The Enterprise Blog

The poor, poor Left. Imagine their surprise that candidate Obama has not turned out to be the same as President Obama. Although as a candidate and senator Barack Obama promised to rethink the Bush administration’s policies on the “global war on terror,” which he described as “dangerously flawed” and as “undermin[ing] the very values we are fighting to defend,” the fact is, with some major and important exceptions (such as the decision to close Guantanamo and try Khalid Sheikh Mohammed in a federal court), Obama, the president, has kept much of the what the Bush team had already put in place.

For example, the Obama administration has not abandoned the option of indefinite detention for captured members of the Taliban or al Qaeda; it has modified but not eliminated the use of military commissions to try some of those same detainees; it continues to use—indeed, has expanded—targeted killings against suspected terrorists; it has retained the option of rendition, that is, capturing terrorist suspects in one country and then handing them over to the government of another; it has reaffirmed the principle of “state secrets” in which the government can prevent the disclosure of certain information on the grounds that it would harm national security; it has argued against expanding habeas corpus rights to captured Taliban and al Qaeda members under U.S. military control in Afghanistan. And, of course, the president has added—perhaps reluctantly, but added nevertheless—tens of thousands of ground troops to Afghanistan in an effort to prevent the return of the al Qaeda-friendly Taliban.

Then, we learn yesterday that the White House is threatening to veto this year’s intelligence authorization bill because the bill contains provisos that curtail presidential discretion and prerogatives. According to the Washington Post:

Under the House plan, which is similar to one passed by the Senate, the White House would have to inform all members of both intelligence committees of the “main features” of activities disclosed in detail to the Gang of Eight—the Speaker and minority leader of the House, the majority and minority leaders of the Senate, and the chairmen and ranking minority members of the Senate and House intelligence committees.

In a letter sent to the senior members of the intelligence panels, Office of Management and Budget Director Peter R. Orszag said Gang of Eight notifications are made in only “the most limited of circumstances” affecting “vital interests” of the United States, arguing that the new requirement would “undermine the president’s authority and responsibility to protect sensitive national security information.”

Orszag also opposed a Senate bill provision that required notification of “any change in a covert action,” which he described as setting up “unreasonable burdens” on the agencies, particularly the CIA. The House bill also requires notification of intelligence “significant undertakings,” a term that Orszag described as “vague and uncertain.”

And, finally,

Another such provision would give the Government Accountability Office legal authority to review practices and operations throughout the intelligence community … The provision would also permit any committee of Congress with an arguable claim of jurisdiction over an intelligence activity to request a GAO investigation of that activity.

Heck, the next thing you might read is that the White House is calling Dick Cheney, David Addington, and John Yoo and asking for advice on the powers of the presidency.

Scientist James Lovelock is a giant in environmental circles. He’s responsible for developing the “Gaia” theory—the idea that the Earth functions, in a way, as a self-regulating organism with a metabolism that helps it regulate its own temperature. Of course, the name of the theory has made it attractive to the Earth-worshipping crowd, and at times, Lovelock’s ideas have been used for those purposes.

But Lovelock is an interesting and independent thinker, and the Gaia hypothesis, as long as it’s not overworked, has some merit. When Guillermo Gonzalez and I wrote The Privileged Planet, we defended the basic idea while trying to separate the wheat from the chaff—that is, the solid science from the speculation and theology. Unfortunately, Lovelock has tended to associate himself with some fringe-y environmental stuff at various times, so that his interesting argument is sometimes dismissed by people who might otherwise find it persuasive.

I’m glad to see an objective piece on Lovelock in the Times of London by Charles Clover.  What’s especially interesting is that Lovelock has some nice things to say about “climate skeptics”:

What, I wondered, would be the great man’s view on the latest twists in the atmospheric story—the Climategate emails and the sloppy science revealed in the reports of the Intergovernmental Panel on Climate Change (IPCC)? To my surprise, he immediately professed his admiration for the climate-change sceptics.

“I think you have to accept that the sceptics have kept us sane—some of them, anyway,” he said. “They have been a breath of fresh air. They have kept us from regarding the science of climate change as a religion. It had gone too far that way. There is a role for sceptics in science. They shouldn’t be brushed aside. It is clear that the angel side wasn’t without sin.”

Lovelock has been known to challenge conventional wisdom. For instance, he has argued that if we want to get away from a carbon economy, we have to build more nuclear power plants. In his comments about skeptics, he seems to once again be showing his independent streak.

Fannie and Freddie have already cost the government $127B, and it’s not done. That’s 90 Nick leeson1Leesons and counting…

More here from Eric Falkenstein, who also points out:

The CFPA tries to do what most regulators try to do: improve efficiency, eliminate waste, consolidate regulations,simplify regulations, protect consumers, and protect jobs! It seems banks are greedy and basically unregulated, leading directly to the 2008 housing crisis. There are seven government bodies already regulating banks, highlighting how incredibly naive this proposal is. If there’s a magic bullet for improving efficiency, etc., share it with existing regulators…unless you think that all the regulators have been captured by some interest group, which if true just means we are bringing in one more interest group to advocate why they should get a better deal.

