WSJ.com - Whoa, Trigger

WSJ.com - Opinion: Whoa, Trigger

 

The latest political gimmick is the notion of a "trigger" for the public option: A new government program for the middle class would only come on line if private insurance companies fail to meet certain benchmarks, such as lowering overall health spending or shrinking the number of the uninsured.

 

Liberals should love the idea because a trigger isn't a substantive concession… Democrats will goose the tests so that private insurers can't possibly meet them, mainly by imposing new regulations and other costly burdens.

 

Keep in mind that every version of ObamaCare now under consideration essentially turns all private insurers into subsidiaries of Congress. All coverage will be strictly regulated down to the fine print, and politics will dictate the level of benefits as well as premiums, deductibles and copays.

 

The [House] bill also rewrites the 1974 federal law known as Erisa that lets large and mid-sized employers offer insurance with little regulation. Many businesses are finding innovative ways to drive down spending, largely with worker incentives to live healthier and be more sensitive to the costs of care. Many Democrats call this discriminatory.  In the individual insurance market, Democrats intend to outlaw medical underwriting: Everyone must be charged the same rate or close to it for the same policies, regardless of health status or history.

 

ObamaCare doesn't bother with incentives, instead merely increasing government command and control of private insurance while making it more expensive in the process. That's why a trigger will inevitably lead to the public option, and also why ObamaCare will make all of our current health problems worse.

 

 

 

WSJ.com - Labor Day and the American Dream

 

WSJ.com - Opinion: Labor Day and the American Dream

Mike Rowe wants to restore the luster to Labor Day. As host of the cable TV show "Dirty Jobs," Mr. Rowe has done them all: from steel-mill worker and pig-slop processor to hot-tar roofer and sewer inspector. In the last year, he's teamed up with industrial-supplies giant Grainger to set up a Web site (www.mikeroweWORKS.com) aimed at the millions of Americans who find their calling outside a university's hallways.

In an entry headlined "WORK IS NOT THE ENEMY," Mr. Rowe nails his thesis to his Web page: "We've convinced ourselves that 'good jobs' are the result of a four-year degree. That's bunk. Not all knowledge comes from college. Skill is back in demand. Steel-toed boots are back in fashion."

It's true that, on average, a college grad will make much more money and have significantly greater job security than his high school counterpart. For most Americans, it's also true that the likeliest path to upward mobility runs through the college quad. Averages, however, never tell the whole story.

 

 

 

WSJ.com - Save the Light Bulb!

 

WSJ.com - Opinion: Save the Light Bulb!

The Energy Independence and Security Act of 2007 will effectively phase out incandescent light bulbs by 2012-2014 in favor of compact fluorescent lamps, or CFLs. Other countries around the world have passed similar legislation to ban most incandescents.

Will some energy be saved? Probably. The problem is this benefit will be more than offset by rampant dissatisfaction with lighting. We are not talking about giving up a small luxury for the greater good. We are talking about compromising light. Light is fundamental. And light is obviously for people, not buildings. The primary objective in the design of any space is to make it comfortable and habitable. This is most critical in homes, where this law will impact our lives the most. And yet while energy conservation, a worthy cause, has strong advocacy in public policy, good lighting has very little.

As a lighting designer with more than 50 years of experience, having designed more than 2,500 projects including the relighting of the Statue of Liberty, I encourage people who care about their lighting to contact their elected officials and urge them to re-evaluate our nation's energy legislation so that it serves people, not an energy-saving agenda.

 

 

WSJ.com - Why Gen-Y Johnny Can't Read Nonverbal Cues

 

WSJ.com - Opinion: Why Gen-Y Johnny Can't Read Nonverbal Cues

Unfortunately, nearly all of their [teenagers] communication tools involve the exchange of written words alone. At least phones, cellular and otherwise, allow the transmission of tone of voice, pauses and the like. But even these clues are absent in the text-dependent world. Users insert smiley-faces into emails, but they don't see each others' actual faces. They read comments on Facebook, but they don't "read" each others' posture, hand gestures, eye movements, shifts in personal space and other nonverbal—and expressive—behaviors.

