Tag Archives: Arnold Kling

If Obamacare is Repealed, Maybe We Should Replace it With George McGovern’s Plan?

The editorial board in today’s Wall Street Journal eulogizes George McGovern. At the end, they point to a 1992 OpEd that McGovern wrote for the journal. It talks about the regulatory burdens he encountered after he gave up the trappings of public office to become an inn-keeper:

My own business perspective has been limited to that small hotel and restaurant in Stratford, Conn., with an especially difficult lease and a severe recession. But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never have doubted the worthiness of any of these goals, the concept that most often eludes legislators is: “Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.” It is a simple concern that is nonetheless often ignored by legislators.

Scott Sumner also linked to it. But as Nick Gillespie points out in a must-read piece for Bloomberg, McGovern had another—in my view, far more libertarian—piece in the Journal in 2008. Arnold Kling picked up on it at the time. Here is McGovern in 2008:

 There’s no question, however, that delinquency and default rates are far too high. But some of this is due to bad investment decisions by real-estate speculators. These losses are not unlike the risks taken every day in the stock market.

…Health-care paternalism creates another problem that’s rarely mentioned: Many people can’t afford the gold-plated health plans that are the only options available in their states.

Buying health insurance on the Internet and across state lines, where less expensive plans may be available, is prohibited by many state insurance commissions. Despite being able to buy car or home insurance with a mouse click, some state governments require their approved plans for purchase or none at all. It’s as if states dictated that you had to buy a Mercedes or no car at all.

…Economic paternalism takes its newest form with the campaign against short-term small loans, commonly known as “payday lending.”

…Anguished at the fact that payday lending isn’t perfect, some people would outlaw the service entirely, or cap fees at such low levels that no lender will provide the service. Anyone who’s familiar with the law of unintended consequences should be able to guess what happens next.

Researchers from the Federal Reserve Bank of New York went one step further and laid the data out: Payday lending bans simply push low-income borrowers into less pleasant options, including increased rates of bankruptcy. Net result: After a lending ban, the consumer has the same amount of debt but fewer ways to manage it.


State and Local Governments: Real Wage Gains from 2000 to 2009

We see that healthcare and social assistance generated $210 billion in real wage gains from 2000 to 2009 (all in 2009 dollars). Next biggest was state and local government, which generated $151 billion in real wage gains. (The exact numbers change a lot if I change the end dates, but the pattern stays the same).

On the other hand, the big losers were manufacturing (-$245 billion), information (-$56 billion), retail trade (-$24 billion), and transportation and warehousing (-$6 billion).

That is Mike Mandel. Here is the data:

 HT to Arnold Kling.

The Voluntary Neighborhood

Last week a Chesterfield circuit court ruled Romito has no obligation to pay dues to the homeowners’ association in the tony Bexley neighborhood. Romito bought his property two decades ago, when membership in the association was voluntary. Last year the Bexley Association made membership and dues mandatory. To force Romito to pay dues now, ruled Judge Herbert C. Gill, would be “simply unjust.”

That is Bart Hinkle of the Richmond Times-Dispatch. He uses the case as an opportunity to examine the political and philosophical arguments that inhere in the notion of government by consent. The issues are by no means clear-cut and Hinkle is careful not to make them seem so.

His conclusion, however, puts the burden of proof on those who would favor government power over individuals rights:

It is very easy to ask questions, said a wise fellow, and not to be satisfied by the answers. Still. Through the individual mandate embedded in health care reform, the economic stimulus, the zeal to regulate everything from restaurant menus to household lightbulbs, and much more besides, the friends of the current administration suggest — tacitly, one might say — that government has the power to do nearly anything it wants . . . anything at all. It would be nice if those who are so eager to order everyone else about would take the trouble to explain what, exactly, gives them the right to do so.

Arnold Kling reacts:

I do not think that there is a perfect solution here. However, my idea of competitive government is to try to minimize the cost of exit. For that reason, I would like to see neighborhood associations allowed to opt out of county services. If I am fed up with my neighborhood association, it is easier for me to move to a nearby neighborhood than it is for me to move to a different county to escape bad county government. The larger the territory controlled by the government, the harder it is to use exit. To me, that argues for minimizing the power of larger governmental units.

For those interested in the idea of competitive local government or private, non-coercive solutions to problems, I can do no better than to recommend two books: the Independent Institute’s Voluntary City and Aligica and Boettke’s Challenging Institutional Analysis and Development.