More importantly, if your concern is about the irrational poor people easily duped by huckster bankers, lower prices and penalties on the poor doesn’t help them, it enables them. Life has carrots and sticks, and one definition of a vice is that which generates bad outcomes in the long run. If you are constantly overdrafting your account, don’t have enough money to make a 20% down payment on a property, you need better financial discipline. Helping the poor from being trapped by debt should try to minimize the amount of debt they have, say by increasing rather than lowering prices on credit cards. That would still allow emergency spending, but make people do it much less, which is a good thing.

Peter Wallison raised objections to the CFPA here.

Any veteran observer of Congress is used to the rampant hypocrisy over the use of parliamentary procedures that shifts totally from one side to the other as a majority moves to minority status, and vice versa. But I can’t recall a level of feigned indignation nearly as great as what we are seeing now from congressional Republicans and their acolytes at the Wall Street Journal, and on blogs, talk radio, and cable news. It reached a ridiculous level of misinformation and disinformation over the use of reconciliation, and now threatens to top that level over the projected use of a self-executing rule by House Speaker Nancy Pelosi. In the last Congress that Republicans controlled, from 2005 to 2006, Rules Committee Chairman David Dreier used the self-executing rule more than 35 times, and was no stranger to the concept of “deem and pass.” That strategy, then decried by the House Democrats who are now using it, and now being called unconstitutional by WSJ editorialists, was defended by House Republicans in court (and upheld). Dreier used it for a $40 billion deficit reduction package so that his fellow GOPers could avoid an embarrassing vote on immigration. I don’t like self-executing rules by either party—I prefer the “regular order”—so I am not going to say this is a great idea by the Democrats. But even so—is there no shame anymore?

It was bound to happen.

Week before last, I discussed the initiatives in some states to introduce policies urging schools to teach scientific theories openly and honestly. None of these policies encourages the introduction of religion into science classrooms. They simply encourage schools to expose students to the actual debates among scientists on controversial issues like evolution, global warming, and cloning. Nevertheless, the initiatives led to a front-page story/panic in the New York Times about this evangelical conspiracy to force religion on hapless schoolchildren.

As I mention in my article in The American today, a sure sign of a bad dogma in science is when it is treated not as an idea that can be debated publicly, but as a simple deliverance of “science” itself.

Now Charles Haynes of the First Amendment Center has done it one better. He’s identified objections to global warming as illicitly religious and philosophical in nature:

At first blush, who can possibly object? After all, intellectual freedom should be the cornerstone of a good education in a democratic society. Of course students should be taught to be critical thinkers. Of course they should be exposed to legitimate scientific questions and debates in science classes.

But are these bills really about academic freedom—or are they driven by politics and religion? The question answers itself when you consider that the science targeted in Kentucky and elsewhere for skeptical treatment just happens to coincide with the science that many religious conservatives question or outright reject.

That’s curious logic. So, if many religious conservatives question eugenics or sociobiology, then these subjects must be taught dogmatically to avoid violating the First Amendment? Surely not.

In addition to this curious logic, Haynes mischaracterizes the issue:

Yes, students should learn about a variety of religious and philosophical worldviews, including those that reject evolution and question global warming. But when public schools teach science, they must ensure that students get an accurate and full account of what science tells us, including those questions that scientists themselves agree remain to be answered.

But that’s exactly what these bills are designed to do: “teach students about questions that scientists themselves agree remain to be answered.” They also address a problem to which Haynes is apparently insensitive: in scientific controversies, sycophants often treat orthodox scientists as if they speak for all scientists. So students need to know, not just about the questions that scientists agree remain to be answered, but also about the answers on which scientists disagree, and the questions some would rather not be asked.

Haynes concludes:

If we want to advance scientific literacy in America, we should refrain from imposing political and religious agendas on the public school curriculum and focus instead on how to provide the best education possible.

Is Haynes really implying that if a teacher mentions the arguments of scientists who raise scientific objections to, say, anthropogenic global warming, they’ll be guilty of violating the establishment clause? Good grief.

Nick Schulz

‘The Purpose of Your Career’

By Nick Schulz

March 16, 2010, 2:27 pm

Chris, for a good encapsulation of the progressive mindset you write about, the one in which “political untidiness, even the loss of an election, are transitory considerations” for “those who think it natural and obvious and historically inevitable that the government must administer medical care,” consider Will Saletan of Slate, who, in a piece called “Hedgislation: Your vote on health care is more important than your re-election,” tells worried Democrats:

Every so often, a bill comes along that’s bigger than anything your predecessor got to touch. You’re the lucky bastard who had your seat in 2010, when that bill reached the floor. And here you are, worrying about your career, when the purpose of your career is staring you in the face.

Can’t you just feel history’s march?

As the health overhaul debate grinds to a close, the role of insurance company profits in health costs is finally receiving greater attention. As my colleague Mark Perry has often pointed out, and as I’ve discussed, insurance company profits are simply too small to significantly drive health costs. Health insurers have an average profit margin of little over 2 percent, putting them (as Perry recently showed) in 86th place among the most profitable industries in America. Insurers are now making this case themselves, including with television ads.

This poses a significant problem to proponents of healthcare overhaul who deem insurers, in House Speaker Nancy Pelosi’s terms, the “real villains” in the healthcare battle.