We live in a culture where young people—outfitted with iPhone and laptop and devoting hours every evening from age 10 onward to messaging of one kind and another—are ever less likely to develop the "silent fluency" that comes from face-to-face interaction. It is a skill that we all must learn, in actual social settings, from people (often older) who are adept in the idiom. As text-centered messaging increases, such occasions diminish. The digital natives improve their adroitness at the keyboard, but when it comes to their capacity to "read" the behavior of others, they are all thumbs.

…we might reasonably pose questions about silent-language acquisition in a digital environment. Lots of folks grumble about the diffidence, self-absorption and general uncommunicativeness of Generation Y. The next time they face a twenty-something who doesn't look them in the eye, who slouches and sighs for no apparent reason, who seems distracted and unaware of the rising frustration of the other people in the room, and who turns aside to answer a text message with glee and facility, they shouldn't think, "What a rude kid." Instead, they should show a little compassion and, perhaps, seize on a teachable moment. "Ah," they might think instead, "another texter who doesn't realize that he is communicating, right now, with every glance and movement—and that we're reading him all too well."

 

 

 

WSJ.com - Obama's Health Rationer-in-Chief

 

WSJ.com - Opinion: Obama's Health Rationer-in-Chief

 

White House health-care adviser Ezekiel Emanuel blames the Hippocratic Oath for the 'overuse' of medical care.

Dr. Ezekiel Emanuel, health adviser to President Barack Obama, is under scrutiny. As a bioethicist, he has written extensively about who should get medical care, who should decide, and whose life is worth saving. Dr. Emanuel is part of a school of thought that redefines a physician’s duty, insisting that it includes working for the greater good of society instead of focusing only on a patient’s needs. Many physicians find that view dangerous, and most Americans are likely to agree.

Dr. Emanuel says that health reform will not be pain free, and that the usual recommendations for cutting medical spending (often urged by the president) are mere window dressing. As he wrote in the Feb. 27, 2008, issue of the Journal of the American Medical Association (JAMA): "Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality of care are merely 'lipstick' cost control, more for show and public relations than for true change."

True reform, he argues, must include redefining doctors' ethical obligations. In the June 18, 2008, issue of JAMA, Dr. Emanuel blames the Hippocratic Oath for the "overuse" of medical care: "Medical school education and post graduate education emphasize thoroughness," he writes. "This culture is further reinforced by a unique understanding of professional obligations, specifically the Hippocratic Oath's admonition to 'use my power to help the sick to the best of my ability and judgment' as an imperative to do everything for the patient regardless of cost or effect on others."

In numerous writings, Dr. Emanuel chastises physicians for thinking only about their own patient's needs.

Is this what Americans want?

 

 

WSJ.com - Tax Withholding Is Bad for Democracy

 

WSJ.com - Opinion: Tax Withholding Is Bad for Democracy

America is supposed to be a democracy in which we're all in it together. Part of that ethos, which has been so essential to the country in times of crisis, is a common understanding that we all pay a share of the costs. Taxes are an essential ingredient in the civic glue that binds us together.

Our democracy is corrupted when some voters think that they won't have to pay for the benefits their representatives offer them. It is corrupted when some voters see themselves as victims of exploitation by their fellow citizens.

By both standards, American democracy is in trouble. We have the worst of both worlds.

***

But the politicians' fear of being honest about taxes doesn't change the urgent need to be honest. The average taxpayer is wrong if he believes the affluent aren't paying their fair share—the top income earners carry an extraordinary proportion of the tax burden. High-income earners are wrong, too, about being exploited: Take account of payroll taxes, and low-income people also bear a heavy tax load.

End the payroll tax, end withholding, and these corrosive misapprehensions go away. We will once again be a democracy in which we're all in it together, we all know that we're all paying a share, and we are all aware how much that share is.

 

 

WSJ.com - A French Surprise

 

WSJ.com - Opinion: A French Surprise

 

Politicians don't "grow" an economy like a vegetable garden, and the reasons behind economic growth in the global economy are at least as mysterious to our political class, if not more so, than they are to the rest of us.

