis on individual bad motives can distract from more systemic issues.”
“Younger, less-well-educated workers have been especially harmed by recent state-level minimum wage hikes, according to a study issued today by the National Bureau of Economic Research. The paper was written by economists Jeffrey Clemens of the University of California, San Diego, and Michael R. Strain of the American Enterprise Institute.”
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“They found that “over the short and medium run, relatively large increases in minimum wages have reduced employment rates among individuals with low levels of experience and education by just over 2.5 percentage points.” By contrast, smaller increases, or ones resulting from indexing inflation to wages, have effects that are “variable and centered on zero.”
The data also offers “evidence that the medium-run effects of large minimum wage changes are larger and more negative than their short-run effects,” so we will often need time to unfold before we see those bad employment effects blossom.”
“The idea behind these vacancy taxes is two-fold. First, the financial penalty would incentivize the owners of empty homes—supposedly real estate speculators holding out for higher rents—to put their properties on the market. Second, the revenue from the tax could then be spent on affordable housing programs.”
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“Yet a new report published on vacant properties in San Diego—one of the cities that is now considering a vacancy tax—suggests that any levy on empty units would do little to raise revenue or boost housing supply.
That report, published by the city’s Housing Commission (SDHC), used utility records to determine how many units in the city were left vacant for six months or more. (The study considered a unit unoccupied if its utility usage fell three standard deviations below a 60-month average.)
The SDHC obtained gas and electric records for 468,352 individual units from 2014 to 2019. During those five years, between 1,500 and 3,700 units were vacant for six months or more, giving the city a long-term vacancy rate of between .32 percent and .79 percent.
When examining water records, the SDHC study found 2,183 out of 252,324 units were potentially vacant for six months or more—a vacancy rate of .85 percent.
Contrary to what some politicians think, there isn’t a mass of hoarded homes that would be pushed onto the market by a vacancy tax.”
“While progressive Democrats in Congress have yet to pass a universal student loan forgiveness bill, the Department of Education has nevertheless forgiven billions of dollars in federal student loan debt since Joe Biden became president. And even without new statutory authority, the federal government is slated to forgive increasingly more student loan debt in the future, thanks to the Biden administration’s expansive interpretation of the Education Department’s existing authorities, as well as a law signed by George W. Bush way back in 2007 that mandates loan forgiveness for certain borrowers.”
“The Biden administration, perhaps worried about the political toll that rising food prices could extract in next year’s midterms, announced plans earlier this month to offer up to $500 million in loan guarantees to beef producers. That’s on top of $500 million approved as part of the $1.9 trillion American Rescue Plan that was supposed to “expand processing capacity and increase competition in meat and poultry” industries, according to the U.S. Department of Agriculture.
The second prong of the White House’s plans seems to involve shaming meat-processing companies. “Just four large conglomerates control the majority of the market for each of these three products (beef, pork, and poultry), and the data show that these companies have been raising prices while generating record profits during the pandemic,” Brian Deese, director of the White House’s National Economic Council, said during a press briefing last Friday, the Detroit Free Press reports.
Taken together, the White House’s approach to high meat prices can be summarized as an argument for greater government subsidies based on the idea that stimulating more competition in the meat-packing industry will expand supply and reduce bottlenecks.
But, as David Frum details in The Atlantic today, there are some good reasons to be skeptical of this argument. For starters, it takes about $200 million (and several months, if not longer) to build a single new meat-processing plant. That means the Biden administration’s new loan programs will not purchase much additional capacity, and whatever gains are made will not happen immediately. Even if the plan is successful, smaller producers will likely need ongoing support beyond the initial loans—if there was a market for more, smaller meat processors, the private sector would be investing in them already.
“There’s a real risk,” writes Frum, “that the initial commitment of $500 million in aid and loan guarantees to small packers will expand into continuing intervention in the marketplace to keep smaller competitors in business in the face of the higher efficiency and lower prices of the big packers.””
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“Offering $500 million in loan guarantees to anyone who wants to build a new meat-processing plant isn’t going to address the supply chain problems at the existing plants or end the Western drought.
Higher prices, while politically difficult for the Biden administration, will send signals up the supply chain that result in more workers being hired and more cows being raised.”
“Tenants in newly seized units obviously benefit from the lower rents that would come from government ownership. Everyone else would be worse off, as they’d be forced to compete for a smaller share of private units.
This is in effect what happened with Berlin’s brief experiment with a law that froze rents at apartments built before 2014. Rents did indeed stop rising in regulated units, benefiting the tenants who lived in them. But prices shot up dramatically for unregulated units. (In April 2021 Germany’s constitutional court struck down Berlin’s rent control.)
The number of regulated units on the rental market also collapsed, while new listings for unregulated units weren’t enough to pick up the slack.
The rent control represented “a windfall to one group of tenants: those, whether rich or poor, who are already ensconced in regulated apartments,” wrote Bloomberg columnist Andreas Kluth in March. “Simultaneously, they hurt all other groups—especially young people and those coming from other cities—by all but shutting them out of the market.”
There is robust evidence that new housing, even expensive new housing, makes cities more affordable for everyone. Berlin’s leaders should consider ways to boost housing production so the city can continue to grow and thrive, instead of just redistributing existing units to benefit a minority of incumbent renters.”
“The simplest way to understand economics is that it is a reckoning with unavoidable tradeoffs. If you spend money on something, you may obtain something in return—but you lose the ability to use those resources on something else. In the world of politics, economics helps us weigh the merits of those tradeoffs. It answers the question: Do the benefits of a policy outweigh the costs? Sometimes the benefits are larger. Sometimes they are meager or even nonexistent. But there are always costs. To acknowledge this is merely to acknowledge reality.”
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“White House press secretary Jen Psaki responded to a question about the tax impact of the $3.5 trillion spending plan now working its way through Congress by declaring that “there are some…who argue that in the past companies have passed on these costs to consumers…we feel that that’s unfair and absurd and the American people would not stand for that.”
When taxes are raised on corporations—the “companies” in Psaki’s response—corporations often respond by passing that tax on to others. In some cases, they pass costs to consumers. In others, as the Cato Institute’s Scott Lincicome wryly notes on Twitter, they reduce the amount they would have otherwise spent on wages. They have to pay more to do business, and so they make adjustments accordingly. Costs create consequences and tradeoffs.
Empirical research has consistently shown that a large portion of corporate tax increases is actually paid by labor down the line. There are some reasonable academic debates about the precise percentage of the tax paid by labor, and how that might change under certain circumstances. But there is little real debate about whether or not some of the costs are passed on. The point is that it happens. Workers, not owners, pay at least some share of higher corporate taxes.”