The New Republic’s Jonathan Cohn handles this problem of health insurer profits by acknowledging it. And then ignoring it.

Cohn admits that health insurer

profits account for less than 1 percent of what America spends on healthcare in a given year. And you know what? It’s a valid point. If you took those profits and put them back into the healthcare system, the money would be enough to subsidize health insurance for a few million more people or to reduce premiums by a fraction for everybody who has insurance. But there’d still be a ton of work to do.

While Cohn admits, “The issue, though, isn’t the profits that insurers make,” he quickly pivots into, “It’s the actions insurers take to maximize those profits.” Cohn states that

But smart insurers know how to make . . . it difficult for the chronically ill to get the care they need, by manipulating benefits and provider networks or making it more difficult to obtain authorization for treatments.

Okay, let’s presume that insurers do what Cohn claims. The question is really how much money is at stake—a little or a lot.

If insurance companies take only small steps to limit benefit payouts—and this op-ed by AEI’s Scott Harrington supports the view that insurer abuses aren’t that common—then the cost savings also are modest, making the difference between a small profit and an even smaller one. Now, when insurers break their agreements they should be subject to civil or criminal action. But if small, it’s hard to see this as a public policy problem justifying remaking the entire healthcare sector.

But if there are a lot of the actions Cohn alleges, then there’s a lot of money at stake. Since we know insurers’ profits are small, this money is the difference of an insurer being in the black or in the red. Put crassly, if they weren’t kicking all these folks out of the hospital they’d be going broke. To the degree insurers take these steps merely to break even, it’s hard to fault them—it’s not “greedy and soulless,” in Cohn’s terms, to avoid running a business at a loss. And it’s not as if insurance companies haven’t taken the alternate route to avoid limiting care—higher premiums—but they get attacked for that, too.

The real problem, as I’ve argued elsewhere, isn’t excessive profits but that our health system encourages maximum spending with minimum attention to cost-effectiveness—factors that proposed reforms will do little to, well, reform. Many of the same insurer “abuses” will likely exist after Obamacare as before, which predictably will prompt the Left to push for single-payer care, which is what most wanted all along.

The core issue, I believe, is that many simply object to healthcare being associated with “profit.” Yet it is difficult to imagine any health system devoid of profit—doctors and nurses must still be paid and those who invent drugs, design new medical devices, or build hospitals must be compensated for their efforts.

Medicare loses approximately $100 billion to fraud each year—eight times what health insurers earn in profits. The fact that the Left ignores the former while focusing relentlessly, and in spite of all evidence, on the latter indicates a fixation based on philosophy rather than policy.

obama_health-careGerard Alexander delivered a fine lecture at the American Enterprise Institute last evening, diagnosing a striking feature of contemporary political debate—that liberals regard conservatives as not merely wrong and wrongheaded but illegitimate, dishonest, pathological, and unworthy of being taken seriously. In this view, conservatism is not a philosophy but a conspiracy. Paul Krugman is explicit that conservative policy ideas are, by definition, lies advanced for ulterior purposes. But the assumption is implicit in the haughty rhetoric and actions of a great many liberals, including President Obama.

Gerard and his audience had many ideas about the causes of Liberal Superiority Complex. One is surely that many liberals today are also progressives. They believe that the natural course of history is the emergence of secular rationality as the true way to think about problems and of state power as the effective way to organize society along rational lines. If that is your worldview, then such things as revealed religion, cultural tradition, and the marketplace (whose outcomes are spontaneous, not rationalized) are vestiges of our primitive past, sure to be displaced by the spreading application of human reason. When liberal politicians describe themselves as “progressives,” that is not just because “liberal” has acquired unpopular connotations but because progressive is the more accurate word for their core beliefs. President Obama, House Speaker Nancy Pelosi, and Senator Majority Leader Harry Reid are progressives in this sense; many recent Democratic presidential candidates were as well—John Kerry, Al Gore, and Michael Dukakis.

The grip of progressivism is probably the best explanation for the Democratic Party’s astonishing campaign to nationalize the U.S. healthcare sector by all means necessary. To attempt to enact a radical and unpopular program in a bill that includes many corrupt provisions, on a party-line vote and through a procedural trick (if the “Slaughter solution” is employed) that seems clearly unconstitutional, appears quite mad and self-defeating to the outsider. But it is not mad at all to those who think it natural and obvious and historically inevitable that the government must administer medical care. In this view, the political actor is simply holding history’s coat while it does its work. Political untidiness, even the loss of an election, are transitory considerations. The progressive mindset also explains, as more than populist demagoguery, the contempt that the proponents of ObamaCare exhibit for doctors and pharmaceutical and medical-insurance companies—for they are the practitioners of a benighted form of healthcare that is about to be swept away by a new and higher form.

Image by DBorman.

Peter J. Wallison

Dodd’s Dodge

By Peter J. Wallison

March 16, 2010, 11:22 am

chris_doddFew have noticed that Senator Chris Dodd does not claim that his bill ends “too big to fail” as most people understand that idea. What he says is that it ends “the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy.” That’s far from ending TBTF. In reality, his proposal makes TBTF national policy. It does this by authorizing the Fed to regulate and supervise the largest financial institutions in the United States, and authorizing a new entity called the Financial Stability Oversight Council to add financial firms to the Fed’s list if—and this is key—they “pose a risk to the financial stability of the United States.”