 

…at a time when politicians around the world are desperate for any sign of a turnaround, it's refreshing to hear the minister responsible for France's economy speak the truth about growth. It is the product of literally millions of decisions made by millions of people about what to produce, buy and sell. Politicians can influence all that decision making, especially by increasing or decreasing the incentives to produce, work and innovate. But they can't control today's multi-trillion-dollar economies, no matter how much they'd like to take credit for doing so when things start looking better.

 

 

 

WSJ.com - The Whole Foods Alternative to ObamaCare

WSJ.com - Opinion: The Whole Foods Alternative to ObamaCare

 

Eight things we can do to improve health care without adding to the deficit.

 

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.

• Repeal all state laws which prevent insurance companies from competing across state lines.

• Repeal government mandates regarding what insurance companies must cover.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.

• Make costs transparent so that consumers understand what health-care treatments cost.

• Enact Medicare reform.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance...

Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?

Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges.

Rather than increase government spending and control, we need to address the root causes of poor health. This begins with the realization that every American adult is responsible for his or her own health.

Unfortunately many of our health-care problems are self-inflicted: two-thirds of Americans are now overweight and one-third are obese. Most of the diseases that kill us and account for about 70% of all health-care spending—heart disease, cancer, stroke, diabetes and obesity—are mostly preventable through proper diet, exercise, not smoking, minimal alcohol consumption and other healthy lifestyle choices.

 

 

WSJ.com - College-Entrance Test Scores Flagging

In my mind, these data show poor U.S. schools are not just an inner-city problem.

 

WSJ.com - College-Entrance Test Scores Flagging

Only about a quarter of the 2009 high school graduates taking the ACT admissions test have the skills to succeed in college, according to a report on the exam that shows little improvement over results from the 2008 graduating class.

The Iowa City, Iowa-based ACT said 23% of this year's high school graduates had scores that indicated they were ready for college in all four ACT subject areas, or had at least a 75% chance of earning a grade of C or better in entry-level courses.

A Department of Education report in April on the results from the National Assessment of Education Progress -- a key federal test -- found that U.S. high school students haven't made any significant progress in reading or math for nearly four decades.

 

 

 

WSJ.com - How to Fix the Health-Care ?Wedge?

 

WSJ.com - Opinion: How to Fix the Health-Care ‘Wedge’

Consumers are receiving quality medical care at little direct cost to themselves. This creates runaway costs that have to be addressed. But ill-advised reforms can make things much worse.

An effective cure begins with an accurate diagnosis, which is sorely lacking in most policy circles. The proposals currently on offer fail to address the fundamental driver of health-care costs: the health-care wedge.

The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase. Mr. Obama’s health-care plan does nothing to address the gap between the price paid and the price received. Instead, it’s like a negative tax: Costs rise and people demand more than they need.

The bottom line is that when the government spends money on health care, the patient does not. The patient is then separated from the transaction in the sense that costs are no longer his concern. And when the patient doesn’t care about costs, only those who want higher costs—like doctors and drug companies—care.

Thus, health-care reform should be based on policies that diminish the health-care wedge rather than increase it.

 

 

WSJ.com - American Babies Are Ruining Everything

 

WSJ.com - Opinion: American Babies Are Ruining Everything

More and more, we are hearing from people who might best be described as anti-birthers. …they advance a simple proposition: that the birth of each additional American child is a kind of calamity for the environment.

There’s a larger trouble with this point of view, of course, and it has nothing to do with the arithmetic. However new-sounding the language about “carbon footprints” may be, what we have here is the same old Malthusian view of people breeding themselves to destruction.

…. it means that when a friend has a baby, you have to think we’re all the worse for it. It means that instead of celebrating the development that brings things like refrigeration, cars and calories to people who don’t now have them, we fear the day that a child in Manila enjoys enough of the blessings of life to have the same carbon footprint as a kid from Minnesota.

