Lone Candle
Champion of Truth
Global Climate Agreements: Successes and Failures Lindsay Maizland. 1 25 2021. Council on Foreign Relations. https://www.cfr.org/backgrounder/paris-global-climate-change-agreements The Climate Change Performance Index 2021 Jan Burck et al. 2021. New Climate Institute. The Climate Change Performance IndexResults 2016 Jan Burck et al. 2016. GermanWatch.
“At least $63 billion—an amount larger than the current annual budgets of 42 states—of the boosted unemployment payments distributed as part of the federal government’s pandemic response has been distributed improperly, according to an estimate from the Department of Labor Office of the Inspector General. The office attributes a “significant portion” of those improper payments to fraud, and preliminary audits indicate that the actual amount of improper payments may be higher.”
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“The inspector general reports “a forty-fold increase” in the number of fraud-related matters, which have “exploded” since the CARES Act passed.”
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“payments to people who can’t work because of the pandemic (or due to the government’s response to it) is a defensible proposal. But even defensible proposals have costs to consider. Extending the federally boosted unemployment payments through August will cost taxpayers an estimated $246 billion—and that likely means that another $24 billion, or more, will be lost to fraud.”
“In 1984, they introduced MediSave, a health savings account that was part of the country’s mandatory savings scheme, called the Central Provident Fund (CPF). Adding the MediSave bucket to the fund (which also has a bucket for housing and a bucket for retirement) forced all Singaporeans to pay something for medical care. This was followed in 1990 by the introduction of a catastrophic insurance policy called MediShield Life that is mandatory for all Singaporeans and permanent residents. Finally, in 1993, Singapore introduced MediFund, a government-managed endowment for Singaporeans who cannot cover their medical bills using the above two funding methods, cash, or family assistance. Interest from the endowment is given to certain health care institutions to underwrite the bills of patients who can’t pay. (The family help aspect is important, as MediSave funds can be used to pay the health bills of an immediate family member.) Although the country also has a supplemental private insurance market, Singaporeans under 55 must contribute 20 percent of their salaries, and their employers another 17 percent, to the CPF.
A network of public hospitals are meant to encourage what Lee Kuan Yew called a “self-administered means test.” Patients can choose any kind of hospital “ward” they like, but the subsidies slide based on consumer income and ward grade. A public hospital’s cheapest ward might sleep four patients to a room and lack air conditioning, while its most expensive wards sleep one person to a room and are cooled. While the vast majority of Singapore’s hospital beds are in public facilities, there are also private hospitals. (The situation for primary care and clinics, where care is cheaper, is the opposite: Most practices are private.)
Singapore has found that making people pay a nominal amount for every type of medical service discourages unnecessary consumption and that the spectrum of service upgrades—from shorter wait times to one-person rooms—allows prices to work as a mechanism for allocating resources. The system is greatly aided by a requirement from the Ministry of Health (MOH) that all public hospitals report to the government what they charge. The MOH then posts facility-specific averages on an easily searchable website where consumers can sort hospitals and wards by how much they charge for specific procedures. Private hospitals aren’t required to submit this information to the MOH, but many do so voluntarily. The differences are stark: The median cost of repairing a one-sided lower abdominal hernia at Singapore’s cheapest public hospital ward in 2018–2019 was $966. The median cost for the same procedure at Singapore’s most expensive private hospital was $15,729.”
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“Singapore doesn’t control just the pharmaceutical choices of its residents; it also controls most of their media choices. Consider that Singapore’s buskers—the independent street performers one sees in public transportation systems and parks around the U.S.—not only need a permit (as is the case in Boston and several other American cities) but “are required to attend an audition to ensure consistency in the quality of busking activities,” according to guidelines published by Singapore’s Media Development Authority (MDA). Video games and movies “deemed to undermine public order” or that are “likely to be prejudicial to national interest” are prohibited. Press freedoms are nonexistent.”
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“Even people who abhor the draconian policies in Singapore begrudgingly admit that it is a well-put-together place. The science fiction writer William Gibson visited the island for a 1993 Wired article in which he described the airport, streets, and buildings as perfectly maintained and the flora as immaculate. He could find no “wrong side of the tracks” or dilapidated infrastructure. The whole country was safe and polite and advanced. “Only the clouds were feathered with chaos,” Gibson wrote.
Following the publication of the piece, which described the country as “Disneyland with the death penalty,” Singapore banned the distribution of Wired.”
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“Singapore is complex, but its core tension comes from the pairing of highly effective public and private institutions that take into account how people respond to incentives while engaging in shocking incursions on personal liberty and bodily autonomy. Imagine for a moment that it were possible for America to import what’s “good” about Singapore—the effective institutions, the economic growth, the tranquility. Could it be done without accidentally importing what’s bad?”