What do these words mean? Obviously, they mean that the firms so designated are too big to fail. So Dodd’s bill actually allows the council to name the firms that are TBTF, but he defines the issue away by claiming that the only real problem with TBTF is the cost to taxpayers of paying for bailing out TBTF firms.

This, however, is incorrect. The real cost of TBTF is an enormous cost to the economy in general, as creditors preferentially lend to companies that are TBTF rather than to smaller companies that are not TBTF and will be sent to ordinary bankruptcy if they fail. This is exactly what happened with Fannie Mae and Freddie Mac. They were seen as backed by the government, and with the lower cost of funds they received were able to drive all competition out of their markets and take exorbitant risks. The result of Dodd’s bill will be the same—to  create Fannies and Freddies in every sector of our economy where these TBTF firms are designated, destroying competition and forcing consolidations over time.

Redefining TBTF as a taxpayer cost question is a clever ploy, but it won’t fool people for long.

Image by SEIU International.

800px-thepopeIn early December, I was focused on Climategate and the Copenhagen Climate Summit/fiasco—both gifts that kept on giving. So I somehow missed the fact that on December 5, Pope Benedict issued a stinging rebuke to liberation theology. And he wasn’t speaking vaguely to a diffuse audience in Rome, but pointedly—to a group of Brazilian bishops.

The Pope always speaks carefully and diplomatically, so the speech is doubly significant in its directness. Here’s how Sam Gregg describes it:

Apart from stressing how certain liberation theologians drew heavily upon Marxist concepts, the pope also described these ideas as “deceitful.” This is very strong language for a pope. But Benedict then underscored the damage that liberation theology did to the Catholic Church. “The more or less visible consequences,” he told the bishops, “of that approach—characterised by rebellion, division, dissent, offence and anarchy—still linger today, producing great suffering and a serious loss of vital energies in your diocesan communities.”

Today, even some of liberation theology’s most outspoken advocates freely admit that it has collapsed, including in Latin America. Once considered avant-garde, it is now generally confined to clergy and laity of a certain age who wield ever-decreasing influence within the Church. Nonetheless, Benedict XVI clearly believes it’s worth underscoring just how much harm it inflicted upon the Catholic Church.

For a start, there’s little question that liberation theology was a disaster for Catholic evangelization. There’s a saying in Latin America which sums this up: “The Church opted for the poor, and the poor opted for the Pentecostals.”

In short, while many Catholic clergy were preaching class-war, many of those on whose behalf the war was presumably being waged decided that they weren’t so interested in Marx or listening to a language of hate. They simply wanted to learn about Jesus Christ and his love for all people (regardless of economic status). They found this in many evangelical communities.

It’s heartening to know that while leftist authoritarians like Hugo Chavez seem to be growing in popularity in certain parts of Latin America, the head of the Catholic Church is willing to call a spade a spade to the shepherds under his charge.

Photo by Rob and Lisa Meehan.

The FCC chairman’s Washington Post op-ed on the broadband plan being unveiled this week (I’ll have more to say on this plan soon) was notable more for what it didn’t say than what it did. In particular, the FCC chief did not mention “net neutrality.” Could there be a shift in emphasis at the FCC away from preemptive regulation as it realizes just how much investment by the private sector will be needed to realize some of its goals? Time will tell. It was encouraging to see the chairman acknowledge the role the private sector—and the investor class—has to play in the evolving IT ecosystem:

With smart policies, we can enable and accelerate the private investment necessary to achieve this future.

gorbyMikhail Gorbachev (remember him? He’s the guy who turns up in Louis Vutton magazine ads, having done Pizza Hut ads 15 years ago and having rejected lucrative offers to be a Las Vegas casino greeter—true story!) turned up in the New York Times reflecting on perestroika 25 years later. Now, Gorby deserves his due as an authentic reformer of the late Soviet Union, but the article makes clear why, as I put it in my Reagan book, he should be thought of less as Machiavelli than Inspector Clouseau.

So, just to pick one example, Gorby writes, “Our main mistake was acting too late to reform the Communist Party.” Um, oh-kay. He never did figure out that it was the one-party system itself that was at the heart of the problem he wished to fix. Also, this howler: “In the heat of political battles we lost sight of the economy.” Actually, he never really had it in sight; Gorbachev made clear early on that he thought the problems of socialism required. . . more socialism. He rejected outright the idea of instituting property rights and opening up private enterprise.

He’d be the perfect adviser for the Democrats on healthcare reform right now.

Image by Ben Sutherland.

Last Monday in the New York Times, I co-authored an op-ed with Alicia Munnell, professor of economics at Boston College and director of the Center for Retirement Research, regarding proposals to pay an ad hoc Cost of Living Adjustment (COLA) to retirees this year, to compensate them for Social Security not paying an automatic COLA in 2010. Our argument was pretty simple: there’s no need for a COLA in a year in which the cost of living didn’t increase—and we show that even using an inflation measure geared toward seniors the cost of living didn’t rise.