The real answer, of course, is to have a little more faith in the creative powers of human beings. Given the freedom to grow and innovate, surely the same people who have licked polio, sent a man to the moon, and given us a revolution in information will sooner or later come up with new technologies that will provide for our energy needs while being friendlier to the environment.

The task is not without its challenges. But we’re not likely to get far with a “science” that defines the problem as American babies.

 

 

WSJ.com - Teeing Up the Middle Class

 

WSJ.com - Opinion: Teeing Up the Middle Class

Few of President Obama’s 2008 campaign pledges were more definitive than his vow that anyone making less than $250,000 a year “will not see their taxes increase by a single dime” if he was elected. And he was right, very strictly speaking: It’s going to be many, many, many billions of dimes.

Democrats already plan to repeal the Bush tax cuts, but that won’t raise enough money. So they’re proposing an income tax surcharge on “the wealthy,” but that won’t raise enough either. Democrats have no choice but to soak the middle class because only they have enough money to finance the liberal dream of yoking the middle class to cradle-to-grave government entitlements.

So waiting in the wings is the biggest middle-class tax increase of them all: a European-style value added tax, or VAT. This tax would apply to every level of production or service, and it is beloved by politicians in Europe because it raises so much money so easily without voters noticing.

The undeniable reality is that you can’t run a European-style welfare-entitlement state without European-style levels of taxation on the middle class (and eventually without low European-style growth and high jobless rates). It’s looking more and more like Mr. Obama’s no-middle-class-tax pledge was one of the greatest confidence tricks in American political history.

 

 

WSJ.com - Pay Your Teachers Well

 

WSJ.com - Opinion: Pay Your Teachers Well

The conflicting interests of teachers unions and students is an underreported education story, so we thought we’d highlight two recent stories in Baltimore and New York City that illustrate the problem.

The Ujima Village Academy is one of the best public schools in Baltimore and all of Maryland. Students at the charter middle school are primarily low-income minorities; 98% are black and 84% qualify for free or reduced-price school meals. Yet Ujima Village students regularly outperform the top-flight suburban schools on state tests.

However, Maryland’s charter law requires teachers to be part of the union. And the Baltimore Teachers Union is demanding that the charter school pay its teachers 33% more than other city teachers, an amount that the school says it can’t afford. Ujima Village teachers are already paid 18% above the union salary scale, reflecting the extra hours they work. To meet the union demands, the school recently told the Baltimore Sun that it has staggered staff starting times, shortened the school day, canceled Saturday classes and laid off staffers who worked with struggling students. For teachers unions, this outcome is a victory; how it affects the quality of public education in Baltimore is beside the point.

The actions of the teachers unions in both Baltimore and New York make sense from their perspective. Unions exist to advance the interests of their members. The problem is that unions present themselves as student advocates while pushing education policies that work for their members even if they leave kids worse off. Until school choice puts more money and power in the hands of parents, public education will continue to put teachers ahead of students.

 

 

 

WSJ.com - Is There a 'Right' to Health Care?

 

WSJ.com - Opinion: Is There a ‘Right’ to Health Care?

If there is a right to health care, someone has the duty to provide it. Inevitably, that “someone” is the government. Concrete benefits in pursuance of abstract rights, however, can be provided by the government only by constant coercion.

The question of health care is not one of rights but of how best in practice to organize it. America is certainly not a perfect model in this regard. But neither is Britain, where a universal right to health care has been recognized longest in the Western world.

Not coincidentally, the U.K. is by far the most unpleasant country in which to be ill in the Western world. Even Greeks living in Britain return home for medical treatment if they are physically able to do so.

Universality is closely allied as an ideal, ideologically, to that of equality. But equality is not desirable in itself. To provide everyone with the same bad quality of care would satisfy the demand for equality. (Not coincidentally, British survival rates for cancer and heart disease are much below those of other European countries, where patients need to make at least some payment for their care.)

In any case, the universality of government health care in pursuance of the abstract right to it in Britain has not ensured equality. After 60 years of universal health care, free at the point of usage and funded by taxation, inequalities between the richest and poorest sections of the population have not been reduced. But Britain does have the dirtiest, most broken-down hospitals in Europe.

