Rampant Use of Ethanol Pushing Food Prices Upwards

Maybe. First saw this on the TV this morning and the reporter didn't sound too sure about it, though. Another great example of the law of unintended consequences.

Universal Health Care, California Edition

Reuters has a story about the struggles of the new plan for universal health care in the state of California. I did some more reading and found a Times article from the early stages of the plan's development, as well as Health Care For All, the homepage of the plan's major supporters. Here's what I've taken from my reading:

I like the idea (from Reuters) that a tax on cigarettes would help to fund this system. Smokers are more expensive from a health care perspective, and this is an easy way to ensure that they contribute their share.

I also like the idea of focusing on preventative care as a way to lower costs. Of course, I wonder about preventative care as something that could be abused, i.e. people taking doctor's visits more often than they need because it's "free."

"This component seems intended to give employers an incentive to offer health insurance, and to level the playing field between employers that do not offer insurance -- and are therefore essentially paying lower wages -- and those that do." This is from the Times article. It seems to be saying that this plan artificially raises some wages compared to others. Making workers more expensive without adding to their skill set leads to lower overall employment (some workers will get fired because these small businesses cannot afford as many workers at the higher wages), and what good is universal health care if you don't have a job or source of income?

Finally, I don't like the assertion (on Health Care For All) that planning will lead to lower costs and bureaucratic cost controls will be beneficial. Bureaucracies by nature are cost-maximizing, because any money that is unspent is lost after the next reallocation of funds, while companies that operate by profit practice cost minimization and pocket the difference. To suggest that a bureaucracy can truly keep costs at a minimum just doesn't sit well with me at all.

Only In America?

I'm not sure what to say about this story other than I'm shocked to see that it's in Europe. Maybe sometimes the cultural differences between Americans and Europeans are overstated.

Warning: Stolen Content Ahead

Found this article recently while browsing the web. I'd say that Roberts' ideas about systems that result from human action but not human design certainly apply to global climate change, our favorite topic of the moment. Alex Taborrak also gets at the same subject, his point being more that you get unintended consequences when a fairly simple system (government) tries to regulate a complex one (the economy). So assuming that we're looking for different government regulations to tackle global climate change, is there any way to prepare for the unavoidable consequences?

Reflecting On the Bush Tax Cuts

This paper, whose co-author is an acquaintance of mine and a Mason student, summarizes the effects of the Bush tax cuts, and adamantly argues that they should be renewed.

A couple of interesting tidbits:

"When the capital gains tax is cut, asset holders are inspired to sell." I wonder if there's a way to truly maximize revenue by raising and cutting the capital gains tax (it would have to be done without a recognizable pattern, but I tend to think the tax being lower causes people to sell).

“Germany, Switzerland and many other countries do not tax capital gains at all.” America as the nation with the highest taxes - what kind of backwards world is this?

"Seventy-nine percent of all returns reporting capital gains were for households with incomes below $100,000 and half had incomes below $50,000." So it's not just a tax cut for the rich - those calling for the return of the tax to higher levels ought to read this.

My Letter to Thomas Sowell

Dear Dr. Sowell:

In your Primary Dilemmas column (1/18/08), I couldn't help but notice that there were two candidates whose names were never mentioned -- and to me these candidates seem to cause the greatest dilemmas for conservatives.

You never mentioned John McCain, and his win in New Hampshire has created quite a dilemma. He has been strong on winning the war in Iraq, but is weak on almost everything else. In a Random Thoughts column, you once lamented the idea of a McCain – Clinton presidential election, saying you wouldn’t know whether to vote independent or move to Australia. Maybe the best way to keep him out of the general election is to not talk about him, in which case the omission was a good one.

What interests me more is that you did not mention Ron Paul, in fact, to my knowledge you have never mentioned Ron Paul in a column. Ron Paul is strong on all the fiscal and economic policies that classic liberals support, and to that end it seems Hayek and Von Mises would have supported him (Bastiat certainly would have) – it is also the reason he will never be president. True, he is no Reagan on foreign policy, but he does acknowledge that terrorism is a different kind of threat that Soviet Russia, and his foreign policy is at least based on reason (though possibly flawed) instead of empty rhetoric.

Have you not mentioned Ron Paul because we can only “choose from the available options” and you do not want to alienate the electorate when he doesn’t get the nomination? Or is there something else? The Republicans have no front runner because they have no strong candidates, at least Ron Paul is putting thought back into the political process. Maybe conceding ‘08 to support a true limited government candidate, gaining ground in the ideological discourse, and making a stronger run in ’12 would be the Republican’s best play…if an Barak or Hillary America could survive that long.

Thank you for your time,
Josh Knox
George Mason ‘10

The End of Growth

I was recalling today a conversation I had with a friend from my hometown over break. He is a British citizen whose family moved to America about ten years ago, but he still maintains close ties with Britain. We spent some time talking about politics, economics, etc... One thing he said really stuck out.

He agreed that capitalism is the best economic system to promote growth, but he then said that he would rather see higher taxes and more socialism because we're at the point where we don't need to grow anymore.

I immediately countered with the fact that we have no cure for cancer, and he relented that growth in medicine was still necessary, but then we both just kind of dropped it. I would add to my argument that with the constant concerns over global warming, we certainly need growth in all the processes that cause pollution.

Growth, and its potential results, are unknowable by their nature. Will there ever be a point where we no longer need growth? I'd answer with a resounding "no."