In Sunday’s New York Times the AARP responds. As you’d expect, they disagree. AARP’s Chief Operating Officer Tom Nelson writes,

The article demonstrates the inadequacy of using textbook economics to discuss the actual experiences of real people. By arguing—despite the biggest economic downturn since the Great Depression—that “retirees did all right over the last few years,” the authors demonstrate a lack of understanding of the negative impact of decimated retirement savings on older Americans.

A general note: when someone writes about “the inadequacy of using textbook economics” or something along those lines, what it usually means is that they’re not going to bother disputing the arguments and evidence you presented.

As it happens, our article didn’t actually rely on much economics, textbook or otherwise. It was really just simple math: when prices rise, Social Security benefits should rise to match them. When prices don’t rise, well, you get the picture.

Now, you can make a case that seniors are suffering due to the recession, rising health costs, or what-have-you and therefore deserve government help. But that has nothing to do with COLAs. Moreover, to make that argument you presumably should present some evidence that seniors are suffering more than working age people, who are, after all, the folks who would pick up the tab for this ad hoc COLA. The evidence really isn’t very strong: younger Americans have taken bigger hits to their retirement savings and are far more likely to be unemployed than seniors. And, unlike current retirees, younger folks are going to need to save far more for retirement as Social Security and Medicare won’t be in nearly as good shape by the time we reach retirement age.

In a sense, I don’t blame AARP. They’re effectively lobbyists for seniors—very good ones, judging by the state of federal finances—and you can’t fault them for trying to get more stuff for their members. But at some point we have to realize that there’s no more money to give; it’s time to start thinking about where we can cut back. It’s very sad that even as deficits reach record levels and the national debt spirals upwards, interest groups continue to make spurious arguments for more. But that’s where we stand.

In Friday’s Wall Street Journal editorial “Obama’s Misleading Assault on the Insurance Industry,” Jack Calfee writes:sebellius_obama

Mr. Obama, Health and Human Services (HHS) Secretary Kathleen Sebelius, and their Democratic allies have also hammered the insurance industry for making huge profits at the cost of patients’ finances and health.  The Democrats’ attack is misplaced. Fortune 500 data show that of the 43 industries that actually made a profit in 2009, health insurance ranked 35th, with profits of only 2.2% of revenues.

America’s Health Insurance Plans (AHIP), the industry’s trade association representing 1,300 members, reported last October that annual health insurance premiums in 2009 averaged $2,985 for individual coverage and $6,328 for family plans. Using the industry profit margin of 2.2 percent last year, it means that insurance companies make only about $66 on average per policy in profits for individual coverage, and less than $140 in profits for each family policy.

While Obama, Sebelius, and the Democrats demonize the health insurance industry for making “excessive profits,” the data tell a much different story of an industry with relatively low profit margins and very modest profits per policy. Even if we could strip away 100 percent of the health insurance industry’s “excessive” profits, it would save the average patient far less than $200 per year in health insurance costs, making it very hard to argue that it’s “huge” industry profits that are driving up healthcare costs. Calfee is exactly correct that Obama’s ongoing attacks on health insurance profits are completely misplaced and are certainly not supported by the actual financial data.

The Center on Budget and Policy Priorities (CBPP) released a report critical of Rep. Paul Ryan’s “Roadmap Plan” for reforming Social Security, Medicare, private healthcare, and the tax code. While they’re well within their rights to do so, some of their charges regarding the Social Security elements of Rep. Ryan’s plan seem clearly mistaken. (Rep. Ryan’s Budget Committee staff has responded to the critiques spanning the full Roadmap Plan here.)

First, the CBPP report states that

Because the [Roadmap] plan would divert massive sums from Social Security to private accounts, it would leave the program with a deep financial hole. The plan would close that hole by transferring $4.9 trillion over the next 60 years from the rest of the budget to Social Security, an amount that exceeds what it would take to make Social Security solvent for the next 75 years if no other action was taken.

I’ve been uncomfortable with Social Security plans that involved large general revenue transfers, since the government isn’t exactly flush with extra cash these days. But Ryan’s Roadmap plan for Social Security doesn’t have this problem. A combination of benefit reductions for higher-earning individuals, indexing the retirement age to increases in life expectancies, and making employer-sponsored health benefits subject to payroll taxes would keep Social Security solvent even as a portion of the payroll tax was used to fund voluntary personal retirement accounts. It appears that CBPP’s claim is based on a previous Ryan proposal, which did include general revenue transfers, but in this case it seems pretty clearly incorrect.

Second, the CBPP report states that

Under the Ryan plan, individuals who divert a portion of their payroll tax contributions to private accounts would be guaranteed that they would receive back in retirement at least as much as they contributed, plus an adjustment for inflation. In essence, they would be given a federal guarantee against stock-market losses. The chief actuary of the Social Security system has estimated that, on average and adjusting for market risk, an earlier version of the Ryan plan’s guarantee would cost the government $2.9 trillion in present-value terms (although the actual cost could turn out to be higher or lower, depending on actual bond and stock returns).