 

 

WSJ.com - New Jersey's 'Italian' Problem

 

WSJ.com - Opinion: New Jersey’s ‘Italian’ Problem

Big Government is the reason New Jersey ranks as the worst of 50 states on the Small Business Survival Index. And Big Government is a leading reason New Jersey has a “corruption problem” that an FBI agent at Friday’s press conference characterized as “one of the worst, if not the worst, in the nation.”

Sandy McClure, co-author of the book “The Soprano State: New Jersey’s Culture of Corruption,” agrees that big government is a big reason behind the state’s corruption problem. “You have all these little authorities that everyone has to go to for permission,” she says. “Too much government means too many opportunities for officials looking to cash in. And there’s no way that the press can keep track of it all.”

Ms. McClure is right: The more extensive government’s reach, the more opportunities the governing class has to steal from and shake down the productive class.

The point is that politicians and officials have more to sell in an environment of high taxes, big spending and overregulation—the same things that help explain New Jersey’s anemic economic growth and job creation. When government gets too big and complicated for businesses to get their permits and approvals and funding honestly, the dishonest prosper. And the honest get fed up and flee.

 

 

WSJ.com - Europe Thumps U.S., Again

 

WSJ.com - Opinion: Europe Thumps U.S., Again

Across the globe, countries are moving ahead with similar bilateral trade deals, often giving their own national companies an edge over U.S. competitors. In a perfect world, all countries would be able to benefit from multilateral trade opening under the Doha Round. But for now bilateral deals are better than nothing, and America is leaving itself behind.

 

 

WSJ.com - Obama Needs to 'Reset' His Presidency

Interesting critique from a Democratic Party insider – while I don’t hope the Democrats remain strong in 2010 elections, I do think the advice he gives to get back on track is telling. 

 

Mr. Van Dyk was Vice President Hubert Humphrey's assistant in the Johnson White House and active in national Democratic politics over 40 years.

 

WSJ.com - Opinion: Obama Needs to 'Reset' His Presidency

What adjustments should be made?

- Cut back both your proposals and expectations. You made promises about jobs that would be "created and saved" by the stimulus package. Those promises have not held up. You continue to engage in hyperbole by claiming that your health-care and energy plans will save tax dollars. Congressional Budget Office analysis indicates otherwise.

It's time to re-examine these initiatives. Could your health plan be scaled back to catastrophic coverage for all -- badly needed by most families, but quite affordable if deductibles are set at the right levels? Should the Rube Goldbergian cap-and-trade proposals be replaced with a simple carbon tax, with proceeds to be allocated to alternative-fuels development?

- Talk less and pick your spots. You are outdoing even Johnson and Mr. Clinton with your daily speeches in the capital and around the country.

Applause and adulation are gratifying. But the more you talk, the less weight your words will hold. Let voters see you at your desk, conferring with serious people about serious matters. When you do choose to talk, people will understand that it's important and they should listen.

- Conform your 2009 politics to your 2008 statements. During your campaign, you called for bipartisanship and bridge-building. You promised to reduce the influence of single-issue and single-interest groups in the policy process. Yet, in your public statements, you keep using President Bush as a scapegoat.

 

 

WSJ.com - Why We Don't Want a Nuclear-Free World

 

WSJ.com - Opinion: Why We Don't Want a Nuclear-Free World

 

We use nuclear weapons every day, Mr. Schlesinger goes on to explain, "to deter our potential foes and provide reassurance to the allies to whom we offer protection."

"We will need a strong deterrent," he finally says, "and that is measured at least in decades -- in my judgment, in fact, more or less in perpetuity. The notion that we can abolish nuclear weapons reflects on a combination of American utopianism and American parochialism. . . . It's like the [1929] Kellogg-Briand Pact renouncing war as an instrument of national policy . . . . It's not based upon an understanding of reality."

In other words: Go ahead and wish for a nuclear-free world, but pray that you don't get what you wish for. A world without nukes would be even more dangerous than a world with them, Mr. Schlesinger argues.