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“Singapore is one of the few countries in the world where the public sector outbids the private sector for talent, thanks to the fact that “cabinet level pay may exceed U.S. $800,000, with bonuses attached that can double that sum for excellent performance.” The country’s culture of public service is also bolstered by “complex and overlapping incentives whereby top public sector workers are…respected highly and develop the personal networks for subsequent advancement in either the public or private sectors.””
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“Bryan Caplan has argued that Singapore is unique in a way that does not bode well for policy adoption in either direction. In a 2009 paper, he summed up the “Singapore paradox” thusly: The island nation “persistently adopts policies that the democratic process would overturn almost anywhere else on earth, but the same party keeps winning election after election by a landslide. Why doesn’t a rival party promise to abolish the PAP’s unpopular policies and soar to power? How, in short, is Singapore’s political-economic equilibrium possible?”
Caplan probed several explanations in his paper, which he presented in Singapore. He ruled out the idea that the country is not actually a democracy, since it has free and fair (though not competitive) elections. Instead, he found strong survey evidence that Singaporeans were both “unusually concerned about economic performance” and deferential to the party that has delivered consistent economic growth for decades. The 2002 World Values Survey, where Caplan derived his data, reported that 58.8 percent of Singaporeans say “a high level of economic growth” should be their nation’s top priority, compared to 48.6 percent of Americans. In terms of political culture, the differences were much starker: 3.2 percent of Singaporeans reported being “very interested” in politics, and 32.8 percent were “somewhat interested” in politics. In America, the World Values Survey reported those numbers at 18.3 percent and 47.2 percent respectively.
Based on both the last eight months of social upheaval and on the United States’ decadeslong preference for swapping Democrats and Republicans in and out of federal power, Americans are almost certainly less deferential than are Singaporeans. And therein lies the rub: Being 10 percent less democratic requires American voters to trust elites and government far more than they do and, frankly, far more than they should.”
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“Yana Chernyak, the assistant director of strategic initiatives at the American Enterprise Institute (and Cowen’s stepdaughter), wrote a guest post for Cowen’s Marginal Revolution blog in 2014 in which she posited that people “run in circles discussing whether Singapore is replicable based on its public and economic policies” and generally miss that “what actually makes Singapore so unique and probably impossible (or at least very difficult) to replicate” is its culture—specifically, Peranakan culture, which is passed down by the descendants of pan-Asian merchants and which holds a “positive view of commercial activity as the machine of wealth creation and basis of improving one’s life.””
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“Singapore has combined classical liberal policies such as free trade, an open port, and low taxes with an authoritarian single-party government that centrally plans large swaths of the island’s economy and infrastructure, plays the role of censor in practically every media sector, canes petty criminals, and executes drug offenders. Because of, or despite, this seemingly incongruous combination, Singapore for most of the 21st century has reported higher annual gross domestic product (GDP) growth than the U.S., as well as lower infant mortality, greater trust in government, a comparable GDP per capita, and a longer life expectancy. The island city-state, as its proudest inhabitants love to mention, is also cleaner than the U.S. and has much less crime.”
“A growing chorus of lawmakers and experts argue Congress could further improve jobless benefits by adding something called “automatic stabilizers” into the equation. That would mean that benefits would be tied to certain economic conditions — say, the unemployment rate — and would phase out as the economy gets better. They would be triggered on and off according to what’s actually happening in the economy for businesses and for workers.
“A ton of resources are wasted during a really crucial time … just having to go through this ad hoc stimulus and relief and recovery, and it just doesn’t have to be like that,” said Heidi Shierholz, a senior economist and director of policy at the Economic Policy Institute and former chief economist at the Labor Department. “We can automate things to make it so Congress could step in if they ever needed to do more relief, but it would mean that the basic structure of relief and recovery would be there already.””
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“The government already has in place automatic stabilizers, including unemployment itself, which is intended to stabilize the economy — not only do they replace income for people who lose jobs, but they’re also meant to help prop up the economy in moments of downturn and keep consumer spending going. When an unemployed worker can’t pay their rent, it’s bad for both the tenant and the landlord.
Because the unemployment system has become so whittled down over the years, benefits are less effective at supporting the economy than they used to be — food stamps tend to be more impactful — but it varies by state. “Unemployment insurance is a much better stabilizer in Massachusetts and New Jersey than it is in Texas and Virginia,” said Wayne Vroman, a labor economist at the Urban Institute.
But with federal interventions during the pandemic, that has changed somewhat, at least temporarily. Expanded unemployment benefits appear to have been quite useful in helping people spend what they need, which in turn helps businesses dependent on those customers. Research shows they actually helped many people with savings, and they likely made the recession less severe. They also reduced some inequalities in how Black and white workers access benefits and the amount of benefits they receive. This makes the argument that they should continue as long as the crisis continues make sense.”
“A genuinely free market family agenda could start with reforming tax laws to ease the burden on two-income families with children. As Edward McCaffery documented in his 1997 book Taxing Women, the U.S. tax code is biased against secondary earners, who are usually women. The secondary earner’s first dollar is taxed at the same high rate as the primary earner’s last dollar, because we don’t allow true individual filing for married couples.”