The problem here is that the guarantee in the current Roadmap plan, which the CBPP issue brief correctly describes, differs significantly from that of the earlier Ryan plan CBPP references. Ryan’s current proposal guarantees only that plans won’t lose money after adjusting for inflation; that’s a pretty cheap guarantee to offer. Earlier versions guaranteed that account holders would receive no less than promised under current law. For some workers, that would require a rate of return on accounts exceeding 6 percent, which is a lot more expensive to do. Whenever a guarantee is offered it should be priced using market principles, but there’s no way the Roadmap’s current guarantee costs $3 trillion.

What’s a little disappointing is that the Congressional Budget Office report on Ryan’s plan has been available since late January, so there’s no need to rely on outdated Social Security Administration analyses of older versions of Ryan’s proposals.

Yesterday, I had the honor of hosting my dear friend and esteemed colleague Diane Ravitch at the American Enterprise Institute for the first forum on her new book. Those interested can watch the event here. As readers are likely aware, Diane’s book, The Death and Life of the Great American School System, has created quite a stir and attracted much media attention. This is due largely to her argument that accountability and school choice, two ideas with which she had long been associated, have been “hijacked” by MBAs and foundation types and have served as ineffective, destructive distractions. On her Bridging Differences blog and elsewhere, Diane has lambasted Secretary of Education Arne Duncan’s enthusiasm for charters and accountability and the Obama administration’s Race to the Top (RTT) initiative as particularly troubling examples of misguided reform.

I have enormous respect for Diane as a historian and colleague, and readers of this blog know that I’m anything but an apologist for RTT. But I think her read on this is dead wrong. Indeed, Diane is now making the same mistake, in reverse, that she and so many school choice and accountability enthusiasts made in the 1990s (and the same mistake that Duncan makes today when he proclaims that charter schooling or merit pay “work”). Both Diane’s stance and Duncan’s reflect the misguided premise that chartering or accountability is a way to improve instruction—like a new curriculum, professional development model, or reading program—rather than an opportunity to create the conditions where sustained improvement in teaching and learning become possible.

(Continue reading this post.)

Danielle Pletka

Not the Worst. Year. Ever.

By Danielle Pletka

March 12, 2010, 3:02 pm

Kevin B. Sullivan over at RealClearWorld’s Compass blog took time out from reheating yesterday’s Domino’s pizza and watching Battlestar in his Mom’s basement (his descripsh, not mine) to take issue with my post smacking the Obama administration’s foreign policy. He finds my litany (which was a bit litany-ish, I’ll give him) “exaggerated … and disingenuous”?? Dude. Please. Many of us thought that former Defense Secretary Donald Rumsfeld’s management of alliance relationships was pathetic, and said so. George Bush left us with a mess in Iran, a mess in North Korea, and a few other messes to boot. I have made no secret of my opinion, nor have many of my colleagues. But one thing I’ll give the late, unlamented GWB is that he was relatively modest about his own importance to the cosmos. If he’d have told us that he was going to heal the ocean or part the sea, or whatever the heck it was that President Obama promised, he would have been laughed out of town. We’re still talking about his daft “mission accomplished” banner, for heaven’s sake.

The standards of comparison I made are to the America that this president promised us in his election campaign and his first inaugural. He has fallen woefully short, as his own acolytes would confess. And worse yet, he has yet to realize just what a bloody mess we’re in. Either he is insulated from reality by his Kevlar bubble of flatterers and bullies in the West Wing or he is indifferent to the muck that is American foreign policy. I suspect a bit of both. The world is neither repaired nor healed, not only is America still disliked (he seemed to care about this), now we are neither respected nor feared. We are doing the right thing in Iraq and Afghanistan (while the egg timer ticks), but we have screwed our allies (viz. Poland, Georgia) without gain. As for expecting too much of our presidents… talk about defining deviancy down. We expect the president of the United States to keep our nation safe and prosperous, to protect us, to build our alliances and isolate our enemies, all the while promoting the values we hold dear. That’s the job description, and Barack Obama told us that, darn it, he was good enough and smart enough and that, doggone it, people would like him while he did it. Saying that the previous administration stunk just as bad is hardly an excuse. And IMHO, this one stinks worse.

Outcry in Afghanistan at Holbrooke Comment

By Ahmad Majidyar

March 12, 2010, 10:40 am

holbrookeA recent comment by Richard Holbrooke, the Obama administration’s special representative for Afghanistan and Pakistan, that “almost every Pashtun family has someone involved with the [Taliban] movement,” has caused an outcry in Afghanistan and strained the already tense relationship between Kabul and Washington. President Hamid Karzai had sought reconciliation with the Taliban because he is a Pashtun himself, adding that Washington did not back the negotiations.

Holbrooke’s remark drew little attention in the United States, but it enraged Afghanistan, especially Pashtun leaders who interpreted the remark as a U.S. ultimatum issued at their ethnic group. According to Tolo, a private Afghan television channel, members of the lower house of Afghanistan’s National Assembly accused Holbrooke of “inflaming ethnic and language conflict among Afghan people,” while the upper house criticized the remark as “detrimental to the unity and solidarity between ethnic groups living in Afghanistan.”

In an attempt ease the tension, Holbrooke issued a clarification published on the website of the U.S. embassy in Kabul: “When I noted that almost every Pashtun family has someone involved with the movement, I was reflecting President Karzai’s comment in Istanbul that ‘those Taliban who were not part of terrorist networks or Al-Qaeda are sons of the Afghan soil.’ I was not suggesting that all Pashtuns are part of the Taliban or all Taliban are Pashtuns.”