Mr. Schlesinger expresses concerns, too, about the safety and reliability of U.S. nuclear weapons, all of which are more than 20 years old…  The U.S. is the only major nuclear power that is not modernizing its weapons.

 

 

WSJ.com - Mandating Unemployment

 

WSJ.com - Opinion: Mandating Unemployment

Here's some economic logic to ponder. The unemployment rate in June for American teenagers was 24%, for black teens it was 38%, and even White House economists are predicting more job losses. So how about raising the cost of that teenage labor?

Sorry to say, but that's precisely what will happen on July 24, when the minimum wage will increase to $7.25 an hour from $6.55.

Proponents argue that millions of workers will benefit from the bigger paychecks. But about two of every three full-time minimum-wage workers get a pay raise anyway within a year on the job. Meanwhile, those who lose their jobs or who never get a job in the first place get a minimum wage of $0.

Mr. Neumark calculates that the 70-cent per-hour minimum wage hike this month would kill "about 300,000 jobs for those between the ages of 16-24." Single working mothers would also be among those most hurt.

 

 

WSJ.com - The Seinfeld Hearings

 

WSJ.com - Opinion: The Seinfeld Hearings

In the 1930s, academics developed a philosophy they called "legal realism" to undercut judicial resistance to "progressive" statutes such as laws restricting the hours a baker or a woman could work. Legal realism elevated just results over the rule of law. It saw analysis of "the law" as an after-the-fact rationalization that allowed reactionary judges to conceal their empathy for the oppressed. Because legal realists believed judges inevitably made law when they ruled, they thought judges should decide cases with progressive ends in mind.

At the same time, and somewhat inconsistently, realist progressives also condemned judges who declared progressive federal and state laws to be unconstitutional as judicial activists who were thwarting the will of the people. Never mind that the Supreme Court was only tepidly enforcing the original meaning of the Constitution and was upholding the vast majority of enlightened regulations. Any interference of the will of the people was deemed to be undemocratic.

Today we live in a legal world in which many progressives and conservatives share the legal realists' preoccupation with results. So justices must be chosen who will reach the politically correct results or opposed because they will reach the wrong results. Judicial confirmation hearings are thereby turned into a game of gotcha…

 

Supreme Court confirmation hearings do not have to be about either results or nothing. They could be about clauses, not cases. Instead of asking nominees how they would decide particular cases, ask them to explain what they think the various clauses of the Constitution mean….  Don't ask how the meaning of these clauses should be applied in particular circumstances. Just ask about the meaning itself and how it should be ascertained. 

 

Such a hearing would not only be entertaining, it would be informative and educational. After all, it would be about the meaning of the Constitution, which is to say it would be about something.

 

 

WSJ.com - The Dumbing Down of Democracy

 

WSJ.com - Opinion: The Dumbing Down of Democracy

 

With a calm and confident smile, Mr. Peskov replied: "Ours is a different system of democracy." That was it. He stopped talking but kept smiling. The message sank in.

 

Dmitry Peskov was defining democracy in a way that could hardly be more different than the system of political pluralism developed over the past 300 years in the West. He couldn't have been clearer: We are changing the rules. Get over it.

 

Where is it written that American-style democracy will last forever, much less spread to new nations? If the members of the U.N. General Assembly could choose between the democracy of the U.S., Britain and France or that of Russia, Venezuela and Bolivia, likely it would be the latter. Genuine democracy is hard work. Why should the likes of Pakistan, Iraq, Turkey, Taiwan or Brazil endure that stress if Potemkin Village democracy is acceptable?

 

What Putin, Khamenei, Chávez, Morales and Mubarak want is fait-accompli legitimacy. When resistance to their dumbed-down democracy stops, they'll have it. China's Orwellian filtering software is a nice metaphor for what's at stake. Vocal criticism, even as eloquent as Mr. Obama's in Moscow this week or in Cairo, is not resistance. Real resistance requires acts of political push-back that all the world's people can see and recognize.