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“One of the book’s best chapters explores the benefits of marriage and decries falling marital rates among the poor. But it does not explore how tax and welfare policies that distort market signals help explain the rejection of marriage. For example, a couple who each earn $20,000 and are eligible for the Earned Income Tax Credit can get substantially more by remaining unmarried and filing two separate tax returns than by marrying and filing one. And because many welfare benefits are reduced as household income rises, there is a disincentive to live with the other biological parent of one’s children. A simpler relief system, along the lines of a negative income tax or a universal basic income, could avoid many of those dysfunctions by providing benefits directly to individuals regardless of marital status or other demographics. But even that sort of reform, hardly a radical libertarian move, doesn’t get discussed here.”
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“Nor do we hear as much as we should about the potential drawbacks to the policies Eichner prefers. She frequently invokes Finland as a country that does more to mandate paid parental leave, subsidize day care, and limit weekly hours of paid work. She does not ask what the costs to Finnish society might be from such policies. For example, the Finnish unemployment rate over the last decade (before COVID-19) was roughly twice the U.S. average, falling only briefly below 6 percent and topping out at almost 12 percent in 2015. The female unemployment rate for 2009–19 averaged about 8 percent, compared to about 6 percent in the United States. In 2014, Reuters found that fewer women are in high management positions in the private sector in the Nordic countries than in the United States. There are two likely explanations for this. First, despite public policy geared toward equality, Nordic women still are disproportionately represented in occupations such as health care and education that are largely in the public sector. Second, parental leave laws still encourage more time off for mothers, and that time off can set women back when pursuing management tracks. The Financial Times recently reported a similar result looking specifically at Norway.
Perhaps these costs are worth the benefits, but to make that case you have to discuss the cost side of the equation. The Free-Market Family does not grapple with the evidence that virtually every federal social program in U.S. history has ended up costing far more than projected when it passed. Whatever Eichner imagines the costs of her preferred pro-family policies to be, we can reliably multiply that several times over to get the likely costs over time.
She does finally say something about costs in the final chapter. But even there we get only a few paragraphs of hand waving and the assurance that these programs will pay for themselves with greater productivity and female employment. And if they don’t, well, we can just reallocate what we spend on the military and make the tax code more progressive. There is no discussion of the potential tradeoffs caused by higher marginal tax rates. (She points out that the U.S. economy grew when statutory rates were higher in the past, but this ignores the difference between statutory rates and the effective rates paid after avoidance and deductions. According to the Tax Foundation, the top 1 percent of earners in the 1950s paid an effective tax rate of about 42 percent, which is not that much different from the 36 percent effective rate today.)
Despite these omissions and flaws, The Free-Market Family does document some significant problems facing American families. As Eichner shows, the more we learn about the neuroscience of child development, the more we know about the material conditions under which children thrive. It is important to think through how best to ensure that parents can create those conditions, especially at a time when the prevailing policy assumptions tend to favor big-government interventions like the ones Eichner proposes.”
“the CBO estimates that raising the minimum wage would cost 1.4 million jobs, reducing total national employment by 0.9 percent in 2025, the first year in which the full $15 hourly wage would be in effect. Some people’s wages would increase, lifting about 0.9 million people out of poverty in the process; the evidence suggests these higher wages would be largely paid for by consumers in the form of higher prices. The knock-on effects to employment, taxation, and various federal programs would raise the deficit by about $54 billion over the next decade.”
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“You can always argue with the CBO’s estimates and models, and at times it’s been quite wrong. But it’s fairly obvious that substantially raising federal wage requirements would result in some number of employers choosing to employ fewer people, especially in rural areas with lower costs of living where employers are likely to be more sensitive to increased labor costs.”
Making Sense of the Minimum Wage: A Roadmap for Navigating Recent Research Jeffrey Clemens. 5 14 2019. CATO Institute. https://www.cato.org/publications/policy-analysis/making-sense-minimum-wage-roadmap-navigating-recent-research Gradually raising the minimum wage to $15 would be good for workers, good for businesses, and good for the economy Ben Zipperer. 2
“The four executive orders President Joe Biden signed on Tuesday on advancing racial equity marked the new administration’s first major address of systemic racism. They signal that Biden plans to attack the problem with sweeping policy changes mandating cooperation across multiple federal agencies — a bold departure from previous administrations which rarely tackled racial inequities head-on.
The executive orders direct the Department of Housing and Urban Development to dismantle Trump-era housing discrimination policies, end the Department of Justice’s contracts with private prisons, reestablish tribal sovereignty and combat xenophobia against Asian Americans, which is on the rise since the start of the pandemic. It’s the latest round in a series of swift, aggressive actions undertaken by the president since he took office last week.”
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“Biden administration officials say the executive orders are but one of several steps the president plans to take to battle racial disparities. It’s why both Biden and racial justice advocates demanding change view the executives orders the same way: as a good first step.”