But the clarification failed to repair the damage and instead has served as a basis for new conspiracy theories. Haji Farid, a lawmaker from Kapisa Province, described the remark as a U.S. “warning that all Pashtuns must be eliminated.” Ghulam Jilani Zawak, head of the Research and Advisory Council of Afghanistan, said Holbrooke’s remarks indicated that the United States had aimed to “massacre Pashtuns” rather than to achieve “humanitarian goals.” Commentary in Taand, a Pashtu-language daily, said that “even the Russians during their ten years of occupation did not make such a rude and brazen comment about Pashtuns.” A meeting of Afghan political analysts and experts held at the Regional Studies Centre in Kabul on Monday strongly criticized Holbrooke’s statement and demanded an apology. Political analyst Abdul Rahman Hotaki said the comment was an attack on the rights of 40 million Pashtun people living on both sides of the Afghan-Pakistan border.

The relationship between Holbrooke and Karzai has been troubled from the start. The frequency of Holbrooke’s meetings with Karzai’s opponents led the Afghan president to believe President Obama wanted to oust him. The danger of the latest episode, however, is that Holbrooke has angered not only the government, but ordinary Afghans as well.

Pashtuns make up perhaps 40 percent of Afghanistan’s population. While it is true that the Taliban in Afghanistan come predominantly from the Pashtun ethnic group, the majority of the Pashtuns oppose the Taliban and are on the front lines to help the Afghan government and coalition forces defeat the insurgent group. Moreover, the Pakistani Taliban includes not only Pashtuns but also Punjabis, Sindhis, Arabs, Chechens, and Uzbeks. Equating the Pashtuns with the Taliban is not only inaccurate, it also helps serve the Taliban’s propaganda and complicates Gen. Stanley McChrystal’s “population-centric” efforts to defeat the Taliban.

Ahmad Majidyar is a research assistant at the American Enterprise Institute.

whatscienceknows1Among the “educated class,” there are two competing trends with regard to natural science. The first is materialism or scientism, which tries to reduce everything to the simple predictive methods of physics, to reduce mind, man, and morality to mere matter deterministically in motion.

The other trend, especially popular in the humanities, is postmodernism, which (to generalize) treats science as just another power trip, a mere social construction of like-minded thinkers who have no purchase on “reality,” whatever that is.

Pundits and commentators interested in science, therefore, are buffeted on both sides by two reductive extremes. I found the problem so acute that earlier in my life I took the time to study philosophy of science and to write a thesis on the philosopher of science Michael Polanyi.

It was a helpful exercise, but I found it frustrating that the subject is largely inaccessible to the non-specialist. The Australian philosopher James Franklin has just written a delightful book that fills the gap, What Science Knows and How It Knows It. Franklin articulately defends the rationality and goodness of science from its detractors, while distinguishing different types of science and showing why it is inherently limited. He’s not afraid to weigh in on controversial subjects—from quantum theory to biological evolution to climate science—but always with an uncommon subtlety and immunity to ephemeral fashion.

Franklin’s prose is enviably lucid, illuminating, and efficient. I’m tempted simply to paste a long string of choice sentences from the book, but I’ll limit myself to three, picked at random.

In describing the skeptical turn in philosophy of science, he says:

Some philosophers of science never manage to move beyond the shocking discovery that induction is fallible to ask seriously why it mostly works.

And after providing a simple summary of the views of philosopher of science Thomas Kuhn (of “paradigm shift” fame)—which suggests that Kuhn is a relativist—Franklin observes:

As with many caricatures, one finds that the original consists of the caricature with the addition of a number of qualifications that render it inconsistent, the number of those inconsistencies multiplying with the author’s subsequent denials that he meant to say anything so crude. One observes also that the caricature has a historical career considerably more vigorous than the original, whose qualifications would have lessened its appeal.

And Franklin concludes the book with a provocative but wise suggestion:

Science has taken us to the brink of another kind of knowledge, by opening up to us a vast range of natural facts but also exposing us to the limits of its ways of knowing. We cannot believe that what science knows is all there is.

I have some minor quibbles with the book. For instance, I don’t like to speak of “science” as if it is an agent that knows something, and I wish he hadn’t passed on the outdated idea that noncoding regions of DNA are “junk.” (We know that these regions perform all sorts of vital functions.) Nevertheless, What Science Knows and How It Knows It is one of the most helpful books on its subject matter that I have had the pleasure of reading.

Steven F. Hayward

Climate Whining

By Steven F. Hayward

March 12, 2010, 9:28 am

707px-crying-girlApparently some folks on the Left are now upset with a new UN body overseeing climate change research because the panel is. . . wait for it. . . all male! This does seem myopic. Everyone knows children and the poor will be hardest hit by climate change. Shouldn’t they be represented on the panel too?

Meanwhile, Nature magazine complains in its latest issue that there’s a climate (sic) of “McCarthyism” loose in the land in the aftermath of Climategate. As Lord Monckton points out, this is rich coming from a scientific community that includes NASA’s James Hansen, who has called for putting climate skeptics and energy company executives on trial for “crimes against humanity.”