 

 

WSJ.com - Fuel Standards Are Killing GM

A good example of unintended consequences from poor regulation:

 

WSJ.com - Opinion: Fuel Standards Are Killing GM

The actual Corporate Average Fuel Economy (CAFE) results will depend on the mixture of fuel-thrifty and fuel-thirsty vehicles consumers choose to buy from each manufacturer -- not on what producers hope to sell. That means only those companies most successful in selling the smallest cars with the smallest engines will, in the future, be allowed to sell the more profitable larger pickups and SUVs and more powerful luxury and sports cars.

General Motors is likely to become profitable only if it is allowed to specialize in what it does best -- namely, midsize and large sedans, sports cars, pickup trucks and SUVs. The company can't possibly afford to scrap billions of dollars of equipment used to produce its best vehicles simply to please politicians who would rather see GM start from scratch, wasting more taxpayer money on "retooling" to produce unwanted and unprofitable subcompacts and electric cars. The average mileage of GM's future cars won't matter if nobody buys them.

Politicians are addicted to CAFE standards because they create an illusion of doing something sometime in the future without voters experiencing the slightest inconvenience in the present.

The bottom line is that CAFE standards are totally unenforceable and ineffective. Regardless of how much damage the rules do to GM and Chrysler, Americans can and will continue to buy big and fast vehicles from German, Japanese, Korean, Chinese and Indian car companies. CAFE standards might just be another foolhardy regulatory nuisance -- were it not for the fact that they could easily prove fatally dangerous for any auto maker overly dependent on the uniquely overregulated U.S. market.

 

 

WSJ.com - Parsing the Health Reform Arguments

 

WSJ.com - Opinion: Parsing the Health Reform Arguments

Here is how one humble economist sees some of the main arguments…

- “Health care represents a rising proportion of our income."

That's not only true but perfectly natural. Quality health care is a discretionary, income-elastic expense -- i.e. the richer a society, the larger the proportion of income that is spent on it.

- "A universal plan will reduce the cost of health care."

Think a moment. Suppose you are in an apple market with 100 buyers and 100 sellers every day and apples sell for $1 a pound. Suddenly one day 120 buyers show up. Will the price of the apples go up or down?

- "We need a public plan to keep the private plans honest."

The 1,500 or so private plans don't produce enough competition? Making it 1,501 will do the trick? But then why stop there? Eating is even more important than health care, so shouldn't we have government-run supermarkets "to keep the private ones honest"? After all, supermarkets clearly put profits ahead of feeding people. And we can't run around naked, so we should have government-run clothing stores to keep the private ones honest. And shelter is just as important, so we should start public housing to keep private builders honest. Oops, we already have that. And that is exactly the point. Think of everything you know about public housing, the image the term conjures up in your mind. If you like public housing you will love public health care.

 

WSJ.com - Honduras Defends Its Democracy

A good explanation of what’s been going on.

 

WSJ.com - Opinion: Honduras Defends Its Democracy

Honduras is fighting back by strictly following the constitution. The Honduran Congress met in emergency session yesterday and designated its president as the interim executive as stipulated in Honduran law. It also said that presidential elections set for November will go forward. The Supreme Court later said that the military acted on its orders. It also said that when Mr. Zelaya realized that he was going to be prosecuted for his illegal behavior, he agreed to an offer to resign in exchange for safe passage out of the country. Mr. Zelaya denies it.

 

 

WSJ.com - The Cap and Tax Fiction

WSJ.com - Opinion: The Cap and Tax Fiction

House Speaker Nancy Pelosi has put cap-and-trade legislation on a forced march through the House, and the bill may get a full vote as early as Friday. It looks as if the Democrats will have to destroy the discipline of economics to get it done.

Despite House Energy and Commerce Chairman Henry Waxman's many payoffs to Members, rural and Blue Dog Democrats remain wary of voting for a bill that will impose crushing costs on their home-district businesses and consumers. The leadership's solution to this problem is to simply claim the bill defies the laws of economics.

The hit to GDP is the real threat in this bill. The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created or higher unemployment.