Image by Crimfants.

peter_beinartSteve, I certainly agree with the bulk of your post. Here’s my reaction to the George Will column, over at NRO. I should also add that Peter Beinart is a very good friend of mine—we’ve been debate opponents for years, on TV, on the Web, and on college campuses—but it’s at least worth pointing out that for all the good work Peter did in reviving the ADA tradition he also largely abandoned that argument by the end of the Bush years. His worthwhile 2004 book, The Good Fight (not A Fighting Faith btw), rousingly called for the Democratic Party to abandon its pacificism, anti-Americanism, and anti-war dogma and commit to fighting Islamic terrorism with the same gusto the Truman wing of the Democratic Party had marshaled for the fight against Communism. Not only did the Democratic Party not pay heed, but even Peter lost his enthusiasm for his own cause. Peter would, with some merit, argue that the facts changed and so did his analysis. But I think it would be an overstatement to say that the anti-Bush passions that consumed the rest of the Democratic Party left Peter entirely unscathed. Peter may have nurtured liberalism’s intellectual roots, but those roots were nowhere near strong enough to withstand the gale force winds of contemporary liberal politics.

I think there’s a lesson in there somewhere.

It’s not necessarily that progressives aren’t interested in history, per se. It’s that history does not play the same role in idea formation for progressives as it does for conservatives. E.J. Dionne conceded this in Stand Up and Fight Back:

“Liberals and Democrats tend not to view themselves as the inheritors of a grand tradition. Almost on principle, they are suspicious of such traditions, of too much theorizing, of linking themselves too much to the past.”

Of course, liberalism doesn’t lack intellectual giants—Herbert Croly, John Dewey, Reinhold Niebuhr—but, Dionne concedes, “not one of them is routinely celebrated by today’s liberals.”

This is an incredibly liberating orientation when it comes to policy formulation. As we can see with the current fight over healthcare, the standard response from social planners is that “we may not have been smart enough to plan the economy the day before yesterday, but now we know everything.”

Mark Schneider

What Diane Ravitch Gets Wrong

By Mark Schneider

March 11, 2010, 11:38 am

dianeravitchYesterday afternoon, the American Enterprise Institute hosted a lively panel in which well-respected education historian Diane Ravitch discussed her new book, The Death and Life of the Great American School System.

Diane is arguably the best educational historian working today and one of the best the nation has ever produced. Chapter after chapter she confirms what we all know about education policy and practice—it is relentlessly based on fads built on the flimsiest of evidence. Diane shows that good ideas are often taken to scale without any thought about how any of reforms might work in a larger venue. She shows that ideas often become invested with magic properties so that people see them as a silver bullet that will cure all our ills.

But while her analysis is often spot-on, she also makes mistakes. And perhaps her most consistent ones pertain to choice and charter schools.

(Continue reading this post.)

Jay Richards

Why Is the UN So Corrupt?

By Jay Richards

March 11, 2010, 11:37 am

800px-flag-of-the-united-nationsAdmittedly, my evidence is anecdotal. For the last couple of months, I’ve seen dozens of private emails describing the monumental efforts by private charitable organizations such as Catholic Social Services and Food for the Poor, and by the U.S. military, in delivering emergency humanitarian aid in Haiti. Catholic Social Services and the U.S. military are entirely different institutions, and yet they both seem well-suited to dispense humanitarian aid—though for obviously different reasons.

There’s something to be said for economies of scale, infrastructure, and military might when it comes to humanitarian aid. But there’s also something to be said for local knowledge, religious conviction, and on-the-ground experience.

But not all humanitarian aid programs work so well. In fact, the world’s largest one doesn’t work so well. The New York Times reports that according to the United Nations’ own study, its World Food Program is having a terrible time in Somalia:

As much as half the food aid sent to Somalia is diverted from needy people to a web of corrupt contractors, radical Islamist militants and local United Nations staff members, according to a new Security Council report.

I’m pretty sure that’s not the goal of the program. I have no desire to disparage hardworking UN aid workers in dangerous parts of the world; but at some point, stories like this ought to make us ask what it is about the UN that causes its programs to work so poorly. Is there something about the UN institutionally—which distinguishes it from the successful efforts by national militaries and private religious charities—that too often subverts its stated mission?

The United States often gets badgered for not funding the UN adequately; but perhaps our money would be more effectively spent elsewhere.

Roger Bate

Ugandan Malaria Team Thrown in Jail

By Roger Bate

March 11, 2010, 11:35 am

Allegations of corruption in the Ugandan health sector have been widely discussed and occasionally documented, but until today there had been virtually no action against those involved. The arrests of three top malaria officers allegedly engaged in procuring and distributing medicines illegally, and probably involved in substandard drug delivery, is a step in the right direction.

Nick Schulz

Progressive Amnesia

By Nick Schulz

March 11, 2010, 11:15 am

Steve, it’s worth noting that there’s a lot of selective amnesia about Niebuhr on the Left. Joe Loconte tackled some of that on these pages (in “Obama Contra Niebhur“) so I’ll be curious to see Beinart’s take on Wilson and the Left’s reaction to it.